<PAGE>
[Loan No. 04-698-610375-8]

                                   PROMISSORY NOTE

$8,646,000 (U.S.)                                      SEATTLE, WASHINGTON
                                                       MARCH 18, 1998

     FOR VALUE RECEIVED, the undersigned (individually and collectively,
"Borrower"), jointly and severally, promise to pay to the order of WASHINGTON
MUTUAL BANK, a Washington corporation, at its office at 1201 Third Avenue,
Seattle, Washington 98101, or at such other place as the holder of this Note
(hereinafter, "holder") may from time to time designate in writing, the sum of
EIGHT MILLION SIX HUNDRED FORTY-SIX THOUSAND DOLLARS ($8,646,000) in lawful
money of the United States, with interest thereon from the date of this Note
until paid at the rate set forth below, computed on monthly balances. Interest
for each full calendar month during the term of this Note shall be calculated on
the basis of a 360-day year and twelve 30-day months. Interest for any partial
calendar month at the beginning or end of the term of this Note shall be
calculated on the basis of a 365 or 366-day year and the actual number of days
in that month.

     SECTION 1. INTEREST RATE.

     The per annum interest rate hereunder (the "Note Rate") shall be seven and
thirty-five one-hundredths percent (7.35%).

     SECTION 2. MONTHLY PAYMENTS.

     Beginning on May 1, 1998 and on the same day of each and every calendar
month thereafter throughout the term of this Note (the "Monthly Payment Dates"),
Borrower shall make monthly payments of principal and interest (the "Monthly
Payment Amounts") to holder in the amount of ONE HUNDRED ONE THOUSAND NINE
HUNDRED FIFTY-THREE and 94/100 DOLLARS ($101,953.94).

     SECTION 3. MATURITY.

     Unless sooner repaid by Borrower, the entire unpaid principal balance of
this Note, plus all accrued but unpaid interest, and all other amounts owing
hereunder or under the Security Documents (as defined in Section 7) shall be due
and payable in full on April 1, 2008 (the "Maturity Date").

     SECTION 4. APPLICATION OF PAYMENTS.

     Payments shall be applied: (i) first, to the payment of accrued 
interest; (ii) second, at the option of holder, to the payment of any other 
amounts owing under this Note or secured by the Security Documents, other 
than accrued interest and principal, including, but not limited to advances 
holder may have made for taxes, assessments, insurance premiums, attorneys' 
fees or other charges on any property given as security for this Note and 
late charges due hereunder, and (iii) third, to the reduction of principal of 
this Note.

     SECTION 5. PREPAYMENT.

     Borrower may, upon thirty (30) days' prior written notice to holder, prepay
its obligation under this Note in full or in part on any Monthly Payment Date
upon payment of a premium (the "Prepayment Premium") equal to the greater of:

            (i)     The "Present Value Premium" (as hereinafter defined); and

            (ii)    Two percent (2.00%) of the amount prepaid.

<PAGE>


Greenwood Note

     The "Present Value Premium" shall be the present value, as of the date of
prepayment, of a stream of monthly interest payments for the period remaining to
the Maturity Date of this Note, computed on the basis of: (i) the amount
prepaid; and (ii) an interest rate equal to the amount, if any, by which (A) the
Note Rate exceeds (B) the "Reinvestment Rate" (as hereinafter defined). Each of
such monthly interest payments shall be discounted to present value at the
"Reinvestment Rate" from the applicable Monthly Payment Date to the date of
prepayment.

     The "Reinvestment Rate" shall be based on the weekly average treasury
constant maturity yields reported in Publication H.15. The figures in the most
recent edition of Publication H.15 available as of the prepayment date that
appear in the column for the week ending immediately preceding the date of such
edition shall be used for purposes of the Reinvestment Rate calculation. The
Reinvestment Rate shall be the yield adjusted to constant maturities stated in
Publication H.15 for the United States government security having a maturity
that most closely corresponds to the Maturity Date of this Note, determined by
linear interpolation between the yields reported in Publication H.15, if
necessary, plus two percent (2.00%).

     Holder may, in its reasonable discretion, select an alternative source of
the Reinvestment Rate if Publication H.15 ceases to be available, or if the
method of calculating treasury constant maturity yield figures set forth therein
changes so as to substantially impact the calculation of the Reinvestment Rate.

     Borrower expressly waives any right to prepay this Note except as provided
in this Section 5.  Therefore, if the maturity of this Note is accelerated for
any reason, including, without limitation, the occurrence of any event of
default hereunder or under the Deed of Trust (as defined in Section 7),
including without limitation Section 4.13 of the Deed of Trust, or any other
document that evidences or secures the repayment of this Note, then any
subsequent tender of payment of this Note, including any redemption following
foreclosure of the Deed of Trust, shall constitute an evasion of the
restrictions on prepayment set forth herein and shall be deemed a voluntary
prepayment. Accordingly, holder may impose as a condition to accepting any such
tender, and may bid at any sheriff's or trustee's sale under the Deed of Trust,
and/or include in any complaint for judicial foreclosure or any claim in
bankruptcy, as part of the indebtedness evidenced by this Note and secured by
the Deed of Trust, the Prepayment Premium that would have otherwise been payable
hereunder for prepayment of this Note occurring on the date of such
acceleration. The Prepayment Premium will not be payable for prepayment of this
Note occurring as a result of the application of insurance and condemnation
proceeds to the reduction of the unpaid principal balance of this Note.

     Borrower acknowledges that: (i) it has been advised by knowledgeable real
estate counsel, (ii) it fully understands the effect of the above waiver, (iii)
the making of the loan evidenced by this Note at the interest rates set forth
above is sufficient consideration for such waiver, and (iv) holder would not
make the loan evidenced by this Note without such waiver.

     Borrower acknowledges that any statement made by holder setting forth the
amount of the Prepayment Premium shall only be binding upon holder if such
statement is made in writing and that the amount of the Prepayment Premium set
forth in such statement is subject to change and is valid only for the date of
such statement.

     Notwithstanding the foregoing, Borrower may prepay its obligation under
this Note in full or in part at any time during the sixty (60) days preceding
the Maturity Date of this Note without payment of a Prepayment Premium.

     SECTION 6. LATE CHARGE.

     If any amount payable hereunder is paid more than ten (10) days after the
due date thereof, Borrower promises to pay a late charge of five percent (5%) of
the delinquent amount as liquidated damages for the extra expense in handling
past due payments.


                                          2

<PAGE>

Greenwood Note

     SECTION 7. SECURITY.

     This Note is secured by a deed of trust, security agreement, assignment 
of leases and rents and fixture filing (the "Deed of Trust") of even date 
herewith and executed by Borrower, encumbering real property located in 
Arapahoe County, Colorado. The Deed of Trust and any and all other documents 
securing this Note are collectively referred to as the "Security Documents"; 
provided, however, that "Security Documents" specifically shall not mean and 
shall not include the certificate and indemnity agreement regarding hazardous 
substances being delivered concurrently herewith to holder by Borrower (the 
"Indemnity Agreement"). The real property and the other collateral provided 
for in the Security Documents are collectively referred to as the "Property".

     SECTION 8. DEFAULT: REMEDIES.

     If default is made in the payment of any amount payable hereunder when due
and such default shall not have been cured within three (3) days after receipt
by Borrower of written notice from holder, or if an Event of Default shall have
occurred under and as defined in any of the Security Documents, then, at the
option of holder, the entire indebtedness evidenced hereby shall become
immediately due and payable. Upon default, and without notice or demand, all
amounts owed under this Note, including all accrued but unpaid interest, shall
thereafter bear interest at the rate of five percent (5%) per annum above the
Note Rate (the "Default Rate") until such default is cured. Failure to exercise
any option granted to holder hereunder shall not waive the right to exercise the
same in the event of any subsequent default. Interest at the Default Rate shall
commence to accrue upon default under this Note, including the failure to pay
this Note at maturity.

     SECTION 9. ATTORNEYS' FEES.

     In the event of any default under this Note, or in the event that any
dispute arises relating to the interpretation, enforcement or performance of
this Note, the prevailing party shall be entitled to collect from the other
party on demand all fees and expenses incurred in connection therewith,
including but not limited to fees of attorneys (and legal assistants),
accountants, appraisers, environmental inspectors, consultants, expert
witnesses, arbitrators, mediators and court reporters. Without limiting the
generality of the foregoing, the non-prevailing party shall pay all such costs
and expenses incurred in connection with: (a) arbitration or other alternative
dispute resolution proceedings, trial court actions and appeals; (b) bankruptcy
or other insolvency proceedings of Borrower, any guarantor or other party liable
for any of the obligations of this Note or any party having any interest in any
security for any of those obligations; (c) judicial or nonjudicial foreclosure
on, or appointment of a receiver for, any property securing this Note; (d)
post-judgment collection proceedings; (e) all claims, counterclaims,
cross-claims and defenses asserted in any of the foregoing whether or not they
arise out of or are related to this Note or any security for this Note; (f) all
preparation for any of the foregoing; and (g) all settlement negotiations with
respect to any of the foregoing.

     SECTION 10. MISCELLANEOUS.

     (a)    Every person or entity at any time liable for the payment of the
indebtedness evidenced hereby waives presentment for payment, demand and, except
as provided herein, notice of nonpayment of this Note. Every such person or
entity further hereby consents to any extension of the time of payment hereof or
other modification of the terms of payment of this Note, the release of all or
any part of the security herefor or the release of any party liable for the
payment of the indebtedness evidenced hereby at any time and from time to time
at the request of anyone now or hereafter liable therefor. Any such extension or
release may be made without notice to any of such persons or entities and
without discharging their liability.

     (b)    Each person or entity who signs this Note is jointly and severally
liable for the full repayment of the entire indebtedness evidenced hereby and
the full performance of each and every obligation contained in the Security
Documents.


                                          3

<PAGE>

Greenwood Note

     (c)    The headings to the various sections have been inserted for
convenience of reference only and do not define, limit, modify, or expand the
express provisions of this Note.

     (d)    Time is of the essence under this Note and in the performance of
every term, covenant and obligation contained herein.

     (e)    This Note is made with reference to and is to be construed in
accordance with the laws of the state of Colorado.

     (f)    Each married person who executes this Note as a Borrower agrees
that recourse hereunder can be had to his or her separate property as well as
the assets of his or her marital community.

     DATED as of the day and year first above written.

                         EAGLE HARDWARE & GARDEN, INC., A WASHINGTON
                         CORPORATION

                         BY   /s/ Ronald P. Maccarone
                              -------------------------------------------------
                              RONALD P. MACCARONE
                              ITS EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
                                  OFFICER


                                          4