<PAGE>   1
                                                                   EXHIBIT 10.25

================================================================================

                     CAMERON ASHLEY BUILDING PRODUCTS, INC.

             U.S. $3,000,000 6.71% Senior Notes due October 7, 2004
             U.S. $63,000,000 6.90% Senior Notes due April 7, 2010


                                 --------------

                            NOTE PURCHASE AGREEMENT

                                 --------------


                           Dated as of April 1, 1998



================================================================================
<PAGE>   2
                               TABLE OF CONTENTS

                         (NOT A PART OF THE AGREEMENT)

<TABLE>
<CAPTION>
SECTION                                                   HEADING                                                     PAGE
<S>                  <C>                                                                                               <C>
SECTION 1.           AUTHORIZATION OF NOTES   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2.           SALE AND PURCHASE OF NOTES   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 3.           CLOSING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 4.           CONDITIONS TO CLOSING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

     Section 4.1.         Certain Agreements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
     Section 4.2.         Representations and Warranties  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     Section 4.3.         Performance; No Default.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     Section 4.4.         Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     Section 4.5.         Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     Section 4.6.         Purchase Permitted by Applicable Law, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     Section 4.7.         Sale of Other Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 4.8.         Payment of Special Counsel Fees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 4.9.         Private Placement Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 4.10.        Changes in Corporate Structure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 4.11.        Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SECTION 5.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY  . . . . . . . . . . . . . . . . . . . . . . . . . . 4

     Section 5.1.         Organization; Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 5.2.         Authorization, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
     Section 5.3.         Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     Section 5.4.         Organization and Ownership of Shares of Subsidiaries; Affiliates  . . . . . . . . . . . . . . 5
     Section 5.5.         Financial Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
     Section 5.6.         Compliance with Laws, Other Instruments, Etc  . . . . . . . . . . . . . . . . . . . . . . . . 6
     Section 5.7.         Governmental Authorizations, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
     Section 5.8.         Litigation; Observance of Agreements, Statutes and Orders . . . . . . . . . . . . . . . . . . 7
     Section 5.9.         Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
     Section 5.10.        Title to Property; Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
     Section 5.11.        Licenses, Permits, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
     Section 5.12.        Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
     Section 5.13.        Private Offering by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
     Section 5.14.        Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
     Section 5.15.        Existing Indebtedness; Future Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
     Section 5.16.        Foreign Assets Control Regulations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
     Section 5.17.        Status under Certain Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
     Section 5.18.        Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
</TABLE>
<PAGE>   3
<TABLE>
<S>                  <C>                                                                                               <C>
SECTION 6.           REPRESENTATIONS OF THE PURCHASER   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

     Section 6.1.         Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
     Section 6.2.         Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

SECTION 7.           INFORMATION AS TO COMPANY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

     Section 7.1.         Financial and Business Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
     Section 7.2.         Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
     Section 7.3.         Inspection  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

SECTION 8.           PREPAYMENT OF THE NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

     Section 8.1.         Required Prepayments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
     Section 8.2.         Optional Prepayments with Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . .  16
     Section 8.3.         Allocation of Partial Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
     Section 8.4.         Maturity; Surrender, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
     Section 8.5.         Purchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
     Section 8.6.         Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

SECTION 9.           AFFIRMATIVE COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

     Section 9.1.         Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     Section 9.2.         Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     Section 9.3.         Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     Section 9.4.         Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     Section 9.5.         Corporate Existence, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

SECTION 10.          NEGATIVE COVENANTS   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

     Section 10.1.        Consolidated Net Worth  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     Section 10.2.        Limitation on Consolidated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
     Section 10.3.        Limitation on Debt of Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .  20
     Section 10.4.        Fixed Charges Coverage Ratio  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
     Section 10.5.        Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
     Section 10.6.        Sale-and-Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
     Section 10.7.        Restricted Payments and Restricted Investments  . . . . . . . . . . . . . . . . . . . . . .  25
     Section 10.8.        Sale of Assets, Etc.; Creation of Minority Interests  . . . . . . . . . . . . . . . . . . .  25
     Section 10.9.        Merger, Consolidation, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
     Section 10.10.       Transactions with Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
     Section 10.11.       Line of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
     Section 10.12.       Guaranties  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
     Section 10.13.       Guarantors To Remain Wholly-Owned Restricted Subsidiaries . . . . . . . . . . . . . . . . .  28

SECTION 11.          EVENTS OF DEFAULT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
</TABLE>





                                      -ii-
<PAGE>   4
<TABLE>
<S>                  <C>                                                                                               <C>
SECTION 12.          REMEDIES ON DEFAULT, ETC   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

     Section 12.1.        Acceleration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
     Section 12.2.        Other Remedies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
     Section 12.3.        Rescission  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
     Section 12.4.        No Waivers or Election of Remedies, Expenses, Etc . . . . . . . . . . . . . . . . . . . . .  31

SECTION 13.          REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . .  32

     Section 13.1.        Registration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
     Section 13.2.        Transfer and Exchange of Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
     Section 13.3.        Replacement of Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

SECTION 14.          PAYMENTS ON NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

     Section 14.1.        Place of Payment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
     Section 14.2.        Home Office Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

SECTION 15.          EXPENSES, ETC  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

     Section 15.1.        Transaction Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
     Section 15.2.        Survival  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

SECTION 16.          SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
                     AGREEMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

SECTION 17.          AMENDMENT AND WAIVER.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

     Section 17.1.        Requirements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
     Section 17.2.        Solicitation of Holders of Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
     Section 17.3.        Binding Effect, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
     Section 17.4.        Notes Held by Company, Etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

SECTION 18.          NOTICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

SECTION 19.          REPRODUCTION OF DOCUMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36

SECTION 20.          CONFIDENTIAL INFORMATION   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36

SECTION 21.          SUBSTITUTION OF PURCHASER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37

SECTION 22.          MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37

     Section 22.1.        Successors and Assigns  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
     Section 22.2.        Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
     Section 22.3.        Severability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
</TABLE>





                                     -iii-
<PAGE>   5
<TABLE>
<S>                       <C>                                                                                          <C>
     Section 22.4.        Construction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
     Section 22.5.        Counterparts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
     Section 22.6.        Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
</TABLE>





                                      -iv-
<PAGE>   6
                     CAMERON ASHLEY BUILDING PRODUCTS, INC.
                                11651 PLANO ROAD
                              DALLAS, TEXAS  75243

             U.S. $3,000,000 6.71% Senior Notes due October 7, 2004
             U.S. $63,000,000 6.90% Senior Notes due April 7, 2010


                                                                     Dated as of
                                                                   April 1, 1998


TO EACH OF THE PURCHASERS LISTED IN
  THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

     CAMERON ASHLEY BUILDING PRODUCTS, INC., a Georgia corporation (the
"Company"), agrees with you as follows:

SECTION 1.       AUTHORIZATION OF NOTES.

     The Company has authorized the issue and sale of the U.S. $3,000,000 6.71%
Senior Notes due October 7, 2004 and the U.S. $63,000,000 6.90% Senior Notes
due April 7, 2010 (respectively, the "2004 Notes" and the "2010 Notes" and
collectively the "Notes", such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement or the Other
Agreements (as hereinafter defined)).  The Notes shall be substantially in the
form set out in Exhibit 1.1.1 or 1.1.2, as the case may be, with such changes
therefrom, if any, as may be approved by you and the Company.  Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.  Payment of the Notes will be
unconditionally guaranteed by the Guarantors under and pursuant to separate
Guaranty Agreements (the "Guaranty Agreements") each substantially in the form
set out in Exhibit 1.2.

SECTION 2.       SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes in the principal amount and the Series
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof.  Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and of
the Series specified opposite its name in Schedule A.  Your obligation
<PAGE>   7
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


hereunder, and the obligations of the Other Purchasers under the Other
Agreements, are several and not joint obligations, and you shall have no
obligation  under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder.

SECTION 3.       CLOSING.

         The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, at 10:00 A.M. Chicago time, at a
closing (the "Closing") on April 7, 1998, or on such other Business Day
thereafter on or prior to April 10, 1998, as may be agreed upon by the Company
and you and the Other Purchasers.  At the Closing the Company will deliver to
you the Notes to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least U.S.  $1,000,000 as you
may request) dated the date of the Closing and registered in your name (or in
the name of your nominee), against delivery by you to the Company or its order
of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds to DDA # 1292833788 at NationsBank
of Texas, N.A., ABA Number 111000012, Beneficiary: Cameron Ashley Building
Products.  If at the Closing the Company shall fail to tender such Notes to you
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights you may have by reason of such failure or
such nonfulfillment.

SECTION 4.       CONDITIONS TO CLOSING.

         Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:

         Section 4.1.     Certain Agreements.  (a) The Guaranty Agreements
shall have been duly authorized, executed and delivered by the Guarantors and
shall be in full force and effect.

         (b)     The Company shall have entered into a Second Amendment to the
1996 Note Purchase Agreements with the holders of at least 66-2/3% in principal
amount of the notes outstanding thereunder (exclusive of notes then owned by
the Company or any of its Affiliates) expressly permitting the execution and
delivery of the Guaranty Agreements and the CA Canada Note Purchase Agreement
Guaranties.

         (c)     The Company shall have entered into a Third Amendment to
Second Restated Credit Agreement in form and substance reasonably satisfactory
to the Required Holders expressly permitting the issuance of the Notes and the
execution and delivery of this Agreement and the Other Agreements.





                                      -2-
<PAGE>   8
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Section 4.2.     Representations and Warranties.  The representations
and warranties of the Company in this Agreement and of the Guarantors in the
Guaranty Agreements shall be correct when made and at the time of the Closing.

         Section 4.3.     Performance; No Default.  The Company, and each
Guarantor, shall have performed and complied with all agreements and conditions
contained in this Agreement and the Guaranty Agreements, as the case may be,
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Section 5.14), no Default or Event of
Default shall have occurred and be continuing.   Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Section 10 hereof had such
Section applied since such date.

         Section 4.4.     Compliance Certificates.

         (a)     Officer's Certificate.  The Company and each Guarantor shall
have delivered to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.2, 4.3 and 4.10 have
been fulfilled.

         (b)     Secretary's Certificate.  The Company and each Guarantor shall
have delivered to you a certificate certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Notes and the Agreements or, as the case may be,
the Guaranty Agreements.

         Section 4.5.     Opinions of Counsel.  You shall have received
opinions in form and substance satisfactory to you, dated the date of the
Closing (a) from Stieber Campbell, P.C., special counsel for the Company and
the Guarantors, and John S. Davis, General Counsel of the Company, covering the
matters set forth in Exhibit 4.5(a) and covering such other matters incident to
the transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs its counsel to deliver such opinion
to you) and (b) from Chapman and Cutler, your special counsel in connection
with such transactions, substantially in the form set forth in Exhibit 4.5(b)
and covering such other matters incident to such transactions as you may
reasonably request.

         Section 4.6.     Purchase Permitted by Applicable Law, Etc.  On the
date of the Closing your purchase of Notes shall (i) be permitted by the laws
and regulations of each jurisdiction to which you are subject, without recourse
to provisions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as to
the character of the particular investment, (ii) not violate any applicable law
or regulation (including, without limitation, Regulation U, T or X of the Board
of Governors of the Federal Reserve System) and (iii) not subject you to any
tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof.  If
requested by you, you shall have received an Officer's Certificate certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.





                                      -3-
<PAGE>   9
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Section 4.7.     Sale of Other Notes.  Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the Other
Purchasers shall purchase, the Notes to be purchased by them at the Closing as
specified in Schedule A.

         Section 4.8.     Payment of Special Counsel Fees.  Without limiting
the provisions of Section 15.1, the Company shall have paid on or before the
Closing the fees, charges and disbursements of your special counsel referred to
in Section 4.5 to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the Closing.

         Section 4.9.     Private Placement Numbers.  A Private Placement
Number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with
the Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for each Series of the Notes.

         Section 4.10.    Changes in Corporate Structure.  The Company shall
not have changed its jurisdiction of incorporation or been a party to any
merger or consolidation and shall not have succeeded to all or any substantial
part of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in Schedule 5.5.

         Section 4.11.    Proceedings and Documents.  All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and the Guaranty Agreements and all documents and instruments incident to such
transactions shall be satisfactory to you and your special counsel, and you and
your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.

SECTION 5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to you that:

         Section 5.1.     Organization; Power and Authority.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement
and the Other Agreements and the Notes and to perform the provisions hereof and
thereof.

         Section 5.2.     Authorization, Etc.  (a) This Agreement, the Other
Agreements and the Notes have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal,





                                      -4-
<PAGE>   10
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

         (b)     Each of the Guaranty Agreements has been duly authorized by
all necessary corporate action on the part of each Guarantor, and each of the
Guaranty Agreements, upon execution and delivery thereof, will constitute, a
legal, valid and binding joint and several obligation of each Guarantor
enforceable against such Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

         Section 5.3.     Disclosure.  The Company, through its agents, SBC
Warburg Dillon Read Inc. and NationsBanc Montgomery Securities LLC, has
delivered to you and each Other Purchaser a copy of a Private Placement
Offering Memorandum, dated January 1998 (the "Memorandum"), relating to the
transactions contemplated hereby.  The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries.  This Agreement, the Other Agreements, the
Memorandum, the documents, certificates or other writings delivered to you by
or on behalf of the Company in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken as a whole,
do not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made.  Since October 31, 1997, there
has been no change  in  the  financial  condition, operations, business,
properties or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.  There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect.

         Section 5.4.     Organization and Ownership of Shares of Subsidiaries;
Affiliates.  (a) Schedule 5.4 contains complete and correct lists (i) of the
Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary, (ii) of the Company's Affiliates,
other than Subsidiaries, and (iii) of the Company's directors and senior
officers.

         (b)     All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its other Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien.

         (c)     Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each





                                      -5-
<PAGE>   11
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.

         (d)     Except as set forth in Schedule 5.4, no Subsidiary is a party
to, or otherwise subject to any legal restriction (other than restrictions
imposed by the corporate law of the jurisdiction under which such Subsidiary
exists) or any agreement (other than this Agreement, the Other Agreements and
the Guaranty Agreements) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.

         (e)     Those Subsidiaries listed in Section IA of said Schedule 5.4
constitute Restricted Subsidiaries.

         (f)     Each Guarantor is a Wholly-Owned Restricted Subsidiary.

         Section 5.5.     Financial Statements.  The Company has delivered to
each Purchaser copies of the financial statements of the Company and its
Subsidiaries listed on Schedule 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).

         Section 5.6.     Compliance with Laws, Other Instruments, Etc.  The
execution, delivery and performance by the Company of this Agreement, the Other
Agreements and the Notes and the execution, delivery and performance by each
Guarantor of its Guaranty Agreement will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Company or any Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.

         Section 5.7.     Governmental Authorizations, Etc.  No consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with





                                      -6-
<PAGE>   12
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



the execution, delivery or performance by the Company of this Agreement, the
Other Agreements or the Notes or the execution, delivery or performance by any
Guarantor of its Guaranty Agreement.

         Section 5.8.     Litigation; Observance of Agreements, Statutes and
Orders.  (a) Except as disclosed in Schedule 5.8, there are no actions, suits
or proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any Subsidiary or any property of the Company or
any Subsidiary in any court or before any arbitrator of any kind or before or
by any Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

         (b)     Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         Section 5.9.     Taxes.  The Company and its Subsidiaries have filed
all tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP.  The Company knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect.  The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate.  The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended October 31, 1993.

         Section 5.10.    Title to Property; Leases.  The Company and its
Restricted Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all
such properties reflected in the most recent audited balance sheet referred to
in Section 5.5 or purported to have been acquired by the Company or any
Restricted Subsidiary after said date (except as sold or otherwise disposed of
in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement.  All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.

         Section 5.11.    Licenses, Permits, Etc. (a) The Company and its
Restricted Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and trade names,
or rights thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;





                                      -7-
<PAGE>   13
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         (b)     to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and

         (c)     to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service mark, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.

         Section 5.12.    Compliance with ERISA.  (a) The Company and each
ERISA Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.

         (b)     The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities.  The  term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and the terms
"current value" and "present value" have the meaning specified in section 3 of
ERISA.

         (c)     The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.

         (d)     The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.

         (e)     The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of your representation in
Section 6.2 as to the sources of the funds used to pay the purchase price of
the Notes to be purchased by you.





                                      -8-
<PAGE>   14
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement




         Section 5.13.    Private Offering by the Company.  Neither the Company
nor anyone acting on its behalf has offered the Notes or any similar securities
for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than you,
the Other Purchasers and not more than 100 other Institutional Investors, each
of which has been offered the Notes at a private sale for investment.  Neither
the Company nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.

         Section 5.14.    Use of Proceeds; Margin Regulations.  The Company
will apply the proceeds of the sale of the Notes to the repayment of
Indebtedness of the Company to banks and for working capital. No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220).  The Company does not
presently own any margin stock and the Company does not have any present
intention to acquire any margin stock in the future.  As used in this Section,
the term "margin stock" and the phrase "purpose of buying or carrying" shall
have the meanings assigned to them in said Regulation U.

         Section 5.15.    Existing Indebtedness; Future Liens.  (a) Except as
described therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Restricted Subsidiaries as of
January 31, 1998, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Restricted Subsidiaries.  Neither the
Company nor any Restricted Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Restricted Subsidiary and no event or
condition exists with respect to any Indebtedness of the Company or any
Restricted Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

         (b)     Neither the Company nor any Restricted Subsidiary has agreed
or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien.

         Section 5.16.    Foreign Assets Control Regulations, Etc.  Neither the
sale of the Notes by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.





                                      -9-
<PAGE>   15
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Section 5.17.    Status under Certain Statutes.  Neither the Company
nor any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.

         Section 5.18.    Environmental Matters.  Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect.  Except as otherwise disclosed to you in writing:

                 (a)      neither the Company nor any Subsidiary has knowledge
         of any facts which would give rise to any claim, public or private, of
         violation of Environmental Laws or damage to the environment emanating
         from, occurring on or in any way related to real properties now or
         formerly owned, leased or operated by any of them or to other assets
         or their use, except, in each case, such as could not reasonably be
         expected to result in a Material Adverse Effect;

                 (b)      neither the Company nor any of its Subsidiaries has
         stored any Hazardous Materialson real properties now or formerly
         owned, leased or operated by any of them and or has disposed of any
         Hazardous Materials in a manner contrary to any Environmental Laws in
         each case in any manner that could reasonably be expected to result in
         a Material Adverse Effect; and

                 (c)      all buildings on all real properties now owned,
         leased or operated by the Company or any of its Subsidiaries are in
         compliance with applicable Environmental Laws, except where failure to
         comply could not reasonably be expected to result in a Material
         Adverse Effect.

SECTION 6.       REPRESENTATIONS OF THE PURCHASER.

         Section 6.1.     Purchase for Investment.  You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control.  You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.





                                      -10-
<PAGE>   16
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement




         Section 6.2.     Source of Funds.  You represent that you are an
insurance company and that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

                 (a)      the Source is an "insurance company general account"
         within the meaning of Department of Labor Prohibited Transaction
         Exemption ("PTE") 95-60 (issued July 12, 1995), and there is no
         employee benefit plan (treating as a single plan all plans maintained
         by the same employer or employee organization) with respect to which
         the amount of the general account reserves and liabilities for all
         contracts held by or on behalf of such plan exceed 10% of the total
         reserves and liabilities of such general account (exclusive of
         separate account liabilities) plus surplus, as set forth in your most
         recent annual statement in the form required by the National
         Association of Insurance Commissioners as filed with your state of
         domicile; or

                 (b)      the Source is either (i) an insurance company pooled
         separate account, within the meaning of PTE 90-1 (issued January 29,
         1990), or (ii) a bank collective investment fund, within the meaning
         of PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
         to the Company in writing pursuant to this paragraph (b), no employee
         benefit plan or group of plans maintained by the same employer or
         employee organization beneficially owns more than 10% of all assets
         allocated to such pooled separate account or collective investment
         fund; or

                 (c)      the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of the QPAM Exemption) managed by a
         "qualified professional asset manager" or "QPAM" (within the meaning
         of Part V of the QPAM Exemption), no employee benefit plan's assets
         that are included in such investment fund, when combined with the
         assets of all other employee benefit plans established or maintained
         by the same employer or by an affiliate (within the meaning of Section
         V(c)(1) of the QPAM Exemption) of such employer or by the same
         employee organization and managed by such QPAM, exceed 20% of the
         total client assets managed by such QPAM, the conditions of Part l(c)
         and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
         person controlling or controlled by the QPAM (applying the definition
         of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
         interest in the Company and (i) the identity of such QPAM and (ii) the
         names of all employee benefit plans whose assets are included in such
         investment fund have been disclosed to the Company in writing pursuant
         to this paragraph (c); or

                 (d)      the Source is a governmental plan; or

                 (e)      the Source is one or more employee benefit plans, or
         a separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this paragraph (e); or





                                      -11-
<PAGE>   17
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (f)      the Source does not include assets of any employee
         benefit plan, other than a plan exempt from the coverage of ERISA.

         As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 7.       INFORMATION AS TO COMPANY.

         Section 7.1.     Financial and Business Information.  The Company
shall deliver to each Holder of Notes that is an Institutional Investor:

                 (a)      Quarterly Statements -- within 45 days after the end
         of each quarterly fiscal period in each fiscal year of the Company
         (other than the last quarterly fiscal period of each such fiscal
         year), duplicate copies of:

                          (i)     consolidated and consolidating balance sheets
                 of the Company and its Restricted Subsidiaries as of the close
                 of such quarterly fiscal period, setting forth in comparative
                 form the consolidated figures for the fiscal year then most
                 recently ended,

                          (ii)    consolidated and consolidating statements of
                 income of the Company and its Restricted Subsidiaries for such
                 quarterly fiscal period and for the portion of the fiscal year
                 ending with such quarterly fiscal period, in each case setting
                 forth in comparative form the consolidated figures for the
                 corresponding periods of the preceding fiscal year, and

                          (iii)   consolidated and consolidating statements of
                 stockholders' equity and cash flows of the Company and its
                 Restricted Subsidiaries for such quarterly fiscal period and
                 for the portion of the fiscal year ending with such quarterly
                 fiscal period, setting forth in comparative form the
                 consolidated figures for the corresponding period of the
                 preceding fiscal year,

         all in reasonable detail, prepared in accordance with GAAP applicable
         to quarterly  financial statements generally, and certified by a
         Senior Financial Officer as fairly presenting, in all material
         respects, the financial position of the companies being reported on
         and their results of operations and cash flows, subject to changes
         resulting from year-end adjustments, provided that so long as the
         consolidated gross revenue, consolidated total assets or consolidated
         net income of the Unrestricted Subsidiaries included in the Company's
         Quarterly Report on Form 10-Q does not exceed 25% of the consolidated
         gross revenue, consolidated total assets or consolidated net income of
         the Company, as the case may be, delivery within the time period
         specified above of copies of the Company's Quarterly Report on Form
         10-Q prepared in compliance with the requirements therefor and filed
         with the Securities and Exchange Commission shall be deemed to satisfy
         the requirements of this Section 7.1(a);





                                      -12-
<PAGE>   18
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (b)      Annual Statements -- within 90 days after the end of
         each fiscal year of the Company, duplicate copies of,

                          (i)     consolidated and consolidating balance sheets
                 of the Company and its Restricted Subsidiaries, as at the end
                 of such year, and

                          (ii)    consolidated and consolidating statements of
                 income, changes in stockholders' equity and cash flows of the
                 Company and its Restricted Subsidiaries, for such year,

setting forth in each case in comparative form the consolidated figures for the
previous fiscal year, all in reasonable detail, prepared in accordance with
GAAP, and accompanied

                          (A)     by an opinion thereon of independent
                 certified public accountants of recognized national standing,
                 which opinion shall state that such financial statements
                 present fairly, in all material respects, the financial
                 position of the companies being reported upon and their
                 results of operations and cash flows and have been prepared in
                 conformity with GAAP, and that the examination of such
                 accountants in connection with such financial statements has
                 been made in accordance with generally accepted auditing
                 standards, and that such audit provides a reasonable basis for
                 such opinion in the circumstances, and

                          (B)     a certificate of such accountants stating
                 that they have reviewed this Agreement and stating further
                 whether, in making their audit, they have become aware of any
                 condition or event that then constitutes a Default or an Event
                 of Default, and, if they are aware that any such condition or
                 event then exists, specifying the nature and period of the
                 existence thereof (it being understood that such accountants
                 shall not be liable, directly or indirectly, for any failure
                 to obtain knowledge of any Default or Event of Default unless
                 such accountants should have obtained knowledge thereof in
                 making an audit in accordance with generally accepted auditing
                 standards or did not make such an audit),

         provided that so long as the consolidated gross revenue, consolidated
         total assets or consolidated net income of the Unrestricted
         Subsidiaries included in the Company's Annual Report on Form 10-K does
         not exceed 25% of the consolidated gross revenue, consolidated total
         assets or consolidated net income of the Company, as the case may be,
         the delivery within the time period specified above of the Company's
         Annual Report on Form 10-K for such fiscal year (together with the
         Company's annual report to shareholders, if any, prepared pursuant to
         Rule 14a-3 under the Exchange Act) prepared in accordance with the
         requirements therefor and filed with the Securities and Exchange
         Commission, together with the accountant's certificate described in
         clause (B) above, shall be deemed to satisfy the requirements of this
         Section 7.1(b);





                                      -13-
<PAGE>   19
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (c)      SEC and Other Reports -- promptly upon their becoming
         available, one copy of (i) each financial statement, report, notice or
         proxy statement sent by the Company or any Subsidiary to public
         securities holders generally, and (ii) each regular or periodic
         report, each registration statement (without exhibits except as
         expressly requested by such holder), and each prospectus and all
         amendments thereto filed by the Company or any Subsidiary with the
         Securities and Exchange Commission and of all press releases and other
         statements made available generally by the Company or any Subsidiary
         to the public concerning developments that are Material;

                 (d)      Notice of Default or Event of Default -- promptly,
         and in any event within five days after a Responsible Officer becoming
         aware of the existence of any Default or Event of Default or that any
         Person has given any notice or taken any action with respect to a
         claimed default hereunder or that any Person has given any notice or
         taken any action with respect to a claimed default of the type
         referred to in Section 11(f), a written notice specifying the nature
         and period of existence thereof and what action the Company is taking
         or proposes to take with respect thereto;

                 (e)      ERISA Matters -- promptly, and in any event within
         five days after a Responsible Officer becoming aware of any of the
         following, a written notice setting forth the nature thereof and the
         action, if any, that the Company, a Guarantor or an ERISA Affiliate
         proposes to take with respect thereto:

                          (i)     with respect to any Plan, any reportable
                 event, as defined in section 4043(b) of ERISA and the
                 regulations thereunder, for which notice thereof has not been
                 waived pursuant to such regulations as in effect on the date
                 hereof; or

                          (ii)    the taking by the PBGC of steps to institute,
                 or the threatening by the PBGC of the institution of,
                 proceedings under section 4042 of ERISA for the termination
                 of, or the appointment of a trustee to administer, any Plan,
                 or the receipt by the Company, any Guarantor or any ERISA
                 Affiliate of a notice from a Multiemployer Plan that such
                 action has been taken by the PBGC with respect to such
                 Multiemployer Plan; or

                          (iii)   any event, transaction or condition that
                 could result in the incurrence of any liability by the
                 Company, any Guarantor or any ERISA Affiliate pursuant to
                 Title I or IV of ERISA or the penalty or excise tax provisions
                 of the Code relating to employee benefit plans, or in the
                 imposition of any Lien on any of the rights, properties or
                 assets of the Company, any Guarantor or any ERISA Affiliate
                 pursuant to Title I or IV of ERISA or such penalty or excise
                 tax provisions, if such liability or Lien, taken together with
                 any other such liabilities or Liens then existing, could
                 reasonably be expected to have a Material Adverse Effect;

                 (f)      Notices from Governmental Authority -- promptly, and
         in any event within 30 days of receipt thereof, copies of any notice
         to the Company or any Subsidiary from any





                                      -14-
<PAGE>   20
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Federal or state Governmental Authority relating to any order, ruling,
         statute or other law or regulation that could reasonably be expected
         to have a Material Adverse Effect;

                 (g)      Unrestricted Subsidiaries --  Within the respective
         periods provided in paragraphs (a) and (b) above, financial statements
         of the character and for the dates and periods as in said paragraphs
         (a) and (b) provided covering each Unrestricted Subsidiary (or groups
         of Unrestricted Subsidiaries on a consolidated basis); and

                 (h)      Requested Information -- with reasonable promptness,
         such other data and information relating to the business, operations,
         affairs, financial condition, assets or properties of the Company or
         any of its Subsidiaries or relating to the ability of the Company to
         perform its obligations hereunder and under the Notes as from time to
         time may be reasonably requested by any such Holder of Notes.

         Section 7.2.     Officer's Certificate.  Each set of financial
statements delivered to a Holder of Notes pursuant to Section 7.1(a) or Section
7.1(b) hereof shall be accompanied by a certificate of a Senior Financial
Officer setting forth:

                 (a)      Covenant Compliance -- the information (including
         detailed calculations) required in order to establish whether the
         Company was in compliance with the requirements of Section 10.1
         through Section 10.8 hereof, inclusive, during the quarterly or annual
         period covered by the statements then being furnished (including with
         respect to each such Section, where applicable, the calculations of
         the maximum or minimum amount, ratio or percentage, as the case may
         be, permissible under the terms of such Sections, and the calculation
         of the amount, ratio or percentage then in existence); and

                 (b)      Event of Default -- a statement that such officer has
         reviewed the relevant terms hereof and has made, or caused to be made,
         under his or her supervision, a review of the transactions and
         conditions of the Company and its Subsidiaries from the beginning of
         the quarterly or annual period covered by the statements then being
         furnished to the date of the certificate and that such review shall
         not have disclosed the existence during such period of any condition
         or event that constitutes a Default or an Event of Default or, if any
         such condition or event existed or exists (including, without
         limitation, any such event or condition resulting from the failure of
         the Company or any Subsidiary to comply with any Environmental Law),
         specifying the nature and period of existence thereof and what action
         the Company shall have taken or proposes to take with respect thereto.

         Section 7.3.     Inspection.  The Company shall permit the
representatives of each Holder of Notes that is an Institutional Investor:

                 (a)      No Default -- if no Default or Event of Default then
         exists, at the expense of such Holder and upon reasonable prior notice
         to the Company, to visit the principal executive office of the
         Company, to discuss the affairs, finances and accounts of the Company
         and its Restricted Subsidiaries with the Company's officers, and (with
         the consent of the Company,





                                      -15-
<PAGE>   21
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         which consent will not be unreasonably withheld) its independent
         public accountants, and (with the consent of the Company, which
         consent will not be unreasonably withheld) to visit the other offices
         and properties of the Company and each Restricted Subsidiary, all at
         such reasonable times and as often as may be reasonably requested in
         writing; and

                 (b)      Default -- if a Default or Event of Default then
         exists, at the expense of the Company to visit and inspect any of the
         offices or properties of the Company or any Restricted Subsidiary, to
         examine all their respective books of account, records, reports and
         other papers, to make copies and extracts therefrom, and to discuss
         their respective affairs, finances and accounts with their respective
         officers and independent public accountants (and by this provision the
         Company authorizes said accountants to discuss the affairs, finances
         and accounts of the Company and its Restricted Subsidiaries), all at
         such times and as often as may be requested.

SECTION 8.       PREPAYMENT OF THE NOTES.

         Section 8.1.     Required Prepayments.  (a)  In addition to paying the
entire outstanding principal amount and the interest due on the 2010 Notes on
the maturity date thereof, on April 7, 2006, April 7, 2007, April 7, 2008, and
April 7, 2009, the Company will prepay U.S. $12,600,000 principal amount (or
such lesser principal amount as shall then be outstanding) of the 2010 Notes at
par and without payment of the Make-Whole Amount or any premium, provided that
(i) upon any partial prepayment of the 2010 Notes pursuant to Section 8.2 or
purchase of the 2010 Notes permitted by Section 8.5 the principal amount of
each required prepayment of the 2010 Notes becoming due under this Section
8.1(a) on and after the date of such prepayment or purchase shall be reduced in
the same proportion as the aggregate unpaid principal amount of the 2010 Notes
is reduced as a result of such prepayment or purchase.

         (b)     Other than paying the entire outstanding principal amount and
the interest due on the 2004 Notes on the maturity date thereof, no prepayment
of the 2004 Notes is required pursuant to this Section 8.1.

         Section 8.2.     Optional Prepayments with Make-Whole Amount.  The
Company may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes, in an amount not less than
10% of the aggregate principal amount of the Notes then outstanding in the case
of a partial prepayment, at 100% of the principal amount so prepaid and accrued
interest thereon to the date of prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount of
Notes being so prepaid.  The Company will give each Holder of Notes to be
prepaid written notice of each optional prepayment under this Section 8.2 not
less than 30 days and not more than 60 days prior to the date fixed for such
prepayment.  Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such Holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment





                                      -16-
<PAGE>   22
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation.  Two Business Days prior to such
prepayment, the Company shall deliver to each Holder of Notes a certificate of
a Senior Financial Officer specifying the calculation of such Make-Whole Amount
as of the specified prepayment date.

         Section 8.3.     Allocation of Partial Prepayments.  In the case of
each partial prepayment of the Notes, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes of all Series at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.

         Section 8.4.     Maturity; Surrender, Etc.  In the case of each
prepayment of Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed
for such prepayment, together with interest on such principal amount accrued to
such date and the applicable Make-Whole Amount, if any.  From and after such
date, unless the Company shall fail to pay such principal amount when so due
and payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue.  Any Note
paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.

         Section 8.5.     Purchase of Notes.  The Company will not and will not
permit any Restricted Subsidiary or Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except
upon the payment or prepayment of the Notes in accordance with the terms of
this Agreement and the Notes.  The Company will promptly cancel all Notes
acquired by it or any Restricted Subsidiary or Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

         Section 8.6.     Make-Whole Amount.  The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero.  For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

                 "Called Principal" means, with respect to any Note, the
         principal of such Note that is to be prepaid pursuant to Section 8.2
         or has become or is declared to be immediately due and payable
         pursuant to Section 12.1, as the context requires.

                 "Discounted Value" means, with respect to the Called Principal
         of any Note, the amount obtained by discounting all Remaining
         Scheduled Payments with respect to such Called Principal from their
         respective scheduled due dates to the Settlement Date with respect to
         such Called Principal, in accordance with accepted financial practice
         and at a discount factor (applied on the same periodic basis as that
         on which interest on the Notes is payable) equal to the Reinvestment
         Yield with respect to such Called Principal.





                                      -17-
<PAGE>   23
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


                 "Reinvestment Yield" means, with respect to the Called
         Principal of any Note, 0.5% plus the yield to maturity implied by (i)
         the yields reported, as of 10:00 A.M. (New York City time) on the
         second Business Day preceding the Settlement Date with respect to such
         Called Principal, on the display designated as page "USD" of the
         Bloomberg Financial Markets Services Screen (or, if not available, any
         other nationally recognized trading screen reporting on-line intraday
         trading in the United States Governmental Securities) for actively
         traded on-the-run U.S. Treasury securities having a maturity equal to
         the Remaining Average Life of such Called Principal as of such
         Settlement Date, or (ii) if such yields are not reported as of such
         time or the yields reported as of such time are not ascertainable, the
         Treasury Constant Maturity Series Yields reported, for the latest day
         for which such yields have been so reported as of the second Business
         Day preceding the Settlement Date with respect to such Called
         Principal, in Federal Reserve Statistical Release H. 15 (519) (or any
         comparable successor publication) for actively traded on-the-run U.S.
         Treasury securities having a constant maturity equal to the Remaining
         Average Life of such Called Principal as of such Settlement Date.
         Such implied yield will be determined, if necessary, by (a) converting
         U.S. Treasury bill quotations to bond-equivalent yields in accordance
         with accepted financial practice and (b) interpolating linearly
         between (1) the actively traded on-the-run U.S. Treasury security with
         the maturity closest to and greater than the Remaining Average Life
         and (2) the actively traded on-the-run U.S. Treasury security with the
         maturity closest to and less than the Remaining Average Life.

                 "Remaining Average Life" means, with respect to any Called
         Principal, the number of years (calculated to the nearest one-twelfth
         year) obtained by dividing (i) such Called Principal into (ii) the sum
         of the products obtained by multiplying (a) the principal component of
         each Remaining Scheduled Payment with respect to such Called Principal
         by (b) the number of years (calculated to the nearest one-twelfth
         year) that will elapse between the Settlement Date with respect to
         such Called Principal and the scheduled due date of such Remaining
         Scheduled Payment.

                 "Remaining Scheduled Payments" means, with respect to the
         Called Principal of any Note, all payments of such Called Principal
         and interest thereon that would be due after the Settlement Date with
         respect to such Called Principal if no payment of such Called
         Principal were made prior to its scheduled due date, provided that if
         such Settlement Date is not a date on which interest payments are due
         to be made under the terms of the Notes, then the amount of the next
         succeeding scheduled interest payment will be reduced by the amount of
         interest accrued to such Settlement Date and required to be paid on
         such Settlement Date pursuant to Section 8.2 or 12.1.

                 "Settlement Date" means, with respect to the Called Principal
         of any Note, the date on which such Called Principal is to be prepaid
         pursuant to Section 8.2 or has become or is declared to be immediately
         due and payable pursuant to Section 12.1, as the context requires.





                                      -18-
<PAGE>   24
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



SECTION 9.       AFFIRMATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are
outstanding:

         Section 9.1.     Compliance with Law.  The Company will and will cause
each of its Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

         Section 9.2.     Insurance.  The Company will and will cause each of
its Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated.

         Section 9.3.     Maintenance of Properties.  The Company will and will
cause each of its Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided
that this Section shall not prevent the Company or any Restricted Subsidiary
from discontinuing the operation and the maintenance of any of its properties
if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

         Section 9.4.     Payment of Taxes and Claims.  The Company will and
will cause each of its Restricted Subsidiaries to file all tax returns required
to be filed in any jurisdiction and to pay and discharge all taxes shown to be
due and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company or any Restricted Subsidiary, provided that neither the
Company nor any Restricted Subsidiary need pay any such tax or assessment or
claim if (i) the amount, applicability or validity thereof is contested by the
Company or such Restricted Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Restricted Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Restricted Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.





                                      -19-
<PAGE>   25
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Section 9.5.     Corporate Existence, Etc.  The Company will at all
times preserve and keep in full force and effect its corporate existence.
Subject to Sections 10.8 and 10.9, the Company will at all times preserve and
keep in full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and
all rights and franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the termination of or
failure to preserve and keep in full force and effect such corporate existence,
right or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.

SECTION 10.      NEGATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are
outstanding:

         Section 10.1.    Consolidated Net Worth.  The Company will not, in any
fiscal year, permit Consolidated Net Worth to be less than (i) in the case of
its fiscal year ending October 31, 1997, U.S. $75,000,000, and (ii) in the case
of each fiscal year thereafter, an amount equal to the sum of the amount
required to be maintained in the immediately previous fiscal year plus 50% of
Consolidated Net Income for such immediately previous fiscal year (but without
deduction in the event of a deficit in Consolidated Net Income).

         Section 10.2.    Limitation on Consolidated Debt.  The Company will
not, and will not permit any Restricted Subsidiary, directly or indirectly, to
create, incur, assume, guarantee, or otherwise become directly or indirectly
liable with respect to, any Debt, unless on the date the Company or such
Restricted Subsidiary becomes liable with respect to any such Debt and
immediately after giving effect thereto and the concurrent retirement of any
other Debt,

                 (a)      no Default or Event of Default exists, and

                 (b)      Consolidated Debt as of such date does not exceed 60%
         of Consolidated Total Capitalization as of the end of the then most
         recent fiscal quarter of the Company; provided, however, that, if such
         Debt is incurred by the Company concurrently with and for the purpose
         of an acquisition of a Person or the assets of a Person or a line of
         business of a Person, then Consolidated Debt may be as much as 65% of
         Consolidated Total Capitalization for the period commencing on the
         date of the incurrence of such Debt and the consummation of such
         acquisition and ending nine months thereafter.

         Section 10.3.    Limitation on Debt of Restricted Subsidiaries.  The
Company will not permit any Restricted Subsidiary, directly or indirectly, to
create, incur, assume, guarantee, or otherwise become directly or indirectly
liable with respect to, any Debt, except:

                 (a)      Debt of a Restricted Subsidiary to the Company or to
         a Wholly-Owned Restricted Subsidiary,

                 (b)      Debt of the Guarantors evidenced by the Credit
         Agreement Guaranties, the 1996 Note Purchase Agreement Guaranties and
         the Guaranty Agreements, and





                                      -20-
<PAGE>   26
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (c)      Debt of a Restricted Subsidiary consisting of:

                          (i)     Debt of a Person existing at the time such
                 Person is merged into or consolidated with a Restricted
                 Subsidiary or such Restricted Subsidiary acquires all or
                 substantially all the properties of such Person,

                          (ii)    Debt of a Person existing at the time such
                 Person becomes a Restricted Subsidiary,

                          (iii)   Debt of a Restricted Subsidiary outstanding
                 on the date hereof and reflected in Schedule 5.15,

                          (iv)    Debt of a Restricted Subsidiary incurred in
                 connection with, or with a view to, compliance by such
                 Restricted Subsidiary with the requirements of any program
                 adopted by any federal, state or local governmental authority
                 and applicable to such Restricted Subsidiary and providing
                 financial or tax benefits to such Restricted Subsidiary which
                 are not available without the incurrence of such Debt and are
                 not available directly to the Company,

                          (v)     Debt of a Restricted Subsidiary incurred to
                 pay all or any part of the purchase price or the cost of
                 construction of property or equipment acquired by a Restricted
                 Subsidiary, provided such Debt is incurred within one year
                 after such acquisition or the completion of such construction,
                 whichever is later,

                          (vi)    Debt of a Restricted Subsidiary incurred to
                 pay all or any part of the cost to construct additions,
                 substantial repairs or alterations or substantial improvements
                 to properties of such Restricted Subsidiary, provided (x) the
                 amount of such Debt does not exceed the expense incurred to
                 construct such additions, substantial repairs or alterations
                 or substantial improvements, and (y) such Debt is incurred
                 within one year after completion of construction and full
                 operation,

                          (vii)   Debt of CA Canada in an aggregate amount of
                 up to Cdn. $25,000,000 owing under the Bank Credit Agreement,

                          (viii)  Debt of CA Canada evidenced by the Cdn.
                 $10,000,000 Senior Note due October 7, 2004 and the U.S.
                 $7,000,000 Senior Note due October 7, 2004 issued to The Paul
                 Revere Life Insurance Company and Nationwide Life Insurance
                 Company, respectively (collectively the "CA Canada
                 Purchasers") pursuant to those certain Note Purchase
                 Agreements, each dated as of April 1, 1998 between CA Canada
                 and the CA Canada Purchasers (the "CA Canada Note Purchase
                 Agreements"),

                          (ix)    Debt of the Guarantors evidenced by the CA
                 Canada Credit Agreement Guaranties and the CA Canada Note
                 Purchase Agreement Guaranties,





                                      -21-
<PAGE>   27
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                          (x)     Debt of a Restricted Subsidiary owing to the
                 seller or sellers of such Restricted Subsidiary or of
                 substantially all the assets thereof, to the Company or such
                 Restricted Subsidiary and incurred by such Restricted
                 Subsidiary to finance the acquisition of either (A) the
                 capital stock of such Restricted Subsidiary by the Company or
                 another Restricted Subsidiary or (B) such assets by such
                 Restricted Subsidiary, and

                          (xi)    any extension, renewal or replacement (or
                 successive extensions, renewals or replacements), in whole or
                 in part, of any Debt referred to in the foregoing clauses (i)
                 through (ix), inclusive, provided the principal amount of the
                 Debt so extended, renewed or replaced shall not exceed the
                 principal amount thereof immediately prior to such extension
                 renewal or replacement,

         provided that, after giving effect thereto and to the application of
         the proceeds thereof the aggregate amount of Priority Obligations does
         not exceed 25% of Consolidated Net Worth as at the end of the
         Company's fiscal year then most recently ended.

         Section 10.4.    Fixed Charges Coverage Ratio.  The Company will not,
at any time, permit the Fixed Charges Coverage Ratio to be less than 1.05 to 1.

         Section 10.5.    Liens.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly create, incur, assume
or permit to exist (upon the happening of a contingency or otherwise) any Lien
on or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom or assign or otherwise
convey any right to receive income or profits (unless it makes, or causes to be
made, effective provision whereby the Notes will be equally and ratably secured
with any and all other obligations thereby secured, such security to be
pursuant to an agreement reasonably satisfactory to the Required Holders and,
in any such case, the Notes shall have the benefit, to the fullest extent that,
and with such priority as, the Holders of the Notes may be entitled under
applicable law, of an equitable Lien on such property), except:

                 (a)      Liens existing on the date of this Agreement and
         securing the Debt of the Company and its Restricted Subsidiaries so
         identified in Schedule 5.15 (other than Liens designated in Section
         5.15 to be discharged at or before the Closing);

                 (b)      any Lien created to secure all or any part of the
         purchase price, or to secure Debt incurred or assumed to pay all or
         any part of the purchase price or cost of construction, of property
         (or any improvement thereon) acquired, constructed or improved by the
         Company or a Restricted Subsidiary after the date of the Closing,
         provided that

                          (i)     any such Lien shall extend solely to the item
                 or items of such property (or improvement thereon) so
                 acquired, constructed or improved and, if required by the
                 terms of the instrument originally creating such Lien, other
                 property (or





                                      -22-
<PAGE>   28
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


                 improvement thereon) which is an improvement to or is acquired
                 for specific use in connection with such acquired or
                 constructed property (or improvement thereon) or which is real
                 property being improved by such acquired or constructed
                 property (or improvement thereon),

                          (ii)    the principal amount of the Debt secured by
                 any such Lien shall at no time exceed an amount equal to the
                 lesser of (A) the cost to the Company or such Restricted
                 Subsidiary of the property (or improvement thereon) so
                 acquired or constructed and (B) the Fair Market Value (as
                 determined in good faith by the board of directors of the
                 Company) of such property (or improvement thereon) at the time
                 of such acquisition or construction,

                          (iii)   any such Lien shall be created
                 contemporaneously with, or within 180 days after, the
                 acquisition of such property (or in the case of property
                 constructed or improved, after the later of (y) the completion
                 of such construction or improvement or (z) the commencement of
                 commercial operation of such property),

                          (iv)    the property subject to such Lien was not
                 acquired in connection with a Property Reinvestment
                 Application, and

                          (v)     in the case of any such construction or
                 improvement such Lien shall not apply to any property
                 theretofore owned by the Company or any Restricted Subsidiary,
                 other than any theretofore unimproved real property on which
                 the property so constructed, or the improvement, is located;

                 (c)      any Lien existing on property of a Person immediately
         prior to its being consolidated with or merged into the Company or a
         Restricted Subsidiary or its becoming a Restricted Subsidiary, or any
         Lien existing on any property acquired by the Company or any
         Restricted Subsidiary at the time such property is so acquired
         (whether or not the Debt secured thereby shall have been assumed),
         provided that (i) no such Lien shall have been created or assumed in
         contemplation of such consolidation or merger or such Person's
         becoming a Restricted Subsidiary or such acquisition of property, and
         (ii) each such Lien shall extend solely to the item or items of
         property so acquired and, if required by the terms of the instrument
         originally creating such Lien, other property which is an improvement
         to or is acquired for specific use in connection with such acquired
         property;

                 (d)      any Lien renewing, extending or refunding any Lien
         permitted by paragraphs (a), (b) or (c) of this Section 10.5, provided
         that (i) the principal amount of Debt secured by such Lien immediately
         prior to such extension, renewal or refunding is not increased or the
         maturity thereof reduced, (ii) such Lien is not extended to any other
         property, and (iii) immediately after such extension, renewal or
         refunding no Default or Event of Default would exist;





                                      -23-
<PAGE>   29
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (e)      Liens for taxes, assessments or other governmental
         charges which are not yet due and payable or the payment of which is
         not at the time required by Section 9.4;

                 (f)      statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and other similar Liens, in each
         case, incurred in the ordinary course of business for sums not yet due
         and payable or which are being contested in good faith by appropriate
         actions or proceedings which will prevent the forfeiture or sale of
         the property subject to such Lien or any material interference with
         the use thereof by the Company or any Restricted Subsidiary and book
         reserves have been set aside with respect thereto in an amount deemed
         adequate by the Company;

                 (g)      Liens (other than any Lien imposed by ERISA) incurred
         or deposits made in the ordinary course of business (i) in connection
         with workers' compensation, unemployment insurance and other types of
         social security or retirement benefits, or (ii) to secure (or to
         obtain letters of credit that secure) the performance of tenders,
         statutory obligations, surety bonds, appeal bonds, bids, leases (other
         than Capital Leases), performance bonds, purchase, construction or
         sales contracts and other similar obligations, in each case not
         incurred or made in connection with the borrowing of money, the
         obtaining of advances or credit or the payment of the deferred
         purchase price of property;

                 (h)      any attachment or judgment Lien, unless the judgment
         it secures shall not, within 60 days after the entry thereof, have
         been discharged or execution thereof stayed pending appeal, or shall
         not have been discharged within 60 days after the expiration of any
         such stay; and

                 (i)      other Liens not otherwise permitted by paragraphs (a)
         through (h), provided that, after giving effect thereto and to the
         Debt secured thereby and to the application of the proceeds of such
         Debt, the aggregate amount of Priority Obligations does not exceed 25%
         of Consolidated Net Worth as at the end of the Company's fiscal year
         then most recently ended.

         Section 10.6.    Sale-and-Leasebacks.  The Company will not, and will
not permit any Restricted Subsidiary to, enter into any Sale-and-Leaseback
Transaction, unless

                 (a)      immediately after giving effect thereto (i)
         Consolidated Debt does not exceed the amount then permitted to be
         incurred under Section 10.2, and (ii) the aggregate amount of Priority
         Obligations does not exceed 25% of Consolidated Net Worth as at the
         end of the Company's fiscal year then most recently ended; or

                 (b)      the Net Proceeds Amount received by the Company or
         such Restricted Subsidiary in respect of such Sale-and-Leaseback
         Transaction is applied within 180 days of the consummation thereof to
         a Debt Prepayment Application; provided that, any Debt Prepayment
         Application with respect to the Notes shall be made in accordance with
         the provisions of Section 8.2.





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         Section 10.7.    Restricted Payments and Restricted Investments.

         (a)     Limitation.  The Company will not, and will not permit any of
its Restricted Subsidiaries to, declare, make or incur any liability to make
any Restricted Payment or make or authorize any Restricted Investment unless
immediately after giving effect to such action:

                 (i)      the sum of (x) the aggregate value of all Restricted
         Investments of the Company and its Restricted Subsidiaries (valued
         immediately after such action), plus (y) the aggregate amount of
         Restricted Payments of the Company and its Restricted Subsidiaries
         declared or made during the period commencing on November 1, 1997, and
         ending on the date such Restricted Payment or Restricted Investment is
         declared or made, inclusive, would not exceed the sum of

                          (A)     U.S. $10,000,000, plus

                          (B)     60% of Consolidated Net Income (or minus 100%
                     of Consolidated Net Income if Consolidated Net Income for
                     such period is a loss) for each full fiscal year beginning
                     with the fiscal year ending October 31, 1998, to and
                     including the date such Restricted Payment or Restricted
                     Investment is declared or made, plus

                          (C)     the aggregate amount of Net Proceeds of
                     Capital Stock for such period; and

                 (ii)     no Default or Event of Default would exist.

         (b)     Time of Payment.  The Company will not, nor will it permit any
of its Restricted Subsidiaries to, authorize a Restricted Payment that is not
payable within 90 days of authorization.

         Section 10.8.    Sale of Assets, Etc.; Creation of Minority Interests.
(a) Except as permitted under Section 10.9 the Company will not, and will not
permit any of its Restricted Subsidiaries to, make any Asset Disposition
unless:

                 (i)      in the good faith opinion of the Company, the Asset
         Disposition is in exchange for consideration having a Fair Market
         Value at least equal to that of the property exchanged and is in the
         best interest of the Company or such Restricted Subsidiary;

                 (ii)     immediately after giving effect to the Asset
         Disposition, no Default or Event of Default would exist; and

                 (iii)    immediately after giving effect to the Asset
         Disposition, (A) the Disposition Value of all the property of the
         Company and its Restricted Subsidiaries that was the subject of any
         Asset Disposition occurring in the period of four fiscal quarters of
         the Company then next ending would not exceed 15% of Consolidated
         Assets as of the end of the then most





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



         recently ended fiscal quarter of the Company, and (B) the Disposition
         Value of all property that was the subject of all Asset Dispositions
         occurring on or after the Closing Date would not exceed 30% of
         Consolidated Assets as of the end of the then most recently ended
         fiscal quarter of the Company.

If the Net Proceeds Amount for any Transfer is applied to a Debt Prepayment
Application or a Property Reinvestment Application within 180 days after such
Transfer, then such Transfer, only for the purpose of determining compliance
with subsection (a)(iii) of this Section 10.8 as of any date, shall be deemed
not to be an Asset Disposition; provided that, any Debt Prepayment Application
with respect to the Notes shall be made in accordance with the provisions of
Section 8.2.

         (b)     The Company will not permit any Restricted Subsidiary to issue
or sell any shares of stock of any class (including as "stock" for the purposes
of this Section 10.8, any warrants, rights or options to purchase or otherwise
acquire stock or other Securities exchangeable for or convertible into stock)
of such Restricted Subsidiary to any Person other than the Company or a
Wholly-Owned Restricted Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority shareholders in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.

         c)      The Company will not sell, transfer or otherwise dispose of
any shares of stock of any Restricted Subsidiary (except to qualify directors)
or any Indebtedness of any Restricted Subsidiary, and will not permit any
Restricted Subsidiary to sell, transfer or otherwise dispose of (except to the
Company or a Wholly-Owned Restricted Subsidiary) any shares of stock or any
Indebtedness of any other Restricted Subsidiary, unless:

                 (i)      simultaneously with such sale, transfer, or
         disposition, all shares of stock and all Indebtedness of such
         Restricted Subsidiary at the time owned by the Company and by every
         other Restricted Subsidiary shall be sold, transferred or disposed of
         as an entirety;

                 (ii)     the Board of Directors of the Company shall have
         determined, as evidenced by a resolution thereof, that the proposed
         sale, transfer or disposition of said shares of stock and Indebtedness
         is in the best interests of the Company;

                 (iii)    said shares of stock and Indebtedness are sold,
         transferred or otherwise disposed of to a Person, for a cash
         consideration and on terms reasonably deemed by the Board of Directors
         to be adequate and satisfactory; and

                 (iv)     the Restricted Subsidiary being disposed of shall not
         have any continuing investment in the Company or any other Restricted
         Subsidiary not being simultaneously disposed of.

         Section 10.9.    Merger, Consolidation, Etc.  The Company will not,
and will not permit any of its Restricted Subsidiaries to, consolidate with or
merge with any other corporation or convey,





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



transfer or lease substantially all of its assets in a single transaction or
series of transactions to any Person (except that a Restricted Subsidiary of
the Company may (x) consolidate with or merge with, or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to, the Company or another Wholly-Owned Restricted Subsidiary of
the Company and (y) convey, transfer or lease all of its assets in compliance
with the provisions of Section 10.8), provided that the foregoing restriction
does not apply to the consolidation or merger of the Company with, or the
conveyance, transfer or lease of substantially all of the assets of the Company
in a single transaction or series of transactions to, any Person so long as:

                 (a)      the successor formed by such consolidation or the
         survivor of such merger or the Person that acquires by conveyance,
         transfer or lease substantially all of the assets of the Company as an
         entirety, as the case may be (the "Successor Corporation"), shall be a
         solvent corporation organized and existing under the laws of the
         United States of America, any State thereof or the District of
         Columbia;

                 (b)      if the Company is not the Successor Corporation, such
         corporation shall have executed and delivered to each Holder of Notes
         its assumption of the due and punctual performance and observance of
         each covenant and condition of this Agreement, the Other Agreements
         and the Notes pursuant to such agreements and instruments as shall be
         reasonably satisfactory to the Required Holders, and the Company shall
         have caused to be delivered to each Holder of Notes an opinion of
         nationally recognized independent counsel, or other independent
         counsel reasonably satisfactory to the Required Holders, to the effect
         that all agreements or instruments effecting such assumption are
         enforceable in accordance with their terms and comply with the terms
         hereof; and

                 (c)      immediately after giving effect to such transaction:

                          (i)     no Default or Event of Default would exist, 
                 and

                          (ii)    the Successor Corporation would be permitted
                 by the provisions of Section 10.2 hereof to incur at least
                 U.S. $1.00 of additional Debt owing to a Person other than a
                 Restricted Subsidiary of the Successor Corporation.

No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.

         Section 10.10.   Transactions with Affiliates.  The Company will not
and will not permit any Restricted Subsidiary to enter into directly or
indirectly any transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the
Company or another Restricted Subsidiary), except in the ordinary course and
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



favorable to the Company or such Restricted Subsidiary than would be obtainable
in a comparable arm's-length transaction with a Person not an Affiliate.

         Section 10.11.   Line of Business.  The Company will not, and will not
permit any of its Restricted Subsidiaries to, engage in any business if, as a
result, the general nature of the business in which the Company and its
Restricted Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the
Company and its Restricted Subsidiaries, taken as a whole, are engaged on the
date of this Agreement as described in the Memorandum.

         Section 10.12.   Guaranties.  The Company will not, and will not
permit any Restricted Subsidiary to, become or be liable in respect of any
Guaranty except (i) Guaranties by the Company which are limited in amount to a
stated maximum dollar exposure or which constitute Guaranties of obligations
incurred by any Restricted Subsidiary in compliance with the provisions of this
Agreement and (ii) Permitted Guaranties.

         Section 10.13.   Guarantors To Remain Wholly-Owned Restricted
Subsidiaries.  The Company will not permit the Guarantors to cease to be
Wholly-Owned Restricted Subsidiaries.

SECTION 11.      EVENTS OF DEFAULT.

         An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing:

                 (a)      the Company defaults in the payment of any principal
         or Make-Whole Amount, if any, on any Note when the same becomes due
         and payable, whether at maturity or at a date fixed for prepayment or
         by declaration or otherwise; or

                 (b)      the Company defaults in the payment of any interest
         on any Note for more than five Business Days after the same becomes
         due and payable; or

                 (c)      the Company defaults in the performance of or
         compliance with any term contained in Section 7.1(d) or in Sections
         10.1 through 10.9, both inclusive; or

                 (d)      the Company defaults in the performance of or
         compliance with any term contained herein (other than those referred
         to in paragraphs (a), (b) and (c) of this Section 11) and such default
         is not remedied within 30 days after the earlier of (i) a Responsible
         Officer obtaining actual knowledge of such default and (ii) the
         Company receiving written notice of such default from any Holder of a
         Note (any such written notice to be identified as a "notice of
         default" and to refer specifically to this paragraph (d) of Section
         11); or

                 (e)      any representation or warranty made in writing by or
         on behalf of the Company or by any officer of the Company in this
         Agreement or in any writing furnished in





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


         connection with the transactions contemplated hereby proves to have
         been false or incorrect in any material respect on the date as of
         which made; or

                 (f)      (i) the Company or any Restricted Subsidiary is in
         default (as principal or as guarantor or other surety) in the payment
         of any principal of or premium or make-whole amount or interest on any
         Debt that is outstanding in an aggregate principal amount of at least
         U.S. $5,000,000 beyond any period of grace provided with respect
         thereto, or (ii) the Company or any Restricted Subsidiary is in
         default in the performance of or compliance with any term of any
         evidence of any Debt in an aggregate outstanding principal amount of
         at least U.S. $5,000,000 or of any mortgage, indenture or other
         agreement relating thereto beyond any period of grace provided with
         respect thereto, or (iii) as a consequence of the occurrence or
         continuation of any event or condition (other than the passage of time
         or the right of the holder of Debt to convert such Debt into equity
         interests), (x) the Company or any Restricted Subsidiary has become
         obligated to purchase or repay Debt before its regular maturity or
         before its regularly scheduled dates of payment in an aggregate
         outstanding principal amount of at least U.S. $5,000,000, or (y) one
         or more Persons have the right to require the Company or any
         Restricted Subsidiary so to purchase or repay such Debt; or

                 (g)      the Company or any Restricted Subsidiary (i) is
         generally not paying, or admits in writing its inability to pay, its
         debts as they become due, (ii) files, or consents by answer or
         otherwise to the filing against it of, a petition for relief or
         reorganization or arrangement or any other petition in bankruptcy, for
         liquidation or to take advantage of any bankruptcy, insolvency,
         reorganization, moratorium or other similar law of any jurisdiction,
         (iii) makes an assignment for the benefit of its creditors, (iv)
         consents to the appointment of a custodian, receiver, trustee or other
         officer with similar powers with respect to it or with respect to any
         substantial part of its property, (v) is adjudicated as insolvent or
         to be liquidated, or (vi) takes corporate action for the purpose of
         any of the foregoing; or

                 (h)      a court or governmental authority of competent
         jurisdiction enters an order appointing, without consent by the
         Company or any of its Restricted Subsidiaries, a custodian, receiver,
         trustee or other officer with similar powers with respect to it or
         with respect to any substantial part of its property, or constituting
         an order for relief or approving a petition for relief or
         reorganization or any other petition in bankruptcy or for liquidation
         or to take advantage of any bankruptcy or insolvency law of any
         jurisdiction, or ordering the dissolution, winding-up or liquidation
         of the Company or any of its Restricted Subsidiaries, or any such
         petition shall be filed against the Company or any of its Restricted
         Subsidiaries and such petition shall not be dismissed within 60 days;
         or

                 (i)      a final judgment or judgments for the payment of
         money aggregating in excess of U.S. $3,000,000 (excluding any
         judgment, or portion thereof, as to which a solvent insurer shall have
         accepted responsibility) are rendered against one or more of the
         Company and its Restricted Subsidiaries and which judgments are not,
         within 30 days after entry thereof, bonded, discharged or stayed
         pending appeal, or are not discharged within 30 days after the
         expiration of such stay; or





                                      -29-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



                 (j)      if (i) any Plan shall fail to satisfy the minimum
         funding standards of ERISA or the Code for any plan year or part
         thereof or a waiver of such standards or extension of any amortization
         period is sought or granted under section 412 of the Code, (ii) a
         notice of intent to terminate any Plan shall have been or is
         reasonably expected to be filed with the PBGC or the PBGC shall have
         instituted proceedings under ERISA section 4042 to terminate or
         appoint a trustee to administer any Plan or the PBGC shall have
         notified the Company or any ERISA Affiliate that a Plan may become a
         subject of any such proceedings, (iii) the aggregate "amount of
         unfunded benefit liabilities" (within the meaning of section
         4001(a)(18) of ERISA) under all Plans, determined in accordance with
         Title IV of ERISA, shall exceed U.S. $3,000,000, (iv) the Company or
         any ERISA Affiliate shall have incurred or is reasonably expected to
         incur any liability pursuant to Title I or IV of ERISA or the penalty
         or excise tax provisions of the Code relating to employee benefit
         plans, (v) the Company or any ERISA Affiliate withdraws from any
         Multiemployer Plan, or (vi) the Company or any Subsidiary establishes
         or amends any employee welfare benefit plan that provides
         post-employment welfare benefits in a manner that would increase the
         liability of the Company or any Subsidiary thereunder; and any such
         event or events described in clauses (i) through (vi) above, either
         individually or together with any other such event or events, could
         reasonably be expected to have a Material Adverse Effect.

As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

SECTION 12.      REMEDIES ON DEFAULT, ETC.

         Section 12.1.    Acceleration.

                 (a)      If an Event of Default with respect to the Company
         described in paragraph (g) or (h) of Section 11 has occurred, all the
         Notes then outstanding shall automatically become immediately due and
         payable.

                 (b)      If any other Event of Default has occurred and is
         continuing, any Holder or Holders of more than 50% in principal amount
         of the Notes at the time outstanding may at any time at its or their
         option, by notice or notices to the Company, declare all the Notes
         then outstanding to be immediately due and payable.

                 (c)      If any Event of Default described in paragraph (a) or
         (b) of Section 11 has occurred and is continuing, any Holder or
         Holders of Notes at the time outstanding affected by such Event of
         Default may at any time, at its or their option, by notice or notices
         to the Company, declare all the Notes held by it or them to be
         immediately due and payable.

         Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and
the entire unpaid principal amount of such Note, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be





                                      -30-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived.  The Company
acknowledges, and the parties hereto agree, that each Holder of a Note has the
right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for), and that the provision
for payment of a Make-Whole Amount by the Company in the event that the Notes
are prepaid or are accelerated as a result of an Event of Default, is intended
to provide compensation for the deprivation of such right under such
circumstances.

         Section 12.2.    Other Remedies.  If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Notes have
become or have been declared immediately due and payable under Section 12.1,
the Holder of any Note at the time outstanding may proceed to protect and
enforce the rights of such Holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise.

         Section 12.3.    Rescission.  At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
Holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes.  No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of
Default or Default or impair any right consequent thereon.

         Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc.
No course of dealing and no delay on the part of any Holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such Holder's rights, powers or remedies.  No right, power
or remedy conferred by this Agreement or by any Note upon any Holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise.  Without limiting the obligations of the Company under Section 15,
the Company will pay to the Holder of each Note on demand such further amount
as shall be sufficient to cover all costs and expenses of such Holder incurred
in any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.





                                      -31-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



SECTION 13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

         Section 13.1.    Registration of Notes.  The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes.  The name and address of each Holder of one or more Notes,
each transfer thereof and  the name and address of each transferee of one or
more Notes shall be registered in such register.  Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and Holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary.  The Company shall give to any Holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered Holders of Notes.

         Section 13.2.    Transfer and Exchange of Notes.  Upon surrender of
any Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered Holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of
such Note or part thereof), the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) of the same Series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note.  Each such new Note shall be payable to such Person as such
Holder may request and shall be substantially in the form of Exhibit 1.1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon.  The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes.  Notes shall not be
transferred in denominations of less than U.S. $100,000, provided that if
necessary to enable the registration of transfer by a Holder of its entire
holding of Notes, one Note may be in a denomination of less than U.S. $100,000.
Any transferee, by its acceptance of a Note registered in its name (or the name
of its nominee), shall be deemed to have made the representation set forth in
Section 6.2.

         Section 13.3.    Replacement of Notes.  Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and

                 (a)      in the case of loss, theft or destruction, of
         indemnity reasonably satisfactory to it (provided that if the Holder
         of such Note is, or is a nominee for, an original Purchaser or another
         Holder of a Note with a minimum net worth or admitted assets of at
         least U.S. $100,000,000, such Person's own unsecured agreement of
         indemnity shall be deemed to be satisfactory), or

                 (b)      in the case of mutilation, upon surrender and
         cancellation thereof,





                                      -32-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note of the same Series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

SECTION 14.      PAYMENTS ON NOTES.

         Section 14.1.    Place of Payment.  Subject to Section 14.2, payments
of principal, Make-Whole Amount, if any, and interest becoming due and payable
on the Notes shall be made in New York, New York, at the principal office of
Citibank, N.A., in such jurisdiction.

         Section 14.2.    Home Office Payment.  So long as you or your nominee
shall be the Holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of
any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to
Section 14.1.  Prior to any sale or other disposition of any Note held by you
or your nominee you will, at your election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2.  The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this Section 14.2.

SECTION 15.      EXPENSES, ETC.

         Section 15.1.    Transaction Expenses.  Whether or not the
transactions contemplated hereby are consummated, the Company will pay all
costs and expenses (including reasonable attorneys' fees of a special counsel
and, if reasonably required, local or other counsel) incurred by you and each
Other Purchaser or Holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement, the Other Agreements or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, without limitation: (a) the
costs and expenses incurred in enforcing or defending (or determining whether
or how to enforce or defend) any rights under this Agreement, the Other
Agreements or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement, the
Other Agreements or the Notes, or by reason of being a Holder of any Note, and
(b) the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Restricted
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes.  The





                                      -33-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement



Company will pay, and will save you and each other Holder of a Note harmless
from, all claims in respect of any fees, costs or expenses, if any, of brokers
and finders (other than those retained by you).

         Section 15.2.    Survival.  The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Other Agreements or
the Notes, and the termination of this Agreement.

SECTION 16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent Holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other Holder of a Note.  All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement.  Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.

SECTION 17.      AMENDMENT AND WAIVER.

         Section 17.1.    Requirements.  This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may,
without the written consent of the Holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the Holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.

         Section 17.2.    Solicitation of Holders of Notes.

         (a)     Solicitation.  The Company will provide each Holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such Holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes.  The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each Holder of outstanding





                                      -34-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


Notes promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite Holders of Notes.

         (b)     Payment.  The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any Holder of Notes as
consideration for or as an inducement to the entering into by any Holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Holder of Notes then outstanding
even if such Holder did not consent to such waiver or amendment.

         Section 17.3.    Binding Effect, Etc.  Any amendment or waiver
consented to as provided in this Section 17 applies equally to all Holders of
Notes and is binding upon them and upon each future Holder of any Note and upon
the Company without regard to whether such Note has been marked to indicate
such amendment or waiver.  No such amendment or waiver will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon.  No course of dealing
between the Company and the Holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of
any Holder of such Note.  As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

         Section 17.4.    Notes Held by Company, Etc.  Solely for the purpose
of determining whether the Holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the Holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.

SECTION 18.      NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid).  Any such notice must be sent:

                 (i)      if to you or your nominee, to you or it at the
         address specified for such communications in Schedule A, or at such
         other address as you or it shall have specified to the Company in
         writing,

                 (ii)     if to any other Holder of any Note, to such Holder at
         such address as such other Holder shall have specified to the Company
         in writing, or





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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


                 (iii)    if to the Company, to the Company at its address set
         forth at the beginning hereof to the attention of Chief Financial
         Officer, or at such other address as the Company shall have specified
         to the Holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19.      REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable
law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you
in the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other Holder of Notes
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.

SECTION 20.      CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Restricted
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified in writing when received
by you as being confidential information of the Company or such Restricted
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by you or
any person acting on your behalf, (c) otherwise becomes known to you other than
through disclosure by the Company or any Restricted Subsidiary or (d)
constitutes financial statements delivered to you under Section 7.1 that are
otherwise publicly available.  You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential Information to (i) your
directors, trustees, officers, employees, agents, attorneys and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other Holder of any Note, (iv) any Institutional Investor to which
you sell or offer to sell such Note or any part thereof or any participation
therein (if such





                                      -36-
<PAGE>   42
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing,
to the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement.  Each Holder of a Note, by
its acceptance of a Note, will be deemed to have agreed to be bound by and to
be entitled to the benefits of this Section 20 as though it were a party to
this Agreement.  On reasonable request by the Company in connection with the
delivery to any Holder of a Note of information required to be delivered to
such holder under this Agreement or requested by such Holder (other than a
Holder that is a party to this Agreement or its nominee), such Holder will
enter into an agreement with the Company embodying the provisions of this
Section 20.

SECTION 21.      SUBSTITUTION OF PURCHASER.

         You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6.  Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than
in this Section 21), such word shall be deemed to refer to such Affiliate in
lieu of you.  In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original Holder of the
Notes under this Agreement.

SECTION 22.      MISCELLANEOUS.

         Section 22.1.    Successors and Assigns.  All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent Holder of a Note) whether so
expressed or not.

         Section 22.2.    Payments Due on Non-Business Days.  Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.





                                      -37-
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Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


         Section 22.3.    Severability.  Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.

         Section 22.4.    Construction.  Each covenant contained herein shall
be construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant.  Where any provision herein refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.

         Section 22.5.    Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.  Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.

         Section 22.6.    Governing Law.  This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of New York excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.


                          *     *     *     *     *





                                      -38-
<PAGE>   44
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement


         If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.

                                     Very truly yours,

                                     CAMERON ASHLEY BUILDING PRODUCTS, INC.

                                     By   /s/ F. Dixon McElwee                
                                       ---------------------------------------
                                        Name: F. Dixon McElwee
                                        Title: Vice President, CFO & Treasurer


The foregoing is hereby agreed
to as of the date thereof.

                                     MASSACHUSETTS MUTUAL LIFE INSURANCE 
                                     COMPANY

                                     By   /s/ Mark A. Ahmed                   
                                       ---------------------------------------
                                       Name: Mark A. Ahmed
                                       Title: Managing Director


                                     TEACHERS INSURANCE AND ANNUITY 
                                     ASSOCIATION OF AMERICA

                                     By  /s/ Loren S. Archibald               
                                       ---------------------------------------
                                       Name: Loren S. Archibald
                                       Title: Managing Director-Private
                                              Placements


                                     THE NORTHWESTERN MUTUAL LIFE INSURANCE 
                                     COMPANY

                                     By  /s/ Richard A. Strait                
                                       ---------------------------------------
                                       Its Authorized Signatory
<PAGE>   45
Cameron Ashley Building Products, Inc.                   Note Purchase Agreement




                                     THE MUTUAL LIFE INSURANCE COMPANY OF 
                                     NEW YORK

                                     By  /s/ Suzanne E. Walton                
                                       ---------------------------------------
                                       Name: Suzanne E. Walton
                                       Title: Managing Director


                                     PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY

                                     By  /s/ Donald Bertrand                  
                                       ---------------------------------------
                                       Name: Donald Bertrand
                                       Title: Vice President


                                     PROVIDENT LIFE AND ACCIDENT INSURANCE 
                                     COMPANY

                                     By  /s/ James T. Rogers                  
                                       ---------------------------------------
                                       Name: James T. Rogers
                                       Title: Vice President


                                     NORTHERN LIFE INSURANCE COMPANY

                                     By  /s/ James V. Wittich                 
                                       ---------------------------------------
                                       Name: James V. Wittich
                                       Title: Assistant Treasurer


                                     WASHINGTON SQUARE ADVISERS PRIVATE 
                                     PLACEMENT TRUST FUND

                                     By  /s/ Frank P. Pintens                 
                                       ---------------------------------------
                                       Name: Frank P. Pintens
                                       Title: Senior Vice President