Document:

<PAGE>

                                                                EXHIBIT 10.15(a)

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

                                 LOAN AGREEMENT

                            Dated as of June 22, 2001

                                      among

                         ATLANTIC FINANCIAL GROUP, LTD.
                             as Lessor and Borrower,

                    the financial institutions party hereto,

                                   as Lenders

                                       and

                                 SUNTRUST BANK,
                                    as Agent

                                                               [OPERATING LEASE]

===============================================================================
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                            <C>
SECTION 1       DEFINITIONS; INTERPRETATION.....................................................................  1

SECTION 2       AMOUNT AND TERMS OF COMMITMENTS; REPAYMENT AND
                PREPAYMENT OF LOANS.............................................................................  1
         SECTION 2.1  Commitment................................................................................  1
         SECTION 2.2  Note......................................................................................  1
         SECTION 2.3  Scheduled Principal Repayment.............................................................  2
         SECTION 2.4  Interest..................................................................................  2
         SECTION 2.5  Allocation of Loans to Leased Properties..................................................  3
         SECTION 2.6  Prepayment................................................................................  3

SECTION 3       RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN
                PAYMENTS IN RESPECT OF LEASE AND LEASED PROPERTY; RELEASE........................................ 3
         SECTION 3.1  Distribution and Application of Rent Payments.............................................. 3
         SECTION 3.2  Distribution and Application of Purchase Payment........................................... 3
         SECTION 3.3  Distribution and Application to Funding Party Balances of Construction
                Failure Payment.................................................................................. 4
         SECTION 3.4  Distribution and Application to Funding Party Balances of Remarketing
                Proceeds of Leased Property...................................................................... 4
         SECTION 3.5  Distribution and Application of Payments Received When an Event of
                Default Exists or Has Ceased to Exist Following Rejection of the Lease........................... 4
         SECTION 3.6  Distribution of Other Payments............................................................. 5
         SECTION 3.7  Timing of Agent Distributions.............................................................. 5
         SECTION 3.8  Release of Leased Properties............................................................... 5

SECTION 4       THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE..................................................... 6
         SECTION 4.1  Covenant of Lessor......................................................................... 6
         SECTION 4.2  Lessor Obligations Nonrecourse; Payment from Certain Lease Obligations
                and Certain Proceeds of Leased Property Only..................................................... 6
         SECTION 4.3  Exercise of Remedies Under the Lease....................................................... 7

SECTION 5       LOAN EVENTS OF DEFAULT; REMEDIES................................................................. 8
         SECTION 5.1  Loan Events of Default..................................................................... 8
         SECTION 5.2  Remedies................................................................................... 9

SECTION 6       THE AGENT....................................................................................... 10
         SECTION 6.1  Appointment............................................................................... 10
         SECTION 6.2  Delegation of Duties...................................................................... 10
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                                             <C>
         SECTION 6.3  Exculpatory Provisions.................................................................... 10
         SECTION 6.4  Reliance by Agent......................................................................... 10
         SECTION 6.5  Notice of Default......................................................................... 11
         SECTION 6.6  Non-Reliance on Agent and Other Lenders................................................... 11
         SECTION 6.7  Indemnification........................................................................... 12
         SECTION 6.8  Agent in Its Individual Capacity.......................................................... 12
         SECTION 6.9  Successor Agent........................................................................... 12

SECTION 7       MISCELLANEOUS................................................................................... 13
         SECTION 7.1  Amendments and Waivers.................................................................... 13
         SECTION 7.2  Notices................................................................................... 13
         SECTION 7.3  No Waiver; Cumulative Remedies............................................................ 13
         SECTION 7.4  Successors and Assigns.................................................................... 13
         SECTION 7.5  Counterparts.............................................................................. 13
         SECTION 7.6  GOVERNING LAW............................................................................. 13
         SECTION 7.7  Survival and Termination of Agreement..................................................... 14
         SECTION 7.8  Entire Agreement.......................................................................... 14
         SECTION 7.9  Severability.............................................................................. 14
</TABLE>
<PAGE>

                                   EXHIBITS

EXHIBIT A        Form of Note

                                      -3-
<PAGE>

     THIS LOAN AGREEMENT (as it may be amended or modified from time to time in
accordance with the provisions hereof, this "Loan Agreement") dated as of June
                                             --------------
22, 2001 is among ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership,
as Lessor and Borrower (the "Lessor"); SUNTRUST BANK and the other financial
                             ------
institutions which are, or may from time to time become, parties hereto as
lenders (the "Lenders") and SUNTRUST BANK, a Georgia banking corporation, as
              -------
agent for the Lenders (in such capacity, the "Agent").
                                              -----

                             PRELIMINARY STATEMENT

     In accordance with the terms and provisions of the Master Agreement, dated
as of June 22, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Master Agreement"), among Hughes Supply, Inc., as Guarantor and as a
           ----------------
Lessee, certain Subsidiaries of Hughes Supply, Inc., as Lessees, the Lessor, the
Lenders and the Agent, the Lease, this Loan Agreement and the other Operative
Documents, (i) the Lessor contemplates acquiring the Leased Properties and
leasing the Leased Properties to the Lessees, (ii) Hughes, as Construction Agent
for the Lessor, wishes, in certain instances, to construct Buildings on the Land
for the Lessor and, when completed, to lease the Buildings, or to cause the
Buildings to be leased, from the Lessor as part of the Leased Properties under
the Lease, (iii) Hughes wishes to obtain, and the Lessor is willing to provide,
funding for the acquisition of the Land and any Buildings thereon or, in certain
instances, the construction of the Buildings, and (iv) the Lessor wishes to
obtain, and the Lenders are willing to provide, financing of a portion of the
funding for the acquisition of the Land and any Buildings thereon and, if
applicable, the construction of the Buildings.

     In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     SECTION 1  DEFINITIONS; INTERPRETATION

     Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in Appendix A to the
                                                           ----------
Master Agreement for all purposes hereof; and the rules of interpretation set
forth in Appendix A to the Master Agreement shall apply to this Loan Agreement.
         ----------

     SECTION 2  AMOUNT AND TERMS OF COMMITMENTS; REPAYMENT AND PREPAYMENT OF
LOANS

     SECTION 2.1  Commitment.  (a)  Subject to the terms and conditions hereof
                  ----------
and of the Master Agreement, each Lender agrees to make term loans to the Lessor
("Loans") from time to time during the period from and including the Initial
  -----
Closing Date through the Funding Termination Date, on each Closing Date and on
each subsequent Funding Date, in the amounts required under Section 2.2 of the
Master Agreement.
<PAGE>

     SECTION 2.2  Note.  The Loans made by each Lender to the Lessor shall be
                  ----
evidenced by a note of the Lessor (the "Note"), substantially in the form of
                                        ----
Exhibit A with appropriate insertions, duly executed by the Lessor and payable
---------
to the order of the Agent, on behalf of the Lenders, and in a principal amount
equal to the aggregate Lenders' Commitment Percentages of the aggregate
Commitments (or, if less, the aggregate unpaid principal amount of all Loans,
made by the Lenders to the Lessor).  The Note shall be dated the Initial Closing
Date and delivered to the Agent in accordance with Section 3.2 of the Master
Agreement.  The Agent is hereby authorized to record the date and amount of each
Loan made by each Lender to the Lessor on the Note or in its records, and each
Lender is hereby authorized to record the date and amount of each Loan made by
such Lender to the Lessor in its records, but the failure by the Agent or any
Lender to so record such Loan shall not affect or impair any obligations with
respect thereto.  The Note shall (i) be stated to mature no later than the final
Lease Termination Date and (ii) bear interest from the date a Loan is made on
the unpaid principal amount thereof from time to time outstanding at the
applicable interest rate per annum determined as provided in, and payable as
specified in, Section 2.4.  Upon the occurrence of an Event of Default under
              -----------
clause (g) of Article XII of the Lease, or upon Acceleration as described in
Section 4.3(b) hereof, each Note shall automatically become due and payable in
--------------
full.

     SECTION 2.3  Scheduled Principal Repayment.  On each Payment Date occurring
                  -----------------------------
after the EBO Date, the Lessor shall pay to the Agent, for distribution to the
Lenders, the Amortization Amount for such Payment Date, which amount shall be
applied to reduce the outstanding principal of the Loans.  On the Lease
Termination Date, the Lessor shall pay the aggregate unpaid principal amount of
all Loans as of such date.

     SECTION 2.4  Interest. (a) Each Loan related to a LIBOR Advance shall bear
                  --------
interest during each Rent Period at a rate equal to the sum of (i) the Adjusted
LIBO Rate for such Rent Period, computed using the actual number of days elapsed
and a 360 day year, plus (ii) the Applicable Margin per annum. Each Loan related
                    ----
to a Base Rate Advance shall bear interest at a rate equal to the Base Rate in
effect from time to time, computed using the actual number of days elapsed and a
360 day year.

     (b)  If all or a portion of the principal amount of or interest on the
Loans shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall, without limiting the
rights of the Lenders under Section 5, bear interest at the Overdue Rate, in
                            ---------
each case from the date of nonpayment until paid in full (after as well as
before judgment).

     (c)  Interest accruing on each Loan with respect to any Leased Property
during the Construction Term of such Leased Property shall, subject to the
limitations set forth in Section 2.3(c) of the Master Agreement, be added to the
principal amount of such Loan from time to time.  Following the date each Loan
is made (or in the case of Loans with respect to a Construction Land Interest,
the Construction Term Expiration Date), interest on such Loan shall be payable
in arrears on each Payment Date with respect thereto.

                                       2
<PAGE>

     (d)  Any change in the interest rate on the Loans resulting from a change
in the Base Rate shall become effective as of the opening of business on the day
on which such Base Rate changes as provided in the definition thereof.

     SECTION 2.5  Allocation of Loans to Leased Properties.  Pursuant to each
                  ----------------------------------------
Funding Request, each Loan shall be allocated to the Leased Property, the cost
of acquisition or construction of which the proceeds of such Loan are used to
pay.  For purposes of the Operative Documents, the "related Loans" with respect
to any Leased Property or Loans "related to" any Leased Property shall mean
those Loans allocated to such Leased Property as set forth in the foregoing
sentence.

     SECTION 2.6  Prepayment.  Except in conjunction with a payment by a Lessee
                  ----------
or the Construction Agent of the Lease Balance, a Construction Failure Payment
or a Leased Property Balance pursuant to the terms of the Lease or the
Construction Agency Agreement, the Lessor shall have no right to prepay the
Loans.

     SECTION 3   RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN PAYMENTS IN
RESPECT OF LEASE AND LEASED PROPERTY; RELEASE; SECURITY INTEREST

     SECTION 3.1  Distribution and Application of Rent Payments.
                  ---------------------------------------------

     (a)  Basic Rent. Each payment of Basic Rent (and any payment of interest on
          ----------
overdue installments of Basic Rent) received by the Agent shall be distributed
first, pro rata to the Lenders to be applied to the amounts of accrued and
-----
unpaid interest (including overdue interest) on the Loans, second, pro rata to
                                                           ------
the Lenders to be applied to the principal amount of the Loans then due, and
third to the Lessor.
-----

     (b)  Supplemental Rent.  Each payment of Supplemental Rent received by the
          -----------------
Agent shall be paid to or upon the order of the Person owed the same in
accordance with the Operative Documents.

     SECTION 3.2  Distribution and Application of Purchase Payment.  With
                  ------------------------------------------------
respect to any Leased Property, the payment by a Lessee of:

          (a)  the purchase price for a consummated sale of such Leased Property
     received by the Agent in connection with such Lessee's exercise of the
     Purchase Option under Section 14.1 of the Lease, or such Lessee's exercise
     of its purchase option pursuant to Section 14.3 of the Lease,  or such
     Lessee's or the Construction Agent's exercise of its option to purchase
     such Leased Property under Section 5.3 of the Construction Agency
     Agreement, or

                                       3
<PAGE>

          (b)  the Leased Property Balance therefor in accordance with Section
     10.1 or Section 10.2 of the Lease,
shall be distributed by Agent as promptly as possible, first, to the Lenders pro
rata in accordance with, and for application to, their respective Funding Party
----
Balances in respect of such Leased Property or Properties and second, to the
                                                              ------
Lessor.

     SECTION 3.3  Distribution and Application to Funding Party Balances of
                  ---------------------------------------------------------
Construction Failure Payment.  With respect to any Leased Property, the payment
----------------------------
by the Construction Agent of the Construction Failure Payment with respect
thereto pursuant to the Construction Agency Agreement shall be applied by the
Agent, first to the accrued and unpaid interest on, and the outstanding
       -----
principal of, the Loans in respect of such Leased Property, and second to the
                                                                ------
Lessor.

     SECTION 3.4  Distribution and Application to Funding Party Balances of
                  ---------------------------------------------------------
Remarketing Proceeds of Leased Property.  Any payments payable to and received
---------------------------------------
by the Lessor in accordance with the Construction Agency Agreement as proceeds
from the sale of any Leased Property sold following the payment of the
Construction Failure Payment shall be distributed (or applied, as appropriate)
by the Lessor as promptly as possible (it being understood that any such payment
received by the Lessor on a timely basis and in accordance with the provisions
of the Construction Agency Agreement shall be distributed on the date received
in the funds so received) in the following order of priority:

          first, to the extent not previously deducted from such proceeds, to
          -----
     the Funding Parties or the Agent, as the case may be, in reimbursement of
     all reasonable costs, expenses and taxes, if any, incurred by any of them
     to complete the construction of such Leased Property, maintain and insure
     such Leased Property, remarket such Leased Property and sell such Leased
     Property, pro rata according to the amount of such costs, expenses and
               --- ----
     taxes;

          second, to the Lenders pro rata for application to their Funding Party
          ------                 --- ----
     Balances in respect to such Leased Property, an amount equal to such
     Funding Party Balances in respect of such Leased Property; and

          third, to the Lessor.
          -----

     SECTION 3.5  Distribution and Application of Payments Received When an
                  ---------------------------------------------------------
Event of Default Exists or Has Ceased to Exist Following Rejection of the Lease.
-------------------------------------------------------------------------------

     (a)  Proceeds of Leased Property.  Any payments received by the Lessor or
          ---------------------------
the Agent when an Event of Default exists (or has ceased to exist by reason of a
rejection of the Lease in a proceeding with respect to a Lessee described in
Article XII (g) of the Lease) or a Loan Event of Default exists, as

                                       4
<PAGE>

          (i)   proceeds from the sale of any or all of the Leased Property sold
     pursuant to the exercise of the Lessor's remedies pursuant to Article XIII
     of the Lease or pursuant to the exercise of the Agent's remedies pursuant
     to the Loan Documents, or

          (ii)  proceeds of any amounts from any insurer or any Governmental
     Authority in connection with an Event of Loss or Event of Taking

shall if received by the Lessor be paid to the Agent as promptly as possible,
and shall be distributed or applied in the following order of priority prior to
the Release Date:

          first, to the Agent for any amounts reasonably expended by it in
          -----
     connection with such Leased Property or the Operative Documents and not
     previously reimbursed to it;

          second, to the Lenders pro rata for application to their Funding Party
          ------                 --- ----
     Balances in respect of all of the Leased Properties, an amount equal to
     such Funding Party Balances; and

          third, to the Lessor; and
          -----

on and after such Release Date (and any application otherwise required under
this Section 3 has been made) such amounts shall be paid over to the Lessor.
     ---------

     (b)  Proceeds of Recoveries from Lessee.  Any payments received by any
          ----------------------------------
Funding Party when an Event of Default exists (or has ceased to exist by reason
of a rejection of the Lease in a proceeding with respect to a Lessee described
in Article XII(g) of the Lease), from a Lessee as a payment in accordance with
the Lease shall be paid to the Agent as promptly as possible, and shall then be
distributed or applied by the Agent as promptly as possible in the order of
priority set forth in paragraph (a) above.
                      -------------

     SECTION 3.6  Distribution of Other Payments.  Except as otherwise provided
                  ------------------------------
in this Section 3, any payment received by the Lessor which is to be paid to
        ---------
Agent pursuant hereto or for which provision as to the application thereof is
made in an Operative Document but not elsewhere in this Section 3 shall, if
                                                        ---------
received by the Lessor, be paid forthwith to the Agent and when received shall
be distributed forthwith by the Agent to the Person and for the purpose for
which such payment was made in accordance with the terms of such Operative
Document.

     SECTION 3.7  Timing of Agent Distributions.  Payments received by the Agent
                  -----------------------------
in immediately available funds before 12:00 p.m. (noon), Atlanta, Georgia time,
on any Business Day shall be distributed to the Funding Parties in accordance
with and to the extent provided in this Section 3 on such Business Day.
                                        ---------
Payments received by the Agent in immediately available funds after 12:00 p.m.
(noon), Atlanta, Georgia time shall be distributed to the Funding Parties in
accordance with and to the extent provided in this Section 3 on the next
                                                   ---------
Business Day.

                                       5
<PAGE>

     SECTION 3.8  Release of Leased Properties.  (a) If one or more of the
                  ----------------------------
Lessees shall at any time purchase any or all of the Leased Properties pursuant
to Section 13.3 or Article 14 of the Lease, then, upon application of such
amounts to prepay the related Loans pursuant to Section 2.6 and the Agent's and
                                                -----------
the Lenders' receipt of all accrued interest and any other payments due and
owing from the Lessees and/or the Lessor to the Agent and the Lenders on such
date in respect thereof, such Leased Property or Properties, as the case may be,
shall be released from the applicable Mortgage and the Assignment of Lease and
Rents, to the extent relating to such Leased Property or Properties.

          (b)  Upon the termination of the Lenders' Commitments and the payment
in full of all of the Loans and all other amounts owing by the Lessees and/or
the Lessor hereunder or under any other Operative Document to the Lessor, the
Agent and the Lenders (other than unasserted indemnities), the Leased Properties
shall be released from the Mortgages and Assignments of Lease and Rents.

          (c)  Upon request of the Lessor or a Lessee following a release of any
Leased Property described in clause (a) or (b) above, the Agent shall, at the
                             ----------    ---
sole cost and expense of the Lessees, execute and deliver to the Lessor or the
requesting Lessee such documents as the Lessor or such Lessee shall reasonably
request to evidence such release, including, if requested, a release of the
Assignments of Lease and Rents to the extent relating to such Leased Property.

                                       6
<PAGE>

     SECTION 4 THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE

     SECTION 4.1  Covenant of Lessor. So long as any Lender's Commitment remains
                  ------------------
in effect, any Loan remains outstanding and unpaid or any other amount is owing
to any Lender with respect to its Funding Party Balances, subject to Section
                                                                     -------
4.2, the Lessor will promptly pay all amounts payable by it under this Loan
---
Agreement and the Notes issued by it in accordance with the terms hereof and
thereof and shall duly perform each of its obligations under this Loan Agreement
and the Note. The Lessor agrees to provide to the Agent a copy of each estoppel
certificate that the Lessor proposes to deliver pursuant to Section 17.13 of the
Lease at least five (5) days prior to such delivery and to make any corrections
thereto reasonably requested by the Agent prior to such delivery. The Lessor
shall keep each Leased Property owned by it free and clear of all Lessor Liens.
In the event that the Construction Agent returns any Leased Property to the
Lessor pursuant to Section 5.3(a) of the Construction Agency Agreement, unless
all of the related Loans are paid in full, the Lessor agrees to take such action
as the Lenders reasonably request to complete the Construction, or to effect a
sale or other disposition, of such Leased Property, provided that the Lessor
                                                    --------
shall not be required to expend its own funds in connection therewith. During
the Construction Term for each Leased Property, the Lessor agrees to assume
liability for, and to indemnify, protect, defend, save and hold harmless the
Agent, each Lender and each of their respective Affiliates, successors, assigns,
employees, officers and directors, on an After-Tax Basis from and against, any
and all Claims that may be imposed on, incurred by or asserted or threatened to
be asserted against the Agent or any Lender, in any way relating to or arising
out of the circumstances set forth in Section 7.1 or 7.4 of the Master
Agreement, provided that the Lessor shall only be obligated pursuant to this
           --------
sentence to the extent that the Lessor receives payment from the Construction
Agent or any other Person with respect to such Claim.

     SECTION 4.2  Lessor Obligations Nonrecourse; Payment from Certain Lease
                  ----------------------------------------------------------
Obligations and Certain Proceeds of Leased Property Only. All payments to be
--------------------------------------------------------
made by the Lessor in respect of the Loans, the Note and this Loan Agreement
shall be made only from certain payments received under the Lease, the Guaranty
Agreement, the Subsidiary Guaranty and the Construction Agency Agreement and
certain proceeds of the Leased Properties and only to the extent that the Lessor
or the Agent shall have received sufficient payments from such sources to make
payments in respect of the Loans in accordance with Section 3.  Each Lender
                                                    ---------
agrees that it will look solely to such sources of payments to the extent
available for distribution to such Lender as herein provided and that neither
the Lessor nor the Agent is or shall be personally liable to any Lender for any
amount payable hereunder or under the Note.  Nothing in this Loan Agreement, the
Note or any other Operative Document shall be construed as creating any
liability (other than for willful misconduct, gross negligence or
misrepresentation) of the Lessor individually to pay any sum or to perform any
covenant, either express or implied, in this Loan Agreement, the Note or any
other Operative Documents (all such liability, if any, being expressly waived by
each Lender) and that each Lender, on behalf of itself and its successors and
assigns, agrees in the case of any liability of the Lessor hereunder or
thereunder (except for such liability attributable to its willful misconduct,
gross negligence or misrepresentation) that it will look solely to those certain
payments received under the Lease, the Guaranty Agreement, the Subsidiary
Guaranty and the

                                       7
<PAGE>

Construction Agency Agreement and those certain proceeds of the Leased
Properties, provided, however, that the Lessor in its individual capacity shall
            --------  -------
in any event be liable with respect to (i) the removal of Lessor's Liens or
involving its gross negligence, willful misconduct or misrepresentation or (ii)
failure to turn over payments the Lessor has received in accordance with Section
                                                                         -------
3; and provided further that the foregoing exculpation of the Lessor shall not
-      -------- -------
be deemed to be exculpations of the Guarantor, any Lessee or any other Person.

     SECTION 4.3  Exercise of Remedies Under the Lease.
                  ------------------------------------

     (a)  Event of Default. With respect to any Potential Event of Default as to
          ----------------
which notice thereof by the Lessor to a Lessee is a requirement to cause such
Potential Event of Default to become an Event of Default, the Lessor agrees to
give such notice to such Lessee promptly upon receipt of a written request by
any Lender or the Agent.  The Lessor shall not, without the prior written
consent of the Required Lenders, waive any Event of Default.

     (b)  Acceleration of Lease Balance.  When an Event of Default exists, the
          -----------------------------
Lessor shall exercise such remedies as shall be permitted by the Operative
Documents or Applicable Law and directed by the Required Lenders, including
demanding payment in full of the amounts owed by the Lessees under the Operative
Documents (the "Acceleration").  The Lessor shall consult with the Lenders
                ------------
regarding actions to be taken in response to such Event of Default.  The Lessor
(1) shall not, without the prior written consent of the Required Lenders and (2)
shall (subject to the provisions of this Section), if so directed by the
                                         -------
Required Lenders, do any of the following:  commence eviction or foreclosure
proceedings, or file a lawsuit against any Lessee under the Lease, or sell the
Leased Properties, or exercise other remedies against the Lessees or the
Guarantor under the Operative Documents in respect of such Event of Default;
provided, however, that any payments received by the Lessor shall be distributed
--------  -------
in accordance with Section 3.  Notwithstanding any such consent, direction or
                   ---------
approval by the Required Lenders of any such action or omission, the Lessor
shall not have any obligation to follow such direction if the same would, in the
Lessor's reasonable judgment, require the Lessor to expend its own funds or
expose the Lessor to expense, or unless Required Lenders provide to the Lessor
an indemnity, in form and substance reasonably acceptable to the Lessor, for
such liability, loss or damage or unless and until the Lenders advance to the
Lessor an amount which is sufficient, in the Lessor's reasonable judgment, to
cover such liability, expense, loss or damage (excluding the Lessor's pro rata
share thereof, if any).  Notwithstanding the foregoing, on and after the related
Release Date (and any application otherwise required under Section 3 has been
                                                           ---------
made): the Lenders shall have no rights to such Leased Property or any proceeds
thereof; the Lenders shall have no rights to direct or give consent to any
actions with respect to such Leased Property and the proceeds thereof; the
Lessor shall have absolute discretion (but in all events subject to the terms of
the Operative Documents) with respect to such exercise of remedies with respect
to such Leased Property, and the proceeds thereof, including, without
limitation, any foreclosure or sale of such Leased Property; and the Lessor
shall have no liability to the Lenders with respect to the Lessor's actions or
failure to take any action with respect to such Leased Property.

                                       8
<PAGE>

     SECTION 5  LOAN EVENTS OF DEFAULT; REMEDIES

     SECTION 5.1  Loan Events of Default.  Each of the following events shall
                  ----------------------
constitute a Loan Event of Default (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any Governmental Authority) and each such Loan Event of Default
shall continue so long as, but only as long as, it shall not have been remedied:

          (a)  Lessor shall fail to distribute in accordance with the provisions
     of Section 3 any amount received by the Lessor pursuant to any Lease or the
        ---------
     Master Agreement within two (2) Business Days of receipt thereof if and to
     the extent that the Agent or the Lenders are entitled to such amount or a
     portion thereof; or

          (b)  the Lessor shall fail to pay to the Agent, within two (2)
     Business Days of the Lessor's receipt thereof, any amount which a Lessee is
     required, pursuant to the Operative Documents, to pay to the Agent but
     erroneously pays to the Lessor; or

          (c)  failure by the Lessor to perform in any material respect any
     other covenant or condition herein or in any other Operative Document to
     which the Lessor is a party, which failure shall continue unremedied for
     thirty (30) days after receipt by the Lessor of written notice thereof from
     the Agent or any Lender; or

          (d)  any representation or warranty of the Lessor contained in any
     Operative Document or in any certificate required to be delivered
     thereunder shall prove to have been incorrect in a material respect when
     made and shall not have been cured within thirty (30) days of receipt by
     the Lessor of written notice thereof from the Agent or any Lender; or

          (e)  the Lessor or the General Partner shall become bankrupt or make
     an assignment for the benefit of creditors or consent to the appointment of
     a trustee or receiver; or a trustee or a receiver shall be appointed for
     the Lessor or the General Partner or for substantially all of its property
     without its consent and shall not be dismissed or stayed within a period of
     ninety (90) days; or bankruptcy, reorganization or insolvency proceedings
     shall be instituted by or against the Lessor or the General Partner and, if
     instituted against the Lessor or the General Partner, shall not be
     dismissed or stayed for a period of ninety (90) days; or

          (f)  any Event of Default shall occur and be continuing.

                                       9
<PAGE>

     SECTION 5.2  Remedies.
                  --------

     (a)  Upon the occurrence of a Loan Event of Default hereunder, (i) if such
event is a Loan Event of Default specified in clause (e) of Section 5.1 with
                                              ----------    -----------
respect to the Lessor, automatically the Lenders' Commitments shall terminate
and the outstanding principal of, and accrued interest on, the Loans shall be
immediately due and payable, and (ii) if such event is any other Loan Event of
Default, upon written request of the Required Lenders, the Agent shall, by
notice of default to the Lessor, declare the Commitments of the Lenders to be
terminated forthwith and the outstanding principal of, and accrued interest on,
the Loans to be immediately due and payable, whereupon the Commitments of the
Lenders shall immediately terminate and the outstanding principal of, and
accrued interest on, the Loans shall become immediately due and payable.

     (b)  When a Loan Event of Default exists, the Agent may, and upon the
written instructions of the Required Lenders shall, exercise any or all of the
rights and powers and pursue any and all of the remedies available to it
hereunder, under the Note, the Mortgages and the Assignments of Lease and Rents
and shall have and may exercise any and all rights and remedies available under
the Uniform Commercial Code or any provision of law.  When a Loan Event of
Default exists, the Agent may, and upon the written instructions of the Required
Lenders shall, have the right to exercise all rights of the Lessor under the
Lease pursuant to the terms and in the manner provided for in the Mortgages and
the Assignments of Lease and Rents.

     (c)  Except as expressly provided above, no remedy under this Section 5.2
                                                                   -----------
is intended to be exclusive, but each shall be cumulative and in addition to any
other remedy provided under this Section 5.2 or under the other Operative
                                 -----------
Documents or otherwise available at law or in equity. The exercise by the Agent
or any Lender of any one or more of such remedies shall not preclude the
simultaneous or later exercise of any other remedy or remedies. No express or
implied waiver by the Agent or any Lender of any Loan Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent Loan
Event of Default. The failure or delay of the Agent or any Lender in exercising
any rights granted it hereunder upon any occurrence of any of the contingencies
set forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by the Agent or any
Lender shall not exhaust the same or constitute a waiver of any other right
provided herein.

                                      10
<PAGE>

     SECTION 6  THE AGENT

     SECTION 6.1  Appointment.  Each Lender hereby irrevocably designates and
                  -----------
appoints the Agent as the agent of such Lender under this Loan Agreement and the
other Operative Documents, and each such Lender irrevocably authorizes the
Agent, in such capacity, to take such action on its behalf under the provisions
of this Loan Agreement and the other Operative Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Loan Agreement and the other Operative Documents, together with
such other powers as are reasonably incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Loan Agreement, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Loan Agreement or any other Operative Document or otherwise exist against the
Agent.

     SECTION 6.2  Delegation of Duties.  The Agent may execute any of its duties
                  --------------------
under this Loan Agreement and the other Operative Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

     SECTION 6.3  Exculpatory Provisions.  Neither the Agent nor any of its
                  ----------------------
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Loan Agreement or any other Operative
Document (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Lessor or any
Lessee or any officer thereof contained in this Loan Agreement or any other
Operative Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Loan Agreement or any other Operative Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Loan
Agreement or any other Operative Document or for any failure of the Lessor or
any Lessee to perform its obligations hereunder or thereunder.  The Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Loan Agreement or any other Operative Document, or to inspect the
properties, books or records of the Lessor, the Guarantor or any Lessee.

     SECTION 6.4  Reliance by Agent.  The Agent shall be entitled to rely, and
                  -----------------
shall be fully protected in relying, upon writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Lessor or any Lessee), independent accountants and other experts selected
by the Agent.

                                      11
<PAGE>

The Agent may deem and treat the payee of the Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Loan Agreement or any other
Operative Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Funding Parties against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Subject to the Operative Documents, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Loan Agreement and the other Operative Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
an interest in the Note.

     SECTION 6.5  Notice of Default.  The Agent shall not be deemed to have
                  -----------------
knowledge or notice of the occurrence of any Loan Potential Event of Default or
Loan Event of Default hereunder unless the Agent has received notice from a
Lender referring to this Loan Agreement, describing such Loan Potential Event of
Default or Loan Event of Default and stating that such notice is a "notice of
default".  In the event that the Agent receives such a notice, the Agent shall
give notice thereof to the Lenders.  The Agent shall take such action, subject
to the Operative Documents with respect to such Loan Potential Event of Default
or Loan Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Agent shall have received such
         --------
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Loan Potential Event of
Default or Loan Event of Default as it shall deem advisable in the best
interests of the Lenders.

     SECTION 6.6  Non-Reliance on Agent and Other Lenders. Each Lender expressly
                  ---------------------------------------
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Lessor, the Guarantor or any Lessee, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Lessor, the Guarantor and each Lessee and
made its own decision to make its Loans hereunder and enter into this Loan
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Loan Agreement and the other Operative Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Lessor, the Guarantor and each Lessee. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition

                                      12
<PAGE>

(financial or otherwise), prospects or creditworthiness of the Lessor, the
Guarantor or any Lessee which may come into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

     SECTION 6.7  Indemnification.  The Lenders agree to indemnify the Agent in
                  ---------------
its capacity as such (to the extent not reimbursed by a Lessee and without
limiting the obligation of any Lessee to do so), ratably according to the
percentage each Lender's Commitment bears to the total Commitments of all of the
Lenders on the date on which indemnification is sought under this Section 6.7
                                                                  -----------
(or, if indemnification is sought after the date upon which the Lenders'
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with the percentage that each Lender's Commitment bears to
the Commitments of all of the Lenders immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments,  suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Note) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Loan Agreement, any of the other Operative Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
                                            --------
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct.  The
agreements in this Section 6.7 shall survive the payment of the Note and all
                   -----------
other amounts payable hereunder.

     SECTION 6.8  Agent in Its Individual Capacity. The Agent and its Affiliates
                  --------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with the Lessor, the Guarantor or any Lessee as though the Agent were
not the Agent hereunder and under the other Operative Documents. With respect to
Loans made or renewed by it, the Agent shall have the same rights and powers
under this Loan Agreement and the other Operative Documents as any Lender and
may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity. Each Lender
acknowledges that the Agent in its individual capacity has had and continues to
have other business relations and transactions with Hughes, Hughes' Affiliates
and the Lessor.

     SECTION 6.9  Successor Agent.  The Agent may resign as Agent upon 20 days'
                  ---------------
notice to the Lenders effective upon the appointment of a successor agent.  If
the Agent shall resign as Agent under this Loan Agreement and the other
Operative Documents, then the Required Lenders shall appoint a successor agent
for the Lenders, which successor agent shall be a commercial bank organized
under the laws of the United States of America or any State thereof or under the
laws of another country which is doing business in the United States of America
and having a combined capital, surplus and undivided profits of at least
$100,000,000, whereupon such successor agent shall succeed to the rights, powers
and duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon such appointment and approval, and the

                                      13
<PAGE>

former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Loan Agreement or any holders of an interest in the Note. After
any retiring Agent's resignation as Agent, all of the provisions of this Section
                                                                         -------
6 shall inure to its benefit as to any actions taken or omitted to be taken by
-
it while it was Agent under this Loan Agreement and the other Operative
Documents.

     SECTION 7  MISCELLANEOUS

     SECTION 7.1  Amendments and Waivers. Neither this Loan Agreement, the Note,
                  ----------------------
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of Section 8.4 of the Master Agreement.

     SECTION 7.2  Notices.  Unless otherwise specified herein, all notices,
                  -------
requests, demands or other communications to or upon the respective parties
hereto shall be given in accordance with Section 8.2 of the Master Agreement.

     SECTION 7.3  No Waiver; Cumulative Remedies.  No failure to exercise and no
                  ------------------------------
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.  The provisions of Section 8.11 of the Master
Agreement shall apply to this Loan Agreement.

     SECTION 7.4  Successors and Assigns.  This Loan Agreement shall be binding
                  ----------------------
upon and inure to the benefit of the Lessor, the Agent, the Lenders, all future
holders of an interest in the Note and their respective successors and permitted
assigns.

     SECTION 7.5  Counterparts.  This Loan Agreement may be executed by one or
                  ------------
more of the parties to this Loan Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same agreement.  A set of the counterparts of this Loan
Agreement signed by all the parties hereto shall be lodged with the Lessor and
the Agent.

     SECTION 7.6  GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTE AND THE RIGHTS
                  -------------
AND OBLIGATIONS OF THE PARTIES UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF FLORIDA.

     SECTION 7.7  Survival and Termination of Agreement. All covenants,
                  -------------------------------------
agreements, representations and warranties made herein and in any certificate,
document or statement

                                      14
<PAGE>

delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Loan Agreement, and the Note and shall continue in full
force and effect so long as the Note or any amount payable to any Lender under
or in connection with this Loan Agreement or the Note is unpaid, at which time
this Loan Agreement shall terminate.

     SECTION 7.8  Entire Agreement. This Loan Agreement and the other Operative
                  ----------------
Documents set forth the entire agreement of the parties hereto with respect to
its subject matter, and supersedes all previous understandings, written or oral,
with respect thereto.

     SECTION 7.9  Severability. Any provision of this Loan Agreement or of the
                  ------------
Note which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or thereof or affecting the validity, enforceability
or legality of any such provision in any other jurisdiction.

                                      15
<PAGE>

     IN WITNESS THEREOF, the parties hereto have caused this Loan Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.

                                        SUNTRUST BANK, as Agent

                                        By:____________________________________
                                           Name:_______________________________
                                           Title:______________________________

                                                                  LOAN AGREEMENT
                                                                 OPERATING LEASE

                                      S-1
<PAGE>

                                        ATLANTIC FINANCIAL GROUP, LTD. as Lessor
                                        and Borrower

                                        By: Atlantic Financial Managers, Inc.,
                                          its General Partner

                                             By:_______________________________
                                                Name: Stephen Brookshire
                                Title: President

                                                                  LOAN AGREEMENT
                                                                 OPERATING LEASE

                                      S-2
<PAGE>

                                        SUNTRUST BANK,
                                        as a Lender

                                        By:___________________________________
                                           Name:______________________________
                                           Title:_____________________________

                                                                  LOAN AGREEMENT
                                                                 OPERATING LEASE

                                      S-3<PAGE>

                                                                Exhibit 10.15(b)

                         CONSTRUCTION AGENCY AGREEMENT

                           dated as of June 22, 2001

                                     among

                        ATLANTIC FINANCIAL GROUP, LTD.

                                      and

                              HUGHES SUPPLY, INC.
                             as Construction Agent

                                                               [OPERATING LEASE]
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE I          DEFINITIONS..................................................................................  1
     1.1.  Defined Terms........................................................................................  1

ARTICLE II         APPOINTMENT OF CONSTRUCTION AGENT............................................................  2
     2.1.  Appointment..........................................................................................  2
     2.2.  Acceptance; Construction.............................................................................  2
     2.3.  Commencement of Construction.........................................................................  2
     2.4.  Supplements to this Agreement........................................................................  2
     2.5.  Term.................................................................................................  3
     2.6.  Identification of Properties; Construction Documents.................................................  3
     2.7.  Scope of Authority...................................................................................  3
     2.8.  Covenants of the Construction Agent..................................................................  4
     2.9.  Insurance............................................................................................  5

ARTICLE III        THE BUILDINGS................................................................................ 11
     3.1.  Amendments; Modifications............................................................................ 11
     3.2.  Casualty and Condemnation............................................................................ 11
     3.3.  Indemnity............................................................................................ 12
     3.4.  Construction Force Majeure Events.................................................................... 12

ARTICLE IV         PAYMENT OF FUNDS............................................................................. 13
     4.1.  Funding of Property Acquisition Costs and Property Buildings Costs................................... 13

ARTICLE V          CONSTRUCTION AGENCY EVENTS OF DEFAULT........................................................ 14
     5.1.  Construction Agency Events of Default................................................................ 14
     5.2.  Damages.............................................................................................. 15
     5.3.  Remedies; Remedies Cumulative........................................................................ 15
     5.4.  Limitation on Construction Agent's Recourse Liability................................................ 17
     5.5.  Construction Agent's Right to Purchase............................................................... 18
     5.6.  Construction Return Procedures....................................................................... 18
     5.7.  Option to Remarket................................................................................... 19
     5.8.  Rejection of Sale.................................................................................... 21
     5.9.  Return of Leased Property............................................................................ 22
     5.10.  Reimbursements...................................................................................... 23
     5.11.  Building Construction Failure Payment............................................................... 23

ARTICLE VI         NO CONSTRUCTION AGENCY FEE................................................................... 23
     6.1.  Lease as Fulfillment of Lessor's Obligations......................................................... 23
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                              <C>
ARTICLE VII        LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS................................................. 23
     7.1.  Exercise of the Lessor's Rights...................................................................... 23
     7.2.  Lessor's Right to Cure Construction Agent's Defaults................................................. 24

ARTICLE VIII       MISCELLANEOUS................................................................................ 24
     8.1.  Notices.............................................................................................. 24
     8.2.  Successors and Assigns............................................................................... 24
     8.3.  GOVERNING LAW........................................................................................ 24
     8.4.  Amendments and Waivers............................................................................... 24
     8.5.  Counterparts......................................................................................... 24
     8.6.  Severability......................................................................................... 24
     8.7.  Headings and Table of Contents....................................................................... 25
     8.8.  Jurisdiction; Waivers................................................................................ 25
</TABLE>

                                      ii
<PAGE>

EXHIBITS

Exhibit A        Form of Supplement to Construction Agency Agreement

                                      iii
<PAGE>

                         CONSTRUCTION AGENCY AGREEMENT
                         -----------------------------

     CONSTRUCTION AGENCY AGREEMENT, dated as of June 22, 2001 (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), between
                                                            ---------
ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, (the "Lessor"), and
                                                                   ------
HUGHES SUPPLY, INC., a Florida corporation ("Hughes", and in its capacity as
                                             ------
construction agent, the "Construction Agent").
                         ------------------

                             PRELIMINARY STATEMENT

     A.  Lessor, Hughes, certain subsidiaries of Hughes that may become
signatories thereto, the Lenders signatory thereto and SunTrust Bank, as agent
for such Lenders (in such capacity, the "Agent") are parties to that certain
                                         -----
Master Agreement, dated as of June 22, 2001 (as amended, supplemented or
otherwise modified from time to time pursuant thereto, the "Master Agreement").
                                                            ----------------

     B.  Subject to the terms and conditions hereof, (i) the Lessor desires to
appoint Hughes as the Construction Agent to act as its sole and exclusive agent
for the identification and acquisition of the Land pursuant to the Master
Agreement and construction of the Buildings in accordance with the Plans and
Specifications and pursuant to the Master Agreement, and (ii) the Construction
Agent desires, for the benefit of the Lessor, to cause the Buildings to be
constructed in accordance with the Plans and Specifications and pursuant to the
Master Agreement and this Agreement, in each case in accordance with the terms
herein set forth.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

     I.1.  Defined Terms.  Capitalized terms used but not otherwise defined in
           -------------
this Agreement shall have the meanings set forth in Appendix A to the Master
Agreement.

                                  ARTICLE II

                       APPOINTMENT OF CONSTRUCTION AGENT

<PAGE>

     II.1.  Appointment.  Pursuant to and subject to the terms and conditions
            -----------
set forth herein and in the Master Agreement and the other Operative Documents,
the Lessor hereby irrevocably designates and appoints Hughes as the Construction
Agent to act as its exclusive agent for (i) the identification and acquisition
from time to time of Land to be acquired or leased by the Lessor and leased or
subleased to Hughes and (ii) the construction of the Buildings in accordance
with the Plans and Specifications on such Land.

     II.2.  Acceptance; Construction.  Hughes hereby unconditionally accepts the
            ------------------------
designation and appointment as Construction Agent.  The Construction Agent will
cause the Buildings to be constructed on the Land substantially in accordance
with the Plans and Specifications and, in accordance with the Operative
Documents, to be equipped in all material respects with all Applicable Law and
insurance requirements.  If a Leased Property will be leased by a Lessee other
than Hughes, Hughes may appoint such Lessee as its sub-construction agent with
respect to such Leased Property, provided that such appointment shall not affect
                                 --------
Hughes' obligations hereunder, which obligations shall be primary and shall
remain in full force and effect.

     II.3.  Commencement of Construction.  Subject to Construction Force Majeure
            ----------------------------
Events, the Construction Agent hereby agrees, unconditionally and for the
benefit of the Lessor, to cause Construction of a Building to commence on each
parcel of Land as soon as is reasonably practicable, in its reasonable judgment,
after the Closing Date in respect of such Land.  For purposes hereof,
Construction of a Building shall be deemed to commence on the date after the
Closing Date for the related Leased Property (the "Construction Commencement
                                                   -------------------------
Date") on which excavation for the foundation for such Building or any other
----
Construction of such Building commences.  Without limiting the foregoing, no
phase of such Construction shall be undertaken until all permits required for
such phase have been issued therefor.

     II.4.  Supplements to this Agreement.  On the Closing Date of each parcel
            -----------------------------
of Land, the Lessor and the Construction Agent shall each execute and deliver to
the Agent a supplement to this Agreement in the form of Exhibit A to this
                                                        ---------
Agreement, appropriately completed, pursuant to which the Lessor and the
Construction Agent shall, among other things, each acknowledge and agree that
the Construction of such parcel of Land will be governed by the terms of this
Agreement.  Following the execution and delivery of a supplement to this
Agreement as provided above, such supplement and all supplements previously
delivered under this Agreement shall constitute a part of this Agreement.  On or
prior to the Closing Date of each parcel of Land, the Construction Agent shall
prepare and deliver to the Lessor and the Agent a construction budget (the

"Construction Budget") for the related Leased Property, setting forth in
--------------------
reasonable detail the budget for the Construction of the proposed Building on
such Land in accordance with the Plans and Specifications therefor, and all
related costs including the capitalized interest and Yield expected to accrue
during the related Construction Term; such Construction Budget shall include a
line item for the amount of self-insurance or deductibles applicable to such
Leased Property.

                                       2
<PAGE>

     II.5.  Term.  This Agreement shall commence on the date hereof and shall
            ----
terminate with respect to any given Leased Property upon the first to occur of:

          (a)  payment by the Lessee of the Leased Property Balance and
     termination of the Lease with respect to such Leased Property in accordance
     with the Lease;

          (b)  the expiration or earlier termination of the Lease;

          (c)  termination of this Agreement pursuant to Article V hereof;
                                                         ---------

          (d)  the Completion Date for such Leased Property and the completion
     of all punch list items as set forth in Section 2.8(d); and
                                             --------------

          (e)  the payment by the Construction Agent of the Leased Property
     Balance or the Construction Failure Payment with respect to such Leased
     Property pursuant to this Agreement.

     II.6.  Identification of Properties; Construction Documents.  The
            ----------------------------------------------------
Construction Agent may execute any of its duties and obligations under this
Agreement by or through agents, contractors, developers, Affiliates, employees
or attorneys-in-fact, and the Construction Agent shall enter into such
agreements with architects and contractors as the Construction Agent deems
necessary or desirable for the construction of the Buildings pursuant hereto
(the "Construction Documents"); provided, however, that no such delegation shall
      ----------------------    --------  -------
limit or reduce in any way the Construction Agent's duties and obligations under
this Agreement; provided, further, that contemporaneously with the execution and
                --------  -------
delivery of a Construction Document, the Construction Agent will execute and
deliver to the Lessor the Security Agreement and Assignment, pursuant to which
the Construction Agent assigns to the Lessor, among other things, all of the
Construction Agent's rights under and interests in such Construction Documents.
Each construction contract shall be with a reputable general contractor with
experience in constructing projects that are similar in scope and type to the
proposed Building, and shall provide for a guaranteed maximum project cost and
at least 10% retainage initially, which amount may decline to 5% retainage at
such time as Construction of the related Building is at least 50% complete in
accordance with the terms of the related construction contract.

     II.7.  Scope of Authority.  (a)  Subject to the terms, conditions,
            ------------------
restrictions and limitations set forth in the Operative Documents, the Lessor
hereby expressly authorizes the Construction Agent, or any agent or contractor
of the Construction Agent, and the Construction Agent unconditionally agrees,
for the benefit of the Lessor, to take all action necessary or desirable for the
performance and satisfaction of all of the Construction Agent's obligations
hereunder with respect to the Leased Properties acquired or leased by the
Lessor, including, without limitation:

          (i)  the identification and assistance with the acquisition or lease
     of Land in accordance with the terms and conditions of the Master
     Agreement;

                                       3
<PAGE>

          (ii)  all design and supervisory functions relating to the
     construction of the Buildings and performing all engineering work related
     to the construction of the Buildings;

          (iii) negotiating and entering into all contracts or arrangements to
     procure the equipment and services necessary to construct the Buildings on
     such terms and conditions as are customary and reasonable in light of local
     standards and practices;

          (iv)  obtaining all necessary permits, licenses, consents, approvals
     and other authorizations, including those required under Applicable Law,
     from all Governmental Authorities in connection with the construction and
     the development of the Leased Property on the Land in accordance with the
     Plans and Specifications;

          (v)   maintaining all books and records with respect to the
     construction, operation and management of the Leased Properties; and

          (vi)  performing any other acts necessary or appropriate in connection
     with the identification, and acquisition (or leasing) and development of
     the Land and construction of the Buildings in accordance with the Plans and
     Specifications, and all other functions typically undertaken for the
     construction and development of similar properties.

     (b)  Neither the Construction Agent nor any of its Affiliates or agents
shall enter into any contract which would, directly or indirectly, impose any
liability or obligation on the Lessor unless such contract expressly contains an
acknowledgment by the other party or parties thereto that the obligations of the
Lessor are non-recourse, and that the Lessor shall have no personal liability
with respect to such obligations.  Any contract entered into by the Construction
Agent or any of its Affiliates or agents not meeting the requirements of the
foregoing sentence shall be ineffective.  Subject to the foregoing, the Lessor
shall execute such documents and take such other actions as the Construction
Agent shall reasonably request, at the Construction Agent's expense (which
expenses shall be Construction Costs and shall be reimbursed with the proceeds
of Advances), to permit the Construction Agent to perform its duties hereunder.

     (c)  Subject to the terms and conditions of this Agreement and the other
Operative Documents, the Construction Agent shall have sole management and
control over the means, methods, sequences and procedures with respect to the
Construction.  The parties agree that the Construction Agent shall be in
possession and control of each Leased Property during the Construction Term
therefor.

     II.8.  Covenants of the Construction Agent.  The Construction Agent hereby
            -----------------------------------
covenants and agrees that it will:

                                       4
<PAGE>

          (a)  following the Construction Commencement Date for each parcel of
     Land, cause construction of a Building on such Land to be prosecuted
     diligently and without undue interruption substantially in accordance with
     the Plans and Specifications for such Land, in accordance with the
     Construction Budget for such Leased Property and in compliance in all
     material respects with all Applicable Law and insurance requirements;

          (b)  notify the Lessor and the Agent in writing not less than five (5)
     Business Days after the occurrence of each Construction Force Majeure
     Event;

          (c)  take all reasonable and practical steps to cause the Completion
     Date for such Leased Property to occur on or prior to the Scheduled
     Construction Termination Date for such Leased Property, and cause all Liens
     (including, without limitation, Liens or claims for materials supplied or
     labor or services performed in connection with the construction of the
     Buildings), other than Permitted Liens and Lessor Liens, to be discharged;

          (d)  following the Completion Date for each Leased Property, cause all
     outstanding punch list items with respect to the Buildings on such Leased
     Property to be completed within sixty (60) days after said Completion Date;

          (e)  at all times during Construction, cause all title to all
     personalty financed by the Lessor on or within such Leased Property to be
     and remain vested in the Lessor and cause to be on file with the applicable
     filing office or offices all necessary documents under Article 9 of the
     Uniform Commercial Code to perfect such title free of all Liens other than
     Permitted Liens, it being understood and acknowledged that such Lessor's
     rights, title and interest in and to said personalty have been assigned to
     the Agent pursuant to the Operative Documents;

          (f)  not enter into any agreements or arrangements with any Person
     (other than the Funding Parties pursuant to the Operative Documents) that
     would result in any claim against, or liability of, the Agent or any
     Funding Party resulting from the fact that any Leased Property is not
     completed on or prior to the Scheduled Construction Termination Date
     therefor; and

          (g)  take all reasonable and practical steps to minimize the
     disruption of the construction process arising from Construction Force
     Majeure Events.

     II.9.  Insurance.
            ---------

     (a)  Insurance by the Construction Agent: The Construction Agent shall
          -----------------------------------
cause to be procured with proceeds of Advances pursuant to, and subject to the
terms and conditions of, the Operative Documents and maintain in full force and
effect during the Construction Term insurance policies with insurance companies
authorized to do business in each jurisdiction in which the Leased Properties
under Construction are located with a Best Insurance Reports rating

                                       5
<PAGE>

of "A-" or better and a financial size category of "VIII" or higher, with limits
and coverage provisions as set forth below.

          (i)   General Liability Insurance.  Liability insurance on an
                ---------------------------
     occurrence basis for the Construction Agent's and Lessor's liability
     arising out of claims for personal injury (including bodily injury and
     death) and property damage. Such insurance shall provide coverage for
     products-completed operations, contractual and personal injury liability
     with a $1,000,000 limit per occurrence for combined bodily injury and
     property damage with policy aggregates of $2,000,000 (other than products-
     completed operations) and $1,000,000 for products-completed operations. A
     maximum deductible or self-insured retention of $5,000 per occurrence shall
     be allowed.

          (ii)  Automobile Liability Insurance.  Automobile liability insurance
                ------------------------------
     for the Construction Agent's and Lessor's liability arising out of claims
     for bodily injury and property damage covering all leased, non-owned and
     hired vehicles used in the performance of the Construction Agent's
     obligations under this Agreement with a $1,000,000 limit per accident for
     combined bodily injury and property damage and containing appropriate no-
     fault insurance provisions wherever applicable.  A maximum deductible or
     self-insured retention of $5,000 per occurrence shall be allowed.

          (iii) Excess Liability Insurance.  Liability insurance in excess of
                --------------------------
     the insurance coverage required in clauses (i) and (ii) above with a limit
                                        -----------     ----
     of $10,000,000 per occurrence and in the aggregate.

          (iv)  Builder's Risk Insurance.  Property damage insurance on an "all
                ------------------------
     risk" basis insuring the Construction Agent and Lessor, as their interests
     may appear, including coverage against loss or damage from the perils of
     earth movement (including but not limited to earthquake, landslide,
     subsidence and volcanic eruption), flood, strike, riot and civil commotion.

                a.  Property Covered. The builder's risk insurance shall provide
                    ----------------
          coverage for (i) the Buildings, structures, machinery, equipment,
          facilities, fixtures, supplies and other property constituting a part
          of the Leased Property under Construction, (ii) property of others in
          the care, custody or control of the Construction Agent in connection
          with the Leased Property, but not contractor's tools, machinery, plant
          and equipment including spare parts and accessories not destined to
          become a permanent part of the Leased Property, (iii) all preliminary
          works, temporary works and interconnection works and (iv) foundations
          and other property below the surface of the ground.

                b.  Additional Coverages. The builder's risk policy shall insure
                    --------------------
          (i) the cost (including labor) of preventive measures to reduce or
          prevent further loss, (ii) inland transit with sublimits sufficient to
          insure the largest single shipment to or

                                       6
<PAGE>

          from the Leased Property site from anywhere within North America,
          (iii) attorney's fees, engineering and other consulting costs, and
          permit fees directly incurred in order to repair or replace damaged
          insured property in the amount of $2,500, (iv) expediting expenses
          (defined as reasonable extra costs incurred after an insured loss to
          make temporary repairs and expedite the permanent repair of the
          damaged property) with a sublimit in the amount of $25,000, (v) off-
          site storage to insure the full replacement value of any property or
          equipment not stored on the Leased Property site with a sublimit of
          $150,000, and (vi) demolition expenses, removal of undamaged portion,
          and increased cost of construction due to operation of laws or codes
          with a sublimit of twenty-five percent (25%) of the amount of the
          physical loss or damage.

               c.  Special Clauses.  The builder's risk policy shall include (i)
                   ---------------
          a 72 hour flood/windstorm/earthquake clause, (ii)unintentional errors
          and omissions clause, (iii) a requirement that the insurer pay losses
          within 60 days after receipt of an acceptable proof of loss, and (iv)
          an extension clause allowing the policy period to be extended up to 60
          days without modification to the terms and conditions of the policy
          and payment of the premium on a pro-rata basis.

               d.  Prohibited Exclusions.  The builder's risk policy shall not
                   ---------------------
          contain any (i) coinsurance provisions, (ii) exclusion for ensuing
          direct physical loss or damage resulting from freezing, (iii)
          exclusion for physical loss or damage covered under any guarantee or
          warranty arising out of an insured peril, or (iv) exclusion for
          resultant physical loss or damage caused by ordinary wear and tear,
          gradual deterioration, faulty workmanship, design or materials.

               e.  Sum Insured.  The builder's risk policy shall (i) be on a
                   -----------
          completed value form, (ii) insure 100% of the completed insurable
          value of the Building(s), (iii) value losses at replacement cost,
          without deduction for physical depreciation or obsolescence including
          custom duties, taxes and fees and (iv) insure loss or damage from
          earth movement and flood with separate sublimits of $15,000,000.

               f.  Deductible.  The builder's risk insurance may have a
                   ----------
          deductible not in excess of $5,000.

          (v)  Delayed Startup Insurance.  Delayed startup coverage insuring the
               -------------------------
     Lessor and covering the Lessor's accrued and capitalized interest and Yield
     for a six month period as a result of loss or damage insured by the
     builder's risk insurance resulting in a delay in completion of the
     Building(s) beyond their anticipated date of completion.

     Such insurance shall (a) have a deductible of not greater than 10 days per
     occurrence during the Construction Term, (b) have an indemnity period not
     less than six months, (c) cover loss sustained when access to the Leased
     Property site is prevented due to an

                                       7
<PAGE>

     insured peril at premises in the vicinity of the Leased Property site with
     a sublimit of $27,500, (d) cover loss sustained due to the action of a
     public authority preventing access to the Leased Property site due to
     imminent or actual loss or destruction arising from an insured peril at
     premises in the vicinity of the Leased Property site with a sublimit of
     $27,500, (e) not contain any form of a coinsurance provision or include a
     waiver of such provisions, (f) insure loss caused by damage to finished
     equipment or machinery while awaiting shipment at a supplier's premises,
     and (g) cover losses relating to real estate tax assessments, insurance
     expenses, architect's and engineer's fees to repair or replace lost work,
     legal and accounting fees, construction management fees, testing and
     permitting expenses, marketing and administration expenses and overhead.

          (vi)  Endorsements.  All policies of liability insurance required to
                ------------
      be maintained by the Construction Agent shall be endorsed as follows.

          a.    To name the Lessor as the loss payee with respect to property
                insurance;

          b.    To name the Lessor, the Lenders and the Agent as additional
                insureds with respect to all liability insurance;

          c.    To provide a severability of interests and cross liability
                clause;

          d.    That the insurance shall be primary and not excess to or
                contributing with any insurance or self-insurance maintained by
                the Lessor or the additional insureds.

          (vii) Waiver of Subrogation.  The Construction Agent hereby waives
                ---------------------
     any and every claim for recovery from the Lessor, the Lenders and the Agent
     for any and all loss or damage covered by any of the insurance policies to
     be maintained under this Agreement to the extent that such loss or damage
     is recovered under any such policy.  If the foregoing waiver will preclude
     the assignment of any such claim to the extent of such recovery, by
     subrogation (or otherwise), to an insurance company (or other person), the
     Construction Agent (or other appropriate party) shall give written notice
     of the terms of such waiver to each insurance company which has issued, or
     which may issue in the future, any such policy of insurance (if such notice
     is required by the insurance policy) and shall cause each such insurance
     policy to be properly endorsed by the issuer thereof to, or to otherwise
     contain one or more provisions that, prevent the invalidation of the
     insurance coverage provided thereby by reason of such waiver.

                (b)  Conditions.
                     ----------

          (i)   Adjustment of Losses. Losses, if any, with respect to any Leased
                --------------------
     Property under any damage policies required to be carried under this
     Section 2.9 shall be adjusted with the insurance companies, including the
     -----------
     filing of appropriate proceedings, as follows:

                                       8
<PAGE>

     (x) so long as no Construction Agency Event of Default shall have occurred
     and be continuing, and provided that the Construction Agent is required, or
     has agreed, to repair the damage or if the purchase option has been
     exercised, such losses will be adjusted by the Construction Agent, (y) if
     any Construction Agency Event of Default shall have occurred and be
     continuing or Construction Force Majeure Event declared, or if the
     Construction Agent is not required to, and has not agreed to, repair the
     damage, such losses shall be adjusted by the Lessor with the consent of the
     Construction Agent (which consent shall not be unreasonably withheld or
     delayed). The party which shall be entitled to adjust losses may appear in
     any proceeding or action to negotiate, prosecute, adjust or appeal any
     claim for any award, compensation or insurance payment on account of any
     Casualty at such party's reasonable request, and the other party shall
     participate in any such proceeding, action, negotiation, prosecution or
     adjustment. The Construction Agent may incur no expenses with respect to
     loss adjustment without the prior consent, not to be unreasonably withheld,
     of the Lessor. Adjustment expenses shall be funded through Advances. The
     parties hereto agree that this Agreement shall control the rights of the
     parties hereto in and to any such award, compensation or insurance payment
     relating to any Casualty affecting a Construction Land Interest.

          (ii)   Application of Insurance Proceeds.  All proceeds of insurance
                 ---------------------------------
     maintained pursuant to this Section 2.9 on account of any damage or
                                 -----------
     destruction of any Leased Property (or part thereof) subject to
     Construction shall be paid to Lessor, provided that (i) if no Construction
     Agency Event of Default shall have occurred and (ii) subject to Section
                                                                     -------
     3.4, the Construction Agent has undertaken to repair the damage and has
     ---
     demonstrated to the reasonable satisfaction of the Lessor that the
     application of such insurance proceeds (including, without limitation,
     delay in start up coverage), together with the remaining Commitment, are
     sufficient to cause the construction to be completed on or prior to the
     Scheduled Construction Termination Date, such funds shall be held by Lessor
     in a segregated account and disbursed to the Construction Agent to pay
     costs incurred by the Construction Agent to effect the repair of the Leased
     Property.  If the Construction cannot be completed on or prior to the
     Scheduled Construction Termination Date, the parties agree to discuss the
     issue of disbursement of insurance proceeds to the Construction Agent in
     good faith and after such discussion the Lessor shall make a determination
     in the exercise of its sole discretion.  Any proceeds of insurance paid to
     Lessor pursuant in this Section 2.9, not used to repair the Leased Property
                             -----------
     and held by Lessor shall be applied to the account of Construction Agent to
     reduce the Lease Balance.

          (iii)  Additional Insurance.  Any additional insurance obtained by the
                 --------------------
     Construction Agent or the Lessor shall provide that it shall not interfere
     with or in any way limit the insurance described in this Section 2.9 or
                                                              -----------
     increase the amount of any premium payable with respect to any insurance
     described in such Section.  The proceeds of any such additional insurance
     will be for the account of the party maintaining such additional insurance.

                                       9
<PAGE>

          (iv)   Payment of Premiums.  The Construction Agent shall cause to be
                 -------------------
     paid (including, in the case of insurance required under this Section 2.9,
                                                                   -----------
     with the proceeds of Advances and capitalized as part of Permitted Lease
     Balance), all premiums for the insurance required hereunder.  The
     Construction Agent shall renew or replace, or cause to be renewed or
     replaced, each insurance policy required hereunder prior to the expiration
     date thereof for the duration of the Construction Term.

          (v)    Policy Cancellation and Change.  All policies of insurance
                 ------------------------------
     required to be maintained pursuant to this Section 2.9 shall be endorsed so
                                                -----------
     that if at any time they are cancelled, or their coverage is reduced (by
     any party including the insured) so as to affect the interests of the
     Lessor, such cancellation or reduction shall not be effective as to the
     Lessor for 30 days, except for non-payment of premium which shall be for 10
     days, after receipt by the Lessor of written notice from such insurer of
     such cancellation or reduction.

          (vi)   Miscellaneous Policy Provisions.  All property damage and
                 -------------------------------
     delayed startup insurance policies, (i) shall not include any annual or
     term aggregate limits of liability or clause requiring the payment of
     additional premium to reinstate the limits after loss except for insurance
     covering the perils of flood, earth movement, sabotage and terrorism, (ii)
     shall include the Lessor as a named insured as its interest may appear, and
     (iii) shall include a clause requiring the insurer to make final payment on
     any claim within 60 days after the submission of proof of loss and its
     acceptance by the insurer.

          (vii)  Separation of Interests.  All policies shall insure the
                 -----------------------
     interests of the Lessor regardless of any breach or violation by the
     Construction Agent or any other Person of warranties, declarations or
     conditions contained in such policies, any action or inaction of the
     Construction Agent or others, or any foreclosure relating to the Leased
     Property or any change in ownership of all or any portion of the Leased
     Property.

          (viii) Acceptable Policy Terms and Conditions.  All policies of
                 --------------------------------------
     insurance required to be maintained pursuant to this Section 2.9 shall
                                                          -----------
     contain terms and conditions reasonably acceptable to the Lessor.

     (c)  Evidence of Insurance.  On the related Construction Commencement Date
          ---------------------
and on an annual basis at least 10 days prior to each policy anniversary, the
Construction Agent shall furnish the Lessor with certificates of insurance or
binders, in a form acceptable to the Lessor, evidencing all of the insurance
required by the provisions of this Section 2.9.  Such certificates of
                                   -----------
insurance/binders shall be executed by each insurer or by an authorized
representative of each insurer.  Such certificates of insurance/binders shall
identify underwriters, the type of insurance, the insurance limits and the
policy term and shall specifically list the special provisions enumerated for
such insurance required by this Section 2.9.  Upon request, the Construction
                                -----------
Agent will promptly furnish the Lessor with copies of all insurance policies,
binders and cover

                                      10
<PAGE>

notes or other evidence of such insurance relating to the insurance required to
be maintained hereunder.

     (d)   Reports.  Concurrently with the furnishing of the certification
           -------
referred to in paragraph (c), the Construction Agent shall furnish the Lessor
               -------------
with a report of an independent broker, signed by an officer of the broker,
stating that in the opinion of such broker, the insurance then carried or to be
renewed is in accordance with the terms of this Section 2.9.  In addition the
                                                -----------
Construction Agent will advise the Lessor in writing promptly of any default in
the payment of any premium and of any other act or omission on the part of the
Construction Agent which may invalidate or render unenforceable, in whole or in
part, any insurance being maintained by the Construction Agent pursuant to this
Section 2.9.
-----------

     (e)   No Duty of Lessor to Verify or Review.  No provision of this Section
           -------------------------------------                        -------
2.9 or any provision of this Agreement or the other Operative Documents shall
---
impose on the Lessor any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Construction Agent, nor shall the
Lessor be responsible for any representations or warranties made by or on behalf
of the Construction Agent to any insurance company or underwriter.  Any failure
on the part of the Lessor to pursue or obtain the evidence of the insurance
required by this Agreement from the Construction Agent and/or failure of the
Lessor to point out any non-compliance of such evidence of insurance shall not
constitute a waiver of any of the insurance requirements in this Agreement.

Notwithstanding anything herein to the contrary, the Construction Agent shall
not be responsible for the payment of any insurance deductible amounts.

                                 ARTICLE III

                                 THE BUILDINGS

     III.1.  Amendments; Modifications.  The Construction Agent may, subject to
             -------------------------
the conditions, restrictions and limitations set forth herein and in the
Operative Documents (but not otherwise), at any time during the term hereof
revise, amend or modify the Plans and Specifications and the related
Construction Documents without the consent of the Lessor; provided, however,
                                                          --------  -------
that the Lessor's prior written consent will be required in the following
instances:  (x) such revision, amendment or modification by its terms would
result in the Completion Date of the Buildings occurring after the Scheduled
Construction Termination Date, or (y) such revision, amendment or modification
would result in the cost for such Leased Property exceeding the then remaining
Commitments, minus the then remaining costs for completing each other Leased
             -----
Property for which the Completion Date has not occurred, or increase the
Construction Budget therefor, or (z) the aggregate effect of such revision,
amendment or modification, when taken together with any previous or
contemporaneous revision, amendment or modification to the Plans and
Specifications for such Leased Property,

                                      11
<PAGE>

would be to reduce the Fair Market Sales Value of such Leased Property in a
material respect when completed.

     III.2.  Casualty and Condemnation.  If at any time prior to the Completion
             -------------------------
Date with respect to any Building there occurs a Casualty or the Lessor or the
Construction Agent receives notice of a Condemnation, then, in each case the
Construction Agent shall promptly and diligently take all commercially
reasonable and practical steps to cause the Construction of the related Building
to be completed substantially in accordance with the Plans and Specifications
and with the terms hereof, and cause the Completion Date to occur on or prior to
the Scheduled Construction Termination Date.  The Construction Agent shall use
all insurance proceeds or Awards received by it with respect to such Casualty or
Condemnation, as the case may be, to pay the construction costs incurred in
connection with such rebuilding or restoration. The Lessor shall make all
insurance proceeds or Awards received with respect to such Casualty or
Condemnation available to the Construction Agent to reimburse the Construction
Agent for, or to pay, all construction costs incurred in connection with such
rebuilding or restoration.  To the extent that such insurance proceeds are
insufficient to pay such construction costs, such construction costs shall be
paid with the proceeds of Advances made pursuant to the Master Agreement.  In
the event that Lessor does not make such insurance proceeds or Advances
available, then the provisions of Section 5.3 shall apply to the related Leased
                                  -----------
Property.  Notwithstanding the foregoing, if the Casualty or Condemnation
constitutes a Construction Force Majeure Event, then the provisions of Section
                                                                       -------
3.4 shall apply.
---

     III.3.  Indemnity.  During the Construction Term for each Leased Property,
             ---------
the Construction Agent agrees to assume liability for, and to indemnify,
protect, defend, save and hold harmless the Lessor on an After-Tax Basis, from
and against, any and all Claims that may be imposed on, incurred by or asserted
or threatened to be asserted, against the Lessor, whether or not the Lessor
shall also be indemnified as to any such Claim by any other Person, in any way
relating to or arising out of (i) any event, condition or circumstance within
the Construction Agent's control,(ii) fraud, misapplication of funds, illegal
acts or willful misconduct on the part of the Construction Agent, or (iii) any
event described in paragraph (g) of Article XII of the Lease with respect to the
Construction Agent.  As used in clause (i) of the foregoing sentence, the term
                                ----------
"within the Construction Agent's control" shall mean caused by or arising from
any failure by any Obligor to comply with any of its obligations under the
Operative Documents (including its insurance obligations), any representation or
warranty by any Obligor in any of the Operative Documents being inaccurate, any
negligence or wilful misconduct of any Obligor, or any claim by any third party
against the Lessor based upon the action or inaction of or by any Obligor;

provided, however, that if such Claim is related to construction completion and
--------  -------
such Claim does not arise out of or result from events or circumstances
described in the foregoing clause (ii) or (iii), the Construction Agent's
                           -----------    -----
liability shall be limited to an amount equal to the Construction Failure
Payment.  Any Claims that are incurred by any Indemnified Party for which the
Construction Agent is not obligated to indemnify pursuant to this Section 3.3 or
                                                                  -----------
the Master Agreement shall, if requested by the Agent by written notice to
Lessor be capitalized, and result in an increase to the Funded Amounts related
to the relevant Leased Property.  The foregoing

                                      12
<PAGE>

indemnities are in addition to, and not in limitation of, the indemnities with
respect to environmental claims set forth in Section 7.2 of the Master
Agreement. The provisions of Section 7.3 of the Master Agreement shall apply to
any amounts that the Construction Agent is requested to pay pursuant to this
Section 3.3.
------------

     III.4.  Construction Force Majeure Events.  If a Construction Force Majeure
             ---------------------------------
Event that results in, or could reasonably be expected to result in, a Force
Majeure Loss (including any losses that result from a Construction Force Majeure
Event that prevents, or could reasonably be expected to prevent, the
Construction Agent from completing Construction prior to the Scheduled
Construction Termination Date) occurs, the Construction Agent shall promptly
provide the Lessor with written notice thereof within ten (10) Business Days of
the Construction Agent's knowledge of the occurrence thereof (the "Construction
                                                                   ------------
Force Majeure Declaration").  Upon receipt of the Construction Force Majeure
-------------------------
Declaration, Lessor and the Construction Agent shall consult with each other as
to what steps, if any, are to be taken to remediate such Construction Force
Majeure Event, including consulting as to the appropriateness of an extension of
the Scheduled Construction Termination Date.  The Construction Agent shall take
all reasonable and practical steps to minimize the disruption of the
construction process and all steps reasonably necessary to prevent further
damage arising from such Construction Force Majeure Event.  The Construction
Agent shall be entitled to reimbursement from Lessor for any costs directly
related to minimizing the disruption and to preventing further damage of such
Construction Force Majeure Event through the proceeds of Fundings pursuant to,
and subject to the terms and conditions of, the Master Agreement.  The
Construction Agent shall, within thirty (30) days of the delivery of the
Construction Force Majeure Declaration, submit to the Lessor a budget detailing
the costs that would be incurred in remediating such Construction Force Majeure
Event and a schedule for effecting the same.  The Construction Agent will
commence such remediation only upon receipt of written authorization from the
Lessor to do so, which authorization (or denial thereof) shall be given by
written notice to Construction Agent not later than fifteen (15) Business Days
after Lessor's receipt of the budget referred to in the preceding sentence.  The
Lessor in its sole discretion may elect to continue Construction and make
Advances for such remediation or terminate this Agreement with respect to the
affected Leased Property.  If the Lessor elects to terminate this Agreement with
respect to the affected Leased Property, subject to Construction Agent's right
to purchase such Leased Property in accordance with Section 5.5 hereof, the
                                                    -----------
Construction Agent shall within thirty (30) days of receipt of written notice of
termination return the affected Leased Property to the Lessor in accordance with
the procedures set forth in Section 5.6 and pay to the Lessor the Construction
                            -----------
Failure Payment, in which event, Section 5.6 shall be applicable, or, if the
                                 -----------
Construction Agent exercises the Construction Default Remarketing Option,

Section 5.7 shall be applicable.
-----------

     In the event the Lessor elects to continue Construction after receipt of a
Construction Force Majeure Declaration, the Lessor shall make available to the
Construction Agent, so long as no Construction Agency Event of Default shall
have occurred and be continuing, all insurance proceeds payable to the Lessor
with respect to such event to the extent necessary to remediate such event.

                                      13
<PAGE>

                                  ARTICLE IV

                               PAYMENT OF FUNDS

     IV.1.  Funding of Property Acquisition Costs and Property Buildings Costs.
            ------------------------------------------------------------------
(a)  In connection with the acquisition or lease of any Land and during the
course of the construction of the Buildings on any Land, the Construction Agent
may request that the Lessor advance funds for the payment of acquisition,
transaction and closing costs or property improvement costs, and the Lessor will
comply with such request to the extent provided for under, and subject to the
conditions, restrictions and limitations contained in, the Master Agreement and
the other Operative Documents.

     (b)    The proceeds of any funds made available to the Lessor to pay
acquisition, transaction and closing costs or improvement costs shall be made
available to the Construction Agent in accordance with the Funding Request
relating thereto and the terms of the Master Agreement. The Construction Agent
will use such proceeds only to pay the acquisition, transaction and closing
costs or improvement costs for Leased Properties set forth in the Funding
Request relating to such funds.

                                   ARTICLE V

                     CONSTRUCTION AGENCY EVENTS OF DEFAULT

     V.1.  Construction Agency Events of Default.  If any one or more of the
           -------------------------------------
following events (each a "Construction Agency Event of Default") shall occur and
                          ------------------------------------
be continuing:

           (a)  the Construction Agent fails to apply any funds paid by, or on
     behalf of, the Lessor to the Construction Agent for the acquisition or
     lease of the Land and the construction of the Buildings to the payment of
     acquisition, transaction and closing costs or improvements costs for such
     Leased Property;

           (b)  subject to Construction Force Majeure Events, the Construction
     Commencement Date with respect to any Leased Property shall fail to occur
     for any reason on or prior to the date that is one year after the Closing
     Date with respect to such Leased Property;

           (c)  the Completion Date with respect to any Leased Property shall
     fail to occur for any reason on or prior to the earlier of the Funding
     Termination Date and the Scheduled Construction Termination Date for such
     Leased Property (as such Scheduled Construction Termination Date may have
     been extended pursuant to Section 3.4);
                               -----------

                                      14
<PAGE>

          (d)  any Event of Default shall have occurred and be continuing; or

          (e)  the Construction Agent shall fail to observe or perform in any
     material respect any term, covenant or condition of this Agreement (except
     those specified in clauses (a) through (d) above), and such failure shall
                        -----------         ---
     remain uncured for a period of thirty (30) days after notice thereof to the
     Construction Agent, except that such thirty (30) day period shall be
     automatically extended for such additional period of time as is reasonably
     necessary to cure such default, if such default is capable of being cured
     but cannot, with reasonable diligence, be cured within such thirty (30) day
     period, provided that (i) the Construction Agent is in the process of
             --------
     diligently curing such default and (ii) such period shall not be extended
     for more than 120 days;

then, in any such event (but subject to Section 5.3), the Lessor may, in
                                        -----------
addition to the other rights and remedies provided for in this Article,
immediately terminate this Agreement as to any Leased Property or Properties or
all of the Leased Properties, separately, successively or concurrently (all in
Lessor's sole discretion) by giving the Construction Agent written notice of
such termination, and upon the giving of such notice, this Agreement shall
terminate as to such Leased Property or Properties or all of the Leased
Properties (as the case may be) and all rights of the Construction Agent and,
subject to the terms of the Operative Documents, all obligations of the Lessor
under this Agreement with respect to such Leased Property or Properties or all
of the Leased Properties (as the case may be) shall cease.  The Construction
Agent shall pay upon demand all reasonable costs, expenses, losses, expenditures
and damages (including, without limitation, attorneys' fees and disbursements)
actually incurred by or on behalf of the Lessor in connection with any
Construction Agency Event of Default.

     V.2.  Damages.  The termination of this Agreement pursuant to Section 5.1
           -------                                                 -----------
shall in no event relieve the Construction Agent of its liability and
obligations hereunder, all of which shall survive any such termination.

     V.3.  Remedies; Remedies Cumulative.  (a)  If a Construction Agency Event
           -----------------------------
of Default shall have occurred and be continuing under Section 5.1(b), 5.1(c),
                                                       --------------  ------
5.1(d) (other than a Lease Event of Default under paragraph (g) of Article XII
------
of the Lease) or 5.1(e) other than as a result of Construction Agent's
                 ------
fraudulent or illegal acts, misapplication of funds or willful misconduct, then,
in each case, the Lessor shall have all rights and remedies available under the
Operative Documents or available at law, equity or otherwise, Lessor shall have
the right to terminate this Agreement by giving Construction Agent written
notice of such termination, and upon the giving of such notice, all rights and
all obligations of the Construction Agent under this Agreement shall cease,
except for such rights and obligations as by their terms are to continue beyond
such termination, including Section 5.6(f) hereof and Lessor shall have the
                            --------------
right to require Construction Agent to pay immediately upon receipt of notice
from Lessor the Construction Failure Payment for all of the Construction Land
Interests; provided that the Construction Agent has the option to purchase the
           --------
Leased Property in accordance with Section 5.5 hereof and the
                                   -----------

                                      15
<PAGE>

Construction Agent shall have the option to cause the Leased Property to be
remarketed in accordance with Section 5.7 hereof.
                               ----------

     In the event Construction Agent does not purchase the Leased Property
pursuant to the terms hereof or the Construction Agent does not cause the Leased
Property to be remarketed in accordance with Section 5.7 hereof, the related
                                             -----------
Lessee(s) shall return the Leased Property to Lessor within ten (10) Business
Days in accordance with Section 5.6 hereof and Lessor shall have the right to
                        -----------
sell the Leased Property to an unaffiliated third party and to require
Construction Agent to pay to Lessor, immediately upon receipt of the termination
notice, cash in an amount equal to the Construction Failure Payment for all of
the Construction Land Interests.  The Agent shall distribute the Land Proceeds
derived from any such sale first, to the Lessor in an amount of the difference
between (i) the Land Acquisition Cost and (ii) the Land Construction Failure
Payment received by the Agent pursuant to the preceding sentence of this Section
                                                                         -------
5.3(a), second, to the extent the Construction Agent has paid the Land
------
Construction Failure Payment due to the Agent pursuant to the preceding sentence
of this Section 5.3(a), to the Construction Agent to reimburse it to the extent
        --------------
of its payment of such amount, third, to the Lessor in an amount equal to the
                               -----
remaining unpaid portion of the related Land Acquisition Cost and fourth, to the
                                                                  ------
Construction Agent, or to the Person or Persons otherwise lawfully entitled
thereto, in an amount equal to the remaining proceeds, if any.  The Agent shall
distribute the Building Proceeds derived from any such sale first, to the Lessor
in an amount of the difference between (i) the Permitted Lease Balance minus the
Land Acquisition Cost and (ii) the Building Construction Failure Payment, if
any, received by the Agent pursuant to the preceding sentence of this Section
                                                                      -------
5.3(a), second, to the extent the Construction Agent has paid the Building
------
Construction Failure Payment due to the Agent pursuant to the preceding sentence
of this Section 5.3(a), to the Construction Agent to reimburse it to the extent
        --------------
of its payment of such amount, and third, to the Lessor.
                                   -----

     (b)  If a Construction Agency Event of Default shall have occurred and be
continuing under Sections 5.1(a) or 5.1(d) (as the result of an Event of Default
                 ---------------    ------
under paragraph (g) of Article XII of the Lease), Lessor shall have the right to
terminate this Agreement by giving Construction Agent written notice of such
termination, and upon the giving of such notice, all rights and all obligations
of the Construction Agent under this Agreement shall cease, except for such
rights and obligations as by their terms are to continue beyond such
termination, including Section 5.6(f) hereof and Lessor shall have the right to
                       --------------
require Construction Agent to pay immediately upon receipt of notice from Lessor
the sum of (i) the Permitted Lease Balance then outstanding and (ii) an amount
equal to all insurance proceeds paid to Construction Agent following the
occurrence of any Construction Force Majeure Event which were not applied by the
Construction Agent or are not required to reimburse the Construction Agent for
Construction Costs incurred in connection with such Construction Force Majeure
Event, to uses permitted by this Agreement (and which are not otherwise included
in clause (i) of this sentence).  In addition, but subject to the Construction
   ----------
Agent's purchase right under Section 5.5 and the Construction Agent's right to
                             -----------
remarket pursuant to Section 5.7, the Lessor may satisfy the foregoing
                     -----------
obligation by a sale of the Leased Property and the proceeds derived from any
such sale, net of all sale costs, closing costs and carrying costs (including,
without limitation, amounts expended by the Agent

                                      16
<PAGE>

or any Funding Party to insure, protect, maintain, operate the Leased Property,
sales, transfer and real property taxes, brokers' fees, legal fees, the
insurance costs, interest and Yield, and survey costs), shall be allocated
between the Land Portion of such proceeds (the "Land Proceeds") and the Building
                                                -------------
Portion of such proceeds (the "Building Portion"). The Land Proceeds shall be
                               ----------------
distributed first, to Lessor in the amount of the Land Acquisition Cost to the
            -----
extent not previously paid by the Construction Agent, second, to the extent the
                                                      ------
Construction Agent has paid to the Lessor the Land Acquisition Cost, to the
Construction Agent to reimburse it to the extent of its payment of the Land
Acquisition Cost, but if no such payment was made to the Lessor, and third, to
                                                                     -----
the Lessor. The Building Proceeds shall be distributed first, to Lessor in the
                                                       -----
amount of the Permitted Lease Balance minus the Land Acquisition Cost to the
extent not previously paid by the Construction Agent, second, to the extent the
                                                      ------
Construction Agent has paid to the Lessor the Permitted Lease Balance minus the
Land Acquisition Cost, to the Construction Agent to reimburse it to the extent
of its payment of the Permitted Lease Balance minus the Land Acquisition Cost,
but if no such payment was made, to the Lessor, and third to the Lessor. The
                                                    -----
Lessor shall have all the rights and remedies afforded Lessor by Applicable Law
and the Operative Documents. If the Construction Agent does not purchase the
Leased Property or exercise the Construction Default Remarketing Option pursuant
to Section 5.7, it shall return the Leased Property to the Lessor within ten
   -----------
(10) Business Days of the declaration of the Construction Agency Event of
Default in accordance with Section 5.6 hereof.
                           -----------

     (c)  Remedies Cumulative.  No failure to exercise and no delay in
          -------------------
exercising, on the part of the Lessor any right, remedy, power or privilege
under this Agreement or under the other Operative Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.  The
rights, remedies, powers and privileges provided in this Agreement and in the
other Operative Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

     V.4. Limitation on Construction Agent's Recourse Liability. Subject to the
          -----------------------------------------------------
last sentence of this Section 5.4, notwithstanding anything contained herein or
                      -----------
in any other Operative Document to the contrary, upon the occurrence and during
the continuance of a Construction Agency Event of Default with respect to any
Leased Property described in Section 5.1(b), 5.1(c), 5.1(d) (other than a Lease
                             --------------  ------  ------
Event of Default under paragraph (g) of Article XII of the Lease) or 5.1(e), the
                                                                     ------
aggregate maximum recourse liability of the Construction Agent with respect to
such default to the Lessor or any Person claiming by, through or under the
Lessor under the Operative Documents, shall be limited to the Construction
Failure Payment for such Leased Property. The Construction Agent nonetheless
acknowledges and agrees that (i) the Lessor shall be entitled to recover from
the applicable Leased Property (including through any reletting and/or sale of
such Leased Property or any portion thereof) the entire outstanding Permitted
Lease Balance of such Leased Property (and, to the extent sales proceeds exceed
the Permitted Lease Balance, amounts in excess of the Permitted Lease Balance as
provided in Section 5.3(a) and (b) and Section 5.7 (g)), all accrued and unpaid
            --------------     ---     ----------------
interest, accrued Yield and other amounts then due and owing to the Lessor under
the Operative Documents and all other costs and expenses of the Lessor incurred
in

                                      17
<PAGE>

connection with such Leased Property (including without limitation, any costs
incurred in connection with the construction of the Building(s) and other
improvements and/or any reletting or sale of such Leased Property or any portion
thereof) from and after the date of such return and (ii) the foregoing recourse
limitations shall not affect the Construction Agent's obligations pursuant to
Section 3.3. If a Construction Agency Event of Default occurs due to the fraud,
-----------
misapplication of funds, illegal acts or wilful misconduct on the part of the
Construction Agent or any event described in paragraph (g) of Article XII of the
Lease, the Construction Agent shall be obligated to pay the Permitted Lease
Balance as set forth herein.

     V.5.  Construction Agent's Right to Purchase. If a Construction Agency
           --------------------------------------
Event of Default hereunder relates only to a specific Leased Property or
specific Leased Properties but not all Leased Properties, the Construction Agent
shall have the right, at its option, to cure such Construction Agency Event of
Default by purchasing (a "Construction Purchase") such affected Leased Property
                          ---------------------
or Properties for the Leased Property Balance(s) therefor from the Lessor within
five (5) Business Days of the delivery of the notice of termination referred to
in Section 5.3 (a) or (b) in accordance with the terms and subject to the
   ---------------    ---
conditions, restrictions and limitations of Section 14.5 of the Lease, in which
case no Construction Agency Event of Default shall be deemed to have occurred
hereunder for the purposes of the other Operative Documents.

     V.6.  Construction Return Procedures.  In the case of any return of any
           ------------------------------
Leased Property to the Lessor pursuant to Section 3.4 or Article V hereof (other
                                          -----------    ---------
than returns pursuant to Section 5.7 hereof)(a "Construction Return"), the
                         -----------            -------------------
Construction Agent shall, at its cost and expense, do each of the following on
or prior to the return date specified by the Lessor in a written notice to the
Construction Agent given at least ten (10) Business Days prior thereto:

     (a)   the Construction Agent shall, on or prior to the return date, execute
and deliver to the Lessor (or to the Lessor's designee): (i) a limited warranty
deed with respect to all of the interest of the Lessees and the Construction
Agent in the Leased Property containing representations and covenants of grantor
to the Lessor (or such other Person) solely regarding the absence of Liens
(other than Lessor Liens and the Liens of the Operative Documents (other than
Liens in favor of a Lessee or the Construction Agent)), (ii) an agreement
granting easements and rights of way to such Leased Property as reasonably
deemed necessary by the Lessor, (iii) a bill of sale without warranty (except as
to the absence of liens other than Lessor Liens) with respect to all of the
interest of the Lessee and the Construction Agent in all personalty and
equipment financed by the Funding Parties and (iv) an assignment of such
Construction Agent's entire interest in such Leased Property (which shall
include an assignment of all such Construction Agent's right, title and interest
in and to all awards, compensation and insurance proceeds payable in connection
with any Casualty, Condemnation or Construction Force Majeure Event affecting
such Leased Property and an assignment of leases of such Leased Property), in
the case of the documents referred to in clauses (i), (ii) and (iv) in
                                          ----------  ----     ----
recordable form and otherwise in conformity with local custom and free and clear
of any Liens other than Lessor Liens.

                                      18
<PAGE>

     (b)  the Construction Agent shall, on the construction return date, pay
over to the Agent (as assignee of the Lessor) any awards, compensation and
insurance previously received by the Construction Agent in connection with such
Leased Property which have not been applied in connection with the Construction,
repair or maintenance of the Leased Property except such amounts as may be
necessary to reimburse the Construction Agent for expenditures incurred in
connection with such Construction, repair or maintenance during the Construction
Term which have not been reimbursed;

     (c)  The Construction Agent shall execute and deliver to the Lessor a
statement of termination of this Agreement and each of the other Operative
Documents with respect to the affected Leased Property to be executed by the
Funding Parties and delivered to the Construction Agent;

     (d)  the Construction Agent shall, on or prior to the return date, vacate
the Leased Property and transfer possession of such Leased Property to the
Lessor or any Person designated by the Lessor, in each case by surrendering the
same into the possession of the Lessor or such Person, as the case may be, free
and clear of all Liens (other than Lessor Liens and the liens of the Operative
Documents) in compliance with all Applicable Law (including Environmental Laws);

     (e)  on or prior to the return date, the Construction Agent shall deliver
to the Lessor or any Person designated by the Lessor copies of all Construction
Documents, permits, licenses, books and records regarding the maintenance of
such Leased Property and the Construction Agent's interest in such Leased
Property, and a current copy of the Plans and Specifications; and

     (f)  the Construction Agent shall take all actions reasonably requested by
the Lessor to fully assign to the Lessor all of its rights and claims in, to and
under, all of the Construction Documents, and all permits and other governmental
authorizations related to such Leased Property or the Construction.

     V.7. Option to Remarket.  Notwithstanding any provisions of this Agreement
          ------------------
and the Operative Documents to the contrary and subject to the fulfillment of
each of the conditions set forth in this Section 5.7, the Construction Agent
                                         -----------
shall have the option to remarket the Leased Property with respect to which a
Construction Agency Event of Default has occurred for the Lessor or with respect
to which the Lessee shall be required to pay the Construction Failure Payment
pursuant to Section 3.4 (the "Construction Default Remarketing Option").  The
            -----------       ---------------------------------------
Construction Agent's effective exercise and consummation of the Construction
Default Remarketing Option shall be subject to the due and timely fulfillment of
each of the following provisions, the failure of any of which, unless waived in
writing by the Lessor and the Lenders, shall render the Construction Default
Remarketing Option and the Construction Agent's exercise thereof null and void,
in which event, the Construction Agent shall not have any rights under this
Section 5.7.
-----------

                                      19
<PAGE>

     (a)  Not later than five Business Days after Lessor's service of the notice
of termination referred to in Section 5.3(a) or (b) or the Lessor's denial of
                              --------------    ---
authorization to remediate any Construction Force Majeure Event under Section
                                                                      -------
3.4, the Construction Agent shall give to the Lessor and the Agent written
---
notice of the Construction Agent's exercise of the Construction Default
Remarketing Option.  The date of such notice shall be the "CDRO Notice Date";
                                                           ----------------

     (b)  Not later than thirty (30) days after Lessor's service of the notice
of termination referred to in Section 5.3(a) or (b) or the Lessor's denial of
                              --------------    ---
authorization to remediate any Construction Force Majeure Event under Section
                                                                      -------
3.4, the Construction Agent shall deliver to the Lessor and the Agent an
---
environmental assessment of such Leased Property dated not earlier than forty-
five (45) days prior to the date of delivery thereof. Such environmental
assessment shall be prepared by an environmental consultant selected by the
Required Funding Parties, shall be in form, detail and substance reasonably
satisfactory to the Required Funding Parties, and shall otherwise indicate the
environmental condition of such Leased Property to be the same as described in
the related Environmental Audit.

     (c)  The Construction Agent shall promptly provide any maintenance records
relating to such Leased Property to the Lessor, the Agent and any potential
purchaser upon request, and shall otherwise do all things necessary to deliver
possession of such Leased Property to the potential purchaser. The Construction
Agent shall allow the Lessor, the Agent and any potential purchaser access to
any Leased Property for the purpose of inspecting the same.

     (d)  On the ninetieth (90/th/) day (such date, or such later date as the
Lessor may specify in writing, being the "CDRO Closing Date") after Lessor's
                                          -----------------
service of the notice of termination referred to in Section 5.3(a) or (b) or the
                                                    --------------    ---
Lessor's denial of authorization to remediate any Construction Force Majeure
Event under Section 3.4, the Construction Agent shall surrender such Leased
            -----------
Property in accordance with Section 5.9 hereof.
                            -----------

     (e)  In connection with any such sale of the Leased Property, the
Construction Agent shall provide to the purchaser all customary "seller's"
indemnities (taking into account the location and nature of the Leased
Property), representations and warranties regarding title, absence of Liens
(except Lessor Liens) and the condition of the Leased Property, including,
without limitation, an environmental indemnity. The Construction Agent shall
fulfill all of the requirements set forth in clause (b) of Section 14.5 of the
Lease (mutatis mutandis, as if Construction Agent were a Lessee, purchasing the
Leased Property in accordance with the provisions of Section 14.1 of the Lease),
and such requirements are incorporated herein by reference. As to the Lessor,
any such sale shall be made on an "as is, with all faults" basis without
representation or warranty by the Lessor, other than the absence of Lessor
Liens.

     (f)  In connection with any such sale of such Leased Property, the
Construction Agent shall pay from the proceeds of remarketing, all prorations,
credits, costs and expenses of the sale of the Leased Property, whether incurred
by the Lessor, any Lender, the Agent or the Construction Agent, including
without limitation, the cost of all title insurance, survey,

                                      20
<PAGE>

environmental report, appraisal, transfer taxes, the Lessor's and the Agent's
attorneys' fees, the Construction Agent's attorneys' fees, commissions, escrow
fees, recording fees, and all applicable documentary and other transfer taxes.

     (g)  The Construction Agent shall pay to the Agent immediately following
the delivery of the termination notice pursuant to Section 5.3(a) or (b) or the
                                                   --------------    ---
Lessor's denial of authorization to remediate any Construction Force Majeure
Event under Section 3.4, (or to such other Person as Agent shall notify
            -----------
Construction Agent in writing, or in the case of Supplemental Rent, to the
Person entitled thereto) an amount equal to (i) in the case of the exercise of
remedies under Section 5.3(a) or a payment due under Section 3.4, the
               --------------                        -----------
Construction Failure Payment, or (ii) in the case of the exercise of remedies
under Section 5.3(b), the Permitted Lease Balance, in the type of funds
      --------------
specified in Section 3.3 of the Lease.  If the Construction Agent has exercised
             -----------
the Construction Default Remarketing Option, the following additional provisions
shall apply: During the period commencing on the CDRO Notice Date, the
Construction Agent shall, as nonexclusive agent for the Lessor, use commercially
reasonable efforts to sell the Lessor's interest in the Leased Property and will
attempt to obtain the highest purchase price therefor. All such marketing of the
Leased Property shall be paid from the proceeds of remarketing. The Construction
Agent promptly shall submit all bids to the Lessor and the Agent and the Lessor
and the Agent will have the right to review the same and the right to submit any
one or more bids. All bids shall be on an all-cash basis. In no event shall such
bidder be the Construction Agent or any Subsidiary or Affiliate of the
Construction Agent. The written offer must specify the CDRO Closing Date as the
closing date. If, and only if, the selling price (net of closing costs and
prorations, as reasonably estimated by the Agent)(the "Construction Offer
                                                       ------------------
Price") is less than the Lease Balance at such time, then the Lessor or the
-----
Agent may, in its sole and absolute discretion, by notice to the Construction
Agent, reject such offer to purchase, in which event the parties will proceed
according to the provisions of Section 5.8 hereof. If neither the Lessor nor the
                               -----------
Agent rejects such purchase offer as provided above, the closing of such
purchase of the Leased Property by such purchaser shall occur on the CDRO
Closing Date, contemporaneously with the Construction Agent's surrender of the
Leased Property in accordance with Section 5.9 hereof, and the gross proceeds of
                                   -----------
the sale (after deduction, however, for any marketing, closing or other costs,
prorations or commissions) shall be paid directly to the Agent (or the Lessor if
the Funded Amounts have been fully paid).  The Agent shall distribute the Land
Proceeds derived from any such sale first, to the Lessor in an amount of the
difference between (i) the Land Acquisition Cost and (ii) the Construction
Failure Payment to the extent attributable to clause (i) of the definition
thereof (the "Land Construction Failure Payment") received by the Agent pursuant
              ---------------------------------
to clause (i) of the first sentence of this Section 5.7(g), second, to the
   ----------                               --------------
extent the Construction Agent has paid the Land Construction Failure Payment due
to the Agent pursuant to clause (i) of the first sentence of this Section
                         ----------                               -------
5.7(g), to the Construction Agent to reimburse it to the extent of its payment
of such amount, and third, to the Lessor.  The Agent shall distribute the
                    -----
Building Proceeds derived from any such sale first, to the Lessor in an amount
of the difference between (i) the Permitted Lease Balance minus the Land
Acquisition Cost and (ii) the Construction Failure Payment to the extent
attributable to clause (ii) of the definition thereof (the "Building
                                                            --------
Construction Failure Payment"), if any, received by the Agent pursuant to clause
----------------------------                                              ------
(i) of the first sentence of this Section 5.7(g),
---                               --------------

                                      21
<PAGE>

second, to the extent the Construction Agent has paid the Building Construction
Failure Payment due to the Agent pursuant to clause (i) of the first sentence of
                                             ----------
this Section 5.7(g), to the Construction Agent to reimburse it to the extent of
     --------------
its payment of such amount, and third, to the Lessor. The Construction Agent
                                -----
shall not have the right, power or authority to bind the Lessor in connection
with any proposed sale of the Leased Property.

     V.8.  Rejection of Sale. Notwithstanding anything contained herein to the
           -----------------
contrary, if the Lessor or the Agent rejects the purchase offer for any Leased
Property as provided in Section 5.7, then the Agent shall have an appraisal done
                        -----------
of the Leased Property by an independent third party appraiser selected by the
Agent, which appraiser shall determine the Fair Market Sales Value of the Leased
Property in the condition in which such Leased Property exists at such time (the
"Construction Appraised Value").  If (A) if the Construction Appraised Value
 ----------------------------
shall be equal to or greater than the Construction Offer Price, and the Lessor
in its sole discretion so elects, or (B) the Construction Appraised Value shall
be less than the Construction Offer Price, the Leased Property shall be sold
pursuant to Section 5.7(g), and the proceeds of such sale shall be distributed,
            --------------
in accordance with Section 5.7.  If the Construction Appraised Value shall be
                   -----------
equal to or greater than the Construction Offer Price and the Lessor shall not
have elected to sell the Leased Property pursuant to Section 5.7(g), (a) the
                                                     --------------
Lessor shall refund to the Lessee the amount by which (x) (i) the Land
Construction Failure Payment exceeds (ii) the amount by which (A) the Land
Acquisition Costs exceeds (B) the Land Portion of the Construction Appraised
Value and (y) (i) the Building Construction Failure Payment exceeds (ii) the
amount by which (A) the Permitted Lease Balance minus the Land Acquisition Costs
exceeds (B) the Building Portion of the Construction Appraised Value, and (b)
the Lessor shall retain title to the Leased Property and shall retain all
proceeds with respect to the Leased Property, free and clear of all claims of
the Lessee and the Construction Agent.

     V.9.  Return of Leased Property. If the Lessor retains title to any Leased
           -------------------------
Property pursuant to Section 5.8 hereof, then the Construction Agent shall, on
                     -----------
the CDRO Closing Date for such Leased Property (or such later date on which the
Lessor shall elect not to sell the Leased Property pursuant to Section 5.7), and
                                                               -----------
at its own expense, return possession of such Leased Property to the Lessor for
retention by the Lessor and shall do all things required under Section 5.6 or,
                                                               -----------
if the Construction Agent properly exercises the Construction Default
Remarketing Option and fulfills all of the conditions of Section 5.7 hereof and
                                                         -----------
neither the Lessor nor the Agent rejects such purchase offer pursuant to Section
                                                                         -------
5.7, then the Construction Agent shall, on such CDRO Closing Date, and at its
---
own cost, transfer possession of the Leased Property to the independent
purchaser thereof, in each case by surrendering the same into the possession of
the Lessor or such purchaser, as the case may be, free and clear of all Liens
other than Lessor Liens, in as good condition as it was on the CDRO Notice Date,
and in compliance in all material respects with Applicable Law and deliver to
the independent purchaser thereof the documents described in clauses (i) through
                                                             -----------
(iii) of Section 5.6(a). In the case of a sale under Section 5.7, the
-----    --------------                              -----------
Construction Agent shall, on and within a reasonable time before and after the
CDRO Closing Date, cooperate with the Lessor and the independent purchaser of
such Leased Property in order to facilitate the ownership and operation by such
purchaser of such Leased Property after the

                                      22
<PAGE>

CDRO Closing Date, which cooperation shall include the following, all of which
the Construction Agent shall do on or before the CDRO Closing Date or as soon
thereafter as is reasonably practicable: providing all books and records,
including copies of all Construction Documents, regarding the construction,
maintenance and ownership of such Leased Property and all know-how, data and
technical information relating thereto, providing a copy of the Plans and
Specifications, granting or assigning all permits and licenses (to the extent
assignable) necessary for the construction, operation and maintenance of such
Leased Property, and cooperating in seeking and obtaining all necessary
Governmental Action and taking all action necessary to fully assign and transfer
all of its rights, claims and causes of action under all of the Construction
Documents (including, without limitation, obtaining all necessary consents to
such assignments). The obligations of the Construction Agent under this Section
                                                                        -------
5.9 shall survive the expiration or termination of this Agreement.
---

     V.10.  Reimbursements.  If (i) any deduction was made in the Construction
            --------------
Failure Payment due from the Construction Agent hereunder for amounts payable by
the Construction Agent that the Construction Agent was legally required to pay
after the end of the Construction Term pursuant to the definition of
"Construction Failure Payment" and (ii) the Construction Agent shall be
reimbursed in full or in part for such amount by any other Person (including,
but not limited to, any insurer), the Construction Agent shall promptly pay the
amount so reimbursed to the Lessor.

     V.11.  Building Construction Failure Payment.  The Building Construction
            -------------------------------------
Failure Payment shall include 89.9% of Project Costs (exclusive of Land
Acquisition Costs) incurred by Lessor to complete or to further the Construction
of the related Leased Property, whether incurred before or after the termination
of the Construction Agent's rights and obligations under this Agreement with
respect to such Leased Property.  To the extent such costs are incurred by
Lessor after the payment by the Construction Agent of the Building Construction
Failure Payment, the Construction Agent shall make one or more additional
payments upon demand to Lessor such that the sum of such payment, plus the
Future Value of the amounts previously paid by the Construction Agent on account
of the Building Construction Failure Payment equals 89.9% of the aggregate
Project Costs (exclusive of Land Acquisition Cost) incurred to the date of
calculation, provided that such additional paid amounts shall be included in the
             --------
Building Construction Failure Payment for purposes of calculating any amount
required to be reimbursed to the Construction Agent from the proceeds of the
sale of the related Leased Property pursuant to this Agreement.

                                  ARTICLE VI

                          NO CONSTRUCTION AGENCY FEE

     VI.1.  Lease as Fulfillment of Lessor's Obligations.  All obligations,
            --------------------------------------------
duties and requirements imposed upon or allocated to the Construction Agent
shall be performed by the Construction Agent at the Construction's Agent's sole
cost and expense, and the Construction

                                      23
<PAGE>

Agent will not be entitled to, and the Lessor shall not have any obligation to
pay, any agency fee or other fee or compensation, and the Construction Agent
shall not be entitled to, and the Lessor shall not have any obligation to make
or pay, any reimbursement therefor, it being understood that this Agreement is
being entered into as consideration for and as an inducement to the Lessor
entering into the Lease and the other Operative Documents.

                                 ARTICLE VII

                 LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS

     VII.1.  Exercise of the Lessor's Rights.  The Construction Agent hereby
             -------------------------------
acknowledges and agrees that the rights and powers of the Lessor under this
Agreement have been assigned to, and may be exercised by, the Agent.

     VII.2.  Lessor's Right to Cure Construction Agent's Defaults.  The Lessor,
             ----------------------------------------------------
without waiving or releasing any obligation or Construction Agency Event of
Default, may, upon prior written notice to the Construction Agent (but shall be
under no obligation to), remedy any Construction Agency Event of Default for the
account of the Construction Agent, and such costs and expenses shall be
capitalized and shall result in an increase to the Funded Amounts related to the
related Leased Property.  All reasonable out of pocket costs and expenses so
incurred (including actual and reasonable fees and expenses of counsel),
together with interest thereon at the Overdue Rate from the date on which such
sums or expenses are paid by the Lessor, shall be capitalized and shall result
in an increase to the Funded Amounts related to the related Leased Property.

                                 ARTICLE VIII

                                 MISCELLANEOUS

     VIII.1.  Notices.  All notices, consents, directions, approvals,
              -------
instructions, requests, demands and other communications required or permitted
by the terms hereof to be given to any Person shall be given in writing in the
manner provided in, shall be sent to the respective addresses set forth in, and
the effectiveness thereof shall be governed by the provisions of, Section 8.2 of
the Master Agreement.

     VIII.2.  Successors and Assigns.  This Agreement shall be binding upon and
              ----------------------
inure to the benefit of the Lessor, the Construction Agent and their respective
legal representatives, successors and permitted assigns.  The Construction Agent
shall not assign its rights or obligations hereunder without the prior written
consent of the Lessor and the Agent.

     VIII.3.  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
              -------------
THE PARTIES UNDER THIS AGREEMENT SHALL BE

                                      24
<PAGE>

GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF FLORIDA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     VIII.4.  Amendments and Waivers.  Subject to Section 8.4 of the Master
              ----------------------
Agreement, the Lessor and the Construction Agent may from time to time, enter
into written amendments, supplements or modifications hereto.

     VIII.5.  Counterparts.  This Agreement may be executed on any number of
              ------------
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.

     VIII.6.  Severability.  Any provision of this Agreement which 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 not invalidate or render
unenforceable such provision in any other jurisdiction.

     VIII.7.  Headings and Table of Contents.  The headings and table of
              ------------------------------
contents contained in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     VIII.8.  Jurisdiction; Waivers.  The Lessor and the Construction Agent
              ---------------------
hereby acknowledge that the terms of Section 8.11 of the Master Agreement apply
to this Agreement.

                                      25
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

                              HUGHES SUPPLY, INC.

                              By
                                --------------------------------
                                Name:
                                     ---------------------------
                                Title:
                                      --------------------------

                              ATLANTIC FINANCIAL GROUP, LTD.

                              By:  Atlantic Financial Managers, Inc., its
                                       General Partner

                              By
                                --------------------------------
                                Name:
                                     ---------------------------
                                Title:
                                      --------------------------

                                      S-1
<PAGE>

                                                                       EXHIBIT A

                  Supplement to Construction Agency Agreement
                  -------------------------------------------

     SUPPLEMENT to Construction Agency Agreement, dated as of ______________,
200__, between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the

"Lessor"), and HUGHES SUPPLY, INC., a Florida corporation (in its capacity as
-------
construction agent, the "Construction Agent").  Capitalized terms used but not
                         ------------------
otherwise defined herein shall have the meanings given them in the Construction
Agency Agreement.

     The Lessor and the Construction Agent are parties to that certain
Construction Agency Agreement, dated as of June 22, 2001 (as amended,
supplemented or otherwise modified, the "Construction Agency Agreement"),
                                         -----------------------------
pursuant to which (i) the Lessor has appointed the Construction Agent as its
sole and exclusive agent in connection with the identification and acquisition
of Land and construction of the Buildings in accordance with the Plans and
Specifications, and (ii) the Construction Agent has agreed, for the benefit of
the Lessor, to cause the construction of the Buildings to be completed in
accordance with the Plans and Specifications.

     Subject to the terms and conditions of the Construction Agency Agreement,
the Lessor and the Construction Agent desire that the terms of the Construction
Agency Agreement apply to the Land described in Schedule 1 and wish to execute
                                                ----------
this Supplement to provide therefor.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

     1.  The Construction Agent agrees to act as Construction Agent and to
perform its obligations under the Construction Agency Agreement in connection
with the completion of construction of the Building on the Land described in
Schedule 1 in accordance with the Plans and Specifications for such Land.  The
----------
Construction Agent hereby represents and warrants to Lessor that the
Construction Agent has heretofore delivered to Lessor a true, correct and
complete copy of the Plans and Specifications for the Building on the Land
described in Schedule 1 or, if not available on the date hereof, will deliver
             ----------
such Plans and Specifications as soon as available.

     2.  Each of the Lessor and the Construction Agent acknowledges and agrees
that the development of the Land described in Schedule 1 and the construction of
                                              ----------
the Buildings thereon shall be governed by the terms of the Construction Agency
Agreement.

                                      A-1
<PAGE>

     3.  The anticipated construction budget relating to the construction and
development of the Building on the Land described in Schedule 1 is $__________.
                                                     ----------
The acquisition cost of the Land described in Schedule 1 is $___________.
                                              ----------

     4.  This Supplement shall, upon its execution and delivery, constitute a
part of the Construction Agency Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

                              HUGHES SUPPLY, INC.

                              By
                                ---------------------------------
                                Name:
                                Title:

                              ATLANTIC FINANCIAL GROUP, LTD.

                              By:  Atlantic Financial Managers,  Inc., its
General Partner

                              By
                                ---------------------------------
                                Name:
                                Title:

                                      A-2
<PAGE>

                                                        Schedule 1 to Supplement

                         Description of Land Interest
                         ----------------------------

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