Document:

LINE OF CREDIT AGREEMENT

                          Dated as of January 26 , 1999

                                  By And Among

                               HUGHES SUPPLY, INC.

                                       AND

              SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION,
                    individually and as Administrative Agent,
                           FIRST UNION NATIONAL BANK,
                    individually and as Documentation Agent,
                               NATIONSBANK, N.A.,
                      individually and as Syndication Agent
                     SOUTHTRUST BANK, NATIONAL ASSOCIATION,
                          individually and as Co-Agent,
                              ABN AMRO BANK, N.V.,
                                 PNC BANK, N.A.,
                              WACHOVIA BANK, N.A.,
                              THE FIFTH THIRD BANK,
                           HIBERNIA NATIONAL BANK and
              other financial institutions becoming a party hereto

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

                                 King & Spalding
                           191 Peachtree Street, N.E.
                             Atlanta, Georgia 30303
                           Attn: Carolyn Zander Alford
                                 (404) 572-4600

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

DEFINITIONS; CONSTRUCTION.....................................................1
     Definitions..............................................................2
     Accounting Terms and Determination......................................18
     Other Definitional Terms................................................18
     Exhibits and Schedules..................................................18
LINE OF CREDIT COMMITMENT....................................................18
     Line of Credit Commitment; Use of Proceeds..............................18
     Line of Credit Notes; Repayment of Principal............................19
     Voluntary Reduction of Line of Credit Commitments.......................19
     Extension of the Line of Credit Termination Date........................20
GENERAL LOAN TERMS...........................................................20
     Funding Notices.........................................................20
     Disbursement of Funds...................................................22
     Interest................................................................23
     Interest Periods........................................................25
     Fees....................................................................26
     Voluntary Prepayments of Borrowings.....................................26
     Payments, etc...........................................................27
     Interest Rate Not Ascertainable, etc....................................28
     Illegality..............................................................29
     Increased Costs.........................................................29
     Lending Offices.........................................................31
     Funding Losses..........................................................31
     Assumptions Concerning Funding of Eurodollar Advances...................31
     Apportionment of Payments...............................................32
     Sharing of Payments, Etc................................................32
     Capital Adequacy........................................................32
     Benefits to Guarantors..................................................33
     Limitation on Certain Payment Obligations...............................33
CONDITIONS TO BORROWINGS.....................................................34
     Conditions Precedent to Initial Line of Credit Loans....................34
     Conditions to All Line of Credit Loans..................................36
REPRESENTATIONS AND WARRANTIES...............................................37
     Organization and Qualification..........................................37
     Corporate Authority.....................................................38
     Financial Statements....................................................38
     Tax Returns.............................................................38
     Actions Pending.........................................................38
     Representations; No Defaults............................................38
     Title to Properties.....................................................39

                                       -ii-

<PAGE>

     Enforceability of Agreement.............................................39
     Consent.................................................................39
     Use of Proceeds; Federal Reserve Regulations............................39
     ERISA...................................................................39
     Subsidiaries............................................................40
     Outstanding Indebtedness................................................40
     Conflicting Agreements..................................................40
     Pollution and Other Regulations.........................................41
     Possession of Franchises, Licenses, Etc.................................42
     Patents, Etc............................................................42
     Governmental Consent....................................................42
     Disclosure..............................................................43
     Insurance Coverage......................................................43
     Labor Matters...........................................................43
     Intercompany Loans; Dividends...........................................43
     Burdensome Restrictions.................................................44
     Investment Company Act, Etc.............................................44
     Notice of Non-Compliance with Laws......................................44
     Year 2000 Issues........................................................44
AFFIRMATIVE COVENANTS........................................................44
     Corporate Existence, Etc................................................44
     Compliance with Laws, Etc...............................................45
     Payment of Taxes and Claims, Etc........................................45
     Keeping of Books........................................................45
     Visitation, Inspection, Etc.............................................45
     Insurance; Maintenance of Properties....................................45
     Reporting Covenants.....................................................46
     Financial Covenants.....................................................49
     Notices Under Certain Other Indebtedness................................50
     Additional Guarantors...................................................50
     Financial Statements; Fiscal Year.......................................50
     Ownership of Guarantors.................................................50
NEGATIVE COVENANTS...........................................................51
     Indebtedness............................................................51
     Liens...................................................................51
     Mergers, Acquisitions, Sales, Etc.......................................52
     Investments, Loans, Etc.................................................53
     Sale and Leaseback Transactions.........................................54
     Transactions with Affiliates............................................54
     Optional Prepayments....................................................54
     Changes in Business.....................................................54
     ERISA...................................................................54
     Additional Negative Pledges.............................................55
     Limitation on Payment Restrictions Affecting Consolidated Companies.....55

                                      -iii-

<PAGE>

     Actions Under Certain Documents.........................................55
EVENTS OF DEFAULT............................................................55
     Payments................................................................55
     Covenants Without Notice................................................56
     Other Covenants.........................................................56
     Representations.........................................................56
     Non-Payments of Other Indebtedness......................................56
     Defaults Under Other Agreements.........................................56
     Bankruptcy..............................................................56
     ERISA...................................................................57
     Money Judgment..........................................................57
     Ownership of Credit Parties and Pledged Entities........................58
     Change in Control of Borrower...........................................58
     Default Under Other Credit Documents....................................58
     Attachments.............................................................58
THE AGENT....................................................................59
     Appointment of Administrative Agent.....................................59
     Nature of Duties of Administrative Agent................................59
     Lack of Reliance on the Administrative Agent............................59
     Certain Rights of the Administrative Agent..............................60
     Reliance by Administrative Agent........................................60
     Indemnification of Administrative Agent.................................60
     The Administrative Agent in Its Individual Capacity.....................61
     Holders of Line of Credit Notes.........................................61
     Successor Administrative Agent..........................................61
     Documentation Agent.....................................................62
     Syndication Agent.......................................................62
MISCELLANEOUS................................................................62
     Notices.................................................................62
     Amendments, Etc.........................................................63
     No Waiver; Remedies Cumulative..........................................63
     Payment of Expenses, Etc................................................63
     Right of Setoff.........................................................65
     Benefit of Agreement....................................................65
     Governing Law; Submission to Jurisdiction...............................67
     Independent Nature of Lenders' Rights...................................68
     Counterparts............................................................68
     Effectiveness; Survival.................................................69
     Severability............................................................69
     Independence of Covenants...............................................69
     Change in Accounting Principles, Fiscal Year or Tax Laws................69
     Headings Descriptive; Entire Agreement..................................70
     Time is of the Essence..................................................70
     Usury...................................................................70

                                      -iv-

<PAGE>

      Construction...........................................................70
      Waiver of Effect of Corporate Seal.....................................70
      IN.....................................................................71

                                      -v-
<PAGE>

                                    SCHEDULES

Schedule 5.01     Organization and Ownership of Subsidiaries
Schedule 5.11     Employee Benefit Matters
Schedule 5.14     Conflicting Agreements
Schedule 5.15(a)  Environmental Compliance
Schedule 5.22     Intercompany Loans
Schedule 7.01(b)  Existing Indebtedness
Schedule 7.02     Existing Liens

                                    EXHIBITS

Exhibit A     Form of Syndicate Note
Exhibit B     Form of Competitive Bid Note
Exhibit C     Form of Closing Certificate
Exhibit D     Form of Assignment and Acceptance

                                      -vi-

<PAGE>

                            LINE OF CREDIT AGREEMENT

         THIS  LINE OF  CREDIT  AGREEMENT,  dated as of  January  26,  1999 (the
"Agreement")  by  and  among  HUGHES  SUPPLY,  INC.   ("Borrower"),   a  Florida
corporation,  SUNTRUST BANK, CENTRAL FLORIDA,  NATIONAL ASSOCIATION,  ("SunTrust
Bank,  Central  Florida") a national banking  association,  FIRST UNION NATIONAL
BANK, a national  banking  association,  NATIONSBANK,  N.A., a national  banking
association,   SOUTHTRUST  BANK,  NATIONAL   ASSOCIATION,   a  national  banking
association, ABN AMRO BANK, N.V., a banking corporation organized under the laws
of the Netherlands,  PNC BANK, N.A., a national  banking  association,  WACHOVIA
BANK,  N.A., a national  banking  association,  THE FIFTH THIRD BANK, a national
banking association,  HIBERNIA NATIONAL BANK, a national banking association and
such other  financial  institutions  becoming a party  hereto from time to time,
(individually,  a "Lender" and  collectively,  the  "Lenders"),  SUNTRUST  BANK,
CENTRAL FLORIDA,  NATIONAL  ASSOCIATION as administrative  agent for the Lenders
(in such capacity,  the "Administrative  Agent"),  FIRST UNION NATIONAL BANK, as
documentation  agent  for the  Lenders  (in such  capacity,  the  "Documentation
Agent"),  NATIONSBANK,  N.A.,  as  syndication  agent for the  Lenders  (in such
capacity,  the "Syndication  Agent"), and SOUTHTRUST BANK, NATIONAL ASSOCIATION,
as Co-agent for the Lenders (in such capacity, the "Co-Agent").

                              W I T N E S S E T H :

         WHEREAS,   Borrower  has  requested   that  the  Lenders   establish  a
$75,000,000  line of credit  facility in favor of  Borrower,  and subject to the
terms and conditions contained herein, the Lenders are willing to establish such
line of credit facility in favor of Borrower subject to the terms and conditions
set forth below;

         NOW,  THEREFORE,  in consideration of the mutual covenants made herein,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby  acknowledged,  the  parties  hereto,  intending  to be legally
bound, agree as follows:

                                    ARTICLE 1

                            DEFINITIONS; CONSTRUCTION

         Section  1.1.  Definitions.  As  used  in  this  Agreement,  and in any
instrument,  certificate,  document or report  delivered  pursuant  hereto,  the
following terms shall have the following  meanings (to be equally  applicable to
both the singular and plural forms of the term defined):

<PAGE>

         "Administrative  Agent" shall mean SunTrust Bank,  Central  Florida,  a
national banking association,  as administrative agent for the Lenders hereunder
and under the other Credit Documents, and each successor administrative agent.

         "Adjusted  LIBO Rate" shall mean with respect to each  Interest  Period
for a  Eurodollar  Advance,  the rate  obtained by  dividing  (A) LIBOR for such
Interest  Period by (B) a  percentage  equal to 1 minus the then stated  maximum
rate  (stated as a decimal) of all  reserves  requirements  (including,  without
limitation, any marginal,  emergency,  supplemental,  special or other reserves)
applicable  to any  member  bank of the  Federal  Reserve  System in  respect of
Eurodollar  liabilities  as defined in  Regulation  D (or against any  successor
category of liabilities as defined in Regulation  D). The  Administrative  Agent
shall promptly notify the Borrower of any such reserve  requirements that become
applicable.

         "Advance"  shall  mean any  principal  amount  advanced  and  remaining
outstanding  at any time under the Line of Credit Loans,  which Advance shall be
made  or  outstanding  as a  Base  Rate  Advance,  Competitive  Bid  Advance  or
Eurodollar Advance, as the case may be.

         "Affiliate" of any Person means any other Person directly or indirectly
controlling,  controlled by, or under common control with, such Person,  whether
through the  ownership  of voting  securities,  by contract  or  otherwise.  For
purposes of this definition, "control" (including with correlative meanings, the
terms  "controlling",  "controlled  by",  and "under  common  control  with") as
applied to any Person,  means the  possession,  directly or  indirectly,  of the
power to direct or cause the  direction of the  management  and policies of that
Person.

         "Agents"  shall  mean,  collectively,  the  Administrative  Agent,  the
Documentation Agent, the Syndication Agent and the Co-Agent.

         "Agreement"  shall  mean  this  Line of  Credit  Agreement,  either  as
originally  executed  or as it may be from time to time  supplemented,  amended,
restated, renewed or extended and in effect.

         "Applicable   Facility  Fee  Percentage"   shall  mean  the  percentage
designated below based on Borrower's  Leverage Ratio for the most recently ended
fiscal quarter for which financial  statements  have been delivered  pursuant to
Section 6.07(a) or (b):

            Leverage Ratio                Applicable Facility Fee
                                       Percentage for Line of Credit
                                              Commitments:
        --------------------------------------------------------------
           Less than 0.4:1.0                     0.125%
        --------------------------------------------------------------
         Greater than or equal to
        0.4:1.0 but less than 0.45:1.0           0.15%
        --------------------------------------------------------------
         Greater than or equal to
        0.45:1.0 but less than 0.5:1.0           0.175%
        --------------------------------------------------------------
         Greater than or equal to
        0.5:1.0 but less than 0.55:1.0           0.225%
        --------------------------------------------------------------
         Greater than or equal to
        0.55:1.0                                 0.275%
        --------------------------------------------------------------

                                      -2-

<PAGE>

provided, however, that:

          (a) The  Applicable  Facility Fee Percentage in effect as of
     the date of execution and delivery of this Agreement is .175% for
     the Line of Credit Commitments,  and such percentage shall remain
     in  effect  until  such  time  as  the  Applicable  Facility  Fee
     Percentage may be adjusted as hereinafter provided; and

          (b)  Adjustments,  if any, to the  Applicable  Facility  Fee
     Percentages  based on changes in the ratios set forth above shall
     be made and  become  effective  on the  first  day of the  fiscal
     quarter   immediately   following   delivery  of  the   financial
     statements required pursuant to Section 6.07(b),  and (ii) on the
     first day of the second fiscal quarter immediately  following the
     last day of any fiscal year of Borrower.

          (c) Notwithstanding the foregoing,  at any time during which
     Borrower  has  failed to deliver  the  financial  statements  and
     certificates  when  required  by Section  6.07(a) and (b), as the
     case may be, the  Applicable  Facility  Fee  Percentage  shall be
     0.275% until such time as the delinquent financial statements are
     delivered at which time the  Applicable  Facility Fee  Percentage
     shall be reset as provided above.

         "Applicable Margin" shall mean the percentage designated below based on
Borrower's  Leverage  Ratio for the most recently ended fiscal quarter for which
financial statements have been delivered pursuant to Section 6.07(a) or (b):

            Leverage Ratio              Applicable Margin for Line
                                         of Credit Commitments:
        --------------------------------------------------------------
           Less than 0.4:1.0                      0.275%
        --------------------------------------------------------------
          Greater than or equal to
        0.4:1.0 but less than 0.45:1.0            0.35%
        --------------------------------------------------------------
          Greater than or equal to
        0.45:1.0 but less than 0.5:1.0            0.575%
        --------------------------------------------------------------
          Greater than or equal to
        0.5:1.0 but less than 0.55:1.0            0.65%
        --------------------------------------------------------------
          Greater than or equal to
        0.55:1.0                                  0.85%
        --------------------------------------------------------------

                                      -3-

<PAGE>

provided, however, that:

          (a)  The  Applicable  Margin  in  effect  as of the  date of
     execution and delivery of this Agreement is .575% for the Line of
     Credit  Commitments,  and such percentage  shall remain in effect
     until  such time as the  Applicable  Margin  may be  adjusted  as
     hereinafter provided; and

          (b) Adjustments,  if any, to the Applicable  Margin based on
     changes in the ratios  set forth  above  shall be made and become
     effective  on the first  day of the  fiscal  quarter  immediately
     following delivery of the financial  statements required pursuant
     to  Section  6.07(b),  and (ii) on the  first  day of the  second
     fiscal quarter  immediately  following the last day of any fiscal
     year of Borrower.

          (c) Notwithstanding the foregoing,  at any time during which
     Borrower  has  failed to deliver  the  financial  statements  and
     certificates  when  required  by Section  6.07(a) and (b), as the
     case may be, the Applicable Margin shall be 0.85% until such time
     as the  delinquent  financial  statements  are delivered at which
     time the Applicable Margin shall be reset as provided above

         "Asbestos  Laws" means the common law in all  federal,  state and local
and foreign jurisdictions and other laws in such jurisdictions, and regulations,
codes, orders, decrees, judgments or injunctions issued,  promulgated,  approved
or entered  thereunder,  now or  hereafter in effect  relating to or  concerning
asbestos or asbestos-containing material, including without limitation, exposure
to asbestos or asbestos-containing material.

         "Asset Value" shall mean,  with respect to any property or asset of any
Consolidated  Company as of any particular  date, an amount equal to the greater
of (i) the  then  book  value  of such  property  or  asset  as  established  in
accordance  with GAAP,  and (ii) the then fair market value of such  property or
asset as determined in good faith by the board of directors of such Consolidated
Company.

         "Assignment  and  Acceptance"  shall mean an assignment  and acceptance
entered into by a Lender and an Eligible  Assignee in accordance  with the terms
of this Agreement and substantially in the form of Exhibit D.

         "Bankruptcy  Code" shall mean The  Bankruptcy  Code of 1978, as amended
and in effect from time to time (11 U.S.C.ss. 101 et seq.).

                                      -4-

<PAGE>

         "Base  Rate"  shall  mean  (with  any  change  in the  Base  Rate to be
effective as of the date of change of either of the following  rates) the higher
of (a) the rate which the  Administrative  Agent designates from time to time to
be its prime lending  rate, as in effect from time to time,  and (b) the Federal
Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%)
per annum. The Administrative Agent's prime lending rate is a reference rate and
does not  necessarily  represent  the lowest or best rate charged to  customers;
Administrative  Agent  may make  commercial  loans  or  other  loans at rates of
interest at, above or below the Administrative Agent's prime lending rate.

         "Base Rate Advance" shall mean an Advance bearing interest based on the
Base Rate.

         "Base Rate Loan"  shall mean any Line of Credit  Loan  hereunder  which
bears interest at the Base Rate.

         "Borrowing" shall mean the incurrence by Borrower under any Facility of
Advances  of one Type  concurrently  having  the  same  Interest  Period  or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.

         "Business Day" shall mean,  with respect to Eurodollar  Loans,  any day
other than a day on which  commercial  banks are closed or required to be closed
for domestic and international  business,  including dealings in Dollar deposits
on the London  interbank  market,  and with  respect to all other Line of Credit
Loans  and  matters,  any day other  than  Saturday,  Sunday  and a day on which
commercial banks are required to be closed for business in Atlanta,  Georgia, or
Orlando, Florida.

         "Capitalized  Lease Obligations" shall mean all lease obligations which
have been or are required to be, in  accordance  with GAAP,  capitalized  on the
books of the lessee.

         "CERCLA"  has  the  meaning  set  forth  in  Section  5.15(a)  of  this
Agreement.

         "Change  in  Control  Provision"  shall  mean  any  term  or  provision
contained in any  indenture,  debenture,  note,  or other  agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a commitment
to extend loans in excess of $5,000,000 which requires, or permits the holder(s)
of such  Indebtedness of Borrower to require that such  Indebtedness of Borrower
be redeemed,  repurchased,  defeased,  prepaid or repaid,  either in whole or in
part, or the maturity of such  Indebtedness of Borrower to be accelerated in any
respect,  as a result of a change in ownership of the capital  stock of Borrower
or voting rights with respect thereto.

         "Closing  Date" shall mean the date on or before  January 26, 1999,  on
which the initial Line of Credit Loans are made and the  conditions set forth in
Section 4.01 are satisfied or waived in accordance with Section 10.02.

                                      -5-

<PAGE>

         "Co-Agent" shall mean SouthTrust Bank, National Association, a national
banking  association,  as co-agent for the Lenders hereunder and under the other
Credit Documents, and each successor co-agent.

         "Commitment Letter" shall mean that certain letter agreement,  dated as
of December 21, 1998,  executed by SunTrust  Equitable  Securities  Corporation,
SunTrust Bank,  Central Florida,  and First Union National Bank and acknowledged
and agreed to by the Borrower.

         "Competitive  Bid Advance" shall mean an Advance bearing interest based
on a Competitive Bid Rate.

         "Competitive  Bid  Loan"  shall  mean a Line of  Credit  Loan made by a
Lender on a competitive bid basis as provided in Article II.

         "Competitive   Bid  Note"  shall  mean  a  promissory  note  evidencing
Competitive Bid Loans in the form attached hereto as Exhibit B.

         "Competitive Bid Rate" shall mean the interest rate charged by a Lender
on a Competitive Bid Loan.

         "Consolidated  Amortization"  shall mean,  for any fiscal period of the
Borrower,  amortization of the Consolidated Companies for such period determined
on a consolidated basis in accordance with GAAP.

         "Consolidated Companies" shall mean, collectively,  Borrower and all of
its Subsidiaries.

         "Consolidated  Depreciation"  shall mean,  for any fiscal period of the
Borrower,  depreciation of the Consolidated Companies for such period determined
on a consolidated basis in accordance with GAAP.

         "Consolidated EBITR" shall mean, for any fiscal period of the Borrower,
an amount equal to Consolidated Net Income (Loss) for such period,  plus, to the
extent deducted in determining  Consolidated Net Income (Loss), (i) Consolidated
Tax Expense for such period, (ii) Consolidated Interest Expense for such period,
and (iii) Consolidated Rental Expense for such period.

         "Consolidated  EBITDAR"  shall  mean,  for  any  fiscal  period  of the
Borrower, an amount equal to Consolidated Net Income (Loss) for such period plus
to the extent  deducted  in  determining  Consolidated  Net Income  (Loss),  (i)
Consolidated Interest Expense for such period, (ii) Consolidated Tax Expense for
such period, (iii) Consolidated  Depreciation for such period,

                                      -6-

<PAGE>

(iv)  Consolidated  Amortization  for such  period and (v)  Consolidated  Rental
Expense for such period.

         "Consolidated  Interest  Expense"  shall mean, for any fiscal period of
Borrower, total interest expense (including without limitation, interest expense
attributable  to capitalized  leases in accordance with the GAAP and any program
costs  incurred  by  Borrower in  connection  with sales of accounts  receivable
pursuant to a  securitization  program) of the  Consolidated  Companies for such
period, determined on a consolidated basis.

         "Consolidated  Net Income  (Loss)" shall mean, for any fiscal period of
Borrower, the net income (or loss) of the Consolidated Companies for such period
(taken as a single  accounting  period)  determined on a  consolidated  basis in
conformity  with GAAP;  provided that there shall be excluded  therefrom (i) any
items of gain or loss which were included in determining  such  Consolidated Net
Income and were not realized in the ordinary course of business or the result of
a sale of assets  other than in the ordinary  course of  business;  and (ii) the
income  (or  loss)  of any  party  accrued  prior  to the date  such  becomes  a
Subsidiary of Borrower or is merged into or consolidated with Borrower or any of
its  Subsidiaries,  or such  party's  assets are  acquired  by any  Consolidated
Company,  unless  such party is  acquired in a  transaction  accounted  for as a
pooling of interests.

         "Consolidated  Net Worth"  shall mean as of the date of  determination,
the  Borrower's  total  shareholder's  equity  of  such  date as  determined  in
accordance with GAAP.

         "Consolidated  Rental  Expense"  shall mean,  for any fiscal  period of
Borrower,  total operating lease expense of the Consolidated  Companies for such
period, determined on a consolidated basis in accordance with GAAP.

         "Consolidated  Tax Expense"  shall mean,  for any fiscal  period of the
Borrower,  tax expense of the Consolidated  Companies for such period determined
on a consolidated basis in accordance with GAAP.

         "Contractual  Obligation" of any Person shall mean any provision of any
security  issued by such Person or of any  agreement,  instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.

         "Credit Documents" shall mean,  collectively,  this Agreement, the Line
of Credit Notes, the Guaranty Agreements,  and all other Guaranty Documents,  if
any.

         "Credit  Parties"  shall  mean,  collectively,  each of  Borrower,  the
Guarantors,  and every other  Person who,  from time to time,  executes a Credit
Document with respect to all or any portion of the Obligations.

         "Default" shall mean any condition or event which, with notice or lapse
of time or both, would constitute an Event of Default.

                                      -7-

<PAGE>

         "Documentation  Agent" shall mean First Union National Bank, a national
banking association,  as documentation agent for the Lenders hereunder and under
the other Credit Documents, and each successor documentation agent.

         "Dollar" and "U.S.  Dollar" and the sign "$" shall mean lawful money of
the United States of America.

         "Eligible  Assignee"  shall mean (i) a commercial  bank organized under
the laws of the United States of America,  or any state thereof,  , or organized
under the laws of any other  country with a Lending  Office in the United States
of America,  having total assets in excess of  $1,000,000,000  or any commercial
finance or asset-based  lending  Affiliate of any such  commercial bank and (ii)
any Lender or any Affiliate of any Lender.

         "Environmental  Laws" shall mean all federal,  state, local and foreign
statutes and codes or regulations,  rules or ordinances issued,  promulgated, or
approved thereunder, now or hereafter in effect (including,  without limitation,
Asbestos  Laws),  relating to pollution or  protection  of the  environment  and
relating to public  health and safety,  relating to (i)  emissions,  discharges,
releases  or  threatened  releases of  pollutants,  contaminants,  chemicals  or
industrial  toxic or hazardous  constituents,  substances  or wastes,  including
without limitation,  any Hazardous  Substance,  petroleum including crude oil or
any  fraction  thereof,  any  petroleum  product or other  waste,  chemicals  or
substances  regulated by any Environmental  Law into the environment  (including
without  limitation,  ambient air, surface water,  ground water, land surface or
subsurface  strata),  or (ii) the manufacture,  processing,  distribution,  use,
generation, treatment, storage, disposal, transport or handling of any Hazardous
Substance,  petroleum including crude oil or any fraction thereof, any petroleum
product or other waste,  chemicals or substances  regulated by any Environmental
Law, and (iii)  underground  storage tanks and related  piping,  and  emissions,
discharges and releases or threatened  releases  therefrom,  such  Environmental
Laws to include,  without  limitation (i) the Clean Air Act (42 U.S.C.ss.7401 et
seq.), (ii) the Clean Water Act (33 U.S.C.ss.  1251 et seq.), (iii) the Resource
Conservation  and  Recovery  Act (42  U.S.C.ss.  6901 et  seq.),  (iv) the Toxic
Substances  Control  Act (15  U.S.C.ss.2601  et seq.) and (v) the  Comprehensive
Environmental  Response  Compensation  and  Liability  Act,  as  amended  by the
Superfund Amendments and Reauthorization Act (42 U.S.C.ss. 9601 et seq.).

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended and in effect from time to time.

         "ERISA Affiliate" shall mean, with respect to any Person, each trade or
business  (whether  or not  incorporated)  which is a member of a group of which
that Person is a member and which is under common  control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.

         "Eurodollar  Advance" shall mean an Advance  bearing  interest based on
the Adjusted LIBO Rate.

                                      -8-

<PAGE>

         "Eurodollar  Loan" shall mean any Line of Credit Loan  hereunder  which
bears interest based on the Adjusted LIBO Rate.

         "Event of Default" shall have the meaning set forth in Article VIII.

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended from time to time, and any successor statute thereto.

         "Executive Officer" shall mean with respect to any Person (other than a
Guarantor), the President, Vice Presidents,  Chief Financial Officer, Treasurer,
Secretary and any Person holding  comparable offices or duties, and with respect
to a Guarantor, the President.

         "Extension of Credit" shall mean the making of a Line of Credit Loan or
the  conversion  of a Line of Credit Loan of one Type into a Line of Credit Loan
of another Type.

         "Facility" or "Facilities" shall mean the Line of Credit Commitment and
Line of Credit Loans.

         "Facility Fee" shall have the meaning  assigned to such term in Section
3.05(a).

         "Federal Funds Rate" shall mean for any period, a fluctuating  interest
rate per annum equal for each day during such period to the weighted  average of
the rates on  overnight  Federal  funds  transactions  with member  banks of the
Federal Reserve System arranged by Federal funds brokers,  as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of Atlanta, or, if such rate is not so published for
any day which is a Business Day, the average of the  quotations  for such day on
such transactions  received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.

         "Fee Letter"  shall mean that  certain  letter  agreement,  dated as of
December  21,  1998,  executed by  SunTrust  Equitable  Securities  Corporation,
SunTrust Bank,  Central  Florida and First Union National Bank and  acknowledged
and agreed to by the  Borrower,  pursuant  to which the  Borrower  agreed to pay
certain fees specified in such letter agreement.

         "Fees"  shall mean,  collectively,  the Facility Fee and any other fees
specified in the Fee Letter.

         "Final Maturity Date" shall mean the date on which all commitments have
been  terminated  and all amounts  outstanding  under this  Agreement  have been
declared or have automatically become due and payable pursuant to the provisions
of Article VIII.

         "Fixed  Charge   Coverage   Ratio"  shall  mean,  as  of  any  date  of
determination,  the  ratio  of (A)  Consolidated  EBITDAR  to (B) the sum of (i)
Consolidated  Interest Expense plus (ii)  Consolidated  Rental Expense,  in each
case measured for the four fiscal quarter period ending on

                                      -9-

<PAGE>

such date (or if such date is not the last day of any  fiscal  quarter,  for the
four fiscal quarter period ending immediately prior to such date).

         "GAAP" shall mean generally accepted accounting principles set forth in
the  opinions  and  pronouncements  of the  Accounting  Principles  Board of the
American   Institute  of  Certified   Public   Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements by such other entity as may be approved by a  significant  segment of
the accounting  profession,  which are applicable to the circumstances as of the
date of determination.

         "Guaranteed  Indebtedness" shall mean, as to any Person, any obligation
of  such  Person  guaranteeing  any  indebtedness,  lease,  dividend,  or  other
obligation ("primary obligation") of any other Person (the "primary obligor") in
any manner including,  without limitation, any obligation or arrangement of such
Person (a) to purchase or repurchase any such primary obligation, (b) to advance
or supply funds (i) for the  purchase or payment of any such primary  obligation
or (ii) to maintain  working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance  sheet  condition
of the  primary  obligor,  (c) to  purchase  property,  securities  or  services
primarily  for the purpose of assuring the owner of any such primary  obligation
of  the  ability  of the  primary  obligor  to  make  payment  of  such  primary
obligation,  or (d) to indemnify  the owner of such primary  obligation  against
loss in respect thereof.

         "Guarantors" shall mean, collectively,  each Material Subsidiary of the
Borrower  that has  executed  the  Guaranty  Agreement  as of the Closing  Date,
together with all other Material Subsidiaries that hereafter execute supplements
to the  Guaranty  Agreement,  and  their  respective  successors  and  permitted
assigns.

         "Guaranty  Agreement"  shall mean the  Subsidiary  Guaranty  Agreement,
dated as of the date hereof,  executed by certain of Borrower's  Subsidiaries in
favor of the Lenders and the  Administrative  Agent, as the same may be amended,
restated or supplemented from time to time.

         "Guaranty Documents" shall mean, collectively,  the Guaranty Agreement,
and each other guaranty agreement,  mortgage, deed of trust, security agreement,
pledge  agreement,  or other  security or collateral  document  guaranteeing  or
securing the Obligations,  as the same may be amended, restated, or supplemented
from time to time.

         "Hazardous  Materials" shall mean oil, petroleum or chemical liquids or
solids,  liquid or gaseous products,  asbestos,  or any other hazardous waste or
hazardous substances,  including, without limitation, hazardous medical waste or
any other substance described in any Hazardous Materials Law.

         "Hazardous  Materials Law" shall mean the  Comprehensive  Environmental
Response  Compensation and Liability Act as amended by the Super Fund Amendments
and  Reauthorization  Act, 42 U.S.C.

                                      -10-

<PAGE>

ss. 9601, the Resource  Conservation  and Recovery Act, 42 U.S.C.  ss. 6901, the
state hazardous waste laws, as such laws may from time to time be in effect, and
related regulations, and all similar laws and regulations.

         "Hazardous Substances" has the meaning assigned to that term in CERCLA.

         "Hughes  Family"  shall mean (i) David H.  Hughes,  Vincent S.  Hughes,
Russell V. Hughes, (ii) any of their direct family members  (including,  without
limitation,  lineal ancestors and descendants,  siblings, and lineal descendants
of siblings),  (iii) any trusts and profit  sharing plans and stock option plans
established  for the sole  benefit  of the  foregoing,  and (iv) the  heirs  and
personal representatives of the foregoing.

         "Indebtedness"  of any Person shall mean,  without  duplication (i) all
obligations  of such Person which in accordance  with GAAP would be shown on the
balance  sheet of such Person as a  liability  (including,  without  limitation,
obligations  for borrowed money and for the deferred  purchase price of property
or services,  and  obligations  evidenced by bonds,  debentures,  notes or other
similar instruments); (ii) all Guaranteed Indebtedness of such Person (including
contingent reimbursements  obligations under undrawn financial letters of credit
but not performance  letters of credit) (iii) all Capitalized Lease Obligations;
(iv) all  Indebtedness of others secured by any Lien upon property owned by such
Person,  whether or not assumed;  and (v) all  obligations or other  liabilities
under currency  contracts,  interest rate  contracts,  interest rate  protection
agreements or similar agreements or combinations  thereof.  Notwithstanding  the
foregoing,  in  determining  the  Indebtedness  of any  Person,  there  shall be
included all obligations of such Person of the character  referred to in clauses
(i) through (v) above  deemed to be  extinguished  under GAAP but for which such
Person  remains  legally liable except to the extent that such  obligations  (x)
have been defeased in accordance  with the terms of the  applicable  instruments
governing  such  obligations  and (y) the accounts or other assets  dedicated to
such defeasance are not included as assets on the balance sheet of such Person.

         "Intercompany Loan Documents" shall mean, collectively,  the promissory
notes and all related loan,  subordination,  and other agreements, to the extent
that they exist, relating in any manner to the Intercompany Loans.

         "Intercompany  Loans"  shall  mean,  collectively,  (i) the loans  more
particularly described on Schedule 5.22 and (ii) those loans or other extensions
of credit  made by any  Consolidated  Company  to another  Consolidated  Company
satisfying  the  terms  and  conditions  set  forth  in  Section  7.01 or as may
otherwise  be approved in writing by the  Administrative  Agent and the Required
Lenders.

         "Interest Period" shall mean (i) with respect to Competitive Bid Loans,
such periods agreed upon between Borrower and Lenders,  and (ii) with respect to
Eurodollar Advances, the period of 1, 2, 3 or 6 months selected by the Borrower,
in case of clause (ii) pursuant to the terms of the credit  facility and subject
to customary  adjustments  in duration;  provided,  that (a) the first day of an
Interest  Period  must be a Business  Day,  (b) any  Interest  Period that would
otherwise end on a day that is not a Business Day for Eurodollar  Loans shall be

                                      -11-

<PAGE>

extended to the next succeeding  Business Day for Eurodollar Loans,  unless such
Business Day falls in the next calendar month, in which case the Interest Period
shall end on the next  preceding  Business  Day for  Eurodollar  Loans,  and (c)
Borrower may not elect an Interest  Period that would extend  beyond the Line of
Credit Termination Date.

         "Investment"  shall mean,  when used with  respect to any  Person,  any
direct or indirect  advance,  loan or other  extension of credit (other than the
creation  of  receivables  in  the  ordinary  course  of  business)  or  capital
contribution  by such  Person (by means of  transfers  of  property to others or
payments  for  property  or  services  for  the  account  or use of  others,  or
otherwise)  to  any  Person,  or  any  direct  or  indirect  purchase  or  other
acquisition  by such Person of, or of a beneficial  interest in,  capital stock,
partnership  interests,  bonds, notes,  debentures or other securities issued by
any other Person.

         "Lender" or  "Lenders"  shall mean the banks and  lending  institutions
listed  on the  signature  pages  hereof,  and each  assignee  thereof,  if any,
pursuant to Section 10.06.

         "Lending  Office" shall mean for each Lender the office such Lender may
designate in writing from time to time to Borrower and the Administrative  Agent
with respect to each Type of Line of Credit Loan.

         "Leverage Ratio" shall mean, as of any date of determination, the ratio
of Total Funded Debt as of such date to Total Capitalization as of such date.

         "LIBOR"  shall mean,  for any Interest  Period,  the offered  rates for
deposits  in  U.S.  dollars  for a  period  comparable  to the  Interest  Period
appearing on the  Telerate  Page 3750,  as of 11:00 a.m.  London time on the day
that is two  business  days prior to the Interest  Period.  If at least two such
rates appear on the Telerate Page 3750,  the rate for that Interest  Period will
be the arithmetic mean of such rates, rounded, if necessary,  to the next higher
1/16 of 1.0%. If the foregoing rate is  unavailable  from the Telerate Page 3750
for any reason,  then such rate shall be determined by the Administrative  Agent
from the Reuters Screen LIBOR Page, or if such rate is also  unavailable on such
service,  then on any  other  interest  rate  reporting  service  of  recognized
standing  designated in writing by the Administrative  Agent to Borrower and the
Lenders;  in any such case  rounded,  if  necessary,  to the next higher 1/16 of
1.0%, if the rate is not such a multiple.

         "Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind or description and shall include, without limitation,
any agreement to give any of the foregoing,  any conditional sale or other title
retention agreement, any capital lease in the nature thereof including any lease
or similar  arrangement with a public authority  executed in connection with the
issuance of industrial  development  revenue bonds or pollution  control revenue
bonds, and the filing of or agreement to give any financing  statement under the
Uniform  Commercial  Code of any  jurisdiction.

         "Line of Credit  Commitment" or "Commitment" shall mean at any time for
any Lender,  the amount of such commitment set forth opposite such Lender's name
on the signature  pages hereof or in any  assignment  hereafter  executed by any
assignee of a Lender pursuant to

                                      -12-

<PAGE>

Section 10.06,  as the same may be increased or decreased from time to time as a
result of any reduction thereof pursuant to Section 2.03, any assignment thereof
pursuant to Section 10.06, or any amendment thereof pursuant to Section 10.02.

         "Line of Credit Loans" or "Loans" shall mean, collectively, the line of
credit loans made to Borrower by the Lenders pursuant to Section 2.01.

         "Line of Credit  Note"  shall  mean any of the  Syndicate  Notes or the
Competitive  Bid Notes either as originally  executed or as the same may be from
time to time supplemented, modified, amended, renewed or extended.

         "Line of Credit Termination Date" shall mean the earlier of (i) January
25,  2000  and  (ii)  the date on  which  the  Line of  Credit  Commitments  are
terminated in accordance with Article VIII.

         "Materially  Adverse  Effect"  shall mean the  occurrence  of an event,
which would (i) cause the  recognition of a liability,  as required by Statement
of  Financial  Accounting  Standards  No. 5, in the  current  quarter  financial
statements  in the amount of  $15,000,000  or more,  or (ii) cause an auditor to
have a  substantial  doubt  about the ability of Borrower to continue as a going
concern after  consideration of management's  plans as described in Statement of
Auditing Standards, No. 59.

         "Material  Subsidiary"  shall mean each  Subsidiary  of  Borrower,  now
existing or hereinafter  established or acquired,  that at any time prior to the
Final  Maturity  Date,  has or acquires  total assets in excess of $1,000,000 or
that  accounted  for or  produced  more  than 5% of the  Consolidated  EBITR  of
Borrower on a consolidated basis during any of the three most recently completed
fiscal years of Borrower.

         "Multiemployer  Plan"  shall  have the  meaning  set  forth in  Section
4001(a)(3) of ERISA.

         "Notice of Borrowing" shall have the meaning provided in Section 3.01.

         "Notice of Continuation/Conversion"  shall have the meaning provided in
Section 3.01.

         "Obligations"  shall  mean  all  amounts  owing to the  Agents  and all
Lenders  pursuant to the terms of this  Agreement or any other Credit  Document,
including without limitation,  all Line of Credit Loans (including all principal
and interest  payments due  thereunder),  fees,  expenses,  indemnification  and
reimbursement obligations, payments, indebtedness,  liabilities, and obligations
of the Credit Parties, direct or indirect, absolute or contingent, liquidated or
unliquidated,  now existing or hereafter  arising,  together  with all renewals,
extensions, modifications or refinancings thereof.

                                      -13-

<PAGE>

         "Payment  Office"  shall mean,  for any Lender,  the  "Payment  Office"
listed on its signature page to this Agreement.

         "PBGC" shall mean the Pension  Benefit  Guaranty  Corporation,  and any
successor thereto.

         "Permitted Liens" shall mean those Liens expressly permitted by Section
7.02.

         "Person" shall mean and shall include an individual,  a partnership,  a
joint  venture,  a  corporation,  a  trust,  an  unincorporated  association,  a
government or any department or agency thereof and any other entity whatsoever.

         "Plan"  shall mean any employee  benefit  plan,  program,  arrangement,
practice or  contract,  maintained  by or on behalf of the  Borrower or an ERISA
Affiliate,  which provides benefits or compensation to or on behalf of employees
or  former  employees,  whether  formal or  informal,  whether  or not  written,
including but not limited to the following types of plans:

          (i)   Executive   Arrangements   -  any   bonus,   incentive
     compensation,  stock option,  deferred compensation,  commission,
     severance, "golden parachute",  "rabbi trust", or other executive
     compensation plan, program, contract, arrangement or practice;

          (ii) ERISA Plans - any "employee benefit plan" as defined in
     Section  3(3) of  ERISA),  including,  but not  limited  to,  any
     defined benefit pension plan, profit sharing plan, money purchase
     pension plan, savings or thrift plan, stock bonus plan,  employee
     stock  ownership  plan,  Multiemployer  Plan, or any plan,  fund,
     program, arrangement or practice providing for medical (including
     post-retirement medical),  hospitalization,  accident,  sickness,
     disability, or life insurance benefits;

          (iii) Other Employee  Fringe  Benefits - any stock purchase,
     vacation,   scholarship,   day  care,   prepaid  legal  services,
     severance pay or other fringe benefit plan, program, arrangement,
     contract or practice.

         "Pro Rata Share" shall mean, with respect to each of the Line of Credit
Commitments  of each  Lender and each Line of Credit Loan to be made by and each
payment (including,  without limitation,  any payment of principal,  interest or
fees) to be made to each Lender, the percentage  designated as such Lender's Pro
Rata Share of such Line of Credit Commitments, such Line of Credit Loans or such
payments,  as  applicable,  set  forth  under  the  name of such  Lender  on the
respective  signature  page  for  such  Lender  or in any  assignment  hereafter
executed by an assignee of a Lender  pursuant to Section 10.06,  in each case as
such Pro Rata Share may change from time to time as a result of  assignments  or
amendments made pursuant to this Agreement.

         "Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time.

                                      -14-

<PAGE>

         "Required  Lenders" shall mean, at any time,  Lenders  holding at least
sixty-six and two-thirds  percent (66 2/3%) of the then aggregate  amount of the
Line of Credit Commitments and the aggregate outstanding Line of Credit Loans.

         "Requirement  of  Law"  for any  Person  shall  mean  the  articles  or
certificate of incorporation  and by-laws or other  organizational  or governing
documents  of  such  Person,  and  any  law,  treaty,  rule  or  regulation,  or
determination of an arbitrator or a court or other  governmental  authority,  in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

         "Reuters   Screen"  shall  mean,  when  used  in  connection  with  any
designated page and LIBOR,  the display page so designated on the Reuter Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).

         "Revolving  Credit  Agreement" shall mean that certain Revolving Credit
Agreement,  dated as of the date hereof,  by and among Borrower,  SunTrust Bank,
Central  Florida,  as  Administrative  Agent,  First  Union  National  Bank,  as
Documentation  Agent,  NationsBank N.A., as Syndication Agent,  SouthTrust Bank,
National Association,  as Co-Agent,  and the banks and lending institutions from
time to time parties thereto, as the same may be amended, restated, supplemented
or otherwise modified from time to time.

         "Subordinated  Debt" shall mean all  Indebtedness  of Borrower  and its
Subsidiaries subordinated to all obligations of Borrower and its Subsidiaries or
any other Credit Party  arising under this  Agreement,  the Line of Credit Notes
and the Guaranty Agreement on terms and conditions  satisfactory in all respects
to  the  Administrative  Agent  and  the  Required  Lenders,  including  without
limitation,   with  respect  to  interest  rates,  payment  terms,   maturities,
amortization  schedules,   covenants,   defaults,  remedies,  and  subordination
provisions, as evidenced by the written approval of the Administrative Agent and
Required Lenders.

         "Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation,  partnerships,  joint ventures, and
associations)  regardless of its  jurisdiction of organization or formation,  at
least a majority  of the total  combined  voting  power of all classes of voting
stock or other  ownership  interests of which shall, at the time as of which any
determination  is being  made,  be  owned by such  Person,  either  directly  or
indirectly through one or more other Subsidiaries.

         "Syndicate  Loan" shall mean the Line of Credit  Loans made to Borrower
hereunder other than Competitive Bid Loans.

         "Syndicate  Note" shall mean a  promissory  note  evidencing  Syndicate
Loans in the form attached hereto as Exhibit A.

                                      -15-

<PAGE>

         "Syndication  Agent" shall mean  NationsBank,  N.A., a national banking
association,  as syndication agent for the Lenders hereunder and under the other
Credit Documents, and each successor syndication agent.

         "Tax Code" shall mean the Internal Revenue Code of 1986, as amended and
in effect from time to time.

         "Taxes"  shall  mean any  present  or future  taxes,  levies,  imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter  imposed or levied by the United  States of America,  or any state,
local or foreign  government  or by any  department,  agency or other  political
subdivision or taxing authority thereof or therein and all interest,  penalties,
additions to tax and similar liabilities with respect thereto.

         "Telerate" shall mean, when used in connection with any designated page
and "LIBOR," the display page so  designated on the Dow Jones  Telerate  Service
(or such other page as may replace  that page on that service for the purpose of
displaying rates comparable to "LIBOR").

         "Total Capitalization" shall mean, as of any date of determination, the
sum of (i) Total Funded Debt plus (ii) Consolidated Net Worth as of such date.

         "Total  Commitment"  shall mean the sum of the Lenders'  Line of Credit
Commitments  as such Total  Commitment  may be reduced by  voluntary  reduction,
prepayment or  nonrenewal  of a Lender's  Line of Credit  Commitment as provided
herein.

         "Total  Funded Debt" shall mean all  Indebtedness  of the  Consolidated
Companies  that by its  terms or by the  terms of any  instrument  or  agreement
relating thereto matures,  or which is otherwise payable or unpaid,  one year or
more from, or is directly or indirectly renewable or extendable at the option of
the debtor to a date one year or more (including an option of the debtor under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit  over a  period  of one  year or more)  from,  the  date of the  creation
thereof,  provided  that  Total  Funded  Debt shall  include,  as at any date of
determination,  any portion of such Indebtedness  outstanding on such date which
matures on demand or within one year from such date  (whether  by sinking  fund,
other required prepayment,  or final payment at maturity) and shall also include
all Indebtedness of the  Consolidated  Companies for borrowed money under a line
of credit,  guidance line,  revolving  credit,  bankers  acceptance  facility or
similar  arrangement  for borrowed money,  including,  without  limitation,  all
unpaid  drawings under letters of credit and  unreimbursed  amounts  pursuant to
letter of credit  reimbursement  agreements,  regardless  of the  maturity  date
thereof.

         "Type" of  Borrowing  shall mean a  Borrowing  consisting  of Base Rate
Advances, Eurodollar Advances or Competitive Bid Advances.

                                      -16-

<PAGE>

         "United  States of  America"  shall mean the fifty (50)  States and the
District of Columbia

         "Wholly Owned Subsidiary"  shall mean any Subsidiary,  all the stock or
ownership interest of every class of which, except directors' qualifying shares,
shall,  at the time as of which any  determination  is being  made,  be owned by
Borrower either directly or indirectly.

         "Year 2000 Issues" shall mean the actual and anticipated costs, claims,
losses,  and liabilities  associated with the inability of certain  computer and
software  applications to effectively  handle data that includes dates prior to,
on,  spanning  or after  January 1, 2000,  as such  inability  in respect of any
Consolidated Company affects the business,  operations,  and financial condition
of any Consolidated Company.

         Section  1.2.  Accounting  Terms and  Determination.  Unless  otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting  determinations  hereunder  shall be made,  all financial  statements
required to be delivered hereunder shall be prepared,  and all financial records
shall be maintained in accordance with, GAAP.

         Section 1.3. Other Definitional Terms. The words "hereof", "herein" and
"hereunder"  and words of similar import when used in this Agreement shall refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement, and Article,  Section,  Schedule,  Exhibit and like references are to
this Agreement unless otherwise specified.

         Section  1.4.  Exhibits  and  Schedules.  All  Exhibits  and  Schedules
attached hereto are by reference made a part hereof.

                                   ARTICLE 2

                            LINE OF CREDIT COMMITMENT

         Section 2.1. Line of Credit Commitment; Use of Proceeds.

         (1) Subject to and upon the terms and conditions herein set forth, each
Lender  severally  agrees to make to Borrower from time to time on and after the
Closing Date, but prior to the Line of Credit  Termination  Date, Line of Credit
Loans in an aggregate amount outstanding at any time not to exceed such Lender's
Line of Credit Commitment. Borrower shall be entitled to repay and reborrow Line
of Credit Loans in accordance with the provisions hereof.

         (2) Each Line of Credit Loan shall, at the option of Borrower,  be made
or continued as, or converted  into,  part of one or more  Borrowings that shall
consist  entirely  of  Syndicate  Loans  (comprised  of Base  Rate  Advances  or
Eurodollar Advances) or Competitive Bid Loans. The aggregate principal amount of
each  Borrowing of Line of Credit Loans

                                      -18-

<PAGE>

comprised of Eurodollar  Advances  shallnot be less than $2,000,000 or a greater
integral multiple of $100,000.  The aggregate principal amount of each Borrowing
of  Competitive  Bid  Loans  shall not be less than  $2,000,000.  The  aggregate
principal  amount of each  Borrowing of Line of Credit  Loans  comprised of Base
Rate Advances shall not be less than $250,000 or a greater integral  multiple of
$10,000.  At no time  shall the  number of  Borrowings  outstanding  under  this
Article II exceed ten;  provided that, for the purpose of determining the number
of Borrowings  outstanding and the minimum amount for Borrowings  resulting from
conversions  or  continuations,  all Borrowings of Base Rate Advances under this
Facility shall be considered as one Borrowing. The parties hereto agree that (i)
the  aggregate  principal  balance of the Line of Credit  Loans  (including  the
Competitive  Bid Loans) of the Lenders as a group shall not exceed the aggregate
principal  amounts of all Line of Credit  Commitments,  (ii) no Lender  shall be
obligated to make Syndicate Loans in excess of the Line of Credit  Commitment of
such Lender,  (iii) no Lender shall be obligated hereunder to extend Competitive
Bid Loans or to make quotes for such Line of Credit  Loans and (iv) a Lender may
elect, in its discretion, to extend Competitive Bid Loans which, either alone or
together  with the  Syndicate  Loans of such  Lender,  exceed the Line of Credit
Commitment of such Lender.

         (3) The  proceeds  of the Line of Credit  Loans shall be used solely to
provide  liquidity for the payment of  commercial  paper issued by Borrower from
time to time pursuant to the Borrower's  unrated  commercial  paper program with
SunTrust Bank,  Atlanta or any of its Affiliates.  Line of Credit Loans plus the
amount of all commercial paper issued by Borrower may not at any one time exceed
seventy-five million dollars ($75,000,000).

         Section 2.2. Line of Credit Notes; Repayment of Principal.

         (1)  Borrower's  obligations  to pay the principal of, and interest on,
the  Syndicate  Loans  and the  Competitive  Bid Loans to each  Lender  shall be
evidenced by the records of the Administrative  Agent and such Lender and by the
Syndicate  Note and the  Competitive  Bid Note,  respectively,  payable  to such
Lender (or the  assignor  of such  Lender)  completed  in  conformity  with this
Agreement.

         (2) All  outstanding  principal  amounts under the Line of Credit Loans
shall be due and  payable at the  earlier of (i) the Line of Credit  Termination
Date or (ii) acceleration of the indebtedness as provided in Article VIII.

         Section 2.3. Voluntary Reduction of Line of Credit Commitments. Upon at
least three (3) Business Days' prior telephonic  notice  (promptly  confirmed in
writing) to the  Administrative  Agent,  Borrower shall have the right,  without
premium or penalty, to terminate the Line of Credit  Commitments,  in part or in
whole, provided that (i) any such termination shall apply to proportionately and
permanently reduce the Line of Credit  Commitments of each of the Lenders,  (ii)
any partial  termination  pursuant to this Section 2.03 shall be in an amount of
at least  $5,000,000  and integral  multiples of  $1,000,000,  and (iii) no such
reduction  shall be  permitted  if  prohibited  or without  payment of all costs
required to be paid  hereunder  with respect to a  prepayment.  If the aggregate
outstanding amount of the Line of Credit Loans exceeds the

                                      -19-

<PAGE>

amount  of  the  Line  of  Credit  Commitments  as so  reduced,  Borrower  shall
immediately  repay the Line of Credit  Loans by an amount  equal to such excess,
together  with all  accrued but unpaid  interest  on such excess  amount and any
amounts due under Section 3.12 hereof.

         Section 2.4. Extension of the Line of Credit Termination Date. Borrower
may, on and before two hundred ten (210) days prior to the then  current Line of
Credit  Termination Date,  request in writing an extension of the Line of Credit
Termination  Date.  The Lenders may, in the  exercise of their sole  discretion,
extend the Line of Credit  Termination Date for an additional one hundred eighty
(180) days. The Lenders shall notify the Borrower in writing of such election no
later  than  one  hundred  eighty  (180)  days  prior  to then  Line  of  Credit
Termination Date. If any Lender elects to extend the Line of credit  Termination
Date for such one  hundred  eighty  (180) day  period  beyond the Line of Credit
Termination  Date,  then  effective  as of  the  then  current  Line  of  Credit
Termination Date, the Line of Credit  Termination Date for such Lender's Line of
Credit  Commitment  shall be extended to the date one hundred  eighty (180) days
from the then current  Line of Credit  Termination  Date.  In the event that any
Lender  elects not to extend the then current Line of Credit  Termination  Date,
such Lender's Line of Credit Commitment shall terminate on the then current Line
of Credit  Termination Date, and all Line of Credit Loans made by such Lender to
the Borrower shall be due and payable in full on the then current Line of Credit
Termination  Date.  Failure  by any  Lender to  respond  to the  request  by the
Borrower to extend the Line of Credit  Termination Date shall be deemed to be an
election by such Lender not to extend the Line of Credit Termination Date.

                                   ARTICLE 3

                               GENERAL LOAN TERMS

         Section 3.1. Funding Notices.

         (1) (i)  Whenever  Borrower  desires to make a Borrowing  of  Syndicate
Loans  under its Line of Credit  Commitments  (other than one  resulting  from a
conversion or continuation  pursuant to Section  3.01(b)(i)),  it shall give the
Administrative  Agent  prior  written  notice  (or  telephonic  notice  promptly
confirmed in writing) of such Borrowing (a "Notice of Borrowing") at its Payment
Office such Notice of Borrowing to be given prior to (x) 11:00 A.M.  (local time
for the  Administrative  Agent) one (1) Business Day prior to the requested date
of such Borrowing in the case of Base Rate Advances,  (y) 11:00 A.M. (local time
for the  Administrative  Agent) three (3) Business  Days prior to the  requested
date of such Borrowing in the case of Eurodollar  Advances and (z) prior to 1:00
P.M.  (local time for the  Administrative  Agent) on the requested  date of such
Borrowing in the case of Competitive Bid Advances.  Notices received after 11:00
A.M.  for  Base  Rate  Advances  and  Eurodollar  Advances  and  1:00  P.M.  for
Competitive Bid Advances shall be deemed received on the next Business Day. Each
Notice of  Borrowing  shall be  irrevocable  and  shall  specify  the  aggregate
principal  amount of the  Borrowing,  the date of  Borrowing  (which  shall be a
Business Day), and whether the Borrowing

                                      -20-

<PAGE>

is to consist of Base Rate Advances or  Eurodollar  Advances and (in the case of
Eurodollar Advances) the Interest Period to be applicable thereto.

         (ii) Whenever  Borrower  desires to make a Borrowing of Competitive Bid
Loans  under its Line of Credit  Commitments  (other than one  resulting  from a
conversion or continuation pursuant to Section  3.01(b)(ii)),  it shall give the
Administrative   Agent  notice  that  the  Lenders  are   requested  to  provide
Competitive Bid Rates for Interest Periods identified by Borrower, such Interest
Periods not to exceed 180 days. Notices must comply with notice  requirements of
each respective Lender,  which shall be communicated by Lenders to Borrower from
time to time.  Each Lender in its discretion may, but shall not be obligated to,
submit a quote to the Borrower in  connection  with such  request.  The Borrower
shall then be  entitled,  in its sole  discretion,  to elect to incur all or any
part of the Competitive Bid Loan offered by one or more of the Lenders that have
elected to provide  quotes for any of the  Interest  Periods  and at the rate(s)
quoted by such Lender(s).  The Competitive Bid Loans incurred by the Borrower in
connection  with such a request for quotes  shall not exceed (i) with respect to
all  Lenders  then  providing  quotes,   the  then  unutilized  Line  of  Credit
Commitments  of all  Lenders as a group,  and (ii) with  respect to each  Lender
providing  a quote,  the  amount  bid by such  Lender  in  connection  with such
Lender's  quote.  The Borrower  shall notify the  Administrative  Agent and such
Lender or Lenders of its election in accordance with the procedures  established
with such Lender or Lenders,  having no obligation to report the terms  thereof;
provided,  however, that if any Borrowing of Eurodollar Advances must be made as
Base Rate  Advances as a result of a  determination  made by the  Administrative
Agent  pursuant  to Section  3.09,  such Notice of  Borrowing  may be revoked by
Borrower no later than one (1) Business Day prior to the date of funding.

         (2) (i)  Whenever  Borrower  desires to convert  all or a portion of an
outstanding  Borrowing of Syndicate Loans under its Line of Credit  Commitments,
which  Borrowing  consists  of Base Rate  Advances  into one or more  Borrowings
consisting  of  Eurodollar  Advances  or to  continue  outstanding  a  Borrowing
consisting of Eurodollar  Advances for a new Interest Period,  it shall give the
Administrative  Agent at least three  Business  Days' prior  written  notice (or
telephonic  notice  promptly  confirmed in writing) of each such Borrowing to be
converted  into or continued as Eurodollar  Advances.  Such notice (a "Notice of
Continuation/Conversion") shall be given prior to 11:00 A.M. (local time for the
Administrative  Agent)  on the  date  specified  at the  Payment  Office  of the
Administrative  Agent.  Each  such  Notice of  Continuation/Conversion  shall be
irrevocable and shall specify the aggregate  principal amount of the Advances to
be converted or continued,  the date of such conversion or continuation  and the
Interest  Period  applicable  thereto.  If, upon the  expiration of any Interest
Period in respect of any  Borrowing,  Borrower  shall have failed to deliver the
Notice of  Continuation/Conversion,  Borrower shall be deemed to have elected to
convert or  continue  such  Borrowing  to a  Borrowing  consisting  of Base Rate
Advances.  So long as any Executive  Officer of Borrower has knowledge  that any
Default or Event of Default shall have occurred and be continuing,  no Borrowing
may be converted into or continued as (upon  expiration of the current  Interest
Period)  Eurodollar  Advances  unless the  Administrative  Agent and each of the

                                      -21-

<PAGE>

Lenders  shall  have  otherwise  consented  in  writing.  No  conversion  of any
Borrowing of Eurodollar  Advances  shall be permitted  except on the last day of
the Interest Period in respect thereof.

         (ii)  Whenever  Borrower  desires  to  continue  all or a portion of an
outstanding  Borrowing  of  Competitive  Bid  Loans  under  its  Line of  Credit
Commitments for a new Interest  Period,  it may request that the Lenders provide
quotes  for  Competitive  Bid Rates in the same  manner  prescribed  in  Section
3.01(a)(ii) for funding.  Whenever  Borrower desires to convert all or a portion
of an outstanding  Borrowing of  Competitive  Bid Loans under its Line of Credit
Commitments  into a  Borrowing  of  Syndicate  Loans  it shall  comply  with the
provisions  prescribed in Section  3.01(b)(i) for conversion of Syndicate Loans.
If, upon the expiration of any Interest Period in respect of any Competitive Bid
Borrowing,   Borrower   shall   have   failed   to   deliver   the   Notice   of
Continuation/Conversion,  or Lenders fail to provide such quotes, Borrower shall
be deemed to have elected to convert or continue  such  Borrowing to a Borrowing
of a Syndicate Loan consisting of Base Rate Advances.  So long as any Default or
Event of Default  shall have  occurred and be  continuing,  no Borrowing  may be
converted  into (upon  expiration  of the current  Interest  Period)  Eurodollar
Advances.  No conversion  of any Borrowing  into  Eurodollar  Advances  shall be
permitted except on the last day of the Interest Period in respect thereof.

         (3) Without in any way  limiting  Borrower's  obligation  to confirm in
writing any telephonic notice, the Administrative  Agent and the Lenders may act
without   liability  upon  the  basis  of  telephonic  notice  believed  by  the
Administrative  Agent or the Lender in good faith to be from  Borrower  prior to
receipt of written  confirmation.  In each such case, Borrower hereby waives the
right to dispute the Administrative Agent's and the Lender's record of the terms
of such telephonic notice.

         (4) The Administrative  Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile transmission
of the matters covered by the notices given to the Administrative Agent pursuant
to this Section 3.01 with respect to the Line of Credit Commitments.

         Section 3.2. Disbursement of Funds.

         (1) No later than 11:00 A.M. (local time for the Administrative  Agent)
on the date of each Borrowing of Syndicate  Loans pursuant to the Line of Credit
Commitments (other than one resulting from a conversion or continuation pursuant
to Section  3.01(b)(i)),  each Lender will make  available its Pro Rata Share of
the amount of such  Borrowing  in  immediately  available  funds at the  Payment
Office of the Administrative Agent. The Administrative Agent will make available
to Borrower  the  aggregate  of the amounts  (if any) so made  available  by the
Lenders to the Administrative Agent in a timely manner by crediting such amounts
to Borrower's demand deposit account maintained with the Administrative Agent or
at  Borrower's  option,  to effect a wire transfer of such amounts to Borrower's
account  specified by the  Borrower,  by the close of business on such  Business
Day. In the event that the  Lenders do not make such  amounts  available  to the
Administrative  Agent by the time prescribed  above, but such amount is received

                                      -22-

<PAGE>

later that day, such amount may be credited to Borrower in the manner  described
in the preceding sentence on the next Business Day (with interest on such amount
to begin accruing hereunder on such next Business Day).

         (2) No later than 2:00 P.M.  (local time for the applicable  Lender) on
the date of each  Borrowing of  Competitive  Bid Loans (other than one resulting
from a conversion or continuation pursuant to Section  3.01(b)(ii)),  the Lender
making any Competitive Bid Loan will make available the amount of such Borrowing
in immediately  available funds by wire transfer to an account  specified by the
Borrower,  by the close of  business  on such  Business  Day on the date of each
Borrowing  pursuant to the Line of Credit  Commitments (other than one resulting
from a conversion or continuation pursuant to Section 3.01(b)(ii)).

         (3) Unless the  Administrative  Agent  shall have been  notified by the
Lender  making any  Syndicate  Loan prior to the date of a  Borrowing  that such
Lender  does not  intend to make  available  to the  Administrative  Agent  such
Lender's  portion of the Borrowing to be made on such date,  the  Administrative
Agent  may  assume  that  such  Lender  has made such  amount  available  to the
Administrative  Agent  on  such  date  and the  Administrative  Agent  may  make
available to Borrower a corresponding  amount. If such  corresponding  amount is
not in fact made  available  to the  Administrative  Agent by such Lender on the
date of Borrowing,  the  Administrative  Agent shall be entitled to recover such
corresponding  amount on demand from such Lender  together  with interest at the
Federal  Funds  Rate.  If such  Lender  does not pay such  corresponding  amount
forthwith upon the  Administrative  Agent's demand therefor,  the Administrative
Agent shall promptly notify  Borrower,  and Borrower shall  immediately pay such
corresponding  amount to the Administrative  Agent together with interest at the
rate specified for the Borrowing.  Nothing in this subsection shall be deemed to
relieve any Lender from its  obligation  to fund its Line of Credit  Commitments
hereunder or to prejudice any rights which  Borrower may have against any Lender
as a result of any default by such Lender hereunder.

         (4) All Borrowings of Syndicate Loans shall be loaned by the Lenders on
the  basis of their  Pro Rata  Share  of the  Line of  Credit  Commitments.  All
Borrowings of Competitive Bid Loans under the Line of Credit  Commitments  shall
be loaned by the Lenders whose quotes were  accepted by the Borrower.  No Lender
shall be  responsible  for any  default by any other  Lender in its  obligations
hereunder,  and each Lender  shall be obligated to make the Line of Credit Loans
provided  to be made by it  hereunder,  regardless  of the  failure of any other
Lender to fund its Line of Credit Commitments hereunder.

         Section 3.3. Interest.

         (1) Borrower agrees to pay interest in respect of all unpaid  principal
amounts of the Syndicate Loans from the respective dates such principal  amounts
were  advanced to maturity  (whether by  acceleration,  notice of  prepayment or
otherwise)  at rates per annum  (on the  basis of a 360-day  year)  equal to the
applicable rates indicated below:

                                      -23-

<PAGE>

          (i) For Base Rate Advances--The Base Rate in effect from time to time;
     and

          (ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate plus the
     Applicable Margin.

         (2) Borrower agrees to pay interest in respect of all unpaid  principal
amounts of the Competitive Bid Loans made to Borrower from the respective  dates
such  principal  amounts  were  advanced to maturity  (whether by  acceleration,
notice of prepayment or otherwise) at times and at rates per annum (on the basis
of a 360-day year) equal to the  applicable  rates agreed upon between  Borrower
and the Lender making such Competitive Bid Loans.

         (3) Overdue  principal  and, to the extent not prohibited by applicable
law, overdue interest, in respect of the Line of Credit Loans, whether Syndicate
Loans or Competitive Bid Loans,  and all other overdue amounts owing  hereunder,
shall bear interest from each date that such amounts are overdue:

          (i) in the  case of  overdue  principal  and  interest  with
     respect to all Line of Credit  Loans  outstanding  as  Eurodollar
     Advances and  Competitive  Bid  Advances,  at the rate  otherwise
     applicable  for  the   then-current   Interest   Period  plus  an
     additional two percent  (2.0%) per annum;  thereafter at the rate
     in effect for Base Rate Advances  plus an additional  two percent
     (2.0%) per annum; and

          (ii) in the case of  overdue  principal  and  interest  with
     respect to all other  Line of Credit  Loans  outstanding  as Base
     Rate Advances,  and all other  Obligations  hereunder (other than
     Line of Credit  Loans),  at a rate equal to the  applicable  Base
     Rate plus an additional two percent (2.0%) per annum;

provided that no Line of Credit Loan shall bear interest after maturity, whether
by  non-payment  at scheduled  due date,  acceleration,  notice of prepayment or
otherwise  at a rate per annum less than two percent  (2.0%) per annum in excess
of the rate of interest applicable thereto at maturity.

         (4)  Interest  on each  Line of  Credit  Loan  shall  accrue  from  and
including  the date of such Line of Credit Loan to, but  excluding,  the date of
any repayment thereof;  provided that, if a Line of Credit Loan is repaid on the
same day made,  one day's  interest  shall be paid on such Line of Credit  Loan.
Interest on all  outstanding  Base Rate Advances  shall be payable  quarterly in
arrears on the last  calendar  day of each  fiscal  quarter of  Borrower in each
year.  Interest on all  outstanding  Eurodollar  Advances  and  Competitive  Bid
Advances  shall be payable on the last day of each  Interest  Period  applicable
thereto,  and, in the case of Eurodollar  Advances  having an Interest Period in
excess of three months, on each day which occurs every three months, as the case
may be, after the initial date of such Interest Period.  Interest on all Line of
Credit Loans shall be payable on any conversion of any Advances  comprising such
Line of Credit Loans into  Advances of another Type,  prepayment  (on the amount
prepaid),  at  maturity  (whether  by  acceleration,  notice  of  prepayment  or
otherwise) and, after maturity, on demand.

                                      -24-

<PAGE>

         (5) The  Administrative  Agent, upon determining the Adjusted LIBO Rate
for any  Interest  Period,  shall  promptly  notify by telephone  (confirmed  in
writing) or in writing  Borrower and the other Lenders.  Any such  determination
shall, absent manifest error, be final, conclusive and binding for all purposes.
A Lender  making a  Competitive  Bid Loan has no  obligation to notify any other
Lender of the interest rates charged to Borrower.

         Section 3.4. Interest Periods.

         (1) In  connection  with the making or  continuation  of, or conversion
into,  each  Borrowing of Syndicate  Loans  comprised  of  Eurodollar  Advances,
Borrower  shall  select an interest  period  (each an  "Interest  Period") to be
applicable to such Eurodollar Advances,  which Interest Period shall be either a
1, 2, 3 or 6 month period; provided that:

          (i)  The  initial  Interest  Period  for  any  Borrowing  of
     Eurodollar  Advances shall commence on the date of such Borrowing
     (including the date of any conversion from a Borrowing consisting
     of Advances of another Type) and each Interest  Period  occurring
     thereafter in respect of such Borrowing shall commence on the day
     on which the next preceding Interest Period expires;

          (ii) If any Interest Period would otherwise  expire on a day
     which is not a Business Day, such Interest Period shall expire on
     the next succeeding  Business Day,  provided that if any Interest
     Period in respect of Eurodollar  Advances would otherwise  expire
     on a day  that is not a  Business  Day but is a day of the  month
     after which no further  Business  Day occurs in such month,  such
     Interest Period shall expire on the next preceding Business Day;

          (iii) Any Interest Period in respect of Eurodollar  Advances
     which  begins  on  a  day  for  which  there  is  no  numerically
     corresponding  day in the  calendar  month  at  the  end of  such
     Interest Period shall,  subject to part (iv) below, expire on the
     last Business Day of such calendar month;

          (iv) No Interest  Period shall  extend  beyond any date upon
     which any  principal  payment is due with  respect to the Line of
     Credit Loans.

         (2) When  Borrower  requests a quote for a  Competitive  Bid Loan,  the
Borrower  shall  specify the Interest  Period to be  applicable  to such Line of
Credit Loan,  which Interest  Period shall be as agreed upon by the Borrower and
such Lender;  provided,  however,  that (i) no Interest  Period shall exceed 180
days, (ii) no Interest Period shall extend beyond the Line of Credit Termination
Date and (iii) if any Interest Period would  otherwise  expire on a day which is
not a Business  Day, such  Interest  Period shall expire on the next  succeeding
Business Day.  Interest shall be payable in respect of each Competitive Bid Loan
on the last day of each Interest Period applicable to such Competitive Bid Loan,
and at maturity (whether by acceleration or otherwise).

                                      -25-

<PAGE>

         Section 3.5. Fees.

         (1) Borrower shall pay to the Administrative  Agent, for the account of
and distribution of the respective Pro Rata Share to each Lender, a facility fee
(the  "Facility  Fee") for the  period  commencing  on the  Closing  Date to and
including the Line of Credit  Termination Date,  computed at a rate equal to the
Applicable  Facility Fee  Percentage  per annum  multiplied by (ii) on the daily
average of the aggregate  Line of Credit  Commitments  of the Lenders,  such fee
being  payable  quarterly  in arrears on the last  calendar  day of each  fiscal
quarter of Borrower and on the Line of Credit Termination Date.

         (2) Borrower shall pay to the  Administrative  Agent such other fees as
are specified, and in accordance with, the Fee Letter.

         Section 3.6. Voluntary Prepayments of Borrowings.

         (1) Borrower may, at its option,  prepay Borrowings  consisting of Base
Rate  Advances  at any time in whole,  or from time to time in part,  in amounts
aggregating  $2,500,000 or any greater integral multiple of $500,000,  by paying
the principal  amount to be prepaid  together  with interest  accrued and unpaid
thereon to the date of  prepayment.  Those  Borrowings  consisting of Eurodollar
Advances may be prepaid, at Borrower's option, in whole, or from time to time in
part,  in amounts  aggregating  $5,000,000 or any greater  integral  multiple of
$1,000,000, by paying the principal amount to be prepaid, together with interest
accrued  and  unpaid  thereon  to the date of  prepayment  and all  compensation
payments  pursuant to Section  3.12 if such  prepayment  is made on a date other
than the last day of an Interest Period applicable  thereto.  Each such optional
prepayment shall be applied in accordance with Section 3.06(c) below.

         (2) Borrower shall give written notice (or telephonic  notice confirmed
in writing) to the Administrative  Agent of any intended  prepayment of (i) Base
Rate Advances not less than one Business Day prior to any such  prepayments  and
(ii)  Eurodollar  Advances not less than three  Business  Days prior to any such
prepayment.  Borrower shall give written notice (or telephonic  notice confirmed
in writing) to the respective  Lender who made any  Competitive  Bid Loan of any
intended  prepayment of such Competitive Bid Loan not less than one Business Day
prior to any prepayment of such  Competitive Bid Loan. Such notice,  once given,
shall be irrevocable.  Upon receipt of such notice of prepayment pursuant to the
first sentence of this paragraph  (b), the  Administrative  Agent shall promptly
notify each Lender of the contents of such notice and of such Lender's  share of
such prepayment.

         (3) Borrower,  when providing notice of prepayment  pursuant to Section
3.06(b)  may  designate  the Types of Advances  and the  specific  Borrowing  or
Borrowings  which are to be  prepaid,  provided  that (i) if any  prepayment  of
Eurodollar  Advances made  pursuant to a single  Borrowing of the Line of Credit
Loans shall reduce the  outstanding  Advances made pursuant to such Borrowing to
an amount less than  $1,000,000,  such Borrowing shall

                                      -26-

<PAGE>

immediately be converted into Base Rate Advances;  and (ii) each prepayment made
pursuant  to a single  Borrowing  shall be  applied  pro rata  among the Line of
Credit Loans  comprising such Borrowing,  if such prepayment is not a prepayment
of a Competitive  Bid Loan.  All voluntary  prepayments  shall be applied to the
payment of any unpaid interest before application to principal.

         Section 3.7. Payments, etc.

         (1) (i) Except as otherwise  specifically provided herein, all payments
under this  Agreement  and the other Credit  Documents,  other than the payments
specified  in clause  (ii)  below,  shall be made  without  defense,  set-off or
counterclaim to the  Administrative  Agent, not later than 2:00 P.M. (local time
for the Administrative  Agent) on the date when due and shall be made in Dollars
in immediately available funds at the respective Payment Office.

         (ii) Except as otherwise  specifically  provided  herein,  all payments
under this  Agreement  with respect to the Lenders  making any  Competitive  Bid
Loans shall be made without defense,  set-off or counterclaim to such Lender not
later than 2:00 P.M.  (local  time for such  Lender) on the date when due and in
immediately  available  funds at the Payment  Office of such  Lender,  or at any
other  location  of the Lender as such Lender may specify in writing to Borrower
not later than 12:00 Noon (local time for the Lender) on the  Business  Day such
payment is due.

         (2) (i) All such  payments  shall be made free and clear of and without
deduction or withholding for any Taxes in respect of this Agreement, the Line of
Credit Notes or other Credit Documents, or any payments of principal,  interest,
fees or other amounts  payable  hereunder or thereunder (but excluding any Taxes
imposed on the  overall  net income of the  Lenders  pursuant to the laws of the
jurisdiction  in which the principal  executive  office or  appropriate  Lending
Office of such  Lender  is  located).  If any  Taxes  are so levied or  imposed,
Borrower  agrees (A) to pay the full amount of such Taxes,  and such  additional
amounts  as may be  necessary  so that  every net  payment  of all  amounts  due
hereunder and under the Line of Credit Notes and other Credit  Documents,  after
withholding  or  deduction  for or on  account  of  any  such  Taxes  (including
additional sums payable under this Section 3.07), will not be less than the full
amount  provided for herein had no such deduction or withholding  been required,
(B) to make  such  withholding  or  deduction  and (C) to pay  the  full  amount
deducted to the relevant  authority in accordance with applicable law.  Borrower
will furnish to the Administrative  Agent and each Lender,  within 30 days after
the date the payment of any Taxes is due pursuant to applicable  law,  certified
copies of tax  receipts  evidencing  such  payment by  Borrower.  Borrower  will
indemnify  and hold  harmless  the  Administrative  Agent  and each  Lender  and
reimburse the Administrative  Agent and each Lender upon written request for the
amount of any Taxes so levied or imposed and paid by the Administrative Agent or
Lender and any liability  (including  penalties,  interest and expenses) arising
therefrom or with respect  thereto,  whether or not such Taxes were correctly or
illegally  asserted.  A  certificate  as to the  amount of such  payment by such
Lender or the  Administrative  Agent,  absent  manifest  error,  shall be final,
conclusive and binding for all purposes.

                                      -27-

<PAGE>

         (ii) Each Lender that is organized  under the laws of any  jurisdiction
other than the United  States of America  agrees to furnish to Borrower  and the
Administrative  Agent,  prior to the time it  becomes  a Lender  hereunder,  two
copies  of either  U.S.  Internal  Revenue  Service  Form 4224 or U.S.  Internal
Revenue  Service Form 1001 or any successor  forms thereto  (wherein such Lender
claims  entitlement to complete  exemption from or reduced rate of U.S.  Federal
withholding  tax on  interest  paid by  Borrower  hereunder)  and to  provide to
Borrower  and the  Administrative  Agent  a new  Form  4224 or Form  1001 or any
successor  forms  thereto  if any  previously  delivered  form  is  found  to be
incomplete or incorrect in any material  respect or upon the obsolescence of any
previously delivered form; provided,  however,  that no Lender shall be required
to furnish a form under this  paragraph  (ii) if it is not  entitled to claim an
exemption from or a reduced rate of withholding  under  applicable law. A Lender
that is not entitled to claim an exemption from or a reduced rate of withholding
under applicable law, promptly upon written request of Borrower, shall so inform
Borrower in writing.

         (3)  Subject to Section  3.04(a)(ii),  whenever  any payment to be made
hereunder  or under any Line of Credit  Note  shall be stated to be due on a day
which is not a Business  Day, the due date thereof shall be extended to the next
succeeding  Business Day and,  with respect to payments of  principal,  interest
thereon shall be payable at the applicable rate during such extension.

         (4) On other than Competitive Bid Loans, which shall be negotiated from
time to time, all  computations  of interest and fees shall be made on the basis
of a year of 360 days for the actual number of days (including the first day but
excluding the last day)  occurring in the period for which such interest or fees
are payable (to the extent  computed on the basis of days elapsed),  except that
interest on Base Rate  Advances  shall be computed on the basis of a year of 360
days for the actual  number of days.  Interest  on Base Rate  Advances  shall be
calculated  based on the Base Rate from and  including  the date of such Line of
Credit Loan to but excluding  the date of the  repayment or conversion  thereof.
Interest on Eurodollar  Advances shall be calculated as to each Interest  Period
from and  including the first day thereof to but excluding the last day thereof.
Each  determination  by the  Administrative  Agent  or  the  Lender  making  any
Competitive  Bid Loan of an interest rate or fee hereunder shall be made in good
faith and, except for manifest error, shall be final, conclusive and binding for
all purposes.

         (5) Payment by Borrower to the Administrative  Agent in accordance with
the terms of this Agreement  shall,  as to Borrower,  constitute  payment to the
Lenders under this Agreement.

         Section 3.8.  Interest Rate Not  Ascertainable,  etc. In the event that
the  Administrative  Agent,  in the case of the Adjusted  LIBO Rate,  shall have
determined (which determination shall be made in good faith and, absent manifest
error, shall be final, conclusive and binding upon all parties) that on any date
for determining the Adjusted LIBO Rate for any Interest Period, by reason of any
changes arising after the date of this Agreement  affecting the London interbank
market or the Administrative Agent's position in such market,  adequate and fair

                                      -28-

<PAGE>

means do not exist for  ascertaining  the applicable  interest rate on the basis
provided  for in the  definition  of  Adjusted  LIBO Rate then,  and in any such
event,  the  Administrative  Agent shall  forthwith  give  notice (by  telephone
confirmed in writing) to Borrower and to the Lenders of such determination and a
summary  of the basis for such  determination.  Until the  Administrative  Agent
notifies Borrower that the circumstances giving rise to the suspension described
herein  no  longer  exist,  the  obligations  of the  Lenders  to make or permit
portions of the Line of Credit Loans to remain  outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be suspended, and
such affected Advances shall bear the same interest as Base Rate Advances.

         Section 3.9. Illegality.

         (1)  In  the  event  that  any  Lender  shall  have  determined  (which
determination  shall be made in good faith and, absent manifest error,  shall be
final,  conclusive  and binding upon all parties) at any time that the making or
continuance of any Eurodollar  Advance has become unlawful by compliance by such
Lender in good faith with any applicable  law,  governmental  rule,  regulation,
guideline  or order  (whether  or not having the force of law and whether or not
failure to comply  therewith  would be unlawful),  then, in any such event,  the
Lender shall give prompt notice (by telephone  confirmed in writing) to Borrower
and to the Administrative Agent of such determination and a summary of the basis
for such  determination  (which notice the  Administrative  Agent shall promptly
transmit to the other Lenders).

         (2) Upon the giving of the notice to Borrower referred to in subsection
(a) above, (i) Borrower's right to request and such Lender's  obligation to make
Eurodollar Advances shall be immediately  suspended,  and such Lender shall make
an Advance as part of the requested  Borrowing of Eurodollar  Advances as a Base
Rate Advance,  provided,  Borrower  does not  negotiate a Competitive  Bid Loan,
which Base Rate Advance shall,  for all other  purposes,  be considered  part of
such Borrowing, and (ii) if the affected Eurodollar Advance or Advances are then
outstanding,  Borrower shall immediately,  or if permitted by applicable law, no
later than the date permitted thereby,  upon at least one Business Day's written
notice to the  Administrative  Agent and the affected Lender,  convert each such
Advance into an Advance or Advances of a different Type with an Interest  Period
ending on the date on which  the  Interest  Period  applicable  to the  affected
Eurodollar  Advances expires,  provided that if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to this
Section 3.09(b).

         Section 3.10. Increased Costs.

         (1) If, by reason of (x) after the date hereof,  the introduction of or
any change (including,  without  limitation,  any change by way of imposition or
increase  of reserve  requirements)  in or in the  interpretation  of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental  authority exercising
control over banks or financial  institutions  generally  (whether or not having
the force of law):

                                      -29-

<PAGE>

          (i) any Lender (or its applicable  Lending  Office) shall be
     subject  to any tax,  duty or other  charge  with  respect to its
     Eurodollar   Advances  or  its  obligation  to  make   Eurodollar
     Advances,  or the basis of  taxation of payments to any Lender of
     the  principal of or interest on its  Eurodollar  Advances or its
     obligation to make Eurodollar Advances shall have changed (except
     for  changes in the tax on the  overall net income of such Lender
     or its applicable  Lending Office imposed by the  jurisdiction in
     which such  Lender's  principal  executive  office or  applicable
     Lending Office is located); or

          (ii) any reserve (including, without limitation, any imposed
     by the Board of Governors of the Federal Reserve System), special
     deposit or similar  requirement  against assets of, deposits with
     or for the  account  of,  or credit  extended  by,  any  Lender's
     applicable  Lending Office shall be imposed or deemed  applicable
     or any other condition  affecting its Eurodollar  Advances or its
     obligation to make  Eurodollar  Advances  shall be imposed on any
     Lender or its applicable  Lending Office or the London  interbank
     market;

and as a result  thereof  there shall be any increase in the cost to such Lender
of  agreeing  to make or making,  funding  or  maintaining  Eurodollar  Advances
(except to the extent already  included in the  determination  of the applicable
Adjusted LIBO Rate for  Eurodollar  Advances),  or there shall be a reduction in
the amount  received  or  receivable  by such Lender or its  applicable  Lending
Office,  then Borrower shall from time to time (subject,  in the case of certain
Taxes,  to the applicable  provisions of Section  3.07(b)),  upon written notice
from and  demand by such  Lender on  Borrower  (with a copy of such  notice  and
demand to the Administrative  Agent),  pay to the  Administrative  Agent for the
account of such Lender  within five  Business Days after the date of such notice
and demand,  additional amounts sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost, submitted
to  Borrower  and the  Administrative  Agent by such  Lender  in good  faith and
accompanied  by a statement  prepared by such Lender  describing  in  reasonable
detail the basis for and calculation of such increased cost,  shall,  except for
manifest error, be final, conclusive and binding for all purposes.

         (2) If any Lender  shall  advise the  Administrative  Agent that at any
time,  because of the  circumstances  described in clauses (x) or (y) in Section
3.10(a) or any other  circumstances  beyond  such  Lender's  reasonable  control
arising  after the date of this  Agreement  affecting  such Lender or the London
interbank  market or the  United  States of  America  secondary  certificate  of
deposit  market or such  Lender's  position in such  markets,  the Adjusted LIBO
Rate, as determined by the Administrative  Agent, will not adequately and fairly
reflect the cost to such Lender of funding its Eurodollar Advances, then, and in
any such event:

          (i) the Administrative Agent shall forthwith give notice (by
     telephone  confirmed  in writing)  to  Borrower  and to the other
     Lenders of such advice;

          (ii)   Borrower's   right  to  request  and  such   Lender's
     obligation to make or permit portions of the Line of Credit Loans
     to  remain  outstanding  past the  last  day of the then  current
     Interest  Periods as  Eurodollar  Advances  shall be  immediately
     suspended; and

                                 -30-

<PAGE>

          (iii) such  Lender  shall make a Line of Credit Loan as part
     of the requested  Borrowing of Eurodollar  Advances,  as the case
     may be,  as a Base Rate  Advance,  which  such Base Rate  Advance
     shall,  for  all  other  purposes,  be  considered  part  of such
     Borrowing.

         Section 3.11. Lending Offices.

         (1) Each Lender  agrees that,  if  requested  by Borrower,  it will use
reasonable efforts (subject to overall policy  considerations of such Lender) to
designate an  alternate  Lending  Office with  respect to any of its  Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08,  3.09 or 3.10 to reduce the  liability  of  Borrower  or avoid the results
provided thereunder,  so long as such designation is not disadvantageous to such
Lender as determined by such Lender,  which determination if made in good faith,
shall be conclusive and binding on all parties  hereto.  Nothing in this Section
3.11 shall affect or postpone any of the obligations of Borrower or any right of
any Lender provided hereunder.

         (2) If any Lender that is organized under the laws of any  jurisdiction
other than the United  States of America  or any State  thereof  (including  the
District of Columbia) issues a public  announcement  with respect to the closing
of  its  lending  offices  in  the  United  States  of  America  such  that  any
withholdings or deductions and additional  payments with respect to Taxes may be
required to be made by Borrower  thereafter  pursuant to Section  3.07(b),  such
Lender shall use reasonable  efforts to furnish  Borrower notice thereof as soon
as  practicable  thereafter;  provided,  however,  that no delay or  failure  to
furnish such notice shall in any event  release or discharge  Borrower  from its
obligations to such Lender  pursuant to Section  3.07(b) or otherwise  result in
any liability of such Lender.

         Section 3.12.  Funding Losses.  Borrower shall  compensate each Lender,
upon its written  request to Borrower  (which  request shall set forth the basis
for requesting such amounts in reasonable detail and which request shall be made
in good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the  parties  hereto),  for all  losses,  expenses  and  liabilities
(including,  without limitation,  any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances, in either case to
the extent not recovered by such Lender in connection with the  re-employment of
such funds and  including  loss of  anticipated  profits),  which the Lender may
sustain: (i) if for any reason (other than a default by such Lender) a borrowing
of, or conversion to or continuation of Eurodollar Advances to Borrower does not
occur on the date  specified  therefor  in a Notice  of  Borrowing  or Notice of
Continuation/Conversion  (whether  or not  withdrawn),  (ii)  if  any  repayment
(including  mandatory  prepayments  and  any  conversions  pursuant  to  Section
3.09(b)) of any  Eurodollar  Advances to Borrower  occurs on a date which is not
the last day of an Interest Period  applicable  thereto,  or (iii),  if, for any
reason,  Borrower  defaults in its obligation to repay its  Eurodollar  Advances
when required by the terms of this Agreement.

         Section 3.13.  Assumptions  Concerning Funding of Eurodollar  Advances.
Calculation  of all amounts  payable to a Lender under this Article III shall be
made as though that

                                      -31-

<PAGE>

Lender had actually funded its relevant Eurodollar Advances through the purchase
of deposits in the relevant  market bearing  interest at the rate  applicable to
such  Eurodollar  Advances  in an amount  equal to the amount of the  Eurodollar
Advances and having a maturity  comparable to the relevant  Interest  Period and
through the transfer of such Eurodollar Advances from an offshore office of that
Lender to a  domestic  office of that  Lender in the United  States of  America;
provided,  however, that each Lender may fund each of its Eurodollar Advances in
any  manner  it sees fit and the  foregoing  assumption  shall be used  only for
calculation of amounts payable under this Article III.

         Section  3.14.  Apportionment  of  Payments.  Aggregate  principal  and
interest  payments in respect of Line of Credit Loans and payments in respect of
the  Facility  Fee shall be  apportioned  among all  outstanding  Line of Credit
Commitments   and  Line  of  Credit  Loans  to  which  such   payments   relate,
proportionately  to the Lenders'  respective  pro rata  portions of such Line of
Credit  Commitments and  outstanding  Line of Credit Loans.  The  Administrative
Agent shall  promptly  distribute to each Lender at its Payment Office set forth
beside its name on the  appropriate  signature page hereof or such other address
as any  Lender  may  request  its  share of all such  payments  received  by the
Administrative Agent.

         Section 3.15. Sharing of Payments,  Etc. If any Lender shall obtain any
payment or reduction  (including,  without  limitation,  any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary,  involuntary,  through the exercise
of any right of  set-off,  or  otherwise)  in excess of its pro rata  portion of
payments  or  reductions  on account  of such  obligations  obtained  by all the
Lenders,  such Lender shall  forthwith  (i) notify each of the other Lenders and
Administrative  Agent of such receipt,  and (ii) purchase from the other Lenders
such  participations in the affected  obligations as shall be necessary to cause
such  purchasing  Lender to share the excess payment or reduction,  net of costs
incurred in connection  therewith,  ratably with each of them,  provided that if
all or any portion of such excess  payment or reduction is thereafter  recovered
from such purchasing Lender or additional costs are incurred, the purchase shall
be rescinded and the purchase  price  restored to the extent of such recovery or
such  additional  costs,  but without  interest  unless the Lender  obligated to
return  such funds is required to pay  interest on such funds.  Borrower  agrees
that any Lender so purchasing a  participation  from another Lender  pursuant to
this Section 3.15 may, to the fullest extent permitted by law,  exercise all its
rights  of  payment  (including  the  right of  set-off)  with  respect  to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.

         Section 3.16. Capital Adequacy. Without limiting any other provision of
this Agreement, in the event that any Lender shall have determined that any law,
treaty,  governmental (or  quasi-governmental)  rule,  regulation,  guideline or
order regarding  capital adequacy not currently in effect or fully applicable as
of the  Closing  Date,  or  any  change  therein  or in  the  interpretation  or
application  thereof  after the Closing  Date, or compliance by such Lender with
any request or directive  regarding  capital adequacy not currently in effect or
fully  applicable as of the Closing Date (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from a central
bank or governmental authority or

                                      -32-

<PAGE>

body having jurisdiction,  does or shall have the effect of reducing the rate of
return on such Lender's capital as a consequence of its obligations hereunder to
a level  below that  which such  Lender  could have  achieved  but for such law,
treaty, rule, regulation, guideline or order, or such change or compliance by an
amount  reasonably  deemed by such Lender to be  material,  then within ten (10)
Business  Days  after  written  notice and demand by such  Lender  (with  copies
thereof to the  Administrative  Agent),  Borrower shall from time to time pay to
such Lender  additional  amounts  sufficient to compensate  such Lender for such
reduction  (but,  in  the  case  of  outstanding  Base  Rate  Advances,  without
duplication  of any  amounts  already  recovered  by such Lender by reason of an
adjustment  in the  applicable  Base Rate).  Each  certificate  as to the amount
payable under this Section 3.16 (which certificate shall set forth the basis for
requesting  such  amounts in  reasonable  detail),  submitted to Borrower by any
Lender in good faith,  shall,  absent manifest  error, be final,  conclusive and
binding for all purposes.

         Section  3.17.  Benefits  to  Guarantors.   In  consideration  for  the
execution  and delivery by the  Guarantors of the Guaranty  Agreement,  Borrower
agrees to make the benefit of  extensions of credit  hereunder  available to the
Guarantors.

         Section 3.18. Limitation on Certain Payment Obligations.

         (1) Each Lender or  Administrative  Agent shall make written  demand on
Borrower for  indemnification or compensation  pursuant to Section 3.07 no later
than 90 days  after  the  earlier  of (i) the date on which  such  Lender or the
Administrative Agent makes payment of such Taxes, and (ii) the date on which the
relevant taxing authority or other  governmental  authority makes written demand
upon such Lender or the Administrative Agent for payment of such Taxes.

         (2) Each Lender or the  Administrative  Agent shall make written demand
on Borrower for  indemnification  or compensation  pursuant to Sections 3.12 and
3.13 no  later  than 90 days  after  the  event  giving  rise to the  claim  for
indemnification or compensation occurs.

         (3) Each Lender or the  Administrative  Agent shall make written demand
on Borrower for  indemnification  or compensation  pursuant to Sections 3.10 and
3.16 no  later  than 90 days  after  such  Lender  or the  Administrative  Agent
receives actual notice or obtains actual knowledge of the promulgation of a law,
rule,  order or  interpretation  or occurrence of another event giving rise to a
claim pursuant to such sections.

         (4) In the event that the Lenders or the  Administrative  Agent fail to
give Borrower notice within the time limitations prescribed in (a) or (b) above,
Borrower  shall not have any  obligation to pay such claim for  compensation  or
indemnification.  In the event that the Lender or the Administrative  Agent fail
to give  Borrower  notice  within the time  limitation  prescribed in (c) above,
Borrower  shall not have any obligation to pay any amount with respect to claims
accruing prior to the ninetieth day preceding such written demand.

                                      -33-

<PAGE>

                                   ARTICLE 4

                            CONDITIONS TO BORROWINGS

         The  obligations of each Lender to make Advances to Borrower  hereunder
is subject to the satisfaction of the following conditions:

         Section 4.1.  Conditions  Precedent to Initial Line of Credit Loans. At
the time of the making of the  initial  Line of Credit  Loans  hereunder  on the
Closing  Date,  all  obligations  of Borrower  hereunder  incurred  prior to the
initial  Line  of  Credit  Loans  (including,  without  limitation,   Borrower's
obligations  to  reimburse  the  reasonable  fees and expenses of counsel to the
Administrative  Agent and any fees and  expenses  payable to the  Administrative
Agent and the Lenders as previously agreed with Borrower),  shall have been paid
in full, and the Administrative Agent shall have received the following, in form
and  substance  reasonably  satisfactory  in all respects to the  Administrative
Agent:

          (1) the duly executed counterparts of this Agreement;

          (2) the duly  completed  Line of Credit Notes  evidencing  the Line of
     Credit Commitment;

          (3) the duly executed Guaranty Agreement;

          (4)  certificate  of Borrower in  substantially  the form of Exhibit C
     attached hereto and appropriately completed;

          (5) the duly executed Commitment Letter;

          (6) the duly executed Fee Letter;

          (7)  certificates  of the Secretary or Assistant  Secretary of each of
     the Credit Parties  attaching and certifying  copies of the  resolutions of
     the boards of directors of the Credit  Parties,  authorizing  as applicable
     the execution, delivery and performance of the Credit Documents;

          (8) certificates of the Secretary or an Assistant Secretary of each of
     the Credit  Parties  certifying  (i) the name,  title and true signature of
     each officer of such  entities  executing  the Credit  Documents,  (ii) the
     bylaws or comparable  governing  documents of such entities;  and (iii) the
     certificate or articles of incorporation of each Credit Party;

          (9)  certificates  of good standing or existence,  as may be available
     from the  Secretary  of  State  of the  jurisdiction  of  incorporation  or
     organization of such Credit Party;

                                      -34-

<PAGE>

          (10) copies of all documents and instruments,  including all consents,
     authorizations and filings,  required or advisable under any Requirement of
     Law or by any material  Contractual  Obligation of the Credit  Parties,  in
     connection  with  the  execution,  delivery,   performance,   validity  and
     enforceability  of the  Credit  Documents  and the  other  documents  to be
     executed  and  delivered  hereunder,  and  such  consents,  authorizations,
     filings  and orders  shall be in full  force and effect and all  applicable
     waiting periods shall have expired;

          (11)  certified  copies of the  Intercompany  Loan  Documents,  to the
     extent  that  they  exist and have not  previously  been  certified  to the
     Lenders;

          (12) duly executed  solvency  certificates of Borrower and each of the
     Guarantors, in form and substance satisfactory to the Agents and Lenders;

          (13)  acknowledgment  from CSC Network  Corporation System, Inc. as to
     its  appointment  as agent for service of process  for the  various  Credit
     Parties;

          (14)  certified  copies  of  indentures,  credit  agreements,  leases,
     capital leases,  instruments,  and other  documents  evidencing or securing
     Indebtedness of any Consolidated  Company described on Schedule 7.01(b), in
     any single case in an amount not less than  $500,000  and to the extent not
     previously certified to the Lenders;

          (15) certificates, reports and other information as the Administrative
     Agent may  reasonably  request  from any  Consolidated  Company in order to
     satisfy  the  Lenders as to the  absence  of any  material  liabilities  or
     obligations  arising from matters relating to employees of the Consolidated
     Companies, including employee relations,  collective bargaining agreements,
     Plans, and other compensation and employee benefit plans;

          (16) certificates,  reports,  environmental audits and investigations,
     and other information as the  Administrative  Agent may reasonably  request
     from any  Consolidated  Company in order to satisfy  the  Lenders as to the
     absence  of  any  material   liabilities   or   obligations   arising  from
     environmental  and  employee  health  and  safety  exposures  to which  the
     Consolidated  Companies may be subject,  and the plans of the  Consolidated
     Companies with respect thereto;

          (17) certificates, reports and other information as the Administrative
     Agent may  reasonably  request  from any  Consolidated  Company in order to
     satisfy  the  Lenders as to the  absence  of any  material  liabilities  or
     obligations arising from litigation (including without limitation, products
     liability and patent infringement claims) pending or threatened against the
     Consolidated Companies;

          (18) a  certificate  of  insurance  summarizing,  in form  and  detail
     reasonably acceptable to the Administrative Agent, of the types and amounts
     of  insurance  (property  and  liability)  maintained  by the  Consolidated
     Companies;

                                      -35-

<PAGE>

          (19) the favorable  opinion of counsel to the Credit Parties addressed
     to the Administrative Agent and each of the Lenders; and

          (20) financial statements of Borrower and its Subsidiaries, audited on
     a  consolidated  basis  for the  fiscal  year  ended on the last  Friday in
     January,  1998 and unaudited on a consolidated basis for the fiscal quarter
     ended on the last Friday in October, 1998.

In addition to the foregoing, the following conditions shall have been satisfied
or shall exist, all to the satisfaction of the  Administrative  Agent, as of the
time the initial Line of Credit Loans are made hereunder:

          (x) the Line of Credit  Loans to be made on the  Closing  Date and the
     use of proceeds thereof shall not contravene,  violate or conflict with, or
     involve the Administrative  Agent or any Lender in a violation of, any law,
     rule,  injunction,  or regulation,  or determination of any court of law or
     other governmental authority;

          (y)  all  corporate   proceedings  and  all  other  legal  matters  in
     connection with the authorization, legality, validity and enforceability of
     the Credit Documents shall be reasonably satisfactory in form and substance
     to the Required Lenders; and

          (z) the status of all pending  and  threatened  litigation  (including
     products  liability  and patent  claims) which might result in a Materially
     Adverse  Effect,  including a  description  of any  damages  sought and the
     claims constituting the basis therefor, shall have been reported in writing
     to the Administrative  Agent, the Administrative  Agent shall have reported
     such matters to the Lenders,  and the Lenders shall be satisfied  with such
     status.

         Section 4.2. Conditions to All Line of Credit Loans. At the time of the
making of all Line of Credit  Loans  (before as well as after  giving  effect to
such Line of Credit Loans and to the proposed use of the proceeds thereof),  the
following conditions shall have been satisfied or shall exist:

          (1) there shall exist no Default or Event of Default;

          (2) all  representations  and warranties by Borrower  contained herein
     shall be true and correct in all material  respects with the same effect as
     though such  representations  and warranties had been made on and as of the
     date of such Line of Credit Loans;

          (3)  since the date of the most  recent  financial  statements  of the
     Consolidated  Companies described in Section 5.03, there shall have been no
     change which has had or could  reasonably  be expected to have a Materially
     Adverse Effect.

                                      -36-

<PAGE>

          (4) there  shall be no  action or  proceeding  instituted  or  pending
     before any court or other  governmental  authority  or, to the knowledge of
     Borrower,  threatened  (i) which  reasonably  could be  expected  to have a
     Materially  Adverse Effect,  or (ii) seeking to prohibit or restrict one or
     more Credit  Party's  ownership or operation of any portion of its business
     or  assets,  or to compel  one or more  Credit  Party to dispose of or hold
     separate all or any portion of its businesses or assets, where such portion
     or portions of such  business(es) or assets, as the case may be, constitute
     a material  portion of the total  businesses or assets of the  Consolidated
     Companies;

          (5) the  Line of  Credit  Loans  to be  made  and the use of  proceeds
     thereof  shall not  contravene,  violate or conflict  with,  or involve the
     Administrative  Agent or any  Lender  in a  violation  of,  any law,  rule,
     injunction,  or regulation,  or  determination of any court of law or other
     governmental authority applicable to Borrower; and

          (6) the Administrative  Agent shall have received such other documents
     or legal opinions as the Administrative  Agent or any Lender may reasonably
     request,  all  in  form  and  substance  reasonably   satisfactory  to  the
     Administrative Agent.

         Each  request for a  Borrowing  and the  acceptance  by Borrower of the
proceeds thereof shall constitute a representation and warranty by Borrower,  as
of the date of the Line of Credit  Loans  comprising  such  Borrowing,  that the
applicable conditions specified in Sections 4.01 and 4.02 have been satisfied.

                                   ARTICLE 5

                         REPRESENTATIONS AND WARRANTIES

         Borrower represents, warrants and covenants to Lenders that:

         Section 5.1. Organization and Qualification.  Borrower is a corporation
duly  organized  and  existing in good  standing  under the laws of the State of
Florida.  Each  Subsidiary  of  Borrower is a  corporation  duly  organized  and
existing under the laws of the jurisdiction of its  incorporation.  Borrower and
each  of its  Subsidiaries  are  duly  qualified  to do  business  as a  foreign
corporation and are in good standing in each jurisdiction in which the character
of their  properties or the nature of their  business  makes such  qualification
necessary,  except  for such  jurisdictions  in which a failure to qualify to do
business would not have a Materially  Adverse  Effect.  Borrower and each of its
Subsidiaries have the corporate power to own their respective  properties and to
carry on their respective businesses as now being conducted. The jurisdiction of
incorporation or  organization,  and the ownership of all issued and outstanding
capital  stock,  for  each  Subsidiary  as of the  date  of  this  Agreement  is
accurately  described  on  Schedule  5.01.  Schedule  5.01 also  designates  the
Material Subsidiaries as of the Closing Date.

                                      -37-

<PAGE>

         Section  5.2.  Corporate  Authority.  The  execution  and  delivery  by
Borrower and the Guarantors of and the performance by Borrower and Guarantors of
their  obligations  under the Credit  Documents have been duly authorized by all
requisite corporate action and all requisite  shareholder action, if any, on the
part of  Borrower  and the  Guarantors  and do not and will not (i)  violate any
provision of any law, rule or regulation,  any judgment,  order or ruling of any
court or governmental agency, the organizational papers or bylaws of Borrower or
the  Guarantors,  or any  indenture,  agreement  or  other  instrument  to which
Borrower or the Guarantors are a party or by which Borrower or the Guarantors or
any of their  properties  is bound,  or (ii) be in  conflict  with,  result in a
breach of, or  constitute  with notice or lapse of time or both a default  under
any such indenture, agreement or other instrument.

         Section 5.3. Financial Statements.  Borrower has furnished Lenders with
the  following  financial  statements:   (i)  consolidated  balance  sheets  and
consolidated  statements  of  income,  stockholders'  equity  and  cash  flow of
Borrower for the fiscal year ended on the last Friday in January,  1998, audited
by PriceWaterhouseCoopers LLP and (ii) unaudited consolidated balance sheets and
consolidated  statements  of  income,  stockholders'  equity  and  cash  flow of
Borrower for the fiscal quarter ending on the last Friday in October, 1998. Such
financial  statements  (including any related  schedules and notes) are true and
correct in all material respects (subject, as to interim statements,  to changes
resulting  from  audits  and  year  end  adjustments),  have  been  prepared  in
accordance with GAAP  consistently  applied  throughout the period or periods in
question and show, in the case of audited statements, all liabilities, direct or
contingent, of Borrower and its Subsidiaries, required to be shown in accordance
with GAAP consistently  applied throughout the period or periods in question and
fairly present the consolidated  financial position and the consolidated results
of  operations  of  Borrower  and its  Subsidiaries  for the  periods  indicated
therein. There has been no material adverse change in the business, condition or
operations,  financial or otherwise,  of Borrower and its Subsidiaries since the
last Friday in October, 1998.

         Section  5.4. Tax Returns.  Each of Borrower and its  Subsidiaries  has
filed all  federal,  state and  other  income  tax  returns  which,  to the best
knowledge  of the  executive  officers of  Borrower  and its  Subsidiaries,  are
required to be filed,  and each has paid all taxes as shown on said  returns and
on all assessments  received by it to the extent that such taxes have become due
or except such as are being  contested in good faith by appropriate  proceedings
for which adequate reserves have been established in accordance with GAAP.

         Section 5.5. Actions Pending.  There is no action, suit,  investigation
or proceeding  pending or, to the knowledge of Borrower,  threatened  against or
affecting  Borrower or any of its  Subsidiaries  or any of their  properties  or
rights,  by or before any court,  arbitrator or  administrative  or governmental
body, which might result in any Materially Adverse Effect.

         Section  5.6.  Representations;  No  Defaults.  At  the  time  of  each
Extension of Credit  there shall exist no Default or Event of Default,  and each
Extension of Credit shall be deemed a renewal by Borrower of the representations
and warranties

                                      -38-

<PAGE>

contained in this Agreement and an  affirmative  statement by Borrower that such
representations  and warranties are true and correct on and as of such time with
the same effect as though such  representations  and warranties had been made on
and as of such time.

         Section 5.7. Title to Properties. Each of Borrower and its Subsidiaries
has (i) good and marketable fee simple title to its respective  real  properties
(other than real  properties  which it leases from others),  including such real
properties  reflected  in the  consolidated  balance  sheet of Borrower  and its
Subsidiaries  as of the last  Friday of  October,  1998,  hereinabove  described
(other than real  properties  disposed of in the ordinary  course of  business),
subject to no Lien of any kind except  Liens  permitted by Section 7.02 and (ii)
good title to all of its other  respective  properties  and assets  (other  than
properties  and  assets  which it  leases  from  others),  including  the  other
properties and assets  reflected in the  consolidated  balance sheet of Borrower
and its Subsidiaries at the last Friday of October,  1998, hereinabove described
(other  than  properties  and  assets  disposed  of in the  ordinary  course  of
business),  subject to no Lien of any kind  except  Liens  permitted  by Section
7.02.  Each of Borrower and its  Subsidiaries  enjoys  peaceful and  undisturbed
possession  under all leases necessary in any material respect for the operation
of its respective  properties and assets,  none of which contains any unusual or
burdensome  provisions which might materially  affect or impair the operation of
such properties and assets,  and all such leases are valid and subsisting and in
full force and effect.

         Section 5.8. Enforceability of Agreement.  This Agreement is the legal,
valid  and  binding  agreement  of  Borrower  enforceable  against  Borrower  in
accordance  with its terms,  and the Line of Credit Notes,  and all other Credit
Documents,  when executed and delivered, will be similarly legal, valid, binding
and enforceable,  except as the  enforceability  of the Line of Credit Notes and
other Credit Documents may be limited by bankruptcy, insolvency, reorganization,
moratorium  and other laws affecting  creditor's  rights and remedies in general
and by general  principles of equity,  whether considered in a proceeding at law
or in equity.

         Section 5.9. Consent. No consent, permission,  authorization,  order or
license of any governmental  authority or Person is necessary in connection with
the execution,  delivery, performance or enforcement of the Credit Documents, or
in order to constitute the  indebtedness to be incurred  hereunder and under the
Line of Credit  Notes and the other  Credit  Documents  as "Senior  Debt" or any
similar term defined within the documents evidencing any Subordinated Debt.

         Section  5.10.  Use  of  Proceeds;  Federal  Reserve  Regulations.  The
proceeds  of the Line of  Credit  Notes  will be used  solely  for the  purposes
specified in Section 2.01(c) and none of such proceeds will be used, directly or
indirectly,  for the purpose of purchasing or carrying any "margin  security" or
"margin stock" or for the purpose of reducing or retiring any indebtedness  that
originally  was  incurred to purchase  or carry a "margin  security"  or "margin
stock" or for any  other  purpose  that  might  constitute  this  transaction  a
"purpose credit" within the meaning of the regulations of the Board of Governors
of the Federal Reserve System.

         Section 5.11. ERISA.

                                      -39-
<PAGE>

         (1)  Identification  of Certain Plans.  Schedule 5.11 hereto sets forth
all Plans of Borrower and its Subsidiaries;

         (2)  Compliance.  Each  Plan is being  maintained,  by its terms and in
operation,  in accordance with all applicable laws,  except such  noncompliances
(when taken as a whole) that will not have a Materially Adverse Effect;

         (3)  Liabilities.  Neither the Borrower nor any Subsidiary is currently
or will become subject to any liability (including withdrawal liability), tax or
penalty  whatsoever to any person whomsoever with respect to any Plan including,
but not limited to, any tax, penalty or liability arising under Title I or Title
IV of ERISA or Chapter 43 of the Tax Code,  except such liabilities  (when taken
as a whole) as will not have a Materially Adverse Effect; and

         (4) Funding.  The Borrower and each ERISA  Affiliate  has made full and
timely payment of all amounts (i) required to be contributed  under the terms of
each Plan and  applicable  law and (ii)  required to be paid as expenses of each
Plan, except where such non-payment would not have a Materially  Adverse Effect.
No Plan has an "amount of unfunded  benefit  liabilities" (as defined in Section
4001(a)(18)  of ERISA) except as disclosed on Schedule  5.11. No Plan is subject
to a waiver or extension of the minimum funding  requirements under ERISA or the
Tax Code, and no request for such waiver or extension is pending.

         Section 5.12. Subsidiaries. All the outstanding shares of stock of each
such  Subsidiary  have been validly issued and are fully paid and  nonassessable
and all such  outstanding  shares,  except as noted on such Schedule  5.01,  are
owned by Borrower or a Wholly Owned  Subsidiary  of Borrower free of any Lien or
claim.

         Each Subsidiary (i) is a corporation  duly organized,  validly existing
and in good standing under the laws of the State of its  incorporation  with the
power and authority  (corporate and other) to carry on its business as it is now
conducted  and (ii) is qualified to transact  business as a foreign  corporation
and is in good  standing in each  jurisdiction  in which such  qualification  is
required under applicable law.

         Section 5.13. Outstanding  Indebtedness.  As of the date of closing and
after giving effect to the transactions contemplated by this Agreement,  neither
Borrower nor any of its Subsidiaries has outstanding any Indebtedness  except as
permitted by Section 7.01 and there exists no default  under the  provisions  of
any  instrument  evidencing  such  Indebtedness  or of  any  agreement  relating
thereto.

         Section 5.14. Conflicting  Agreements.  Neither Borrower nor any of its
Subsidiaries  is a party  to any  contract  or  agreement  or  other  burdensome
restrictions  or subject to any  charter or other  corporate  restriction  which
materially and adversely affects its business,  property or assets, or financial
condition.  Assuming the consummation of the  transactions  contemplated by this
Agreement,  neither the  execution  or delivery of this  Agreement or the

                                      -40-

<PAGE>

Credit Documents, nor fulfillment of or compliance with the terms and provisions
hereof and  thereof,  will  conflict  with,  or result in a breach of the terms,
conditions or provisions  of, or  constitute a default  under,  or result in any
violation  of, or result in the creation of any Lien upon any of the  properties
or assets of Borrower  or any of its  Subsidiaries  pursuant  to, the charter or
By-Laws of Borrower or any of its  Subsidiaries,  any award of any arbitrator or
any agreement  (including any agreement with stockholders),  instrument,  order,
judgment,  decree,  statute, law, rule or regulation to which Borrower or any of
its Subsidiaries is subject, and neither Borrower nor any of its Subsidiaries is
a party to, or otherwise  subject to any provision  contained in, any instrument
evidencing  Indebtedness of Borrower or any of its  Subsidiaries,  any agreement
relating  thereto or any other  contract or  agreement  (including  its charter)
which limits the amount of, or otherwise  imposes  restrictions on the incurring
of,  Indebtedness  of the type to be  evidenced  by the Line of Credit  Notes or
contains dividend or redemption limitations on Common Stock of Borrower,  except
for this Agreement,  Borrower's  Certificate of Incorporation  and those matters
listed on Schedule 5.14 attached hereto.

         Section 5.15. Pollution and Other Regulations.

         (1) Each of the  Borrower  and its  Subsidiaries  has  complied  in all
material  respects with all applicable  Environmental  Laws,  including  without
limitation,   compliance  with  permits,  licenses,  standards,   schedules  and
timetables,  and is not in violation of, and does not presently have outstanding
any liability under, has not been notified that it is or may be liable under and
does not have knowledge of any liability or potential  liability  (including any
liability relating to matters set forth on Schedule 5.15(a)) except as set forth
on Schedule 5.15(a),  under any applicable  Environmental Law, including without
limitation,  the Resource  Conservation  and  Recovery  Act of 1976,  as amended
("RCRA"), the Comprehensive  Environmental Response,  Compensation and Liability
Act of 1980, as amended by the Superfund  Amendments and  Reauthorization Act of
1986 ("CERCLA"),  the Federal Water Pollution Control Act, as amended ("FWPCA"),
the Federal Clean Air Act, as amended ("FCAA"),  and the Toxic Substance Control
Act ("TSCA"), which violation, liability or potential liability could reasonably
be expected to have a Materially Adverse Effect.

         (2) Neither the  Borrower  nor any of its  Subsidiaries  has received a
written request for information under CERCLA,  any other  Environmental  Laws or
any  comparable  state  law,  or any public  health or safety or welfare  law or
written  notice  that  any  such  entity  has  been  identified  as a  potential
responsible party under CERCLA, and other  Environmental Laws, or any comparable
state law,  or any  public  health or safety or  welfare  law,  nor has any such
entity received any written notification that any Hazardous Substance that it or
any of its respective  predecessors in interest has generated,  stored, treated,
handled,  transported,  or disposed of, has been released or is threatened to be
released at any site at which any Person  intends to conduct or is  conducting a
remedial investigation or other action pursuant to any applicable  Environmental
Law, or any other Environmental Laws.

                                      -41-

<PAGE>

         (3) Each of the Borrower and its Subsidiaries has obtained all permits,
licenses or other  authorizations  required for the conduct of their  respective
operations under all applicable  Environmental  Laws and each such authorization
is in full force and effect.

         (4) Each of Borrower  and its  Subsidiaries  complies  in all  material
respects with all laws and regulations relating to equal employment  opportunity
and  employee  safety  in all  jurisdictions  in  which  it is  presently  doing
business, and Borrower will use its best efforts to comply, and to cause each of
its  Subsidiaries  to comply,  with all such laws and  regulations  which may be
legally imposed in the future in  jurisdictions  in which Borrower or any of its
Subsidiaries may then be doing business.

         Section 5.16. Possession of Franchises, Licenses, Etc. Each of Borrower
and its Subsidiaries possesses all franchises,  certificates,  licenses, permits
and other authorizations from governmental  political subdivisions or regulatory
authorities,  free  from  burdensome  restrictions,  that are  necessary  in any
material respect for the ownership,  maintenance and operation of its properties
and assets,  and neither Borrower nor any of its Subsidiaries is in violation of
any thereof in any material respect.

         Section 5.17. Patents,  Etc. Each of Borrower and its Subsidiaries owns
or has the right to use all patents,  trademarks,  service  marks,  trade names,
copyrights, licenses and other rights, free from burdensome restrictions,  which
are necessary for the operation of its business as presently conducted.  Nothing
has come to the attention of Borrower,  any of its  Subsidiaries or any of their
respective  directors and officers to the effect that (i) any product,  process,
method,  substance,  part or other material presently contemplated to be sold by
or  employed  by  Borrower or any of its  Subsidiaries  in  connection  with its
business  may  infringe  any  patent,  trademark,   service  mark,  trade  name,
copyright,  license  or other  right  owned by any other  Person,  (ii) there is
pending or threatened any claim or litigation  against or affecting  Borrower or
any of its  Subsidiaries  contesting  its right to sell or use any such product,
process, method,  substance,  part or other material or (iii) there is, or there
is pending or proposed, any patent, invention,  device, application or principle
or any statute,  law,  rule,  regulation,  standard or code which would prevent,
inhibit  or  render  obsolete  the  production  or sale of any  products  of, or
substantially   reduce  the  projected  revenues  of,  or  otherwise  materially
adversely  affect the business,  condition or operations of,  Borrower or any of
its Subsidiaries.

         Section 5.18.  Governmental Consent.  Neither the nature of Borrower or
any of its Subsidiaries  nor any of their  respective  businesses or properties,
nor any relationship between Borrower and any other Person, nor any circumstance
in connection  with the  execution and delivery of the Credit  Documents and the
consummation of the transactions  contemplated  thereby is such as to require on
behalf of Borrower or any of its  Subsidiaries  any  consent,  approval or other
action  by or any  notice  to or  filing  with any  court or  administrative  or
governmental  body  in  connection  with  the  execution  and  delivery  of this
Agreement and the Credit Documents.

                                      -42-

<PAGE>

         Section  5.19.  Disclosure.  Neither  this  Agreement  nor  the  Credit
Documents nor any other document,  certificate or written statement furnished to
Lenders by or on behalf of Borrower in connection  herewith  contains any untrue
statement  of a material  fact or omits to state a material  fact  necessary  in
order to make the statements  contained herein or therein not misleading.  There
is no fact peculiar to Borrower  which  materially  adversely  affects or in the
future may (so far as Borrower can now foresee) materially  adversely affect the
business, property or assets, financial condition or prospects of Borrower which
has  not  been  set  forth  in  this  Agreement  or  in  the  Credit  Documents,
certificates  and  written  statements  furnished  to Lenders by or on behalf of
Borrower  prior  to  the  date  hereof  in  connection  with  the   transactions
contemplated hereby.

         Section 5.20.  Insurance Coverage.  Each property of Borrower or any of
its  Subsidiaries is insured within terms  acceptable to Lenders for the benefit
of Borrower or a Subsidiary of Borrower in amounts deemed adequate by Borrower's
management  and no less than those  amounts  customary  in the industry in which
Borrower and its  Subsidiaries  operate against risks usually insured against by
Persons operating businesses similar to those of Borrower or its Subsidiaries in
the localities where such properties are located.

         Section  5.21.   Labor   Matters.   The  Borrower  and  the  Borrower's
Subsidiaries  have  experienced no strikes,  labor disputes,  slow downs or work
stoppages  due to labor  disagreements  which have had, or would  reasonably  be
expected to have, a Materially  Adverse  Effect,  and, to the best  knowledge of
Borrower's executive officers,  there are no such strikes,  disputes, slow downs
or  work  stoppages  threatened  against  any  Borrower  or  any  of  Borrower's
Subsidiaries. The hours worked and payment made to employees of the Borrower and
Borrower's  Subsidiaries  have not been in violation in any material  respect of
the Fair Labor  Standards  Act or any other  applicable  law  dealing  with such
matters. All payments due from the Borrower and Borrower's Subsidiaries,  or for
which any claim may be made against the  Consolidated  Companies,  on account of
wages and employee  health and welfare  insurance  and other  benefits have been
paid or accrued  as  liabilities  on the books of the  Borrower  and  Borrower's
Subsidiaries  where  the  failure  to  pay  or  accrue  such  liabilities  would
reasonably be expected to have a Materially Adverse Effect.

         Section 5.22. Intercompany Loans; Dividends. The Intercompany Loans and
the Intercompany  Loan Documents,  to the extent that they exist, have been duly
authorized and approved by all necessary corporate and shareholder action on the
part of the  parties  thereto,  and  constitute  the  legal,  valid and  binding
obligations  of the  parties  thereto,  enforceable  against  each  of  them  in
accordance with their respective  terms,  except as may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium, or similar laws affecting
creditors' rights generally,  and by general principles of equity.  There are no
restrictions on the power of any Consolidated  Company to repay any Intercompany
Loan or to pay  dividends  on the capital  stock.  Intercompany  Loans as of the
Closing Date are described in Schedule 5.22.

                                      -43-

<PAGE>

         Section  5.23.  Burdensome  Restrictions.   None  of  the  Consolidated
Companies is a party to or bound by any Contractual Obligation or Requirement of
Law which has had or would  reasonably be expected to have a Materially  Adverse
Effect.

         Section 5.24. Investment Company Act, Etc. Neither the Borrower nor any
of its Subsidiaries is an "investment  company" or a company  "controlled" by an
"investment  company"  (as each of the  quoted  terms is  defined or used in the
Investment Company Act of 1940, as amended). Neither the Borrower nor any of its
Subsidiaries  is subject to regulation  under the Public Utility Holding Company
Act of 1935, the Federal Power Act, or any foreign,  federal or local statute or
regulation  limiting  its  ability  to incur  indebtedness  for money  borrowed,
guarantee such  indebtedness,  or pledge its assets to secure such indebtedness,
as contemplated hereby or by any other Credit Document.

         Section 5.25. Notice of Non-Compliance  with Laws. Neither the Borrower
nor  any of its  Subsidiaries  has  received  notice  of any  violation  of Law,
statute,  order,  rule,  regulation,  or judgment  entered by any court that may
reasonably be expected to have a Materially Adverse Effect.

         Section  5.26.  Year 2000 Issues.  Borrower and the other  Consolidated
Companies  (i) are  performing a  comprehensive  review of their  computers  and
software  applications  to identify  the systems  that would be affected by Year
2000 Issues as such issues  pertain to the computer  programs and systems of the
Consolidated  Companies,  (ii) based on their  review and all other  information
currently available to them, do not reasonably  anticipate that Year 2000 Issues
will have a Materially  Adverse  Effect,  and (iii) are in  compliance  with all
laws, rules and regulations of the Securities and Exchange Commission.

                                   ARTICLE 6

                              AFFIRMATIVE COVENANTS

         Borrower  covenants and agrees that so long as it may borrow under this
Agreement or so long as any indebtedness  remains  outstanding under the Line of
Credit Notes that it will:

         Section 6.1. Corporate Existence, Etc. Preserve and maintain, and cause
each of its  Material  Subsidiaries  to preserve  and  maintain,  its  corporate
existence,  its material  rights,  franchises,  and  licenses,  and its material
patents and copyrights (for the scheduled duration thereof),  trademarks,  trade
names,  and service  marks,  necessary or desirable in the normal conduct of its
business,  and its qualification to do business as a foreign  corporation in all
jurisdictions  where it  conducts  business  or  other  activities  making  such
qualification necessary, where the failure to do so would reasonably be expected
to have a Materially Adverse Effect.

                                      -44-

<PAGE>

         Section 6.2.  Compliance with Laws, Etc. Comply,  and cause each of its
Subsidiaries  to  comply  with  all  Requirements  of  Law  (including,  without
limitation,  the  Environmental  Laws,  subject  to the  exception  set forth in
Section  6.07(f)  where the  penalties,  claims,  fines,  and other  liabilities
resulting from noncompliance with such Environmental Laws do not involve amounts
in  excess  of  $10,000,000  in  the  aggregate)  and  Contractual   Obligations
applicable  to or binding on any of them where the  failure to comply  with such
Requirements of Law and Contractual  Obligations would reasonably be expected to
have a Materially Adverse Effect.

         Section 6.3.  Payment of Taxes and Claims,  Etc. Pay, and cause each of
its  Subsidiaries to pay, (i) all taxes,  assessments and  governmental  charges
imposed upon it or upon its property,  and (ii) all claims  (including,  without
limitation,  claims for labor, materials,  supplies or services) which might, if
unpaid,  become a Lien upon its property,  unless, in each case, the validity or
amount thereof is being  contested in good faith by appropriate  proceedings and
adequate reserves are maintained with respect thereto.

         Section 6.4. Keeping of Books. Keep, and cause each of its Subsidiaries
to keep,  proper books of record and account,  containing  complete and accurate
entries of all their respective financial and business transactions.

         Section 6.5. Visitation, Inspection, Etc. Permit, and cause each of its
Subsidiaries to permit, any  representative of the  Administrative  Agent or any
Lender  to visit and  inspect  any of its  property,  to  examine  its books and
records  and to make  copies and take  extracts  therefrom,  and to discuss  its
affairs,  finances and accounts with its officers,  all at such reasonable times
and as often as the  Administrative  Agent or such Lender may reasonably request
after reasonable prior notice to Borrower;  provided,  however, that at any time
following the occurrence and during the  continuance of a Default or an Event of
Default, no prior notice to Borrower shall be required.

         Section 6.6. Insurance; Maintenance of Properties.

         (1)  Maintain  or cause to be  maintained  with  financially  sound and
reputable insurers,  insurance with respect to its properties and business,  and
the properties and business of its  Subsidiaries,  against loss or damage of the
kinds customarily  insured against by reputable companies in the same or similar
businesses,  such  insurance to be of such types and in such amounts,  including
such  self-insurance  and  deductible  provisions,  as  is  customary  for  such
companies  under similar  circumstances;  provided,  however,  that in any event
Borrower  shall use its best  efforts to  maintain,  or cause to be  maintained,
insurance in amounts and with  coverages not  materially  less  favorable to any
Consolidated  Company as in effect on the date of this  Agreement,  except where
the costs of maintaining  such insurance would, in the judgment of both Borrower
and the Administrative Agent, be excessive.

         (2) Cause, and cause each of the  Consolidated  Companies to cause, all
properties  used or useful in the conduct of its business to be  maintained  and
kept in good

                                      -45-

<PAGE>

condition,  repair and working order and supplied  with all necessary  equipment
and  will  cause  to be made  all  necessary  repairs,  renewals,  replacements,
settlements and improvements  thereof, all as in the judgment of Borrower may be
necessary  so that  the  business  carried  on in  connection  therewith  may be
properly and  advantageously  conducted at all times;  provided,  however,  that
nothing in this Section shall prevent Borrower from  discontinuing the operation
or maintenance of any such properties if such discontinuance is, in the judgment
of  Borrower,  desirable  in the conduct of its  business or the business of any
Consolidated Company.

         Section 6.7. Reporting Covenants. Furnish to each Lender:

         (1) Annual Financial Statements.  As soon as available and in any event
within 95 days after the end of each fiscal year of Borrower,  balance sheets of
the  Consolidated  Companies  as  at  the  end  of  such  year,  presented  on a
consolidated basis, and the related statements of income,  shareholders' equity,
and cash flows of the Consolidated  Companies for such fiscal year, presented on
a consolidated basis, setting forth in each case in comparative form the figures
for the previous  fiscal year,  all in reasonable  detail and  accompanied  by a
report thereon of independent public accountants of recognized national standing
reasonably  acceptable to the  Administrative  Agent, which such report shall be
unqualified  as to going  concern  and scope of audit and shall  state that such
financial  statements  present  fairly in all material  respects  the  financial
condition  as at the end of such fiscal year on a  consolidated  basis,  and the
results of operations and statements of cash flows of the Consolidated Companies
for such fiscal year in accordance  with GAAP and that the  examination  by such
accountants in connection with such consolidated  financial  statements has been
made in accordance with generally accepted auditing standards;

         (2)  Quarterly  Financial  Statements.  As soon as available and in any
event  within 60 days after the end of each fiscal  quarter of  Borrower  (other
than the fourth fiscal quarter), balance sheets of the Consolidated Companies as
at the end of such  quarter  presented on a  consolidated  basis and the related
statements of income,  shareholders'  equity, and cash flows of the Consolidated
Companies for such fiscal quarter and for the portion of Borrower's  fiscal year
ended at the end of such  quarter,  presented on a  consolidated  basis  setting
forth in each case in comparative form the figures for the corresponding quarter
and the  corresponding  portion  of  Borrower's  previous  fiscal  year,  all in
reasonable  detail and  certified  by the chief  financial  officer or principal
accounting officer of Borrower that such financial  statements fairly present in
all material respects the financial  condition of the Consolidated  Companies as
at the end of such fiscal  quarter on a consolidated  basis,  and the results of
operations and statements of cash flows of the  Consolidated  Companies for such
fiscal  quarter and such portion of Borrower's  fiscal year, in accordance  with
GAAP consistently  applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);

         (3) No  Default/Compliance  Certificate.  Together  with the  financial
statements  required pursuant to subsections (a) and (b) above, a certificate of
the  president,  chief  financial  officer or  principal  accounting  officer of
Borrower (the  "Compliance  Certificate")  (i) to the effect that,  based upon a
review  of the  activities  of the  Consolidated  Companies  and such

                                      -46-

<PAGE>

financial statements during the period covered thereby, there exists no Event of
Default  and no Default  under this  Agreement,  or if there  exists an Event of
Default or a Default  hereunder,  specifying the nature thereof and the proposed
response thereto,  and (ii)  demonstrating in reasonable detail compliance as at
the end of such  fiscal  year or such  fiscal  quarter  with  Section  6.08  and
Sections 7.01 through 7.04;

         (4) Notice of Default. Promptly after any Executive Officer of Borrower
has notice or knowledge of the occurrence of an Event of Default or a Default, a
certificate of the chief financial  officer or principal  accounting  officer of
Borrower specifying the nature thereof and the proposed response thereto;

         (5) Litigation.  Promptly after (i) the occurrence  thereof,  notice of
the institution of or any adverse  development in any action, suit or proceeding
or any  governmental  investigation  or any  arbitration,  before  any  court or
arbitrator  or any  governmental  or  administrative  body,  agency or official,
against any Consolidated  Company,  or any material property thereof which might
have a Materially  Adverse Effect, or (ii) actual knowledge  thereof,  notice of
the threat of any such action, suit, proceeding, investigation or arbitration;

         (6) Environmental  Notices.  Promptly after receipt thereof,  notice of
any actual or alleged violation,  or notice of any action,  claim or request for
information, either judicial or administrative,  from any governmental authority
relating  to any actual or alleged  claim,  notice of  potential  responsibility
under or violation  of any  Environmental  Law, or any actual or alleged  spill,
leak,  disposal or other release of any waste,  petroleum product,  or hazardous
waste or Hazardous  Substance by any Consolidated  Company which could result in
penalties,  fines,  claims or other  liabilities to any Consolidated  Company in
amounts in excess of $5,000,000 individually or in the aggregate;

         (7) ERISA.

               (i)  Promptly  after the  occurrence  thereof with respect to any
          Plan of any Consolidated  Company or any ERISA Affiliate  thereof,  or
          any trust established  thereunder,  notice of (x) a "reportable event"
          described  in Section  4043 of ERISA and the  regulations  issued from
          time to time thereunder  (other than a "reportable  event" not subject
          to  the   provisions   for  30-day  notice  to  the  PBGC  under  such
          regulations),   or  (y)  any  other  event  which  could  subject  any
          Consolidated Company to any tax, penalty or liability under Title I or
          Title IV of ERISA or Chapter 43 of the Tax Code, or any tax or penalty
          resulting  from a loss of deduction  under Sections 162, 404 or 419 of
          the Tax Code, where any such taxes, penalties or liabilities exceed or
          could exceed $1,000,000 in the aggregate;

               (ii) Promptly  after such notice must be provided to the PBGC, or
          to a Plan  participant,  beneficiary or alternative  payee, any notice
          required under Section 101(d),  302(f)(4),  303, 307, 4041(b)(1)(A) or
          4041(c)(1)(A)  of ERISA or under

                                      -47-

<PAGE>

          Section  401(a)(29) or 412 of the Tax Code with respect to any Plan of
          any Consolidated Company or any ERISA Affiliate thereof;

               (iii)  Promptly  after  receipt,   any  notice  received  by  any
          Consolidated  Company or any ERISA  Affiliate  thereof  concerning the
          intent of the PBGC or any other governmental  authority to terminate a
          Plan of such Company or ERISA  Affiliate  thereof  which is subject to
          Title IV of ERISA,  to impose any  liability  on such Company or ERISA
          Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;

               (iv) Upon the request of the Administrative  Agent, promptly upon
          the filing thereof with the Internal  Revenue  Service  ("IRS") or the
          Department of Labor ("DOL"),  a copy of IRS Form 5500 or annual report
          for each Plan of any Consolidated  Company or ERISA Affiliate  thereof
          which is subject to Title IV of ERISA;

               (v) Upon the request of the  Administrative  Agent,  (A) true and
          complete copies of any and all documents,  government  reports and IRS
          determination  or  opinion  letters  or  rulings  for any  Plan of any
          Consolidated  Company from the IRS, PBGC or DOL, (B) any reports filed
          with the IRS,  PBGC or DOL with respect to a Plan of the  Consolidated
          Companies or any ERISA Affiliate  thereof,  or (C) a current statement
          of   withdrawal   liability  for  each   Multiemployer   Plan  of  any
          Consolidated Company or any ERISA Affiliate thereof;

         (8)  Liens.  Promptly  upon any  Consolidated  Company  becoming  aware
thereof,  notice of the filing of any federal statutory Lien, tax or other state
or  local   government  Lien  or  any  other  Lien  affecting  their  respective
properties, other than those Liens expressly permitted by Section 7.02;

         (9) Public Filings,  Etc. Promptly upon the filing thereof or otherwise
becoming available,  copies of all financial statements,  annual,  quarterly and
special reports,  proxy statements and notices sent or made available  generally
by Borrower to its public security holders,  of all regular and periodic reports
and all  registration  statements  and  prospectuses  (other  than  registration
statements filed on Form S-3 of the Securities and Exchange Commission regarding
the issuance of restricted stock in acquisitions),  if any, filed by any of them
with any securities  exchange,  and of all press  releases and other  statements
made available generally to the public containing  material  developments in the
business  or  financial   condition  of  Borrower  and  the  other  Consolidated
Companies;

         (10) Accountants' Reports. Promptly upon receipt thereof, copies of all
financial  statements  of, and all  reports  submitted  by,  independent  public
accountants  to Borrower in  connection  with each annual,  interim,  or special
audit of Borrower's consolidated financial statements;

         (11)  Burdensome  Restrictions,  Etc.  Promptly  upon the  existence or
occurrence thereof, notice of the existence or occurrence of (i) any Contractual
Obligation or Requirement

                                      -48-

<PAGE>

of Law described in Section 5.23,  (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks,  patents,  trade names,  copyrights,  licenses and similar rights
necessary in the normal  conduct of its  business,  and (iii) any strike,  labor
dispute, slow down or work stoppage as described in Section 5.21;

         (12) New  Material  Subsidiaries.  Simultaneously  with the delivery of
each Compliance Certificate, a written list of all Material Subsidiaries formed,
acquired,  or created  from a transfer  of assets or  through  any other  event,
during the period commencing on the Closing Date and ending on the date on which
the first Compliance Certificate is delivered,  and thereafter since the date of
the most  recently  delivered  Compliance  Certificate;  such written list shall
include the name of each new Material  Subsidiary,  its state of  incorporation,
list of its officers and any other  information  that the  Administrative  Agent
shall reasonably request.

         (13)  Intercompany  Asset  Transfers.   Promptly  upon  the  occurrence
thereof,  notice of the transfer of any assets from Borrower or any Guarantor to
any other  Consolidated  Company  that is not  Borrower or a  Guarantor  (in any
transaction  or  series  of  related  transactions),  excluding  sales  or other
transfers of assets in the ordinary course of business, where the Asset Value of
such assets is greater than $5,000,000 per transfer;

         (14) Year 2000 Issues.  Promptly upon any Executive Officer of Borrower
has notice or knowledge  thereof,  notice that any computer programs and systems
of the  Consolidated  Companies  are  subject to any Year 2000 Issues that could
reasonable be expected to have a Materially Adverse Effect; and

         (15)  Other  Information.   With  reasonable  promptness,   such  other
information about the Consolidated  Companies as the Administrative Agent or any
Lender may reasonably request from time to time.

Section 6.8.       Financial Covenants.

         (1) Fixed Charge  Coverage  Ratio.  Maintain as of the last day of each
fiscal quarter, a Fixed Charge Coverage Ratio of greater than 1.50:1.0.

         (2) Leverage Ratio. Maintain as of the last day of each fiscal quarter,
a Leverage Ratio of less than or equal to 0.60:1.0.

         (3) Minimum Net Worth.  Maintain a  Consolidated  Net Worth of not less
than (i)  $425,000,000  plus (ii) 50% of Consolidated  Net Income (but not Loss)
for each fiscal quarter ended after January 30, 1998 and on or prior to the date
of determination.

         (4) Dividends. Not declare or pay any dividend on its capital stock, or
make any payment to purchase,  redeem, retire or acquire any of its Subordinated
Debt or capital  stock or any option,  warrant,  or other right to acquire  such
Subordinated Debt or capital stock, other than:

                                      -49-

<PAGE>

                    (i) dividends payable solely in shares of capital stock; and

                    (ii) cash  dividends  declared and paid,  and all other such
               payments made,  after January 29, 1993, in an aggregate amount at
               any  time  not  to  exceed  (x)  $1,000,000,   plus  (y)  50%  of
               Consolidated  Net Income (or minus 100% of Consolidated Net Loss)
               earned during  Borrower's fiscal year ended January 29, 1993, and
               thereafter (such period to be treated as one accounting period);

provided, further, however, no such dividend or other payment may be declared or
paid pursuant to clause (ii) above unless no Default or Event of Default  exists
at the time of such  declaration or payment,  or would exist as a result of such
declaration or payment.

         Section 6.9. Notices Under Certain Other Indebtedness. Immediately upon
its receipt thereof,  Borrower shall furnish the Administrative  Agent a copy of
any notice received by it or any other  Consolidated  Company from the holder(s)
of  Indebtedness  referred  to in  Section  7.01 (or from  any  trustee,  agent,
attorney, or other party acting on behalf of such holder(s)) in an amount which,
in the aggregate, exceeds $5,000,000, where such notice states or claims (i) the
existence or  occurrence of any default or event of default with respect to such
Indebtedness  under  the  terms  of any  indenture,  loan or  credit  agreement,
debenture, note, or other document evidencing or governing such Indebtedness, or
(ii) the  existence or occurrence  of any event or condition  which  requires or
permits  holder(s) of any  Indebtedness  to exercise  rights under any Change in
Control  Provision.  Borrower agrees to take such actions as may be necessary to
require the  holder(s)  of any  Indebtedness  (or any trustee or agent acting on
their behalf)  incurred  pursuant to documents  executed or amended and restated
after the Closing  Date, to furnish  copies of all such notices  directly to the
Administrative Agent simultaneously with the furnishing thereof to Borrower, and
that such requirement may not be altered or rescinded  without the prior written
consent  of the  Administrative  Agent.

         Section  6.10.  Additional  Guarantors.  Borrower  shall cause each new
Material  Subsidiary  reported  to the  Administrative  Agent  and  the  Lenders
pursuant to Section  6.07(l) above to execute and deliver to the  Administrative
Agent, simultaneously with the report given pursuant to Section 6.07(l) above, a
supplement to the Guaranty  Agreement,  together  with related  documents of the
kind  described  in Section  4.01,  as  appropriate,  all in form and  substance
satisfactory to the Administrative Agent and the Required Lenders.

         Section 6.11. Financial Statements; Fiscal Year. Borrower shall make no
change in the dates of the fiscal year now employed for accounting and reporting
purposes  without  the prior  written  consent of the  Required  Lenders,  which
consent shall not be unreasonably withheld.

         Section 6.12.  Ownership of  Guarantors.  Borrower  shall  maintain its
percentage of ownership  existing as of the date hereof of all  Guarantors,  and
shall not  decrease its  ownership  percentage  in each Person  which  becomes a
Guarantor  after  the date  hereof,  as such  ownership  exists at the time such
Person becomes a Guarantor.

                                      -50-

<PAGE>

                                   ARTICLE 7

                               NEGATIVE COVENANTS

         So long as any Line of Credit Commitment remains in effect hereunder or
any Line of Credit  Note shall  remain  unpaid,  Borrower  will not and will not
permit any Subsidiary to:

         Section 7.1. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, other than:

         (1)   Indebtedness   under  this  Agreement  or  the  Revolving  Credit
Agreement;

         (2) Indebtedness outstanding on the date hereof or pursuant to lines of
credit  in  effect  on the  date  hereof  and  described  on  Schedule  7.01(b);

         (3)  purchase  money  Indebtedness  to  the  extent  secured  by a Lien
permitted by Section 7.02(b) provided such purchase money  Indebtedness does not
exceed $20,000,000;

         (4) unsecured current  liabilities (other than liabilities for borrowed
money  or  liabilities   evidenced  by  promissory   notes,   bonds  or  similar
instruments) incurred in the ordinary course of business and either (i) not more
than 30 days past due,  or (ii)  being  disputed  in good  faith by  appropriate
proceedings with reserves for such disputed  liability  maintained in conformity
with GAAP;

         (5) any  Intercompany  Loans;  provided,  however,  that the  aggregate
principal  amount of all Intercompany  Loans made to any Consolidated  Companies
that  are not  Guarantors  shall  not  exceed  $5,000,000  in the  any one  time
outstanding unless otherwise agreed in writing by the  Administrative  Agent and
the Required Lenders;

         (6) other  Subordinated  Debt in form and  substance  acceptable to the
Administrative  Agent and the Required  Lenders,  and evidenced by their written
consent thereto; and

         (7)  other  Indebtedness  not to  exceed  $75,000,000  at any one  time
outstanding.

         Section 7.2. Liens.  Create,  incur, assume or suffer to exist any Lien
on  any  of  its  property  now  owned  or  hereafter  acquired  to  secure  any
Indebtedness other than:

         (1) Liens existing on the date hereof disclosed on Schedule 7.02;

         (2) any Lien on any property securing  Indebtedness incurred or assumed
for the purpose of  financing  all or any part of the  acquisition  cost of such
property and any refinancing thereof, provided that such Lien does not extend to
any other property,  and provided

                                      -51-

<PAGE>

further that the aggregate principal amount of Indebtedness  secured by all such
Liens at any time does not exceed $20,000,000;

         (3) Liens for taxes not yet due,  and Liens for taxes or Liens  imposed
by ERISA which are being contested in good faith by appropriate  proceedings and
with respect to which adequate reserves are being maintained;

         (4) Statutory  Liens of landlords and Liens of carriers,  warehousemen,
mechanics,  materialmen  and other Liens  imposed by law created in the ordinary
course of business for amounts not yet due or which are being  contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained;

         (5) Liens incurred or deposits made in the ordinary  course of business
in connection with workers' compensation, unemployment insurance and other types
of  social  security,  or  to  secure  the  performance  of  tenders,  statutory
obligations,  surety and  appeal  bonds,  bids,  leases,  government  contracts,
performance and return-of-money  bonds and other similar obligations  (exclusive
of obligations for the payment of borrowed money); and

         (6) Liens (other than those  permitted by paragraphs (a) through (e) of
this Section  7.02)  encumbering  assets  having an Asset Value not greater than
$20,000,000 in the aggregate at any one time.

         Section 7.3.  Mergers,  Acquisitions,  Sales, Etc. Merge or consolidate
with any other  Person,  other than  Borrower  or another  Subsidiary,  or sell,
lease, or otherwise dispose of its accounts, property or other assets (including
capital stock of Subsidiaries),  or purchase,  lease or otherwise acquire all or
any substantial  portion of the property or assets (including  capital stock) of
any Person;  provided,  however, that the foregoing  restrictions on asset sales
shall not be  applicable  to (i) sales of equipment or other  personal  property
being  replaced by other  equipment or other  personal  property  purchased as a
capital  expenditure  item,  (ii) sales of  accounts  receivable  pursuant  to a
securitization program,  provided further that any program costs incurred by the
Borrower in pursuing  such a program  shall be  considered  interest  under this
Credit Agreement,  (iii) other asset sales (including the stock of Subsidiaries)
where, on the date of execution of a binding  obligation to make such asset sale
(provided  that if the asset  sale is not  consummated  within six (6) months of
such execution,  then on the date of consummation of such asset sale rather than
on the date of execution of such binding  obligation),  the Asset Value of asset
sales occurring  after the Closing Date,  taking into account the Asset Value of
the  proposed  asset  sale,  would not exceed ten  percent  (10%) of  Borrower's
Consolidated  Net Worth,  since the Closing Date, and (iv) sales of inventory in
the  ordinary  course  of  business;   provided,  further,  that  the  foregoing
restrictions  on  mergers  shall not apply to  mergers  involving  Borrower  and
another entity, provided Borrower is the surviving entity, and mergers between a
Subsidiary of Borrower and Borrower or between Subsidiaries of Borrower provided
that,  in  either  case,  upon  consummation  of such  mergers,  Borrower  is in
compliance  with  the  other  provisions  hereof;  provided,  further,  that the
foregoing  restrictions on asset purchases shall not apply to asset purchases by
Borrower to the extent that (i) after giving effect to such purchases,  Borrower
is in

                                      -52-

<PAGE>

compliance  with  Section  7.04 hereof and (ii) the Board of  Directors or other
governing  body of such  Person  whose  assets or stock is being  purchased  has
approved the terms of such acquisition;  provided,  however, that no transaction
pursuant to clauses  (i),  (ii) or (iii) or the second or third  provisos  above
shall be  permitted if any Default or Event of Default  otherwise  exists at the
time  of  such  transaction  or  would  otherwise  exist  as a  result  of  such
transaction.

         Section  7.4.  Investments,  Loans,  Etc.  Make,  permit  or  hold  any
Investments in any Person, or otherwise acquire or hold any Subsidiaries,  other
than:

         (1)  Investments  in  Subsidiaries   that  are  Guarantors  under  this
Agreement,  whether  such  Subsidiaries  are  Guarantors  on the Closing Date or
become  Guarantors  in  accordance  with  Section  6.10 after the Closing  Date;
provided,  however, nothing in this Section 7.04 shall be deemed to authorize an
investment  pursuant  to  this  subsection  (a)  in  any  entity  that  is not a
Subsidiary and a Guarantor prior to such investment;

         (2) Investments in Subsidiaries, other than those Subsidiaries that are
or become  Guarantors  under this Agreement,  or persons that thereafter  become
Subsidiaries,  in an aggregate amount not to exceed $25,000,000 unless otherwise
consented to in writing by the Required Lenders;

         (3)  Investments  in other  Persons  that are not,  and do not  become,
Subsidiaries in an aggregate amount not to exceed  $25,000,000  unless otherwise
consented to in writing by the Required Lenders;

         (4) direct  obligations  of the United  States of America or any agency
thereof, or obligations guaranteed by the United States of America or any agency
thereof,  in each case  supported  by the full  faith and  credit of the  United
States  of  America  and  maturing  within  one year  from the date of  creation
thereof;

         (5) commercial paper maturing within one year from the date of creation
thereof  rated in the highest  grade by a nationally  recognized  credit  rating
agency;

         (6) time  deposits  maturing  within one year from the date of creation
thereof with,  including  certificates  of deposit  issued by any Lender and any
office  located  in the United  States of  America of any bank or trust  company
which is organized  under the laws of the United  States of America or any state
thereof  and has  total  assets  aggregating  at least  $500,000,000,  including
without limitation,  any such deposits in Eurodollars issued by a foreign branch
of any such bank or trust company;

         (7) Investments made by Plans; and

         (8) permitted  Intercompany Loans on terms and conditions acceptable to
the Administrative Agent.

                                      -53-

<PAGE>

         Section  7.5.  Sale and  Leaseback  Transactions.  Sell or transfer any
property,  real or  personal,  whether  now  owned or  hereafter  acquired,  and
thereafter rent or lease such property or other property which any  Consolidated
Company  intends to use for  substantially  the same  purpose or purposes as the
property  being sold or  transferred,  except to the extent  that the  aggregate
value of all such  property  sold and leased back does not exceed  $5,000,000 at
any one time.

         Section 7.6. Transactions with Affiliates.

         (1)  Enter  into  any  material   transaction   or  series  of  related
transactions  which in the  aggregate  would be material,  whether or not in the
ordinary course of business, with any Affiliate of any Consolidated Company (but
excluding any Affiliate  which is also a  Consolidated  Company),  other than on
terms and conditions  substantially as favorable to such Consolidated Company as
would be  obtained  by such  Consolidated  Company  at the time in a  comparable
arm's-length transaction with a Person other than an Affiliate.

         (2)  Convey  or  transfer  to any  other  Person  (including  any other
Consolidated  Company) any real  property,  buildings,  or fixtures  used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer  to  any  other  Consolidated   Company  any  other  assets  (excluding
conveyances  or transfers in the ordinary  course of business) if at the time of
such  conveyance  or transfer  any  Default or Event of Default  exists or would
exist as a result of such conveyance or transfer.

         Section 7.7.  Optional  Prepayments.  Directly or  indirectly,  prepay,
purchase,  redeem,  retire,  defease or otherwise acquire,  or make any optional
payment on account  of any  principal  of,  interest  on, or premium  payable in
connection with the optional prepayment, redemption or retirement of, any of its
Indebtedness,  or  give  a  notice  of  redemption  with  respect  to  any  such
Indebtedness,  or make any payment in violation of the subordination  provisions
of any Subordinated  Debt, except with respect to (i) the Obligations under this
Agreement  and the  Line of  Credit  Notes,  (ii)  prepayments  of  Indebtedness
outstanding  pursuant  to  revolving  credit,   overdraft  and  line  of  credit
facilities  permitted pursuant to Section 7.01, (iii) Intercompany Loans made or
outstanding  pursuant to Section 7.01, and (iv)  Subordinated  Debt, in form and
substance  acceptable to the Administrative  Agent and the Required Lenders,  as
evidenced by their written consent,  issued to refinance  existing  Subordinated
Debt.

         Section  7.8.  Changes in Business.  Enter into any  business  which is
substantially  different  from  that  presently  conducted  by the  Consolidated
Companies  taken as a whole except where the  Investment  made,  and other funds
expended or committed with respect to such business, do not exceed $5,000,000 in
each new business.

         Section 7.9. ERISA. Take or fail to take any action with respect to any
Plan of any Consolidated  Company or, with respect to its ERISA Affiliates,  any
Plans  which are  subject to Title IV of ERISA or to  continuation  health  care
requirements  for group  health  plans  under the Tax  Code,  including  without
limitation (i)  establishing  any such Plan, (ii) amending any such Plan (except

                                      -54-

<PAGE>

where required to comply with applicable law), (iii)  terminating or withdrawing
from any such Plan, or (iv) incurring an amount of unfunded benefit liabilities,
as defined in Section  4001(a)(18) of ERISA,  or any withdrawal  liability under
Title IV of ERISA with respect to any such Plan,  without  first  obtaining  the
written approval of the  Administrative  Agent and the Required  Lenders,  where
such actions or failures could result in a Materially Adverse Effect.

         Section 7.10. Additional Negative Pledges. Create or otherwise cause or
suffer to exist or become effective,  directly or indirectly, any prohibition or
restriction  on the  creation  or  existence  of any Lien  upon any asset of any
Consolidated  Company,  other than  pursuant to (i) the terms of any  agreement,
instrument or other  document  pursuant to which any  Indebtedness  permitted by
Section 7.01(a) or (b) is incurred by any Consolidated  Company, so long as such
prohibition or restriction  applies only to the property or asset being financed
by  such  Indebtedness,  and  (ii)  any  requirement  of  applicable  law or any
regulatory authority having jurisdiction over any of the Consolidated Companies.

         Section 7.11. Limitation on Payment Restrictions Affecting Consolidated
Companies. Create or otherwise cause or suffer to exist or become effective, any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay  dividends  or make  any  other  distributions  on such  Consolidated
Company's  stock,  or (ii) pay any  indebtedness  owed to  Borrower or any other
Consolidated  Company,  or (iii)  transfer  any of its  property  or  assets  to
Borrower or any other Consolidated Company, except any consensual encumbrance or
restriction  existing under the Credit  Documents or under the Revolving  Credit
Agreement and related documents.

         Section  7.12.  Actions  Under  Certain  Documents.  Without  the prior
written  consent  of  the  Administrative  Agent  (which  consent  shall  not be
unreasonably  withheld),  modify,  amend,  cancel or rescind any  agreements  or
documents  evidencing or governing  Subordinated Debt or the senior Indebtedness
permitted  pursuant to Section 7.01 hereof,  or make demand of payment or accept
payment on any Intercompany Loans permitted by Section 7.01, except that current
interest  accrued  thereon  as of the date of this  Agreement  and all  interest
subsequently accruing thereon (whether or not paid currently) may be paid unless
a Default or Event of Default has occurred and is continuing.

                                   ARTICLE 8

                                EVENTS OF DEFAULT

         Upon the occurrence and during the  continuance of any of the following
specified events (each an "Event of Default"):

         Section 8.1.  Payments.  Borrower  shall fail to make promptly when due
(including,  without limitation,  by mandatory prepayment) any principal payment
with respect to

                                      -55-

<PAGE>

the Line of  Credit  Loans,  or  Borrower  shall  fail to make  within  five (5)
Business  Days after the due date thereof any payment of interest,  fee or other
amount payable hereunder;

         Section 8.2.  Covenants Without Notice.  Borrower shall fail to observe
or perform any covenant or agreement contained in Sections 6.07, 6.08, 6.11, and
Article VII;

         Section 8.3. Other Covenants. Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement, other than those referred
to in Sections 8.01 and 8.02,  and, if capable of being  remedied,  such failure
shall  remain  unremedied  for 30  days  after  the  earlier  of (i)  Borrower's
obtaining  knowledge  thereof,  or (ii) written  notice  thereof shall have been
given to Borrower by the Administrative Agent or any Lender;

         Section 8.4.  Representations.  Any  representation or warranty made or
deemed  to be  made by  Borrower  or any  other  Credit  Party  or by any of its
officers  under this  Agreement  or any other  Credit  Document  (including  the
Schedules attached  thereto),  or any certificate or other document submitted to
the Administrative Agent or the Lenders by any such Person pursuant to the terms
of this  Agreement  or any other  Credit  Document,  shall be  incorrect  in any
material respect when made or deemed to be made or submitted;

         Section  8.5.  Non-Payments  of Other  Indebtedness.  Any  Consolidated
Company  shall  fail  to  make  when  due  (whether  at  stated   maturity,   by
acceleration,  on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations)  exceeding $5,000,000 in the aggregate including,  without
limitation, indebtedness outstanding under the Revolving Credit Agreement;

         Section 8.6. Defaults Under Other Agreements.  Any Consolidated Company
shall  fail to  observe  or  perform  within  any  applicable  grace  period any
covenants or agreements  contained in any agreements or instruments  relating to
any of its Indebtedness exceeding $5,000,000 in the aggregate including, without
limitation,  indebtedness  outstanding under the Revolving Credit Agreement,  or
any other event  shall occur if the effect of such  failure or other event is to
accelerate,  or to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of such Indebtedness; or any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required prepayment)
in whole or in part prior to its stated maturity;

         Section 8.7.  Bankruptcy.  Borrower or any other  Consolidated  Company
shall commence a voluntary case  concerning  itself under the Bankruptcy Code or
an involuntary case for bankruptcy is commenced against any Consolidated Company
and the petition is not controverted  within 10 days, or is not dismissed within
60 days,  after  commencement  of the case;  or a  custodian  (as defined in the
Bankruptcy  Code) is appointed  for, or takes charge of, all or any  substantial
part of the property of any Consolidated  Company;  or any Consolidated  Company
commences  proceedings  of its own  bankruptcy  or to be granted a suspension of
payments  or  any  other  proceeding  under  any  reorganization,   arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction, whether

                                      -56-

<PAGE>

now or hereafter  in effect,  relating to any  Consolidated  Company or there is
commenced  against any  Consolidated  Company any such proceeding  which remains
undismissed for a period of 60 days; or any Consolidated  Company is adjudicated
insolvent or bankrupt;  or any order of relief or other order approving any such
case  or  proceeding  is  entered;  or  any  Consolidated  Company  suffers  any
appointment of any custodian or the like for it or any  substantial  part of its
property to continue  undischarged  or unstayed for a period of 60 days;  or any
Consolidated Company makes a general assignment for the benefit of creditors; or
any Consolidated  Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay,  its debts  generally as they become due; or any
Consolidated  Company  shall  call a  meeting  of its  creditors  with a view to
arranging a composition or adjustment of its debts; or any Consolidated  Company
shall by any act or failure to act  indicate  its  consent  to,  approval  of or
acquiescence  in any of the foregoing;  or any corporate  action is taken by any
Consolidated Company for the purpose of effecting any of the foregoing;

         Section 8.8. ERISA. A Plan of a Consolidated  Company or a Plan subject
to Title IV of ERISA of any of its ERISA Affiliates:

          (i)  shall fail to be funded in  accordance  with the minimum  funding
               standard  required  by  applicable  law,  the terms of such Plan,
               Section  412 of the Tax Code or Section 302 of ERISA for any plan
               year or a waiver  of such  standard  is sought  or  granted  with
               respect to such Plan under applicable law, the terms of such Plan
               or Section 412 of the Tax Code or Section 303 of ERISA; or

          (ii) is being,  or has been,  terminated or the subject of termination
               proceedings under applicable law or the terms of such Plan; or

          (iii)shall require a  Consolidated  Company to provide  security under
               applicable law, the terms of such Plan, Section 401 or 412 of the
               Tax Code or Section 306 or 307 of ERISA; or

          (iv) results in a liability to a Consolidated Company under applicable
               law, the terms of such Plan, or Title IV of ERISA;

and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC or a Plan that would have a Materially Adverse Effect;

         Section  8.9.  Money  Judgment.  A judgment or order for the payment of
money in excess of $5,000,000 or otherwise  having a Materially  Adverse  Effect
shall be rendered  against Borrower or any other  Consolidated  Company and such
judgment or order shall continue  unsatisfied  (in the case of a money judgment)
and in  effect  for a period  of 30 days  during  which  execution  shall not be
effectively  stayed or deferred  (whether by action of a court,  by agreement or
otherwise);

                                      -57-

<PAGE>

         Section  8.10.  Ownership of Credit  Parties and Pledged  Entities.  If
Borrower  shall at any time fail to own and control the required  percentage  of
the voting  stock of any  Guarantor,  either  directly or  indirectly  through a
wholly-owned Subsidiary of Borrower;

         Section  8.11.  Change in  Control of  Borrower.  (a) Any  "person"  or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than the Hughes Family shall become the "beneficial  owner(s)" (as defined
in said Rule 13d-3) of more than twenty-five  percent (25%) of the shares of the
outstanding  common stock of Borrower entitled to vote for members of Borrower's
board of  directors,  or (b) any event or condition  shall occur or exist which,
pursuant  to the terms of any change in control  provision,  requires or permits
the holder(s) of Indebtedness of any  Consolidated  Company to require that such
Indebtedness be redeemed, repurchased,  defeased, prepaid or repaid, in whole or
in part, or the maturity of such Indebtedness to be accelerated in any respect;

         Section 8.12.  Default Under Other Credit Documents.  There shall exist
or occur any "Event of Default" as provided  under the terms of any other Credit
Document,  or any Credit  Document  ceases to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of Borrower or
any other Credit Party, or at any time it is or becomes unlawful for Borrower or
any other  Credit  Party to perform  or comply  with its  obligations  under any
Credit Document,  or the obligations of Borrower or any other Credit Party under
any Credit Document are not or cease to be legal,  valid and binding on Borrower
or any such Credit Party;

         Section 8.13.  Attachments.  An  attachment or similar  action shall be
made on or taken against any of the assets of any  Consolidated  Company with an
Asset Value exceeding  $5,000,000 in aggregate and is not removed,  suspended or
enjoined  within 60 days of the same being made or any  suspension or injunction
being lifted;

then, and in any such event,  and at any time thereafter if any Event of Default
shall then be continuing,  the Administrative Agent may, and upon the written or
telex request of the Required  Lenders,  shall,  by written  notice to Borrower,
take any or all of the following actions, without prejudice to the rights of the
Administrative  Agent,  any Lender or the  holder of any Line of Credit  Note to
enforce its claims against  Borrower or any other Credit Party:  (i) declare all
Line of Credit Commitments terminated,  whereupon the Line of Credit Commitments
of each Lender shall terminate  immediately and Fees shall forthwith  become due
and payable without any other notice of any kind; and (ii) declare the principal
of and  any  accrued  interest  on the  Line of  Credit  Loans,  and  all  other
Obligations owing hereunder,  to be, whereupon the same shall become,  forthwith
due and payable  without  presentment,  demand,  protest or other  notice of any
kind, all of which are hereby waived by Borrower; provided, that, if an Event of
Default specified in Section 8.07 shall occur, the result which would occur upon
the giving of written notice by the Administrative Agent to any Credit Party, as
specified in clauses (i) and (ii) above, shall occur  automatically  without the
giving of any such notice.

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<PAGE>

                                   ARTICLE 9

                                   THE AGENTS

         Section 9.1.  Appointment of  Administrative  Agent. Each Lender hereby
designates  SunTrust  Bank,  Central  Florida,   National   Association  as  the
"Administrative  Agent" to administer all matters  concerning the Line of Credit
Loans and to act as herein specified. Each Lender hereby irrevocably authorizes,
and each holder of any Line of Credit Note by the acceptance of a Line of Credit
Note shall be deemed irrevocably to authorize,  the Administrative Agent to take
such actions on its behalf under the  provisions  of this  Agreement,  the other
Credit Documents, and all other instruments and agreements referred to herein or
therein,  and to exercise  such powers and to perform such duties  hereunder and
thereunder as are  specifically  delegated to or required of the  Administrative
Agent by the terms  hereof and thereof and such other  powers as are  reasonably
incidental  thereto.  The  Administrative  Agent may  perform  any of its duties
hereunder by or through its agents or employees.  The provisions of this Section
9.01 are solely for the benefit of the  Administrative  Agent,  and Borrower and
the  other  Consolidated  Companies  shall not have any  rights  as third  party
beneficiaries of any of the provisions  hereof.  In performing its functions and
duties under this Agreement,  the Administrative Agent shall act solely as agent
of the Lenders  and does not assume and shall not be deemed to have  assumed any
obligations  towards or relationship of agency or trust with or for the Borrower
and the other Consolidated Companies.

         Section   9.2.   Nature  of  Duties  of   Administrative   Agent.   The
Administrative  Agent  shall  have no duties or  responsibilities  except  those
expressly set forth in this  Agreement and the other Credit  Documents.  Neither
the Administrative Agent nor any of its officers, directors, employees or agents
shall be liable for any action  taken or omitted by it as such  hereunder  or in
connection  herewith,  unless caused by its or their gross negligence or willful
misconduct.  The duties of the  Administrative  Agent shall be  ministerial  and
administrative in nature; the  Administrative  Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Lender; and nothing in
this Agreement,  express or implied,  is intended to or shall be so construed as
to impose  upon the  Administrative  Agent any  obligations  in  respect of this
Agreement or the other Credit Documents except as expressly set forth herein.

         Section 9.3. Lack of Reliance on the Administrative Agent.

         (1) Independently and without reliance upon the  Administrative  Agent,
each Lender, to the extent it deems appropriate,  has made and shall continue to
make  (i) its own  independent  investigation  of the  financial  condition  and
affairs of the Credit Parties in connection with the taking or not taking of any
action   in   connection   herewith,   and  (ii)  its  own   appraisal   of  the
creditworthiness  of the Credit Parties,  and,  except as expressly  provided in
this Agreement,  the Administrative  Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other  information with respect  thereto,  whether coming into its possession
before  the  making  of the  Line  of  Credit  Loans  or at any  time  or  times
thereafter.

                                      -59-

<PAGE>

         (2) The Administrative Agent shall not be responsible to any Lender for
any recitals, statements,  information,  representations or warranties herein or
in any document,  certificate or other writing delivered in connection  herewith
or for the  execution,  effectiveness,  genuineness,  validity,  enforceability,
collectibility,  priority or sufficiency of this  Agreement,  the Line of Credit
Notes, the Guaranty  Agreement,  or any other documents  contemplated  hereby or
thereby,  or the financial  condition of the Credit  Parties,  or be required to
make any inquiry  concerning  either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Line of Credit Notes, the
Guaranty  Agreement,  or the other documents  contemplated hereby or thereby, or
the  financial  condition of the Credit  Parties,  or the  existence or possible
existence of any Default or Event of Default;  provided,  however, to the extent
that the  Administrative  Agent has been  advised that a Lender has not received
any  information  formally  delivered to the  Administrative  Agent  pursuant to
Section 6.07,  the  Administrative  Agent shall deliver or cause to be delivered
such information to such Lender.

         Section  9.4.  Certain  Rights  of  the  Administrative  Agent.  If the
Administrative  Agent shall request  instructions from the Required Lenders with
respect to any action or actions  (including  the failure to act) in  connection
with this Agreement,  the Administrative Agent shall be entitled to refrain from
such act or taking  such act,  unless and until the  Administrative  Agent shall
have received  instructions  from the Required Lenders;  and the  Administrative
Agent  shall  not incur  liability  in any  Person  by reason of so  refraining.
Without  limiting  the  foregoing,  no  Lender  shall  have any  right of action
whatsoever  against the  Administrative  Agent as a result of the Administrative
Agent  acting  or  refraining  from  acting  hereunder  in  accordance  with the
instructions of the Required Lenders.

         Section 9.5. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely,  and shall be fully  protected  in relying,  upon any
note, writing, resolution,  notice, statement,  certificate,  telex, teletype or
telecopier  message,   cable  gram,  radiogram,   order  or  other  documentary,
teletransmission  or telephone  message believed by it to be genuine and correct
and to have been signed,  sent or made by the proper Person.  The Administrative
Agent may consult with legal counsel  (including  counsel for any Credit Party),
independent public accountants and other experts selected by it and shall not be
liable  for any  action  taken or  omitted  to be  taken by it in good  faith in
accordance with the advice of such counsel, accountants or experts.

          Section 9.6.  Indemnification  of Administrative  Agent. To the extent
the  Administrative  Agent  is not  reimbursed  and  indemnified  by the  Credit
Parties,  each Lender will  reimburse and indemnify  the  Administrative  Agent,
ratably  according  to the  respective  amounts  of the  Line  of  Credit  Loans
outstanding  under all Facilities (or if no amounts are outstanding,  ratably in
accordance with the Total Commitments),  in either case, for and against any and
all liabilities,  obligations,  losses, damages, penalties,  actions, judgments,
suits,   costs,   expenses   (including   counsel  fees  and  disbursements)  or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or  asserted  against  the  Administrative  Agent in  performing  its  duties
hereunder,  in any way relating to or arising out of this Agreement or the other
Credit Documents;  provided that no Lender shall be liable to the Administrative
Agent for

                                      -60-

<PAGE>

any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct.

         Section 9.7. The Administrative Agent in Its Individual Capacity.  With
respect to its obligation to lend under this Agreement, the Line of Credit Loans
made by it and the Line of Credit Notes issued to it, the  Administrative  Agent
shall have the same rights and powers hereunder as any other Lender or holder of
a Line of Credit Note and may exercise the same as though it were not performing
the  duties  specified  herein;  and the terms  "Lenders",  "Required  Lenders",
"holders  of Line of Credit  Notes",  or any  similar  terms  shall,  unless the
context clearly otherwise  indicates,  include the  Administrative  Agent in its
individual  capacity.  The  Administrative  Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust, financial advisory
or other  business  with the  Consolidated  Companies  or any  affiliate  of the
Consolidated Companies as if it were not performing the duties specified herein,
and may accept fees and other consideration from the Consolidated  Companies for
services in  connection  with this  Agreement and  otherwise  without  having to
account for the same to the Lenders.

         Section 9.8. Holders of Line of Credit Notes. The Administrative  Agent
may deem and treat the payee of any Line of Credit Note as the owner thereof for
all  purposes  hereof  unless and until a written  notice of the  assignment  or
transfer  thereof  shall  have been  filed with the  Administrative  Agent.  Any
request,  authority  or consent of any Person  who,  at the time of making  such
request or giving such authority or consent, is the holder of any Line of Credit
Note shall be conclusive  and binding on any  subsequent  holder,  transferee or
assignee  of such  Line of Credit  Note or of any Line of  Credit  Note or Notes
issued in exchange therefor.

         Section 9.9. Successor Administrative Agent.

         (1) The  Administrative  Agent may resign at any time by giving written
notice  thereof to the Lenders and  Borrower and may be removed at any time with
or without cause by the Required Lenders; provided,  however, the Administrative
Agent may not resign or be removed  until a successor  Administrative  Agent has
been  appointed  and  shall  have  accepted  such  appointment.  Upon  any  such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor  Administrative Agent subject to Borrower's prior written approval, so
long as no Event of Default has occurred and is continuing,  which approval will
not be unreasonably  withheld.  If no successor  Administrative Agent shall have
been so  appointed  by the  Required  Lenders,  and  shall  have  accepted  such
appointment,  within 30 days after the retiring Administrative Agent's giving of
notice  of  resignation  or  the  Required  Lenders'  removal  of  the  retiring
Administrative  Agent, then the retiring  Administrative Agent may, on behalf of
the Lenders,  appoint a successor  Administrative  Agent  subject to  Borrower's
prior written  approval,  which shall be a bank which maintains an office in the
United States of America,  or a commercial  bank organized under the laws of the
United  States of America or any State  thereof,  or any Affiliate of such bank,
having a combined capital and surplus of at least  $100,000,000.  If

                                      -61-

<PAGE>

at any time  SunTrust  Bank,  Central  Florida is removed as a Lender,  SunTrust
Bank, Central Florida shall simultaneously resign as Administrative Agent.

         (2) Upon the acceptance of any appointment as the Administrative  Agent
hereunder by a successor  Administrative  Agent,  such successor  Administrative
Agent shall thereupon succeed to and become vested with all the rights,  powers,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative  Agent shall be discharged from its duties and obligations  under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Administrative Agent under this Agreement.

         Section 9.10.  Documentation  Agent. Each Lender designates First Union
National Bank as  Documentation  Agent and agrees that the  Documentation  Agent
shall have no duties or obligations hereunder.

         Section 9.11.  Syndication  Agent. Each Lender designates  NationsBank,
N.A. as Syndication  Agent and agrees that the  Syndication  Agent shall have no
duties or obligations hereunder.

         Section  9.12.  Co-Agent.   Each  Lender  designates  SouthTrust  Bank,
National  Association  as Co-Agent  and agrees that the  Co-Agent  shall have no
duties or obligations hereunder.

                                   ARTICLE 10

                                  MISCELLANEOUS

         Section 10.1. Notices.  All notices,  requests and other communications
to any party hereunder shall be in writing (including bank wire, telex, telecopy
or similar  teletransmission or writing) and shall be given to such party at its
address or applicable  teletransmission  number set forth on the signature pages
hereof,  or such other  address or  applicable  teletransmission  number as such
party may hereafter specify by notice to the Administrative  Agent and Borrower.
Each such notice, request or other communication shall be effective (i) if given
by telex,  when such telex is transmitted to the telex number  specified in this
Section and the  appropriate  answerback is received,  (ii) if given by mail, 72
hours  after such  communication  is  deposited  in the mails  with first  class
postage prepaid,  addressed as aforesaid,  (iii) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate  confirmation  is  received,  or (iv) if  given by any  other  means
(including,  without limitation,  by air courier), when delivered or received at
the  address   specified  in  this   Section;   provided  that  notices  to  the
Administrative Agent shall not be effective until received.

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<PAGE>

         Section 10.2. Amendments,  Etc. No amendment or waiver of any provision
of this Agreement or the other Credit Documents, nor consent to any departure by
any Credit  Party  therefrom,  shall in any event be  effective  unless the same
shall be in writing and signed by the Required Lenders,  and then such waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose for which given;  provided that no amendment,  waiver or consent  shall,
unless in writing  and signed by all the  Lenders do any of the  following:  (i)
waive any of the conditions specified in Section 4.01 or 4.02, (ii) increase the
Line of Credit  Commitments or other  contractual  obligations to Borrower under
this  Agreement,  (iii)  reduce the  principal  of, or interest  on, the Line of
Credit Notes or any fees hereunder, (iv) postpone any date fixed for the payment
in respect of principal of, or interest on, the Line of Credit Notes or any fees
hereunder, (v) change the percentage of the Line of Credit Commitments or of the
aggregate  unpaid principal amount of the Line of Credit Notes, or the number or
identity of Lenders  which  shall be required  for the Lenders or any of them to
take any action hereunder, (vi) release any Guarantor from its obligations under
any Guaranty  Agreement,  (vii) modify the definition of "Required  Lenders," or
(viii) modify this Section 10.02.  Notwithstanding the foregoing,  no amendment,
waiver or  consent  shall,  unless in writing  and signed by the  Administrative
Agent in addition  to the  Lenders  required  hereinabove  to take such  action,
affect the rights or duties of the Administrative  Agent under this Agreement or
under any other Credit Document.

         Section 10.3. No Waiver;  Remedies  Cumulative.  No failure or delay on
the part of the  Administrative  Agent,  any  Lender or any  holder of a Line of
Credit  Note in  exercising  any  right or remedy  hereunder  or under any other
Credit  Document,  and no course of dealing  between  any  Credit  Party and the
Administrative  Agent, any Lender or the holder of any Line of Credit Note shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right or remedy hereunder or under any other Credit Document  preclude any other
or  further  exercise  thereof  or the  exercise  of any  other  right or remedy
hereunder or thereunder.  The rights and remedies herein expressly  provided are
cumulative and not exclusive of any rights or remedies which the  Administrative
Agent, any Lender or the holder of any Line of Credit Note would otherwise have.
No notice to or demand on any Credit Party not  required  hereunder or under any
other Credit Document in any case shall entitle any Credit Party to any other or
further  notice or demand in  similar or other  circumstances  or  constitute  a
waiver of the rights of the  Administrative  Agent, the Lenders or the holder of
any Line of Credit  Note to any  other or  further  action in any  circumstances
without notice or demand.

         Section 10.4. Payment of Expenses, Etc. Borrower shall:

          (i)  whether  or  not  the   transactions   hereby   contemplated  are
     consummated,  pay all reasonable,  out-of-pocket  costs and expenses of the
     Administrative  Agent in the  administration  (both  before  and  after the
     execution  hereof  and  including  reasonable  expenses  actually  incurred
     relating  to  advice  of  counsel  as to  the  rights  and  duties  of  the
     Administrative  Agent and the  Lenders  with  respect  thereto)  of, and in
     connection with the preparation, execution and delivery of, preservation of
     rights  under,  enforcement  of, and,  after a Default or Event of Default,
     refinancing,  renegotiation  or  restructuring  of, this

                                      -63-

<PAGE>

     Agreement and the other Credit  Documents and the documents and instruments
     referred to therein, and any amendment,  waiver or consent relating thereto
     (including,  without limitation,  the reasonable fees actually incurred and
     disbursements of counsel for the Administrative  Agent), and in the case of
     enforcement  of this  Agreement  or any Credit  Document  after an Event of
     Default, all such reasonable,  out-of-pocket costs and expenses (including,
     without limitation, the reasonable fees actually incurred and disbursements
     of counsel), for any of the Lenders;

          (ii)  subject,  in the  case  of  certain  Taxes,  to  the  applicable
     provisions of Section  3.07(b),  pay and hold each of the Lenders  harmless
     from and against any and all present  and future  stamp,  documentary,  and
     other  similar  Taxes with  respect to this  Agreement,  the Line of Credit
     Notes and any other Credit Documents,  any collateral described therein, or
     any payments due thereunder, and save each Lender harmless from and against
     any and all  liabilities  with  respect to or  resulting  from any delay or
     omission to pay such Taxes; and

          (iii)  indemnified the  Administrative  Agent and each Lender and each
     director,  officer,  employee,   affiliate  and  agent  thereof  (each,  an
     "Indemnitee")  from, and hold each of them harmless against,  and reimburse
     each  Indemnitee,  upon  its  demand,  for  any  losses,  claims,  damages,
     liabilities  or  other  expenses  ("Losses")  incurred  by such  Indemnitee
     insofar as such Losses  arise out of or are in any way related to or result
     from this Agreement, the Line of Credit Notes or any other Credit Documents
     or the financing provided hereby,  including,  without  limitation,  Losses
     arising in  connection  with any legal  proceeding  relating  to any of the
     foregoing  (whether  or not such  Indemnitee  is a party  thereto)  and the
     reasonable  attorneys  fees and expenses  actually  incurred in  connection
     therewith;  provided,  however,  that the foregoing  shall not apply to any
     Losses  resulting from the gross  negligence or willful  misconduct of such
     Indemnitee;

     (iv) without  limiting the indemnities set forth in subsection (iii) above,
     indemnify  each  Indemnitee  for any and all expenses and costs  (including
     without  limitation,   remedial,  removal,  response,  abatement,  cleanup,
     investigative,  closure and monitoring  costs),  losses,  claims (including
     claims  for   contribution   or  indemnity   and   including  the  cost  of
     investigating  or  defending  any claim and  whether  or not such  claim is
     ultimately defeated,  and whether such claim arose before,  during or after
     any  Credit  Party's  ownership,  operation,  possession  or control of its
     business,  property or facilities  or before,  on or after the date hereof,
     and  including  also any  amounts  paid  incidental  to any  compromise  or
     settlement  by the  Indemnitee  or  Indemnitees  to the holders of any such
     claim), lawsuits,  liabilities,  obligations,  actions,  judgments,  suits,
     disbursements,  encumbrances,  liens, damages (including without limitation
     damages for contamination or destruction of natural  resources),  penalties
     and fines of any kind or nature whatsoever (including without limitation in
     all  cases  the  reasonable  fees  actually  incurred,  other  charges  and
     disbursements  of counsel in connection  therewith)  incurred,  suffered or
     sustained  by that  Indemnitee  based  upon,  arising  under or relating to
     Environmental  Laws based on,  arising out of or relating to in whole or in
     part, the existence or exercise

                                      -64-

<PAGE>

     of any rights or remedies by any Indemnitee under this Agreement, any other
     Credit  Document or any related  documents (but excluding  those  incurred,
     suffered or sustained by any  Indemnitee as a result of any action taken by
     or on behalf of the Lenders with respect to any  Subsidiary of Borrower (or
     the assets thereof) owned or controlled by the Lenders.

If and to the extent that the  obligations  of Borrower under this Section 10.04
are  unenforceable  for any reason,  Borrower  hereby agrees to make the maximum
contribution  to the  payment  and  satisfaction  of such  obligations  which is
permissible under applicable law.

         Section 10.5. Right of Setoff.  In addition to and not in limitation of
all rights of offset  that any Lender or other  holder of a Line of Credit  Note
may have under  applicable  law, each Lender or other holder of a Line of Credit
Note shall,  upon the occurrence of any Event of Default and whether or not such
Lender or such holder has made any demand or any Credit Party's  obligations are
matured,  have the right to  appropriate  and apply to the payment of any Credit
Party's obligations hereunder and under the other Credit Documents, all deposits
of any Credit Party (general or special,  time or demand,  provisional or final)
then or thereafter held by and other indebtedness or property then or thereafter
owing by such Lender or other holder to any Credit Party, whether or not related
to this  Agreement or any  transaction  hereunder.  Each Lender  shall  promptly
notify Borrower of any offset hereunder.

         Section 10.6. Benefit of Agreement.

         (1) This  Agreement  shall be binding  upon and inure to the benefit of
and be  enforceable  by the  respective  successors  and  assigns of the parties
hereto,  provided  that  Borrower may not assign or transfer any of its interest
hereunder without the prior written consent of the Lenders.

         (2) Any Lender may make,  carry or transfer Line of Credit Loans at, to
or for the account of, any of its branch  offices or the office of an  Affiliate
of such Lender.

         (3) Each  Lender may assign all or a portion of its  interests,  rights
and obligations  under this Agreement  (including all or a portion of any of its
Line of Credit  Commitments and the Line of Credit Loans at the time owing to it
and the Line of Credit  Notes held by it) to any  Eligible  Assignee;  provided,
however,  that (i) the Administrative  Agent and, so long as no Event of Default
has occurred and is continuing,  Borrower must give their prior written  consent
to such assignment (which consent shall not be unreasonably withheld or delayed)
unless such assignment is an Affiliate of the assigning Lender,  (ii) the amount
of the Line of  Credit  Commitments  of the  assigning  Lender  subject  to each
assignment (determined as of the date the assignment and acceptance with respect
to such assignment is delivered to the  Administrative  Agent) shall not be less
than  $10,000,000,  and (iii) the parties to each such assignment  shall execute
and deliver to the Administrative  Agent an Assignment and Acceptance,  together
with a Line of Credit Note or Notes subject to such  assignment and, unless such
assignment is to an Affiliate of such Lender,  a processing and  recordation fee
of $2,500.

                                      -65-

<PAGE>

Borrower shall not be responsible for such processing and recordation fee or any
costs  or  expenses  incurred  by any  Lender  or the  Administrative  Agent  in
connection with such assignment.  From and after the effective date specified in
each Assignment and Acceptance,  which effective date shall be at least five (5)
Business Days after the execution  thereof,  the assignee  thereunder shall be a
party hereto and to the extent of the interest  assigned by such  Assignment and
Acceptance,  have the rights and  obligations of a Lender under this  Agreement.
Within five (5) Business Days after receipt of the notice and the Assignment and
Acceptance,  Borrower,  at its own  expense,  shall  execute  and deliver to the
Administrative  Agent,  in exchange for the  surrendered  Line of Credit Note or
Notes,  a new Line of Credit  Note or Notes to the order of such  assignee  in a
principal  amount equal to the applicable Line of Credit  Commitments or Line of
Credit Loans assumed by it pursuant to such  Assignment  and  Acceptance and new
Line of  Credit  Note or Notes to the  assigning  Lender  in the  amount  of its
retained Line of Credit Commitment or Commitments or amount of its retained Line
of Credit Loans.  Such new Line of Credit Note or Notes shall be in an aggregate
principal  amount equal to the aggregate  principal  amount of such  surrendered
Line of Credit Note or Notes, shall be dated the date of the surrendered Line of
Credit Note or Notes which they replace, and shall otherwise be in substantially
the form attached hereto.

         (4)  Each  Lender   may,   without  the  consent  of  Borrower  or  the
Administrative  Agent, sell  participations  without  restriction to one or more
banks or other entities in all or a portion of its rights and obligations  under
this Agreement  (including all or a portion of its Line of Credit Commitments in
the Line of Credit  Loans owing to it and the Line of Credit  Notes held by it),
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged,  (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,  (iii) the participating
bank or other  entity shall not be entitled to the benefit  (except  through its
selling  Lender) of the cost protection  provisions  contained in Article III of
this Agreement, and (iv) Borrower and the Administrative Agent and other Lenders
shall  continue to deal solely and directly with each Lender in connection  with
such Lender's rights and  obligations  under this Agreement and the other Credit
Documents,  and  such  Lender  shall  retain  the  sole  right  to  enforce  the
obligations of Borrower  relating to the Line of Credit Loans and to approve any
amendment,  modification  or waiver of any  provisions  of this  Agreement.  Any
Lender selling a participation  hereunder shall provide prompt written notice to
Borrower of the name of such participant.

         (5) Any Lender or participant may, in connection with the assignment or
participation or proposed assignment or participation, pursuant to this Section,
disclose to the assignee or participant or proposed  assignee or participant any
information  relating to Borrower or the other Consolidated  Companies furnished
to such Lender by or on behalf of Borrower  or any other  Consolidated  Company.
With  respect  to  any  disclosure  of  confidential,   non-public,  proprietary
information,  such  proposed  assignee  or  participant  shall  agree to use the
information  only for the purpose of making any necessary  credit judgments with
respect to this credit  facility  and not to use the  information  in any manner
prohibited by any law, including without limitation,  the securities laws of the
United States of America.  The proposed  participant or assignee shall agree not
to disclose any of such information except (i) to directors, employees, auditors

                                      -65-

<PAGE>

or counsel to whom it is necessary to show such information,  each of whom shall
be informed of the confidential nature of the information, (ii) in any statement
or testimony pursuant to a subpoena or order by any court,  governmental body or
other agency asserting  jurisdiction over such entity, or as otherwise  required
by law (provided prior notice is given to Borrower and the Administrative  Agent
unless otherwise  prohibited by the subpoena,  order or law), and (iii) upon the
request  or  demand  of  any   regulatory   agency  or  authority   with  proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other  written  material and copies  thereof  received from any
Lender,  the  Administrative  Agent or Borrower  relating  to such  confidential
information unless otherwise properly disposed of by such entity.

         (6) Any Lender may at any time  assign all or any portion of its rights
in this Agreement and the Line of Credit Notes issued to it to a Federal Reserve
Bank;  provided that no such assignment shall release the Lender from any of its
obligations hereunder.

         (7) If (i) any Taxes referred to in Section 3.07(b) have been levied or
imposed so as to require  withholdings  or deductions by Borrower and payment by
Borrower  of  additional  amounts  to any Lender as a result  thereof,  (ii) any
Lender  shall make  demand for  payment of any  material  additional  amounts as
compensation  for  increased  costs  pursuant to Section 3.10 or for its reduced
rate of return  pursuant to Section  3.16,  or (iii) any Lender shall decline to
consent to a modification  or waiver of the terms of this Agreement or the other
Credit  Documents  requested by Borrower,  then and in such event,  upon request
from Borrower delivered to such Lender and the Administrative Agent, such Lender
shall assign, in accordance with the provisions of Section 10.06(c),  all of its
rights and  obligations  under this Agreement and the other Credit  Documents to
another Lender or an Eligible  Assignee  selected by Borrower,  in consideration
for the payment by such assignee to the Lender of the principal of, and interest
on, the outstanding Line of Credit Loans accrued to the date of such assignment,
and  the  assumption  of such  Lender's  Line of  Credit  Commitment  hereunder,
together  with  any  and all  other  amounts  owing  to such  Lender  under  any
provisions of this Agreement or the other Credit  Documents  accrued to the date
of such assignment.

         Section 10.7. Governing Law; Submission to Jurisdiction.

         (1) THIS  AGREEMENT  AND THE  RIGHTS  AND  OBLIGATIONS  OF THE  PARTIES
HEREUNDER  AND UNDER THE LINE OF CREDIT NOTES SHALL BE  CONSTRUED IN  ACCORDANCE
WITH AND BE GOVERNED BY THE LAW  (WITHOUT  GIVING  EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.

         (2) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT,  THE
LINE OF CREDIT NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR
COURT OF FULTON COUNTY,  GEORGIA,  OR ANY OTHER COURT OF THE STATE OF GEORGIA OR
OF THE UNITED  STATES OF AMERICA FOR THE NORTHERN  DISTRICT OF GEORGIA,  AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT,

                                      -67-

<PAGE>

BORROWER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY,  THE JURISDICTION OF THE AFORESAID  COURTS.  THE PARTIES HERETO
HEREBY  IRREVOCABLY WAIVE TRIAL BY JURY, AND BORROWER HEREBY  IRREVOCABLY WAIVES
ANY OBJECTION,  INCLUDING,  WITHOUT  LIMITATION,  ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE  GROUNDS  OF  FORUM  NON  CONVENIENS,  WHICH IT MAY NOW OR
HEREAFTER  HAVE  TO THE  BRINGING  OF ANY  SUCH  ACTION  OR  PROCEEDING  IN SUCH
RESPECTIVE JURISDICTIONS.

         (3) BORROWER  HEREBY  IRREVOCABLY  DESIGNATES THE  CORPORATION  SERVICE
COMPANY,  ATLANTA,  GEORGIA,  AS ITS  DESIGNEE,  APPOINTEE  AND  LOCAL  AGENT TO
RECEIVE,  FOR AND ON BEHALF OF BORROWER,  SERVICE OF PROCESS IN SUCH  RESPECTIVE
JURISDICTIONS  IN ANY LEGAL ACTION OR PROCEEDING  WITH RESPECT TO THIS AGREEMENT
OR THE LINE OF CREDIT NOTES OR ANY DOCUMENT  RELATED  THERETO.  IT IS UNDERSTOOD
THAT A COPY  OF SUCH  PROCESS  SERVED  ON  SUCH  LOCAL  AGENT  WILL BE  PROMPTLY
FORWARDED  BY SUCH  LOCAL  AGENT AND BY THE  SERVER OF SUCH  PROCESS  BY MAIL TO
BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE  BELOW, BUT THE FAILURE
OF BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS.  BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,  TO BORROWER AT
ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.

         (4) Nothing herein shall affect the right of the Administrative  Agent,
any  Lender,  any holder of a Line of Credit  Note or any Credit  Party to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.

         Section  10.8.  Independent  Nature of  Lenders'  Rights.  The  amounts
payable at any time hereunder to each Lender shall be a separate and independent
debt,  and each  Lender  shall be  entitled  to protect  and  enforce its rights
pursuant to this  Agreement  and its Line of Credit  Notes,  and it shall not be
necessary  for any  other  Lender to be  joined  as an  additional  party in any
proceeding for such purpose.

         Section  10.9.  Counterparts.  This  Agreement  may be  executed in any
number  of  counterparts  and  by  the  different  parties  hereto  on  separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

                                      -68-

<PAGE>

         Section 10.10. Effectiveness; Survival.

         (1) This Agreement  shall become  effective on the date (the "Effective
Date") on which all of the parties hereto shall have signed a counterpart hereof
(whether the same or different  counterparts)  and shall have delivered the same
to the  Administrative  Agent  pursuant to Section  10.01 or, in the case of the
Lenders,  shall have given to the  Administrative  Agent written or telex notice
(actually received) that the same has been signed and mailed to them.

         (2) The  obligations of Borrower under Sections  3.07(b),  3.10,  3.12,
3.13,  3.16,  and 10.04  hereof  shall  survive  for ninety  (90) days after the
payment in full of the Line of Credit Notes after the Final  Maturity  Date. All
representations  and  warranties  made  herein,  in the  certificates,  reports,
notices,  and other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement,  the other Credit  Documents,  and
such other  agreements  and  documents,  the making of the Line of Credit  Loans
hereunder, and the execution and delivery of the Line of Credit Notes.

         Section  10.11.  Severability.  In case any  provision in or obligation
under this Agreement or the other Credit Documents shall be invalid,  illegal or
unenforceable,  in whole or in part, in any jurisdiction, the validity, legality
and  enforceability  of the  remaining  provisions  or  obligations,  or of such
provision  or  obligation  in any  other  jurisdiction,  shall not in any way be
affected or impaired thereby.

         Section 10.12. Independence of Covenants. All covenants hereunder shall
be given  independent  effect so that if a particular action or condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant,  shall
not avoid the  occurrence  of a Default or an Event of Default if such action is
taken or condition exists.

         Section  10.13.  Change in  Accounting  Principles,  Fiscal Year or Tax
Laws. If (i) any preparation of the financial  statements referred to in Section
6.07  hereafter   occasioned  by  the   promulgation   of  rules,   regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the  American  Institute of Certified  Public  Accounts (or  successors
thereto or agencies with similar functions) (other than changes mandated by FASB
106)  result in a material  change in the  method of  calculation  of  financial
covenants,  standards or terms found in this Agreement, (ii) there is any change
in Borrower's fiscal quarter or fiscal year, or (iii) there is a material change
in federal tax laws which materially affects any of the Consolidated  Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement, Borrower and the Required Lenders agree to enter into negotiations in
order to amend such provisions so as to equitably  reflect such changes with the
desired  result  that  the  criteria  for  evaluating  any of  the  Consolidated
Companies'  financial  condition shall be the same after such changes as if such
changes  had not been  made.  Unless  and  until  such  provisions  have been so
amended, the provisions of this Agreement shall govern.

                                      -69-

<PAGE>

         Section 10.14. Headings Descriptive;  Entire Agreement. The headings of
the  several  sections  and  subsections  of this  Agreement  are  inserted  for
convenience  only and shall not in any way affect the meaning or construction of
any provision of this Agreement. This Agreement, the other Credit Documents, and
the agreements and documents  required to be delivered  pursuant to the terms of
this  Agreement  constitute  the entire  agreement  among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.

         Section  10.15.  Time  is of the  Essence.  Time is of the  essence  in
interpreting and performing this Agreement and all other Credit Documents.

         Section  10.16.  Usury.  It is the intent of the parties  hereto not to
violate any federal or state law, rule or regulation  pertaining either to usury
or to the  contracting  for or charging or collecting of interest,  and Borrower
and Lenders agree that, should any provision of this Agreement or of the Line of
Credit Notes,  or any act performed  hereunder or  thereunder,  violate any such
law, rule or regulation,  then the excess of interest  contracted for or charged
or collected  over the maximum  lawful rate of interest  shall be applied to the
outstanding  principal  indebtedness  due to  Lenders  by  Borrower  under  this
Agreement.

         Section  10.17.  Construction.  Should any provision of this  Agreement
require  judicial  interpretation,  the  parties  hereto  agree  that the  court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly  construed against one party by reason of the rule
of  construction  that a document is to be more strictly  construed  against the
party who itself or through its agents  prepared the same,  it being agreed that
Borrower, the Administrative Agent, the Lenders and their respective agents have
participated in the preparation hereof.

         Section 10.18.  Waiver of Effect of Corporate Seal. Borrower represents
and  warrants  that it is not  required  to  affix  its  corporate  seal to this
Agreement or any other Credit  Document  pursuant to any  Requirement of Law and
waives any  shortening  of the statute of  limitations  that may result from not
affixing the corporate seal to this Agreement or the other Credit Documents.

                                      -70-

<PAGE>

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

Address for Notices:                     BORROWER:
-------------------

20 N. Orange Avenue                      HUGHES SUPPLY, INC.
Suite 200
Orlando, Florida 32801
                                         By:_______________________________
Attention: J. Stephen Zepf               J. Stephen Zepf
                                         Treasurer

                                         By:_______________________________
                                         Ben Butterfield
                                         Secretary

                                      -71-

<PAGE>

Address for Notices:                     SUNTRUST BANK, CENTRAL FLORIDA,
-------------------                      NATIONAL ASSOCIATION, individually and
                                         as Administrative Agent
200 S. Orange Avenue
MC 2064
Orlando, Florida 32801
                                         By: ______________________________
Attn: Mr. William C. Barr                      Name:
                                               Title:
Telecopy No.  407/237-4076

Payment Office:
--------------

200 S. Orange Avenue
MC 2064
Orlando, Florida 32801

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

Line of Credit Commitment: $13,750,000.00

Pro Rata Share of Line of Credit Commitment: 18.33%

                                      -72-

<PAGE>

Address for Notices:                    FIRST UNION NATIONAL BANK, individually
-------------------                     and as Documentation Agent

225 Water Street
4th Floor
Mail Code FL0060
Jacksonville, Florida 32202             By:_______________________________
Attn: Mr. Michael L. Williamson            Name:
                                           Title:
Telecopy No. 904/361-3560

Payment Office:
--------------

100 S. Ashley Drive
Suite 1000
Mail Code FL4009
Tampa, Florida  32602
Attn: Ms. Mary Doonan

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                                      -73-

<PAGE>

Address for Notices:
-------------------
                                          NATIONSBANK, N.A., individually and as
100 SE 2nd Street, 14th Floor             Syndication Agent
Miami, Florida 33131
Attn: Mr. Richard Starke
                                          By:_______________________________
Telecopy No.                                 Name:
                                             Title:

Payment Office:
--------------

NationsBank, N.A.
101 N. Tryon Street
Charlotte, North Carolina  28255
Attn: Ms. Deon Wright

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                                      -74-

<PAGE>

Address for Notices:
-------------------
                                       SOUTHTRUST BANK, NATIONAL
150 2nd Avenue North                   ASSOCIATION, individually and as Co-Agent
Suite 470
St. Petersburg, Florida 33701          By:_______________________________
Attn: Mr. Lee Culbreath                   Name:
                                          Title:
Telecopy No. 727/898-5319

Payment Office:
--------------

150 2nd Avenue North
Suite 470
St. Petersburg, Florida 33701
Attn: Ms. Joanne Gundling

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                                      -75-

<PAGE>

Address for Notices:                            ABN AMRO BANK, N.V.
-------------------
Southwest Financial Center
200 S. Biscayne Boulevard, 22nd Floor
Miami, Florida 33131-5311
Attn: Ms. Deborah Day Orozco
                                                By:____________________________
                                                   Name:
                                                   Title:
Telecopy No.  (305)372-2397

Payment Office:
--------------

335 Madison Avenue, 16th Floor
New York, New York 10017
Attn: Trade Services Department

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                                      -76-

<PAGE>

Address for Notices:                            PNC BANK, N.A.
-------------------

249 5th Avenue
Pittsburgh, Pennsylvania 15222
Attn: Mr. James D. Neil
                                                By:_____________________________
Telecopy No. 412/762-6484                          Name:
                                                   Title:
Payment Office:
--------------

Two PNC Plaza/ Liberty Avenue.
Pittsburgh, Pennsylvania 15222
Attn: Ms. Anita Truchman

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                                      -77-

<PAGE>

Address for Notices:                           WACHOVIA BANK, N.A.
-------------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Mr. Shawn Janko
                                               By:______________________________
                                                  Name:
                                                  Title:
Telecopy No. (404)332-5016

Payment Office:
--------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Ms. Sharon Westmoreland

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                                      -78-

<PAGE>

Address for Notices:                           THE FIFTH THIRD BANK
-------------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Mr. Kevin J. Walter
                                               By:______________________________
Telecopy No. 513/579-5226                         Name:  Kevin J. Walter
                                                  Title: Large Corporate
Payment Office:                                          Banking Officer
--------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Ms. Megan Heisel

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                                      -79-

<PAGE>

Address for Notices:                          HIBERNIA NATIONAL BANK
-------------------

313 Carondelet Street
New Orleans, LA 70130
Attn: Ms. Kristie Peychaud
                                              By:_______________________________
Telecopy No. 504/533-5344                        Name:  Kristie Peychaud
                                                 Title: Banking Officer
Payment Office:
--------------

313 Carondelet Street
New Orleans, LA 70130
Attn: Ms. Shelly Strada

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                                      -80-

<PAGE>

                               FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT

         THIS  FIRST   AMENDMENT  TO  LINE  OF  CREDIT   AGREEMENT  (the  "First
Amendment")  is made and entered  into as of September  29,  1999,  by and among
HUGHES SUPPLY, INC. ("Borrower"), a Florida corporation,  SUNTRUST BANK, CENTRAL
FLORIDA,  NATIONAL  ASSOCIATION,  a national  banking  association,  FIRST UNION
NATIONAL BANK, a national banking association,  BANK OF AMERICA,  N.A., formerly
known as NATIONSBANK,  N.A., a national  banking  association,  SOUTHTRUST BANK,
NATIONAL  ASSOCIATION,  a national banking  association,  ABN AMRO BANK, N.V., a
banking corporation organized under the laws of the Netherlands, PNC BANK, N.A.,
a  national  banking  association,  WACHOVIA  BANK,  N.A.,  a  national  banking
association,  THE FIFTH THIRD BANK,  a national  banking  association,  HIBERNIA
NATIONAL  BANK,  a  national  banking   association  and  such  other  financial
institutions  becoming  a party  hereto  from  time to  time,  (individually,  a
"Lender" and  collectively,  the  "Lenders"),  SUNTRUST BANK,  CENTRAL  FLORIDA,
NATIONAL  ASSOCIATION as administrative agent for the Lenders (in such capacity,
the "Administrative  Agent"),  FIRST UNION NATIONAL BANK, as documentation agent
for the Lenders (in such capacity, the "Documentation  Agent"), BANK OF AMERICA,
N.A., formerly known as NATIONSBANK,  N.A., as syndication agent for the Lenders
(in such  capacity,  the  "Syndication  Agent") and  SOUTHTRUST  BANK,  NATIONAL
ASSOCIATION, as Co-Agent for the Lenders (in such capacity, the "Co-Agent").

                              W I T N E S S E T H:

         WHEREAS,  the Lenders,  the  Administrative  Agent,  the  Documentation
Agent,  the Syndication  Agent,  the Co-Agent and the Borrower are party to that
certain  Line of Credit  Agreement  dated as of January  26,  1999 (the "Line of
Credit  Agreement"),  pursuant to which the Lenders  made  available to Borrower
credit facilities subject to the terms and conditions set forth therein; and

         WHEREAS,  the Lenders,  the  Administrative  Agent,  the  Documentation
Agent, the Syndication  Agent, the Co-Agent and the Borrower,  at the request of
the Borrower,  desire to (i) extend the Line of Credit  Termination Date to July
24, 2000 and (ii) amend certain other terms of the Line of Credit Agreement.

         NOW, THEREFORE,  in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the Line
of Credit Agreement and agree as follows:

         1. The Line of Credit  Agreement  is hereby  amended by  replacing  the
definition of "Line of Credit  Termination Date" in Section 1.01 in its entirety
with the following:

          "Line of Credit  Termination  Date" shall mean the earlier of (i) July
     24,  2000 aand (ii) the date on which  the Line of Credit  Commitments  are
     terminated in accordance with Article VIII.

                                      -81-

<PAGE>

         2. The Line of Credit Agreement is hereby amended by replacing  Section
6.08(c) in its entirety with the following:

          (c) Minimum Net Worth.  Maintain a Consolidated  Net Worth of not less
     than (i)  $365,000,000  plus (ii) 50% of  Consolidated  Net Income (but not
     Consolidated Net Loss) for each fiscal quarter ended after January 30, 1998
     and on or prior to the date of determination.

         3. The Line of Credit Agreement is hereby amended by replacing  Section
6.08(d) in its entirety with the following:

          (d)  Dividends.  Not declare or pay any dividend on its capital stock,
     or make any  payment to  purchase,  redeem,  retire or  acquire  any of its
     Subordinated Debt or capital stock or any option,  warrant,  or other right
     to  acquire  such  Subordinated  Debt or capital  stock,  other  than:

               (i)    dividends payable solely in shares of capital stock;

               (ii)   any  payments  made  for  the   repurchase of  outstanding
     capital stock  previously  issued by Borrower in an aggregate amount at any
     time not to exceed $60,000,000; and

               (iii)  cash  dividends  declared  and  paid  and all  other  such
          payments made,  after January 29, 1993, in an aggregate  amount at any
          time not to exceed (x) $1,000,000,  plus (y) 50% of  Consolidated  Net
          Income  (or  minus  100%  of  Consolidated  Net  Loss)  earned  during
          Borrower's  fiscal year ended January 29, 1993, and  thereafter  (such
          period to be treated as one  accounting  period);  provided,  further,
          however,  no such  dividend  or other  payment may be declared or paid
          pursuant to clause  (ii) or (iii) above  unless no Default or Event of
          Default exists at the time of such  declaration  or payment,  or would
          exist as a result of such declaration or payment.

         4. The Line of Credit Agreement is hereby amended by replacing  Section
7.05 in its entirety with the following:

               Section 7.05 Sale and  Leaseback  Transactions.  Sell or transfer
          any  property,  real or  personal,  whether  now  owned  or  hereafter
          acquired, and thereafter rent or lease such property or other property
          which any Consolidated  Company intends to use for  substantially  the
          same  purpose or purposes as the property  being sold or  transferred,
          except to the extent  that at the time any such  property  is sold and
          leased back,  and after giving effect  thereto,  the aggregate  amount
          paid  (whether in cash or  otherwise)  for all such  property sold and
          leased back by the Consolidated  Companies since the Closing Date does
          not exceed five  percent  (5%) of the  Consolidated  Companies'  total
          assets  as  reported  in the  most  recent  audited  annual  financial
          statements  delivered to the Administrative  Agent pursuant to Section
          6.07(a).

                                      -82-

<PAGE>

         5.  Borrower  represents  and warrants  that, as of the date hereof and
after giving effect to the transactions  contemplated by the First Amendment and
the Credit Documents, (i) the assets of Borrower, at fair valuation and based on
their present fair  saleable  value,  will exceed  Borrower's  debts,  including
contingent  liabilities,  (ii) the  remaining  capital of  Borrower  will not be
unreasonably small to conduct Borrower's  business,  and (iii) Borrower will not
have incurred debts, or have intended to incur debts,  beyond its ability to pay
such debts as they  mature.  For  purposes of this  paragraph,  "debt" means any
liability on a claim, and "claim" means (a) the right to payment, whether or not
such right is reduced to judgment, liquidated,  unliquidated, fixed, contingent,
matured,  unmatured,   disputed,   undisputed,   legal,  equitable,  secured  or
unsecured,  or (b) the right to an equitable remedy for breach of performance if
such breach  gives rise to a right to  payment,  whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent,  matured, unmatured,
disputed, undisputed, secured or unsecured.

         6. Except as expressly  provided  herein,  the Line of Credit Agreement
shall continue in full force and effect,  and the unamended terms and conditions
of the Line of Credit Agreement are expressly  incorporated  herein and ratified
and confirmed in all respects.  This First Amendment is not intended to be or to
create, nor shall it be construed as, a novation or an accord and satisfaction.

         7.  From and after the date  hereof,  references  to the Line of Credit
Agreement shall be references to the Line of Credit Agreement as amended hereby.

         8. This First Amendment  constitutes the entire  agreement  between the
parties  hereto with respect to the subject  matter  hereof.  Neither this First
Amendment nor any provision hereof may be changed, waived, discharged,  modified
or terminated orally, but only by an instrument in writing signed by the parties
required to be a party  thereto  pursuant to Section 10.02 of the Line of Credit
Agreement.

         9. THIS FIRST  AMENDMENT  SHALL BE  GOVERNED  IN ALL  RESPECTS  BY, AND
CONSTRUED  AND  ENFORCED IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF GEORGIA
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         10. This First Amendment may be executed in any number of counterparts,
each of  which  shall  be  deemed  to be an  original  and all of  which,  taken
together,  shall constitute one and the same document, and shall be effective as
of the date first above written.

         11.  Borrower  shall  reimburse  the   Administrative   Agent  for  the
reasonable  fees  and  expenses  of  counsel  for the  Administrative  Agent  in
connection with this First Amendment.

                                      -83-

<PAGE>

                  IN WITNESS WHEREOF, Borrower, the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Co-Agent and the Required
Lenders have caused this First Amendment to be executed as of the date first
above written.

Address for Notices:                      BORROWER:
-------------------

20 N. Orange Avenue                       HUGHES SUPPLY, INC.
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf                By:_______________________________
                                             J. Stephen Zepf
                                             Treasurer

                                          By:________________________________
                                             Ben Butterfield
                                             Secretary

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          SUNTRUST BANK, CENTRAL FLORIDA,
-------------------                           NATIONAL ASSOCIATION, individually
                                              and as Administrative Agent
200 S. Orange Avenue
MC 2064
Orlando, Florida 32801
                                              By: ______________________________
Attn: Mr. William C. Barr                         William C. Barr, III
                                                  First Vice President
Telecopy No.  407/237-4076

Payment Office:
--------------

200 S. Orange Avenue
MC 2064
Orlando, Florida 32801

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

Line of Credit Commitment: $13,750,000.00

Pro Rata Share of Line of Credit Commitment: 18.33%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                    FIRST UNION NATIONAL BANK, individually
-------------------                     and as Documentation Agent

225 Water Street
4th Floor
Mail Code FL0060
Jacksonville, Florida 32202             By:_______________________________
Attn: Mr. Mike Carlin                      Name:
                                           Title:
Telecopy No. 904/361-3560

Payment Office:
--------------

100 S. Ashley Drive
Suite 1000
Mail Code FL4009
Tampa, Florida  32602
Attn: Ms. Mary Doonan

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:
-------------------                      BANK OF AMERICA, N.A., formerly known
                                         as NATIONSBANK, N.A., individually and
100 SE 2nd Street, 14th Floor            as Syndication Agent
Miami, Florida 33131
Attn: Mr. Richard Starke
                                         By:_______________________________
Telecopy No.                                Name:
                                            Title:

Payment Office:
--------------

Bank of America, N.A.
101 N. Tryon Street
Charlotte, North Carolina  28255
Attn: Ms. Deon Wright

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                            SOUTHTRUST BANK, NATIONAL
-------------------                             ASSOCIATION, individually and
                                                as Co-Agent
420 North 20th Street
Birmingham, AL 35203
Attn: Florida Corporate Banking (Orlando)       By:_____________________________
                                                   Name:
Telecopy No. 727/898-5319                          Title:

Payment Office:
--------------

P.O. Box 830716
Birmingham, AL 35283-0716
Attn: Ms. Joanne Gundling (727/825-2733)

Telecopy No. 727/898-5419

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                            ABN AMRO BANK, N.V.
-------------------
Southwest Financial Center
200 S. Biscayne Boulevard, 22nd Floor
Miami, Florida 33131-5311
Attn: Ms. Deborah Day Orozco
                                                By:_____________________________
                                                   Name:
                                                   Title:
Telecopy No.  (305)372-2397

Payment Office:
--------------

335 Madison Avenue, 16th Floor
New York, New York 10017
Attn: Trade Services Department

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           PNC BANK, N.A.
-------------------

249 5th Avenue
Pittsburgh, Pennsylvania 15222
Attn: Mr. Doug King
                                               By:______________________________
Telecopy No. 412/762-6484                         Name:
                                                  Title:
Payment Office:
--------------

Two PNC Plaza/ Liberty Avenue.
Pittsburgh, Pennsylvania 15222
Attn: Ms. Anita Truchman

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          WACHOVIA BANK, N.A.
-------------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Mr. Bill McCamey
                                              By:_______________________________
                                                 Name:
                                                 Title:
Telecopy No. (404)332-5016

Payment Office:
------- ------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Ms. Sharon Westmoreland

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                         THE FIFTH THIRD BANK
-------------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Mr. Kevin J. Walter                    By:_______________________________
Telecopy No. 513/579-5226                       Name:  Kevin J. Walter
                                                Title: Large Corporate Banking
Payment Office:                                 Officer
--------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Ms. Megan Heisel

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                      [SIGNATURE PAGE TO FIRST AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                         HIBERNIA NATIONAL BANK
-------------------

313 Carondelet Street
New Orleans, LA 70130
Attn: Ms. Kristie Peychaud
                                             By:_______________________________
Telecopy No. 504/533-5344                       Name:  Kristie Peychaud
                                                Title: Banking Officer
Payment Office:
--------------

313 Carondelet Street
New Orleans, LA 70130
Attn: Ms. Shelly Strada

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                                      -94-

<PAGE>

                               SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT

         THIS  SECOND  AMENDMENT  TO  LINE  OF  CREDIT  AGREEMENT  (the  "Second
Amendment")  is made and entered  into as of May 29,  2000,  by and among HUGHES
SUPPLY,  INC.  ("Borrower"),  a Florida  corporation,  SUNTRUST  BANK, a Georgia
banking  corporation and successor by merger to SunTrust Bank,  Central Florida,
National Association, FIRST UNION NATIONAL BANK, a national banking association,
BANK OF AMERICA,  N.A., formerly known as NATIONSBANK,  N.A., a national banking
association,   SOUTHTRUST  BANK,  NATIONAL   ASSOCIATION,   a  national  banking
association, ABN AMRO BANK, N.V., a banking corporation organized under the laws
of the Netherlands,  PNC BANK, N.A., a national  banking  association,  WACHOVIA
BANK,  N.A., a national  banking  association,  THE FIFTH THIRD BANK, a national
banking  association  and such  other  financial  institutions  becoming a party
hereto  from time to time,  (individually,  a  "Lender"  and  collectively,  the
"Lenders"),  SUNTRUST  BANK,  as  administrative  agent for the Lenders (in such
capacity,   the   "Administrative   Agent"),   FIRST  UNION  NATIONAL  BANK,  as
documentation  agent  for the  Lenders  (in such  capacity,  the  "Documentation
Agent"),  BANK OF  AMERICA,  N.A.,  formerly  known  as  NATIONSBANK,  N.A.,  as
syndication  agent for the Lenders (in such capacity,  the "Syndication  Agent")
and SOUTHTRUST BANK, NATIONAL ASSOCIATION,  as Co-Agent for the Lenders (in such
capacity, the "Co-Agent").

                              W I T N E S S E T H:

         WHEREAS,  the Lenders,  the  Administrative  Agent,  the  Documentation
Agent,  the Syndication  Agent,  the Co-Agent and the Borrower are party to that
certain Line of Credit  Agreement  dated as of January 26,  1999,  as amended by
that certain First  Amendment to Line of Credit  Agreement dated as of September
29, 1999 (as so amended, the "Line of Credit Agreement"),  pursuant to which the
Lenders made available to Borrower  credit  facilities  subject to the terms and
conditions set forth therein; and

         WHEREAS,  the Lenders,  the  Administrative  Agent,  the  Documentation
Agent, the Syndication  Agent, the Co-Agent and the Borrower,  at the request of
the Borrower,  desire to extend the Line of Credit  Termination  Date to January
19, 2001.

         NOW, THEREFORE,  in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the Line
of Credit Agreement and agree as follows:

         12. The Line of Credit  Agreement is hereby  amended by  replacing  the
definition of "Line of Credit  Termination Date" in Section 1.01 in its entirety
with the following:

               "Line of Credit  Termination  Date" shall mean the earlier of (i)
          January  19,  2001  and (ii)  the  date on  which  the Line of  Credit
          Commitments are terminated in accordance with Article VIII.

                                      -95-

<PAGE>

         13. The  effectiveness of this Second Amendment is conditioned upon the
Administrative  Agent's  receipt  of the  following,  each  dated as of the date
hereof,  in form and substance  reasonably  satisfactory  in all respects to the
Administrative Agent:

               (a) The  duly  executed  original  counterparts  of  this  Second
          Amendment;

               (b) The duly executed  Consent and Ratification of Guaranty (Line
          of Credit  Agreement),  dated as of the date hereof, by and among each
          of the Subsidiaries of Borrower, listed on the signature pages thereof
          and the Administrative Agent; and

               (c) Certificates of the Secretary or Assistant  Secretary of each
          of the  Credit  Parties  certifying  (i)  the  name,  title  and  true
          signature  of each  officer of such  entities  executing  this  Second
          Amendment and the other Credit Documents, (ii) that there have been no
          changes  to the  bylaws  or  comparable  governing  documents  of such
          entities since the delivery  thereof to the Lenders in connection with
          the Line of  Credit  Agreement  and that  such  bylaws  or  comparable
          governing  documents  remain in full  force and  effect as of the date
          hereof,  (iii) that there have been no changes to the  certificates or
          articles  of  incorporation  of each Credit  Party since the  delivery
          thereof to the Lenders in connection with the Line of Credit Agreement
          and that such certificates or articles of incorporation remain in full
          force and effect as of the date hereof;  and (iv) the  resolutions  of
          the board of directors of such entities  authorizing the  transactions
          contemplated   under  the  Second   Amendment  and  the  other  Credit
          Documents.

         14.  Borrower  represents  and warrants that, as of the date hereof and
after giving effect to the transactions contemplated by the Second Amendment and
the Credit Documents, (i) the assets of Borrower, at fair valuation and based on
their present fair  saleable  value,  will exceed  Borrower's  debts,  including
contingent  liabilities,  (ii) the  remaining  capital of  Borrower  will not be
unreasonably small to conduct Borrower's  business,  and (iii) Borrower will not
have incurred debts, or have intended to incur debts,  beyond its ability to pay
such debts as they  mature.  For  purposes of this  paragraph,  "debt" means any
liability on a claim, and "claim" means (a) the right to payment, whether or not
such right is reduced to judgment, liquidated,  unliquidated, fixed, contingent,
matured,  unmatured,   disputed,   undisputed,   legal,  equitable,  secured  or
unsecured,  or (b) the right to an equitable remedy for breach of performance if
such breach  gives rise to a right to  payment,  whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent,  matured, unmatured,
disputed, undisputed, secured or unsecured.

         15. Except as expressly  provided herein,  the Line of Credit Agreement
shall continue in full force and effect,  and the unamended terms and conditions
of the Line of Credit Agreement are expressly  incorporated  herein and ratified
and confirmed in all respects. This Second Amendment is not intended to be or to
create, nor shall it be construed as, a novation or an accord and satisfaction.

         16. From and after the date  hereof,  references  to the Line of Credit
Agreement shall be references to the Line of Credit Agreement as amended hereby.

                                      -96-

<PAGE>

         17. This Second Amendment  constitutes the entire agreement between the
parties hereto with respect to the subject  matter  hereof.  Neither this Second
Amendment nor any provision hereof may be changed, waived, discharged,  modified
or terminated orally, but only by an instrument in writing signed by the parties
required to be a party  thereto  pursuant to Section 10.02 of the Line of Credit
Agreement.

         18. THIS SECOND  AMENDMENT  SHALL BE GOVERNED IN ALL  RESPECTS  BY, AND
CONSTRUED  AND  ENFORCED IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF GEORGIA
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         19.   This  Second   Amendment   may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed to be an original and all of which,
taken  together,  shall  constitute  one and the  same  document,  and  shall be
effective as of the date first above written.

         20.  Borrower  shall  reimburse  the   Administrative   Agent  for  the
reasonable  fees  and  expenses  of  counsel  for the  Administrative  Agent  in
connection with this Second Amendment.

                                      -97-

<PAGE>

         IN  WITNESS   WHEREOF,   Borrower,   the   Administrative   Agent,  the
Documentation  Agent,  the  Syndication  Agent,  the  Co-Agent  and the Required
Lenders  have caused this Second  Amendment  to be executed as of the date first
above written.

Address for Notices:                      BORROWER:
-------------------

20 N. Orange Avenue                       HUGHES SUPPLY, INC.
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf                By:_______________________________
                                             J. Stephen Zepf
                                             Treasurer

                                          By:________________________________
                                             Ben Butterfield
                                             Secretary

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                       SUNTRUST BANK, formerly known as
-------------------                        SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION,                      individually and as Administrative
200 S. Orange Avenue                       Agent
MC 2064
Orlando, Florida 32801
                                           By: ______________________________
Attn: Mr. William C. Barr                      William C. Barr, III
                                               Vice President
Telecopy No.  407/237-4076

Payment Office:
--------------

200 S. Orange Avenue
MC 2064
Orlando, Florida 32801

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

Line of Credit Commitment: $13,750,000.00

Pro Rata Share of Line of Credit Commitment: 18.33%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                     FIRST UNION NATIONAL BANK, individually
-------------------                      and as Documentation Agent

225 Water Street
4th Floor
Mail Code FL0060
Jacksonville, Florida 32202              By:_______________________________
Attn: Mr. Mike Carlin                       Name:
                                            Title:
Telecopy No. 904/361-3560

Payment Office:
--------------

100 S. Ashley Drive
Suite 1000
Mail Code FL4009
Tampa, Florida  32602
Attn: Ms. Mary Doonan

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:
-------------------
                                           BANK OF AMERICA, N.A., formerly known
individually and as                        as NATIONSBANK, N.A., Syndication
100 SE 2nd Street, 14th Floor              Agent
Miami, Florida 33131
Attn: Mr. Richard Starke
                                           By:_______________________________
Telecopy No.                                  Name:
                                              Title:

Payment Office:
--------------

Bank of America, N.A.
101 N. Tryon Street
Charlotte, North Carolina  28255
Attn: Ms. Deon Wright

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

Line of Credit Commitment: $12,500,000.00

Pro Rata Share of Line of Credit Commitment: 16.67%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           SOUTHTRUST BANK, NATIONAL
-------------------                            ASSOCIATION, individually and
420 North 20th Street                          as Co-Agent
Birmingham, AL 35203
Attn: Florida Corporate Banking (Orlando)      By:______________________________
                                                  Name:
Telecopy No. 727/898-5319                         Title:

Payment Office:
--------------

P.O. Box 830716
Birmingham, AL 35283-0716
Attn: Ms. Joanne Gundling (727/825-2733)

Telecopy No. 727/898-5419

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           ABN AMRO BANK, N.V.
-------------------
Southwest Financial Center
200 S. Biscayne Boulevard, 22nd Floor
Miami, Florida 33131-5311
Attn: Ms. Deborah Day Orozco
                                               By:_____________________________
                                                  Name:
                                                  Title:
Telecopy No.  (305)372-2397

Payment Office:
--------------

335 Madison Avenue, 16th Floor
New York, New York 10017
Attn: Trade Services Department

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                       PNC BANK, N.A.
-------------------

249 5th Avenue
Pittsburgh, Pennsylvania 15222
Attn: Mr. Doug King
                                           By:_______________________________
Telecopy No. 412/762-6484                     Name:
                                              Title:
Payment Office:
--------------

Two PNC Plaza/ Liberty Avenue.
Pittsburgh, Pennsylvania 15222
Attn: Ms. Anita Truchman

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           WACHOVIA BANK, N.A.
-------------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Mr. Bill McCamey
                                               By:______________________________
                                                  Name:
                                                  Title:
Telecopy No. (404)332-5016

Payment Office:
--------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Ms. Sharon Westmoreland

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                     [SIGNATURE PAGE TO SECOND AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                       THE FIFTH THIRD BANK
-------------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Mr. Daniel Klus                      By:_______________________________
Telecopy No. 513/579-5226                     Name: Daniel Klus
                                              Title:
Payment Office:
--------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Ms. Amy Buquo

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                                     -107-

<PAGE>

                               THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO LINE OF CREDIT AGREEMENT (this  "Amendment") is
made and entered  into as December 13, 2000,  by and among HUGHES  SUPPLY,  INC.
("Borrower"),   a  Florida   corporation,   SUNTRUST  BANK,  a  Georgia  banking
corporation and successor by merger to SunTrust Bank, Central Florida,  National
Association,  BANK OF AMERICA,  N.A.,  formerly  known as  NationsBank,  N.A., a
national banking association,  SOUTHTRUST BANK, an Alabama corporation, formerly
known as  SouthTrust  Bank,  N.A.,  ABN AMRO BANK,  N.V., a banking  corporation
organized under the laws of the Netherlands,  PNC BANK, N.A., a national banking
association,  WACHOVIA BANK,  N.A., a national  banking  association,  THE FIFTH
THIRD  BANK,  a  national   banking   association,   and  such  other  financial
institutions becoming a party hereto from time to time (individually, a "Lender"
and collectively, the "Lenders"), SUNTRUST BANK, as administrative agent for the
Lenders (in such capacity,  the "Administrative  Agent"), BANK OF AMERICA, N.A.,
as  syndication  agent  for the  Lenders  (in such  capacity,  the  "Syndication
Agent"), and SOUTHTRUST BANK, as Co-Agent for the Lenders (in such capacity, the
"Co-Agent").

                              W I T N E S S E T H:

         WHEREAS, the Lenders, the Administrative  Agent, the Syndication Agent,
the Co-Agent and the Borrower are party to that certain Line of Credit Agreement
dated as of January 26, 1999, as amended by that certain First Amendment to Line
of Credit  Agreement  dated as of  September  29, 1999 and that  certain  Second
Amendment to Line of Credit  Agreement  dated as of May 29, 2000 (as so amended,
and as further amended, restated, supplemented, or otherwise modified, the "Line
of Credit Agreement"),  pursuant to which the Lenders made available to Borrower
credit facilities subject to the terms and conditions set forth therein; and

         WHEREAS, the Lenders, the Administrative  Agent, the Syndication Agent,
the Co-Agent and the Borrower, at the request of the Borrower,  desire to extend
the Line of Credit Termination Date to July 17, 2001.

         NOW, THEREFORE,  in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the Line
of Credit Agreement and agree as follows:

                                  A. AMENDMENT

         1. The Line of Credit  Agreement  is hereby  amended by  replacing  the
definition of "Line of Credit  Termination Date" in Section 1.01 in its entirety
with the following:

                                    -108-
<PAGE>

               "Line of Credit  Termination  Date" shall mean the earlier of (i)
          July  17,  2001,  and  (ii)  the  date on  which  the  Line of  Credit
          Commitments are terminated in accordance with Article VIII.

                         B. CONDITIONS TO EFFECTIVENESS

         The   effectiveness   of  this  Amendment  is   conditioned   upon  the
Administrative  Agent's  receipt  of the  following,  each  dated as of the date
hereof,  in form and substance  reasonably  satisfactory  in all respects to the
Administrative Agent:

         (a) The duly executed original counterparts of this Amendment; and

         (b) The duly executed  Consent and  Ratification  of Guaranty  (Line of
Credit  Agreement),  dated  as of the  date  hereof,  by and  among  each of the
Subsidiaries  of  Borrower,  listed  on the  signature  pages  thereof  and  the
Administrative Agent.

                                C. MISCELLANEOUS

         21.  Borrower  represents and warrants that after giving effect to this
Amendment and the transactions  contemplated  hereby, all of the representations
and warranties  set forth in Article V of the Line of Credit  Agreement are true
and  correct in all  material  respects  and no Default or Event of Default  has
occurred and is continuing as of the date hereof.

         22. Except as expressly  provided herein,  the Line of Credit Agreement
shall continue in full force and effect,  and the unamended terms and conditions
of the Line of Credit Agreement are expressly  incorporated  herein and ratified
and  confirmed  in all  respects.  This  Amendment  is not  intended to be or to
create, nor shall it be construed as, a novation or an accord and satisfaction.

         23. From and after the date  hereof,  references  to the Line of Credit
Agreement shall be references to the Line of Credit Agreement as amended hereby.

         24. This Amendment constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. Neither this Amendment nor any
provision  hereof may be changed,  waived,  discharged,  modified or  terminated
orally,  but only by an instrument in writing signed by the parties  required to
be a party thereto pursuant to Section 10.02 of the Line of Credit Agreement.

         25. THIS AMENDMENT  SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
AND  ENFORCED  IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF GEORGIA  (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

                                     -109-

<PAGE>

         26. This Amendment may be executed in any number of counterparts,  each
of which shall be deemed to be an  original  and all of which,  taken  together,
shall  constitute  one and the same  document,  and shall be effective as of the
date first above written.

         27.  Borrower  shall  reimburse  the   Administrative   Agent  for  the
reasonable  fees  and  expenses  of  counsel  for the  Administrative  Agent  in
connection with this Amendment.

                                     -110-

<PAGE>

         IN  WITNESS  WHEREOF,  the  Borrower,  the  Administrative  Agent,  the
Syndication  Agent,  the  Co-Agent  and the  Required  Lenders  have caused this
Amendment to be executed as of the date first above written.

Address for Notices:                    BORROWER:
-------------------

20 N. Orange Avenue                     HUGHES SUPPLY, INC.
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf              By:_______________________________
                                           J. Stephen Zepf
                                           Treasurer

                                        Attest:________________________________
                                               Ben Butterfield
                                               Secretary

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           SUNTRUST BANK, formerly known as
-------------------                            SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION,                          individually and as
200 S. Orange Avenue                           Administrative Agent
MC 2064
Orlando, Florida 32801
                                               By: ____________________________
Attn: Mr. William C. Barr                          William C. Barr, III
                                                   Vice President
Telecopy No.  407/237-4076

Payment Office:
--------------

200 S. Orange Avenue
MC 2064
Orlando, Florida 32801

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

Line of Credit Commitment: $13,750,000.00

Pro Rata Share of Line of Credit Commitment: 18.33%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:
-------------------                        BANK OF AMERICA, N.A., formerly known
                                           as NATIONSBANK, N.A., individually
100 SE 2nd Street, 14th Floor              and as Syndication Agent
Miami, Florida 33131
Attn: Mr. Richard Starke
                                           By:_______________________________
Telecopy No.                                  Name:
                                              Title:

Payment Office:
--------------

Bank of America, N.A.
101 N. Tryon Street
Charlotte, North Carolina  28255
Attn: Ms. Deon Wright

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

Line of Credit Commitment: $25,000,000.00

Pro Rata Share of Line of Credit Commitment: 33.34%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                         SOUTHTRUST BANK, formerly known as
-------------------                          SouthTrust Bank, N.A., individually
                                             and as Co-Agent
420 North 20th Street
Birmingham, AL 35203
Attn: Florida Corporate Banking (Orlando)    By:_______________________________
                                                Name:
Telecopy No. 727/898-5319                       Title:

Payment Office:
--------------

P.O. Box 830716
Birmingham, AL 35283-0716
Attn: Ms. Joanne Gundling (727/825-2733)

Telecopy No. 727/898-5419

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          ABN AMRO BANK, N.V.
-------------------
Southwest Financial Center
200 S. Biscayne Boulevard, 22nd Floor
Miami, Florida 33131-5311
Attn: Ms. Deborah Day Orozco
                                              By:_______________________________
                                                 Name:
                                                 Title:
Telecopy No.  (305)372-2397

Payment Office:
--------------

335 Madison Avenue, 16th Floor
New York, New York 10017
Attn: Trade Services Department

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          PNC BANK, N.A.
-------------------

249 5th Avenue
Pittsburgh, Pennsylvania 15222
Attn: Mr. Doug King
                                              By:_______________________________
Telecopy No. 412/762-6484                        Name:
                                                 Title:
Payment Office:
--------------

Two PNC Plaza/ Liberty Avenue.
Pittsburgh, Pennsylvania 15222
Attn: Ms. Anita Truchman

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                         WACHOVIA BANK, N.A.
-------------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Mr. Bill McCamey                       By:_______________________________
                                                Name:
                                                Title:
Telecopy No. (404)332-5016

Payment Office:
--------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Ms. Sharon Westmoreland

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                      [SIGNATURE PAGE TO THIRD AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                        THE FIFTH THIRD BANK
-------------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Mr. Daniel Klus                       By:_______________________________
Telecopy No. 513/579-5226                      Name: Daniel Klus
                                               Title:
Payment Office:
--------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Ms. Amy Buquo

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                                     -119-

<PAGE>

                  FOURTH AMENDMENT TO LINE OF CREDIT AGREEMENT

         THIS FOURTH AMENDMENT TO LINE OF CREDIT AGREEMENT (this "Amendment") is
made and entered  into as December 20, 2000,  by and among HUGHES  SUPPLY,  INC.
("Borrower"),   a  Florida   corporation,   SUNTRUST  BANK,  a  Georgia  banking
corporation and successor by merger to SunTrust Bank, Central Florida,  National
Association,  BANK OF AMERICA,  N.A.,  formerly  known as  NationsBank,  N.A., a
national banking association,  SOUTHTRUST BANK, an Alabama corporation, formerly
known as  SouthTrust  Bank,  N.A.,  ABN AMRO BANK,  N.V., a banking  corporation
organized under the laws of the Netherlands,  PNC BANK, N.A., a national banking
association,  WACHOVIA BANK,  N.A., a national  banking  association,  THE FIFTH
THIRD  BANK,  a  national   banking   association,   and  such  other  financial
institutions becoming a party hereto from time to time (individually, a "Lender"
and collectively, the "Lenders"), SUNTRUST BANK, as administrative agent for the
Lenders (in such capacity,  the "Administrative  Agent"), BANK OF AMERICA, N.A.,
as  syndication  agent  for the  Lenders  (in such  capacity,  the  "Syndication
Agent"), and SOUTHTRUST BANK, as Co-Agent for the Lenders (in such capacity, the
"Co-Agent").

                              W I T N E S S E T H:

         WHEREAS, the Lenders, the Administrative  Agent, the Syndication Agent,
the Co-Agent and the Borrower are party to that certain Line of Credit Agreement
dated as of January 26, 1999, as amended by that certain First Amendment to Line
of  Credit  Agreement  dated as of  September  29,  1999,  that  certain  Second
Amendment to Line of Credit Agreement dated as of May 29, 2000, and that certain
Third Amendment to Line of Credit Agreement dated as of December __, 2000 (as so
amended, and as further amended, restated,  supplemented, or otherwise modified,
the "Line of Credit Agreement"), pursuant to which the Lenders made available to
Borrower  credit  facilities  subject  to the  terms  and  conditions  set forth
therein; and

         WHEREAS, the Lenders, the Administrative  Agent, the Syndication Agent,
the Co-Agent and the Borrower,  at the request of the Borrower,  desire to amend
certain  terms of the Line of Credit  Agreement,  all as more  particularly  set
forth below..

         NOW, THEREFORE,  in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the Line
of Credit Agreement and agree as follows:

                                  A. AMENDMENTS

         1. Section 7.01 of the Credit Agreement is hereby amended by adding the
following subsections (h) and (i) in order:

               (h)  Indebtedness  consisting  of (x) Series A Senior Notes dated
          December 21,

                                     -120-

<PAGE>

          2000 due November 30, 2003, with an average life of three years in the
          aggregate  amount of $19,000,000  with an interest rate of 8.27%;  (y)
          Series B Senior  Notes dated  December 21, 2000 due November 30, 2005,
          with an  average  life of  three  years  in the  aggregate  amount  of
          $28,000,000  with an interest  rate of 8.27%;  and (z) Series C Senior
          Notes dated  December 21, 2000 due November 30, 2007,  with an average
          life of five years in the  aggregate  amount of  $103,000,000  with an
          interest rate of 8.42%;

               (i)  Indebtedness  incurred  in  connection  with  financing  the
          construction  of the Borrower's new branch located in Miami,  Florida;
          provided that the aggregate principal amount of Indebtedness  incurred
          in connection with the Miami branch does not exceed  $15,000,000;  and
          Indebtedness incurred in connection with financing the construction of
          the Borrower's headquarters located in Orlando, Florida; provided that
          the aggregate principal amount of Indebtedness  incurred in connection
          with the Orlando headquarters does not exceed $25,000,000.

         2. Section 7.02 of the Revolving  Credit Agreement is hereby amended by
replacing  subsection  (f) with the  following  subsection  (f) and  adding  the
following subsection (g) in order:

               (f) any Lien on any property securing  Indebtedness  described in
          Section 7.01(i), incurred for the purpose of financing all or any part
          of the construction cost of such property and any refinancing thereof;
          provided that such Lien does not extend to any other property;

               (g) Liens (other than those  permitted by paragraphs  (a) through
          (f) of this Section 7.02) encumbering assets having an Asset Value not
          greater than $20,000,000 in the aggregate at any one time.

                                B. MISCELLANEOUS

         28.  Borrower  represents and warrants that after giving effect to this
Amendment and the transactions  contemplated  hereby, all of the representations
and warranties  set forth in Article V of the Line of Credit  Agreement are true
and  correct in all  material  respects  and no Default or Event of Default  has
occurred and is continuing as of the date hereof.

         29. Except as expressly  provided herein,  the Line of Credit Agreement
shall continue in full force and effect,  and the unamended terms and conditions
of the Line of Credit Agreement are expressly  incorporated  herein and ratified
and  confirmed  in all  respects.  This  Amendment  is not  intended to be or to
create, nor shall it be construed as, a novation or an accord and satisfaction.

         30. From and after the date  hereof,  references  to the Line of Credit
Agreement shall be references to the Line of Credit Agreement as amended hereby.

         31. This Amendment constitutes the entire agreement between the parties
hereto with

                                     -121-

<PAGE>

respect to the subject matter  hereof.  Neither this Amendment nor any provision
hereof may be changed,  waived,  discharged,  modified or terminated orally, but
only by an  instrument in writing  signed by the parties  required to be a party
thereto pursuant to Section 10.02 of the Line of Credit Agreement.

         32. THIS AMENDMENT  SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
AND  ENFORCED  IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF GEORGIA  (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         33. This Amendment may be executed in any number of counterparts,  each
of which shall be deemed to be an  original  and all of which,  taken  together,
shall  constitute  one and the same  document,  and shall be effective as of the
date first above written.

         34.  Borrower  shall  reimburse  the   Administrative   Agent  for  the
reasonable  fees  and  expenses  of  counsel  for the  Administrative  Agent  in
connection with this Amendment.

                                     -122-

<PAGE>

         IN  WITNESS  WHEREOF,  the  Borrower,  the  Administrative  Agent,  the
Syndication  Agent,  the  Co-Agent  and the  Required  Lenders  have caused this
Amendment to be executed as of the date first above written.

Address for Notices:                      BORROWER:
-------------------

20 N. Orange Avenue                       HUGHES SUPPLY, INC.
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf                By:___________________________________
                                             J. Stephen Zepf
                                             Treasurer

                                          Attest:_______________________________
                                                 Ben Butterfield
                                                 Secretary

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          SUNTRUST BANK, formerly known as
-------------------                           SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION,                         individually and as
200 S. Orange Avenue                          Administrative Agent
MC 2064
Orlando, Florida 32801
                                              By: ______________________________
Attn: Mr. William C. Barr                         William C. Barr, III
                                                  Vice President
Telecopy No.  407/237-4076

Payment Office:
--------------

200 S. Orange Avenue
MC 2064
Orlando, Florida 32801

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

Line of Credit Commitment: $13,750,000.00

Pro Rata Share of Line of Credit Commitment: 18.33%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:
-----------------
                                             BANK OF AMERICA, N.A., formerly
                                             known as NATIONSBANK, N.A.,
100 SE 2nd Street, 14th Floor                individually and as Syndication
Miami, Florida 33131                         Agent
Attn: Mr. Richard Starke
                                             By:_______________________________
Telecopy No.                                    Name:
                                                Title:

Payment Office:
--------------

Bank of America, N.A.
101 N. Tryon Street
Charlotte, North Carolina  28255
Attn: Ms. Deon Wright

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

Line of Credit Commitment: $25,000,000.00

Pro Rata Share of Line of Credit Commitment: 33.34%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                           SOUTHTRUST BANK, formerly known
-----------------                              as SouthTrust Bank, N.A.,
                                               individually and as Co-Agent
420 North 20th Street
Birmingham, AL 35203
Attn: Florida Corporate Banking (Orlando)      By:______________________________
                                                  Name:
Telecopy No. 727/898-5319                         Title:

Payment Office:
--------------

P.O. Box 830716
Birmingham, AL 35283-0716
Attn: Ms. Joanne Gundling (727/825-2733)

Telecopy No. 727/898-5419

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:
-------------------
                                               ABN AMRO BANK, N.V.

208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attn:  Credit Administration                   By:______________________________
Telecopy No. 312/992-5111                         Name:
                                                  Title:

and
                                               By:______________________________
One Ravinia Drive, Suite 1200                     Name:
Atlanta, Georgia  30346                           Title:
Attn:  Mr. Pat Fischer
Telecopy No. 770/399-7397

Payment Office:
--------------

208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attn:  Loan Administration

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                          PNC BANK, N.A.
-------------------

249 5th Avenue
Pittsburgh, Pennsylvania 15222
Attn: Mr. Doug King
                                              By:______________________________
Telecopy No. 412/762-6484                        Name:
                                                 Title:
Payment Office:
--------------

Two PNC Plaza/ Liberty Avenue.
Pittsburgh, Pennsylvania 15222
Attn: Ms. Anita Truchman

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

Line of Credit Commitment: $6,250,000.00

Pro Rata Share of Line of Credit Commitment: 8.33%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                            WACHOVIA BANK, N.A.
-----------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Mr. Bill McCamey
                                                By:_____________________________
                                                   Name:
                                                   Title:
Telecopy No. (404)332-5016

Payment Office:
--------------

191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Attn: Ms. Sharon Westmoreland

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

Line of Credit Commitment: $10,000,000.00

Pro Rata Share of Line of Credit Commitment: 13.33%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]

<PAGE>

Address for Notices:                         THE FIFTH THIRD BANK
------------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Mr. Daniel Klus
                                             By:_______________________________
Telecopy No. 513/579-5226                       Name: Daniel Klus
                                                Title:
Payment Office:
--------------

MD 109054
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Ms. Amy Buquo

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

Line of Credit Commitment: $3,750,000.00

Pro Rata Share of Line of Credit Commitment: 5.00%

                     [SIGNATURE PAGE TO FOURTH AMENDMENT TO
                            LINE OF CREDIT AGREEMENT]--------------------------------------------------------------------------------

                               HUGHES SUPPLY, INC.

          $19,000,000 8.27% Series A Senior Notes due November 30, 2003

          $28,000,000 8.27% Series B Senior Notes due November 30, 2005

         $103,000,000 8.42% Series C Senior Notes due November 30, 2007

                             NOTE PURCHASE AGREEMENT

                             Dated December 21, 2000

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

<PAGE>
                                TABLE OF CONTENTS

1.   AUTHORIZATION OF NOTES....................................................1

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

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

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

     4.1      Representations and Warranties...................................2

     4.2      Performance; No Default..........................................2

     4.3      Compliance Certificates..........................................3

     4.4      Opinions of Counsel..............................................3

     4.5      Purchase Permitted by Applicable Law, etc........................3

     4.6      Sale of Other Notes..............................................4

     4.7      Payment of Special Counsel Fees..................................4

     4.8      Private Placement Number.........................................4

     4.9      Changes in Corporate Structure...................................4

     4.10     Proceedings and Documents........................................4

     4.11     Guarantees of Subsidiaries.......................................4

     4.12     Copy of Bank Credit Agreements...................................5

     4.13     Dismissal of Case/Affirmative Coverage Response..................5

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

     5.1      Organization; Power and Authority................................5

     5.2      Authorization, etc...............................................5

     5.3      Disclosure.......................................................6

     5.4      Organization and Ownership of Shares of Subsidiaries;
              Affiliates.......................................................6

     5.5      Financial Statements.............................................7

     5.6      Compliance With Laws, Other Instruments, etc.....................7

     5.7      Governmental Authorizations, etc.................................8

     5.8      Litigation; Observance of Agreements, Statutes and Orders........8

     5.9      Taxes............................................................8

     5.10     Title to Property; Leases........................................9

     5.11     Licenses, Permits, etc...........................................9

<PAGE>

     5.12     Compliance With ERISA............................................9

     5.13     Private Offering by the Company.................................10

     5.14     Use of Proceeds; Margin Regulations.............................10

     5.15     Existing Debt; Future Liens.....................................11

     5.16     Foreign Assets Control Regulations, etc.........................11

     5.17     Status Under Certain Statutes...................................11

     5.18     Environmental Matters...........................................12

     5.19     Certain Matters.................................................12

6.   REPRESENTATIONS OF THE PURCHASER.........................................13

     6.1      Purchase for Investment.........................................13

     6.2      Source of Funds.................................................13

7.   INFORMATION AS TO COMPANY................................................15

     7.1      Financial and Business Information..............................15

     7.2      Officer's Certificate...........................................18

     7.3      Inspection......................................................19

8.   PREPAYMENT OF THE NOTES..................................................19

     8.1(A)   Series A Required Payments......................................19

     8.1(B)   Series B Required Prepayments...................................20

     8.1(C)   Series C Required Prepayments...................................20

     8.2      Optional Prepayments With Make-Whole Amount.....................20

     8.3      Allocation of Partial Prepayments...............................21

     8.4      Maturity; Surrender, etc........................................21

     8.5      Mandatory Offer to Prepay Upon Change of Control................21

     8.6      Make-Whole Amount...............................................23

     8.7      Purchase of Notes...............................................24

9.   AFFIRMATIVE COVENANTS....................................................24

     9.1      Compliance With Law.............................................25

     9.2      Insurance.......................................................25

     9.3      Maintenance of Properties.......................................25

     9.4      Payment of Taxes and Claims.....................................25

                                       ii

<PAGE>

     9.5      Corporate Existence, etc........................................26

     9.6      Covenant To Secure Notes Equally................................26

     9.7      Covenant Relating to Subsidiary Guarantees......................26

     9.8      Ownership of Subsidiary Guarantors..............................27

10.  NEGATIVE COVENANTS.......................................................27

     10.1     Funded Debt.....................................................27

     10.2     Current Debt....................................................27

     10.3(A)  Minimum Net Worth...............................................28

     10.3(B)  Adjusted Interest Coverage Ratio................................28

     10.4     Restricted Payments.............................................28

     10.5     Liens...........................................................28

     10.6     Priority Debt...................................................30

     10.7     Merger or Consolidation.........................................30

     10.8     Sale of Assets..................................................31

     10.9     Transactions With Related Party.................................35

     10.10    Nature of Business..............................................35

     10.11    Limitation on Dividend and Other Payment Restrictions Affecting
              Subsidiaries....................................................35

11.  EVENTS OF DEFAULT........................................................36

12.  REMEDIES ON DEFAULT, ETC.................................................38

     12.1     Acceleration....................................................38

     12.2     Other Remedies..................................................39

     12.3     Rescission......................................................39

     12.4     No Waivers or Election of Remedies, Expenses, etc...............40

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................40

     13.1     Registration of Notes...........................................40

     13.2     Transfer and Exchange of Notes..................................40

     13.3     Replacement of Notes............................................41

14.  PAYMENTS ON NOTES........................................................41

     14.1     Place of Payment................................................41

     14.2     Home Office Payment.............................................41

                                      iii

<PAGE>

15.  EXPENSES, ETC............................................................42

     15.1     Transaction Expenses............................................42

     15.2     Survival........................................................42

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.............43

17.  AMENDMENT AND WAIVER.....................................................43

     17.1     Requirements....................................................43

     17.2     Solicitation of Holders of Notes................................43

     17.3     Binding Effect, etc.............................................44

     17.4     Notes Held by Company, etc......................................44

18.  NOTICES..................................................................44

19.  REPRODUCTION OF DOCUMENTS................................................45

20.  CONFIDENTIAL INFORMATION.................................................45

21.  SUBSTITUTION OF PURCHASER................................................47

22.  MISCELLANEOUS............................................................47

     22.1     Successors and Assigns..........................................47

     22.2     Payments Due on Non-Business Days...............................47

     22.3     Severability....................................................47

     22.4     Construction....................................................48

     22.5     Counterparts....................................................48

     22.6     Governing Law...................................................48

SCHEDULE A    --   Information Relating to Purchasers

SCHEDULE B    --   Defined Terms

SCHEDULE 4.9  --   Changes in Corporate Structure

SCHEDULE 4.11 --   Material  Subsidiaries  Executing and Delivering  Guarantees
                   on Date of closing

SCHEDULE 5.3  --   Disclosure Materials

                                       iv

<PAGE>

SCHEDULE 5.4    --  Subsidiaries of the Company and Ownership of
                      Subsidiary Stock; Company's Affiliates; Company's
                      Directors and Senior Officers

SCHEDULE 5.5    --  Financial Statements

SCHEDULE 5.8    --  Certain Litigation

SCHEDULE 5.11   --  Patents, etc.

SCHEDULE 5.14   --  Use of Proceeds

SCHEDULE 5.15   --  Existing Debt

SCHEDULE 10.5   --  Liens

EXHIBIT 1       --  Form of Senior Note

EXHIBIT 4.4(a)  --  Matters To Be Covered by Opinion of General
                     Counsel for the Company

EXHIBIT 4.4(b)  --  Matters To Be Covered by Opinion of Special
                     Counsel to the Purchasers

EXHIBIT 4.11(a) --  Form of Guarantee

EXHIBIT 4.11(b) --  Form of Contribution Agreement

                                       v

<PAGE>

          $19,000,000 8.27% Series A Senior Notes due November 30, 2003

         $28,000,000 8.27% Series B Senior Notes due November 30, 2005

         $103,000,000 8.42% Series C Senior Notes due November 30, 2007

                                                               December 21, 2000

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

Ladies and Gentlemen:

         Hughes Supply, Inc., a Florida corporation (the "Company"), agrees with
you as follows:

1.      AUTHORIZATION OF NOTES.

         The Company will  authorize the issue and sale of (i) Nineteen  Million
Dollars  ($19,000,000)  aggregate principal amount of its 8.27% Senior Notes due
November  30, 2003 (the "Series A Notes"),  (ii)  Twenty-Eight  Million  Dollars
($28,000,000)  aggregate principal amount of its 8.27% Senior Notes due November
30, 2005 (the "Series B Notes"),  and (iii) One  Hundred-Three  Million  Dollars
($103,000,000) aggregate principal amount of its 8.42% Senior Notes due November
30, 2007 (the "Series C Notes";  the Series A Notes,  the Series B Notes and the
Series C Notes shall be collectively  referred to herein as the "Notes" and each
referred to herein as a "Note" and the term "Note" shall  include any such notes
issued in substitution  therefor pursuant to Section 13 of this Agreement or the
Other Agreements (as hereinafter defined)).  The Notes shall be substantially in
the form set out in Exhibit 1, with such  changes  therefrom,  if any, as may be
approved  by you  and  the  Company.  Certain  capitalized  terms  used  in this
Agreement are defined in Schedule B;  references to a "Schedule" or an "Exhibit"
are, unless  otherwise  specified,  to a Schedule or an Exhibit attached to this
Agreement.

2.      SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will  purchase  from the  Company,  at the Closing
provided  for in  Section 3, Notes of a given  Series in the  principal  amounts
specified  opposite your respective names in Schedule A at the purchase price of
100% of the principal amount thereof.  Contemporaneously with entering into this
Agreement,  the Company is entering into separate Note Purchase  Agreements (the
"Other  Agreements")  identical  with  this  Agreement  with  each of the  other
purchasers named in Schedule A (the "Other

<PAGE>

Purchasers"),  providing  for  the  sale at such  Closing  to each of the  Other
Purchasers  of Notes in the  principal  amount  specified  opposite  its name in
Schedule A. Your  respective  obligations  hereunder and the  obligations of the
Other   Purchasers  under  the  Other  Agreements  are  several  and  not  joint
obligations  and you shall have no obligation  under any Other  Agreement and no
liability  to any Person for the  performance  or  non-performance  by any Other
Purchaser thereunder.

3.      CLOSING.

         The sale and purchase of the Notes to be purchased by you and the Other
Purchasers  shall occur at the offices of Alston & Bird LLP, 1201 West Peachtree
Street,  Atlanta,  Georgia,  at 9:00  a.m.,  Atlanta  time,  at a  closing  (the
"Closing") on December 21, 2000, or on such other Business Day thereafter as may
be agreed upon by the Company and you and the Other  Purchasers.  At the Closing
the Company  will deliver to you the Notes to be purchased by you in the form of
a single Note for each series (or such greater number of Notes in  denominations
of at least  $500,000  as you may  request)  dated the date of the  Closing  and
registered in your name (or in the name of your  nominee),  against  delivery by
you to the Company or its order of immediately  available funds in the amount of
the purchase price therefor by wire transfer of immediately  available funds for
the account of the Company to Wachovia Bank, N.A., ABA Number 061000010, Account
Number  13028327,   Account  Name  "Hughes  Supply,  Inc.,"  Atlanta,   Georgia,
Reference:  Private Placement Disbursement . If at the Closing the Company shall
fail to tender such Notes to you as provided  above in this Section 3, or any of
the  conditions  specified  in Section 4 shall not have been  fulfilled  to your
satisfaction,   you  shall,  at  your  election,  be  relieved  of  all  further
obligations  under this  Agreement,  without  thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.

4.      CONDITIONS TO CLOSING.

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

4.1     Representations and Warranties.

         The  representations  and  warranties of the Company in this  Agreement
shall be correct when made and at the time of the Closing.

4.2     Performance; No Default.

         The Company shall have  performed and complied with all  agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after  giving  effect to the issue and sale
of the Notes (and the  application of the proceeds  thereof as  contemplated  by
Schedule  5.14) no  Default  or Event of  Default  shall  have  occurred  and be
continuing.  Neither the Company nor any

                                       2

<PAGE>

Subsidiary  shall  have  entered  into  any  transaction  since  the date of the
Memorandum that would have been prohibited by Sections 10.1 through 10.10 hereof
had such Sections applied since such date.

4.3     Compliance Certificates.

         (a) Officer's  Certificate.  The Company shall have delivered to you an
Officer's  Certificate,  dated  the  date of the  Closing,  certifying  that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

         (b) Secretary's Certificates. The Company and each Subsidiary executing
the  Guarantee  referenced  in  Section  4.11  shall  have  delivered  to  you a
certificate  from the Secretary or an Assistant  Secretary  certifying as to the
resolutions  attached  thereto and other corporate  proceedings  relating to the
authorization,  execution and delivery of, in the case of the Company, the Notes
and the  Agreements  and, in the case of such  Subsidiaries,  the  Guarantee and
Contribution Agreement referenced in Section 4.11.

4.4     Opinions of Counsel.

         You shall have received opinions in form and substance  satisfactory to
you,  dated the date of the Closing (a) from  Benjamin P.  Butterfield,  General
Counsel for the Company,  covering  the matters set forth in Exhibit  4.4(a) and
covering such other matters incident to the transactions  contemplated hereby as
you or your counsel may reasonably  request and (b) from Alston & Bird LLP, your
special counsel in connection with such  transactions,  covering the matters set
forth in  Exhibit  4.4(b)  and  covering  such other  matters  incident  to such
transactions as you may reasonably request.

4.5     Purchase Permitted by Applicable Law, etc.

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

                                       3

<PAGE>

4.6     Sale of Other Notes.

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

4.7     Payment of Special Counsel Fees.

         Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the reasonable fees,  charges and disbursements of
your  special  counsel  referred to in Section 4.4 to the extent  reflected in a
statement  of such  counsel  rendered to the Company at least one  Business  Day
prior to the Closing.

4.8     Private Placement Number.

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

4.9     Changes in Corporate Structure.

         Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any  substantial  part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.

4.10    Proceedings and Documents.

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

4.11    Guarantees of Subsidiaries.

         Each of the Material Subsidiaries specified in Schedule 4.11 shall have
executed and delivered a Guarantee in the form set forth in Exhibit  4.11(a) and
the Company and each such Material  Subsidiary shall have executed and delivered
a Contribution Agreement in the form set forth in Exhibit 4.11(b).

                                       4

<PAGE>

4.12    Copy of Bank Credit Agreements.

         The  Company  shall have  delivered  to each  Purchaser  a copy of each
existing Bank Credit Agreement,  including all amendments thereto,  certified as
true and correct by a Senior Financial Officer.

4.13    Dismissal of Case/Affirmative Coverage Response

         The Company shall have delivered to counsel to the Purchasers a copy of
the Order dated December 14, 2000 issued by the Superior Court of Washington for
King County by which the Company is  dismissed,  with  prejudice,  from the Case
referred to in Section 5.19 hereof.  The Company shall have delivered to counsel
to  the  Purchasers  a  copy  of  the  affirmative   coverage  response  of  the
CNA-affiliated insurance companies referred to in Section 5.19 hereof.

5.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to you that:

5.1     Organization; Power and Authority.

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

5.2     Authorization, etc.

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

                                       5

<PAGE>

5.3     Disclosure.

         The Company,  through its agent,  Banc of America  Securities  LLC, has
delivered  to you  and  each  Other  Purchaser  a copy  of a  Private  Placement
Memorandum, dated October 2000 (the "Memorandum"),  relating to the transactions
contemplated hereby. The Memorandum fairly describes,  in all material respects,
the general  nature of the business and principal  properties of the Company and
its  Subsidiaries.  Except as disclosed in Schedule  5.3,  this  Agreement,  the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial  statements  listed in Schedule 5.5, taken as a whole,  do not
contain any untrue  statement  of a material  fact or omit to state any material
fact  necessary to make the  statements  therein not  misleading in light of the
circumstances  under which they were made. Except as disclosed in the Memorandum
or as  expressly  described  in  Schedule  5.3,  or in  one  of  the  documents,
certificates  or  other  writings   identified  therein,  or  in  the  financial
statements  listed in Schedule 5.5, since July 31,  2000January 28, 2000,  there
has been no change in the financial condition,  operations, business, properties
or prospects of the Company or any Subsidiary  except changes that  individually
or in the aggregate could not reasonably be expected to have a Material  Adverse
Effect.  There is no fact known to the Company that could reasonably be expected
to have a Material  Adverse  Effect that has not been set forth herein or in the
Memorandum or in the other documents,  certificates and other writings delivered
to you by or on behalf of the Company  specifically  for use in connection  with
the transactions contemplated hereby.

5.4     Organization and Ownership of Shares of Subsidiaries; Affiliates.

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

         (b) All of the  outstanding  shares of capital stock or similar  equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued,  are fully paid and nonassessable
and are owned by the  Company or another  Subsidiary  free and clear of any Lien
(except as otherwise  disclosed in Schedule  5.4). All of the entities set forth
in  Schedule  5.4 are  Consolidated.  Schedule  4.11  sets  forth  all  Material
Subsidiaries of the Company as of the date hereof.

         (c) Each  Subsidiary  identified  in Schedule 5.4 is a  corporation  or
other legal entity duly organized,  validly  existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation  or other legal entity and is in good standing in each  jurisdiction
in which such  qualification is required by law, other than those  jurisdictions
as to which the  failure  to be so  qualified  or in good

                                       6

<PAGE>

standing could not, individually or in the aggregate,  reasonably be expected to
have a Material Adverse Effect.  Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the  business it  transacts  and proposes to
transact.  The Guarantee and Contribution Agreement to be executed and delivered
by each Material Subsidiary referenced in Section 4.11 have been duly authorized
by all necessary  corporate action on the part of each such Material  Subsidiary
and such Guarantee and Contribution Agreement will constitute a legal, valid and
binding obligation of such Material Subsidiary enforceable against such Material
Subsidiary  except  as such  enforceability  may be  limited  by (i)  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  the  enforcement  of  creditors'  rights  generally  and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         (d) No  Subsidiary  is a party to, or  otherwise  subject  to any legal
restriction or any agreement (other than this Agreement,  the agreements  listed
on Schedule 5.4 and  customary  limitations  imposed by corporate  law statutes)
restricting  the ability of such  Subsidiary  to pay dividends out of profits or
make any other  similar  distributions  of profits to the  Company or any of its
Subsidiaries  that owns  outstanding  shares of capital stock or similar  equity
interests of such Subsidiary.

5.5     Financial Statements.

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

5.6     Compliance With Laws, Other Instruments, etc.

         The  execution,  delivery  and  performance  by  the  Company  of  this
Agreement and the Notes and by the Material  Subsidiaries  referenced in Section
4.11 of the Guarantee and Contribution Agreement referenced therein will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the  creation  of any Lien in  respect  of any  property  of the  Company or any
Subsidiary  under, any indenture,  mortgage,  deed of trust,  loan,  purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument  to which  the  Company  or any  Subsidiary  is bound or by which the
Company or any Subsidiary or any of their respective  properties may be bound or
affected,  (ii)  conflict  with  or  result  in a  breach  of any of the  terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator

                                       7

<PAGE>

or Governmental  Authority  applicable to the Company or any Subsidiary or (iii)
violate  any  provision  of any  statute  or  other  rule or  regulation  of any
Governmental Authority applicable to the Company or any Subsidiary.

5.7     Governmental Authorizations, etc.

         No consent,  approval or authorization  of, or registration,  filing or
declaration with, any Governmental  Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the Notes
or of the Guarantee and the Contribution Agreement referenced in Section 4.11 by
the Material Subsidiaries referenced therein.

5.8     Litigation; Observance of Agreements, Statutes and Orders.

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

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

5.9     Taxes.

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

                                       8

<PAGE>

ended  1996  and any  resulting  deficiencies,  additional  assessments,  fines,
penalties,  interest or other  charge  have  either been paid for or  adequately
reserved for in the financial  statements.  Other than certain  ordinary  course
audits of state  sales and income  tax  returns,  neither  the  Company  nor any
Subsidiary  is  presently  under,  nor has any of them  received  notice of, any
investigation  or audit by any national,  regional,  provincial,  local or other
agency concerning any fiscal year or period ended prior to the date hereof.  All
taxes required to be withheld from employees of the Company and its Subsidiaries
for income and social security taxes have been properly withheld.

5.10    Title to Property; Leases.

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

5.11    Licenses, Permits, etc.

         Except as disclosed in Schedule 5.11,

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

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

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

5.12    Compliance With ERISA.

         (a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance  with all  applicable  laws except for such instances of
noncompliance  as have not resulted in and could not  reasonably  be expected to
result

                                       9

<PAGE>

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

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

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

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

5.13    Private Offering by the Company.

         Neither  the  Company  nor anyone  acting on its behalf has offered the
Notes or any similar  securities  for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any  person  other  than you,  the Other  Purchasers  and not more than 50 other
Institutional  Investors,  each of which has been offered the Notes at a private
sale for  investment.  Neither the  Company,  nor, to the best  knowledge of the
Company,  anyone acting on its behalf has taken,  or will take,  any action that
would subject the issuance or sale of the Notes to the registration requirements
of Section 5 of the Securities Act.

5.14    Use of Proceeds; Margin Regulations.

         The  Company  will apply the  proceeds  of the sale of the Notes as set
forth in  Schedule  5.14.  No part of the  proceeds  from the sale of the  Notes
hereunder  will be used,  directly or  indirectly,  for the purpose of buying or
carrying  any margin  stock  within

                                       10

<PAGE>

the meaning of  Regulation U of the Board of  Governors  of the Federal  Reserve
System (12 CFR 207),  or for the purpose of buying or carrying or trading in any
securities under such  circumstances as to involve the Company in a violation of
Regulation  X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation  of  Regulation  T of said Board (12 CFR 220).  Margin  stock does not
constitute more than 5% of the value of the  Consolidated  Assets of the Company
and its  Subsidiaries  and the Company does not have any present  intention that
margin stock will constitute  more than 5% of the value of such assets.  As used
in this Section,  the terms  "margin  stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.

5.15    Existing Debt; Future Liens.

         (a) Except as described  therein,  Schedule  5.15 sets forth a complete
and correct list of all outstanding  Debt of the Company and its Subsidiaries as
of November 30, 2000,  since which date there has been no Material change in the
amounts,  interest rates,  sinking funds,  installment payments or maturities of
the  Debt of the  Company  or its  Subsidiaries.  Neither  the  Company  nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment  of any  principal  or  interest  on any  Debt  of the  Company  or such
Subsidiary  and no event or  condition  exists  with  respect to any Debt of the
Company or any Subsidiary that would permit (or that with notice or the lapse of
time,  or both,  would  permit) one or more Persons to cause such Debt to become
due and payable  before its stated  maturity or before its  regularly  scheduled
dates of payment.

         (b) Except as disclosed in Schedule  5.15,  neither the Company nor any
Subsidiary  has agreed or  consented  to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property,  whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.

5.16    Foreign Assets Control Regulations, etc.

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

5.17    Status Under Certain Statutes.

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

                                       11

<PAGE>

5.18    Environmental Matters.

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

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

          (b) neither the  Company  nor any of its  Subsidiaries  has stored any
     Hazardous  Materials on real  properties now or formerly  owned,  leased or
     operated by any of them and has not disposed of any Hazardous  Materials in
     a manner contrary to any Environmental Laws in each case in any manner that
     could reasonably be expected to result in a Material Adverse Effect; and

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

5.19    Certain Matters.

         Pursuant to an Asset Purchase  Agreement  dated as of November 30, 1999
(the  "Asset  Purchase  Agreement")  by and  between  the  Company  and  Western
Utilities Supply Co. (the "Seller"),  the Company purchased substantially all of
the assets of the Seller on February 1, 2000.  The asset purchase was negotiated
at arm's  length  and the  Company  paid the  Seller  fair  value for the assets
purchased.  The Asset Purchase  Agreement sets forth  substantially all material
terms of the asset  purchase and neither the Company nor any  Subsidiary has any
continuing  obligation to purchase  products or services from, or otherwise deal
with, the Seller.

         Pursuant to Section 2(b) of the Asset Purchase  Agreement,  the Company
assumed no liabilities (including any tort liabilities) of the Seller other than
certain  ledger  accounts.  Pursuant to Section  7(b)(iv) of the Asset  Purchase
Agreement,  the Seller has agreed to  indemnify  the  Company for all Losses (as
defined in the Asset Purchase

                                       12

<PAGE>

Agreement)  suffered or  incurred by the Company by reason of, or in  connection
with,  any claim or cause of action of any third party to the extent arising out
of any action, inaction, event, condition, liability or obligation of the Seller
occurring  prior  to the  consummation  of the  acquisition  including,  but not
limited to, any Loss arising out of a cause of action entitled  Miller,  et. ux.
v.  Hughes  Supply,  Inc.,  King  County,  Washington,  Superior  Court Case No.
00-2-20913-4SEA (the "Case") or any similar claim or cause of action;  provided,
however,   that  such  indemnification   obligation   terminates  on  the  first
anniversary date of the closing.

         The Company further  represents that neither the Company nor any of its
Subsidiaries  has,  at any  time,  distributed  or  sold  to,  or  manufactured,
warehoused  or  otherwise  dealt with any of the products or materials on behalf
of, Persons engaged in the  shipbuilding  industry in the State of Washington or
any other  jurisdiction  other  than  certain  high-alloy  and  stainless  steel
products. The Seller's insurance companies, certain insurance company affiliates
of CNA Financial  Corporation,  have issued an affirmative  coverage response to
the Seller indicating that coverage would be afforded to the Seller with respect
to the Case  within  the  limits  and other  terms of the  applicable  policies;
provided,  however,  that the  coverage  would not extend to the Company as such
Persons  are not  insureds  under  such  policies.  However,  and in any  event,
pursuant to an Order issued by the Superior  Court of Washington for King County
dated  December  21,  2000,  the Company has been  dismissed  from the Case with
prejudice.

6.      REPRESENTATIONS OF THE PURCHASER.

6.1     Purchase for Investment.

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

6.2     Source of Funds.

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

          (a) the Source is an "insurance company general account" as defined in
     Department of Labor Prohibited  Transaction  Exemption ("PTE") 95-60 (60 FR
     35925, July 12, 1995) and in respect thereof you represent that there is no

                                       13

<PAGE>

     "employee  benefit  plan" (as defined in Section  3(3) of ERISA and Section
     4975(e)(1) of the Code,  treating as a single plan all plans  maintained by
     the same  employer or employee  organization  or  affiliate  thereof)  with
     respect to which the amount of the general account reserves and liabilities
     of all contracts held by or on behalf of such plan exceed ten percent (10%)
     of the total reserves and liabilities of such general account (exclusive of
     separate account liabilities) plus surplus, as set forth in the NAIC Annual
     Statement  filed with your state of domicile and that such  acquisition  is
     eligible for and satisfies the other requirements of such exemption; or

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

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

          (d) the Source is a governmental plan; or

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

          (f) the Source is an insurance  company  separate  account  maintained
     solely in connection  with fixed  contractual  obligations of the insurance
     company  under which the amounts  payable,  or  credited,  to any  employee
     benefit plan (or its related  trust) and to any  participant or beneficiary
     of such plan (including any

                                       14

<PAGE>

     annuitant) are not affected in any manner by the investment  performance of
     the separate account; or

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

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

7.      INFORMATION AS TO COMPANY.

7.1     Financial and Business Information.

         The  Company  shall  deliver  to  each  holder  of  Notes  that  is  an
Institutional Investor:

          (a)  Quarterly  Statements  --  within  60 days  after the end of each
     quarterly  fiscal period in each fiscal year of the Company (other than the
     last quarterly  fiscal period of each such fiscal year),  duplicate  copies
     of,

               (i)  a  consolidated   balance  sheet  of  the  Company  and  its
          Subsidiaries as at the end of such quarter, and

               (ii) consolidated  statements of income, changes in shareholders'
          equity and cash flows of the  Company and its  Subsidiaries,  for such
          quarter  and (in the case of the  second and third  quarters)  for the
          portion of the fiscal year ending with such quarter,

      setting  forth  in each  case in  comparative  form  the  figures  for the
      corresponding  periods in the  previous  fiscal  year,  all in  reasonable
      detail, prepared in accordance with GAAP applicable to quarterly financial
      statements  generally,  and  certified  by a Senior  Financial  Officer as
      fairly presenting, in all material respects, the financial position of the
      companies  being  reported  on and their  results of  operations  and cash
      flows, subject to changes resulting from year-end adjustments;

      provided that delivery within the time period specified above of copies of
      the Company's  Quarterly  Report on Form 10-Q prepared in compliance  with
      the  requirements  therefor  and filed with the  Securities  and  Exchange
      Commission  shall be deemed to satisfy the  requirements  of this  Section
      7.1(a)  so  long as  such  requirements  of the  Securities  and  Exchange
      Commission  continue  to  require  that Form 10-Q  include  the  financial
      statements described in subparagraphs (i) and (ii) above;

                                       15

<PAGE>

          (b) Annual  Statements -- within 105 days after the end of each fiscal
     year of the Company, duplicate copies of,

                    (i) a  consolidated  balance  sheet of the  Company  and its
               Subsidiaries, as at the end of such year, and

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

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

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

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

      provided,  that the delivery within the time period specified above of the
      Company's  Annual Report on Form 10-K for such fiscal year  (together with
      the Company's annual report to shareholders,  if any, prepared pursuant to
      Rule  14a-3  under the  Exchange  Act)  prepared  in  accordance  with the
      requirements   therefor  and  filed  with  the   Securities  and  Exchange
      Commission  shall be deemed to satisfy the  requirements  of this  Section
      7.1(b)  so  long as  such  requirements  of the  Securities  and  Exchange
      Commission  continue  to  require  that Form 10-K  include  the  financial
      statements described in subparagraphs (i) and (ii) above.

          (c) SEC and Other Reports -- promptly upon their  becoming  available,
      one  copy  of (i)  each  financial  statement,  report,  notice  or  proxy
      statement  sent by the  Company  or any  Subsidiary  to public  securities
      holders  generally,  and  (ii)  each

                                       16

<PAGE>

      regular or periodic report, each registration  statement (without exhibits
      except as expressly requested by such holder), and each prospectus and all
      amendments  thereto  filed  by the  Company  or any  Subsidiary  with  the
      Securities  and Exchange  Commission  and of all press  releases and other
      statements  made  available  generally by the Company or any Subsidiary to
      the public concerning developments that are Material;

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

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

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

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

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

               (iv) if at any time the  aggregate  "amount of  unfunded  benefit
          liabilities"  (within  the  meaning of section  4001(a)(18)  of ERISA)

                                       17

<PAGE>

          under all  Plans,  determined  in  accordance  with Title IV of ERISA,
          shall exceed $1,000,000;

               (f) Notices From Governmental  Authority -- promptly,  and in any
          event within 30 days of receipt  thereof,  copies of any notice to the
          Company  or any  Subsidiary  from any  Federal  or state  Governmental
          Authority  relating  to any  order,  ruling,  statute  or other law or
          regulation  that  could  reasonably  be  expected  to have a  Material
          Adverse Effect;

               (g) New Material  Subsidiaries -- within 60 days after the end of
          each  quarterly  fiscal  period in each  fiscal year of the Company in
          which a Material Subsidiary has been formed or acquired,  or any other
          event resulting in the creation of a new Material  Subsidiary,  notice
          of the formation or  acquisition  of such Material  Subsidiary or such
          occurrence,  including a description of the assets of such entity, the
          activities in which it will be engaged,  and such other information as
          an Institutional Investor may request;

               (h) Bank Credit  Agreements -- promptly,  and in any event within
          30 days after the execution thereof, a copy of a Bank Credit Agreement
          entered  into after the date hereof by the  Company or any  Subsidiary
          and of each  amendment of, other  modification  to, or waiver  granted
          under, a Bank Credit Agreement;

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

7.2     Officer's Certificate.

         Each  set of  financial  statements  delivered  to a  holder  of  Notes
pursuant  to  Section  7.1(a)  or  Section  7.1(b)  shall  be  accompanied  by a
certificate of a Senior Financial Officer setting forth:

               (a) Covenant  Compliance -- the information  (including  detailed
          calculations)  required in order to establish  whether the Company was
          in compliance  with the  requirements  of Sections 10.1,  10.2,  10.3,
          10.4,  10.5, 10.6 and 10.8  inclusive,  during the quarterly or annual
          period covered by the statements then being furnished  (including with
          respect to each such Section,  where  applicable,  the calculations of
          the maximum or minimum  amount,  ratio or percentage,  as the case may
          be, permissible under the terms of such Sections,  and the calculation
          of the amount, ratio or percentage then in existence); and

                                       18

<PAGE>

               (b)  Event of  Default  -- a  statement  that  such  officer  has
          reviewed the relevant terms hereof and has made, or caused to be made,
          under  his or her  supervision,  a  review  of  the  transactions  and
          conditions of the Company and its  Subsidiaries  from the beginning of
          the quarterly or annual period  covered by the  statements  then being
          furnished  to the date of the  certificate  and that such review shall
          not have  disclosed the existence  during such period of any condition
          or event that  constitutes a Default or an Event of Default or, if any
          such  condition or event existed or exists,  specifying the nature and
          period of  existence  thereof and what  action the Company  shall have
          taken or proposes to take with respect thereto.

7.3     Inspection.

         The Company  shall permit the  representatives  of each holder of Notes
that is an Institutional Investor:

               (a) No Default -- if no Default or Event of Default  then exists,
          at the expense of such holder and upon reasonable  prior notice to the
          Company,  to visit the principal  executive office of the Company,  to
          discuss  the  affairs,  finances  and  accounts of the Company and its
          Subsidiaries with the Company's officers, and (with the consent of the
          Company,   which  consent  will  not  be  unreasonably  withheld)  its
          independent public accountants,  and (with the consent of the Company,
          which  consent will not be  unreasonably  withheld) to visit the other
          offices and properties of the Company and each Subsidiary, all at such
          reasonable  times  and as  often  as may be  reasonably  requested  in
          writing; and

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

8.      PREPAYMENT OF THE NOTES.

8.1(A)  Series A Required Payments.

         There shall be no required  prepayment  of Series A Notes.  The Company
shall repay the entire outstanding principal amount of all Series A Notes at par
and  without  payment  of the  Make-Whole  Amount  or any  premium  in a  single
installment on November 30, 2003,  together with all accrued but unpaid interest
thereon.

                                       19

<PAGE>

8.1(B)  Series B Required Prepayments.

         The  Company  shall  prepay,  and there shall  become due and  payable,
$5,600,000  in  aggregate  principal  amount of Series B Notes on November 30 of
each year  commencing  on November  30, 2001 and ending on  November  30,  2004,
inclusive.  The Company shall make a final  payment of the  remaining  principal
amount  of the  Series B Notes of  $5,600,000  (or such  amount  as shall be the
remaining  principal amount of Series B Notes outstanding) on November 30, 2005.
Each such payment  shall be  accompanied  by all accrued but unpaid  interest to
date and each such payment of the Series B Notes pursuant to this Section 8.1(B)
shall be at par and without  payment of the  Make-Whole  Amount or any  premium,
provided that, upon any partial prepayment of Series B Notes pursuant to Section
8.2 or purchase of Series B Notes permitted by Section 8.7, the principal amount
of each required  prepayment  of Series B Notes  becoming due under this Section
8.1(B) on and after the date of such  prepayment or purchase shall be reduced in
the same proportion as the aggregate  unpaid  principal amount of Series B Notes
is reduced as a result of such prepayment or purchase.

8.1(C)  Series C Required Prepayments

         The  Company  shall  prepay,  and there shall  become due and  payable,
$20,600,000  in aggregate  principal  amount of Series C Notes on November 30 of
each year  commencing  on November  30, 2003 and ending on  November  30,  2006,
inclusive.  The Company shall make a final  payment of the  remaining  principal
amount  of the  Series C Notes of  $20,600,000  (or such  amount as shall be the
remaining  principal amount of Series C Notes outstanding) on November 30, 2007.
Each such payment  shall be  accompanied  by all accrued but unpaid  interest to
date and each such payment of the Series C Notes pursuant to this Section 8.1(C)
shall be at par and without  payment of the  Make-Whole  Amount or any  premium,
provided that, upon any partial prepayment of Series C Notes pursuant to Section
8.2 or purchase of Series C Notes permitted by Section 8.7, the principal amount
of each required  prepayment  of Series C Notes  becoming due under this Section
8.1(C) on and after the date of such  prepayment or purchase shall be reduced in
the same proportion as the aggregate  unpaid  principal amount of Series C Notes
is reduced as a result of such prepayment or purchase.

8.2     Optional Prepayments With Make-Whole Amount.

         The Company may, at its option,  upon notice as provided below,  prepay
the  Notes in whole at any time,  or from time to time in part in an amount  not
less  than  $5,000,000,  at 100% of the  principal  amount so  prepaid  plus all
accrued  interest  on the  principal  amount  of  Notes  so  prepaid,  plus  the
Make-Whole  Amount  determined  for the  prepayment  date with  respect  to such
principal  amount.  Any such optional payment shall be on a Business Day and the
Company  will  give  each  holder  of  Notes  written  notice  of each  optional
prepayment  under  this  Section  8.2 not less than 30 days and not more than 60
days prior to the Business Day fixed for such prepayment. Each such notice shall
specify such date, the aggregate  principal amount of the Notes to be prepaid on
such date,

                                       20

<PAGE>

the principal amount of each Note held by such holder to be prepaid  (determined
in accordance  with Section 8.3),  and the interest to be paid on the prepayment
date  with  respect  to such  principal  amount  being  prepaid,  and  shall  be
accompanied by a certificate of a Senior  Financial  Officer as to the estimated
Make-Whole  Amount due in connection with such prepayment  (calculated as if the
date of such notice were the date of the prepayment),  setting forth the details
of such  computation.  Two Business Days prior to such  prepayment,  the Company
shall deliver to each holder of Notes a certificate  via facsimile  transmission
of a Senior  Financial  Officer  specifying the  calculation of such  Make-Whole
Amount as of the specified prepayment date.

8.3     Allocation of Partial Prepayments.

         In the case of any  partial  prepayment  of the  Notes,  the  principal
amount  of the Notes to be  prepaid  shall be  allocated  among all Notes of all
Series  then  outstanding  in  proportion,  as  nearly  as  practicable,  to the
respective  unpaid  principal  amounts of all Notes not  theretofore  called for
prepayment.

8.4     Maturity; Surrender, etc.

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

8.5     Mandatory Offer to Prepay upon Change of Control.

         (a) Notice and Offer. In the event of either:

               (i) a Change of Control, or

               (ii) the obtaining of knowledge of a Control Event by any officer
          of the  Company  (including,  without  limitation,  via the receipt of
          notice of a Control Event from any holder of Notes),

the Company will, within three Business Days of the occurrence of either of such
events  (or,  in  the  case  of any  Change  of  Control,  the  consummation  or
finalization  of which would involve any action of the Company,  at least thirty
days prior to such Change of  Control),  give  written  notice of such Change of
Control or Control Event to each holder of outstanding  Notes by registered mail
and,  simultaneously with the sending of such outstanding written notice, send a
copy of such  notice to each such  holder via an

                                       21

<PAGE>

overnight courier of national reputation. Such written notice shall contain, and
such written notice shall  constitute,  an irrevocable  offer to prepay all, but
not less than all,  the Notes held by such  holder on a date  specified  in such
notice  (the  "Control  Prepayment  Date") that is not less than 30 days and not
more than 60 days after the date of such notice. If the Control  Prepayment Date
shall not be specified in such notice,  the Control Prepayment Date shall be the
30th day after the date of such holder's  first  receipt of such notice.  If the
Company  shall not have  received a written  response  to such  notice from each
holder of Notes  within 10 days after the date of posting of such notice to such
holder of Notes, then the Company shall immediately send a second written notice
via an overnight courier of national reputation to each such holder of Notes who
shall have not previously responded to the Company. In no event will the Company
take  any  action  to  consummate  or  finalize  a  Change  of  Control   unless
contemporaneously  with such action the Company prepays all Notes required to be
prepaid in accordance with Section 8.5(b) hereof.

         (b) Acceptance and Payment. To accept such offered prepayment, a holder
of Notes shall cause a notice of such  acceptance to be delivered to the Company
not later than 15 days  after the date of  receipt by such  holder of the latest
written  offer of such  prepayment  (it being  understood  that the failure by a
holder to respond to such written offer of  prepayment  within such period of 15
days shall be deemed to  constitute a rejection of such offer).  If so accepted,
such offered prepayment shall be due and payable on the Control Prepayment Date.
Such  offered  prepayment  shall be made at one  hundred  percent  (100%) of the
principal  amount of such Notes,  together with interest on the Notes then being
prepaid  accrued  to the  Control  Prepayment  Date.  The  Company  shall not be
required to pay any  Make-Whole  Amount upon any prepayment of Notes pursuant to
this Section 8.5.

         (c) Officer's  Certificate.  Each offer to prepay the Notes pursuant to
this Section 8.5 shall be  accompanied  by a  certificate,  executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:

               (i) the Control Prepayment Date;

               (ii) the Section hereof under which such offer is made;

               (iii) the principal amount of each Note offered to be prepaid;

               (iv) the interest  that would be due on each such Note offered to
          be prepaid, accrued to the Control Prepayment Date;

               (v) that the conditions of this Section 8.5 have been  fulfilled;
          and

               (vi) in reasonable  detail,  the nature and date or proposed date
          of the Change of Control.

                                       22

<PAGE>

         (d) Notice Concerning  Status of Holders of Notes.  Promptly after each
Control  Prepayment Date and the making of all prepayments  contemplated on such
Control Prepayment Date under this Section 8.5 (and, in any event, within thirty
days thereafter),  the Company shall deliver to each remaining holder of Notes a
certificate  signed by a Senior  Financial  Officer of the Company  containing a
list of the then current  holders of Notes  (together with their  addresses) and
setting forth as to each such holder the outstanding  principal  amount of Notes
held by each such holder at such time.

8.6     Make-Whole Amount.

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

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

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

                  "Reinvestment Yield" means, with respect to the Called
         Principal of any Note, 0.50% plus the yield to maturity implied by (i)
         the yields reported (offer side), as of 10:00 A.M. (New York City time)
         on the second Business Day preceding the Settlement Date with respect
         to such Called Principal, as set forth on page "USD" of the Bloomberg
         Financial Markets Service (or, if not available, any other nationally
         recognized trading screen reporting on-line intraday trading in United
         States Treasury fixed interest rate securities) for actively traded
         U.S. Treasury securities having a maturity equal to the Remaining
         Average Life of such Called Principal as of such Settlement Date, or
         (ii) if such yields are not reported as of such time or the yields
         reported as of such time are not ascertainable, the Treasury Constant
         Maturity Series Yields reported, for the latest day for which such
         yields have been so reported as of the second Business Day preceding
         the Settlement Date with respect to such Called Principal, in Federal
         Reserve Statistical Release H.15 (519) (or any comparable successor
         publication) for actively traded U.S. Treasury securities having a
         constant maturity equal to the Remaining Average Life of such Called
         Principal as of such Settlement Date.

                                       23

<PAGE>

         Such  implied  yield  in (i) and  (ii)  above  will be  determined,  if
         necessary,   by  (a)  converting  U.S.   Treasury  bill  quotations  to
         bond-equivalent  yields in accordance with accepted  financial practice
         and (b)  interpolating  linearly  between (1) the actively  traded U.S.
         Treasury  security  with the  maturity  closest to and greater than the
         Remaining  Average  Life  and (2) the  actively  traded  U.S.  Treasury
         security  with the  maturity  closest  to and less  than the  Remaining
         Average Life.

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

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

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

8.7     Purchase of Notes.

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

9.      AFFIRMATIVE COVENANTS.

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

                                       24

<PAGE>

9.1     Compliance With Law.

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

9.2     Insurance.

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

9.3     Maintenance of Properties.

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

9.4     Payment of Taxes and Claims.

         The Company shall,  and shall cause each of its  Subsidiaries  to, file
all  tax  returns  required  to be  filed  in any  jurisdiction  and to pay  and
discharge  all taxes shown to be due and  payable on such  returns and all other
taxes,  assessments,  governmental  charges, or levies imposed on them or any of
their  properties,  assets,  income or franchises,  to the extent such taxes and
assessments  have become due and payable and before they have become  delinquent
and all  claims for which sums have  become due and  payable  that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary  need pay any such tax

                                       25

<PAGE>

or assessment or claims if (i) the amount,  applicability or validity thereof is
contested  bythe Company or such  Subsidiary on a timely basis in good faith and
in  appropriate  proceedings,  and the Company or a Subsidiary  has  established
adequate  reserves  therefor in accordance with GAAP on the books of the Company
or such  Subsidiary or (ii) the nonpayment of all such taxes and  assessments in
the  aggregate  could not  reasonably  be  expected  to have a Material  Adverse
Effect.

9.5     Corporate Existence, etc.

         The  Company  shall at all times  preserve  and keep in full  force and
effect its corporate  existence.  Subject to Sections 10.7 and 10.8, the Company
shall at all times  preserve  and keep in full force and  effect  the  corporate
existence  of each of its  Subsidiaries  (unless  merged  into the  Company or a
Subsidiary)  and all rights and  franchises of the Company and its  Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve  and keep in full force and effect such  corporate  existence of any
Subsidiary, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.

9.6     Covenant To Secure Notes Equally

         The Company  covenants  that, if it or any  Subsidiary  shall create or
assume  any Lien  upon any of its  property  or  assets,  whether  now  owned or
hereafter acquired, other than Liens permitted by the provisions of Section 10.5
and 10.6 hereof  (unless  prior  written  consent to the creation or  assumption
thereof shall have been obtained  pursuant to Section 17), the Company will make
or cause to be made  effective  provision  whereby  the Notes will be secured by
such Lien  equally and ratably  with any and all other Debt  thereby  secured so
long as any such other Debt shall be so secured.  This  Section 9.6 shall not be
deemed a consent to any Lien or Liens not otherwise permitted by Section 10.5 or
Section 10.6.

9.7     Covenant Relating to Subsidiary Guarantees.

         Within 60 days after the end of each  quarterly  fiscal  period in each
fiscal  year of the Company  after:  (i) the  formation  or  acquisition  of any
Material  Subsidiary  not listed on Schedule  4.11;  (ii) the transfer of assets
from the Company or any Subsidiary to another Subsidiary and as a result thereof
the recipient of such assets becomes a Material Subsidiary; (iii) the occurrence
of any other event creating a new Material Subsidiary; or (iv) the execution and
delivery  by a  Subsidiary  (a "Bank  Guaranty  Subsidiary")  (whether  or not a
Material  Subsidiary) of a guaranty of the  indebtedness  and obligations of the
Company under a Bank Credit Agreement the Company shall cause to be executed and
delivered a guarantee of the obligations of the Company  hereunder and under the
Notes from such Material Subsidiary or Bank Guaranty Subsidiary (as the case may
be) in  substantially  the form of Exhibit 4.11(a) and a Contribution  Agreement
from such Material  Subsidiary or Bank Guaranty  Subsidiary (as the case may be)
in  substantially  the form of  Exhibit  4.11(b),  together  with an  opinion of
counsel of the General Counsel to

                                       26

<PAGE>

the Company covering the matters described in Section 5.4(c),  and copies of any
accompanying  resolutions of the board of directors of such Material  Subsidiary
or Bank Guaranty Subsidiary (as the case may be), good standing certificates and
the like, all in form and substance satisfactory to your special counsel.

9.8     Ownership of Subsidiary Guarantors.

         The Company shall maintain its  percentage of ownership  existing as of
the  date  hereof  of all  Material  Subsidiaries  that  execute  the  Guarantee
referenced in Section 4.11,  and shall not decrease its ownership  percentage in
each Material Subsidiary that executes a Guarantee pursuant to Section 9.7 after
the date  hereof,  as such  ownership  exists  at the time  such  Subsidiary  so
executes such Guarantee.

10.     NEGATIVE COVENANTS.

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

10.1    Funded Debt.

         The Company shall not, and shall not permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly  liable  with  respect to any  Funded  Debt  unless,  on the date the
Company  or such  Subsidiary  becomes  liable  with  respect  to such  Debt  and
immediately  after giving effect  thereto and the  concurrent  retirement of any
other  Debt,  (i) no Default or Event of  Default  exists and (ii)  Consolidated
Funded Debt  outstanding at such time does not exceed 60% of Consolidated  Total
Capitalization  at such time.  For  purposes of this  Section  10.1,  any Person
becoming a  Subsidiary  after the date  hereof  shall be deemed,  at the time it
becomes a Subsidiary, to have incurred all of its then outstanding Debt, and any
Person  extending,  renewing  or  refunding  any Debt  shall be  deemed  to have
incurred such Debt at the time of such extension, renewal or refunding. Further,
it is hereby  understood that the restrictions  against the incurrence of Funded
Debt by Subsidiaries contained in this Section 10.1 shall be in addition to, and
not in derogation of, the restrictions contained in Section 10.6 hereof.

10.2    Current Debt.

         Neither the Company nor any Subsidiary shall at any time have or suffer
to exist Current Debt unless,  during the preceding 365-day period,  there shall
be at least  45  consecutive  days on each of which  there  shall  have  been no
Consolidated  Current  Debt  outstanding  in excess of the amount of  additional
Funded Debt that the Company would have been permitted to incur on each such day
under Section 10.1.

                                       27

<PAGE>

10.3(A) Minimum Net Worth

         The  Company  shall not permit  Consolidated  Net Worth to be less than
$445,000,000 at any time.

10.3(B) Adjusted Interest Coverage Ratio

         The Company shall not permit,  as at the end of each fiscal  quarter of
the Company, the Adjusted Interest Coverage Ratio to be less than 1.50 to 1.00.

10.4    Restricted Payments.

        The Company shall not:

               (i) pay or  declare  any  cash  dividend  on  account  of or with
          respect to any Capital  Stock or make any other cash  distribution  on
          account of or with respect to any class of its Capital Stock; or

               (ii)  redeem,   purchase  or  otherwise   acquire,   directly  or
          indirectly, any shares of the Company's Capital Stock

(all of the foregoing described in these subparagraphs (i) and (ii) hereof being
herein called  "Restricted  Payments")  unless (A) the  aggregate  amount of all
Restricted  Payments  made since  July 31,  2000 would not exceed the sum of (x)
$40,000,000  plus (y) 60% of cumulative  Consolidated  Net Income since July 31,
2000 (less 100% of cumulative  Consolidated  Net Income incurred for such period
if such  Consolidated  Net  Income  for  such  period  is a loss)  plus  (z) the
aggregate  net cash  proceeds of any issuance or sale of the  Company's  Capital
Stock  and (B) no  Default  or Event  of  Default  shall  have  occurred  and be
continuing,  or a Default or Event of Default  would occur,  as a result of such
Restricted Payment.

10.5    Liens

         The Company shall not, and shall not permit any  Subsidiary to, create,
assume or suffer to exist any Lien upon any of its  property or assets,  whether
now owned or hereafter acquired except:

               (i)  Liens  existing  on the Date of  Closing  and  specified  on
          Schedule 10.5;

               (ii) any Lien on tangible fixed assets  acquired,  constructed or
          improved by the Company after the date hereof to secure or provide for
          all or a portion of the purchase  price of such assets or a portion of
          the  indebtedness  of such  assets  provided  (A) any such Lien  shall
          extend  solely  to the item or items of

                                       28

<PAGE>

          such assets so acquired or  constructed  and, if required by the terms
          of the instrument  originally  creating such Lien,  other assets which
          constitute  an  improvement  to or is  acquired  for  specific  use in
          connection  with such acquired or constructed  assets or which is real
          property being improved by such acquired or  constructed  assets,  (B)
          the principal  amount of the Debt secured by any such Lien shall at no
          time  exceed  an  amount  equal to the  lesser  of (1) the cost to the
          Company or such  Subsidiary  of the assets so acquired or  constructed
          and (2) the  Fair  Market  Value  of such  assets  at the time of such
          acquisition  or  construction  and (C) any such Lien  shall be created
          contemporaneously  with, or within 180 days after,  the acquisition or
          construction of such assets;

               (iii)  Liens (A) for taxes  (including  ad valorem  and  property
          taxes) and assessments or  governmental  charges or levies not yet due
          or (B) for taxes due or (C) resulting from any judgment or award,  and
          in the case of clause (B) and (C),  are being  actively  contested  in
          good  faith  by  appropriate  proceedings  and with  respect  to which
          adequate reserves are being maintained;

               (iv)   landlord   liens   and   statutory   liens  of   carriers,
          warehousemen,  mechanics, material men and other liens imposed by law,
          created in the ordinary  course of business for amounts not yet due or
          which are being contested in good faith by appropriate  proceedings or
          with  respect to which  adequate  reserves are being  maintained,  and
          which were not incurred in connection with the borrowing of money;

               (v) Liens  incurred or deposits  made in the  ordinary  course of
          business  in  connection  with  workers'  compensation,   unemployment
          insurance  and  other  types  of  social  security  or to  secure  the
          performance  of  tenders,  statutory  obligations,  surety  and appeal
          bonds, bids, leases,  government contracts,  performance and return of
          money bonds and similar obligations;

               (vi) easements,  rights-of-way,  zoning and similar  restrictions
          and other similar charges or encumbrances  not materially  interfering
          with the ordinary conduct of the business of the Company or any of its
          Subsidiaries;

               (vii) other Liens  incidental  to the conduct of its  business or
          the  ownership  of its  property and assets which were not incurred in
          connection  with  the  borrowing  of  money,  and  which do not in the
          aggregate  materially  detract from the value of property or assets of
          the Company and its Subsidiaries taken as a whole or materially impair
          the use of such property or assets in the operation of the business of
          the Company or any of its Subsidiaries;

               (viii)  Liens  provided  for in  equipment  leases  that  are not
          Capitalized  Lease  Obligations  (including  financing  statements and
          undertakings  to file  financing  statements);  provided that they are
          limited  to the  equipment  subject to such  leases  and the  proceeds
          thereof;

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<PAGE>

               (ix) leases, subleases, licenses and sublicenses granted to third
          parties not  interfering in any material  respect with the business of
          the Company or any of its Subsidiaries;

               (x) any lien renewing, extending, or refunding any Lien described
          in subparagraphs  (i) through (ix) above,  provided that the principal
          amount  secured is not increased and that such lien is not extended to
          other property (other than pursuant to its original terms);

               (xi) Liens on property or assets of a  Subsidiary  of the Company
          to secure  obligations  of such  Subsidiary  to the Company or another
          Wholly-Owned Subsidiary;

               (xii) any right of set off or  banker's  lien  (whether by common
          law, statute,  contract or otherwise) in favor of any bank (other than
          Liens securing Debt); and

               (xiii) Liens of any Subsidiary  that arose prior to the time that
          such Subsidiary became a Subsidiary of the Company,  provided that (A)
          any such Lien was not incurred in  anticipation  of such  acquisition,
          (B) the assets of such acquired  Subsidiary subject to such Lien shall
          only be those  assets  subject to such Lien at the time of the closing
          of the acquisition of such Subsidiary and (C) the principal  amount of
          Debt  secured  by such Lien  shall not  exceed  the  amount of Debt so
          secured by such Lien at the time of the closing of the  acquisition of
          such Subsidiary; and

               (xiv) Liens  securing  Priority Debt  described in clause (ii) of
          the definition of Priority Debt; provided,  however, that after giving
          effect to the Debt  secured  by such  Liens,  Priority  Debt shall not
          exceed 20% of Consolidated Net Worth at any time.

10.6    Priority Debt.

         The Company will not at any time permit  Priority Debt to exceed 20% of
Consolidated Net Worth.

10.7    Merger or Consolidation.

         The Company shall not, and shall not permit any  Subsidiary  to, merge,
consolidate or exchange shares with any other Person, except that:

               (i) any  Subsidiary  may merge or  consolidate  with and into the
          Company or with a Subsidiary  that is a Wholly-Owned  Subsidiary or if
          not a Wholly-Owned  Subsidiary in which the ownership  interest of the
          Company is not

                                       30

<PAGE>

          reduced or diluted in connection with or as a result of such merger or
          consolidation; and

               (ii)  the  Company  may  merge  or  consolidate  with  any  other
          corporation so long as:

                    (A)  the  surviving  corporation  shall  be the  Company  or
               another corporation organized under the laws of the United States
               or a State thereof or the District of Columbia;

                    (B) the  surviving  corporation  (if not the Company)  shall
               assume the  obligations of the Company  hereunder  pursuant to an
               agreement reasonably acceptable to the Required Holders

                    (C)  immediately  after  giving  effect  to such  merger  or
               consolidation, no Default or Event of Default shall have occurred
               or exist; and

                    (D)  immediately  after  giving  effect  to such  merger  or
               consolidation,  the Company (or the surviving corporation, if not
               the Company) could incur at least $1 of Funded Debt under Section
               10.1; and

               (iii) the Company or any  Subsidiary may acquire any other Person
          provided such  acquisition  does not  otherwise  result in an Event of
          Default hereunder.

               (iv) Any assumption  agreement executed and delivered pursuant to
          subparagraph (B) hereof shall be accompanied by a favorable opinion of
          counsel to such  surviving  corporation  stating that such  assumption
          agreement  has been duly  authorized,  executed and  delivered by such
          surviving  corporation,  that  the  execution  and  delivery  of  such
          assumption  agreement  does not violate or contravene any agreement or
          instrument to which such surviving corporation is a party and covering
          the other  matters  described in Exhibit  4.4(a) hereto and such other
          matters as counsel to the Required Holders shall  reasonably  request,
          together with copies of accompanying board resolutions,  good standing
          certificates  and the like as counsel to the  Required  Holders  shall
          reasonably request.

10.8    Sale of Assets.

         The Company will not, and will not permit any Subsidiary to, Dispose of
any property or assets (other than marketable securities), except, so long as no
Default or Event of Default shall exist and be continuing:

               (i) any Subsidiary (the  "Transferor  Subsidiary") may Dispose of
          its  assets to the  Company  or another  Subsidiary  (the  "Transferee
          Subsidiary")  so long

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<PAGE>

          as, in the case of a Disposition to another Subsidiary,  the ownership
          interest of the Company in the Transferee

          Subsidiary  is at least  equal  to, or  greater  than,  the  Company's
          ownership interest in the Transferor Subsidiary;

               (ii) the Company or any  Subsidiary  may Dispose of any equipment
          that it in its good faith opinion determines to be obsolete,  worn out
          or no longer  useful in its  business,  as determined in good faith by
          the Company;

               (iii) the Company or any  Subsidiary  may Dispose of inventory in
          the ordinary course of business;

               (iv) the  Company or any  Subsidiary  may Dispose of any other of
          its assets so long as immediately after giving effect to such proposed
          Disposition;

                    (A) the  consideration  for such assets  represents the Fair
               Market Value of such assets at the time of such Disposition;

                    (B) at least 85% of the  consideration  therefor received by
               the Company or such Subsidiary is in the form of cash; and

                    (C) the cumulative net book value of all assets  Disposed of
               by the Company and its  Subsidiaries  during any period of twelve
               consecutive  calendar  months does not exceed 15% of Consolidated
               Assets determined as of the most recently  completed fiscal year;
               provided,  however,  that the Company or a Subsidiary may Dispose
               of  assets in excess of 15% of  Consolidated  Assets  during  any
               consecutive  twelve-month  period  if,  within 180 days after the
               receipt by the Company or such  Subsidiary of any Net Proceeds of
               any  Disposition  in excess of 15% of  Consolidated  Assets (such
               excess  Net  Proceeds  referred  to as  "Excess  Proceeds"),  the
               Company applies such Excess Proceeds at its option:

                         (x) to make a  capital  expenditure  or  acquire  other
                    long-term  assets  that are used or useful in a business  or
                    businesses  conducted  by the  Company  on the  date of such
                    application or otherwise  permitted by Section 10.10 hereof;
                    or

                         (y) to  consummate  an Asset  Sale  Offer  (as  defined
                    below) with  respect to all Holders of Notes and all holders
                    of  other  Debt  that  is  pari  passu  with  the  Notes  as
                    contemplated in paragraph (3) below; or

                         (z) a combination of (x) and (y).

               Pending  final  application  of any Excess  Proceeds  as required
         above,  the Company  shall invest such Excess  Proceeds in cash or cash
         equivalents.

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<PAGE>

For purposes of this Section 10.8:

               (1)  "Disposition"  means  the  sale,  lease,  transfer  or other
         disposition  of property  but shall not  include  any public  taking or
         condemnation,   and  "Dispose  of"  and  "Disposed  of"  shall  have  a
         corresponding meaning to Disposition.  The term "Disposition" shall not
         include an exchange  of assets,  provided  that the assets  involved in
         such  exchange are similar in function in that after  giving  effect to
         such exchange  there has not been (A) a Materially  Adverse Effect upon
         the Company and its  Subsidiaries  taken as a whole,  (B) any  material
         deterioration  of cash flow  generation from or in connection with such
         assets,  or (C) any material  deterioration  in the overall  quality of
         plant, property and equipment of the Company and its Subsidiaries taken
         as a whole.  An "exchange"  shall be deemed to have occurred if each of
         the  transactions   involved  shall  have  been  consummated  within  a
         six-month period.

               (2)  Calculation  of Net Book  Value.  The net book  value of any
         assets shall be determined as of the respective  date of Disposition of
         those assets.

               (3) Asset Sale  Offer.  On the 180th day after a  Disposition  of
         assets giving rise to Excess Proceeds, or such earlier date, if any, as
         the Board of Directors of the Company or of such Subsidiary  determines
         not  to  apply  the  Excess  Proceeds   relating  to  such  Disposition
         exclusively  as set forth in  subparagraph  (x) of Section  10.8(iv)(C)
         above (each, an "Asset Sale Offer Trigger Date"), such aggregate amount
         of Excess  Proceeds which have not been applied on or before such Asset
         Sale Offer  Trigger  Date as set forth in  subparagraph  (x) of Section
         10.8(iv)(C)  above (each,  an "Excess  Proceeds Offer Amount") shall be
         applied by the Company or such  Subsidiary to make an offer to purchase
         (the  "Asset  Sale  Offer") on a date (the  "Asset  Sale Offer  Payment
         Date") not less than 30 nor more than 45 days  following the applicable
         Asset  Sale  Offer  Trigger  Date,  from all  Holders  of Notes and all
         holders  of other Debt that is pari passu with the Notes (the Notes and
         such other Debt referred to herein  collectively as "Senior Debt") on a
         pro rata basis that amount of Senior Debt equal to the Excess  Proceeds
         Offer Amount at a price equal to 100% of the principal amount of Senior
         Debt to be purchased, plus accrued and unpaid interest thereon, if any,
         to the date of  purchase;  provided,  however,  that if at any time any
         non-cash consideration received by the Company or any Subsidiary of the
         Company,  as the case may be, in  connection  with any  Disposition  is
         converted  into or  sold  or  otherwise  disposed  of for  cash or cash
         equivalents  (other than  interest  received  with  respect to any such
         non-cash  consideration),  then such conversion or disposition shall be
         deemed to  constitute a Disposition  hereunder and the Excess  Proceeds
         thereof shall be applied in accordance with this Section 10.8.

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<PAGE>

               Each Asset Sale  Offer  shall be mailed to the  holders of Senior
         Debt within 10 days  following the Asset Sale Offer  Trigger Date.  The
         notice  shall be  executed  by a Senior  Financial  Officer  and  shall
         contain all instructions and materials necessary to enable such holders

         to elect that Senior Debt held by them may be purchased pursuant to the
         Asset Sale Offer and shall state the following terms:

                    (A) that the Asset Sale Offer is being made pursuant to this
               Section 10.8 and that all Senior Debt  tendered  will be accepted
               for payment;

                    (B) the  purchase  price  (including  the  amount of accrued
               interest)  and the Asset Sale Offer  Payment Date (which shall be
               20  Business  Days from the date such  notice is mailed,  or such
               longer period as may be required by law);

                    (C) that any Senior  Debt not elected to be  purchased  will
               continue to accrue interest if interest is then accruing;

                    (D) that,  unless the  Company  defaults  in making  payment
               therefor,  any Senior Debt  accepted for payment  pursuant to the
               Asset Sale Offer shall cease to accrue  interest  after the Asset
               Sale Offer Payment Date;

                    (E) that  Holders  may elect to have the Senior Debt held by
               them  purchased  pursuant  to an Asset Sale  Offer by  delivering
               written  notice of such  election  to the  Company at the address
               specified in the Asset Sale Offer  setting  forth the name of the
               holder and the  principal  amount of Senior Debt that such holder
               elects to be so  purchased  and that  holders  must  deliver such
               election  notice within two Business Days prior to the Asset Sale
               Offer  Payment  Date (it being  understood  that the failure by a
               holder to respond to an Asset Sale Offer within such period shall
               be deemed to  constitute  a rejection  of such Asset Sale Offer);
               and

                    (F) that holders of Senior Debt will be entitled to withdraw
               their election if the Company  receives,  not later than the date
               two Business  Days prior to the Asset Sale Offer  Payment Date, a
               written  notice  setting  forth  the  name  of  the  holder,  the
               principal amount of Senior Debt the holder thereof has elected to
               have  purchased,  and a statement that such holder is withdrawing
               its election to have such Senior Debt purchased.

         On the Asset Sale Offer Payment Date, the Company shall deliver to such
holder via wire  transfer in  immediately  available  funds the amount of Senior
Debt so elected to be  repurchased,  plus accrued but unpaid  interest  thereon,
subject to adjustment as contemplated by subparagraph (A) above.

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<PAGE>

         To the extent that the  aggregate  amount of Senior Debt  elected to be
repurchased  pursuant  to an Asset Sale  Offer is less than the Excess  Proceeds
Offer Amount, the Company shall commence a second Asset Sale Offer to holders of
Senior Debt that elected to have the Senior Debt held by them purchased pursuant
to the first Asset Sale Offer but whose Senior Debt was not purchased in full by
reason of the pro rata nature of such first Asset Sale Offer.  Such second Asset
Sale Offer shall be conducted on substantially the same terms as the first Asset
Sale Offer.  To the extent that Excess  Proceeds are not used to purchase Senior
Debt after  conducting  the second  Asset Sale  Offer,  the  Company may use any
remaining Excess Proceeds for general corporate purposes.

10.9    Transactions With Related Party

         The Company shall not, and shall not permit any  Subsidiary  to, effect
or permit  to exist any  transaction  with any  Affiliate  by which any asset or
services of the Company or a Subsidiary is  transferred  to such  Affiliate,  or
enter into any other  transaction  with an Affiliate on terms less  favorable to
the Company or such Subsidiaries than would be reasonably  expected in a similar
transaction with an unrelated entity.

10.10   Nature of Business.

         Neither the Company nor any Subsidiary shall engage in any business, if
as a result,  when taken as a whole,  the general  nature of the  business  then
engaged in by the Company and its Subsidiaries  would be  substantially  changed
from the nature of the business of the Company and its  Subsidiaries on the date
hereof.

10.11   Limitation on Dividend and Other Payment Restrictions Affecting
        Subsidiaries.

         The  Company  shall  not,  and shall  not  cause or  permit  any of its
Subsidiaries to, directly or indirectly,  create or otherwise cause or permit to
exist or become  effective any  encumbrance or restriction on the ability of any
Subsidiary of the Company to: (i) pay dividends or make any other  distributions
on or in respect of its Capital Stock;  (ii) make loans or advances or to pay or
guarantee  any  Debt or  other  obligation  owed  to the  Company  or any  other
Subsidiary  of the Company;  or (iii)  transfer any of its property or assets to
the Company or any other Subsidiary of the Company, except for such encumbrances
or  restrictions  existing  under or by reason of (1)  applicable  law; (2) this
Agreement  or a Bank  Credit  Agreement  as in  effect on the date  hereof;  (3)
customary  non-assignment  provisions  of any contract or any lease  governing a
leasehold  interest  of  any  Subsidiary  of the  Company;  (4)  any  instrument
governing  Acquired Debt, which  encumbrance or restriction is not applicable to
any Person,  or the properties or assets of any Subsidiary  thereof,  other than
the Person  (or the  properties  or assets of the  Person)  so  acquired  or any
Subsidiary  thereof;  (5) purchase money  obligations for property acquired that
impose  restrictions of the nature described in clause (4) above on the property
so acquired;  (6) an agreement  governing  Debt incurred to refinance or replace
the Debt

                                       35

<PAGE>

issued,  assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5)  above;  provided,  however,  that the  provisions  relating  to such
encumbrance or restriction contained in any such refinancing or replacement Debt
are no less favorable to the Company in any material respect than the provisions
relating to such encumbrance or restriction  contained in agreements referred to
in such clause (2), (4) or (5); or (7) restrictions contained in any purchase or
sale agreement  relating to the purchase or sale of a Subsidiary,  provided that
such  restriction  does not extend to any assets other than those being acquired
or sold.

11.     EVENTS OF DEFAULT.

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

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

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

          (c) the Company  defaults in the performance of or compliance with any
     term contained in Sections 10.1,  10.2,  10.3, 10.4, 10.5, 10.6, 10.7, 10.8
     or 10.9; or

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

          (e) any  representation or warranty made in writing by or on behalf of
     the Company or by any officer of the  Company in this  Agreement  or in any
     writing furnished in connection with the transactions  contemplated  hereby
     proves to have been false or incorrect in any material  respect on the date
     as of which made; or

          (f) (i) the Company or any  Subsidiary  is in default (as principal or
     as guarantor or other surety) in the payment of any principal of or premium
     or  make-whole  amount or  interest on any Debt that is  outstanding  in an
     aggregate  principal  amount of at least  $5,000,000  beyond  any period of
     grace provided with respect thereto,  or (ii) the Company or any Subsidiary
     is in  default in the  performance  of

                                       36

<PAGE>

     or  compliance  with any term of any  evidence of any Debt in an  aggregate
     outstanding  principal  amount of at least  $5,000,000  or of any mortgage,
     indenture  or other  agreement  relating  thereto  or any  other  condition
     exists,  and as a  consequence  of such default or condition  such Debt has
     become,  or has been  declared  (or one or more  Persons  are  entitled  to
     declare  such Debt to be),  due and payable  before its stated  maturity or
     before its regularly  scheduled dates of payment, or (iii) as a consequence
     of the occurrence or continuation of any event or condition (other than the
     passage  of time or the right of the  holder of Debt to  convert  such Debt
     into  equity  interests),  (x) the  Company  or any  Subsidiary  has become
     obligated  to purchase or repay Debt before its regular  maturity or before
     its  regularly  scheduled  dates of  payment  in an  aggregate  outstanding
     principal  amount of at least  $5,000,000,  or (y) one or more Persons have
     the right to require the Company or any  Subsidiary so to purchase or repay
     such Debt; or

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

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

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of $5,000,000 are rendered against one or more of the Company and
     its  Subsidiaries  and which  judgments are not, within 60 days after entry
     thereof, bonded, discharged or stayed pending appeal, or are not discharged
     within 60 days after the expiration of such stay; or

          (j) if (i)  any  Plan  shall  fail  to  satisfy  the  minimum  funding
     standards  of ERISA or the Code  for any  plan  year or part  thereof  or a
     waiver of such standards or extension of any amortization  period is sought
     or  granted  under

                                       37

<PAGE>

     section  412 of the Code,  (ii) a notice of  intent to  terminate  any Plan
     shall have been or is reasonably  expected to be filed with the PBGC or the
     PBGC  shall  have  instituted  proceedings  under  ERISA  section  4042  to
     terminate  or  appoint a trustee to  administer  any Plan or the PBGC shall
     have notified the Company or any ERISA  Affiliate  that a Plan may become a
     subject of any such  proceedings,  (iii) the Company or any ERISA Affiliate
     shall  have  incurred  or is  reasonably  expected  to incur any  liability
     pursuant to Title I or IV of ERISA or the penalty or excise tax  provisions
     of the Code  relating to employee  benefit  plans,  (iv) the Company or any
     ERISA Affiliate  withdraws from any Multiemployer  Plan, (v) the Company or
     any Subsidiary establishes or amends any employee welfare benefit plan that
     provides  post-employment  welfare benefits in a manner that would increase
     the  liability  of the Company or any  Subsidiary  thereunder,  or (vi) the
     aggregate "amount of unfunded benefit  liabilities"  (within the meaning of
     section  4001(a)(18)  of ERISA) under all Plans,  determined  in accordance
     with Title IV of ERISA, shall at any time exceed  $5,000,000;  and any such
     event or  events  described  in  clauses  (i)  through  (v)  above,  either
     individually  or  together  with any  other  such  event or  events,  could
     reasonably be expected to have a Material Adverse Effect.

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

12.     REMEDIES ON DEFAULT, ETC.

12.1    Acceleration.

         (a) If an Event of Default  with  respect to the Company  described  in
paragraph (g) or (h) of Section 11 (other than an Event of Default  described in
clause (i) of paragraph  (g) or  described  in clause (vi) of  paragraph  (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred,  all the Notes then outstanding shall automatically become immediately
due and payable.

         (b) If any other Event of Default has occurred and is  continuing,  any
holder or holders of more than 51% in principal  amount of the Notes at the time
outstanding may at any time at its or their option,  by notice or notices to the
Company,  declare  all the Notes  then  outstanding  to be  immediately  due and
payable.

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

                                       38

<PAGE>

         Upon any Notes  becoming  due and  payable  under  this  Section  12.1,
whether  automatically  or by declaration,  such Notes will forthwith mature and
the entire  unpaid  principal  amount of such  Notes,  plus (x) all  accrued and
unpaid interest thereon and (y) the Make-Whole  Amount  determined in respect of
such principal  amount (to the full extent  permitted by applicable  law), shall
all be immediately due and payable, in each and every case without  presentment,
demand,  protest or further notice,  all of which are hereby waived. The Company
acknowledges,  and the parties hereto agree,  that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically  provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are  accelerated  as a result of an Event of  Default,  is  intended  to provide
compensation for the deprivation of such right under such circumstances.

12.2    Other Remedies.

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

12.3    Rescission.

         At any time after any Notes have been declared due and payable pursuant
to  clause  (b) or (c) of  Section  12.1,  the  holders  of not less than 51% in
principal  amount  of the  Notes  then  outstanding,  by  written  notice to the
Company,  may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue  interest on the Notes,  all  principal  of and
Make-Whole  Amount, if any, on any Notes that are due and payable and are unpaid
other  than by reason of such  declaration,  and all  interest  on such  overdue
principal  and  Make-Whole  Amount,  if any,  and (to the  extent  permitted  by
applicable  law) any overdue  interest  in respect of the Notes,  at the Default
Rate, (b) all Events of Default and Defaults,  other than non-payment of amounts
that have  become due solely by reason of such  declaration,  have been cured or
have been waived  pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due  pursuant  hereto or to the Notes.  No
rescission  and  annulment  under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.

                                       39

<PAGE>

12.4    No Waivers or Election of Remedies, Expenses, etc.

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

13.     REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1    Registration of Notes.

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

13.2    Transfer and Exchange of Notes.

         Upon  surrender of any Note at the  principal  executive  office of the
Company for registration of transfer or exchange (and in the case of a surrender
for  registration  of  transfer,  duly  endorsed  or  accompanied  by a  written
instrument of transfer duly  executed by the  registered  holder of such Note or
his  attorney  duly  authorized  in writing and  accompanied  by the address for
notices of each  transferee  of such Note or part  thereof),  the Company  shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered  Note.  Each such new Note shall be  payable to such  Person as such
holder may  request  and shall be  substantially  in the form of Exhibit 1. Each
such new Note shall be dated and bear interest  from the date to which  interest
shall  have  been  paid  on the  surrendered  Note  or  dated  the  date  of the
surrendered  Note if no interest  shall have been paid thereon.  The Company may
require  payment  of a sum  sufficient  to cover any

                                       40

<PAGE>

stamp tax or  governmental  charge  imposed in respect of any such  transfer  of
Notes.  Notes shall not be transferred in  denominations  of less than $500,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire  holding  of Notes,  one Note may be in a  denomination  of less than
$500,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee),  shall be deemed to have made the  representation  set
forth in Sections  6.1 and 6.2.  Transfers  hereunder  shall only be made by the
Company to the extent such transfers are permitted by applicable law.

13.3    Replacement of Notes.

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

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

          (b) in  the  case  of  mutilation,  upon  surrender  and  cancellation
     thereof,  the Company at its own expense shall execute and deliver, in lieu
     thereof,  a new Note,  dated and  bearing  interest  from the date to which
     interest shall have been paid on such lost, stolen,  destroyed or mutilated
     Note or dated the date of such lost, stolen, destroyed or mutilated Note if
     no interest shall have been paid thereon.

14.     PAYMENTS ON NOTES.

14.1    Place of Payment.

         Subject to Section 14.2,  payments of principal,  Make-Whole Amount, if
any,  and  interest  becoming  due and payable on the Notes shall be made in New
York,  New  York,  at the  principal  office  of The  Chase  Manhattan  Bank (or
successor entity) in such  jurisdiction.  The Company may at any time, by notice
to each  holder of a Note,  change  the place of payment of the Notes so long as
such place of payment  shall be either the  principal  office of the  Company in
such  jurisdiction  or the  principal  office of a bank or trust company in such
jurisdiction.

14.2    Home Office Payment.

         So long as you or your  nominee  shall be the  holder of any Note,  and
notwithstanding  anything  contained  in  Section  14.1 or in  such  Note to the
contrary, the

                                       41

<PAGE>

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

15.     EXPENSES, ETC.

15.1    Transaction Expenses.

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

15.2    Survival.

         The  obligations  of the Company  under  Section 15.1 shall survive the
payment  or  transfer  permitted  pursuant  to  Section  13.2 of any  Note,  the
enforcement,

                                       42

<PAGE>

amendment  or waiver of any  provision  of this  Agreement  or the
Notes, and the termination of this Agreement.

16.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

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

17.     AMENDMENT AND WAIVER.

17.1    Requirements.

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

17.2    Solicitation of Holders of Notes.

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

                                       43

<PAGE>

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

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

17.3    Binding Effect, etc.

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

17.4    Notes Held by Company, etc.

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

18.     NOTICES.

         All notices  and  communications  provided  for  hereunder  shall be in
writing  and sent (a) via fax if the  sender on the same day sends a  confirming
copy  of  such  notice  by a  recognized  overnight  delivery  service  (charges
prepaid),  or (b) by a  recognized  overnight  delivery  service  (with  charges
prepaid). Any such notice must be sent:

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

                                       44

<PAGE>

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

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

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

19.     REPRODUCTION OF DOCUMENTS.

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

20.     CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20,  "Confidential  Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions  contemplated by or otherwise  pursuant to this
Agreement  that is  proprietary in nature and that was clearly marked or labeled
or otherwise  adequately  identified when received by you as being  confidential
information of the Company or such Subsidiary,  provided that such term does not
include  information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure,  (b) subsequently becomes publicly known through
no act or omission by you or any person  acting on your  behalf,  (c)  otherwise
becomes  known to you  other  than  through  disclosure  by the  Company  or any
Subsidiary,  (d) constitutes financial statements delivered to you under Section
7.1 that are otherwise publicly available,  or (e) is independently developed by
you,  your  Affiliates  or  your  professional   advisors  without  the  use  of
Confidential  Information.   You  will  maintain  the  confidentiality  of  such
Confidential  Information in accordance with  procedures  adopted by you in good
faith to protect  confidential  information  of third parties  delivered to you,
provided that you may deliver or disclose  Confidential  Information to (i) your
directors,  officers, employees, agents, attorneys and affiliates (to the extent
such  disclosure  reasonably  relates to the  administration  of the  investment
represented by your Notes),  (ii) your financial advisors and other professional

                                       45

<PAGE>

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

                                       46

<PAGE>

21.     SUBSTITUTION OF PURCHASER.

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

                                       47

<PAGE>

22.     MISCELLANEOUS.

22.1    Successors and Assigns.

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

22.2    Payments Due on Non-Business Days.

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

22.3    Severability.

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

22.4    Construction.

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

22.5    Counterparts.

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

                                       47

<PAGE>

22.6    Governing Law.

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

                         [Signatures on Following Pages]

                                       48

<PAGE>

         [Hughes Supply Note Purchase Agreement dated December 21, 2000]

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

                                      Very truly yours,

                                      HUGHES SUPPLY, INC.

                                      By:_______________________________________
                                         J. Stephen Zepf
                                          Treasurer and Chief Financial Officer

The foregoing is hereby
agreed to as of the
date hereof:

Purchasers of Series A Notes:

PACIFIC LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

By: _______________________
    Name:__________________
    Title:_________________

PACIFIC LIFE AND ANNUITY COMPANY

By: _______________________
    Name:__________________
    Title:_________________

By: _______________________
    Name:__________________
    Title:_________________

                                       49

<PAGE>

Purchasers of Series B Notes:

GENERAL ELECTRIC CAPITAL
    ASSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

GE LIFE AND ANNUITY ASSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

GE CAPITAL LIFE ASSURANCE COMPANY
    OF NEW YORK

By: _______________________
    Name:__________________
    Title:_________________

ALLSTATE LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

By: _______________________
    Name:__________________
    Title:_________________
          (Authorized Signatories)

                                       50

<PAGE>

AMERICAN UNITED LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

PIONEER MUTUAL LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

Purchasers of Series C Notes:

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

     By: CIGNA Investments, Inc.

         By: _______________________
             Name:__________________
             Title:_________________

LIFE INSURANCE COMPANY OF NORTH AMERICA

     By: CIGNA Investments, Inc.

         By: _______________________
             Name:__________________
             Title:_________________

JEFFERSON-PILOT LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

                                       51

<PAGE>

TEACHERS INSURANCE AND ANNUITY ASSOCIATION
    OF AMERICA

By: _______________________
    Name:__________________
    Title:_________________

SUNAMERICA LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

AMERICAN GENERAL LIFE INSURANCE COMPANY
and
AMERICAN GENERAL ANNUITY INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

NATIONWIDE LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

NATIONWIDE LIFE AND ANNUITY INSURANCE
    COMPANY

By: _______________________
    Name:__________________
    Title:_________________

NEW YORK LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

                                       52

<PAGE>

NEW YORK LIFE INSURANCE AND
     ANNUITY CORPORATION

   By:   New York Life Investment Management, LLC,
          its Investment Manager

         By: _______________________
             Name:__________________
             Title:_________________

THE CANADA LIFE ASSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

THE OHIO NATIONAL LIFE INSURANCE COMPANY

By: _______________________
    Name:__________________
    Title:_________________

MODERN WOODMEN OF AMERICA

By: _______________________
    Name:__________________
    Title:_________________

                                       53
<PAGE>

                      SCHEDULE A TO NOTE PURCHASE AGREEMENT

                          Information as to Purchasers

--------------------------------------------------------------------------------
         PURCHASER NAME                          PACIFIC LIFE
                                              INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    95-1079000
--------------------------------------------------------------------------------
Name in which to register Note(s)                 Mac & Co.
--------------------------------------------------------------------------------
Series                                             Series A
--------------------------------------------------------------------------------
Note registration number                              R-1
--------------------------------------------------------------------------------
Amount                                           $9,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Federal Reserve Bank of Boston
                                            ABA# 0110-0123-4/BOS SAFE DEP
                                            DDA 125261
                                            Attn:  MBS Income CC: 1253
                                            A/C Name: Pacific Life General
                                                      Account
                                                     PLCF1810132
                                            Re:      Security Description & PPN
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series A
                                            Senior Notes due November 30, 2003;
                                            CUSIP 44482 C# 8

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     Mellon Trust
                                            Attn: Pacific Life Accounting Team
                                            One Mellon Bank Center
                                            Room 0930
                                            Pittsburgh, PA 15258-0001
                                                AND
                                            Pacific Life Insurance Company
                                            Attn: Securities Administration-Cash
                                            Team
                                            700 Newport Center Drive
                                            Newport Beach, CA 92660-6397
--------------------------------------------------------------------------------
Address for all other communications        Pacific Life Insurance Company
and notices                                 Attn:  Securities Department
                                            700 Newport Center Drive
                                            Newport Beach, CA 92660-6397
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                           PACIFIC LIFE
                                              AND ANNUITY COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    95-3760914
--------------------------------------------------------------------------------
Name in which to register Note(s)                 Mac & Co.
--------------------------------------------------------------------------------
Series                                             Series A
--------------------------------------------------------------------------------
Note registration number                           R-2; R-3
--------------------------------------------------------------------------------
Amount                                       R-2 = $5,000,000.00
                                             R-3 = $5.000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Federal Reserve Bank of Boston
                                            ABA# 0110-0123-4/BOS SAFE DEP
                                            DDA 12561
                                            Attn:  MBS Income CC: 1253
                                            A/C Name: Pacific Life General
                                                      Account
                                                      PLCF1811612
                                            Re:       Security Description & PPN
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series A
                                            Senior Notes due November 30, 2003;
                                            CUSIP 44482 C# 8

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     Mellon Trust
                                            Attn: Pacific Life Accounting Team
                                            One Mellon Bank Center
                                            Room 0930
                                            Pittsburgh, PA 15258-0001
                                                AND
                                            Pacific Life Insurance Company
                                            Attn: Securities Administration-Cash
                                            Team
                                            700 Newport Center Drive
                                            Newport Beach, CA 92660-6397
--------------------------------------------------------------------------------
Address for all other communications        Pacific Life Insurance Company
and notices                                 Attn:  Securities Department
                                            700 Newport Center Drive
                                            Newport Beach, CA 92660-6397
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                     GENERAL ELECTRIC CAPITAL
                                                ASSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    91-6027719
--------------------------------------------------------------------------------
Name in which to register Note(s)               SALKELD & CO.
--------------------------------------------------------------------------------
Series                                             Series B
--------------------------------------------------------------------------------
Note registration number                              R-1
--------------------------------------------------------------------------------
Amount                                          $12,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Bankers Trust Company
                                            14 Wall Street
                                            New York, NY 10005
                                            SWIFT Code: BKTR US 33
                                            ABA #021-001-033
                                            Account Number 99-911-145
                                            FCC #097833
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     GE Financial Assurance
                                            Account: General Electric Capital
                                                     Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Accounting
                                                  Tel.: (206) 516-2871
                                                  Fax: (206) 516-4740
--------------------------------------------------------------------------------
Address for all other communications        GE Financial Assurance
and notices                                 Account:  General Electric Capital
                                                      Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Dept., Private
                                                  Placements
                                                  Tel: (206) 516-4954
                                                  Fax: (206) 516-4863
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                       GE LIFE AND ANNUITY
                                               ASSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    54---0283385
--------------------------------------------------------------------------------
Name in which to register Note(s)               SALKELD & CO.
--------------------------------------------------------------------------------
Series                                             Series B
--------------------------------------------------------------------------------
Note registration number                              R-2
--------------------------------------------------------------------------------
Amount                                           $2,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Bankers Trust Company
                                            14 Wall Street
                                            New York, NY 10005
                                            SWIFT Code: BKTR US 33
                                            ABA #021-001-033
                                            Account Number 99-911-145
                                            FCC #097828
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     GE Financial Assurance
                                            Account: General Electric Capital
                                                     Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Accounting
                                                  Tel.: (206) 516-2871
                                                  Fax: (206) 516-4740
--------------------------------------------------------------------------------
Address for all other communications        GE Financial Assurance
and notices                                 Account:  General Electric Capital
                                                      Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Dept., Private
                                                  Placements
                                                  Tel: (206) 516-4954
                                                  Fax: (206) 516-4863
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                     GE CAPITAL LIFE ASSURANCE
                                               COMPANY OF NEW YORK
--------------------------------------------------------------------------------
Taxpayer Identification Number                    22-2882416
--------------------------------------------------------------------------------
Name in which to register Note(s)               SALKELD & CO.
--------------------------------------------------------------------------------
Series                                             Series B
--------------------------------------------------------------------------------
Note registration number                              R-3
--------------------------------------------------------------------------------
Amount                                           $2,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Bankers Trust Company
                                            14 Wall Street
                                            New York, NY 10005
                                            SWIFT Code: BKTR US 33
                                            ABA #021-001-033
                                            Account Number 99-911-145
                                            FCC #097836
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     GE Financial Assurance
                                            Account: General Electric Capital
                                                     Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Accounting
                                                  Tel: (206) 516-2871
                                                  Fax: (206) 516-4740
--------------------------------------------------------------------------------
Address for all other communications        GE Financial Assurance
and notices                                 Account:  General Electric Capital
                                                      Assurance Company
                                            Two Union Square, 601 Union Street
                                            Seattle, WA 98101
                                            Attn: Investment Dept., Private
                                                  Placements
                                                  Tel: (206) 516-4954
                                                  Fax: (206) 516-4863
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                          ALLSTATE LIFE
                                               INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    36-2554642
--------------------------------------------------------------------------------
Name in which to register Note(s)         Allstate Life Insurance Company
--------------------------------------------------------------------------------
Series                                             Series B
--------------------------------------------------------------------------------
Note registration number                              R-4
--------------------------------------------------------------------------------
Amount                                          $8,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Harris Trust and Savings Bank
                                            ABA #071000288

                                            BNF   Allstate Life Insurance
                                                  Company Collection Account
                                                  #168-117-0
                                            ORG   (Enter Issuer Name)
                                            OBI   DPP - (Enter Private Placement
                                                   No., if available
                                                  Payment Due Date (MM/DD/YY)
                                                    P_____ (Enter "P"
                                                    and amount of principal
                                                    being remitted; for example,
                                                    P5000000.00) I_____
                                                    (Enter "I" and amount of
                                                    interest being remitted; for
                                                    example, I225000.00)
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     Allstate Insurance Company
                                            Investment Operations - Private
                                            Placements
                                            3075 Sanders Road, Suite G4A
                                            Northbrook, IL 60062-7127
                                            Telephone: (847) 402-2769
                                            Fax:       (847) 326-5040
--------------------------------------------------------------------------------
Address for all other communications        Allstate Insurance Company
and notices                                 Private Placements Department
                                            3075 Sanders Road, Suite G3A
                                            Northbrook, IL 60062-7127
                                            Telephone: (847) 402-8922
                                            Fax:       (847) 402-3092
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                      AMERICAN UNITED LIFE
                                               INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                    35-0145825
--------------------------------------------------------------------------------
Name in which to register Note(s)      American United Life Insurance Company
--------------------------------------------------------------------------------
Series                                             Series B
--------------------------------------------------------------------------------
Note registration numbers                          R-5; R-6
--------------------------------------------------------------------------------
Amount                                       R-5 = $2,000,000.00
                                             R-6 = $1,500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Bank of New York
                                            Attn:  P&I Department
                                            One Wall Street, 3rd Floor
                                            Window A
                                            New York, NY 10286
                                            ABA #021000018, BNF:IOC566
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     American United Life Insurance
                                            Company
                                            Attn: Christopher D. Palke,
                                                  Securities Department
                                            Post Office Box 368
                                            Indianapolis, IN 46206-0368
--------------------------------------------------------------------------------
Address for all other communications        American United Life Insurance
and notices                                 Company
                                            Attn: Christopher D. Palke,
                                                  Securities Department
                                            Post Office Box 368
                                            Indianapolis, IN 46206-0368
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                    PIONEER MUTUAL LIFE INSURANCE
                                                      COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                      45-0220640
--------------------------------------------------------------------------------
Name in which to register Note(s)      Pioneer Mutual Life Insurance Company
--------------------------------------------------------------------------------
Series                                               Series B
--------------------------------------------------------------------------------
Note registration numbers                              R-7
--------------------------------------------------------------------------------
Amount                                            $500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

   Method                                   Immediately available funds, via
                                            federal funds wire transfer

   Account Information                      Bank of New York
                                            Attn:  P&I Department
                                            One Wall Street, 3rd Floor
                                            Window A
                                            New York, NY 10286
                                            ABA #021000018, BNF:IOC566
                                            Pioneer Mutual, c/o American United
                                            Life
--------------------------------------------------------------------------------
Accompanying Information                    Hughes Supply, Inc.; 8.27% Series B
                                            Senior Notes due November 30, 2005;
                                            CUSIP 444482 D* 1

                                            [insert due date and application as
                                            among principal, premium and
                                            interest]
--------------------------------------------------------------------------------
Address for notices related to payments     American United Life Insurance
                                            Company
                                            Attn: Christopher D. Palke,
                                                  Securities Department
                                            Post Office Box 368
                                            Indianapolis, IN 46206-0368
--------------------------------------------------------------------------------
Address for all other communications        American United Life Insurance
and notices                                 Company
                                            Attn: Christopher D. Palke,
                                                  Securities Department
                                            Post Office Box 368
                                            Indianapolis, IN 46206-0368
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                    CONNECTICUT GENERAL LIFE INSURANCE
                                                       COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                        13-3574027
--------------------------------------------------------------------------------
Name in which to register Notes                        CIG & Co.
--------------------------------------------------------------------------------
Series                                                 Series C
--------------------------------------------------------------------------------
Note registration numbers                          R-1 through R-5
--------------------------------------------------------------------------------
Amount                                           R-1 = $3,200,000.00
                                                 R-2 = $5,000,000.00
                                                 R-3 = $3,800,000.00
                                                 R-4 = $3,000,000.00
                                                 R-5 = $4,000,000.00
--------------------------------------------------------------------------------
Payment on account of Notes

      Method                               Immediately available funds, via
                                           federal funds wire transfer

      Account Information                  Chase NYC/CTR
                                           BNF=CIGNA Private Placements
                                           AC=9009001802
                                           ABA#021000021
--------------------------------------------------------------------------------
Accompanying Information                   Hughes Supply, Inc.; 8.42% Series C
                                           Senior Notes due November 30, 2007
                                           CUSIP 444482 D@ 9

                                           [insert due date and application as
                                           among principal, premium and
                                           interest]
--------------------------------------------------------------------------------
 Address for notices related to payments   CIG & Co.
                                           c/o CIGNA Investments, Inc.
                                           Attn: Securities Processing S-309
                                           900 Cottage Grove Road
                                           Hartford, CT 06152-2309

                                           CIG & Co.
                                           c/o CIGNA Investments, Inc.
                                           Attn:  Private Securities -S307
                                           Operations Group
                                           900 Cottage Grove Road
                                           Hartford, CT 06152-2307
                                           Fax:  860-726-7203
                                               with a copy to:
                                               Chase Manhattan Bank
                                               Private Placement Servicing
                                               P.O. Box 1508
                                               Bowling Green Station
                                               New York, NY 10081
                                               Attn:  CIGNA Private Placements
                                               Fax:  212-552-3107/1005
--------------------------------------------------------------------------------
Address for all other communications      CIG & Co., c/o CIGNA Investments, Inc.
and notices                               Attention: Private Securities
                                          Division - S-307
                                          900 Cottage Grove Road
                                          Hartford, CT 06152-2307
                                          Fax:  860-726-7203
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                          LIFE INSURANCE COMPANY
                                                    OF NORTH AMERICA
--------------------------------------------------------------------------------
Taxpayer Identification Number                         13-3574027
--------------------------------------------------------------------------------
Name in which to register Note(s)                       CIG & Co.
--------------------------------------------------------------------------------
Series                                                  Series C
--------------------------------------------------------------------------------
Note registration number                                   R-6
--------------------------------------------------------------------------------
Amount                                               $3,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                Chase NYC/CTR
                                          BNF=CIGNA Private Placements
                                          AC=9009001802
                                          ABA#021000021
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   CIG & Co.
                                          c/o CIGNA Investments, Inc.
                                          Attn: Securities Processing S-309
                                          900 Cottage Grove Road
                                          Hartford, CT 06152-2309

                                          CIG & Co.
                                          c/o CIGNA Investments, Inc.
                                          Attn:  Private Securities -S307
                                          Operations Group
                                          900 Cottage Grove Road
                                          Hartford, CT 06152-2307
                                          Fax:  860-726-7203
                                              with a copy to:
                                              Chase Manhattan Bank
                                              Private Placement Servicing
                                              P.O. Box 1508
                                              Bowling Green Station
                                              New York, NY 10081
                                              Attn:  CIGNA Private Placements
                                              Fax:  212-552-3107/1005
--------------------------------------------------------------------------------
Address for all other communications     CIG & Co., c/o CIGNA Investments, Inc.
and notices                              Attention: Private Securities- S-307
                                         900 Cottage Grove Road
                                         Hartford, CT 06152-2307
                                         Fax:  860-726-7203
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                          JEFFERSON-PILOT LIFE
                                                   INSURANCE COMPANY

--------------------------------------------------------------------------------
Taxpayer Identification Number                         56-0359860
--------------------------------------------------------------------------------
Name in which to register Note(s)         Jefferson-Pilot Life Insurance Company
--------------------------------------------------------------------------------
Series                                                  Series C
--------------------------------------------------------------------------------
Note registration number                                   R-7
--------------------------------------------------------------------------------
Amount                                              $17,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

        Method                             Immediately available funds, via
                                           federal funds wire transfer

        Account Information                Jefferson-Pilot Life Insurance
                                           Company
                                           c/o The Bank of New York
                                           ABA#021 000 018  BNF: IOC566
                                           Attn:  P&I Department
--------------------------------------------------------------------------------
Accompanying Information                   Hughes Supply, Inc.; 8.42% Series C
                                           Senior Notes due November 30, 2007;
                                           CUSIP 444482 D@ 9

                                           [insert due date and application as
                                           among principal, premium and
                                           interest]
--------------------------------------------------------------------------------
Address for notices related to payments    Jefferson-Pilot Life Insurance
                                           Company
                                           c/o The Bank of New York
                                           Attention:  P&I Department
                                           P.O. Box 19266
                                           Newark, NJ 07195
--------------------------------------------------------------------------------
Address for all other communications       Jefferson-Pilot Life Insurance
and notices                                Company
                                           P.O. Box 21008
                                           Greensboro, NC 27420
                                           Attn:  Securities Administration -
                                                  3630
                                           Fax:  336-691-3717
                                               For hand delivery:
                                               100 North Greene Street
                                               (ZIP 27401)

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

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                        TEACHERS INSURANCE AND ANNUITY
                                                   ASSOCIATION OF AMERICA

--------------------------------------------------------------------------------
Taxpayer Identification Number                           13-1624203
--------------------------------------------------------------------------------
Name in which to register Note(s)             Teachers Insurance and Annuity
                                                  Association of America
--------------------------------------------------------------------------------
Series                                                   Series C
--------------------------------------------------------------------------------
Note registration number                                    R-8
--------------------------------------------------------------------------------
Amount                                                $17,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

        Method                             Immediately available funds, via
                                           federal funds wire transfer

        Account Information                Chase Manhattan Bank
                                           ABA #021-000-021
                                           Account of Teachers Insurance and
                                           Annuity Association of America
                                           Account No. 900-9-000200
                                           For further credit to the TIAA
                                           Account Number G07040
--------------------------------------------------------------------------------
Accompanying Information                   Hughes Supply, Inc.; 8.42% Series C
                                           Senior Notes due November 30, 2007;
                                           CUSIP 444482 D@ 9

                                           [insert due date and application as
                                           among principal, premium and
                                           interest; identify name of bank from
                                           which payment was sent]
--------------------------------------------------------------------------------
Address for notices related to payments    Teachers Insurance and Annuity
                                           Association of America
                                           730 Third Avenue
                                           New York, NY 10017-3206
                                           Attn: Securities Accounting Division
                                           212-916-6004 Phone
                                           212-916-6955 Fax
--------------------------------------------------------------------------------
Address for all other communications       Teachers Insurance and Annuity
and notices                                Association of America
                                           730 Third Avenue
                                           New York, NY 10017-3206
                                           Attn:  Securities Accounting Division
                                           212-916-5695  Greg MacCordy
                                           212-916-6329  Margie Ello-Satin
                                           212-490-9000  (General Number)
                                           212-916-6583  (Team Fax Number)
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                        SUNAMERICA LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                            52-0502540
--------------------------------------------------------------------------------
Name in which to register Note(s)                         OKGBD & Co.
--------------------------------------------------------------------------------
Series                                                      Series C
--------------------------------------------------------------------------------
Note registration number                                       R-9
--------------------------------------------------------------------------------
Amount                                                  $12,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                 Bankers Trust Company
                                           ABA #021-001-033
                                           Account #99-911-145
                                           For further credit to Account #099530
                                           Ref:  Hughes Supply
--------------------------------------------------------------------------------
Accompanying Information                   Hughes Supply, Inc.; 8.42% Series C
                                           Senior Notes due November 30, 2007;
                                           CUSIP 444482 D@ 9

                                           [insert due date and application as
                                           among principal, premium and
                                           interest]
--------------------------------------------------------------------------------
Address for notices related to payments    SunAmerica Financial
                                           Attn: Investment Accounting
                                           - 36th Floor
                                           1 SunAmerica Center
                                           Los Angeles, CA 90067-6022
                                           310-772-6486 Phone
                                           310-772-6596 Fax
--------------------------------------------------------------------------------
Address for all other communications       SunAmerica Investments
and notices                                c/o AIG Global Investment Corp.
                                           175 Water Street - 25th Floor
                                           New York, NY 10038
                                           Attn: Private Placements/G. Herman
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                                NATIONWIDE LIFE
                                                      INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                            31-4156830
--------------------------------------------------------------------------------
Name in which to register Note(s)             Nationwide Life Insurance Company
--------------------------------------------------------------------------------
Series                                                     Series C
--------------------------------------------------------------------------------
Note registration number                                     R-10
--------------------------------------------------------------------------------
Amount                                                  $7,500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                The Bank of New York
                                          ABA #021-000-108
                                          BNF: IOC566
                                          F/A/O Nationwide Life Insurance
                                          Company
                                          Attn:  P & I Department
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   Nationwide Life Insurance Company
                                          c/o The Bank of New York
                                          P.O. Box 19266
                                          Attn:  P & I Department
                                          Newark, NJ 07195
                                          with a copy to:
                                          Nationwide Life Insurance Company
                                          Attn:  Investment Accounting
                                          One Nationwide Plaza (1-32-05)
                                          Columbus, OH 43215-2220
--------------------------------------------------------------------------------
Address for all other communications      Nationwide Life Insurance Company
and notices                               One Nationwide Plaza (1-33-07)
                                          Columbus, OH 43215-2220
                                          Attn: Corporate Fixed-Income
                                          Securities
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                          NATIONWIDE LIFE AND ANNUITY
                                                      INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                            31-1000740
--------------------------------------------------------------------------------
Name in which to register Note(s)               Nationwide Life and Annuity
                                                      Insurance Company
--------------------------------------------------------------------------------
Series                                                     Series C
--------------------------------------------------------------------------------
Note registration number                                     R-11
--------------------------------------------------------------------------------
Amount                                                  $2,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                The Bank of New York
                                          ABA #021-000-018
                                          BNF: IOC566
                                          F/A/O Nationwide Life and Annuity
                                          Insurance Company
                                          Attn: P & I Department
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   Nationwide Life and Annuity Insurance
                                          Company
                                          c/o The Bank of New York
                                          P. O. Box 19266
                                          Attn:  P & I Department
                                          Newark, NJ 07195
                                          with a copy to:
                                          Nationwide Life and Annuity Insurance
                                          Company
                                          Attn:  Investment Accounting
                                          One Nationwide Plaza (1-32-05)
                                          Columbus, OH 43215-2220
--------------------------------------------------------------------------------
Address for all other communications      Nationwide Life and Annuity Insurance
and notices                               Company
                                          One Nationwide Plaza (1-33-07)
                                          Columbus, OH 43215-2220
                                          Attn: Corporate Fixed-Income
                                          Securities
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                        THE CANADA LIFE ASSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                             38-0397420
--------------------------------------------------------------------------------
Name in which to register Note(s)                        J. Romeo & Co.
--------------------------------------------------------------------------------
Series                                                       Series C
--------------------------------------------------------------------------------
Note registration number                                        R-12
--------------------------------------------------------------------------------
Amount                                                    $9,500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)
       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                Chase Manhattan Bank
                                          ABA 021-000-021
                                          A/C 900-9-000200
                                          Trust Account No. G52708
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   Chase Manhattan Bank
                                          North American Insurance
                                          3 Chase MetroTech Centre, 6th Floor
                                          Brooklyn, NY 11245
                                          Attn: Doll Balbadar
                                             with a copy to:
                                             The Canada Life Assurance Company
                                             330 University Avenue, SP-12
                                             Securities Accounting
                                             Toronto, ON M5G 1R8
--------------------------------------------------------------------------------
Address for all other communications      Canada Life Assurance Company
and notices                               330 University Avenue, SP-11
                                          Toronto, ON M5G 1R8
                                          Attn:  Paul English, US Investments
                                          Division
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                        NEW YORK LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                            13-5582869
--------------------------------------------------------------------------------
Name in which to register Note(s)              New York Life Insurance Company
--------------------------------------------------------------------------------
Series                                                     Series C
--------------------------------------------------------------------------------
Note registration number                                     R-13
--------------------------------------------------------------------------------
Amount                                                   $2,500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                Chase Manhattan Bank
                                          New York, NY 10019
                                          ABA #021-000-021
                                          Credit:  New York Life Insurance
                                          Company
                                          General Account No. 008-9-00687
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   New York Life Insurance Company
                                          51 Madison Avenue
                                          New York, NY 10010-1603
                                          Attn: Treasury Department
                                                Securities Income Section
                                                Room 209
                                                Fax: 212-447-4160
--------------------------------------------------------------------------------
Address for all other communications      New York Life Insurance Company
and notices                               51 Madison Avenue
                                          New York, NY 10010-1603
                                          Attn: Investment Department
                                                Private Finance Group
                                                Room 206
                                                Fax:  212-447-4122
                                                with a copy of any notices
                                                regarding defaults or Events of
                                                Default under the operative
                                                documents to:
                                                Attn: Office of General Counsel
                                                Investment Section, Room 1107
                                                Fax: 212-576-8340
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                        NEW YORK LIFE INSURANCE AND
                                                   ANNUITY CORPORATION
--------------------------------------------------------------------------------
Taxpayer Identification Number                           13-3044743
--------------------------------------------------------------------------------
Name in which to register Note(s)              New York Life Insurance and
                                                   Annuity Corporation
--------------------------------------------------------------------------------
Series                                                    Series C
--------------------------------------------------------------------------------
Note registration number                                     R-14
--------------------------------------------------------------------------------
Amount                                                  $5,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)
       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                Chase Manhattan Bank
                                          New York, NY 10019
                                          ABA #021-000-021
                                          Credit:  New York Life Insurance
                                          and Annuity Corporation
                                          General Account No. 323-8-47382
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   New York Life Insurance and
                                          Annuity Corporation
                                          51 Madison Avenue
                                          New York, NY 10010-1603
                                          Attn: Treasury Department
                                                Securities Income Section
                                                Room 209
                                                Fax: 212-447-4160
--------------------------------------------------------------------------------
Address for all other communications      New York Life Insurance Company
and notices                               51 Madison Avenue
                                          New York, NY 10010-1603
                                          Attn: Investment Department
                                                Private Finance Group
                                                Room 206
                                                Fax:  212-447-4122
                                                with a copy of any notices
                                                regarding defaults or Events of
                                                Default under the operative
                                                documents to:
                                                Attn: Office of General Counsel
                                                Investment Section, Room 1107
                                                Fax: 212-576-8340
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                 THE OHIO NATIONAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Taxpayer Identification Number                          31-0397080
--------------------------------------------------------------------------------
Name in which to register Note(s)       The Ohio National Life Insurance Company
--------------------------------------------------------------------------------
Series                                                   Series C
--------------------------------------------------------------------------------
Note registration number                                   R-15
--------------------------------------------------------------------------------
Amount                                                $4,500,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                Firstar Bank, N.A.
                                          ABA #042-000013
                                          5th & Walnut Streets
                                          Cincinnati, OH 45202
                                          For credit to The Ohio National Life
                                          Insurance
                                          Company:  Account No. 910-275-7
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 3, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   The Ohio National Life Insurance
                                          Company
                                          P.O. Box 237
                                          Cincinnati, OH 45201
                                          Attn:  Investment Department
--------------------------------------------------------------------------------
Address for all other communications      The Ohio National Life Insurance
and notices                               Company
                                          One Financial Way
                                          Cincinnati, OH 45242
                                          Attn:  Investment Department
                                          Fax:   513-794-4506
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         PURCHASER NAME                       MODERN WOODMEN OF AMERICA
--------------------------------------------------------------------------------
Taxpayer Identification Number                         36-1493430
--------------------------------------------------------------------------------
Name in which to register Note(s)             Modern Woodmen of America
--------------------------------------------------------------------------------
Series                                                  Series C
--------------------------------------------------------------------------------
Note registration number                                  R-16
--------------------------------------------------------------------------------
Amount                                                $4,000,000.00
--------------------------------------------------------------------------------
Payment on account of Note(s)

       Method                             Immediately available funds, via
                                          federal funds wire transfer

       Account Information                The Northern Trust Company
                                          50 South LaSalle Street
                                          Chicago, IL 60675
                                          ABA #071-000-152
                                          Account Name: Modern Woodmen
                                                        of America
                                                        Account No. 84352
--------------------------------------------------------------------------------
Accompanying Information                  Hughes Supply, Inc.; 8.42% Series C
                                          Senior Notes due November 30, 2007;
                                          CUSIP 444482 D@ 9

                                          [insert due date and application as
                                          among principal, premium and interest]
--------------------------------------------------------------------------------
Address for notices related to payments   Modern Woodmen of America
                                          Attn: Investment Accounting Department
                                          1701 First Avenue
                                          Rock Island, IL 61201
--------------------------------------------------------------------------------
Address for all other communications      Modern Woodmen of America
and notices                               Attn:  Investment Department
                                          1701 First Avenue
                                          Rock Island, IL 61201
--------------------------------------------------------------------------------

<PAGE>

                      SCHEDULE B TO NOTE PURCHASE AGREEMENT

                                  Defined Terms

         As used herein,  the following  terms have the respective  meanings set
forth below or set forth in the Section hereof following such term:

         "Acquired Debt" shall mean, with respect to any specified  Person:  (i)
Debt of any other  Person  existing at the time such other Person is merged with
or into, or became a Subsidiary of, such specified  Person,  whether or not such
Debt is incurred in connection with, or in  contemplation  of, such other Person
merging with or into, or becoming a Subsidiary  of, such specified  Person;  and
(ii) Debt secured by a Lien  encumbering  any asset  acquired by such  specified
Person.

         "Adjusted  Interest  Coverage  Ratio"  shall mean,  with respect to the
Company  and its  Subsidiaries  on a  Consolidated  basis,  the  ratio  of:  (i)
Consolidated  EBITDAR  for  the  Four-Quarter  Period  ending  on  the  date  of
computation  thereof to (ii) the sum of: (a)  Consolidated  Interest Expense for
such  Four-Quarter   Period  plus  (b)  Consolidated  Rental  Expense  for  such
Four-Quarter Period.

         "Affiliate" means, at any time, and with respect to any Person, (a) any
other  Person  that at such time  directly  or  indirectly  through  one or more
intermediaries  Controls,  or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially  owning or holding,  directly
or  indirectly,  10% or more of any class of voting or equity  interests  of the
Company  or any  Subsidiary  or any  corporation  of which the  Company  and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or  more  of any  class  of  voting  or  equity  interests.  As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the  direction  of the  management  and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

         "Bank  Credit  Agreement"  shall mean (i) that  certain  Line of Credit
Agreement  dated as of January  26, 1999 by and among the  Company,  the Lenders
named therein and SunTrust  Bank,  Central  Florida,  National  Association,  as
Administrative  Agent,  as  amended  and as the  same may be  further  modified,
amended,  renewed, extended or supplemented from time to time, (ii) that certain
Revolving  Credit  Agreement  dated as of  January  26,  1999 by and  among  the
Company, the Lenders named therein and SunTrust Bank, Central Florida,  national
Association,  as Administrative  Agent, and as the same may be further modified,
amended,  renewed,  extended or supplemented  from time to time, (iii) any other
committed  revolving  and/or  term credit  facility,  note  purchase  agreement,
indenture  or other  instrument  or line of credit  having a maturity of greater
than one year and evidencing  Funded Debt equal to or in excess of  $25,000,000,
and  (iv)  all  replacements,   extensions,   substitutions,   refinancings  and
refundings thereof.

         "Beneficial Owner" shall have the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the  Exchange  Act,  except that in  calculating  the
beneficial ownership of any particular "person" (as such term is used in Section
13(d)(3) of the

<PAGE>

Exchange Act), such "person" shall be deemed to have beneficial ownership of all
securities  that such  "person" has the right to acquire,  whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.

         "Board of  Directors"  means the board of  directors of the Company (or
such other group of individuals designated to perform a similar function).

         "Business Day" shall mean any day other than a Saturday,  a Sunday or a
day on which  commercial banks in New York City are required or authorized to be
closed.

         "Capital  Lease"  means a lease  with  respect  to which the  lessee is
required  concurrently  to  recognize  the  acquisition  of  an  asset  and  the
incurrence of a liability in accordance with GAAP.

         "Capital Stock" shall mean, with respect to any Person, the outstanding
capital stock  (including all common,  preferred or other equity  securities and
any  options  or  warrants  to  purchase   capital  stock  or  other  securities
exchangeable for or convertible into capital stock) of such Person.

         "Capitalized  Lease Obligation" shall mean, with respect to any Person,
any  rental  obligation  which,  under  GAAP,  is  or  will  be  required  to be
indebtedness (net of interest expense) in accordance with such principles.

         "Change of Control" means the occurrence of any of the following:

               (i) the sale,  transfer,  conveyance or other disposition  (other
          than by way of merger or consolidation), in one or a series of related
          transactions, of all or substantially all of the assets of the Company
          and its Subsidiaries,  taken as a whole, to any "person" (as such term
          is used in Section 13(d)(3) of the Exchange Act);

               (ii)  the  adoption  of a plan  relating  to the  liquidation  or
          dissolution of the Company;

               (iii) the  consummation  of any transaction  (including,  without
          limitation,  any merger or consolidation)  the result of which is that
          any "person" (as defined above) becomes the Beneficial Owner, directly
          or  indirectly,  of more than 30% of the Voting  Stock of the Company,
          measured by voting power rather than number of shares;

               (iv) the  first day on which a  majority  of the  members  of the
          Board of Directors of the Company are not Continuing Directors; or

               (v) the Company  consolidates  with, or merges with or into,  any
          Person, or any Person  consolidates  with, or merges with or into, the
          Company,  in any  such  event  pursuant  to a  transaction  in which a
          majority  of the  Voting  Stock of the  Company is  converted  into or
          exchanged for cash, securities or other property.

<PAGE>

         "Closing" is defined in Section 3.

         "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time, and the rules and regulations  promulgated thereunder from time to
time.

         "Company" shall mean Hughes Supply, Inc., a Florida corporation, or any
successor  thereto  that shall have  become  such in the  manner  prescribed  in
Section 10.7.

         "Confidential Information" is defined in Section 20.

         "Consolidated" shall mean the consolidated financial information of the
Company and its Subsidiaries under generally accepted accounting principles.

         "Consolidated  Assets" shall mean, at any time, the total assets of the
Company and its Subsidiaries on a Consolidated basis under GAAP.

         "Consolidated  Current  Debt"  shall mean,  at any time,  the amount of
Current Debt of the Company and its  Subsidiaries on a Consolidated  basis under
GAAP at such time.

         "Consolidated EBITR" shall mean, for any period, an amount equal to the
sum of  Consolidated  Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income (i) provisions for taxes based on income for
such period,  (ii)  Consolidated  Interest  Expense for such  period,  and (iii)
Consolidated Rental Expense for such period.

         "Consolidated  EBITDAR" shall mean, for any period,  an amount equal to
the sum of  Consolidated  EBITR for such period plus, to the extent  deducted in
determining  Consolidated Net Income,  depreciation and amortization  expense of
the Company and its  Subsidiaries  on a  Consolidated  basis (as  determined  in
accordance with GAAP) for such period.

         "Consolidated  Funded  Debt"  shall  mean,  at  any  time  but  without
duplication,  the amount of Funded Debt of the Company and its Subsidiaries on a
Consolidated basis under GAAP at such time.

         "Consolidated  Interest  Expense"  shall mean,  for any  period,  total
interest expense (including without limitation, interest expense attributable to
capitalized leases in accordance with generally accepted accounting  principles)
of the Company and its Subsidiaries on a Consolidated basis under GAAP.

         "Consolidated Net Income" shall mean, for any period,  the consolidated
net income (or loss) of the Company and its  Subsidiaries for such period (taken
as a single accounting period) determined in conformity with GAAP, but excluding
therefrom (to the extent otherwise included therein) (i) any extraordinary gains
or losses, together with any related provision for taxes, realized upon any sale
of assets outside the ordinary course of business,  and (ii)  undistributed  net
income of a Subsidiary  to the extent that such  distribution  is  prohibited by

<PAGE>

agreement,  judgment or regulation;  provided,  however,  that all earnings from
acquisitions will accrue to the benefit of the Company in accordance with GAAP.

         "Consolidated  Net Worth" shall mean,  at any time,  on a  Consolidated
basis,  shareholders'  equity of the Company and its  Subsidiaries  at such time
determined in accordance with GAAP.

         "Consolidated  Rental  Expense"  shall  mean,  for  any  period,  total
operating  lease expense of the Company and its  Subsidiaries  on a Consolidated
basis under GAAP.

         "Consolidated Total Capitalization" shall mean, at any time, the sum of
Consolidated Net Worth and Consolidated Funded Debt.

         "Continuing  Director"  means,  as of any  date of  determination,  any
member of the Board of Directors of the Company who:

               (i) was a member of such Board of  Directors  on the date hereof;
          or

               (ii) was  nominated  for  election  or  elected  to such Board of
          Directors with the approval of a majority of the Continuing  Directors
          who were  members  of such  Board at the  time of such  nomination  or
          election.

         "Control Event" means the execution of any written agreement that, when
fully performed by the parties thereto, would result in a Change of Control.

         "Current  Debt"  shall mean all Debt with an  original  maturity of one
year or less.  For the  avoidance of doubt,  Debt  incurred  under a Bank Credit
Agreement shall not constitute "Current Debt".

         "Debt" shall mean, without duplication,  with respect to any Person, as
at any date of determination:

               (i) all  indebtedness  for  borrowed  money which such Person has
          directly  or  indirectly  created,  incurred  or  assumed  (including,
          without limitation, all Capitalized Lease Obligations);

               (ii) all indebtedness, whether or not for borrowed money, secured
          by any  Lien on any  property  or asset  owned or held by such  Person
          subject thereto, whether or not the indebtedness secured thereby shall
          have been assumed by such Person;

               (iii) any  indebtedness,  whether or not for borrowed money, with
          respect to which such Person has become directly or indirectly  liable
          and which  represents  or has been  incurred to finance  the  purchase
          price (or a portion  thereof) of any  property or services or business
          acquired by such Person, whether by purchase, consolidation, merger or
          otherwise other than any payables and accrued expenses in the ordinary
          course of business that are current liabilities under GAAP; and

<PAGE>

               (iv)  any  indebtedness  of any  other  Person  of the  character
          referred to in clauses (i),  (ii),  or (iii) of this  definition  with
          respect to which the Person whose Debt is being  determined has become
          liable by way of a Guarantee;

all as determined in accordance  with GAAP;  provided,  however,  Debt shall not
include  endorsement  of negotiable  instruments  for collection in the ordinary
course of business.

         "Default"  shall mean an event or condition the occurrence or existence
of which would,  with the lapse of time or the giving of notice or both,  become
an Event of Default.

         "Default  Rate" shall mean that rate of interest that is the greater of
(i) 2% per annum  above the rate of  interest  stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest  publicly  announced
by The Chase Manhattan Bank as its "base" or "prime" rate.

         "Environmental Laws" shall mean any and all Federal,  state, local, and
foreign statutes,  laws,  regulations,  ordinances,  rules,  judgments,  orders,
decrees,  permits,  concessions,  grants,  franchises,  licenses,  agreements or
governmental  restrictions  relating  to  pollution  and the  protection  of the
environment or the release of any materials into the environment,  including but
not limited to those related to hazardous  substances  or wastes,  air emissions
and discharges to waste or public systems.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as  amended  from  time to  time,  and the  rules  and  regulations  promulgated
thereunder from time to time in effect.

         "ERISA  Affiliate"  shall mean any trade or  business  (whether  or not
incorporated)  that is treated as a single  employer  together  with the Company
under section 414 of the Code.

         "Event of Default" is defined in Section 11.

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended.

         "Fair Market Value" shall mean, at any time, the sale value of property
that would be realized in an arm's  length sale at such time between an informed
and willing buyer,  and an informed and willing  seller,  under no compulsion to
buy or sell, respectively.

         "Four-Quarter Period" shall mean the rolling, previous consecutive four
fiscal-quarter  period  ending  on the  date  of any  computation  of any  ratio
contained herein.

         "Funded  Debt"  shall mean (i) all Debt with an  original  maturity  of
greater than one year (including  Debt incurred under a Bank Credit  Agreement),
including  current  maturities  of such Debt,  and all Debt  which is  renewable
solely  at the  option of the  Company  or a  Subsidiary,  (ii) all Debt with an
original  maturity of less than one year,  including  commercial paper issued by
the Company,  if a direct or  secondary  source of

<PAGE>

repayment of such Debt is, or such Debt is credit  enhanced by, a line of credit
or other financial  accommodation having a maturity of greater than one year and
(iii) all other Debt that is now or  hereafter  characterized  by the Company or
any Subsidiary in its financial statements as "Funded Debt".

         "GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.

         "Governmental Authority" shall mean

               (a) the government of

                    (i) the  United  States  of  America  or any  State or other
               political subdivision thereof, or

                    (ii) any jurisdiction in which the Company or any Subsidiary
               conducts  all or any  part  of its  business,  or  which  asserts
               jurisdiction   over  any   properties   of  the  Company  or  any
               Subsidiary, or

               (b)  any  entity  exercising  executive,  legislative,  judicial,
          regulatory or administrative  functions of, or pertaining to, any such
          government.

         "Guarantee"  shall  mean,  with  respect to any  Person,  any direct or
indirect liability,  contingent or otherwise, of such Person with respect to any
Debt,  lease,  dividend  or other  obligation  of  another,  including,  without
limitation,  any such  obligation  directly or indirectly  guaranteed,  endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted  or sold with  recourse by such  Person,  or in respect of which such
Person  is  otherwise   directly  or  indirectly  liable,   including,   without
limitation,  any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge  of such  obligation  (whether in the form of loans,  advances,  stock
purchases,  capital  contributions or otherwise) in any such case if the purpose
or intent of such agreement is to provide assurance that such obligation will be
paid or  discharged,  or that any agreements  relating  thereto will be complied
with, or that the holders of such obligation  will be protected  against loss in
respect  thereof.  The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which the
maximum exposure of the guarantor shall have been specifically limited.

         "Hazardous  Material"  shall  mean  any and all  pollutants,  toxic  or
hazardous  wastes or any other  substances that might pose a hazard to health or
safety,  the removal of which may be required  or the  generation,  manufacture,
refining, production,  processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be  restricted,  prohibited or penalized by any applicable law
(including, without limitation,  asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

<PAGE>

         "Holder" shall mean, with respect to any Note, the Person in whose name
such Note is  registered in the register  maintained by the Company  pursuant to
Section 13.1.

         "Institutional  Investor"  shall mean (a) any  original  purchaser of a
Note,  (b) any holder of a Note holding more than 5% of the aggregate  principal
amount of the Notes then outstanding,  and (c) any bank, trust company,  savings
and loan  association  or other  financial  institution,  any pension plan,  any
investment  company,  any insurance company,  any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.

         "Lien" shall mean,  with  respect to any Person,  any  mortgage,  lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor,  lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention  agreement or Capital Lease,  upon
or with respect to any property or asset of such Person  (including  in the case
of stock,  stockholder  agreements,  voting  trust  agreements  and all  similar
arrangements).

         "Make-Whole Amount" is defined in Section 8.6.

         "Material" shall mean material in relation to the business, operations,
affairs,  financial condition,  assets,  properties, or prospects of the Company
and its Subsidiaries taken as a whole.

         "Material  Adverse Effect" shall mean a material  adverse effect on (a)
the business, operations,  affairs, financial condition, assets or properties of
the Company  and its  Subsidiaries  taken as a whole,  or (b) the ability of the
Company to perform its  obligations  under this Agreement and the Notes,  or (c)
the validity or enforceability of this Agreement or the Notes.

         "Material  Subsidiary"  shall  mean (i) each  Subsidiary  set  forth on
Schedule  4.11 and (ii) each other  Subsidiary  of the Company,  now existing or
hereinafter established or acquired, that has or acquires total assets in excess
of $1,000,000 or that accounted for or produced more than 5% of the Consolidated
EBITR of the  Company  on a  Consolidated  basis  during  any of the three  most
recently completed fiscal years of the Company.

         "Memorandum" is defined in Section 5.3.

         "Multiemployer Plan" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).

         "Net Proceeds"  shall mean the aggregate cash proceeds  received by the
Company or any of its  Subsidiaries  in respect of any  Disposition  (including,
without limitation,  any cash received upon the sale or other disposition of any
non-cash  consideration  received in any  Disposition),  net of the direct costs
relating to such Disposition,  including, without limitation,  legal, accounting
and investment banking fees, and sales commissions,  and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available  tax credits or deductions  and any
tax-sharing arrangements.

<PAGE>

         "Notes" is defined in Section 1.

         "Officer's  Certificate" shall mean a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities  extend to
the subject matter of such certificate.

         "Other Agreements" is defined in Section 2.

         "Other Purchasers" is defined in Section 2.

         "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to
and defined in ERISA or any successor thereto.

         "Person"  shall  mean  an  individual,  corporation,  company,  limited
liability  company,  voluntary  association,   partnership,   limited  liability
partnership, trust, unincorporated organization or joint venture or a government
or any agency,  instrumentality or political  subdivision  thereof,  and for the
purpose of the definition of "ERISA Affiliate", a trade or business.

         "Plan"  shall mean an  "employee  benefit  plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or  maintained,  or to which  contributions  are or, within the  preceding  five
years,  have been  made or  required  to be made,  by the  Company  or any ERISA
Affiliate or with respect to which the Company or any ERISA  Affiliate  may have
any liability.

         "Preferred   Stock"  shall  mean  any  class  of  Capital  Stock  of  a
corporation  that is  preferred  over any other  class of Capital  Stock of such
corporation  as to the  payment of  dividends  or the payment of any amount upon
liquidation or dissolution of such corporation.

         "Priority  Debt" shall mean with  respect to any  Person,  at any time,
without duplication, the sum of:

                (i) Unsecured Debt of each Subsidiary (other than such Debt held
                    by the Company or a Wholly-Owned Subsidiary thereof);

               (ii) Debt of the Company and any  Subsidiary  secured by any Lien
                    unless such Lien is otherwise permitted by subparagraphs (i)
                    through (xiii) of Section 10.5 (other than such Debt held by
                    the Company or a Wholly-Owned Subsidiary thereof); and

              (iii) All Preferred Stock of Subsidiaries  owned by a Person other
                    than the Company or a Wholly-Owned Subsidiary thereof.

         "Property" or "Properties"  shall mean,  unless otherwise  specifically
limited,  real or personal property of any kind, tangible or intangible,  choate
or inchoate.

<PAGE>

         "QPAM  Exemption"  shall mean  Prohibited  Transaction  Class Exemption
84-14 issued by the United States Department of Labor.

         "Required  Holders"  shall  mean the  holders  of at  least  51% in the
principal amount of the Notes at the time outstanding.

         "Responsible  Officer" shall mean any Senior Financial  Officer and any
other officer of the Company with  responsibility  for the administration of the
relevant portion of this agreement.

         "Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.

         "Senior  Financial  Officer"  shall mean the chief  financial  officer,
principal accounting officer, treasurer or comptroller of the Company.

         "Series A Notes,"  "Series B Notes" and "Series C Notes" shall have the
meaning set forth in Section 1 and any reference to a particular  "Series" shall
be a reference to either the Series A Notes, Series B Notes or Series C Notes.

         "Subsidiary"  means, as to any Person, any corporation,  association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests  to  enable  it or them (as a group)  ordinarily,  in the  absence  of
contingencies,  to elect a majority  of the  directors  (or  Persons  performing
similar  functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or  more  of its  Subsidiaries  or  such  Person  and  one  or  more  of its
Subsidiaries  (unless such  partnership or joint venture can and does ordinarily
take major business  actions without the prior approval of such Person or one or
more of its  Subsidiaries).  Unless the context otherwise clearly requires,  any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

         "Subsidiary  Debt" shall mean all Debt of which the direct obligor is a
subsidiary of the Company.

         "Voting  Stock" of any  Person as of any date  shall  mean the  Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.

         "Wholly-Owned  Subsidiary"  means,  at any  time,  any  Subsidiary  one
hundred  percent  (100%)  of all  of the  equity  interests  (except  directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.

<PAGE>

                     SCHEDULE 4.9 TO NOTE PURCHASE AGREEMENT

                         Changes in Corporate Structure

         (i) Closed Acquisitions:

             -   bestroute.com,  LLC,  a New York  limited  liability  company -
                 closed September 27, 2000

             -   Kingston Pipe  Industries,  Inc., a Rhode Island  corporation -
                 closed  August  30,  2000  Does  not  include  asset   purchase
                 acquisitions   where  the  acquiring   entity  is  an  existing
                 subsidiary of the Company

         (ii) Pending Acquisitions:

              None

<PAGE>

                    SCHEDULE 4.11 TO NOTE PURCHASE AGREEMENT

            Material Subsidiaries Executing and Delivering Guarantees
                               on Date of Closing

Each of the following is a Material Subsidiary of the Company:

Atlantic Pump & Equipment Company of Miami, Inc., a Florida corp.
Atlantic Pump & Equipment Company of West Palm Beach, Inc., a Florida corp.
Bestroute.com, LLC, a New York limited liability company (99% owned subsidiary)
Carolina Pump & Supply Corp., a Rhode Island corp.
Cayesteel, Inc., a Georgia corp. (100% owned by WCC Merger Corporation)
Chad Supply, Inc., a Florida corp.
Coastal Wholesale, Inc., a Florida corp.
Dominion Pipe Fabricators, Incorporated, a Virginia corp.
Dominion Pipe & Supply Co., a Virginia corp.
Douglas Leonhardt & Associates, a North Carolina corp.
Elasco Agency Sales, Inc., an Illinois corp.
Elec-Tel Supply Company, a Georgia corp.
Electric Laboratories and Sales Corporation, a Delaware corp.
FES Merger Corp., Inc., a Florida corp.
Gayle Supply Company, an Alabama corp.
Gilleland Concrete Products, Inc., a Georgia corp.
HSI Acquisition Corporation, an Ohio corp.
HSI Bestroute Investment, Inc., a Florida corp.
HSI Fusion Services, Inc., a Florida corp.
Hughes Supply Management Services, Inc., a Delaware corporation
Hughes Water & Sewer Company, a West Virginia corp.
H Venture Corporation, a Florida corp.
Juno Industries, Inc., a Florida corp.
Kamen Supply Company, Inc., a Kansas corp.
Kingston Pipe Industries, Inc., a Rhode Island corp.
Merex Corporation, a Texas corp.
Metals Incorporated, an Oklahoma corp.
Metals, Inc. - Gulf Coast Division, an Oklahoma corp.
Mills & Lupton Supply Company, a Tennessee corp.
Moore Electric Supply, Inc., a North Carolina corp.
Mountain Country Supply, Inc., an Arizona corp.
Olander & Brophy, Incorporated, a Pennsylvania corp.
One Stop Supply, Inc., a Tennessee corp.
Paine Supply of Jackson, Inc., a Mississippi corp.

[Listing of Material Subsidiaries Continued on Next Page]

<PAGE>

[Continuation of Listing of Material Subsidiaries]

Palm Pool Products, Inc., a Michigan corp.
Panhandle Pipe & Supply Co., Inc., a West Virginia corp.
Port City Electrical Supply, Inc., a Georgia corp.
R & G Plumbing Supply, Inc., an Alabama corp.
Reaction Supply Corporation, a California corp.
Shrader Holding Company, Inc., an Arkansas corp.
Southwest Stainless, L. P., a Delaware limited partnership
Stainless Tubular Products, Inc., an Oklahoma corp.
USCO Incorporated, a North Carolina corp.
Union Merger Corporation, a North Carolina corp.
U.S. Fusion Services, Inc., a Louisiana corp.
Virginia Water & Waste Supply Company, Inc., a Virginia corp.
WCC Merger Corporation, a Georgia corp.
Wholesale Electric Supply Corporation, a New York corp.
Z&L Acquisition Corp., a Delaware corp.

<PAGE>

                     SCHEDULE 5.3 TO NOTE PURCHASE AGREEMENT

                              Disclosure Materials

                                 No Exceptions.

<PAGE>

                     SCHEDULE 5.4 TO NOTE PURCHASE AGREEMENT

                           Subsidiaries of the Company
                  and Ownership of Subsidiary Stock; Company's
               Affiliates; Company's Directors and Senior Officers

         (i)  Subsidiaries of the Company

                                 Legal Entities

SUBSIDIARIES:
(updated as of April 23, 2001)

Atlantic Pump & Equipment Company of Miami, Inc., a Florida corp.
Atlantic Pump & Equipment Company of West Palm Beach, Inc., a Florida corp.
Bestroute.com, LLC, a New York limited liability company (99%) owned)
Carolina Pump & Supply Corp., a Rhode Island corp.
Cayesteel, Inc., a Georgia corp. (100% owned by WCC Merger Corporation)
CF Fluid Controls, Inc., a Texas corp.
Chad Supply, Inc., a Florida corp.
Coastal Wholesale, Inc., a Florida corp.
Dominion Pipe Fabricators, Incorporated, a Virginia corp.
Dominion Pipe & Supply Co., a Virginia corp.
Douglas Leonhardt & Associates, a North Carolina corp.
Elasco Agency Sales, Inc., an Illinois corp.
Elec-Tel Supply Company, a Georgia corp.
Electric Laboratories and Sales Corporation, a Delaware corp.
FES Merger Corp., Inc., a Florida corp.
Gayle Supply Company, an Alabama corp.
Gilleland Concrete Products, Inc., a Georgia corp.
HHH, Inc., a Delaware corp.
HSI Acquisition Corporation, an Ohio corp.
HSI Bestroute Investment, Inc., a Florida corp.
HSI Corp., a Delaware corp.
HSI Fusion Services, Inc., a Florida corp.
Hughes Supply Foundation, Inc., a Florida not-for-profit corporation
Hughes Supply Management Services, Inc., a Delaware corporation
Hughes Water & Sewer Company, a West Virginia corp.
H Venture Corporation, a Florida corp.
Juno Industries, Inc., a Florida corp.
Kamen Supply Company, Inc., a Kansas corp.

[Listing of Subsidiaries Continued on Next Page]

<PAGE>

[Listing of Subsidiaries Continued]

Kingston Pipe Industries, Inc., a Rhode Island corp.
L&T of Delaware, Inc., a Delaware corp.
Merex Corporation, a Texas corp.
Merex de Mexico, S.A. De C.V., a Mexican corp. (75% owned)
Merex Diesel Power, S.A. De C.V., a Mexican corp. (75% owned)
Metals Incorporated, an Oklahoma corp.
Metals, Inc. - Gulf Coast Division, an Oklahoma corp.
Mills & Lupton Supply Company, a Tennessee corp.
Moore Electric Supply, Inc., a North Carolina corp.
Mountain Country Supply, Inc., an Arizona corp.
Olander & Brophy, Incorporated, a Pennsylvania corp.
One Stop Supply, Inc., a Tennessee corp.
Paine Supply of Jackson, Inc., a Mississippi corp.
Palm Pool Products, Inc., a Michigan corp.
Panhandle Pipe & Supply Co., Inc., a West Virginia corp.
Port City Electrical Supply, Inc., a Georgia corp.
R & G Plumbing Supply, Inc., an Alabama corp.
Reaction Supply Corporation, a California corp.
Shrader Holding Company, Inc., an Arkansas corp.
Southwest Stainless, L. P., a Delaware limited partnership
Stainless Tubular Products, Inc., an Oklahoma corp.
USCO Incorporated, a North Carolina corp.
Union Merger Corporation, a North Carolina corp.
U.S. Fusion Services, Inc., a Louisiana corp.
Virginia Water & Waste Supply Company, Inc., a Virginia corp.
WCC Merger Corporation, a Georgia corp.
Wholesale Electric Supply Corporation, a New York corp.
Z&L Acquisition Corp., a Delaware corp.

         Except as noted above, all Subsidiaries are Wholly-Owned Subsidiaries

         (ii) Affiliates of the Company:

               (a) No Person holds 10% or more of the Company's  common stock as
          of the date of this Agreement.

               (b)  Except for the  Subsidiaries  of the  Company,  there are no
          other Affiliates of the Company.

<PAGE>

     (iii)  Directors and Senior Officers of the Company:

            Directors:

              David H. Hughes
              Vincent S. Hughes
              A. Stewart Hall, Jr.
              John D. Baker II
              Robert N. Blackford
              H. Corbin Day
              William P. Kennedy

            Officers:

              David H. Hughes, Chairman of the Board and Chief Executive Officer
              A. Stewart Hall, Jr., President
              Vincent S. Hughes, Vice President
              Sidney J. Strickland, Vice President
              Gradie Winstead, Group President
              Jim Holland, Group President
              Skip Hughes, Group President
              Mike Stanwood, Group President
              Bob Machaby, Group President
              Tom Ward, Vice President - Chief Technology Officer
              Jack Clark, Vice President - Corporate Credit Manager
              Jim Plyler, Vice President
              Kenny Stephens, Vice President
              J. Stephen Zepf, Treasurer and Chief Financial Officer
              Benjamin P. Butterfield, Secretary
              Jay Clark, Assistant Secretary and Treasurer

<PAGE>

                     SCHEDULE 5.5 TO NOTE PURCHASE AGREEMENT

                              Financial Statements

         (i) The Company's  Annual Reports to Shareholders  for the Fiscal Years
1996, 1997, 1998 and 1999.

         (ii) The  Company's  Annual  Reports on Form 10-K for the fiscal  years
ended January 30, 1998 and January 29, 1999.

         (iii)  The  Company's  Quarterly  Report  on Form  10-Q for the  fiscal
quarter ending July 31, 2000.

<PAGE>

                     SCHEDULE 5.8 TO NOTE PURCHASE AGREEMENT

                               Certain Litigation

                                      None.

<PAGE>

                    SCHEDULE 5.11 TO NOTE PURCHASE AGREEMENT

                                  Patents, Etc.

                                 No Exceptions.

<PAGE>

                    SCHEDULE 5.14 TO NOTE PURCHASE AGREEMENT

                                 Use of Proceeds

         The proceeds received by the Company shall be used for the repayment of
existing  indebtedness of the Company and its Subsidiaries and general corporate
purposes.

<PAGE>

                    SCHEDULE 5.15 TO NOTE PURCHASE AGREEMENT

                        Existing Debt; Unpermitted Liens

         (i)      Existing Debt:
<TABLE>
<CAPTION>
                                                                  Maximum             Current Principal
                                                                 Principal        Amount Outstanding as of
                                                                   Amount              November 30, 2000
<S>                                                             <C>                       <C>

7.96% Senior Notes due May 30, 2011
        Metropolitan Life Insurance Company                     $40,000,000               $40,000,000
        CM Life Insurance Company                                $1,000,000                $1,000,000
        Massachusetts Mutual Life Insurance Company             $23,000,000               $23,000,000
        Massachusetts Mutual Life Insurance Company              $6,000,000                $6,000,000
        Massachusetts Mutual Life Insurance Company              $3,000,000                $3,000,000
        American General Life and Accident Insurance             $3,000,000                $3,000,000
        Company
        American General Life and Accident Insurance             $7,000,000                $7,000,000
        Company
        Independent Life and Accident Insurance Company          $3,000,000                $3,000,000
        The Variable Annuity Life Insurance Company             $12,000,000               $12,000,000

7.19% Senior Notes Due May 30, 2012
        Nationwide Mutual Insurance Co. SAOH                     $1,500,000                $1,500,000
        Nationwide Mutual Insurance Co.                          $8,500,000                $8,500,000
        Anchor National Life Insurance Company                   $5,000,000                $5,000,000
        SunAmerican Life Insurance Company                      $10,000,000               $10,000,000
        Hartford Life Insurance Company                          $7,000,000                $7,000,000
        Hartford Life Insurance Company                          $8,000,000                $8,000,000

7.19% Senior Notes Due May 30, 2012
        Allstate Life Insurance Company                         $20,000,000               $20,000,000
        The Mutual Life Insurance Company of NY                 $20,000,000               $20,000,000

6.74% Senior Notes Due May 1, 2013
        New York Life Insurance Company                         $22,500,000               $22,500,000
        New York Life Insurance and Annuity Corporation          $7,500,000                $7,500,000
        Allstate Life Insurance Company                         $10,000,000               $10,000,000
        Jefferson-Pilot Life Insurance Company                  $10,000,000               $10,000,000

Bank Revolving Credit Agreement
        First Union                                             $45,833,333               $44,166,667
        Bank of America                                         $50,833,333               $48,984,849
        SouthTrust bank                                         $30,000,000               $28,909,091
        SunTrust Bank                                           $58,750,000               $56,613,636
        PNC Bank                                                $18,750,000               $18,068,182

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                                             <C>                       <C>
        ABN AMRO Bank                                           $22,916,667               $22,083,333
        The Fifth Third Bank                                    $13,750,000               $13,250,000
        Hibernia National Bank                                  $11,250,000               $10,840,909
        Wachovia Bank                                           $22,916,667               $22,083,333

Bank Line of Credit Agreement
        First Union                                             $12,500,000                     $0.00
        Bank of America                                         $12,500,000                     $0.00
        Southtrust Bank                                         $10,000,000                     $0.00
        SunTrust Bank                                           $13,750,000                     $0.00
        PNC Bank                                                 $6,250,000                     $0.00
        ABN AMRO Bank                                            $6,250,000                     $0.00
        The Fifth Third Bank                                     $3,750,000                     $0.00
        Wachovia Bank                                           $10,000,000                     $0.00
        Commercial Paper                                        $75,000,000               $73,835,964

SunTrust Swing Line                                             $10,000,000                $2,674,248
SunTrust Bank Guidance Line                                     $15,000,000                     $0.00

Bank of America Short Term Credit Agreement                     $10,000,000                     $0.00

</TABLE>

The Company has a $40,000,000  interest rate hedging agreement (the "Agreement")
between First Union National Bank and Hughes Supply,  Inc.  effective August 27,
1997.  The Agreement  will mature on May 30, 2012,  however First Union National
Bank has the option to terminate the Agreement at six month intervals.

The Company entered into an eighteen month, $1.00 purchase option, capital lease
for a Kronos time  management  system on August 30,  1999.  Monthly  payments of
$58,232 per month began September 1, 1999 with the final payment due on February
1, 2001. Remaining payments due as of November 30, 2000 totaled $174,696.

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

         (ii)     Unpermitted Liens.

                  None

         See also "Schedule 10.5 to Note Purchase Agreement - Liens."

<PAGE>

                    SCHEDULE 10.5 TO NOTE PURCHASE AGREEMENT

                                      Liens

The Company entered into an eighteen month, $1.00 purchase option, capital lease
for a Kronos time  management  system on August 30,  1999.  Monthly  payments of
$58,232 per month began September 1, 1999 with the final payment due on February
1, 2001. Remaining payments due as of October 31, 2000 totaled $232,928.

<PAGE>

                      EXHIBIT 1 TO NOTE PURCHASE AGREEMENT

                               Form of Senior Note

                               HUGHES SUPPLY, INC.

           ____% SENIOR NOTE SERIES [A] [B] [C] DUE NOVEMBER 30, 200_

[Series A]
[Series B]
[Series C]
No. [R-_____]
$[_______]                                                     December 21, 2000

         FOR VALUE RECEIVED, the undersigned, HUGHES SUPPLY, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Florida,  hereby promises to pay to [ ], or registered assigns, the principal
sum of [ ] DOLLARS on November 30, 200[3] [5] [7],  with  interest  (computed on
the basis of a 360-day year of twelve 30-day  months) (a) on the unpaid  balance
thereof  at  the  rate  of  [__%]  per  annum  from  the  date  hereof,  payable
semiannually,  on the 30th day of May and November in each year, commencing with
the May 30 next  succeeding  the date hereof,  until the principal  hereof shall
have  become  due and  payable,  and (b) to the extent  permitted  by law on any
overdue  payment  (including any overdue  prepayment) of principal,  any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as defined
in the Note Purchase  Agreements  referred to below),  payable  semiannually  as
aforesaid (or, at the option of the registered holder hereof,  on demand),  at a
rate per annum from time to time equal to the  greater of (i) [____%] or (ii) 2%
over the rate of interest  publicly  announced by The Chase  Manhattan  Bank (or
successor  entity)  from  time to time in New  York,  New York as its  "base" or
"prime" rate.

         Subject to Section  14.2 of each Note  Purchase  Agreement  (as defined
below),  payments of principal of,  interest on and any  Make-Whole  Amount with
respect  to this Note are to be made in  lawful  money of the  United  States of
America at The Chase Manhattan Bank, or at such other place as the Company shall
have  designated by written notice to the holder of this Note as provided in the
Note Purchase Agreements.

         This Note is one of the Series  [A][B][C]  Senior Notes (herein  called
the "Notes") issued pursuant to separate Note Purchase  Agreements,  dated as of
December  21,  2000  (as  from  time  to  time  amended,   the  "Note   Purchase
Agreements"),  between the Company and the respective  Purchasers  named therein
and is  entitled  to the  benefits  thereof.  Each  holder  of this Note will be
deemed,  by its  acceptance  hereof,  (i) to have agreed to the  confidentiality
provisions  set forth in Section 20 of the Note Purchase  Agreements and (ii) to
have  made the  representation  set  forth in  Sections  6.1 and 6.2 of the Note
Purchase Agreements.

<PAGE>

         This Note is a  registered  Note and, as provided in the Note  Purchase
Agreements,  upon  surrender of this Note for  registration  of  transfer,  duly
endorsed,  or accompanied by a written instrument of transfer duly executed,  by
the  registered  holder  hereof or such  holder's  attorney  duly  authorized in
writing,  a new  Note  for a like  principal  amount  will  be  issued  to,  and
registered  in the  name  of,  the  transferee.  Prior  to due  presentment  for
registration  of  transfer,  the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving  payment and
for all other  purposes,  and the Company  will not be affected by any notice to
the contrary.

         The Company will make  required  prepayments  of principal on the dates
and in the amounts specified in the Note Purchase Agreements.  This Note is also
subject to optional  prepayment,  in whole or from time to time in part,  at the
times  and on the  terms  specified  in the Note  Purchase  Agreements,  but not
otherwise.

         If an Event of Default occurs and is continuing,  the principal of this
Note may be declared or otherwise  become due and payable in the manner,  at the
price (including any applicable  Make-Whole Amount) and with the effect provided
in the Note Purchase Agreements.

         This Note is governed by and is to be construed in accordance  with the
terms of the Note Purchase Agreement, the terms of which are incorporated herein
by reference.  All capitalized terms not otherwise defined herein shall have the
same  meanings  attributed  to  them  as are  set  forth  in the  Note  Purchase
Agreement.

                                      HUGHES SUPPLY, INC.

                                      By:_____________________________________
                                         J. Stephen Zepf
                                         Treasurer and Chief Financial Officer

<PAGE>

                    EXHIBIT 4.4(a) TO NOTE PURCHASE AGREEMENT

       Matters To Be Covered by Opinion of General Counsel for the Company

         1. Each of the Company and its  Subsidiaries  being duly  incorporated,
validly existing and in good standing and having  requisite  corporate power and
authority to, in the case of the Company,  execute and deliver the Note Purchase
Agreement  and to  execute,  deliver and issue the Notes and, in the case of the
Subsidiaries,  the Subsidiary Guarantee Agreement and the Contribution Agreement
(the Note Purchase Agreement,  the Notes, the Subsidiary Guarantee Agreement and
the  Contribution   Agreement   collectively   referred  to  as  the  "Operative
Documents"),  to  issue  and sell the  Notes  and to  execute  and  deliver  the
documents.

         2. Each of the Company and its Subsidiaries being duly qualified and in
good standing as a foreign corporation in appropriate jurisdictions.

         3. Due  authorization and execution by the Company and the Subsidiaries
of all Operative Documents and, if governed by the laws of the State of Florida,
all such documents would be legal, valid, binding and enforceable.

         4.  Execution and delivery of all  Operative  Documents and issuance of
Notes do not conflict with charter  documents,  laws or other  agreements of the
Company and its Subsidiaries.

         5. All consents required to issue and sell the Notes and to execute and
deliver all Operative Documents having been obtained.

         6. No litigation questioning validity of Operative Documents.

         7. No litigation  against the Company or its  Subsidiaries  or in which
the Company or any  Subsidiary is a party that could,  if adversely  determined,
reasonably be expected to have a Material Adverse Effect.

         8. The Notes not requiring  registration  under the  Securities  Act of
1933, as amended;  no need to qualify an indenture under the Trust Indenture Act
of 1939, as amended.

         9. No violation of Regulations T, U or X of the Federal Reserve Board.

         10. Company not an "investment  company",  or a company "controlled" by
an "investment company", under the Investment Company Act of 1940, as amended.

<PAGE>

         11. A Florida  state  court,  or a federal  court  sitting in  Florida,
would,  under Florida conflict of laws  principles,  recognize the choice of New
York law to govern the operative documents.

         The opinion shall be subject to standard and customary qualification of
counsel with respect to transactions of this nature.

<PAGE>

                    EXHIBIT 4.4(b) TO NOTE PURCHASE AGREEMENT

      Matters To Be Covered by Opinion of Special Counsel to the Purchasers

1.   Existence and good  standing of the Company and corporate  authority of the
     Company to execute and deliver the Note Purchase Agreement and to issue the
     Notes.

2.   Existence and good standing of the  Guarantors  and corporate  authority of
     the  Guarantors to execute and deliver the Subsidiary  Guarantee  Agreement
     and the Contribution Agreement (the Note Purchase Agreement, the Notes, the
     Subsidiary Guarantee Agreement and the Contribution  Agreement collectively
     referred to as the "Operative Documents").

3.   The Operative Documents are in commercially acceptable legal form.

4.   Due authorization and execution of all Operative Documents.

5.   The  Operative   Documents   constitute   the  legal,   valid  and  binding
     obligations,  enforceable  against  the  Company  and  the  Guarantors,  as
     applicable, in accordance with their respective terms.

6.   The Notes not requiring  registration  under the Securities Act of 1933, as
     amended;  no need to qualify an indenture  under the Trust Indenture Act of
     1939, as amended.

Opinions subject to standard and customary qualifications and exceptions.

<PAGE>

                   EXHIBIT 4.11(a) TO NOTE PURCHASE AGREEMENT

                                Form of Guarantee

                         SUBSIDIARY GUARANTEE AGREEMENT

         This  SUBSIDIARY  GUARANTEE  AGREEMENT,  dated as of December  21, 2000
(this  "Guarantee"),  made by the undersigned  signatories  hereto as Guarantors
(each  of the  undersigned  individually  a  "Guarantor"  and  collectively  the
"Guarantors"),  in favor of PACIFIC  LIFE  INSURANCE  COMPANY,  PACIFIC LIFE AND
ANNUITY COMPANY, GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY, GE LIFE AND ANNUITY
ASSURANCE COMPANY,  GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK, ALLSTATE LIFE
INSURANCE COMPANY,  AMERICAN UNITED LIFE INSURANCE COMPANY,  PIONEER MUTUAL LIFE
INSURANCE COMPANY,  CONNECTICUT  GENERAL LIFE INSURANCE COMPANY,  LIFE INSURANCE
COMPANY OF NORTH  AMERICA,  JEFFERSON-PILOT  LIFE  INSURANCE  COMPANY,  TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, SUNAMERICA LIFE INSURANCE COMPANY,
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY,  NEW YORK LIFE INSURANCE COMPANY,
NEW YORK LIFE  INSURANCE  AND ANNUITY  CORPORATION,  THE CANADA  LIFE  ASSURANCE
COMPANY, THE OHIO NATIONAL LIFE INSURANCE COMPANY and MODERN WOODMEN OF AMERICA,
the  foregoing,  together  with their  successors  and assigns,  individually  a
"Guaranteed Party" and collectively the "Guaranteed Parties");

                              W I T N E S S E T H:

         WHEREAS,  Hughes  Supply,  Inc., a  corporation  organized and existing
under the laws of the State of Florida  ("Hughes")  and the  Guaranteed  Parties
have  entered  into  those  certain  identical  (except  for  the  names  of the
purchasers  and the amounts of Notes,  as defined below,  to be purchased)  Note
Purchase Agreements dated as of December 21, 2000 (together the "Agreements" and
separately  each an  "Agreement"),  pursuant  to which  Hughes has issued to the
Guaranteed  Parties its 8.27% Series A Senior  Notes due November 30, 2003,  its
8.27% Series B Senior Notes due November 30, 2005, and its 8.42% Series C Senior
Notes due November 30, 2007;

         WHEREAS, Hughes owns, directly or indirectly,  all or a majority of the
outstanding capital stock of each of the Guarantors;

         WHEREAS, Hughes and Guarantors share an identity of interest as members
of a consolidated group of companies engaged in substantially similar businesses
with Hughes

<PAGE>

providing certain centralized  financial,  accounting and management services to
each of the  Guarantors by virtue of  intercompany  advances and loans such that
financial  accommodations  extended  to Hughes  shall  inure to the  direct  and
material benefit of Guarantors; and

         WHEREAS,  consummation of the  transactions  pursuant to the Agreements
will  facilitate  expansion  and  enhance  the overall  financial  strength  and
stability of Hughes's entire corporate group, including the Guarantors; and

         WHEREAS,  it  is a  condition  precedent  to  the  Guaranteed  Parties'
obligations to enter into the  Agreements  and to purchase the Notes  thereunder
that  Guarantors  execute and deliver this Guarantee,  and Guarantors  desire to
execute and deliver this Guarantee to satisfy such condition precedent;

         NOW, THEREFORE, in consideration of the premises and in order to induce
the  Guaranteed  Parties to enter into and perform their  obligations  under the
Agreements, the Guarantors hereby jointly and severally agree as follows:

         SECTION 1.  Guarantee.  The Guarantors  hereby,  jointly and severally,
irrevocably,  absolutely  and  unconditionally  guarantee  the due and  punctual
payment of all principal of, premium, if any, and interest on, the Notes and all
other  obligations  owing by Hughes to the Guaranteed  Parties,  or any of them,
jointly or severally  under the Agreements,  the Notes and the other  documents,
instruments  and agreements  relating to the  transactions  contemplated  by the
Agreements,  and  all  renewals,  extensions,   modifications  and  refinancings
thereof, now or hereafter owing, whether for principal,  interest, make-whole or
yield maintenance premium or other fees, expenses or otherwise,  and any and all
reasonable  out-of-pocket  expenses  (including  reasonable  attorneys' fees and
expenses actually  incurred) incurred by the Guaranteed Parties in enforcing any
rights  under  this  Guarantee  (collectively,   the  "Guaranteed  Obligations")
including,  without  limitation,  all  interest  which,  but for the filing of a
petition in  bankruptcy  with respect to Hughes,  would accrue on any  principal
portion of the  Guaranteed  Obligations.  Any and all payments by the Guarantors
hereunder shall be made free and clear of and without deduction for any set-off,
counterclaim,  or withholding so that, in each case, each Guaranteed  Party will
receive,  after giving  effect to any  withholding  or other tax,  assessment or
charge of any kind or nature imposed by an governmental agency or authority, but
excluding taxes imposed on overall net income of any Guaranteed Party ("Taxes"),
the full amount that it would  otherwise  be entitled to receive with respect to
the Guaranteed Obligations (but without duplication of amounts for Taxes already
included in the Guaranteed  Obligations).  The Guarantors  acknowledge and agree
that this is a guarantee of payment when due, and not of  collection,  and that,
subject to Section 13 hereof,  this  Guarantee  may be  enforced  up to the full
amount of the Guaranteed  Obligations without proceeding against Hughes, against
any  security for the  Guaranteed  Obligations,  against any other  Guarantor or
under any other guaranty covering any portion of the Guaranteed Obligations.

<PAGE>

         SECTION  2.  Guarantee  Absolute.  The  Guarantors  guarantee  that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
documents,  instruments  and agreements  evidencing any Guaranteed  Obligations,
regardless  of any law,  regulation  or order now or  hereafter in effect in any
jurisdiction  affecting any of such terms or the rights of any Guaranteed  Party
with respect thereto. The liability of each Guarantor under this Guarantee shall
be absolute and  unconditional  in accordance with its terms and shall remain in
full force and effect without  regard to, and shall not be released,  suspended,
discharged,  terminated or otherwise affected by, any circumstance or occurrence
whatsoever,  including,  without limitation,  the following (whether or not such
Guarantor consents thereto or has notice thereof):

               (a) any change in the time,  place or manner of payment
          of, or in any other  term of,  all or any of the  Guaranteed
          Obligations,  any waiver,  indulgence,  renewal,  extension,
          amendment  or  modification  of  or  addition,   consent  or
          supplement  to or  deletion  from  or any  other  action  or
          inaction under or in respect of the Agreements, or any other
          documents,   instruments  or  agreements   relating  to  the
          Guaranteed  Obligations or any other instrument or agreement
          referred  to therein or any  assignment  or  transfer of any
          thereof;

               (b)  any  lack of  validity  or  enforceability  of the
          Agreement or the Notes or any illegality or impossibility of
          performance  of the  Agreements  or the  Notes or any  other
          document, instrument or agreement referred to therein or any
          assignment or transfer of any thereof;

               (c) any  furnishing  to the  Guaranteed  Parties of any
          additional security for the Guaranteed  Obligations,  or any
          sale, exchange,  release or surrender of, or realization on,
          any security for the Guaranteed Obligations;

               (d)  any   settlement  or  compromise  of  any  of  the
          Guaranteed  Obligations,   any  security  therefor,  or  any
          liability of any other party with respect to the  Guaranteed
          Obligations,  or any  subordination  of the  payment  of the
          Guaranteed Obligations to the payment of any other liability
          of Hughes;

               (e)   any   bankruptcy,   insolvency,   reorganization,
          composition,  adjustment, dissolution,  liquidation or other
          like proceeding  relating to any Guarantor or Hughes, or any
          action taken with  respect to this  Guarantee by any trustee
          or receiver, or by any court, in any such proceeding;

               (f) any  nonperfection of any security interest or lien
          on any collateral,  or any amendment or waiver of or consent
          to departure  from any guaranty or security,  for all or any
          of the Guaranteed Obligations;

<PAGE>

               (g) any application of sums paid by Hughes or any other
          Person  with  respect  to the  liabilities  of Hughes to the
          Guaranteed Parties, regardless of what liabilities of Hughes
          remain unpaid;

               (h) any act or failure to act by any  Guaranteed  Party
          which may adversely affect a Guarantor's subrogation rights,
          if any,  against Hughes to recover  payments made under this
          Guarantee; and

               (i)  any  other   circumstance  which  might  otherwise
          constitute a defense  available  to, or a discharge  of, any
          Guarantor.

If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts  received  in  payment or on account of any of the  Guaranteed
Obligations,  and any  Guaranteed  Party  repays  all or part of said  amount by
reason of (a) any judgment,  decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including Hughes or a trustee in bankruptcy for Hughes), then
and in such event the Guarantors  agree that any such judgment,  decree,  order,
settlement or compromise shall be binding on it,  notwithstanding any revocation
hereof or the cancellation of the Agreements or the other documents, instruments
and agreements evidencing any Guaranteed  Obligations,  and the Guarantors shall
be and  remain  liable  to the  Guaranteed  Party for the  amounts  so repaid or
recovered to the same extent as if such amount had never originally been paid to
the Guaranteed Party.

         The  obligations of each  Guarantor  shall be joint and several and the
release or  discharge  of the  obligations  of one  Guarantor  shall not modify,
affect, release or discharge the obligations of the other Guarantors hereunder.

         SECTION 3. Waiver.  The Guarantors hereby waive notice of acceptance of
this Guarantee, notice of any liability to which it may apply, and further waive
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such  liabilities,  suit or taking of other  action  by the  Guaranteed  Parties
against,  and any other notice to, Hughes or any other party liable with respect
to the  Guaranteed  Obligations  (including  the  Guarantors or any other Person
executing a guaranty of the obligations of Hughes).

         SECTION 4. Waiver of Subrogation. No Guarantor will exercise any rights
against Hughes which it may acquire by way of subrogation  or  contribution,  by
any payment made hereunder or otherwise.  Each Guarantor hereby expressly waives
any  claim,  right or remedy  which  such  Guarantor  may now have or  hereafter
acquire against Hughes that arises  hereunder and/or from the performance by any
Guarantor hereunder,  including,  without limitation, any claim, right or remedy
of the  Guaranteed  Parties  against Hughes or any security which the Guaranteed
Parties  now have or  hereafter  acquire,  whether or not such  claim,  right or
remedy  arises in equity,  under  contract,  by  statute,  under color of law or
otherwise.

<PAGE>

         SECTION 5.  Severability.  Any  provision  of this  Guarantee  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.

         SECTION 6. Amendments,  Etc. No amendment or waiver of any provision of
this  Guarantee nor consent to any departure by a Guarantor  therefrom  shall in
any event be  effective  unless  the same shall be in  writing  executed  by the
Guaranteed Parties.

         SECTION 7. Notices. All notices and other  communications  provided for
hereunder  shall be given in the manner  specified in the  Agreements (i) in the
case of the  Guaranteed  Parties,  at the address  specified for the  Guaranteed
Parties  in the  Agreements,  and  (ii) in the  case of the  Guarantors,  at the
respective addresses specified for such Guarantors in this Guarantee.

         SECTION  8.  No  Waiver;  Remedies.  No  failure  on  the  part  of the
Guaranteed Parties to exercise, and no delay in exercising,  any right hereunder
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right. No notice to or demand on any Guarantor in any case
shall  entitle  such  Guarantor  to any  other  further  notice or demand in any
similar  or other  circumstances  or  constitute  a waiver of the  rights of the
Guaranteed  Parties to any other or further action in any circumstances  without
notice or demand.  The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

         SECTION 9. Right of Set-Off.  In addition to and not in  limitation  of
all rights of offset that the Guaranteed  Parties may have under applicable law,
the Guaranteed  Parties  shall,  upon the occurrence of any Event of Default and
whether or not the  Guaranteed  Parties  have made any demand or the  Guaranteed
Obligations are matured,  have the right to appropriate and apply to the payment
of the Guaranteed  Obligations,  all indebtedness or property then or thereafter
owing by the Guaranteed Parties to any Guarantor, whether or not related to this
Guarantee or any transaction  hereunder.  The Guaranteed  Parties shall promptly
notify the relevant Guarantor of any offset hereunder.

         SECTION  10.  Continuing  Guarantee;   Transfer  of  Obligations.  This
Guarantee is a continuing guaranty and shall (i) remain in full force and effect
until  payment  in full of the  Guaranteed  Obligations  and all  other  amounts
payable under this  Guarantee and the  termination  of the  Agreements,  (ii) be
binding upon each Guarantor,  its successors and assigns, and (iii) inure to the
benefit of and be enforceable by the Guaranteed Parties.

         SECTION  11.   Governing   Law.  THIS  GUARANTEE  AND  THE  RIGHTS  AND
OBLIGATIONS OF THE PARTIES HEREUNDER,  SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF

<PAGE>

NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         SECTION 12. Subordination of Hughes's Obligations to the Guarantors. As
an independent  covenant,  each Guarantor hereby expressly  covenants and agrees
for the benefit of the Guaranteed  Parties that all  obligations and liabilities
of  Hughes  to such  Guarantor  of  whatsoever  description  including,  without
limitation,  all intercompany receivables of such Guarantor from Hughes ("Junior
Claims") shall be subordinate  and junior in right of payment to all obligations
of Hughes to the  Guaranteed  Parties under the terms of the  Agreements and the
other   documents,   instruments   and  agreements   evidencing  any  Guaranteed
Obligations ("Senior Claims").

         If an Event of Default shall occur,  then,  unless and until such Event
of Default  shall have been cured,  waived,  or shall have  ceased to exist,  no
direct  or  indirect  payment  (in  cash,  property,  securities  by  setoff  or
otherwise)  shall be made by Hughes to any  Guarantor  on  account  of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.

         In the event of a  Proceeding  (as  hereinafter  defined),  all  Senior
Claims  shall  first be paid in full  before any direct or  indirect  payment or
distribution  (in cash,  property,  securities by setoff or otherwise)  shall be
made to any  Guarantor  on  account of or in any manner in respect of any Junior
Claim  except such  payments  and  distributions  the proceeds of which shall be
applied to the  payment  of Senior  Claims.  For the  purposes  of the  previous
sentence,  "Proceeding" means Hughes or any Guarantor shall commence a voluntary
case  concerning  itself  under the  Bankruptcy  Code of 1978,  as amended  (the
"Bankruptcy Code"), or any other applicable  bankruptcy laws; or any involuntary
case is commenced against Hughes or any Guarantor; or a custodian (as defined in
the Bankruptcy Code or any other  applicable  bankruptcy laws) is appointed for,
or takes charge of, all or any substantial part of the property of Hughes or any
Guarantor,  or Hughes or any Guarantor commences any other proceedings under any
reorganization  arrangement,  adjustment of debt, relief of debtor, dissolution,
insolvency  or  liquidation  or similar law of any  jurisdiction  whether now or
hereafter in effect relating to Hughes or any Guarantor,  or any such proceeding
is commenced  against  Hughes or any  Guarantor,  or Hughes or any  Guarantor is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving  any such case or  proceeding  is entered;  or Hughes or any Guarantor
suffers any  appointment of any custodian or the like for it or any  substantial
part of its property;  or Hughes or any Guarantor makes a general assignment for
the benefit of creditors; or Hughes or any Guarantor shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay,  its debts  generally
as they  become  due;  or Hughes or any  Guarantor  shall  call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts;  or
Hughes or any Guarantor  shall by any act or failure to act indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate action
shall be taken by Hughes or any  Guarantor  for the purpose of effecting  any of
the foregoing.

<PAGE>

         In the event any direct or indirect  payment or distribution is made to
a Guarantor in  contravention  of this Section 12, such payment or  distribution
shall be deemed received in trust for the benefit of the Guaranteed  Parties and
shall be immediately paid over to the Guaranteed Parties for application against
the Guaranteed Obligations in accordance with the terms of the Agreements.

         Each  Guarantor  agrees to execute  such  additional  documents  as the
Guaranteed Parties may reasonably request to evidence the subordination provided
for in this Section 12.

         SECTION 13. Savings Clause.  (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:

               (i) in a case or  proceeding  commenced  by or  against
          such Guarantor  under the  Bankruptcy  Code on or within one
          year  from  the  date  on  which   any  of  the   Guaranteed
          Obligations are incurred, the maximum amount which would not
          otherwise  cause the  Guaranteed  Obligations  (or any other
          obligations of such Guarantor to the Guaranteed  Parties) to
          be avoidable or  unenforceable  against such Guarantor under
          (A)  Section  548 of the  Bankruptcy  Code or (B) any  state
          fraudulent transfer or fraudulent  conveyance act or statute
          applied in such case or  proceeding by virtue of Section 544
          of the Bankruptcy Code; or

               (ii) in a case or  proceeding  commenced  by or against
          such Guarantor  under the Bankruptcy  Code subsequent to one
          year  from  the  date  on  which   any  of  the   Guaranteed
          Obligations are incurred, the maximum amount which would not
          otherwise  cause the  Guaranteed  Obligations  (or any other
          obligations of the Guarantor to the  Guaranteed  Parties) to
          be avoidable or  unenforceable  against such Guarantor under
          any state fraudulent  transfer or fraudulent  conveyance act
          or statute  applied in any such case or proceeding by virtue
          of Section 544 of the Bankruptcy Code; or

               (iii) in a case or  proceeding  commenced by or against
          such Guarantor  under any law,  statute or regulation  other
          than the Bankruptcy Code (including, without limitation, any
          other bankruptcy,  reorganization,  arrangement, moratorium,
          readjustment  of debt,  dissolution,  liquidation or similar
          debtor  relief  laws),  the maximum  amount  which would not
          otherwise  cause the  Guaranteed  Obligations  (or any other
          obligations of such Guarantor to the Guaranteed  Parties) to
          be avoidable or  unenforceable  against such Guarantor under
          such  law,   statute  or   regulation   including,   without
          limitation,  any state  fraudulent  transfer  or  fraudulent
          conveyance  act or  statute  applied  in any  such  case  or
          proceeding.

<PAGE>

(The substantive laws under which the possible avoidance or  unenforceability of
the Guaranteed  Obligations  (or any other  obligations of such Guarantor to the
Guaranteed  Parties)  shall be determined  in any such case or proceeding  shall
hereinafter be referred to as the "Avoidance Provisions").

               (b) To the end set forth in Section 13(a),  but only to
          the extent that the Guaranteed  Obligations  would otherwise
          be subject to avoidance  under the  Avoidance  Provisions if
          such  Guarantor  is not  deemed  to have  received  valuable
          consideration, fair value or reasonably equivalent value for
          the Guaranteed Obligations, or if the Guaranteed Obligations
          would render the Guarantor insolvent, or leave the Guarantor
          with an unreasonably  small capital to conduct its business,
          or cause the  Guarantor to have  incurred  debts (or to have
          intended to have  incurred  debts) beyond its ability to pay
          such debts as they  mature,  in each case as of the time any
          of the  Guaranteed  Obligations  are  deemed  to  have  been
          incurred  under the  Avoidance  Provisions  and after giving
          effect to  contribution  as among  Guarantors,  the  maximum
          Guaranteed  obligations  for which such  Guarantor  shall be
          liable  hereunder  shall be  reduced to that  amount  which,
          after giving effect thereto,  would not cause the Guaranteed
          Obligations  (or any other  obligations of such Guarantor to
          the  Guaranteed  Parties),  as so reduced,  to be subject to
          avoidance under the Avoidance Provisions. This Section 13(b)
          is intended  solely to preserve the rights of the Guaranteed
          Parties hereunder to the maximum extent that would not cause
          the Guaranteed Obligations of any Guarantor to be subject to
          avoidance under the Avoidance  Provisions,  and neither such
          Guarantor nor any other Person shall have any right or claim
          under this Section 13 as against the Guaranteed Parties that
          would not  otherwise  be  available to such Person under the
          Avoidance Provisions.

         SECTION  14.   Information.   Each  of  the   Guarantors   assumes  all
responsibility  for being and  keeping  itself  informed  of  Hughes'  financial
condition and assets,  and of all other  circumstances  bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder,  and agrees that none of
the  Guaranteed  Parties will have any duty to advise any of the  Guarantors  of
information known to it or any of them regarding such circumstances or risks.

         SECTION 15. Survival of Agreement. All agreements,  representations and
warranties  made  herein  shall  survive  the  execution  and  delivery  of this
Guarantee.

         SECTION 16. Counterparts.  This Guarantee and any amendments,  waivers,
consents or  supplements  may be executed in any number of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed and delivered

<PAGE>

shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument.

         SECTION 17. Additional  Guarantors.  Upon execution and delivery by any
Material  Subsidiary of Hughes of an  instrument in the form of this  Guarantee,
such Material  Subsidiary of Hughes shall become a Guarantor  hereunder with the
same  force and  effect  as if  originally  named a  Guarantor  herein  (each an
"Additional Guarantor"). The execution and delivery of any such instrument shall
not require the consent of any Guarantor  hereunder.  The rights and obligations
of  each   Guarantor   hereunder   shall   remain  in  full   force  and  effect
notwithstanding  the  addition of any  Additional  Guarantor  as a party to this
Guarantee.

         SECTION 18.  Successors and Assigns.  This  Guarantee  shall be binding
upon the successors and assigns of the Guarantors. This Guarantee shall inure to
the benefit of the successors and assigns of the  Guaranteed  Parties  including
any  subsequent  holder of any Notes.  No Guarantor  may assign its  obligations
hereunder to any other Person.

         SECTION 19. Defined Terms.  All  capitalized  terms used herein and not
otherwise  defined herein shall have their  respective  defined  meanings as set
forth in the Agreements.

         IN WITNESS WHEREOF,  each Guarantor and Hughes caused this Guarantee to
be duly executed and delivered by their  respective duly authorized  officers as
of the date first above written.

                                        THE GUARANTORS

                                        ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY
                                          OF MIAMI, INC.
                                        ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY
                                          OF WEST PALM BEACH, INC.
                                        BESTROUTE.COM, LLC (99% OWNED)
                                        CAROLINA PUMP & SUPPLY CORP.
                                        CAYESTEEL, INC.
                                        CHAD SUPPLY, INC.
                                        COASTAL WHOLESALE, INC.
                                        DOMINION PIPE & SUPPLY CO.
                                        DOMINION PIPE FABRICATORS, INCORPORATED
                                        DOUGLAS LEONHARDT & Associates, Inc.

                                        [Continuation of Guarantors on next
                                        page]

<PAGE>

                                        [Continuation of Listing of Guarantors]

                                        ELASCO AGENCY SALES, INC.
                                        ELEC-TEL SUPPLY COMPANY
                                        ELECTRIC LABORATORIES AND SALES
                                          CORPORATION
                                        FES MERGER CORP., INC.
                                        GAYLE SUPPLY COMPANY, INC.
                                        GILLELAND CONCRETE PRODUCTS, INC.
                                        HSI ACQUISITION CORPORATION
                                        HSI BESTROUTE INVESTMENT, INC.
                                        HSI FUSION SERVICES, INC.
                                        HUGHES SUPPLY MANAGEMENT SERVICES
                                        HUGHES WATER & SEWER COMPANY
                                        H VENTURE CORP.
                                        JUNO INDUSTRIES, INC.
                                        KAMEN SUPPLY COMPANY, INC.
                                        KINGSTON PIPE INDUSTRIES, INC.
                                        MEREX CORPORATION
                                        METALS INCORPORATED
                                        METALS, INC. - GULF COAST DIVISION
                                        MILLS & LUPTON SUPPLY COMPANY
                                        MOORE ELECTRIC SUPPLY, INC.
                                        MOUNTAIN COUNTRY SUPPLY, INC.
                                        OLANDER & BROPHY, INCORPORATED
                                        ONE STOP SUPPLY, INC.
                                        PAINE SUPPLY OF JACKSON, INC.
                                        PALM POOL PRODUCTS, INC.
                                        PANHANDLE PIPE & SUPPLY CO., INC.
                                        PORT CITY ELECTRICAL SUPPLY, INC.
                                        R&G PLUMBING SUPPLY, INC.
                                        REACTION SUPPLY CORPORATION
                                        SHRADER HOLDING COMPANY, INC.
                                        STAINLESS TUBULAR PRODUCTS, INC.
                                        USCO INCORPORATED
                                        UNION MERGER CORPORATION
                                        U.S. FUSION SERVICES, INC.
                                        VIRGINIA WATER & WASTE SUPPLY
                                          COMPANY, INC.

                 [Listing of Guarantors Continued on Next Page]

<PAGE>

                                     [Continuation of Listing of Guarantors]

                                         WCC MERGER CORPORATION
                                         WHOLESALE ELECTRIC SUPPLY CORPORATION

                                         By: _________________________
                                         Title: ______________________

                                         SOUTHWEST STAINLESS, L.P.

                                         By:  Z&L Acquisition Corp.,
                                                 as General Partner

                                              By: _________________________
                                                  Title: ______________________

                                         Z&L ACQUISITION CORP., IN ITS
                                            INDIVIDUAL CAPACITY

                                         By: _________________________
                                         Title: ______________________

                                         Address for Notices for all Guarantors:
                                         [Insert Guarantor]
                                         c/o Hughes Supply, Inc.
                                         20 North Orange Avenue
                                         Orlando, Florida 32801
                                         Attention: General Counsel

SECTION 12 OF THE
FOREGOING GUARANTEE
ACKNOWLEDGED AND
AGREED TO:

HUGHES SUPPLY, INC.

By: __________________
    Name:  J. Stephen Zepf
    Title:  Treasurer and Chief Financial Officer

<PAGE>

                   EXHIBIT 4.11(b) TO NOTE PURCHASE AGREEMENT

                         Form of Contribution Agreement

                             CONTRIBUTION AGREEMENT

         THIS  CONTRIBUTION  AGREEMENT,  dated as of  December  21,  2000  (this
"Contribution  Agreement"),  by and among  HUGHES  SUPPLY,  INC.  ("Hughes"),  a
corporation  organized  and existing  under the laws of the State of Florida and
each  of  the  undersigned  signatories  hereto  as  Guarantors  (each  of  such
undersigned   referred  to  herein  as  a  "Guarantor"  and   collectively   the
"Guarantors")  for  the  purpose  of  establishing  rights  and  obligations  of
contribution among the Guarantors in connection with the Guarantee Agreement (as
such term is defined below).

                                 R E C I T A L S

         WHEREAS,  Hughes  Supply,  Inc., a  corporation  organized and existing
under the laws of the State of Florida  ("Hughes"),  and PACIFIC LIFE  INSURANCE
COMPANY,  PACIFIC LIFE AND ANNUITY COMPANY,  GENERAL ELECTRIC CAPITAL  ASSURANCE
COMPANY,  GE LIFE AND  ANNUITY  ASSURANCE  COMPANY,  GE CAPITAL  LIFE  ASSURANCE
COMPANY OF NEW YORK,  ALLSTATE  LIFE  INSURANCE  COMPANY,  AMERICAN  UNITED LIFE
INSURANCE COMPANY,  PIONEER MUTUAL LIFE INSURANCE COMPANY,  CONNECTICUT  GENERAL
LIFE INSURANCE COMPANY, LIFE INSURANCE COMPANY OF NORTH AMERICA, JEFFERSON-PILOT
LIFE INSURANCE COMPANY,  TEACHERS INSURANCE AND ANNUITY  ASSOCIATION OF AMERICA,
SUNAMERICA LIFE INSURANCE COMPANY, NATIONWIDE LIFE INSURANCE COMPANY, NATIONWIDE
LIFE AND ANNUITY INSURANCE COMPANY,  NEW YORK LIFE INSURANCE  COMPANY,  NEW YORK
LIFE INSURANCE AND ANNUITY  CORPORATION,  THE CANADA LIFE ASSURANCE COMPANY, THE
OHIO  NATIONAL  LIFE  INSURANCE  COMPANY  and  MODERN  WOODMEN OF  AMERICA,  the
foregoing corporations, together with their successors and assigns, individually
a "Guaranteed  Party" and  collectively  the "Guaranteed  Parties") have entered
into those certain  identical  (except for the names of the  purchasers  and the
amounts of Notes, as defined below,  to be purchased)  Note Purchase  Agreements
dated as of December 21, 2000 (together the  "Agreements" and separately each an
"Agreement"),  pursuant to which Hughes has issued to the Guaranteed Parties its
8.27% Series A Senior  Notes due  November  30, 2003,  its 8.27% Series B Senior
Notes due November 30, 2005 and its 8.42% Series C Senior Notes due November 30,
2007;

<PAGE>

         WHEREAS,  the  obligation of  Guaranteed  Parties to purchase the Notes
under the Agreements is conditioned  on, among other things,  the provision of a
Contribution Agreement in the form hereof;

         WHEREAS,  the  Guarantors  have entered into the  Subsidiary  Guarantee
Agreement dated as of even date herewith (the "Guarantee Agreement") pursuant to
which such  Guarantors  have agreed to guarantee all the  obligations  of Hughes
pursuant to the Agreements and all other Guaranteed Obligations;

         WHEREAS,  as a result of  transactions  contemplated by the Agreements,
Guarantors  will benefit from the Guaranteed  Obligations  and in  consideration
thereof desire to enter into this  Contribution  Agreement to provide a fair and
equitable arrangement to make contributions in the event payments are made under
the Guarantee Agreement.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, Hughes, each Guarantor hereby agrees as follows:

         SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and  subrogation as the Guarantors may have under  applicable law (but
subject to Section 3),  Hughes  agrees that in the event a payment shall be made
by any  Guarantor  under the  Guarantee  Agreement in respect of any  Guaranteed
Obligations,  Hughes shall  indemnify such Guarantor for the full amount of such
payment.  Each  Guarantor  has  waived its rights to  subrogation,  pursuant  to
Section 4 of the Guarantee Agreement.

         SECTION 2. Contribution and Subrogation. Each Guarantor agrees (subject
to Section 3) that in the event a payment shall be made by any  Guarantor  under
the Guarantee  Agreement or assets of any  Guarantor  shall be sold to satisfy a
claim of any Guaranteed  Party,  and such  Guarantor (the "Claiming  Guarantor")
shall not have been  indemnified  by Hughes as provided in Section 1, each other
Guarantor (a "Contributing Guarantor") shall indemnify the Claiming Guarantor in
an amount  equal to the amount of such  payment or the greater of the book value
or the fair market value of such  assets,  as the case may be,  multiplied  by a
fraction,  the  numerator  of which  shall be the net worth of the  Contributing
Guarantor on the date hereof,  and the  denominator of which shall be the sum of
the net  worth  of all the  Guarantors  on the  date  hereof.  Any  Contributing
Guarantor making any payment to a Claiming  Guarantor pursuant to this Section 2
shall be subrogated to the rights of such Claiming  Guarantor under Section 1 to
the extent of such payment.

         SECTION  3.  Subordination.   Notwithstanding  any  provision  of  this
Agreement to the contrary, (i) all rights of the Guarantors under Sections 1 and
2 and all other rights of  indemnity or  contribution  under  applicable  law or
otherwise  shall be fully  subordinated to the  indefeasible  payment in full in
cash of the Guaranteed  Obligations,  and (ii) no such rights shall be exercised
until all of the Guaranteed Obligations shall

<PAGE>

have been  irrevocably  paid in full in cash and the Agreements  shall have been
irrevocably terminated.  If any amount shall be paid to any Guarantor on account
of such indemnity or contribution  rights at any time when all of the Guaranteed
Obligations  shall not have been paid in full in cash, such amount shall be held
in trust for the benefit of the Guaranteed  Parties and shall  forthwith be paid
to the  Guaranteed  Parties  to be  credited  and  applied  upon the  Guaranteed
Obligations in accordance  with the terms of the  Agreements.  No failure on the
part of Hughes or any Guarantor to make the payments  required by Sections 1 and
2 (or any other payments  required under  applicable law or otherwise)  shall in
any respect limit the  obligations and liabilities of any Guarantor with respect
to the Guarantee Agreement,  and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor under such Guarantee Agreement.

         SECTION  4.  Allocation.  If at any time  there  exists  more  than one
Claiming  Guarantor with respect to the Guarantee  Agreement,  then payment from
other  Guarantors  pursuant to this  Contribution  Agreement  shall be allocated
among such  Claiming  Guarantors in proportion to the total amount of money paid
for or on account of the Guaranteed  Obligations by each such Claiming Guarantor
pursuant to the Guarantee Agreement.

         SECTION 5. Preservation of Rights.  This  Contribution  Agreement shall
not limit or affect any right  which any  Guarantor  may have  against any other
Person that is not a party hereto.

         SECTION 6. Subsidiary Payment. The amount of contribution payable under
this  Contribution  Agreement by any  Guarantor  with  respect to the  Guarantee
Agreement shall be reduced by the amount of any contribution paid hereunder by a
Subsidiary of such Guarantor with respect to the Guarantee Agreement.

         SECTION 7. Asset Sale.  If all of the stock of any  Guarantor  shall be
sold or otherwise disposed of (including by merger or consolidation) in an asset
sale  not  prohibited  by  the  Agreements  or  otherwise  consented  to by  the
Guaranteed  Parties  under the  Agreements,  the  agreements  of such  Guarantor
hereunder  shall  automatically  be discharged and released  without any further
action by such Guarantor and shall be assumed in full by the  corporation  which
prior to such asset sale or consent owned the stock of such Guarantor, effective
as of the time of such  asset  sale or  consent.  Hughes  shall  cause  any such
corporation  which is not a  Guarantor  to  become a party to this  Contribution
Agreement and the Guarantee  Agreement unless otherwise agreed in writing by the
Guaranteed Parties.

         SECTION 8. Equitable Allocation.  If as a result of any reorganization,
recapitalization or other corporate change in Hughes or any of its Subsidiaries,
or as a result  of any  amendment,  waiver  or  modification  of the  terms  and
conditions   governing  the  Guarantee   Agreement  or  any  of  the  Guaranteed
Obligations,  or for any other reason, the contributions under this Contribution
Agreement become inequitable, the parties hereto shall promptly modify and amend
this  Contribution   Agreement  to  provide  for  an

<PAGE>

equitable  allocation of  contributions.  All such  modifications and amendments
shall be in writing and signed by all parties hereto.

         SECTION 9. Asset of Party to Which Contribution and Indemnification Are
Owing.  The  parties  hereto  acknowledge  that the  right to  contribution  and
indemnification  hereunder  shall each constitute an asset in favor of the party
to which such contribution or indemnification is owing.

         SECTION 10.  Successors  and  Assigns;  Amendments.  This  Contribution
Agreement shall be binding upon each party hereto and its respective  successors
and  assigns  and shall  inure to the  benefit of the  parties  hereto and their
respective  successors  and  assigns.  None  of any  Guarantor's  rights  or any
interest  therein  under  this   Contribution   Agreement  may  be  assigned  or
transferred  without the written consent of the Guaranteed Parties. In the event
of any such transfer or assignment  of rights by any  Guarantor,  the rights and
privileges  herein conferred upon that Guarantor shall  automatically  extend to
and be vested in such  transferee  or  assignee,  all  subject  to the terms and
conditions hereof. This Contribution  Agreement shall not be amended without the
prior written consent of the Guaranteed Parties.

         SECTION 11.  Termination.  This  Contribution  Agreement,  as it may be
modified or amended from time to time, shall remain in effect,  and shall not be
terminated as to the Guarantee Agreement, until the Guarantee Agreement has been
discharged or otherwise satisfied in accordance with its terms.

         SECTION  12.  CHOICE  OF LAW.  THIS  CONTRIBUTION  AGREEMENT  SHALL  BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

         SECTION  13.   Counterparts.   This  Contribution   Agreement  and  any
amendments,  waivers,  consents or supplements  may be executed in any number of
counterparts and by the different parties hereto in separate counterparts,  each
of which when so executed and  delivered  shall be deemed an  original,  but all
such counterparts shall constitute but one and the same instrument.

         SECTION 14. Additional Guarantors.  Upon execution and delivery,  after
the date hereof, by a Material Subsidiary of Hughes of an instrument in the form
of this Contribution Agreement,  such Material Subsidiary of Hughes shall become
a Guarantor hereunder with the same force and effect as if originally named as a
Guarantor  hereunder.  The rights and  obligations of each  Guarantor  hereunder
shall  remain in full force and effect  notwithstanding  the addition of any new
Guarantor as a party to this Contribution Agreement.

<PAGE>

         SECTION 15. Severability.  In case any provision in or obligation under
this  Contribution  Agreement shall be invalid,  illegal or unenforceable in any
jurisdiction,   the  validity,  legality  or  enforceability  of  the  remaining
provisions  or  obligations,  or of such  provision or  obligation  in any other
jurisdiction, shall not in any way be affected or impaired thereby.

         SECTION 16. Addresses for Notices. All notices and other communications
provided for hereunder  shall be in writing  (including  telegraphic or telecopy
communication)  and mailed,  telegraphed,  telecopied  or  delivered,  if to any
Guarantor,  addressed  to it at the  address  set  forth  for such  party in the
Guarantee  Agreement,  and if to any other  party,  at the address set forth for
such party in the Agreements. All such notices and other communications shall be
given  and  deemed  to have  been  received  as  provided  by the  terms  of the
Agreements.

         SECTION 17. Defined Terms.  All  capitalized  terms used herein and not
defined herein shall have their respective defined meanings as set forth or used
in the Guarantee Agreement.

         IN WITNESS  WHEREOF,  Hughes and the Guarantors have duly executed this
Contribution Agreement as of the day and year first above written.

                                     HUGHES SUPPLY, INC.

                                     By:________________________________________
                                           Title:_______________________________

                                     THE GUARANTORS:

                                     ATLANTIC PUMP & Equipment SUPPLY COMPANY OF
                                       MIAMI, INC.
                                     ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY OF
                                       WEST PALM BEACH, INC.
                                     BESTROUTE.COM, LLC (99% OWNED)
                                     CAROLINA PUMP & SUPPLY CORP.
                                     CAYESTEEL, INC.
                                     CHAD SUPPLY, INC.
                                     COASTAL WHOLESALE, INC.
                                     DOMINION PIPE & SUPPLY CO.
                                     DOMINION PIPE FABRICATORS, INCORPORATED
                                     DOUGLAS LEONHARDT & ASSOCIATES, INC.
                                     ELASCO AGENCY SALES, INC.
                                     ELEC-TEL SUPPLY COMPANY

                 [Listing of Guarantors Continued on Next Page]

<PAGE>

                     [Continuation of Listing of Guarantors]

                                     ELECTRIC LABORATORIES AND SALES CORPORATION
                                     FES MERGER CORP., INC.
                                     GAYLE SUPPLY COMPANY, INC.
                                     GILLELAND CONCRETE PRODUCTS, INC.
                                     HSI ACQUISITION CORPORATION
                                     HSI BESTROUTE INVESTMENT, INC.
                                     HSI FUSION SERVICES, INC.
                                     HUGHES SUPPLY MANAGEMENT SERVICES
                                     HUGHES WATER & SEWER COMPANY
                                     H VENTURE CORP.
                                     JUNO INDUSTRIES, INC.
                                     KAMEN SUPPLY COMPANY, INC.
                                     KINGSTON PIPE INDUSTRIES, INC.
                                     MEREX CORPORATION
                                     METALS INCORPORATED
                                     METALS, INC. - GULF COAST DIVISION
                                     MILLS & LUPTON SUPPLY COMPANY
                                     MOORE ELECTRIC SUPPLY, INC.
                                     MOUNTAIN COUNTRY SUPPLY, INC.
                                     OLANDER & BROPHY, INCORPORATED
                                     ONE STOP SUPPLY, INC.
                                     PAINE SUPPLY OF JACKSON, INC.
                                     PALM POOL PRODUCTS, INC.
                                     PANHANDLE PIPE & SUPPLY CO., INC.
                                     PORT CITY ELECTRICAL SUPPLY, INC.
                                     R&G PLUMBING SUPPLY, INC.
                                     REACTION SUPPLY CORPORATION
                                     SHRADER HOLDING COMPANY, INC.
                                     STAINLESS STEEL TUBULAR PRODUCTS, INC.
                                     USCO INCORPORATED
                                     UNION MERGER CORPORATION
                                     U.S. FUSION SERVICES, INC.
                                     VIRGINIA WATER & WASTE SUPPLY COMPANY, INC.
                                     WCC MERGER CORPORATION

                 [Listing of Guarantors Continued on Next Page]

<PAGE>

                     [Continuation of Listing of Guarantors]

                                            WHOLESALE ELECTRIC SUPPLY
                                              CORPORATION

                                            By: _____________________________
                                            Title: __________________________

                                            SOUTHWEST STAINLESS, L.P.

                                            By:  Z&L Acquisition Corp.,
                                                    as General Partner

                                            By: _____________________________
                                                Title: ______________________

                                            Z&L ACQUISITION CORP., in its
                                               individual capacity

                                            By: _____________________________
                                                Title: ______________________

                                                Address for Notices for all
                                                Guarantors:
                                                [Insert Guarantor]
                                                c/o Hughes Supply, Inc.
                                                20 North Orange Avenue
                                                Orlando, Florida 32801
                                                Attention: General Counsel

<PAGE>

                   FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

         THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT dated as of January 19,
2001 by and among HUGHES  SUPPLY,  INC. (the  "Company")  and the Purchasers set
forth on the signature  pages below (each a  "Purchaser"  and  collectively  the
"Purchasers").

         WHEREAS,  the Company and each  Purchaser  entered into a Note Purchase
Agreement dated as of December 21, 2000 (each a "Note Purchase Agreement"; terms
used herein and not defined herein have their  respective  meanings as set forth
in the Note Purchase Agreement);

         WHEREAS,  the  Company  and each  Purchaser  desires  to amend the Note
Purchase  Agreement  to which they are a party on the terms and  conditions  set
forth herein;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which is hereby  acknowledged by the parties hereto,  the parties
hereto hereby agree as follows:

         Section 1. Specific Amendments to Note Purchase Agreement

         (a) Section 10.8(iv) of each Note Purchase  Agreement is hereby amended
by deleting subparagraph (B) thereof in its entirety.

         (b)  Subparagraph  (C)  of  Section  10.8(iv)  of  each  Note  Purchase
Agreement is hereby  amended by inserting  the following  immediately  after the
word "if," appearing therein:

               "(1) at least 85% of the consideration received by the Company or
          such  Subsidiary in connection  with  Dispositions in excess of 15% of
          Consolidated Assets is in the form of cash and (2)".

         Section 2. Full Force and Effect.  Except as modified hereby, each Note
Purchase  Agreement  remains  in full  force and  effect  without  modification.
Section  references  in the  Note  Purchase  Agreement  shall  remain  the  same
notwithstanding  the  deletion  of a  subparagraph  in its  entirety.  Upon  the
effectiveness  of  this  First  Amendment,  all  references  to a Note  Purchase
Agreement  shall be deemed to be references  to each Note Purchase  Agreement as
amended by this First Amendment.

         Section 3.  Effectiveness  of Amendment.  This First Amendment shall be
effective upon the execution and delivery of this First Amendment by the Company
and the Required Holders.

<PAGE>

         Section 4. Fees and  Expenses.  Pursuant  to Section  15.1 of each Note
Purchase  Agreement,  the  Company  shall pay all fees and  expenses  of special
counsel to the  Purchasers in  connection  with the  preparation,  execution and
delivery of this First Amendment.

         Section 5.  Governing Law. This First  Amendment  shall be governed by,
and construed in accordance  with, the laws of the State of New York,  excluding
choice-of-law  principles  of the law of  such  State  that  would  require  the
application of the laws of a jurisdiction other than such State.

         Section 6.  Headings.  Headings of sections are for the  convenience of
the  parties  and shall not be used to  interpret  or affect the  meaning of any
provision contained herein.

         Section 7.  Counterparts.  This First  Amendment may be executed in any
number of  counterparts,  each of which  shall be an  original  but all of which
together shall  constitute one  instrument.  Each  counterpart  may consist of a
number of copies  hereof,  each signed by less than all, but together  signed by
all,  of the  parties  hereto.  Any  signature  hereto  may be  transmitted  via
facsimilie  transmission  and such  signature  shall  have the  same  effect  as
original signature thereof.

                         [Signatures on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

         IN WITNESS  WHEREOF,  this First  Amendment is hereby duly executed and
delivered by the parties hereto as of the date and year first written above.

                                        THE COMPANY:

                                        HUGHES SUPPLY, INC.

                                        By: ___________________________
                                        Title: ________________________

                                        Purchasers of Series A Notes:

                                        PACIFIC LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        PACIFIC LIFE AND ANNUITY COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                    Signatures Continued on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

                                        Purchasers of Series B Notes:

                                        GENERAL ELECTRIC CAPITAL
                                         ASSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        GE LIFE AND ANNUITY ASSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        GE CAPITAL LIFE ASSURANCE COMPANY OF
                                          NEW YORK

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        ALLSTATE LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________
                                        (Authorized Signatories)

                    [Signatures Continued on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

                                        AMERICAN UNITED LIFE INSURANCE
                                          COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        PIONEER MUTUAL LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                       Purchasers of Series C Notes:

                                       CONNECTICUT GENERAL LIFE INSURANCE
                                         COMPANY

                                       By: CIGNA Investments, Inc.

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        LIFE INSURANCE COMPANY OF NORTH AMERICA

                                        By: CIGNA Investments, Inc.

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                    [Signatures Continued on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

                                        JEFFERSON-PILOT LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        TEACHERS INSURANCE AND ANNUITY
                                          ASSOCIATION OF AMERICA

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        SUNAMERICA LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        NATIONWIDE LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                    [Signatures Continued on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

                                        NATIONWIDE LIFE AND ANNUITY INSURANCE
                                          COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        NEW YORK LIFE INSURANCE COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        NEW YORK LIFE INSURANCE AND
                                          ANNUITY CORPORATION

                                        By:  New York Life Investment
                                             Management, LLC,
                                             its Investment Manager

                                             By: ___________________________
                                                 Name: _____________________
                                                 Title: ____________________

                                        THE CANADA LIFE ASSURANCE COMPANY,
                                          as beneficial owner

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                    [Signatures Continued on Following Pages]

<PAGE>

  [Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]

                                        THE OHIO NATIONAL LIFE  INSURANCE
                                          COMPANY

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

                                        MODERN WOODMEN OF AMERICA

                                        By: ___________________________
                                            Name: _____________________
                                            Title: ____________________

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