Document:

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                                                                     EXHIBIT 4.4

                               CENTEX CORPORATION

                                     Issuer

                                       and

                            THE CHASE MANHATTAN BANK
               (formerly Chase Bank of Texas, National Association
                  and Texas Commerce Bank National Association)

                                     Trustee

                           INDENTURE SUPPLEMENT NO. 7

                          Dated as of November 17, 2000

                                       to

                                    INDENTURE

                           Dated as of March 12, 1987

                    Subordinated Medium-Term Notes, Series D

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         INDENTURE SUPPLEMENT NO. 7 ("Indenture Supplement"), dated as of
November 17, 2000, between CENTEX CORPORATION, a Nevada corporation (together
with its successors and assigns as provided in the Indenture referred to below,
the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation
(formerly, Chase Bank of Texas, National Association and Texas Commerce Bank
National Association) (together with its successors in trust thereunder as
provided in the Indenture referred to below, the "Trustee"), as trustee under an
Indenture dated as of March 12, 1987 (the "Indenture").

                              PRELIMINARY STATEMENT

         Section 2.02 of the Indenture provides, among other things, that the
Company may, when authorized by its Board of Directors, and the Trustee may at
any time and from time to time, enter into a series supplement to the Indenture
for the purpose of authorizing one or more Series of Subordinated Debt
Securities and to specify certain terms of each such Series of Subordinated Debt
Securities. The Board of Directors of the Company has duly authorized the
creation of a Series of Subordinated Debt Securities to be known as the
Company's Subordinated Medium-Term Notes, Series D (the "Subordinated Notes"),
and the Company and the Trustee are executing and delivering this Indenture
Supplement in order to provide for the issuance of the Subordinated Notes.

                                   ARTICLE ONE

                                   Definitions

         Except to the extent such terms are otherwise defined in this Indenture
Supplement or the context clearly requires otherwise, all terms used in this
Indenture Supplement which are defined in the Indenture or the form of Fixed
Rate Note or Floating Rate Note attached hereto as Exhibits A and B,
respectively, either directly or by reference therein, shall have the meanings
assigned to them therein.

         As used in this Indenture Supplement, the following terms shall have
the following meanings:

AMORTIZED FACE AMOUNT:

         The term "Amortized Face Amount" of an Original Issue Discount Note, as
of the date that (i) the principal amount of such Subordinated Note is to be
repaid prior to its Stated Maturity, whether upon declaration of acceleration,
call for redemption, repayment at the option of the Holder or otherwise, or (ii)
any consent, notice, request, direction, waiver or suit by the Noteholders shall
be deemed to be given, made or commenced under this Indenture, shall mean the
principal amount of such Subordinated Note multiplied by its Issue Price plus
the portion of the difference between the dollar amount thus obtained and the
principal amount of such Subordinated Note that has accreted at the Yield to
maturity of such Subordinated Note (computed in accordance with generally
accepted United States bond yield computation principles) to such date, but in
no event shall the Amortized Face Amount of an Original Issue Discount Note
exceed its principal amount stated in the applicable Company Order.

AMORTIZING NOTE:

         The term "Amortizing Note" shall mean a Subordinated Note for which
payments of principal of and interest on such Subordinated Note are made in
installments over the life of such Subordinated Note, and unless otherwise
specified in the applicable Company Order, payments with respect to an
Amortizing Note shall be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof.

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AUTHORIZED AGENT:

         The term "Authorized Agent" shall mean an agent of the Company
designated by an Officers' Certificate to give to the Trustee the information
specified in clause (a) of "Company Order" for the issuance of a Subordinated
Note.

BASIS POINT:

         The term "Basis Point" shall mean one-one hundredth of a percentage
point.

CD RATE:

         The term "CD Rate" shall mean, with respect to any CD Rate Interest
Determination Date, the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) (as hereinafter defined) under the
heading "CDs (secondary market)" or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity specified in the applicable Pricing Supplement as
published in H.15 Daily Update (as hereinafter defined), or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "CDs (secondary market)." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable United States dollar certificates
of deposit in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent for negotiable United States
dollar certificates of deposit of major United States money center banks for
negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement in an amount that
is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the CD Rate determined as of such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.

CD RATE INTEREST DETERMINATION DATE:

         The term "CD Rate Interest Determination Date" shall mean the Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CD Rate.

CMT RATE:

         The term "CMT Rate" shall mean, with respect to any CMT Rate Interest
Determination Date, the rate displayed on the Designated CMT Telerate Page under
the caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index for (i) if the Designated CMT Telerate Page is 7051, the rate on
such CMT Rate Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the weekly or monthly average, as specified in the
Company Order, for the week or the month, as applicable, ended immediately
preceding the week or the month, as applicable, in which the related CMT Rate
Interest Determination Date falls. If such rate is no longer displayed on the
relevant page or is not so displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published or is not

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so published by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate on such CMT Rate Interest Determination Date will be such
treasury constant maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity Index) for the CMT
Rate Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve System
or the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the Designated CMT
Telerate Page and published in H.15(519). If such information is not so provided
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate on the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market offered rates as of approximately 3:30 P.M., New York
City time, on such CMT Rate Interest Determination Date reported, according to
their written records, by three leading primary United States government
securities dealers in The City of New York (which may include the Agents or
their affiliates) (each, a "Reference Dealer") selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offered rates as of approximately 3:30 P.M., New York
City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate will
be based on the arithmetic mean of the offered rates obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers so selected by the Calculation Agent
are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain quotations for the Treasury Note with the shorter remaining term to
maturity.

CMT RATE INTEREST DETERMINATION DATE:

         The term "CMT Rate Interest Determination Date" shall mean any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CMT Rate.

CALCULATION AGENT:

         The term "Calculation Agent" for a particular Floating Rate Note shall
mean the Trustee, unless otherwise specified in the applicable Company Order.

CALCULATION DATE:

         The term "Calculation Date" shall, unless otherwise specified in the
applicable Company Order, mean with regard to any particular Interest
Determination Date, the earlier of (i) the tenth calendar day

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after such Interest Determination Date, or, if any such day is not a Business
Day, the next day that is a Business Day, or (ii) the Business Day immediately
preceding the applicable Interest Payment Date or Maturity Date, as the case may
be.

COMMERCIAL PAPER RATE:

         The term "Commercial Paper Rate" for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall mean, with
respect to any Interest Determination Date, the Money Market Yield on such date
of the rate for commercial paper having the Index Maturity specified in such
Company Order, as such rate shall be published in H.15(519) under the caption
"Commercial Paper--Nonfinancial" or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such Commercial Paper
Rate Interest Determination Date for commercial paper having the Index Maturity
specified in the applicable Company Order as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Commercial Paper--Nonfinancial." If such rate is not
yet published in H.15(519), H.15 Daily Update or another recognized electronic
source by 3:00 P.M., New York City time, on the related Calculation Date, then
the Commercial Paper Rate on such Commercial Paper Rate Interest Determination
Date will be calculated by the Calculation Agent and will be the Money Market
Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M.,
New York City time, on such Commercial Paper Rate Interest Determination Date of
three leading dealers of commercial paper in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement placed for industrial issuers whose bond rating is "Aa," or the
equivalent, from a nationally recognized statistical rating organization;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate determined
as of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.

COMMERCIAL PAPER RATE INTEREST DETERMINATION DATE:

         The term "Commercial Paper Rate Interest Determination Date" shall mean
any Interest Determination Date relating to a Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate.

COMMERCIAL PAPER RATE NOTES:

         The term "Commercial Paper Rate Notes" shall mean Floating Rate Notes
which are specified in the applicable Company Order as bearing interest at an
interest rate calculated with reference to the Commercial Paper Rate.

COMPANY ORDER:

         The term "Company Order" shall mean:

         (a) a written order signed in the name of the Company by the Chairman
of the Board, the President or any Vice President and by the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee, to
authenticate a Subordinated Note and to make it available for delivery, and
specifying for such Subordinated Note the following information:

                  (1) the name of the Person in which a Subordinated Note to be
         issued and authenticated shall be registered;

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                  (2) the address of such Person;

                  (3) the taxpayer identification number of such Person;

                  (4) the principal amount of such Subordinated Note and, if
         multiple Subordinated Notes are to be issued to such Person, the
         denominations of such Subordinated Notes;

                  (5) the Issue Price of such Subordinated Note;

                  (6) the Original Issue Date of such Subordinated Note;

                  (7) the date upon which such Subordinated Note is scheduled to
         mature and the Final Maturity Date;

                  (8) if the Subordinated Note is to be redeemable at the option
         of the Company, the Initial Redemption Date and the date or dates on
         which, and the price or prices at which, such Subordinated Note is
         redeemable at the option of the Company;

                  (9) if the Subordinated Note is to be repayable prior to the
         Stated Maturity at the option of the Holder, the date or dates on
         which, and the price or prices at which, such Subordinated Note is
         repayable at the option of the Holder;

                  (10) if the Subordinated Note is a Fixed Rate Note, the rate
         of interest on such Subordinated Note and the Interest Payment Dates,
         if other than March 1 and September 1, and the Record Dates, if other
         than February 15 and August 15;

                  (11) if the Subordinated Note is an Original Issue Discount
         Note, its Yield to Maturity;

                  (12) if such Subordinated Note is an Amortizing Note, a table
         setting forth the schedule of dates and amounts of payments of
         principal of and interest on such Subordinated Note or the formula for
         the amortization of principal and/or interest;

                  (13) if the Subordinated Note is a Reset Note, the Optional
         Interest Reset Date and the formula, if any, for resetting the interest
         rate of a Fixed Rate Note or the Spread and/or Spread Multiplier of a
         Floating Rate Note;

                  (14) if the Subordinated Note is a Floating Rate Note, its:

                           (A)      Initial Interest Rate

                           (B)      Interest Rate Basis or Bases (including any
                                    Designated LIBOR Currency and Designated
                                    LIBOR Page or any Designated CMT Maturity
                                    Index and Designated CMT Telerate Page)

                           (C)      Index Maturity

                           (D)      Interest Determination Dates

                           (E)      Interest Reset Period

                           (F)      Initial Interest Reset Date

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                           (G)      Fixed Rate Commencement Date, if applicable

                           (H)      Fixed Interest Rate, if applicable

                           (I)      Interest Reset Dates

                           (J)      Spread

                           (K)      Spread Multiplier

                           (L)      Maximum Interest Rate

                           (M)      Minimum Interest Rate

                           (N)      Interest Payment Dates

                           (O)      Record Dates

                  (15) If such Subordinated Note is a Floating Rate Note,
         whether it is a Regular Floating Rate Note or a Floating Rate/Fixed
         Rate Note;

                  (16) whether or not such Subordinated Note is to be issued in
         the form of a Global Note to the Depositary;

                  (17) the name and address of the Calculation Agent, if other
         than the Trustee;

                  (18) if other than United States dollars or denominations of
         $1,000 and integral multiples thereof, the authorized currency or
         denominations in which Subordinated Notes shall be issued; and

                  (19) all other information necessary for the issuance of such
         Subordinated Note not inconsistent with the provisions of this
         Indenture; or

         (b) confirmation given to the Trustee by an officer of the Company
designated by an Officers' Certificate, by telephone, confirmed by telex or
facsimile or similar writing, of the information given to the Trustee by an
Authorized Agent for the issuance of a Subordinated Note, and the written order
of the Company to authenticate such Subordinated Note and to make it available
for delivery.

COMPOSITE QUOTATIONS:

         The term "Composite Quotations" shall mean the daily statistical
release "Composite 3:30 P.M. Quotations for U. S. Government Securities" or any
successor publication published by the Federal Reserve Bank of New York.

CUSIP:

         The term "CUSIP" shall mean the registered trademark "Committee on
Uniform Securities Identification Procedures" or "CUSIP" and a unique system of
identification of each public issue of a security owned by the American Bankers
Association and administered by Standard and Poor's Corporation, as agent of the
American Bankers Association.

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DEPOSITARY:

         The term "Depositary" shall mean, unless otherwise specified by the
Company, The Depository Trust Company, New York, New York, or any successor
thereto registered as a Clearing Agency under the Securities and Exchange Act of
1934, as amended, or any successor statute or regulation.

DESIGNATED CMT TELERATE PAGE:

         The term "Designated CMT Telerate Page" shall mean the display on
Bridge Telerate, Inc. (or any successor service) on the page specified in the
applicable Pricing Supplement (or any other page as may replace such page on
such service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519) or, if no such page is specified in the applicable Pricing
Supplement, page 7052.

DESIGNATED CMT MATURITY INDEX:

         The term "Designated CMT Maturity Index" shall mean the original period
to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in the applicable Pricing Supplement with respect to which the
CMT Rate will be calculated or, if no such maturity is specified in the
applicable Pricing Supplement, 2 years.

DESIGNATED LIBOR CURRENCY:

         The term "Designated LIBOR Currency" shall mean the currency or
composite currency specified in the applicable Company Order as to which LIBOR
shall be calculated or, if no such currency or composite currency is specified
in the applicable Company Order, United States dollars.

DESIGNATED LIBOR PAGE:

         The term "Designated LIBOR Page" shall mean either (a) the display on
the Reuters Monitor Money Rates Service (or any successor service) on the page
specified in such Company Order (or any other page as may replace such page on
such service) for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency (if "LIBOR Reuters" is specified in the
applicable Company Order), or (b) the display on Bridge Telerate, Inc. (or any
successor service) on the page specified in the applicable Company Order (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency (if "LIBOR Telerate" is specified in the applicable Company Order or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Company Order as the method for calculating LIBOR).

ELEVENTH DISTRICT COST OF FUNDS RATE:

         The term "Eleventh District Cost of Funds Rate" shall mean, with
respect to any Eleventh District Cost of Funds Rate Interest Determination Date,
the rate equal to the monthly weighted average cost of funds for the calendar
month immediately preceding the month in which such Eleventh District Cost of
Funds Rate Interest Determination Date falls as set forth under the caption
"11th District" on the display on Bridge Telerate, Inc. (or any successor
service) on page 7058 ("Telerate Page 7058") as of 11:00 A.M., San Francisco
time, on such Eleventh District Cost of Funds Rate Interest Determination Date.
If such rate does not appear on Telerate Page 7058 on such Eleventh District
Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost
of Funds Rate on such Eleventh District Cost of Funds Rate Interest
Determination Date shall be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced

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(the "Index") by the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.

ELEVENTH DISTRICT COST OF FUNDS RATE INTEREST DETERMINATION DATE:

         The term "Eleventh District Cost of Funds Rate Interest Determination
Date" shall mean any Interest Determination Date relating to a Floating Rate
Note for which the interest rate is determined with reference to the Eleventh
District Cost of Funds Rate.

FEDERAL FUNDS RATE:

         The terms "Federal Funds Rate" shall mean, with respect to any Federal
Funds Rate Interest Determination Date, the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)", as such rate is displayed on Bridge Telerate, Inc. (or any
successor service) on page 120 ("Telerate Page 120"), or, if such rate does not
appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such Federal Funds Rate
Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "Federal Funds (Effective)."
If such rate does not appear on Telerate Page 120 or is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Federal
Funds Rate on such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight United States dollar federal funds
arranged by three leading brokers of federal funds transactions in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds
Rate Interest Determination Date; provided, however, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.

FEDERAL FUNDS RATE INTEREST DETERMINATION DATE:

         The term "Federal Funds Rate Interest Determination Date" shall mean
any Interest Determination Date relating to a Floating Rate Note for which the
interest rate is determined with reference to the Federal Funds Rate.

FINAL MATURITY DATE:

         The term "Final Maturity Date" shall mean the date beyond which the
Stated Maturity of a particular Subordinated Note may not be extended at the
option of the Company.

FIXED RATE AMORTIZING NOTE:

         The term "Fixed Rate Amortizing Note" shall mean a Fixed Rate Note
which is an Amortizing Note.

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FIXED RATE NOTE:

         The term "Fixed Rate Note" shall mean a Subordinated Note which bears
interest at a fixed rate (which may be zero in the case of a Zero Coupon Note)
specified in the applicable Company Order.

FLOATING RATE NOTE:

         The term "Floating Rate Note" shall mean a Subordinated Note which
bears interest at a variable rate determined by reference to an interest rate
formula, and includes a CD Rate Note, a CMT Rate Note, a Commercial Paper Rate
Note, an Eleventh District Cost of Funds Rate Note, a Federal Funds Rate Note, a
LIBOR Note, a Prime Rate Note or a Treasury Rate Note.

GLOBAL NOTE:

         The term "Global Note" shall mean a single Subordinated Note that is
issued to evidence Subordinated Notes having identical terms and provisions,
which is delivered to the Depositary or pursuant to instructions of the
Depositary and which shall be registered in the name of the Depositary or its
nominee.

H.15(519):

         The term "H.15(519)" shall mean the weekly publication "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication
published by the Board of Governors of the Federal Reserve System.

H.15 DAILY UPDATE:

         The term "H.15 Daily Update" shall mean the daily update of H.15(519),
available through the world-wide-web site of the Board of Governors of the
Federal Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any
successor site or publication.

HIGHEST LAWFUL RATE:

         The term "Highest Lawful Rate" shall mean at the particular time in
question the maximum rate of interest which, under applicable law, the Holders
are then permitted to charge on the Subordinated Notes. If the maximum rate of
interest which, under applicable law, the Holders are permitted to charge on the
Subordinated Notes shall change after the date of this Indenture Supplement, the
Highest Lawful Rate shall be automatically increased or decreased, as the case
may be, from time to time as of the effective time of each change in the Highest
Lawful Rate without notice to the Company. For purposes of determining the
Highest Lawful Rate under the applicable law of the State of Texas, the
applicable rate ceiling shall be (a) the weekly rate ceiling described in and
computed in accordance with the provisions of Articles 5069.1D and 5069.1H.002,
Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art. 5069.1D") or
(b) if the parties subsequently contract as allowed by applicable law, the
quarterly ceiling or the annualized ceiling computed pursuant to Art. 5069.1D;
provided, however, that at any time the weekly rate ceiling, the quarterly
ceiling or the annualized ceiling shall be less than 18% per annum or more than
24% per annum, the provisions of Section 1D.009 of said Art. 5069.1D shall
control for purposes of such determination, as applicable.

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INDEX MATURITY:

         The term "Index Maturity" of a particular Floating Rate Note shall mean
the period to Stated Maturity of the instrument or obligation with respect to
which the related Interest Rate Basis or Bases of such Floating Rate Note is
calculated, as specified in the applicable Company Order.

INITIAL INTEREST RATE:

         The term "Initial Interest Rate" for a particular Floating Rate Note
shall mean the interest rate specified in the applicable Company Order as in
effect from the Original Issue Date of such Floating Rate Note to its first
Interest Reset Date.

INITIAL REDEMPTION DATE:

         The term "Initial Redemption Date" shall mean the earliest date, if
any, on which a particular Subordinated Note shall be redeemable at the option
of the Company prior to the Stated Maturity of such Subordinated Note, as
specified in the applicable Company Order.

INTEREST ACCRUAL PERIOD:

         The term "Interest Accrual Period" for a particular Floating Rate Note
shall mean the period from the date of issue of such Floating Rate Note, or from
an Interest Reset Date, if any, to its next subsequent Interest Reset Date.

INTEREST DETERMINATION DATE:

         The term "Interest Determination Date" shall mean, with respect to the
CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the
Prime Rate, the second Business Day immediately preceding the applicable
Interest Reset Date; the "Interest Determination Date" with respect to the
Eleventh District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the FHLB of
San Francisco publishes the Index; and the "Interest Determination Date" with
respect to LIBOR shall be the second London Business Day immediately preceding
the applicable Interest Reset Date, unless the Designated LIBOR Currency is
British pounds sterling, in which case the "Interest Determination Date" shall
be the applicable Interest Reset Date. With respect to the Treasury Rate, the
"Interest Determination Date" shall be the day in the week in which the
applicable Interest Reset Date falls on which day Treasury Bills are normally
auctioned (Treasury Bills are normally sold at an auction held on Monday of each
week, unless such Monday is a legal holiday, in which case the auction is
normally held on the immediately succeeding Tuesday although such auction may be
held on the preceding Friday); provided, however, that if an auction is held on
the Friday of the week preceding the applicable Interest Reset Date, the
"Interest Determination Date" shall be such preceding Friday; provided, further,
that if the Interest Determination Date would otherwise fall on an Interest
Reset Date, then such Interest Reset Date shall be postponed to the next
succeeding Business Day. The "Interest Determination Date" pertaining to a
Floating Rate Note the interest rate of which is determined by reference to two
or more Interest Rate Bases shall be the most recent Business Day which is at
least two Business Days prior to the applicable Interest Reset Date for such
Floating Rate Note on which each Interest Rate Basis is determinable. Each
Interest Rate Basis shall be determined as of such date, and the applicable
interest rate shall take effect on the applicable Interest Reset Date.

                                       10
<PAGE>   12

INTEREST PAYMENT DATE:

         (a) The term "Interest Payment Date" shall mean with respect to a
Floating Rate Note, including a Floating Rate Amortizing Note, which has an
Interest Reset Date reset (1) daily, weekly or monthly: the third Wednesday of
each month or the third Wednesday of March, June, September and December of each
year, as specified in the applicable Company Order, (2) quarterly: the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Company Order, (3) semiannually: the third Wednesday of the two
months of each year, as specified in the applicable Company Order; (4) annually:
the third Wednesday of the month of each year, as specified in the applicable
Company Order, and, in each case, the Maturity Date of such Floating Rate Note
and, with respect to defaulted interest on such Floating Rate Note, the date
established by the Company for the payment of such defaulted interest. If any
Interest Payment Date (other than at Maturity) for any Floating Rate Note would
fall on a day that is not a Business Day with respect to such Floating Rate
Note, such Interest Payment Date will be the immediately following day that is a
Business Day with respect to such Floating Rate Note, except that, in the case
of a LIBOR Note, if such Business Day with respect to such Floating Rate Note is
in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding London Business Day.

         (b) The term "Interest Payment Date" shall mean with respect to a Fixed
Rate Note, including a Fixed Rate Amortizing Note, each March 1 and September 1,
or such other dates which are specified in the applicable Company Order during
the period such Fixed Rate Note is outstanding, the Maturity Date of such Fixed
Rate Note, and with respect to defaulted interest on such Fixed Rate Note, the
date established by the Company for the payment of such defaulted interest.

         (c) Notwithstanding the foregoing, the first Interest Payment Date for
any Subordinated Note originally issued between a Record Date and the next
Interest Payment Date shall be the Interest Payment Date following the next
succeeding Record Date.

INTEREST RATE:

         (a) The term "Interest Rate" for a particular Floating Rate Note shall
mean (1) from the date of issue of such Floating Rate Note to the first Interest
Reset Date for such Floating Rate Note, the Initial Interest Rate, and (2) each
Interest Accrual Period commencing on or after such First Interest Reset Date,
the Base Rate with reference to the Index Maturity for such Floating Rate Note
as specified in the applicable Company Order plus or minus the Spread, if any,
multiplied by the Spread Multiplier, if any; PROVIDED that in the event no
Spread or Spread Multiplier is provided in such Company Order, the Spread and
Spread Multiplier shall be zero and one, respectively; PROVIDED, FURTHER, in no
event shall the Interest Rate be greater than the Maximum Interest Rate, if any,
or less than the Minimum Interest Rate, if any; PROVIDED, FURTHER, the Interest
Rate in effect for the ten days immediately prior to Maturity will be the
Interest Rate in effect on the tenth day preceding such Maturity; and PROVIDED,
FURTHER, the Interest Rate will in no event be higher than the maximum rate
permitted by Texas or other applicable law, as the same may be modified by
United States federal laws of general application.

         (b) The term "Interest Rate" for a particular Fixed Rate Note shall
mean the interest rate specified in the applicable Company Order.

INTEREST RATE BASIS:

         The term "Interest Rate Basis" shall mean with respect to (a) CD Rate
Notes, the CD Rate, (b) CMT Rate Notes, the CMT Rate, (c) Commercial Paper Rate
Notes, the Commercial Paper Rate, (d)

                                       11
<PAGE>   13

Eleventh District Cost of Funds Note, the Eleventh District Cost of Funds Rate,
(e) Federal Funds Rate Notes, the Federal Funds Rate, (f) LIBOR Notes, LIBOR,
(g) Prime Rate Notes, the Prime Rate, (h) Treasury Rate Notes, the Treasury
Rate, and (i) any other Floating Rate Note, the interest rate formula which
determines the variable rate at which such Subordinated Note bears interest.

INTEREST RESET DATE:

         The term "Interest Reset Date" shall mean, in the case of a Floating
Rate Note specified in the applicable Company Order as being reset (a) daily:
each Business Day; (b) weekly: the Wednesday of each week (with the exception of
weekly reset Treasury Rate Notes which reset the Tuesday of each week, except as
specified below); (c) monthly: the third Wednesday of each month (with the
exception of monthly reset Floating Rate Notes as to which the Eleventh District
Cost of Funds Rate is an applicable Interest Rate Basis which will reset on the
first calendar day of the month); (d) quarterly: the third Wednesday of March,
June, September and December; (e) semiannually: the third Wednesday of the two
months specified in the applicable Company Order; and (f) annually: the third
Wednesday of the month specified in the applicable Company Order. If any
Interest Reset Date for a Floating Rate Note would otherwise be a day which is
not a Business Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding London Business Day. If, in the
case of a Treasury Rate Note, an Interest Reset Date shall fall on a day on
which the Treasury auctions Treasury Bills, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction.

INTEREST RESET PERIOD:

         The term "Interest Reset Period" shall mean for:

         (a) each Floating Rate Note on which interest is reset monthly,
quarterly, semiannually or annually, and each Fixed Rate Note, the period:

                  (1) beginning on and including the Original Issue Date of such
         Subordinated Note or the most recent Interest Payment Date on which
         interest was paid on such Subordinated Note, and

                  (2) ending on but not including the next Interest Payment Date
         or, for the last Interest Reset Period, the Maturity Date, of such
         Subordinated Note;

         (b) each Floating Rate Note on which interest is reset daily or weekly,
the period:

                  (1) beginning on and including the Original Issue Date of such
         Floating Rate Note, or beginning on but excluding the most recent
         Record Date through which interest was paid on such Subordinated Note,
         and

                  (2) ending on and including the next Record Date or, for the
         last Interest Reset Period, ending on but excluding the Maturity Date,
         of such Subordinated Note;

PROVIDED, HOWEVER, that the first Interest Reset Period for any Subordinated
Note which has its Original Issue date after a Record Date and prior to its next
Interest Payment Date, shall begin on and include such Original Issue Date and
(i) end on and include the next Record Date for Floating Rate Notes on which
interest is reset daily or weekly, and (ii) end on but not include the second
Interest Payment Date after the Original Issue Date for all other Subordinated
Notes.

                                       12
<PAGE>   14

ISSUE PRICE:

         The term "Issue Price" shall mean the price expressed as a percentage
of the aggregate principal amount of a Subordinated Note at which such
Subordinated Note is issued.

LIBOR:

         The term "LIBOR," unless otherwise indicated in the applicable Company
Order, shall mean, with respect to any LIBOR Interest Determination Date, the
rate determined:

                  (i) With respect to any LIBOR Interest Determination Date,
         LIBOR shall be either: (a) if "LIBOR Telerate" is specified in the
         applicable Company Order or if neither "LIBOR Reuters" nor "LIBOR
         Telerate" is specified in the applicable Company Order as the method
         for calculating LIBOR, the rate for deposits in the Designated LIBOR
         Currency having the Index Maturity specified in such Company Order,
         commencing on such Interest Reset Date, that appears on the Designated
         LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest
         Determination Date; or (b) if "LIBOR Reuters" is specified in the
         applicable Pricing Supplement, the arithmetic mean of the offered rates
         (unless the Designated LIBOR Page by its terms provides only for a
         single rate, in which case such single rate shall be used) for deposits
         in the Designated LIBOR Currency having the Index Maturity specified in
         such Pricing Supplement, commencing on the applicable Interest Reset
         Date, that appear (or, if only a single rate is required as aforesaid,
         appears) on the Designated LIBOR Page as of 11:00 A.M., London time, on
         such LIBOR Interest Determination Date. If fewer than two such offered
         rates so appear, or if no such rate so appears, as applicable, LIBOR on
         such LIBOR Interest Determination Date shall be determined in
         accordance with the provisions described in clause (ii) below.

                 (ii) With respect to a LIBOR Interest Determination Date on
         which fewer than two offered rates appear, or no rate appears, as the
         case may be, on the Designated LIBOR Page as specified in clause (i)
         above, the Calculation Agent will request the principal London offices
         of each of four major reference banks (which may include affiliates of
         the Agents) in the London interbank market, as selected by the
         Calculation Agent, to provide the Calculation Agent with its offered
         quotation for deposits in the Designated LIBOR Currency for the period
         of the Index Maturity specified in the applicable Pricing Supplement,
         commencing on the applicable Interest Reset Date, to prime banks in the
         London interbank market at approximately 11:00 A.M., London time, on
         such LIBOR Interest Determination Date and in a principal amount that
         is representative for a single transaction in the Designated LIBOR
         Currency in such market at such time. If at least two such quotations
         are so provided, then LIBOR on such LIBOR Interest Determination Date
         shall be the arithmetic mean of such quotations. If fewer than two such
         quotations are so provided, then LIBOR on such LIBOR Interest
         Determination Date shall be the arithmetic mean of the rates quoted at
         approximately 11:00 A.M., in the applicable Principal Financial Center,
         on such LIBOR Interest Determination Date by three major banks (which
         may include affiliates of the Agents) in such Principal Financial
         Center selected by the Calculation Agent for loans in the Designated
         LIBOR Currency to leading European banks, having the Index Maturity
         specified in the applicable Company Order and in a principal amount
         that is representative for a single transaction in the Designated LIBOR
         Currency in such market at such time; provided, however, that if the
         banks so selected by the Calculation Agent are not quoting as mentioned
         in this sentence, LIBOR determined as of such LIBOR Interest
         Determination Date shall be LIBOR in effect on such LIBOR Interest
         Determination Date.

                                       13
<PAGE>   15

LIBOR INTEREST DETERMINATION DATE:

         The term "LIBOR Interest Determination Date" shall mean any Interest
Determination Date relating to a LIBOR Note.

LIBOR NOTES:

         The term "LIBOR Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to LIBOR.

LONDON BUSINESS DAY:

         The term "London Business Day" shall mean any day on which dealings in
the Designated LIBOR Currency are transacted in the London interbank market.

MATURITY DATE:

         The term "Maturity Date," when used with respect to any Subordinated
Note, shall mean the date on which the principal of such Subordinated Note or an
installment of principal becomes due and payable in accordance with its terms
and the terms of this Indenture as therein or herein provided, whether at Stated
Maturity, upon declaration of acceleration, call for redemption, repayment at
the option of the Holder or otherwise.

MAXIMUM INTEREST RATE:

         The term "Maximum Interest Rate" shall mean the maximum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.

MINIMUM INTEREST RATE:

         The term "Minimum Interest Rate" shall mean the minimum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.

MONEY MARKET YIELD:

         The term "Money Market Yield" shall be the yield (expressed as a
percentage) calculated in accordance with the following formula:

             Money Market Yield = [(D x 360)/(360 - (D x M))] x 100

where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.

NOTEHOLDER; HOLDER:

         The terms "Noteholder" or "Holder" shall mean any Person in whose name
at the time a particular Subordinated Note is registered in the register of the
Company kept for that purpose in accordance with the terms hereof.

                                       14
<PAGE>   16

OFFICERS' CERTIFICATE:

         The term "Officers' Certificate" when used with respect to the Company,
shall mean a certificate signed by the Chairman of the Board, the President or
any Vice President and by the Secretary or an Assistant Secretary of the
Company.

OPTIONAL INTEREST RESET DATE:

         The term "Optional Interest Reset Date" shall mean each date on which
the interest rate on a Fixed Rate Reset Note or the Spread and/or Spread
Multiplier of a Floating Rate Reset Note may be reset at the option of the
Company.

ORIGINAL ISSUE DATE:

         The term "Original Issue Date" shall mean for a particular Subordinated
Note, or portions thereof, the date upon which it, or such portion, was issued
by the Company pursuant to this Indenture or any indenture supplemental thereto
and authenticated by the Trustee (other than in connection with a transfer,
exchange or substitution).

ORIGINAL ISSUE DISCOUNT NOTE:

         The term "Original Issue Discount Note" shall mean (i) a Subordinated
Note that has a "stated redemption price at maturity" that exceeds its "issue
price", each as defined for United States federal income tax purposes, by at
least 0.25% of its stated redemption price at maturity multiplied by the number
of complete years from the Original Issue Date to the Stated Maturity for such
Subordinated Note (or in the case of a Subordinated Note that provides for
payment of any amount other than the "qualified stated interest", as defined for
United States federal income tax purposes, prior to maturity, the weighted
average maturity of the Subordinated Note) and (ii) any other Subordinated Note
designated by the Company in the applicable Company Order as issued with
original issue discount for United States federal income tax purposes.

PERSON:

         The term "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

PRIME RATE:

         The term "Prime Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Prime Rate Interest Determination Date, the rate on such date as published
in H.15(519) under the caption "Bank Prime Loan" or, if not published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Prime Rate Interest Determination Date as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Bank Prime Loan." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Prime Rate
shall be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME1 Page (as hereinafter defined)
as such bank's prime rate or base lending rate as of 11:00 A.M., New York City
time, on such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest
Determination Date, then the Prime Rate shall be

                                       15
<PAGE>   17

the arithmetic mean of the prime rates or base lending rates quoted on the basis
of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by four major
money center banks (which may include affiliates of the Agents) in The City of
New York selected by the Calculation Agent. If fewer than four such quotations
are so provided, then the Prime Rate shall be the arithmetic mean of four prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in The City of New York by the major money
center banks, if any, that have provided such quotations and by a reasonable
number of substitute banks or trust companies (which may include affiliates of
the Agents) to obtain four such prime rate quotations, provided such substitute
banks or trust companies are organized and doing business under the laws of the
United States, or any State thereof, each having total equity capital of at
least $500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the banks or trust companies so selected by
the Calculation Agent are not quoting as mentioned in this sentence, the Prime
Rate determined as of such Prime Rate Interest Determination Date will be the
Prime Rate in effect on such Prime Rate Interest Determination Date.

PRIME RATE NOTES:

         The term "Prime Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Prime Rate.

PRINCIPAL AMOUNT:

         The term "principal amount" with respect to any Subordinated Note shall
mean the principal amount thereof set forth in the applicable Company Order;
PROVIDED that in the case of any Original Issue Discount Note, its principal
amount as of (i) any date that the principal amount of such Subordinated Note is
to be repaid prior to its Stated Maturity, whether upon declaration of
acceleration, call for redemption, repayment at the option of the Noteholder or
otherwise, or (ii) any date that any consent, notice, request, direction, waiver
or suit by the Noteholders shall be deemed to be given, made or commenced under
this Indenture, such term shall mean the Amortized Face Amount of such
Subordinated Note as of such date.

PRINCIPAL FINANCIAL CENTER:

         The term "Principal Financial Center" shall mean the capital city of
the country to which the Designated LIBOR Currency relates (or, in the case of
EUR, Luxembourg and London), except that with respect to United States dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Portuguese
escudos, South African rand and Swiss francs, the "Principal Financial Center"
shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, London,
Johannesburg and Zurich, respectively.

RECORD DATE:

         The term "Record Date" shall mean for the Interest Payment Date for the
payment of interest for an Interest Reset Period for a particular Subordinated
Note, unless otherwise specified in the applicable Company Order, (a) the day
which is fifteen calendar days immediately prior to such Interest Payment Date,
whether or not such day is a Business Day, (b) the Maturity Date of such
Subordinated Note, unless such Maturity Date for a Fixed Rate Note is a January
1 or a July 1, in which event the Record Date will be as provided in clause (a),
and (c) a date which is not less than five Business Days immediately

                                       16
<PAGE>   18

preceding the Interest Payment Date of defaulted interest on such Subordinated
Note established by notice given by first-class mail by or on behalf of the
Company to the Holder of such Subordinated Note not less than fifteen calendar
days prior to such Interest Payment Date.

REDEMPTION DATE:

         The term "Redemption Date" for a Subordinated Note shall mean the date
fixed for the redemption of such Subordinated Note in accordance with the
provisions of this Indenture.

RESET NOTE:

         The term "Reset Note" shall mean a Fixed Rate Note, with respect to
which the Company has the option to reset the interest rate, and a Floating Rate
Note, with respect to which the Company has the option to reset the Spread
and/or Spread Multiplier.

REUTERS SCREEN USPRIME1 PAGE:

         The term "Reuters Screen USPRIME1" shall mean the display designated as
page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
which may replace the USPRIME1 page on such service) for the purpose of
displaying the prime rate or base lending rate of major United States banks.

SPREAD:

         The term "Spread" applicable to a particular Floating Rate Note shall
mean the number of Basis Points to be added to or subtracted from the related
Interest Rate Basis or Bases applicable to such Floating Rate Note as specified
in the applicable Company Order, used in the calculation of the Interest Rate
for such Floating Rate Note.

SPREAD MULTIPLIER:

         The term "Spread Multiplier" applicable to a particular Floating Rate
Note shall mean the percentage of the related Interest Rate Basis or Bases
applicable to such Floating Rate Note as specified in the applicable Company
Order, used in the calculation of the Interest Rate for such Floating Rate Note.

STATED MATURITY:

         The term "Stated Maturity," when used with respect to any Subordinated
Note, shall mean the date specified in such Subordinated Note as the date on
which the principal of such Subordinated Note is due and payable.

TREASURY:

         The term "Treasury" shall mean the United States Department of the
Treasury.

TREASURY BILLS:

         The term "Treasury Bills" shall mean direct obligations of the United
States.

                                       17
<PAGE>   19

TREASURY RATE:

         The term "Treasury Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Treasury Rate Interest Determination Date, the rate from the auction held on
such Treasury Rate Interest Determination Date (the "Auction") of Treasury Bills
having the Index Maturity specified in the applicable Company Order under the
caption "INVESTMENT RATE" on the display on Bridge Telerate, Inc. (or any
successor service) on page 56 ("Telerate Page 56") or page 57 ("Telerate Page
57") or, if not so published by 3:00 P.M., New York City time, on the related
Calculation Date, the auction average rate of such Treasury Bills (expressed as
a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the Auction of Treasury Bills
having the Index Maturity specified in the applicable Company Order are not so
published by 3:00 P.M., New York City time, on the related Calculation Date, or
if no such Auction is held, then the Treasury Rate shall be the rate (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) on such Treasury Rate Interest Determination Date
of Treasury Bills having the Index Maturity specified in the applicable Company
Order as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Auction High" or, if not yet published by 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on such Treasury
Rate Interest Determination Date of such Treasury Bills as published in H.15
Daily Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High." If such rate is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate
Interest Determination Date, of three leading primary United States government
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified in the applicable Company
Order; provided, however, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date shall be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.

TREASURY RATE NOTES:

         The term "Treasury Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Treasury Rate.

TRUSTEE:

         The term "Trustee" shall mean The Chase Manhattan Bank and shall also
include any successor Trustee.

YIELD TO MATURITY:

         The term "Yield to Maturity" shall mean for a particular Subordinated
Note the yield to maturity of such Subordinated Note, computed in accordance
with generally accepted United States bond yield computation principles and
expressed as a percentage, specified in the applicable Company Order.

                                       18
<PAGE>   20

ZERO COUPON NOTE:

         The term "Zero Coupon Note" means a Subordinated Note issued at a price
representing a discount from the principal amount payable at maturity and
bearing a zero fixed rate of interest.

                                   ARTICLE TWO

                  TERMS AND ISSUANCE OF THE SUBORDINATED NOTES

         Section 2.01. Issuance and Designation. A Series of Subordinated Debt
Securities which shall be designated as the Company's "Subordinated Medium-Term
Notes, Series D" shall be executed, authenticated and delivered from time to
time in accordance with the provisions of, and shall in all respects be subject
to, the terms, conditions and covenants of, the Indenture and this Indenture
Supplement (including the form of Subordinated Notes set forth in Exhibits A and
B). The aggregate principal amount of the Subordinated Notes which may be
authenticated and delivered under the Indenture Supplement shall not, except as
permitted by the provisions of the Indenture, exceed $150,000,000.

         Section 2.02. Form and Other Terms of Subordinated Notes; Incorporation
of Terms. (a) Subject to subsection (b) below, the Subordinated Notes shall be
in the form attached hereto as Exhibits A and B, respectively. The Subordinated
Notes shall be registered in such names, shall be in such amounts and shall have
such Original Issue Dates, Interest Rates, Maturity Dates, Redemption Dates, if
any, Initial Redemption Percentages, if any, and Annual Redemption Percentage
Reductions, if any, and such other terms as are communicated by the Company to
the Trustee in accordance with the Administrative Procedures described in the
Distribution Agreement, dated November 17, 2000, between the Company and the
agents named therein. The terms of such Subordinated Notes are herein
incorporated by reference and are part of this Indenture Supplement.

         (b) Any Subordinated Note may be issued without the consent of the
Holders of any Subordinated Notes in any such other form or forms and have such
other term or terms that may be established consistent with the Indenture and
this Indenture Supplement, including, but not limited to, Subordinated Notes
denominated in a foreign currency ("Foreign Currency Subordinated Notes"), and
Subordinated Notes that initially bear interest at a fixed rate or floating rate
through a certain date and then bear interest as established by a remarketing
agent for either a period of 365 days or less or a period of more than 365 days
("Remarketed Subordinated Notes").

         Section 2.03. Depository for Global Securities. The Depositary for any
Global Securities of the series of which a Subordinated Note is a part shall be
the Depository Trust Company in The City of New York.

         Section 2.04. Place of Payment. The Place of Payment in respect of the
Subordinated Notes will be at the principal office or agency of the Company in
Dallas, Texas or at the office or place of business of the Trustee or its
successor in trust under the Indenture, which, at the date hereof, is located at
Chase Global Trust, 450 W. 33rd, 15th Floor, New York, New York 10001.

                                  ARTICLE THREE

                                   DEFEASANCE

         Section 3.01. Option to Effect Legal Defeasance. The Company may, at
any time, with respect to the Subordinated Notes, elect to have either Section
13.01 of the Indenture or Section 3.02 of this

                                       19
<PAGE>   21

Indenture Supplement be applied to all outstanding Subordinated Notes upon
compliance with the conditions set forth in Article Thirteen of the Indenture
and below in this Article Three.

         Section 3.02. Legal Defeasance. Upon the Company's exercise under
Section 3.01 of this Indenture Supplement of the option applicable to Section
13.01 of the Indenture, the Company may terminate its obligations under the
Subordinated Notes, the Indenture and this Indenture Supplement by complying
with the terms and conditions of Section 13.01 of the Indenture; provided,
however, that the Opinion of Counsel delivered to the Trustee will also state
that either (A) the Company has received from, or there has been published by,
the Internal Revenue Service, a ruling or (B) since the date hereof, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
holders of the outstanding Subordinated Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred.

                                  ARTICLE FOUR

                                  MISCELLANEOUS

         Section 4.01. Ratification of Indenture. As supplemented by this
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.

         Section 4.02. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture Supplement by any of the provisions of
the Trust Indenture Act, such required provisions shall control.

         Section 4.03. Effect of Headings. The article and section headings
herein are included for convenience only and shall not affect the construction
hereof.

         Section 4.04. Counterparts. This Indenture Supplement may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.

         Section 4.05. Severability. In case any provision of this Indenture
Supplement or in the Subordinated Notes shall be found invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

         Section 4.06. Benefits of Indenture Supplement. Nothing in this
Indenture Supplement or in the Subordinated Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture Supplement.

         Section 4.07. Acceptance of Trusts. The Chase Manhattan Bank hereby
accepts the trusts in this Indenture Supplement declared and provided, upon the
terms and conditions herein and in the Indenture set forth.

         Section 4.08. Governing Law. This Indenture Supplement and each
Subordinated Note issued hereunder shall be deemed to be a contract made under
the laws of the State of Texas, and for all purposes shall be construed in
accordance with the laws of said State.

                                       20
<PAGE>   22

         Section 4.09. Compliance with Law. It is the intent of the Company and
the Holders of the Subordinated Notes to conform to and contract in strict
compliance with applicable usury law from time to time in effect. All agreements
between the Holders of the Subordinated Notes and the Company are hereby limited
by the provisions of this Section 4.09 which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited to
prepayment, default, demand for payment, or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for, charged or
received under this Indenture Supplement or the Subordinated Notes or otherwise,
exceed the Highest Lawful Rate. If, from any possible construction of any
document, interest would otherwise be payable in excess of the Highest Lawful
Rate, any such construction shall be subject to the provisions of this Section
4.09 and such document shall be automatically reformed and the interest payable
shall be automatically reduced to the Highest Lawful Rate, without the necessity
of execution of any amendment or new document. If the Holders shall ever receive
anything of value which is characterized as interest under applicable law and
which would apart from this provision be in excess of the Highest Lawful Rate,
an amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Subordinated Notes in the inverse order of its maturity and not to the
payment of interest, or refunded to the Company if and to the extent such amount
which would have been excessive exceeds such unpaid principal. The right to
accelerate the maturity of the Subordinated Notes does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and the Holders do not intend to charge or receive any unearned
interest in the event of acceleration. All interest paid or agreed to be paid to
the Holders shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full stated term (including any
renewal or extension) of the Subordinated Notes so that the amount of interest
on account of the Subordinated Notes does not exceed the Highest Lawful Rate.

                  [Remainder of page intentionally left blank.]

                                       21
<PAGE>   23

         IN WITNESS WHEREOF, the Company and the Trustee have caused this
Indenture Supplement to be duly executed by their respective officers thereunto
duly authorized and their respective seals duly attested to be hereunto affixed
all as of the day and year first above written.

                                       CENTEX CORPORATION
                     [CORPORATE
[SEAL]                  SEAL]

Attest:                                By: /s/ VICKI A. ROBERTS
                                          ---------------------------------
                                          Vicki A. Roberts
                                          Vice President and Treasurer

/s/ PAUL JOHNSTON
---------------------------------
Paul Johnston
Assistant Secretary

                                       THE CHASE MANHATTAN BANK, as Trustee

[SEAL]

Attest:                                By: /s/ JOHN G. JONES
                                          ---------------------------------
                                          Name: JOHN G. JONES
                                          Title: VICE PRESIDENT

/s/ DENNIS J. ROEMLEIN
---------------------------------
Name: DENNIS J. ROEMLEIN
Title: VICE PRESIDENT

                                       22
<PAGE>   24

STATE OF TEXAS             )
                           )
COUNTY OF DALLAS           )

         BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared Vicki A. Roberts and Paul Johnston, known
to me to be the persons and officers whose names are subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said CENTEX
CORPORATION, a Nevada corporation, and that they executed the same as the act of
said corporation for the purposes and consideration therein expressed, and in
the capacity therein stated.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of November,
2000.

                                     /s/ KATHLEEN MCCAMEY
                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

                                         Kathleen McCamey
My commission expires:               -------------------------------------------
 November 4, 2002                    Printed Name of Notary Public
-------------------------------

            [SEAL]

STATE OF TEXAS             )
                           )
COUNTY OF HARRIS           )

         BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared John G. Jones and Dennis J. Roemlein,
known to me to be the persons and officers whose names are subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said THE CHASE MANHATTAN BANK, a New York banking corporation, and that they
executed the same as the act of said national banking association for the
purposes and consideration therein expressed, and in the capacity therein
stated.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of November,
2000.

                                     /s/ VIRGINIA RIOS-RAMIREZ
                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

                                     Virginia Rios-Ramirez
My commission expires:               -------------------------------------------
Oct. 23, 2001                        Printed Name of Notary Public
-------------------------------

            [SEAL]

                                       23
<PAGE>   25

                                                                       EXHIBIT A

                       GLOBAL SUBORDINATED FIXED RATE NOTE

REGISTERED                                                      PRINCIPAL AMOUNT
NO.                                                             $
    -----                                                        ---------------

                               CENTEX CORPORATION
                     Subordinated Medium-Term Note, Series D
                                   Fixed Rate

     Unless this Subordinated Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation, 55 Water Street, New
York, New York ("DTC"), to Centex Corporation, a Nevada corporation (herein
called the "Company," which term includes any successor person under the
Indenture referred to on the reverse hereof), or its agent for registration of
transfer, exchange or payment, and any Subordinated Note issued is registered in
the name of Cede & Co., or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

     Unless and until it is exchanged in whole or in part for Subordinated Notes
in certificated form, this Subordinated Note may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor of DTC or a nominee
of such successor of DTC.

     The following summary of terms is subject to the provisions set forth
below:

<TABLE>
<S>                                                <C>
CUSIP No.:                                         OPTION TO ELECT REPAYMENT:             [ ] Yes [ ] No

ORIGINAL ISSUE DATE(S):                            OPTIONAL REPAYMENT DATE:               [ ] Yes [ ] No

PRINCIPAL AMOUNT:                                  CURRENCY:

STATED MATURITY DATE:                              OPTIONAL INTEREST RESET:               [ ] Yes [ ] No

INTEREST RATE:                                     OPTIONAL INTEREST RESET DATES:

INTEREST PAYMENT DATES:                            ORIGINAL ISSUE DISCOUNT NOTE:          [ ] Yes [ ] No

                                                   ISSUE PRICE
                                                   (percentage of principal):
RECORD DATES:

OPTIONAL REDEMPTION:          [ ] Yes [ ] No       YIELD TO MATURITY:

INITIAL REDEMPTION DATE:

AMORTIZING NOTE:              [ ] Yes [ ] No       ANNEX ATTACHED (and incorporated  by
                                                   reference herein):                     [ ] Yes [ ] No

AUTHORIZED DENOMINATION:                           OTHER/ADDITIONAL PROVISIONS:

     [ ] $1,000 and integral multiples thereof
     [ ] Other:
</TABLE>

<PAGE>   26

     The Company, for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum specified above, in such coin or currency
of the ________________ as at the time of payment is legal tender for payment of
public and private debts, on the Maturity Date specified above and to pay
interest thereon, in such coin or currency, from and including the Original
Issue Date (or if this Global Subordinated Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which such Original Issue Date
is applicable) specified above, or from and including the most recent Interest
Payment Date specified above to which interest has been paid or duly provided
for, as the case may be. Interest shall be paid in arrears semiannually on each
Interest Payment Date in each year commencing on (a) the first such Interest
Payment Date next succeeding the earliest Original Issue Date or Dates, or (b)
if such Original Issue Date is after a Record Date and prior to the first
Interest Payment Date, on the second Interest Payment Date, at a rate per annum
from time to time equal to the lesser of (i) the Highest Lawful Rate (as defined
in the Indenture) or (ii) the per annum Interest Rate set forth above until
Maturity and the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Subordinated Note is registered at the close of business on the Record
Date specified above next preceding such Interest Payment Date; PROVIDED,
HOWEVER, that if an Original Issue Date falls between a Record Date and the next
Interest Payment Date, the first payment of interest with respect to such
Original Issue Date will be made on the second Interest Payment Date subsequent
to such Original Issue Date to the Person in whose name this Subordinated Note
is registered at the close of business on the Record Date for such second
Interest Payment Date; and PROVIDED, FURTHER, that interest payable on the
Maturity Date or, if applicable, upon redemption, shall be payable to the Person
to whom principal shall be payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and shall be
paid to the Person in whose name this Subordinated Note is registered at the
close of business on a Record Date for the payment of such defaulted interest to
be fixed by the Company, notice whereof shall be given to Subordinated
Noteholders not less than fifteen calendar days prior to such Record Date.
Payment of the principal of and any premium and interest on this Subordinated
Note shall be made on or before 10:30 A.M., New York City time or such other
time as shall be agreed upon between the Trustee and the Depositary, on the day
on which such payment is due, by wire transfer into the account specified by the
Depositary; PROVIDED, HOWEVER, that as a condition to the payment at the
Maturity Date of any part of the principal and any applicable premium of this
Global Subordinated Note, the Depositary shall surrender, or cause to be
surrendered, this Global Subordinated Note to the Trustee. The Company will pay
any administrative costs imposed by banks in connection with making payments by
wire transfer, but not any tax, assessment or governmental charge imposed on the
Holder of this Subordinated Note.

     Under certain circumstances, this Global Subordinated Note is exchangeable
in whole or from time to time in part for a definitive individual Subordinated
Note or Subordinated Notes, with the same Original Issue Date or Dates, Maturity
Date, Interest Rate and redemption and other provisions as provided herein or in
the Indenture.

     The Indenture and the Subordinated Notes shall be governed by, and
construed in accordance with, the laws of the State of Texas.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL
SUBORDINATED NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL
AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through a duly appointed
and authorized authenticating agent, by manual signature of an authorized
signatory, this Subordinated Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

<PAGE>   27

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:

                                       CENTEX CORPORATION

[SEAL]
                                       By:
                                           -------------------------------------
                                           Vicki A. Roberts
                                           Vice President and Treasurer

ATTEST:

-----------------------------------
Paul Johnston
Assistant Secretary

TRUSTEE'S CERTIFICATE
    OF AUTHENTICATION

This is one of the Subordinated Notes referred
to in the within-mentioned Indenture.

THE CHASE MANHATTAN BANK, as Trustee

By:
    -------------------------------
    Authorized Signatory

<PAGE>   28

                [REVERSE OF GLOBAL SUBORDINATED FIXED RATE NOTE]

                               CENTEX CORPORATION
               SUBORDINATED FIXED RATE MEDIUM-TERM NOTE, SERIES D

     This Global Subordinated Note is one of, and a global security which
represents Subordinated Notes which are part of, a duly authorized issue of
Subordinated Debt Securities of the Company (herein called the "Subordinated
Notes"), issued and to be issued in one or more Series under an Indenture dated
as of March 12, 1987 (herein, together with all indentures supplemental thereto,
called the "Subordinated Indenture") between the Company and The Chase Manhattan
Bank, as Trustee (formerly, Chase Bank of Texas, National Association and Texas
Commerce Bank National Association) (herein called the "Trustee," which term
includes any successor Trustee under the Subordinated Indenture), to which
Subordinated Indenture and all indentures supplemental thereto (including the
Indenture Supplement dated as of November 17, 2000 which authorizes the
Subordinated Notes) reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Subordinated Noteholders, and of the terms upon which the
Subordinated Notes are, and are to be, authenticated and delivered. All terms
used in this Subordinated Note which are defined in the Subordinated Indenture
or in any indenture supplemental thereto but are not defined in this
Subordinated Note shall have the meanings assigned to them in the Subordinated
Indenture or in any indenture supplemental thereto.

     Each Subordinated Note shall be dated the date of its authentication by the
Trustee. Each Subordinated Note shall also bear an Original Issue Date or Dates
which with respect to this Global Subordinated Note (or any portion thereof)
shall mean the date or dates of the original issue of the Subordinated Notes
represented hereby as specified on the face hereof, and such Original Issue Date
or Dates shall remain the same for all Subordinated Notes subsequently issued
upon transfer, exchange or substitution of such original Subordinated Note (or
such subsequently issued Subordinated Notes) regardless of their dates of
authentication. The Subordinated Notes may bear different dates, mature at
different times, bear interest at different rates, be subject to different
redemption provisions, if any, and may otherwise vary, all as provided in the
Subordinated Indenture.

     The indebtedness evidenced by the Subordinated Notes is, to the extent and
in the manner provided in the Subordinated Indenture and Indenture Supplement,
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Company. As provided in the Subordinated Indenture,
each holder of this Subordinated Note, by his acceptance hereof, agrees to and
shall be bound by all the provisions of the Subordinated Indenture relating to
such subordination and authorizes the Trustee to take such action in his behalf
as may be necessary or appropriate to effectuate the subordination as provided
in the Subordinated Indenture and appoints the Trustee his attorney-in-fact for
any and all such purposes.

     Interest on this Subordinated Note will be payable on the Interest Payment
Date or Interest Payment Dates as specified on the face hereof and, in either
case, at Maturity. Unless otherwise specified on the face hereof, payments on
this Subordinated Note with respect to any particular Interest Payment Date or
the Maturity Date will include interest accrued from and including the
applicable Original Issue Date, or from and including the most recent Interest
Payment Date to which interest has been paid or duly provided for, to but
excluding the particular Interest Payment Date or the Maturity Date. Interest on
this Subordinated Note will be computed and paid on the basis of a 360-day year
of twelve 30-day months.

     Unless otherwise specified on the face hereof or the Company Order, if this
Subordinated Note is an Amortizing Note, payments with respect to this
Subordinated Note will be applied first to interest due and payable hereon and
then to the reduction of the unpaid principal amount hereof. If this
Subordinated Note is an Amortizing Note, a table setting forth the schedule of
dates and amounts of payments of principal of and interest on this Subordinated
Note or the formula for the amortization of principal and/or interest is set
forth in an annex attached to this Subordinated Note.

<PAGE>   29

     All percentages resulting from any calculation with respect to this
Subordinated Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with five one-millionths of a
percentage point rounded upward) and all dollar or foreign or composite currency
amounts used in or resulting from any such calculation with respect to this
Subordinated Note will be rounded, in the case of United States dollars, to the
nearest cent or, in the case of a foreign or composite currency, to the nearest
unit (with one-half cent or unit being rounded upward).

     If an Interest Payment Date or the Maturity Date for this Subordinated Note
falls on a day that is not a Business Day, payment of principal, premium, if
any, and interest to be made on such day with respect to this Subordinated Note
will be made on the next succeeding day that is a Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable on the date of payment for the period from and after the due date as a
result of such delayed payment.

     This Subordinated Note will be redeemable at the option of the Company
prior to its Stated Maturity Date only if an Initial Redemption Date is
specified on the face hereof. If so specified, this Subordinated Note will be
subject to redemption at the option of the Company on any date on and after such
Initial Redemption Date in whole or from time to time in part in increments of
$1,000 or any other integral multiple thereof, at the redemption prices
specified in an annex attached to this Subordinated Note, plus accrued and
unpaid interest to but excluding the date of redemption, but payments due with
respect to this Subordinated Note prior to the date of redemption will be
payable to the Holder of this Subordinated Note of record at the close of
business on the relevant Record Date specified on the face hereof, all as
provided in the Subordinated Indenture. Notice of such redemption shall be given
by mailing by first-class mail a notice of such redemption not less than 20 nor
more than 60 calendar days prior to the date fixed for redemption to the Holder
of this Subordinated Note, in accordance with the provisions of the Subordinated
Indenture. In the event of redemption of this Subordinated Note in part only,
this Subordinated Note will be canceled and a new Subordinated Note or
Subordinated Notes representing the unredeemed portion hereof will be issued in
the name of the Holder hereof. This Subordinated Note is not subject to a
sinking fund unless otherwise specified in an annex attached hereto.

     If so specified on the face of this Subordinated Note, (i) this
Subordinated Note shall be subject to repayment, in whole or in part, prior to
the Stated Maturity Date at the option of the Holder on a certain date or dates
and at a certain price or prices, plus accrued and unpaid interest to but
excluding the date of payment; and/or (ii) the Interest Rate specified on the
face hereof may be reset by the Company in accordance with a formula or
otherwise on the Optional Interest Reset Date or Dates specified on the face
hereof.

     Notwithstanding anything herein to the contrary, if this Subordinated Note
is an Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal amount hereof is declared to be due and
payable immediately by reason of an Event of Default or in the event of
redemption or repayment hereof prior to the Stated Maturity hereof, in lieu of
the principal amount due at the Stated Maturity hereof, shall be the Amortized
Face Amount of this Subordinated Note as of the date of declaration, redemption
or repayment, as the case may be. The "Amortized Face Amount" of this
Subordinated Note shall be the amount equal to the principal amount of this
Subordinated Note multiplied by the Issue Price specified on the face hereof
plus (b) the portion of the difference between the dollar amount thus obtained
and the principal amount hereof that has accreted at the Yield to Maturity
specified on the face hereof (computed in accordance with generally accepted
United States bond yield computation principles) to such date of declaration,
redemption or repayment but in no event shall the Amortized Face Amount of this
Subordinated Note exceed the principal amount stated on the face hereof.

     In case an Event of Default shall have occurred and be continuing with
respect to the Subordinated Notes, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Subordinated Indenture. The
Subordinated Indenture provides that in certain events such declaration and its
consequences may be waived by the Holders of a majority in aggregate principal
amount of the Subordinated Notes then outstanding. An Event of Default with
respect to the Subordinated Debt Security of any other Series issued under the
Subordinated Indenture, including the failure to

<PAGE>   30

make any payment of principal or interest with respect thereto when and as due,
will not be an Event of Default with respect to the Subordinated Notes.

     The Subordinated Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Subordinated Notes at the time outstanding,
evidenced as in the Subordinated Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Subordinated Indenture or of any supplemental indenture
or modifying in any manner the rights of the Holders of the Subordinated Notes;
PROVIDED, HOWEVER, that no such supplemental indenture shall (i) extend the
fixed maturity of any Subordinated Notes, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable on the redemption thereof, without the consent of
the Holder of each Subordinated Note so affected, or (ii) reduce the aforesaid
percentage of Subordinated Notes, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the Holders
of all Subordinated Notes then outstanding. It is also provided in the
Subordinated Indenture that the Holders of a majority in aggregate principal
amount of the Subordinated Notes at the time outstanding may on behalf of the
Holders of all the Subordinated Notes waive any past default under the
Subordinated Indenture and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Subordinated
Notes. Any such consent or waiver by the Holder of this Global Subordinated Note
(unless revoked as provided in the Subordinated Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this
Global Subordinated Note and of any Subordinated Note issued in exchange or
substitution herefor, whether or not any notation of such consent or waiver is
made upon this Global Subordinated Note.

     As set forth in, and subject to, the provisions of the Subordinated
Indenture, no Holder of any Subordinated Notes will have any right to institute
any proceeding with respect to the Subordinated Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of default in respect of the Subordinated Notes and the
continuance thereof, and unless the Holders of not less than 25 percent in
aggregate principal amount of the Subordinated Notes then outstanding shall have
made written request upon the Trustee to institute such action or proceedings in
its own name as Trustee hereunder and shall have furnished to the Trustee such
reasonable indemnity as it may require, and the Trustee shall have failed to
institute such proceeding within 60 calendar days; PROVIDED, HOWEVER, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on this
Global Subordinated Note on or after the respective due dates expressed herein.

     THIS SUBORDINATED NOTE IS A GLOBAL SUBORDINATED NOTE REGISTERED IN THE NAME
OF THE DEPOSITARY OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
SUBORDINATED NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be registered
as a clearing agency under the Securities Exchange Act of 1934, as amended, or
any successor statute or regulation, the Company may appoint a successor
Depositary with respect to this Global Note. If (A) a successor Depositary for
this Global Note is not appointed by the Company within 60 calendar days after
the Company receives such notice or becomes aware of such ineligibility, or (B)
any Notes are represented by this Global Note at a time when an Event of Default
with respect to the Notes shall have occurred and be continuing, then in each
case the Company's election to issue this Note in global form shall no longer be
effective with respect to this Global Subordinated Note and the Company will
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of individual Subordinated Notes in exchange for this Global
Subordinated Note, shall

<PAGE>   31

authenticate and make available for delivery, individual Subordinated Notes of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of this Global Subordinated Note in exchange for this
Global Subordinated Note.

     If agreed by the Company and the Depositary with respect to Subordinated
Notes issued in the form of this Global Subordinated Note, the Depositary for
such Global Subordinated Note shall surrender this Global Subordinated Note in
exchange in whole or in part for individual Subordinated Notes of like tenor and
terms in definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon the Company shall execute, and the Trustee shall
authenticate and make available for delivery, without a service charge, (1) to
each Person specified by such Depositary, a new Subordinated Note or
Subordinated Notes of like tenor and terms, and of any authorized denominations
as requested by such Person in aggregate principal amount equal to and in
exchange for the beneficial interest of such Person in this Global Subordinated
Note, and (2) to such Depositary a new Global Subordinated Note of like tenor
and terms and in a denomination equal to the difference, if any, between the
principal amount of this Global Subordinated Note and the aggregate principal
amount of Subordinated Notes delivered to Holders thereof.

     Under certain circumstances specified in the Subordinated Indenture, the
Depositary may be required to surrender any two or more Global Subordinated
Notes which have identical terms (but which may have differing Original Issue
Dates) to the Trustee, and the Company shall execute and the Trustee shall
authenticate and deliver to, or at the direction of, the Depositary a Global
Subordinated Note in principal amount equal to the aggregate principal amount
of, and with all terms identical to, the Global Subordinated Notes surrendered
to the Trustee, and such new Global Subordinated Note shall indicate each
applicable Original Issue Date and the principal amount applicable to each such
Original Issue Date.

     No reference herein to the Subordinated Indenture and no provision of this
Global Subordinated Note or of the Subordinated Indenture shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Global Subordinated Note at
the times, places and rates, and in the coin or currency, herein prescribed.

     The Subordinated Indenture contains provisions for the satisfaction and
discharge of the Subordinated Indenture upon compliance by the Company with
certain conditions specified therein, which provisions apply to this
Subordinated Note.

     The Company, the Trustee, any paying agent and any Subordinated Debt
Security Registrar (as defined in the Subordinated Indenture) for the
Subordinated Notes may deem and treat the Holder hereof as the absolute owner of
this Global Subordinated Note (whether or not this Global Subordinated Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any such Subordinated Debt
Security Registrar), for the purpose of receiving payment hereof or on account
hereof and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any such Subordinated Debt Security Registrar shall be
affected by any notice to the contrary.

     No recourse shall be had for the payment of the principal of, or premium,
if any, or interest on, this Global Subordinated Note, or for any claim based
hereon or otherwise in respect hereof, or based on or in respect of the
Subordinated Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

     It is the intent of the Company and the Holders of this Subordinated Note
to conform to and contract in strict compliance with applicable usury law from
time to time in effect. All agreements between the Holders of this Subordinated
Note and the Company are hereby limited by the provisions of this paragraph
which shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor

<PAGE>   32

in any event or contingency (including but not limited to prepayment, default,
demand for payment, or acceleration of the maturity of any obligation), shall
the interest taken, reserved, contracted for, charged or received under this
Subordinated Note or otherwise exceed the Highest Lawful Rate. If, from any
possible construction of any document, interest would otherwise be payable in
excess of the Highest Lawful Rate, any such construction shall be subject to the
provisions of this paragraph and such document shall be automatically reformed
and the interest payable shall be automatically reduced to the Highest Lawful
Rate, without the necessity of execution of any amendment or new document. If
the Holders of this Subordinated Note shall ever receive anything of value which
is characterized as interest under applicable law and which would apart from
this provision be in excess of the Highest Lawful Rate, an amount equal to the
amount which would have been excessive interest shall, without penalty, be
applied to the reduction of the principal amount owing on this Subordinated Note
in the inverse order of its maturity and not to the payment of interest, or
refunded to the Company if and to the extent such amount which would have been
excessive exceeds such unpaid principal. The right to accelerate the maturity of
this Subordinated Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Holders of this Subordinated Note do not intend to charge or receive any
unearned interest in the event of acceleration. All interest paid or agreed to
be paid to the Holders of this Subordinated Note shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full stated term (including any renewal or extension) of this Subordinated Note
so that the amount of interest on account of this Subordinated Note does not
exceed the Highest Lawful Rate.

<PAGE>   33

                            OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Subordinated Note (or portion hereof specified below) pursuant to
its terms at a price equal to 100% of the principal amount to be repaid,
together with unpaid interest accrued hereon to the Repayment Date, to the
undersigned, at ______________________________________________________________.

     If less than the entire principal amount of this Subordinated Note is to be
repaid, specify the portion hereof (which shall be increments of
_______________) which the holder elects to have repaid and specify the
denomination or denominations (which shall be an authorized denomination) not
less than ___________ of the Subordinated Notes to be issued to the Holder for
the portion of this Subordinated Note not being repaid (in the absence of any
such specification, one such Subordinated Note will be issued for the portion
not to be repaid).

Principal Amount
to be Repaid:

                                      $
-----------------------------------    --------

CUSIP Number or other identifier:

Date:
      -----------------------------     ----------------------------------------
                                        NOTICE: The signature(s) to this
                                        assignment must correspond with the
                                        name(s) as written upon the face of the
                                        within instrument in every particular,
                                        without alteration or enlargement or any
                                        change whatever. The signature(s) must
                                        be guaranteed by an "eligible guarantor
                                        institution" that is a member or
                                        participant in the Securities Transfer
                                        Agents Medallion Program, the Stock
                                        Exchange Medallion Program or the New
                                        York Stock Exchange, Inc. Medallion
                                        Program.

Notice: The signature(s) on this Option to Elect Repayment must correspond with
the name(s) as written upon the face of this Subordinated Note in every
particular, without alteration or enlargement or any change whatsoever.

<PAGE>   34

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription of the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                             <C>
TEN COM - as tenants in common                  UNIF GIFT

TEN ENT - as tenants by the entireties          MIN ACT - __________Custodian__________
                                                            (Cust)            (Minor)
JT TEN  - as joint tenants with right of           Under Uniform Gifts to Minors Act
          survivorship and not as tenants in
          common                                   ---------------------------------

                                                               State
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                   ----------

FOR VALUE RECEIVED the undersigned hereby sell(s) assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
     OTHER IDENTIFYING NUMBER OF
     ASSIGNEE

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

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

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

                   Please print or typewrite name and address
                      including postal zip code of assignee

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

the within Subordinated Note and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________________________________
attorney to transfer said note on the books of the Company, with full power of
substitution in the premises.

Dated:                                 NOTICE:  The signature(s) to this
       ----------------------------    assignment must correspond with the
                                       name(s) as written upon the face of the
                                       within instrument in every particular,
                                       without alteration or enlargement or any
                                       change whatever. The signature(s) must be
                                       guaranteed by an "eligible guarantor
                                       institution" that is a member or
                                       participant in the Securities Transfer
                                       Agents Medallion Program, the Stock
                                       Exchange Medallion Program or the New
                                       York Stock Exchange, Inc. Medallion
                                       Program.
<PAGE>   35
                                                                       EXHIBIT B

                     GLOBAL SUBORDINATED FLOATING RATE NOTE

REGISTERED                                                      PRINCIPAL AMOUNT
NO. ______                                                                $

                               CENTEX CORPORATION
                     Subordinated Medium-Term Note, Series D
                                  Floating Rate

         Unless this Subordinated Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation, 55 Water
Street, New York, New York ("DTC"), to Centex Corporation, a Nevada corporation
(herein called the "Company," which term includes any successor person under the
Indenture referred to on the reverse hereof) or its agent for registration of
transfer, exchange or payment, and any Subordinated Note issued is registered in
the name of Cede & Co., or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

         Unless and until it is exchanged in whole or in part for Subordinated
Notes in certificated form, this Subordinated Note may not be transferred except
as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor of DTC or a nominee
of such successor of DTC.

         The following summary of terms is subject to the provisions set forth
below:

<TABLE>
<S>                                      <C>                                          <C>
CUSIP No.:                               CURRENCY:

ORIGINAL ISSUE DATE(S):                  OPTIONAL REDEMPTION:                         Yes    No

PRINCIPAL AMOUNT:                        INITIAL REDEMPTION DATE:

STATED MATURITY DATE:                    AMORTIZING NOTE:                             Yes    No

INITIAL INTEREST RATE:                   CALCULATION AGENT:

INTEREST RATE BASIS OR BASES             OPTION TO ELECT REPAYMENT                    Yes    No
(including any Designated LIBOR Page):

INDEX MATURITY:                          AUTHORIZED DENOMINATIONS:
                                             $1,000 and integral multiples thereof
INTEREST DETERMINATION DATES:                Other:

INTEREST RESET PERIOD:                   OPTIONAL REPAYMENT DATE:

INTEREST RESET DATES:                    OPTIONAL INTEREST RESET:                      Yes   No

SPREAD:                                  OPTIONAL INTEREST RESET DATES:

SPREAD MULTIPLIER:                       ORIGINAL ISSUE DISCOUNT NOTE:                 Yes   No

MAXIMUM INTEREST RATE:                   ISSUE PRICE (percentage of principal):

MINIMUM INTEREST RATE:                   YIELD TO MATURITY:

INTEREST PAYMENT DATES:                  ANNEX ATTACHED (and incorporated
                                         by reference herein):                         Yes   No
</TABLE>

<PAGE>   36

<TABLE>
<S>                                      <C>
RECORD DATES:                            OTHER/ADDITIONAL PROVISIONS

IF LIBOR:                                IF CMT RATE:
        LIBOR Reuters Page:              Designated CMT Telerate Page:
        LIBOR Telerate Page:             IF Telerate Page 7052:
DESIGNATED LIBOR CURRENCY:                           Weekly Average
                                                     Monthly Average
                                         Designated CMT Maturity Index:

INTEREST CATEGORY:                       DAY COUNT CONVENTION
       Regular Floating Rate Note                    30/360 for the period from
       Floating Rate/Fixed Rate Note                              to
           Fixed Rate Commencement                   Actual/360 for the period from
           Date:                                                  to
           Fixed Interest Rate:   %                  Actual/Actual for the period from   to.
       Inverse Floating Rate Note                    Applicable Interest Rate Basis:
           Fixed Interest Rate:   %
</TABLE>

         The Company, for value received, hereby promises to pay to Cede & Co.
or registered assigns, the principal sum specified above, in such coin or
currency of the ______________________ as at the time of payment is legal tender
for payment of public and private debts, on the Stated Maturity Date specified
above and to pay interest thereon, in such coin or currency, from and including
the Original Issue Date (or if this Global Subordinated Note has two or more
Original Issue Dates, interest shall, beginning on each such Original Issue
Date, begin to accrue for that part of the principal amount to which such
Original Issue Date is applicable) specified above, or from and including the
most recent Interest Payment Date specified above to which interest has been
paid or duly provided for, as the case may be. Interest shall be paid in arrears
monthly, quarterly, semiannually or annually as specified above under Interest
Payment Dates, on each Interest Payment Date in each year and at Maturity,
commencing on (a) the first such Interest Payment Date next succeeding the
earliest Original Issue Date or Dates, or (b) if such Original Issue Date is
after a Record Date and prior to the first Interest Payment Date, on the second
Interest Payment Date, at a rate per annum from time to time equal to the lesser
of (i) the Highest Lawful Rate (as defined in the Indenture) or (ii) the Initial
Interest Rate specified above until the initial Interest Reset Date specified
above, and thereafter at a rate per annum determined in accordance with the
provisions in the Indenture for calculating the Interest Rate for Subordinated
Notes having the Interest Rate Basis specified above, until Maturity and the
principal hereof is paid or made available for payment. The interest so payable
and punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Subordinated
Note is registered at the close of business on the Record Date specified above
next preceding such Interest Payment Date; PROVIDED, HOWEVER, that if an
Original Issue Date falls between a Record Date and the next Interest Payment
Date, the first payment of interest with respect to such Original Issue Date
will be made on the second Interest Payment Date subsequent to such Original
Issue Date to the Person in whose name this Subordinated Note is registered at
the close of business on the Record Date for such second Interest Payment Date;
and PROVIDED, FURTHER, that interest payable on the Maturity Date or, if
applicable, upon redemption, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Record Date and shall be paid to the Person in
whose name this Subordinated Note is registered at the close of business on a
Record Date for the payment of such defaulted interest to be fixed by the
Company, notice whereof shall be given to Subordinated Noteholders not less than
fifteen calendar days prior to such Record Date. Payment of the principal of and
any premium and interest on this Subordinated Note shall be made on or before
10:30 A.M., New York City time or such other time as shall be agreed upon
between the Trustee and the Depositary, on the day on which such payment is due,
by wire transfer into the account specified by the Depositary; PROVIDED,
HOWEVER, that as a condition to the payment at the Maturity Date of any part of
the principal and any applicable premium of this Global Subordinated Note, the
Depositary shall surrender, or cause to be surrendered, this Global Subordinated
Note to the Trustee. The Company will pay any administrative costs imposed by
banks in connection with making payments by wire transfer, but not any tax,
assessment or governmental charge imposed on the Holder of this Subordinated
Note.

<PAGE>   37

         Under certain circumstances, this Global Subordinated Note is
exchangeable in whole or from time to time in part for a definitive individual
Subordinated Note or Subordinated Notes, with the same Original Issue Date or
Dates, Maturity Date, Interest Rate Basis or Bases and redemption and other
provisions as provided herein or in the Indenture.

         The Indenture and the Subordinated Notes shall be governed by, and
construed in accordance with, the laws of the State of Texas.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL
SUBORDINATED NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL
AT THIS PLACE.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through a duly
appointed and authorized authenticating agent, by manual signature of an
authorized signatory, this Subordinated Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

<PAGE>   38

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:
                                      CENTEX CORPORATION

        [SEAL]

                                       By:
                                          ----------------------------
                                          Vicki A. Roberts
                                          Vice President and Treasurer

ATTEST:

-------------------------------------
Paul Johnston
Assistant Secretary

TRUSTEE'S CERTIFICATE
      OF AUTHENTICATION

This is one of the Subordinated Notes
referred to in the within-mentioned
Indenture.

THE CHASE MANHATTAN BANK, as Trustee

By:
    ---------------------------------
     Authorized Signatory

<PAGE>   39

               [REVERSE OF GLOBAL SUBORDINATED FLOATING RATE NOTE]

                               CENTEX CORPORATION
              SUBORDINATED FLOATING RATE MEDIUM-TERM NOTE, SERIES D

         This Global Subordinated Note is one of, and a global security which
represents Subordinated Notes which are part of, a duly authorized issue of
Subordinated Debt Securities of the Company (herein called the "Subordinated
Notes"), issued and to be issued in one or more Series under an Indenture dated
as of March 12, 1987 (herein, together with all indentures supplemental thereto,
called the "Subordinated Indenture") between the Company and The Chase Manhattan
Bank, as Trustee (formerly, Chase Bank of Texas, National Association and Texas
Commerce Bank National Association) (herein called the "Trustee," which term
includes any successor Trustee under the Subordinated Indenture), to which
Subordinated Indenture and all indentures supplemental thereto (including the
Indenture Supplement dated as of November 17, 2000 which authorizes the
Subordinated Notes) reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Subordinated Noteholders, and of the terms upon which the
Subordinated Notes are, and are to be, authenticated and delivered. All terms
used in this Subordinated Note which are defined in the Subordinated Indenture
or in any indenture supplemental thereto but are not defined in this
Subordinated Note shall have the meanings assigned to them in the Subordinated
Indenture or in any indenture supplemental thereto.

         Each Subordinated Note shall be dated the date of its authentication by
the Trustee. Each Subordinated Note shall also bear an Original Issue Date or
Dates which with respect to this Global Subordinated Note (or any portion
thereof) shall mean the date or dates of the original issue of the Subordinated
Notes represented hereby as specified on the face hereof, and such Original
Issue Date or Dates shall remain the same for all Subordinated Notes
subsequently issued upon transfer, exchange or substitution of such original
Subordinated Note (or such subsequently issued Subordinated Notes) regardless of
their dates of authentication. The Subordinated Notes may bear different dates,
mature at different times, bear interest at different rates, be subject to
different redemption provisions, if any, and may otherwise vary, all as provided
in the Subordinated Indenture.

         The indebtedness evidenced by the Subordinated Notes is, to the extent
and in the manner provided in the Subordinated Indenture, subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness of the Company. As provided in the Subordinated Indenture, each
holder of this Subordinated Note, by his acceptance hereof, agrees to and shall
be bound by all the provisions of the Subordinated Indenture relating to such
subordination and authorizes the Trustee to take such action in his behalf as
may be necessary or appropriate to effectuate the subordination as provided in
the Subordinated Indenture and appoints the Trustee his attorney-in-fact for any
and all such purposes.

         Interest on this Subordinated Note will be payable on the Interest
Payment Date or Interest Payment Dates as specified on the face hereof and, in
either case, at Maturity. Unless otherwise specified on the face hereof,
payments on this Subordinated Note with respect to any particular Interest
Payment Date or the Maturity Date will include interest accrued from and
including the applicable Original Issue Date, or from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, to but excluding the particular Interest Payment Date or the Maturity Date.
Interest on this Subordinated Note shall be calculated for each day during such
period by dividing the interest rate applicable to such day by 360, if the
Interest Rate Basis specified on the face hereof is the CD Rate, the Commercial
Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate,
LIBOR or the Prime Rate, or by the actual number of days in the year, if the
Interest Rate Basis specified on the face hereof is the CMT Rate or the Treasury
Rate. Unless otherwise provided in an annex attached hereto, the Trustee, acting
in the capacity of Calculation Agent, will calculate the Interest Rate on this
Subordinated Note. Upon the request of any Holder of this Subordinated Note, the
Trustee shall provide to such Holder the Interest Rate then in effect and, if
then determined, the interest rate that will become effective on the next
Interest Reset Date with respect to this Subordinated Note. Each such
determination of an Interest Rate will be final and binding in the absence of
manifest error.

         Unless otherwise specified in an annex attached hereto, if this
Subordinated Note is an Amortizing Note, payments with respect to this
Subordinated Note will be applied first to interest due and payable hereon and
then to the reduction of the unpaid principal amount hereof. If this
Subordinated Note is an Amortizing Note, a table setting

<PAGE>   40

forth the schedule of dates and amounts of payments of principal of and interest
on this Subordinated Note or the formula for the amortization of principal
and/or interest is set forth in an annex attached to this Subordinated Note.

         All percentages resulting from any calculation with respect to this
Subordinated Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with five one-millionths of a
percentage point rounded upward) and all dollar or foreign or composite currency
amounts used in or resulting from any such calculation with respect to this
Subordinated Note will be rounded, in the case of United States dollars, to the
nearest cent or, in the case of a foreign or composite currency, to the nearest
unit (with one-half cent or unit being rounded upward).

         If an Interest Payment Date or Maturity for this Subordinated Note
falls on a day that is not a Business Day, payment of principal, premium, if
any, and interest to be made on such day with respect to this Subordinated Note
will be made on the next succeeding day that is a Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable on the date of payment for the period from and after the due date as a
result of such delayed payment. Notwithstanding the foregoing, in the case LIBOR
is the applicable Interest Rate Basis with respect to this Subordinated Note and
the next succeeding Business Day falls in the next succeeding calendar month,
payment of interest to be made on such day with respect to this Subordinated
Note will be made on the immediately preceding Business Day.

         This Subordinated Note will be redeemable at the option of the Company
prior to its Stated Maturity Date only if an Initial Redemption Date is
specified on the face hereof. If so specified, this Subordinated Note will be
subject to redemption at the option of the Company on any date on and after such
Initial Redemption Date in whole or from time to time in part in increments of
$1,000 or any other integral multiple thereof, at the redemption prices
specified in an annex attached to this Subordinated Note, plus accrued and
unpaid interest to but excluding the date of redemption, but payments due with
respect to this Subordinated Note prior to the date of redemption will be
payable to the Holder of this Subordinated Note of record at the close of
business on the relevant Record Date specified on the face hereof, all as
provided in the Subordinated Indenture. Notice of such redemption shall be given
by mailing by first-class mail a notice of such redemption not less than 20 nor
more than 60 calendar days prior to the date fixed for redemption to the Holder
of this Subordinated Note, in accordance with the provisions of the Subordinated
Indenture. In the event of redemption of this Subordinated Note in part only,
this Subordinated Note will be canceled and a new Subordinated Note or
Subordinated Notes representing the unredeemed portion hereof will be issued in
the name of the Holder hereof. This Subordinated Note is not subject to a
sinking fund unless otherwise specified in an annex attached hereto.

         If so specified on the face of this Subordinated Note, (i) this
Subordinated Note shall be subject to repayment, in whole or in part, prior to
Stated Maturity Date at the option of the Holder on a certain date or dates and
at a certain price or prices, plus accrued and unpaid interest to but excluding
the date of payment; and/or (ii) the interest rate specified on the face hereof
may be reset by the Company in accordance with a formula or otherwise on the
Optional Interest Reset Date or Dates specified on the face hereof.

         In case an Event of Default shall have occurred and be continuing with
respect to the Subordinated Notes, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Subordinated Indenture. The
Subordinated Indenture provides that in certain events such declaration and its
consequences may be waived by the Holders of a majority in aggregate principal
amount of the Subordinated Notes then outstanding. An Event of Default with
respect to the Subordinated Debt Security of any other Series issued under the
Subordinated Indenture, including the failure to make any payment of principal
or interest with respect thereto when and as due, will not be an Event of
Default with respect to the Subordinated Notes.

         The Subordinated Indenture contains provisions permitting the Company
and the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Subordinated Notes at the time outstanding,
evidenced as in the Subordinated Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Subordinated Indenture or of any supplemental indenture
or modifying in any manner the rights of the Holders of the Subordinated Notes;
PROVIDED, HOWEVER, that no such supplemental indenture shall (i) extend the
fixed maturity of any

<PAGE>   41

Subordinated Notes, or reduce the principal amount thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any premium payable
on the redemption thereof, without the consent of the Holder of each
Subordinated Note so affected, or (ii) reduce the aforesaid percentage of
Subordinated Notes, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of all Subordinated
Notes then outstanding. It is also provided in the Subordinated Indenture that
the Holders of a majority in aggregate principal amount of the Subordinated
Notes at the time outstanding may on behalf of the Holders of all the
Subordinated Notes waive any past default under the Subordinated Indenture and
its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Subordinated Notes. Any such consent
or waiver by the Holder of this Global Subordinated Note (unless revoked as
provided in the Subordinated Indenture) shall be conclusive and binding upon
such Holder and upon all future Holders and owners of this Global Subordinated
Note and of any Subordinated Note issued in exchange or substitution herefor,
whether or not any notation of such consent or waiver is made upon this Global
Subordinated Note.

         As set forth in, and subject to, the provisions of the Subordinated
Indenture, no Holder of any Subordinated Notes will have any right to institute
any proceeding with respect to the Subordinated Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of default in respect of the Subordinated Notes and of the
continuance thereof, and unless the Holders of not less than 25 percent in
aggregate principal amount of the Subordinated Notes then outstanding shall have
made written request upon the Trustee, to institute such action or proceedings
in its own name as Trustee hereunder and shall have furnished to the Trustee
such reasonable indemnity as it may require, and the Trustee shall have failed
to institute such proceeding within 60 calendar days; PROVIDED, HOWEVER, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on this
Global Subordinated Note on or after the respective due dates expressed herein.

         THIS SUBORDINATED NOTE IS A GLOBAL SUBORDINATED NOTE REGISTERED IN THE
NAME OF THE DEPOSITARY OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS
GLOBAL SUBORDINATED NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.

         If at any time the Depositary for this Global Subordinated Note
notifies the Company that it is unwilling or unable to continue as Depositary
for this Global Subordinated Note or if at any time the Depositary for this
Global Subordinated Note shall no longer be registered as a clearing agency
under the Securities Exchange Act of 1934, as amended, or any successor statute
or regulation, the Company may appoint a successor Depositary with respect to
this Global Subordinated Note. If (A) a successor Depositary for this Global
Subordinated Note is not appointed by the Company within 60 calendar days after
the Company receives such notice or becomes aware of such ineligibility, or (B)
any Subordinated Notes are represented by this Global Subordinated Note at a
time when an Event of Default with respect to the Subordinated Notes shall have
occurred and be continuing, then in each case the Company's election to issue
this Subordinated Note in global form shall no longer be effective with respect
to this Global Subordinated Note and the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
individual Subordinated Notes in exchange for this Global Subordinated Note,
shall authenticate and make available for delivery, individual Subordinated
Notes of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of this Global Subordinated Note in
exchange for this Global Subordinated Note.

         If agreed by the Company and the Depositary with respect to
Subordinated Notes issued in the form of this Global Subordinated Note, the
Depositary for such Global Subordinated Note shall surrender this Global
Subordinated Note in exchange in whole or in part for individual Subordinated
Notes of like tenor and terms in definitive form on such terms as are acceptable
to the Company and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and make available for delivery, without a service
charge, (1) to each Person specified by such Depositary, a new Subordinated Note
or Subordinated Notes of like tenor and terms, and of any authorized
denominations as requested by such Person in aggregate principal amount equal to
and in exchange

<PAGE>   42

for the beneficial interest of such Person in this Global Subordinated Note, and
(2) to such Depositary a new Global Subordinated Note of like tenor and terms
and in a denomination equal to the difference, if any, between the principal
amount of this Global Subordinated Note and the aggregate principal amount of
Subordinated Notes delivered to Holders thereof.

         Under certain circumstances specified in the Subordinated Indenture,
the Depositary may be required to surrender any two or more Global Subordinated
Notes which have identical terms (but which may have differing Original Issue
Dates) to the Trustee, and the Company shall execute and the Trustee shall
authenticate and deliver to, or at the direction of, the Depositary a Global
Subordinated Note in principal amount equal to the aggregate principal amount
of, and with all terms identical to, the Global Subordinated Notes surrendered
to the Trustee, and such new Global Subordinated Note shall indicate each
applicable Original Issue Date and the principal amount applicable to each such
Original Issue Date.

         No reference herein to the Subordinated Indenture and no provision of
this Global Subordinated Note or of the Subordinated Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Global Subordinated
Note at the times, places and rates, and in the coin or currency, herein
prescribed.

         The Subordinated Indenture contains provisions for the satisfaction and
discharge of the Subordinated Indenture upon compliance by the Company with
certain conditions specified therein, which provisions apply to this
Subordinated Note.

         The Company, the Trustee, any paying agent and any Subordinated Debt
Security Registrar (as defined in the Subordinated Indenture) for the
Subordinated Notes may deem and treat the Holder hereof as the absolute owner of
this Global Subordinated Note (whether or not this Global Subordinated Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any such Subordinated Debt
Security Registrar), for the purpose of receiving payment hereof or on account
hereof and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any such Subordinated Debt Security Registrar shall be
affected by any notice to the contrary.

         No recourse shall be had for the payment of the principal of, or
premium, if any, or interest on, this Global Subordinated Note, or for any claim
based hereon or otherwise in respect hereof, or based on or in respect of the
Subordinated Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

         It is the intent of the Company and the Holders of this Subordinated
Note to conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Holders of this
Subordinated Note and the Company are hereby limited by the provisions of this
paragraph which shall override and control all such agreements, whether now
existing or hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged or received under this
Subordinated Note or otherwise exceed the Highest Lawful Rate. If, from any
possible construction of any document, interest would otherwise be payable in
excess of the Highest Lawful Rate, any such construction shall be subject to the
provisions of this paragraph and such document shall be automatically reformed
and the interest payable shall be automatically reduced to the Highest Lawful
Rate, without the necessity of execution of any amendment or new document. If
the Holders of this Subordinated Note shall ever receive anything of value which
is characterized as interest under applicable law and which would apart from
this provision be in excess of the Highest Lawful Rate, an amount equal to the
amount which would have been excessive interest shall, without penalty, be
applied to the reduction of the principal amount owing on this Subordinated Note
in the inverse order of its maturity and not to the payment of interest, or
refunded to the Company if and to the extent such amount which would have been
excessive exceeds such unpaid principal. The right to accelerate the maturity of
this Subordinated Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Holders of this Subordinated Note do not intend to charge or receive any
unearned interest in

<PAGE>   43

the event of acceleration. All interest paid or agreed to be paid to the Holders
of this Subordinated Note shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) of this Subordinated Note so that the
amount of interest on account of this Subordinated Note does not exceed the
Highest Lawful Rate.

<PAGE>   44

                            OPTION TO ELECT REPAYMENT

         The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Subordinated Note (or portion hereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount to be
repaid, together with unpaid interest accrued hereon to the Repayment Date, to
the undersigned, at _________________________________________________.

         If less than the entire principal amount of this Subordinated Note is
to be repaid, specify the portion hereof (which shall be increments of
____________) which the holder elects to have repaid and specify the
denomination or denominations (which shall be an authorized denomination) not
less than ________ of the Subordinated Notes to be issued to the Holder for the
portion of this Subordinated Note not being repaid (in the absence of any such
specification, one such Subordinated Note will be issued for the portion not to
be repaid).

Principal Amount
to be Repaid:
                                               $
---------------------------------               -----------------

CUSIP Number or other identifier:

Dated:
       -----------------           --------------------------------------------
                                   NOTICE: The signature(s) to this assignment
                                   must correspond with the name(s) as written
                                   upon the face of the within instrument in
                                   every particular, without alteration or
                                   enlargement or any change whatever. The
                                   signature(s) must be guaranteed by an
                                   "eligible guarantor institution" that is a
                                   member or participant in the Securities
                                   Transfer Agents Medallion Program, the Stock
                                   Exchange Medallion Program or the New York
                                   Stock Exchange, Inc. Medallion Program.

Notice: The signature(s) on this Option to Elect Repayment must correspond with
the name(s) as written upon the face of this Subordinated Note in every
particular, without alteration or enlargement or any change whatsoever.

<PAGE>   45

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT
                                          MIN ACT - ________ Custodian _________
TEN ENT - as tenants by the entireties               (Cust)             (Minor)
                                                    Under Uniform Gifts
JT TEN -  as joint tenants with right of            to Minors Act
          survivorship and not as tenants           ___________________
          in common                                 State

    Additional abbreviations may also be used though not in the above list.

                                   ----------

FOR VALUE RECEIVED the undersigned hereby sell(s) assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
   OTHER IDENTIFYING NUMBER OF
   ASSIGNEE

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

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

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

                   Please print or typewrite name and address
                      including postal zip code of assignee

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

the within Subordinated Note and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________________________________
attorney to transfer said Subordinated Note on the books of the Company, with
full power of substitution in the premises.

Dated:
       -----------------           --------------------------------------------
                                   NOTICE: The signature(s) to this assignment
                                   must correspond with the name(s) as written
                                   upon the face of the within instrument in
                                   every particular, without alteration or
                                   enlargement or any change whatever. The
                                   signature(s) must be guaranteed by an
                                   "eligible guarantor institution" that is a
                                   member or participant in the Securities
                                   Transfer Agents Medallion Program, the Stock
                                   Exchange Medallion Program or the New York
                                   Stock Exchange, Inc. Medallion Program.<PAGE>   1
                                                                   EXHIBIT 10.43

                       THIRD AMENDMENT TO CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of the 20th day of November, 2000, by and among the banks listed on the
signature pages hereof (the "Lenders"), KEVCO, INC., a Texas corporation (the
"Borrower"), and BANK OF AMERICA, N.A., formerly known as NationsBank, N.A., as
administrative agent for the Lenders (the "Administrative Agent"), to the extent
and in the manner provided for in the Credit Agreement (defined below and herein
so called).

                                   BACKGROUND

                  (a) The Lenders, the Borrower, and the Administrative Agent
         are parties to that certain Third Amended and Restated Credit Agreement
         dated as of July 14, 1999 (as amended through the date hereof and as
         may be further amended, extended, renewed, or restated from time to
         time, the "Credit Agreement"; terms defined in the Credit Agreement and
         not otherwise defined herein shall be used herein as defined in the
         Credit Agreement).

                  (b) The Borrower has requested an amendment to certain
         financial covenants under the Credit Agreement, and the Administrative
         Agent and the Lenders have agreed to such amendment, subject to the
         terms and conditions contained herein.

         NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:

         1. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended as follows:

                  (a) Section 1.1 is amended by amending and restating in its
         entirety the definition of "Applicable Base Rate Margin" as follows:

                           "Applicable Base Rate Margin" means, with respect to
                  Revolving Credit Advances and Facility A Term Loan Advances,
                  2.00%, per annum, and with respect to Facility B Term Loan
                  Advances, 2.50%, per annum; provided that if the Borrower
                  fails to make the mandatory prepayment required under Section
                  2.5(h) hereof on or before March 8, 2001, the Applicable Base
                  Rate Margin with respect to the Term Loan Advances shall be
                  immediately increased, without notice, by an additional 0.25%.

                  (b) Section 1.1 is amended by amending and restating in its
         entirety the definition of "Applicable LIBOR Rate Margin" as follows:

<PAGE>   2

                           "Applicable LIBOR Rate Margin" means, with respect to
                  Revolving Credit Advances and Facility A Term Loan Advances,
                  3.50%, per annum, and with respect to Facility B Term Loan
                  Advances, 4.00%, per annum; provided that if the Borrower
                  fails to make the mandatory prepayment required under Section
                  2.5(h) hereof on or before March 8, 2001, the Applicable LIBOR
                  Rate Margin with respect to the Term Loan Advances shall be
                  immediately increased, without notice, by an additional 0.25%.

                  (c) Section 1.1 is amended by amending and restating in its
         entirety the definition of "Permitted Assets Sales" as follows:

                           "Permitted Asset Sales" means (a) the sale of
                  inventory in the ordinary course of business, (b) the sale or
                  discount of accounts receivable arising in the ordinary course
                  of business in connection with the compromise or collection
                  thereof, (c) subject to the other terms and provisions hereof,
                  leases or subleases (or assignments of leases or subleases) or
                  licenses or sublicenses (or assignments of licenses or
                  sublicenses) of any assets in the ordinary course of business
                  and (d) the sale or other disposition of Cash Equivalents in
                  the ordinary course of business.

                  (d) Section 1.1 is amended by inserting the following
         definitions in the appropriate alphabetical order, as follows:

                           "Eligible Accounts" shall mean, at any time, all
                  accounts (as such term is defined in the UCC) of the Borrower
                  and its Subsidiaries created in the ordinary course of
                  business, less any and all rebates and discounts, that satisfy
                  the following conditions:

                           (a) The account complies with all applicable laws,
                  rules, and regulations, including, without limitation, usury
                  laws, the Federal Truth in Lending Act, and Regulation Z of
                  the Board of Governors of the Federal Reserve System;

                           (b) The account has not been outstanding for more
                  than ninety (90) days past the original date of invoice;

                           (c) The account was created in connection with (i)
                  the sale of goods in the ordinary course of business and such
                  sale has been consummated and such goods have been shipped, or
                  (ii) the performance of services in the ordinary course of
                  business and such services have been completed and accepted by
                  the account debtor;

                           (d) The account arises from an enforceable contract,
                  the performance of which has been completed;

                                       2
<PAGE>   3

                           (e) The account does not arise from the sale of any
                  good that is on a bill-and-hold, guaranteed sale,
                  sale-or-return, sale on approval, consignment, or any other
                  repurchase or return basis;

                           (f) The Borrower or its Subsidiary has good and
                  indefeasible title to the account and the account is not
                  subject to any Lien except Liens in favor of the
                  Administrative Agent;

                           (g) The account does not arise out of a contract with
                  or order from, an account debtor that, by its terms, prohibits
                  or makes void or unenforceable the grant of a security
                  interest to the Administrative Agent in and to such account;

                           (h) The account is not subject to any setoff,
                  counterclaim, defense, dispute, recoupment, or adjustment
                  other than normal discounts for prompt payment;

                           (i) The account debtor is not insolvent or the
                  subject of any bankruptcy or insolvency proceeding and has not
                  made an assignment for the benefit of creditors, suspended
                  normal business operations, dissolved, liquidated, terminated
                  its existence, ceased to pay its debts as they become due, or
                  suffered a receiver or trustee to be appointed for any of its
                  assets or affairs;

                           (j) The account is not evidenced by chattel paper or
                  an instrument, unless all steps necessary to perfect the
                  Administrative Agent's Lien thereon have been taken;

                           (k) No default exists under the account by any party
                  thereto;

                           (l) The account debtor has not returned or refused to
                  retain, or otherwise notified the Borrower or any Subsidiary
                  of any dispute concerning, or claimed nonconformity of, any of
                  the goods from the sale of which the account arose, but only
                  to the extent of the amount represented by the goods returned,
                  refused, disputed or claimed to be non-conforming;

                           (m) The account is not owed by an Affiliate of the
                  Borrower;

                           (n) The account is payable in Dollars by the account
                  debtor;

                           (o) The account shall be ineligible if the account
                  debtor is domiciled in any country other than the United
                  States of America or

                                        3
<PAGE>   4

                  Canada, provided that such accounts owing by accounts debtors
                  domiciled in Canada shall not at any time exceed $100,000;

                           (p) The account shall be ineligible if more than five
                  percent (5%) of the aggregate balances then outstanding on
                  accounts owed by such account debtor and its Affiliates to the
                  Borrower and its Subsidiaries are more than ninety (90) days
                  past due from the dates of their original invoices, and to the
                  extent that the accounts owed by an account debtor and its
                  Affiliates to the Borrower and its Subsidiaries exceed seven
                  and one-half percent (7 1/2%) of the aggregate accounts then
                  owing to the Borrower and its Subsidiaries the amount of such
                  excess shall be ineligible; and

                           (q) The account shall be ineligible if the account
                  debtor is the United States of America or any department,
                  agency, or instrumentality thereof, and the Federal Assignment
                  of Claims Act of 1940, as amended, shall not have been
                  complied with.

                  The amount of the Eligible Accounts owed by an account debtor
                  shall be reduced by the amount of all "contra accounts" and
                  other obligations owed by the Borrower and its Subsidiaries to
                  such account debtor.

                           "Eligible Inventory" shall mean, at any time, all
                  inventory of raw materials and finished goods (but excluding
                  work in process) then owned by (and in the possession or under
                  the control of) the Borrower or its Subsidiaries and held for
                  sale or disposition in the ordinary course, in which the
                  Administrative Agent has a perfected, first priority security
                  interest, valued at the lower of actual cost or fair market
                  value. Eligible Inventory shall not include (a) inventory that
                  has been shipped or delivered to a customer on consignment, a
                  sale-or-return basis, or on the basis of any similar
                  understanding, (b) inventory with respect to which a claim
                  exists disputing title to or right to possession of such
                  inventory, and (c) inventory that is not in good condition or
                  does not comply with any applicable law, rule, or regulation
                  or any standard imposed by any governmental authority with
                  respect to its manufacture, use, or sale.

                           "Revolving Credit Borrowing Base" shall mean, at any
                  time, the lesser of (a) $5,000,000, or (b) the sum of (i) 75%
                  of Eligible Accounts (net of gross trade payables less
                  agreed-upon float and the face amount of Letters of Credit
                  which secure trade payables), plus (ii) 55% of Eligible
                  Inventory, each as shown on the most recent Revolving Credit
                  Borrowing Base Report delivered to Administrative Agent under
                  Section 6.9 hereof.

                                       4
<PAGE>   5

                           "Revolving Credit Borrowing Base Report" means a
                  report, certified and signed by an Authorized Signatory, in
                  substantially the form of Exhibit E, appropriately completed.

                           "Scheduled Asset Sales" means those asset sales
                  described on Exhibit F hereto.

                           "Third Amendment Effective Date" means November 20,
                  2000.

                  (e) Section 2.1 is amended by entirely amending clause (a)(i)
         thereof as follows:

                           (i) the principal amount of all outstanding Revolving
                  Credit Advances and Reimbursement Obligations exceed the
                  lesser of (A) the Revolving Credit Borrowing Base, or (B) the
                  Revolving Credit Commitment,

                  (f) Section 2.3 is amended by entirely amending clause (a)(ii)
         thereof as follows:

                           (ii) Interest on the Base Rate Advances shall be
                  computed on the basis of a year of 365 or 366 days, as
                  applicable, for the number of days actually elapsed, and shall
                  be payable in arrears on each Monthly Date and on the
                  Revolving Commitment Maturity Date, the Facility A Term Loan
                  Maturity Date or the Facility B Term Loan Maturity Date, as
                  appropriate.

                  (g) Section 2.3 is amended by entirely amending clause (b)(ii)
         thereof as follows:

                           (ii) Subject to Section 11.9 hereof, interest on each
                  LIBOR Advance shall be computed on the basis of a 360-day year
                  for the actual number of days elapsed, and shall be payable in
                  arrears on the applicable Payment Date and on the Revolving
                  Commitment Maturity Date, the Facility A Term Loan Maturity
                  Date and the Facility B Term Loan Maturity Date, as
                  appropriate; provided, however, that if the Interest Period
                  for such Advance exceeds one month, interest shall be due and
                  payable in arrears on each one-month anniversary of the
                  commencement of such Interest Period during such Interest
                  Period.

                  (h) Section 2.4 is amended by entirely amending the first
         sentence thereof as follows:

                  Subject to Section 11.9 hereof, the Borrower agrees to pay to
                  the Administrative Agent, for the ratable account of the
                  Lenders, a commitment fee (the "Revolving Commitment Fee") on
                  the daily average Unused Portion at the rate of 0.500% per
                  annum.

                                       5
<PAGE>   6

                  (i) Section 2.5 is amended by deleting the first sentence of
         clause (b)(ii) thereof and replacing it with the following:

                  (ii) At any time when the limitation in Section 2.1(a)(i) is
                  exceeded, whether because the Revolving Credit Commitment has
                  been fully or partially terminated, canceled or reduced or for
                  any other reason, Borrower shall promptly prepay applicable
                  outstanding Revolving Credit Advances in an amount necessary
                  to reduce the sum of outstanding Revolving Credit Advances and
                  Reimbursement Obligations to an amount less than or equal to
                  the lesser of (A) the Revolving Credit Borrowing Base, or (B)
                  the Revolving Credit Commitment. At any time when the
                  limitation in Section 2.1(a)(ii)(A) is exceeded, whether
                  because the Revolving Credit Commitment has been fully or
                  partially terminated, canceled or reduced or for any other
                  reason, Borrower shall promptly prepay applicable outstanding
                  Revolving Credit Advances in an amount necessary to reduce the
                  sum of outstanding Revolving Credit Advances and Reimbursement
                  Obligations to an amount less than or equal to the Revolving
                  Credit Commitment.

                  (j) Section 2.5(c) is amended entirely, as follows:

                  (c) Prepayments from Sales of Assets.

                           (i) Concurrently with the receipt of Net Cash
                  Proceeds in excess of an aggregate amount equal to $500,000
                  from the sale or disposition by the Borrower or any of its
                  Subsidiaries of any assets (including the Capital Stock of any
                  Subsidiary) sold or disposed of (other than Permitted Asset
                  Sales) at any time, the Borrower shall prepay the Term Loan
                  Advances in a principal amount equal to (A) 100% of such Net
                  Cash Proceeds from asset sales other than Scheduled Asset
                  Sales and (B) 80% of such Net Cash Proceeds from Scheduled
                  Asset Sales.

                           (ii) [Intentionally deleted].

                           (iii) [Intentionally deleted].

                           (iv) Any prepayment made under this Section 2.5(c)
                  shall (A) include accrued but unpaid interest to the date of
                  such prepayment on the principal amount prepaid, (B) not be
                  subject to the notice and minimum payment provisions of this
                  Section 2.5; provided, however, the Borrower shall be required
                  to reimburse each Lender for any loss, cost or expense
                  incurred by such Lender in connection with any such prepayment
                  as set forth in Section 2.9 hereof if any prepayment results
                  in a LIBOR Advance being paid on a day other than the last day
                  of an Interest Period for such LIBOR

                                       6
<PAGE>   7

                  Advance, and (C) be applied first to Base Rate Advances, if
                  any, and then to LIBOR Advances.

                           (v) (A) [Intentionally deleted].

                               (B) Any prepayment made under this Section 2.5(c)
                  shall be applied (A) to all of the unpaid scheduled
                  installment payments of the Facility A Term Loan Advances, in
                  inverse order of maturity, at all times until Borrower has
                  made prepayments under this Section 2.5(c) equal to
                  $3,750,000, in the aggregate, and (B) at any time after
                  Borrower has made prepayments under this Section 2.5(c) equal
                  to $3,750,000, in the aggregate, to all of the unpaid
                  scheduled installment payments of the Facility A Term Loan
                  Advances and the Facility B Term Loan Advances, in inverse
                  order of maturity, pro rata based upon the respective
                  principal amounts of the Facility A Term Loan Advances and
                  Facility B Term Loan Advances outstanding at the time of such
                  prepayment (provided, however, if at any time that there are
                  no Facility A Term Loan Advances and Facility B Term Loan
                  Advances outstanding, 100% of any such prepayment shall be
                  applied to repay outstanding Revolving Credit Advances but not
                  to permanently reduce the Revolving Credit Commitment).

                  (k) A new Section 2.5(h) is added immediately following
         Section 2.5(g), as follows:

                           (h) Additional Mandatory Prepayment of Term Loan
                  Advances. If the aggregate amount of prepayments made under
                  Section 2.5(c) prior to March 8, 2001, is less than
                  $15,000,000, the Borrower shall, on March 8, 2001, prepay the
                  Term Loan Advances in a principal amount equal to the
                  difference between $15,000,000 and the actual amount prepaid
                  under Section 2.5(c) prior to March 8, 2001. Such prepayment
                  shall be applied to the Term Loan Advances in accordance with
                  Section 2.5(c) as if made with Net Cash Proceeds from asset
                  sales.

                  (l) Section 2.6(b) is entirely amended, as follows:

                           (b) Mandatory Reduction. (i) On the Revolving
                  Commitment Maturity Date, the Revolving Credit Commitment
                  shall automatically reduce to zero.

                                 (ii) The Revolving Credit Commitment shall be
                  permanently reduced by the amount of any prepayment of
                  Revolving Credit Advances pursuant to Sections 2.5(e) and (f)
                  hereof.

                                 (iii) The Revolving Credit Commitment shall be
                  permanently reduced by the amount of $10,000,000 upon the
                  earlier

                                       7
<PAGE>   8

                  of (A) March 8, 2001, or (B) the date upon which the Borrower
                  makes a prepayment under Section 2.5(c) which causes the
                  aggregate amount of all prepayments made under Section 2.5(c)
                  to equal or exceed $15,000,000.

                  (m) Section 2.16(a)(i) is entirely amended, as follows:

                           (i) $7,500,000 (the "Letter of Credit Facility") and

                  (n) Section 6.9 is entirely amended, as follows:

                           Section 6.9 Revolving Credit Borrowing Base Reports.
                  (a)Within 15 days after the end of each month, a Revolving
                  Credit Borrowing Base Report as of the end of such month, (b)
                  within 30 days after the end of each month, a Borrowing Base
                  Report as of the end of such month, and (c) on or before the
                  30th day of each month, a Revolving Credit Borrowing Base
                  Report as of the 15th day of the then current month. In
                  addition to the monthly Borrowing Base Report and Revolving
                  Credit Borrowing Base Report required to be delivered
                  hereunder, the Borrower may provide the Lenders with a
                  Borrowing Base Report or Revolving Credit Borrowing Base
                  Report, as the case may be, reflecting information as of any
                  date subsequent to the previously required Borrowing Base
                  Report or Revolving Credit Borrowing Base Report, as the case
                  may be, and the Borrowing Base or Revolving Credit Borrowing
                  Base, as the case may be, reflected in such updated Borrowing
                  Base Report or Revolving Credit Borrowing Base Report, as the
                  case may be, shall be effective until the Borrower delivers
                  another Borrowing Base Report, or Revolving Credit Borrowing
                  Base Report, as the case may be. Each Revolving Credit
                  Borrowing Base Report shall be accompanied by an accounts
                  receivable aging.

                  (o) A new Section 6.11 is hereby added immediately following
         Section 6.10, as follows:

                           Section 6.11 Business Plan and Reports. Within
                  fifteen (15) days after the end of each month, commencing with
                  the month ending November 30, 2000, a detailed report
                  regarding the Borrower's progress with respect to the matters
                  addressed in its comprehensive business plan delivered to
                  Lenders on or before December 15, 2000, pursuant to the terms
                  of the Third Amendment to Credit Agreement dated as of
                  November 20, 2000, such report to be in form and detail
                  acceptable to the Administrative Agent.

                                       8
<PAGE>   9

                  (p) Section 7.5 is entirely amended, as follows:

                           Section 7.5 Sale of Assets. The Borrower shall not,
                  and shall not permit any of its Subsidiaries to, sell, lease,
                  abandon, transfer or otherwise dispose of assets in an
                  aggregate amount effective on and after November 20, 2000, in
                  excess of $500,000, except for the following, so long as no
                  Default exists immediately prior to or after the contemplated
                  transaction: (i) Permitted Asset Sales, so long as the
                  consideration received by the Borrower and its Subsidiaries in
                  connection with such transaction is greater than or equal to
                  the fair market value of such assets as determined in good
                  faith by Borrower; (ii) asset sales other than Scheduled Asset
                  Sales consented to in writing by the Determining Lenders, the
                  Net Cash Proceeds of which are subject to Section 2.5(c)
                  hereof; (iii) transfers resulting from any casualty or
                  condemnation of property or assets; (iv) intercompany sales or
                  transfers of assets among Subsidiaries made in the ordinary
                  course of business; and (v) Scheduled Asset Sales.

                  (q) Sections 7.10, 7.11 and 7.12 are each entirely amended, as
         follows:

                           Section 7.10 [Intentionally Omitted]

                           Section 7.11 [Intentionally Omitted]

                           Section 7.12 [Intentionally Omitted]

                  (r) Section 8.1(c) is amended entirely, as follows:

                           (c) The Borrower or any of its Subsidiaries shall
                  default in the performance or observance of any agreement or
                  covenant contained in (i) Section 5.1 or Article 7 hereof,
                  provided that the Borrower's failure to comply with Section
                  7.11 of this Agreement with respect to fiscal quarters ending
                  on or before December 31, 2000, shall only constitute an Event
                  of Default if such noncompliance shall occur in two
                  consecutive fiscal quarters, or (ii) on and after the Third
                  Amendment Effective Date, Sections 6.1, 6.2, 6.3, 6.7, 6.9, or
                  6.11;

                  (s) New Exhibits E and F are added to the Credit Agreement in
         the form of, and all references in the Credit Agreement to Exhibits E
         and F are hereby deemed to be references to, the attached Exhibits E
         and F.

         2. EFFECTIVENESS OF CERTAIN AMENDMENTS. Notwithstanding any other
provision herein to the contrary, the amendments described in Section 1(q) above
shall be effective as of September 30, 2000, and shall terminate automatically
without any action by the Administrative Agent, the Lenders or any other Person
and be of no further force or effect upon the earliest to occur

                                       9
<PAGE>   10

of (a) October 1, 2001, or (b) the occurrence of an Event of Default (such
period of effectiveness being referred to herein as the "Covenant Amendment
Period"). The parties hereto acknowledge and agree that upon termination of the
Covenant Amendment Period, the financial covenants amended by Section 1(q)
hereof shall be reinstated in their entirety as if never amended hereby, and an
Event of Default will then exist under the Credit Agreement unless a further
agreement has been entered into among the necessary Persons.

         3. MINIMUM EBITDA COVENANT. During the Covenant Amendment Period, the
Borrower will not permit EBITDA (exclusive of up to $3,595,000 in restructuring
charges incurred in the fourth quarter of fiscal year 2000) for the periods set
forth below to be less than the amount set forth opposite each such period:

<TABLE>
<CAPTION>
               Period                                      Amount
               ------                                      ------
<S>                                                      <C>
       1 month ended 10/31/00                            $(1,000,000)
       2 months ended 11/30/00                           $(2,000,000)
       3 months ended 12/31/00                           $(3,000,000)
       4 months ended 1/31/01                            $(3,500,000)
       5 months ended 2/28/01                            $(3,483,000)
       6 months ended 3/31/01                            $(3,156,000)
       7 months ended 4/30/01                            $(2,567,000)
       8 months ended 5/31/01                            $(2,077,000)
       9 months ended 6/30/01                            $(1,437,000)
       10 months ended 7/31/01                           $(994,000)
       11 months ended 8/31/01                           $(384,000)
       12 months ended 9/30/01                           $256,000
</TABLE>

The required minimum cumulative EBITDA may be adjusted upon terms satisfactory
to Borrower and Determining Lenders from time to time as a result of asset
sales.

         4. MINIMUM TRADE PAYABLES COVENANT. During the Covenant Amendment
Period, the Borrower will not permit outstanding trade payables of the Borrower
and its Subsidiaries for the periods set forth below to be less than the amount
set forth opposite each such period:

<TABLE>
<CAPTION>
               Period                                      Amount
               ------                                      ------
<S>                                                     <C>
       Month ended 10/31/00                             $31,705,000
       Month ended 11/30/00                             $27,935,000
       Month ended 12/31/00                             $27,430,000
       Month ended 1/31/01                               $22,825,000
       Month ended 2/28/01                               $24,860,000
       7 months ended 9/30/01                            $27,490,000
</TABLE>

The required minimum trade payables outstanding may be adjusted upon terms
satisfactory to Borrower and Determining Lenders from time to time as a result
of asset sales.

         5. ADDITIONAL EVENT OF DEFAULT. It will be an Event of Default if the
Borrower shall fail, on or before December 15, 2000, to deliver to Lenders a
comprehensive business

                                       10
<PAGE>   11

plan, acceptable as to scope to the Administrative Agent and its counsel and
financial consultants, including, without limitation, separate financial
projections for the divisions of the Borrower and its Subsidiaries.

         6. AMENDMENT FEE. The Borrower shall pay to the Administrative Agent,
for the pro rata account of each Lender, an amendment fee equal to $100,000 (the
"Amendment Fee"). Such Amendment Fee shall be allocated to each Lender pro rata,
based on the sum of (a) such Lender's Revolving Credit Specified Percentage
multiplied by $5,000,000 plus (b) the total outstanding principal amount of all
Term Loan Advances owed to such Lender as of the date of this Amendment. Such
amendment fee shall be earned and payable as of the date of this Amendment in
immediately available funds.

         7. ACKNOWLEDGMENT OF THE BORROWER. The Borrower acknowledges and agrees
that the Lenders executing this Amendment have done so in their sole discretion
and without any obligation.

         8. SUBSIDIARIES ACKNOWLEDGMENT. By signing below, each of the
Subsidiaries which has executed a Subsidiary Guaranty (a) consents and agrees to
the execution and delivery of this Amendment, (b) ratifies and confirms its
obligations under its Subsidiary Guaranty, (c) acknowledges and agrees that its
obligations under its Subsidiary Guaranty are not released, diminished,
impaired, reduced, or otherwise adversely affected by this Amendment, and (d)
acknowledges and agrees that it has no claims or offsets against, or defenses or
counterclaims to, its Subsidiary Guaranty.

         9. RELEASE.

                  (a) The Borrower and each Subsidiary Guarantor hereby
         unconditionally and irrevocably remises, acquits, and fully and forever
         releases and discharges the Administrative Agent and the Lenders and
         all respective affiliates and subsidiaries of the Administrative Agent
         and the Lenders, their respective officers, servants, employees,
         agents, attorneys, principals, directors and shareholders, and their
         respective heirs, legal representatives, successors and assigns
         (collectively, the "Released Lender Parties") from any and all claims,
         demands, causes of action, obligations, remedies, suits, damages and
         liabilities (collectively, the "Borrower Claims") of any nature
         whatsoever, whether now known, suspected or claimed, whether arising
         under common law, in equity or under statute, which the Borrower or any
         Guarantor ever had or now has against the Released Lender Parties which
         may have arisen at any time on or prior to the date of this Amendment
         and which were in any manner related to any of the Loan Documents or
         the enforcement or attempted enforcement by the Administrative Agent or
         the Lenders of rights, remedies or recourses related thereto.

                  (b) The Borrower and each Subsidiary Guarantor covenants and
         agrees never to commence, voluntarily aid in any way, prosecute or
         cause to be commenced or prosecuted against any of the Released Lender
         Parties any action or other proceeding based upon any of the Borrower
         Claims which may have arisen at any time on or prior to the date of
         this Amendment and were in any manner related to any of the Loan
         Documents.

                                       11
<PAGE>   12

                  (c) The agreements of the Borrower and each Guarantor set
         forth in this Section 9 shall survive termination of this Amendment and
         the other Loan Documents.

         10. REPRESENTATIONS AND WARRANTIES TRUE, NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants to the
Lenders that, as of the date hereof:

                  (a) after giving effect to this Amendment, the representations
         and warranties contained in the Credit Agreement and the other Loan
         Documents are true and correct in all material respects on and as of
         the date hereof as made on and as of such date, except for any
         representations and warranties made as of a specific date, which shall
         be true and correct in all material respects as of such specific date;
         and

                  (b) after giving effect to this Amendment, no event has
         occurred and is continuing which constitutes a Default or an Event of
         Default.

         11. CONDITIONS OF EFFECTIVENESS. This Amendment shall not be effective
until each of the following conditions precedent shall have been satisfied:

                  (a) All reasonable out-of-pocket fees and expenses in
         connection with the Loan Documents, including this Amendment, including
         legal and other professional fees and expenses incurred on or prior to
         the date of this Amendment by the Administrative Agent, including,
         without limitation, the fees and expenses of Winstead Sechrest & Minick
         P.C. and Arthur Andersen L.L.P., shall have been paid; and

                  (b) The Administrative Agent shall have received such
         documents, certificates and instruments as the Administrative Agent
         shall reasonably require; and

                  (c) The Administrative Agent shall have received for the
         account of the Lenders the Amendment Fee described in Section 6 of this
         Amendment.

         12. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to "this Agreement,"
"hereunder," or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended by this Amendment.

         13. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Amendment may be validly executed and delivered by facsimile or other electronic
transmission.

         14. GOVERNING LAW: BINDING EFFECT. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrower, the Administrative Agent, each Lender and their
respective successors and assigns.

                                       12
<PAGE>   13

         15. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

         16. LOAN DOCUMENT. This Amendment is a Loan Document and is subject to
all provisions of the Credit Agreement applicable to Loan Documents, all of
which are incorporated in this Amendment by reference the same as if set forth
in this Amendment verbatim.

         17. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>   14

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
the date first above written.

                                             KEVCO, INC.

                                             By:
                                                --------------------------------
                                                    Joseph P. Tomczak
                                                    Executive Vice President and
                                                    Chief Financial Officer

                                             BANK OF AMERICA, N.A., formerly
                                             known as NationsBank, N.A., as
                                             Administrative Agent and as a
                                             Lender

                                             By:
                                                --------------------------------
                                                    Mike V. Colon
                                                    Vice President

                                             NATIONAL CITY BANK OF KENTUCKY

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

                                             GUARANTY FEDERAL BANK, F.S.B.

                                             By:
                                                --------------------------------
                                                Name:
                                                     ---------------------------
                                                Title:
                                                      --------------------------
<PAGE>   15

                                             WELLS FARGO BANK, N.A.

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

                                             PILGRIM PRIME RATE TRUST

                                             By: Pilgrim Investments, Inc., as
                                                 its Investment Manager

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

                                             ARCHIMEDES FUNDING, L.L.C.

                                             By: ING Capital Advisors, Inc., as
                                                 Collateral Manager

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

                                             ALLIANCE CAPITAL FUNDING, L.L.C.

                                             By: Alliance Capital Management,
                                                 L.P., as Manager on behalf of
                                                 ALLIANCE CAPITAL FUNDING,
                                                 L.L.C.

                                                 By: ALLIANCE CAPITAL MANAGEMENT
                                                     CORPORATION
                                                     General Partner of Alliance
                                                     Capital Management, L.P.

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

<PAGE>   16

                               BANK ONE, TEXAS, N.A.

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

                               PAM CAPITAL FUNDING LP

                               By: Highland Capital Management, L.P.,
                                   as Collateral Manager

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

                               ML CBO IV (CAYMAN) LTD.

                               By: Highland Capital Management, L.P., as
                                   Collateral Manager

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

ACKNOWLEDGED AND AGREED:

KEVCO MANAGEMENT, INC.

By:
   --------------------------------------
    Name:
         --------------------------------
    Title:
          -------------------------------
<PAGE>   17

KEVCO HOLDING, INC.

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

KEVCO GP, INC.

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

KEVCO COMPONENTS, INC.

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

DCM DELAWARE, INC.

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

KEVCO MANUFACTURING, L.P.

By: KEVCO GP, INC., its General Partner

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

<PAGE>   18

KEVCO DISTRIBUTION, L.P.

By: KEVCO GP, INC., its General Partner

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

<PAGE>   19
                                    EXHIBIT E

                     REVOLVING CREDIT BORROWING BASE REPORT

ADMINISTRATIVE AGENT: Bank of America, N.A.                   DATE:
                                                                   -------------
BORROWER: Kevco, Inc.

     This Revolving Credit Borrowing Base Report, prepared as of , is executed
and delivered by Borrower pursuant to that certain Third Amended and Restated
Credit Agreement dated as of July 14, 1999 among the Borrower, each of the banks
or other lending institutions which is or may from time to time become a
signatory thereto and any successors or permitted assigns thereof ("Lenders")
and Administrative Agent (as amended, supplemented or modified from time to
time, the "Credit Agreement"). All terms used herein shall have the meanings
assigned to them in the Credit Agreement.

     Borrower represents and warrants to Administrative Agent that all
information contained herein is true, correct, and complete, and that the total
Eligible Accounts and total Eligible Inventory referred to below represent the
Eligible Accounts and Eligible Inventory that qualify for purposes of
determining the Revolving Credit Borrowing Base under the Credit Agreement.

ELIGIBLE ACCOUNTS:

1.   Accounts (less any and all rebates and discounts)
     (ending balance for period ended __________, 20__) ........$ ______________

2.   Less: Ineligible Accounts (determined pursuant to the
     definition of Eligible Accounts in the Credit
     Agreement), including, without duplication:

     (a)  Accounts not paid within 90 days of original
          invoice date .........................................$ ______________

     (b)  Accounts subject to any setoff, counterclaim,
          defense, dispute, recoupment, or adjustment other
          than normal discounts for prompt payment .............$ ______________

     (c)  Accounts on which the account debtor is not
          domiciled in the United States or Canada .............$ ______________

     (d)  Total accounts on which the account debtor is
          domiciled in Canada less $100,000 (leave blank if
          less than zero) ......................................$ ______________

     (e)  Accounts not arising out of (i) the sale of goods
          in the ordinary course of business which has been
          consummated and such goods have been shipped, or
          (ii) the performance of services in the ordinary
          course of business which have been completed and
          accepted by the account debtor .......................$ ______________

     (f)  Accounts from the sale of any good that is on a
          bill-and-hold, guaranteed sale, sale-or-return,
          sale on approval, consignment, or any other
          repurchase or return basis. ..........................$ ______________

     (g)  Accounts owed by each account debtor with over 5%
          of the balances owed by such account debtor and
          its Affiliates outstanding and payable for more
          than 90 days past the original invoice date ..........$ ______________

     (h)  Accounts not payable in Dollars ......................$ ______________

     (i)  Accounts owed by the United States or any other
          government for which the Federal Assignment of
          Claims Act of 1940, as amended, or other
          applicable law (other than the Uniform Commercial
          Code) has not been complied with .....................$ ______________

     (j)  Accounts owed by account debtor that is insolvent,
          or is the subject any bankruptcy or insolvency
          proceeding or has made an assignment for the
          benefit of creditors, suspended normal business
          operations, dissolved, liquidated, terminated its
          existence, ceased to pay its debts as they become
          due, or suffered a receiver or trustee to be
          appointed for any of its assets or affairs ...........$ ______________

     (k)  Accounts that do not comply with all applicable
          laws, rules, and regulations, including, without
          limitation, usury laws, the Federal Truth in
          Lending Act, and Regulation Z of the Board of
          Governors of the Federal Reserve System. .............$ ______________

     (l)  Accounts not arising from an enforceable contract,
          the performance of which has been completed ..........$ ______________

     (m)  Accounts evidenced by instruments or chattel paper
          with respect to which all steps necessary to
          perfect the Administrative Agent's Lien thereon
          have not been taken ..................................$ ______________

     (n)  Accounts with respect to which a default exists ......$ ______________

     (o)  Accounts with respect to which the account debtor
          has returned or refused to retain, or otherwise
          notified the Borrower or the applicable Subsidiary
          of any dispute concerning, or claimed
          nonconformity of, any of the goods from the sale
          of which the account arose, but only to the extent
          of the amount represented by the goods returned,
          refused, disputed or claimed to be non-conforming ....$ ______________
<PAGE>   20

     (p)  Accounts arising out of a contract with or order
          from, an account debtor that, by its terms,
          prohibits or makes void or unenforceable the grant
          of a security interest to the Administrative Agent
          in and to such account ...............................$ ______________

     (q)  Accounts to which the Borrower or the applicable
          Subsidiary does not have good and indefeasible
          title or which is subject to any Lien except Liens
          in favor of the Administrative Agent .................$ ______________

     (r)  Accounts owed by an Affiliate of the Borrower ........$ ______________

     (s)  With respect to any account debtor, the amount by
          which the amount of all accounts owed by such
          account debtor and its Affiliates to Borrower or
          any of its Subsidiaries exceeds 7-1/2% of the
          aggregate amount of all accounts owed to Borrower
          or any of its Subsidiaries ...........................$ ______________

     (t)  "Contra accounts" and other obligations owed by
          the Borrower and its Subsidiaries to account
          debtors ..............................................$ ______________

3.   Gross trade payables ......................................$ ______________

4.   Agreed-upon float .........................................$ ______________

5.   Face amount of Letters of Credit which secure trade
     payables ..................................................$ ______________

6.   Line 3 minus Line 4 minus Line 5 ..........................$ ______________

7.   Total Ineligible Accounts (sum of Lines 2(a)-(t) plus
     Line 6) ...................................................$ ______________

8.   Total Eligible Accounts (Line 1 minus Line 7) .............$ ______________

ELIGIBLE INVENTORY:

9.   Total Inventory (valued at lesser of actual cost or
     fair market value) ........................................$ ______________

10.  Less: Ineligible Inventory (determined pursuant to the
     definition of Eligible Inventory in the Credit
     Agreement, without duplication)

     (a)  Inventory not with respect to which a claim exists
          disputing title to or right to possession of such
          inventory ............................................$ ______________

     (b)  Work-in-process inventory ............................$ ______________

     (c)  Inventory shipped or delivered on consignment,
          sale or return, or similar terms .....................$ ______________

     (d)  Inventory that is not in good condition or does
          not comply with any applicable law, rule, or
          regulation or any standard imposed by any
          governmental authority with respect to its
          manufacture, use, or sale ............................$ ______________

     (e)  Inventory that is not owned by and in the
          possession or under the control of Borrower or one
          of its Subsidiaries and held for sale or
          disposition in the ordinary course ...................$ ______________

     (f)  Inventory in which the Administrative Agent does
          not have a perfected, first priority security
          interest .............................................$ ______________

11.  Total Ineligible Inventory (sum of Lines 10(a)-(f)) .......$ ______________

12.  Total Eligible Inventory (Line 9 minus Line 11) ...........$ ______________

BORROWING BASE:

13.  Total Eligible Accounts (Line 8) ..........................$ ______________

14.  Total Eligible Inventory (Line 12) ........................$ ______________

15.  75% of Line 13 ............................................$ ______________

16.  55% of Line 14 ............................................$ ______________

17.  Borrowing Base: Sum of Line 15 plus Line 16 ...............$ ______________

18.  Outstanding Revolving Loans ...............................$ ______________

19.  Available Credit Amount or amount to be paid if
     negative [(the lesser of $17,500,000 or Line 17) minus
     Line 18] ..................................................$ ______________

     Borrower further represents and warrants to Administrative Agent and
Lenders that the representations and warranties contained in Article 4 of the
Credit Agreement are true and correct on and as of the date of this Revolving
Credit Borrowing Base Report as if made on and as of the date hereof, and that
no Material Adverse Effect, Default, or Event of Default exists.

Date:                                         KEVCO, INC.
     -------------------
                                              By:
                                                 -------------------------------
                                                 Name:
                                                      --------------------------
                                                 Title:
                                                       -------------------------

<PAGE>   21
                      THIRD AMENDMENT TO CREDIT AGREEMENT
                                   EXHIBIT F
                             SCHEDULED ASSET SALES

<TABLE>
<CAPTION>
                                                                                APPRAISED
                                                              SQUARE              VALUE
      DIVISION                      LOCATION                   FEET           (in thousands)
----------------------    ------------------------------   -------------   ---------------------
<S>                       <C>                              <C>             <C>
Distribution              Bear Creek, Ala.                       90,000                  $  819

Distribution              Douglas, Ga.                           72,000                     750

Distribution              Elkhart, In.
                            27217 CR6 W                          54,500                     660
                            27200 D.I. Drive                     25,200                     500
                            27256 D.I. Drive                     15,000                     300
                            21861 Protecta Drive                 64,000                   1,010
                            2200 Industrial Parkway              84,000                   1,450

Wood                      Spruce Pine, Ala.                      26,400                     170
                                                                -------                  ------

    Totals                                                      431,100                  $5,659
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]