Document:

<PAGE>   1
                                                                    EXHIBIT 10.3

                       OPTION TO PURCHASE SHARES OF STOCK

         THIS OPTION TO PURCHASE SHARES OF STOCK (the "Agreement") is made as of
the 24th day of May, 2001 (the "Effective Date"), by and between Hynix
Semiconductor America Inc., a California corporation (the "Holder"), and Maxtor
Corporation, a Delaware corporation, or a subsidiary of, and designated by,
Maxtor Corporation (collectively with Maxtor Corporation, "Maxtor").

                                    RECITALS

         A. Pursuant to the Holder's rights under Section 3.2 of that certain
Stockholder Agreement dated June 25, 1998, as amended (the "Stockholder
Agreement"), by and between the Holder and Maxtor, the Holder has notified
Maxtor of the Holder's desire to sell 28,329,850 shares (the "Shares") of common
stock (the "Common Stock") of Maxtor.

         B. To facilitate the Holder's sale of the Shares, Maxtor has agreed to
file a registration statement on Form S-3 (the "Registration Statement") with,
and to use its reasonable commercial efforts to have such Registration Statement
declared effective by, the Securities and Exchange Commission (the "SEC"),
relating to a public offering of some or all of the Shares (the "Offering").

         C. Maxtor has indicated a desire to purchase, at its option and
simultaneously with the closing of the Offering, up to $50.0 million of the
Shares to be sold by the Holder, at a price per share equal to the price per
share in the Offering.

         NOW, THEREFORE, IT IS AGREED between the parties as follows:

         1. Option to Purchase Shares.

              a. The Option. Maxtor may elect, at its option (the "Option"), to
purchase up to $50.0 million of the Shares (the "Purchased Shares") from the
Holder at a per share price equal to the Per Share Public Offering Price (the
"Purchase Price") set forth on the front cover of the final prospectus relating
to the Offering (the "Final Prospectus"), and filed by Maxtor with the SEC
pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the
"Securities Act").

              b. Notice of Election. In the event Maxtor elects to exercise its
Option, Maxtor shall notify the Holder of such election prior to the final
pricing call between the Holder and the managing underwriters of the Offering on
the day the Registration Statement is declared effective by the SEC.

              c. Payment for the Purchased Shares. In the event Maxtor elects to
exercise its Option, Maxtor shall pay, at the Closing (as such term is defined
in Section 2.1 below), the aggregate Purchase Price to the Holder by delivery of
a check or wire transfer to an account designated in writing by the Holder to
Maxtor.

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<PAGE>   2

         2. Closing; Delivery.

              a. The Closing. In the event Maxtor exercises its Option, the
closing of the purchase and sale of the Purchased Shares hereunder (the
"Closing") shall occur simultaneously with the closing of the Offering (the
"Offering Closing") as provided for in that certain underwriting agreement to be
entered into by and among Maxtor, the Holder and Salomon Smith Barney Inc.,
Bear, Stearns & Co. Inc. and Needham & Company, Inc., as representatives of the
underwriters. In the event the Offering Closing does not occur for any reason,
Maxtor shall not be obligated in any way to purchase any of the Purchased Shares
from the Holder.

              b. Delivery. At the Closing, the Holder shall deliver to Maxtor
the following: (i) a stock assignment, in the form attached hereto as Exhibit A
(the "Assignment") transferring the Purchased Shares which Maxtor has elected to
purchase, and (ii) the certificate(s) representing the Purchased Shares to be
purchased by Maxtor from the Holder. At the Closing, Maxtor shall deliver the
aggregate Purchase Price to the Holder.

         3. Representations and Warranties of the Holder. In connection with
this Agreement and the transactions contemplated hereby, the Holder hereby
represents and warrants that as of the date of this Agreement, the following are
true and correct and as of the Closing, the following shall be true and correct
as if made on such date:

              a. Organization and Standing. The Holder is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
California, and is in good standing under such laws. The Holder has the
requisite corporate power to own and operate its properties and assets and to
carry on its business as presently conducted and as proposed to be conducted.

              b. Corporate Power. The Holder has all requisite corporate power
to (i) enter into this Agreement, (ii) sell the Purchased Shares hereunder and
(iii) carry out and perform its other obligations under the terms of this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Holder and constitutes a valid and binding agreement of the Holder,
enforceable against the Holder in accordance with the terms hereof (except as
such enforceability may be limited by applicable bankruptcy, insolvency, or
other laws affecting creditors' rights generally or by general principles of
equity and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws).

              c. Valid Title to Purchased Shares. The Holder represents that it
has good and valid title to the Purchased Shares, free and clear of all liens,
charges, encumbrances, equities, claims, restrictions and other defects of
title; and upon delivery of the Purchased Shares and payment therefor pursuant
hereto, good and valid title to the Purchased Shares, free and clear of all
liens, charges, encumbrances, equities, claims, restrictions and other defects
of title, will be delivered to Maxtor.

                                       2
<PAGE>   3

         4. Representations and Warranties of Maxtor. In connection with this
Agreement and the transactions contemplated hereby, Maxtor hereby represents and
warrants that as of the date of this Agreement, the following are true and
correct and as of the Closing, the following shall be true and correct as if
made on such date:

              a. Organization and Standing. Maxtor is a corporation duly
organized and validly existing under, and by virtue of, the laws of, the State
of Delaware and is in good standing under such laws. Maxtor has the requisite
corporate power to own and operate its properties and assets and to carry on its
business as presently conducted and as proposed to be conducted.

              b. Corporate Power. Maxtor has all requisite corporate power to
(i) enter into this Agreement, (ii) purchase the Purchased Shares hereunder and
(iii) carry out and perform its other obligations under the terms of this
Agreement. This Agreement has been duly authorized, executed and delivered by
Maxtor and constitutes a valid and binding agreement of Maxtor, enforceable
against Maxtor in accordance with the terms hereof (except as such
enforceability may be limited by applicable bankruptcy, insolvency, or other
laws affecting creditors' rights generally or by general principles of equity
and except as rights to indemnity or contribution may be limited by federal or
state securities laws and the public policy underlying such laws).

              c. No Conflict With Other Instruments or Proceedings. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement will not (i) result in the breach of
any of the terms or conditions of, or constitute a default under, Maxtor's
charter documents or any material contract that Maxtor has filed with the SEC
pursuant to Item 601 of Regulation S-K under the Securities Act; (ii) violate
any law, rule or regulation of any administrative agency or governmental body or
any order, writ, injunction or decree of any court, administrative agency or
governmental body; or (iii) give rise to any right of first refusal or similar
right to any third party with respect to any interest in Maxtor or in any of
Maxtor's assets.

         5. Conditions to Closing.

              a. Conditions to the Holder's Obligations. The Holder's obligation
to sell the Purchased Shares to Maxtor at the Closing is subject to the
fulfillment on or prior to the Closing of the following conditions, the waiver
of which shall not be effective against the Holder without the Holder's consent
thereto:

                  (i) Representations and Warranties Correct. The
representations and warranties of Maxtor in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Closing with the same
force and effect as if they had been made on and as of the Closing, subject to
the changes contemplated by this Agreement.

                  (ii) Qualifications. All authorizations, approvals or permits
of any governmental authority that are required in connection with the lawful
transfer of the Purchased Shares shall have been duly obtained and shall be
effective on and as of the Closing, or will be

                                        3
<PAGE>   4

made or obtained in a timely manner so as to comply with the requirements of
such governmental authority.

                  (iii) Legal Investment. At the time of the Closing, the
purchase and sale of the Purchased Shares hereunder shall be legally permitted
by all laws and regulations to which Maxtor and the Holder are subject.

              b. Conditions to Maxtor's Obligations. The obligation of Maxtor to
purchase the Purchased Shares from the Holder at the Closing is subject to the
fulfillment on or prior to the Closing of the following conditions, the waiver
of which shall not be effective against Maxtor without Maxtor's consent thereto:

                  (i) Representations and Warranties Correct. The
representations and warranties made by the Holder in Section 3 hereof shall be
true and correct when made, and shall be true and correct on the Closing with
the same force and effect as if they had been made on and as of the Closing,
subject to changes contemplated by this Agreement.

                  (ii) Qualifications. All authorizations, approvals or permits
of any governmental authority that are required in connection with the lawful
transfer of the Purchased Shares shall have been duly obtained and shall be
effective on and as of the Closing, or will be made or obtained in a timely
manner so as to comply with the requirements of such governmental authority.

                  (iii) No Conflict With Other Instruments or Proceedings. At
the time of the Closing and the consummation of the transactions contemplated by
this Agreement and all related agreements will not (i) result in the breach of
any of the terms or conditions of, or constitute a default under, the Holder's
charter documents or any contract, agreement, lease, commitment, indenture,
mortgage, pledge, note, bond, license or other instrument or obligation to which
the Holder is now a party or by which the Holder or any of the Holder's
properties or assets may be bound or affected; (ii) violate any law, rule or
regulation of any administrative agency or governmental body or any order, writ,
injunction or decree of any court, administrative agency or governmental body;
or (iii) give rise to any right of first refusal or similar right to any third
party with respect to any interest in the Holder or in any of the Holder's
assets.

                  (iv) Legal Investment. At the time of the Closing, the
purchase and sale of the Purchased Shares hereunder shall be legally permitted
by all laws and regulations to which Maxtor and the Holder are subject.

         6. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.

         7. Notice. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to the other party hereto at the address
hereinafter shown below his signature or at such other address as such party may
designate by ten (10) days' advance written notice to the other party hereto.

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         8. Successors and Assigns. This Agreement shall inure to the benefit of
the successors and assigns of the Holder and Maxtor.

         9. Entire Agreement; Amendments. This Agreement, together with the
Exhibits hereto, shall constitute the entire agreement of the parties with
respect to the subject matter hereof superseding all prior written or oral
agreements, and no amendment or addition hereto shall be deemed effective unless
agreed to in writing by the parties hereto.

         10. Governing Law. This Agreement, together with the Exhibits hereto,
shall be construed under the laws of the State of California (as it applies to
agreements between California residents, entered into and to be performed
entirely within California).

         11. Right to Specific Performance. The Holder agrees that Maxtor shall
be entitled to a decree of specific performance of the terms hereof or an
injunction restraining violation of this Agreement, said right to be in addition
to any other remedies available to Maxtor.

         12. Separability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Agreement.

            [The remainder of this page is intentionally left blank.]

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<PAGE>   6

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                       THE HOLDER:

                                       By:
                                          -----------------------------------
                                          Tom Thomas, Chief Financial Officer
                                          Address:  3101 North First Street
                                                    San Jose, CA  95134

                                       MAXTOR:

                                       By:
                                          -----------------------------------
                                          Glenn H. Stevens
                                          Address:  500 McCarthy Blvd.
                                                    Milpitas, CA  95035

<PAGE>   7

                                    EXHIBIT A

                   ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE

         FOR VALUE RECEIVED, Hynix Semiconductor America Inc., hereby sells,
assigns and transfers unto _____________________ (______________) shares of the
Common Stock of Maxtor Corporation, Inc., a Delaware corporation (the
"Corporation"), standing in the undersigned's name on the books of the
Corporation represented by Certificate No. ____________ herewith, and does
hereby authorize the Corporation's transfer agent to transfer the said stock on
the books of the Corporation.

         Dated:
               -------------------------

                                        Hynix Semiconductor America Inc.

                                        By:
                                            --------------------------------

                                        Name:

                                        Title:<PAGE>

                                                                   EXHIBIT 10.15

                                FIRST AMENDMENT
                                      TO
               AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment"), dated
effective as of March 30, 2001 (the "First Amendment Effective Date"), is
executed and entered into by and between THE ACR GROUP, INC., a Texas
corporation (the "Borrower"), the undersigned Guarantors and BANK OF AMERICA,
N.A., a national banking association (the "Lender"), as follows:

                                    RECITAL:

     The Borrower, joined by the Guarantors, and the Lender are parties to the
certain Amended and Restated Loan and Security Agreement dated as of May 25,
2000 (the "Agreement"), and have agreed to amend the Agreement as provided
below.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:

                                   ARTICLE 1

                                  Definitions

     Section 1.1  Definitions.  Unless otherwise defined in this Amendment,
terms defined by the Agreement, where used in this Amendment, shall have the
same meanings in this Amendment as are prescribed by the Agreement, as amended
by this Amendment.

                                   ARTICLE 2

                                  Amendments

     Section 2.1  Amendment and Addition to Definitions in Article 1 of the
Agreement.

     (a) Effective as of the First Amendment Effective Date, the following
definition hereby is added to Section 1.1 of the Agreement, and is deemed to be
inserted immediately following the existing definition of "Existing Liens":

     "Existing Real Estate Term Loan" means the loan and related obligations
evidenced by Real Estate Term Note A.

     (b) Effective as of the First Amendment Effective Date, the following
definitions in Section 1.1 of the Agreement are hereby amended and restated in
their entirety to read as follows:

     "Real Estate Term Loan B Maximum Amount" means an amount equal to $487,500.

First Amendment to Amended and Restated Loan and Security Agreement - Page 1
<PAGE>

     "Tangible Net Worth" means, as applied to any Person, the Net Worth of such
Person plus Subordinated Debt at the time in question, after deducting therefrom
the amount of all intangible items reflected therein, including the unamortized
amount of all debt discount and expense, research and development expense,
deferred charges, goodwill, Intellectual Property, excess cost of investment in
Subsidiaries over equity at dates of acquisition, and all similar items which
should properly be treated as intangibles in accordance with GAAP (provided,
that notwithstanding the foregoing there shall not be deducted the effect, if
any, of any write-down of non-cash deferred taxes).

     Section 2.2. Amendment to Section 2B.1(b). Effective on and after the First
Amendment Effective Date, the date "November 27, 2000" in Section 2B.1(b) of the
Agreement hereby is amended and restated to read "March 30, 2001."

     Section 2.3. Amendment to Section 10.1. Effective on the First Amendment
Effective Date, Section 10.1 of the Agreement hereby is amended and restated in
its entirety to read as follows:

Section 10.1 Financial Ratios.

   (a) Maximum Leverage Ratio.  Permit the Leverage Ratio of Borrower and its
       Subsidiaries on a consolidated basis, as of the last day of any of the
       following specified fiscal quarters, to be greater than the corresponding
       amount specified for such fiscal quarter:

       Fiscal Quarter Ending                   Maximum Ratio
       ---------------------                   -------------
       May 31, 2001:                           9.50 to 1.00

       August 31, 2001                         6.35 to 1.00

       November 30, 2001                       5.00 to 1.00

       February 28, 2002                       4.75 to 1.00

       the last day of each
       fiscal quarter thereafter:              4.50 to 1.0

   (b) Minimum Tangible Net Worth.  Permit the Tangible Net Worth of Borrower
       and its Subsidiaries, on a consolidated basis, as of the last day of any
       of the following specified fiscal quarters, to be less than the
       corresponding amount specified for such fiscal quarter:

       Fiscal Quarter Ending                           Minimum Amount
       ---------------------                           --------------
       February 28, 2001                                 $5,200,000

       May 31, 2001                                      $5,300,000

First Amendment to Amended and Restated Loan and Security Agreement - Page 2
<PAGE>

       November 30, 2001                     $6,200,000

       February 28, 2002                     $6,200,000

       the last day of each
       fiscal quarter thereafter             $6,200,000 plus an amount
                                             equal to fifty percent (50%) of the
                                             cumulative Adjusted Net Income of
                                             Borrower and its Subsidiaries on a
                                             consolidated basis, determined for
                                             the period beginning March 1, 2002
                                             and ending on the last day of such
                                             fiscal quarter

   (c) Free Cash Flow to Fixed Charges.  Permit the ratio of Free Cash Flow to
       Fixed Charges, determined for Borrower and its Subsidiaries on a
       consolidated basis as of the end of any fiscal quarter for the preceding
       four fiscal quarters, to be less than the ratios specified as follows:

       Fiscal Quarter Ending                     Minimum Ratio
       ---------------------                     -------------
       May 31, 2001                              0.34 to 1.0

       August 31, 2001                           0.67 to 1.0

       November 30, 2001                         1.00 to 1.0

       February 28, 2002                         1.15 to 1.0

       The last day of
       Each fiscal quarter thereafter            1.15 to 1.0

     Section 2.5  Amendment to Schedule 5.1(a).  Effective on the First
Amendment Effective Date, Schedule 5.1(a) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(a) attached to this
Amendment.

     Section 2.6  Amendment to Schedule 5.1(b).  Effective on the First
Amendment Effective Date, Schedule 5.1(b) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(b) attached to this
Amendment.

     Section 2.7  Amendment to Schedule 5.1(h).  Effective on the First
Amendment Effective Date, Schedule 5.1(h) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(h) attached to this
Amendment.

First Amendment to Amended and Restated Loan and Security Agreement - Page 3
<PAGE>

     Section 2.8  Amendment to Schedule 5.1(i).  Effective on the First
Amendment Effective Date, Schedule 5.1(i) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(i) attached to this
Amendment.

     Section 2.9  Amendment to Schedule 5.1(j).  Effective on the First
Amendment Effective Date, Schedule 5.1(j) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(j) attached to this
Amendment.

     Section 2.10 Amendment to Schedule 5.1(p).  Effective on the First
Amendment Effective Date, Schedule 5.1(p) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(p) attached to this
Amendment.

     Section 2.11 Amendment to Schedule 5.1(u).  Effective on the First
Amendment Effective Date, Schedule 5.1(u) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(u) attached to this
Amendment.

     Section 2.12 Amendment to Schedule 5.1(w).  Effective on the First
Amendment Effective Date, Schedule 5.1(w) of the Agreement hereby is amended and
restated in its entirety to read as provided by Schedule 5.1(w) attached to this
Amendment.

     Section 2.13 Amendment to Schedule 10.3.  Effective on the First Amendment
Effective Date, Schedule 10.3 of the Agreement hereby is amended and restated in
its entirety to read as provided by Schedule 10.3 attached to this Amendment.

     Section 2.14 Amendment to Loan Documents.  Effective on the First Amendment
Effective Date, all references to "Time Energy Systems Southwest, Inc."  in the
Loan Documents are hereby amended and restated to read  "CAC Distributors, Inc.
(f/k/a Time Energy Systems Southwest, Inc.)".

                                   ARTICLE 3

                     Waiver of Specified Event of Default

     Section 3.1  Waiver of Specified Event of Default.  Subject to Section
12.10 of the Loan and Security Agreement, Effective as of the First Amendment
Date the Lender waives any Event of Default which exists by reason of the
Borrower's non-compliance with the requirements of Sections 10.1(a), 10.1(b) and
10.1(c) of the Loan and Security Agreement with respect to the fiscal quarters
ending August 31, 2000, November 30, 2000, and February 28, 2001.

     Section 3.2  Limitation.  The waiver granted pursuant to Section 3.1 of
this Amendment is expressly limited as provided therein.

First Amendment to Amended and Restated Loan and Security Agreement - Page 4
<PAGE>

                                   ARTICLE 4

                                 Miscellaneous

     Section 4.1  Acknowledgment of Expiration of Facility for Real Estate Term
Loan C. Borrower acknowledges that the facility for Real Estate Term Loan C has
expired and that Lender has no commitment or obligation with respect thereto.

     Section 4.2  Conditions Precedent.  The effectiveness of this Amendment is
subject to the satisfaction of each of the following conditions precedent:

     (a) The Lender shall have received all of the following, each dated the
date of the First Amendment Effective Date, in form and substance satisfactory
to the Lender:

          (i) Amendment.  This Amendment, duly executed by each of the Borrower,
     the Guarantors, and the Lender;

          (ii) Secretary's Certificate.  Certificates of incumbency and specimen
     signatures with respect to each of the officers of (i) the Borrower
     authorized to execute and deliver this Amendment and any and all other Loan
     Documents now or hereafter to be executed on behalf of the Borrower in
     connection with this Amendment, and (ii) the Guarantors authorized to
     execute and deliver this Amendment and any and all other Loan Documents now
     or hereafter to be executed on behalf of any Guarantor in connection with
     this Amendment, in each case certified by the corporate secretary of the
     Borrower or such Guarantors, as the case may be, effective as of the First
     Amendment Effective Date;

          (iii) Authorizing Resolutions.  Copies of all action taken by the
     Borrower and the Guarantors to authorize the execution, delivery and
     performance of this Amendment,  in each case certified by the corporate
     secretary of the Borrower or each such Guarantor, as the case may be,
     effective as of the First Amendment Effective Date;

     (b) On the First Amendment Effective Date and as of the date of signing by
Borrower and Guarantors of this Amendment, after giving effect to this
Amendment, the representations and warranties contained in this Amendment, the
Agreement, as amended hereby, and all other Loan Documents shall be true and
correct as if made on such dates (except those, if any, which by their terms
specifically relate only to a different date);

     (c) All corporate proceedings taken in connection with the transactions
contemplated by this Amendment and all other agreements, documents and
instruments executed and/or delivered pursuant hereto, and all legal matters
incident thereto, shall be reasonably satisfactory to the Lender;

     (d) On the First Amendment Effective Date and as of the date of signing by
Borrower and Guarantors of this Amendment, after giving effect to this
Amendment, no Default or Event of Default shall have occurred and be continuing;
and

     (e) Borrower shall have paid to the Lender an amendment fee in the amount
of $15,000.

First Amendment to Amended and Restated Loan and Security Agreement - Page 5
<PAGE>

     Section 4.3  Representations and Warranties.

          (a) Each of the Borrower and the Guarantors has the right and power,
     and has taken all necessary action to authorize it, to execute, deliver and
     perform this Agreement and each of the other Loan Documents in accordance
     with their respective terms. This Agreement has been duly executed and
     delivered by the duly authorized officers of each of the Borrower and the
     Guarantors and is a legal, valid and binding obligation of each of the
     Borrower and the Guarantors, respectively, enforceable in accordance with
     its terms, except as may be limited by bankruptcy, insolvency and similar
     laws of general application.

          (b) On the First Amendment Effective Date and as of the date of
     signing by Borrower and Guarantors of this Amendment, after giving effect
     to this Amendment, the representations and warranties contained in this
     Amendment, the Agreement, as amended hereby, and all other Loan Documents
     are true and correct as if made on such dates (except those, if any, which
     by their terms specifically relate only to a different date).

          (c) On the First Amendment Effective Date and as of the date of
     signing by Borrower and Guarantors of this Amendment, after giving effect
     to this Amendment, no Default or Event of Default has occurred and is
     continuing.

     Section 4.4  Reaffirmation. The Loan Documents remain in full force and
effect, as amended by this Amendment.  Each of the of the Borrower and the
Guarantors represents, warrants and agrees that as of First Amendment Effective
Date and as of the date of signing by Borrower and Guarantors of this Amendment
there are no claims or offsets against or defenses or counterclaims to its
obligations under the Loan Documents and hereby waives any and all such claims,
offsets, defenses or counterclaims, whether known or unknown, arising on or
prior to such date.

     Section 4.5  Survival of Representations and Warranties.  All
representations and warranties made in this Amendment shall survive the
execution and delivery of this Amendment.

     Section 4.6  Reference to Agreement.  Each of the Loan Documents is hereby
amended so that any reference in such Loan Documents to the Agreement, whether
direct or indirect, shall mean a reference to the Agreement as amended by this
Amendment.

     Section 4.7  Severability.  Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

     Section 4.8  General.  This Amendment, when signed by Borrower, Guarantor
and each of the Lenders, (i) shall be deemed effective prospectively as of the
First Amendment Effective Date, (ii) contains the entire agreement among the
parties and may not be amended or modified except in writing signed by all
parties, (iii)SHALL BE GOVERNED AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS, (iv) may be executed in any number of counterparts, each of which
shall be valid as an original and all of which shall be one and the same
agreement and (vi) shall constitute a Loan Document.  A telecopy or other
electronic transmission of any executed counterpart shall be deemed valid as an
original.

First Amendment to Amended and Restated Loan and Security Agreement - Page 6
<PAGE>

     THIS WRITTEN AGREEMENT REPRESENTS 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 ORAL AGREEMENTS
     BETWEEN THE PARTIES.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts effective as
provided by Section 4.8 of this Amendment.

                              BORROWER:

                              ACR GROUP, INC.

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

                              LENDER:

                              BANK OF AMERICA, N.A.

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

First Amendment to Amended and Restated Loan and Security Agreement - Page 7
<PAGE>

                             CONSENT BY GUARANTORS

                     CONSENT AND AGREEMENT BY SUBSIDIARIES

     Reference is made to the forgoing First Amendment to Amended and Restated
Loan and Security Agreement (the "Agreement").  For value received, and in
consideration of benefits to the undersigned under and resulting from the
Agreement and the other Loan Documents, and without impairing any obligation of
the undersigned under any Guaranty previously executed for the benefit of the
Lender (or any of its predecessors), each of the undersigned Subsidiaries of
Borrower consents to and agrees to be bound by the Agreement.  Without limiting
the forgoing, each of the undersigned Subsidiaries hereby (i) ratifies and
confirms all security interests and liens previously granted by it to or for the
benefit of Lender and agrees that such security interests and liens shall
continue in full force and effect as security for the Secured Obligations as
provided by the Agreement and the Loan Documents and (ii) ratifies and confirms
any and all Guaranty agreements previously executed by it for the benefit of
Lender (or any predecessor of Lender) as being and continuing in full force and
effect.

     Signed by the undersigned Subsidiaries effective as of the First Amendment
Effective Date.

                              ACR SUPPLY, INC.

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

                              TOTAL SUPPLY, INC.

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

                              HEATING AND COOLING SUPPLY, INC.

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

First Amendment to Amended and Restated Loan and Security Agreement - Page 8
<PAGE>

                              VALLEY SUPPLY, INC.

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

                              ENER-TECH INDUSTRIES, INC.

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

                              FLORIDA COOLING SUPPLY, INC.

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

                              LIFETIME FILTER, INC.

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

                              WEST COAST HVAC SUPPLY, INC.

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

First Amendment to Amended and Restated Loan and Security Agreement - Page 9
<PAGE>

                              CONTRACTORS HEATING & SUPPLY, INC.

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

                              CAC DISTRIBUTORS, INC. (f/k/a Time Energy Systems
                              Southwest, Inc.)

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

First Amendment to Amended and Restated Loan and Security Agreement - Page 10
<PAGE>

                                SCHEDULE 5.1(A)

                             FOREIGN QUALIFICATIONS

Company                                            State
-------                                            -----

ACR SUPPLY, INC.                                 Louisiana

TOTAL SUPPLY, INC.                               Georgia
                                                 Alabama
                                                 Florida
                                                 N. Carolina
                                                 S. Carolina

VALLEY SUPPLY, INC.                              Tennessee
                                                 Kentucky

FLORIDA COOLING SUPPLY, INC.                     Florida

WEST COAST HVAC SUPPLY, INC.                     California

CONTRACTORS HEATING & SUPPLY, INC.               Colorado
                                                 New Mexico

SCHEDULE 5.1(a)
<PAGE>

                                SCHEDULE 5.1(b)

                            SUBSIDIARIES OF BORROWER

ACR Supply, Inc.
Total Supply, Inc.
Heating and Cooling Supply, Inc.
Valley Supply, Inc.
Ener-Tech Industries, Inc.
Florida Cooling Supply, Inc.
Lifetime Filter, Inc.
West Coast HVAC Supply, Inc.
Contractors Heating & Supply, Inc.
CAC Distributors, Inc. (f/k/a Time Energy Systems Southwest, Inc.)

SCHEDULE 5.1(b)
<PAGE>

                                SCHEDULE 5.1(h)

                          REAL ESTATE OWNED AND LEASED

A.  List of owned real estate:

1.  806 East Harris
    Pasadena, TX  77506
    occupied by ACR Supply, Inc.

2.  1005 Katyland Drive
    Katy, TX  77493
    occupied by Lifetime Filter, Inc.

3.  5401 NW 13th Street
    Suite B
    Gainesville, FL 32653
    occupied by Florida Cooling Supply, Inc.

B.  List of leased real estate:

1.  All leased properties listed on Schedule 5.1(v)

2.  3200 Wilcrest Dr.
    Suite 440
    Houston, TX  77042
    occupied by ACR Group,Inc.
    Lessor: Transwestern Westchase III, L.P.

3.  2101 W. 42nd Street
    Winter Haven, FL
    Lessor: Wesley S. and Margaret K. Lawson
    Lessee: Florida Cooling Supply, Inc.

C.  List of leased personal property that is valued in excess of $100,000:

1.  AS/400-e computer system and operating software
    Property located at 8798 Westpark, Houston, TX  77042
    Original cost - $190,160
    Lessor: Matrix Funding Corporation

SCHEDULE 5.1(h) - Page 1
<PAGE>

2.   Sheet metal elbow machine
     Property located at 3130 N. El Paso, Colorado Springs, CO  80907
     Original cost - $100,900
     Lessor: Matrix Funding Corporation

D.  Subleased properties:

1.   2101 W. 42nd Street Winter Haven, FL
     Lessee: Florida Cooling Supply, Inc.
     Sub-lessee: Advanced A/C & Refrigeration, Inc.

2.   9516 Neils Thompson Dr, Suites 112, 114 and 116
     Austin, TX
     Lessee:ACR Supply, Inc.
     Sub-lessee: Swiff-Train Company

SCHEDULE 5.1(h) - Page 2
<PAGE>

                                SCHEDULE 5.1(i)

                                LIENS EXCEPTIONS

1. Liens securing promissory notes:

<TABLE>
<CAPTION>
                                                                                          Original
                                                                                         Principal                Principal
Maker                                   Payee                   Date                       Amount                  Balance
---------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                              <C>                      <C>                      <C>
ACR Supply, Inc.              The Catalyst Fund, Ltd.            5/26/1993               $  800,000                $ 87,247

Total Supply, Inc.            The Catalyst Fund, Ltd.            5/26/1993               $  100,000                $ 10,906

Heating and Cooling           The Catalyst Fund, Ltd.            5/26/1993               $  100,000                $ 10,906
 Supply, Inc.

West Coast HVAC               The Catalyst Fund, Ltd.            4/14/1997               $  450,000                $112,500
 Supply, Inc.

ACR Group, Inc.               The Catalyst Fund, Ltd.            1/28/1998               $  440,000                $210,853

ACR Group, Inc.               Southwest/Catalyst                 1/28/1998               $1,100,000                $479,167
                               Capital, Ltd.
</TABLE>

2.   Lien securing purchases by ACR Supply, Inc. from International Comfort
     Supply, Inc., subject to Subordination Agreement between ACR Supply, Inc.,
     Inter-City Products Corporation (USA), NationsBank of Texas, N.A., and The
     Catalyst Fund, Ltd., dated March 8, 1994.

3.   Liens granted to GMC Sales Corp. by Valley Supply, Inc., Total Supply, Inc.
     (f/k/a Fabricated Systems, Inc.) and Heating and Cooling Supply, Inc.,
     subject to Subordination Agreements between GMC Sales Corp. and NationsBank
     of Texas, N.A. dated March 8, 1994.

4.   Lien granted to Armstrong Air Conditioning, Inc. by West Coast HVAC Supply,
     Inc. d/b/a ACH Supply, granting security interest in inventory purchased
     from Armstrong by ACH Supply.

5.   Liens securing purchase money loans by West Coast HVAC Supply, Inc., d/b/a
     ACH Supply, and CAC Distributors, Inc. from Transamerica Commercial Finance
     Corporation to finance purchase of Inventory consisting of Nordyne
     products, as evidenced by the certain Security Agreement dated _____, 2000
     between West Coast HVAC Supply, Inc. d/b/a ACH Supply,CAC Distributors,
     Inc. (f/k/a Time Energy Systems Southwest, Inc.) and Transamerica
     Commercial Finance Corporation.

6.   Lien granted to GHP, Ltd., a Florida limited partnership, by Florida
     Cooling Supply, Inc., granting security interests in real property and
     improvements purchased from GHP, Ltd.

SCHEDULE 5.1(i) - Page 1
<PAGE>

7.  Liens securing purchase money loans by Florida Cooling Supply, Inc. and
Heating and Cooling Supply, Inc. from Deutsche Financial Services Corporation to
finance purchase of Inventory consisting of International Comfort Products
Corporation (USA) products, as evidenced by the certain Agreement for Wholesale
Financing dated March 30, 2001 between Florida Cooling Supply, Inc., Heating and
Cooling Supply, Inc. and Deutsche Financial Services Corporation.

SCHEDULE 5.1(i) - Page 2
<PAGE>

                                SCHEDULE 5.1(j)

                        INDEBTEDNESS FOR MONEY BORROWED

                           * AS OF FEBRUARY 28, 2001

<TABLE>
<CAPTION>
                                                        DESCRIPTION          CURRENT    LONG-TERM       TOTAL
                                                        -----------          -------    ---------       -----
<S>                                              <C>                         <C>       <C>           <C>
ACR GROUP, INC.
  Bank of America                                revolving line of credit          0   23,328,902    23,328,902
  Bank of America                                mortgage                     28,800      237,419       266,219
  Bank of America                                term loan facility           94,596       63,064       157,660
  SW/Catalyst Capital Partners                   note (subordinated)         250,000      229,167       479,167
  SW/Catalyst Capital Partners                   warrant valuation (GAAP)          0      (20,000)      (20,000)
  The Catalyst Fund, Ltd.                        note (subordinated)         110,000      100,833       210,833
  Toyota Motor Credit                            note - automobiles (2)       24,986       50,843        75,829
                                                                             -------   ----------    ----------
                                                                             508,382   23,990,228    24,498,610
                                                                             -------   ----------    ----------
ACR SUPPLY, INC.
  Mike Kothawala                                 note (subordinated)         136,713            0       136,713
  The Catalyst Fund, Ltd.                        note (subordinated)               0       87,247        87,247
  Toyota Motor Credit                            lease - forklifts (6)        23,546       31,349        54,895
  Lease Plan USA                                 lease - trucks (2)            1,190            0         1,190
  Enterprise Leasing                             lease - trucks (2)            1,040            0         1,040
                                                                             -------   ----------    ----------
                                                                             162,489      118,596       281,085
                                                                             -------   ----------    ----------
TOTAL SUPPLY, INC.
  Toyota Motor Credit                            lease - forklifts (5)        16,583       59,692        76,275
  Enterprise Leasing                             lease - trucks (3)            1,928            0         1,928
  The Catalyst Fund, Ltd.                        note (subordinated)               0       10,906        10,906
                                                                             -------   ----------    ----------
                                                                              18,511       70,598        89,109
                                                                             -------   ----------    ----------
HEATING & COOLING SUPPLY, INC.
  Zion Credit Corporation                        lease - furniture/equip.     13,658       21,608        35,266
  The Catalyst Fund, Ltd.                        note (subordinated)               0       10,906        10,906
  Yale Financial Services                        lease - forklift              4,253        1,106         5,359
                                                                             -------   ----------    ----------
                                                                              17,911       33,620        51,531
                                                                             -------   ----------    ----------
VALLEY SUPPLY, INC.
  Toyota Motor Credit                            lease - forklifts (3)         5,664       11,031        16,695
                                                                             -------   ----------    ----------
ENER-TECH INDUSTRIES, INC.
  Advanta Leasing                                lease - phone system          3,629          667         4,296
                                                                             -------   ----------    ----------
FLORIDA COOLING SUPPLY, INC.
  George KPH Partnership                         seller mortgage              17,754      797,544       815,298
  Toyota Motor Credit                            lease - forklifts (4)        16,716       55,636        72,352
                                                                             -------   ----------    ----------
                                                                              34,470      853,180       887,650
                                                                             -------   ----------    ----------
WEST COAST HVAC SUPPLY, INC.
  The Catalyst Fund, Ltd.                        note (subordinated)               0      112,500       112,500
                                                                             -------   ----------    ----------
CONTRACTORS HEATING & SUPPLY, INC.
  Frank Cabral                                   note (subordinated)          50,667       76,000       126,667
  Matrix Funding                                 lease - machinery            26,219       25,505        51,724
  GMAC                                           lease - truck                 2,809        1,522         4,331
  Yale Financial Services                        lease - forklift              5,976       16,145        22,121
  Toyota Motor Credit                            lease - forklifts (3)        11,925       36,536        48,461
                                                                             -------   ----------    ----------
                                                                              97,596      155,708       253,304
                                                                             -------   ----------    ----------
TOTAL INDEBTEDNESS AS OF FEBRUARY 28, 2001                                   848,652   25,346,128    26,194,780
                                                                             =======   ==========    ==========
Loans and notes, not subordinated                                            166,136   24,477,772    24,643,908
Loans and notes, subordinated                                                547,380      607,559     1,154,939
Capital leases                                                               135,136      260,797       395,933
                                                                             -------   ----------    ----------
                                                                             848,652   25,346,128    26,194,780
                                                                             -------   ----------    ----------
</TABLE>

SCHEDULE 5.1(j)
<PAGE>

                                SCHEDULE 5.1(p)

                                 ERISA MATTERS

1.  BENEFIT PLANS

ACR Group, Inc. Retirement Plan with Hartford Life Insurance Company.

     401(k) plan with employer matching contributions and discretionary employer
     additional contributions, for employees of all ACR Group, Inc. companies.

Contractors Heating and Supply, Inc. Retirement Plan with Principal Financial
Group

     401(k) plan for employer and employee contributions prior to the effective
     date of the acquisition by ACR Group, Inc.

AH & L Group Plan #760546

     Group health and dental insurance for employees of ACR Group, Inc. and
     certain of its subsidiaries.  The plan is self-funded up to specified
     individual and aggregate limits and administered by AH & L Insurance.

Guarantee Life Insurance Company Group Policy No. GL 01-0004157

     Group term life and short-term disability insurance policy covering
     employees of ACR Group, Inc. and all subsidiaries except Contractors
     Heating & Supply, Inc.

Guarantee Life Insurance Company Group Policy No. GL 01-0004158

     Group term long-term disability insurance policy covering employees of ACR
     Group, Inc. and all subsidiaries except Contractors Heating & Supply, Inc.

Schedule 5.1(p) - Page 1
<PAGE>

UNUM Life Insurance Company of America Policy No. 027371

     Group long-term care insurance covering certain groups of employees of at
     all ACR Group, Inc. companies.

America United Life Insurance Company Policy No. GL00602129

     Group voluntary term life insurance with accelerated life benefit available
     to all employees of ACR Group, Inc. companies.

Continental Casualty Co. Policy No. SR-83072577

     Group voluntary accidental death and dismemberment insurance available to
     all employees of all ACR Group, Inc. companies except Contractors Heating &
     Supply, Inc.

United Health Care Policy No. J8875 and 1J8876

     Group health care insurance for employees of Contractors Heating & Supply,
     Inc. The plan is a fully insured preferred provider organization.

United Dental Care Policy No. 1962 and 92975

     Group dental care insurance for employees of Contractors Heating & Supply,
     Inc.

The Guardian  - Policy No. 00313383

     Group long-term disability for employees of Contractors Heating & Supply,
     Inc.

John Alden Life Insurance Company Policy No. 9747120001

     Group health insurance policy for employees at the El Paso, TX branch of
     Contractors Heating & Supply, Inc.

Schedule 5.1(p) - Page 2
<PAGE>

Nevada Care Policy No. 131093

    Group health care insurance for employees of Heating and Cooling Supply,
    Inc.

Ameritas Life Insurance Company Policy No. BL329841-1

    Group dental and vision care insurance for employees of Heating and Cooling
    Supply, Inc.

Schedule 5.1(p) - Page 3
<PAGE>

                                SCHEDULE 5.1(u)

             CHIEF EXECUTIVE OFFICE; LOCATION OF BOOKS AND RECORDS

ACR Group, Inc.                             Time Energy Systems Southwest, Inc.
3200 Wilcrest Dr., Suite 440                3200 Wilcrest Dr., Suite 440
Houston, TX 77042                           Houston, TX 77042

ACR Supply, Inc.
8798 Westpark Dr.
Houston, TX 77063

Total Supply, Inc.
5158 Kennedy Rd., Suite F
Forest Park, GA  30297

Heating and Cooling Supply, Inc.            Prior to 1998:
3955 West Sunset Rd.                        3600 West Oquendo
Las Vegas, NV 89118                         Las Vegas, NV 89118

Valley Supply, Inc.                         Prior to 1998:
5158 Kennedy Rd., Suite F                   1957 Vanderhorn
Forest Park, GA 30297                       Memphis, TN 38134

Ener-Tech Industries, Inc.                  Prior to 2000:
722 Massman Drive                           4304 Charlotte Avenue
Nashville, TN 37210                         Nashville, TN 37209

Florida Cooling Supply, Inc.                Prior to 1999:
2040 Range Road                             2041 Range Road
Clearwater, FL 33765                        Clearwater, FL 33765

Lifetime Filter, Inc.
1005 Katyland Dr.
Katy, TX  77493

West Coast HVAC Supply, Inc.                Prior to 1998:
5403 Ayon Avenue                            577 E. Edna Place
Irwindale, CA 91706                         Covina, CA 91723

SCHEDULE 5.1(u) - Page 1
<PAGE>

Contractors Heating & Supply, Inc.
70 Santa Fe Dr.
Denver, CO  80223

CAC Distributors, Inc.
747 Kenrick, Suite 124
Houston, TX 77060

SCHEDULE 5.1(u) - Page 2
<PAGE>

                                SCHEDULE 5.1(w)

                           FICTITIOUS, ASSUMED NAMES

Total Supply - used in Tennessee as a trade name for Valley Supply, Inc.

ACH Supply - used in California as a trade name for West Coast HVAC Supply, Inc.

Central Air-Conditioning Distributors - used in Texas as trade name for CAC
Distributors, Inc.

SCHEDULE 5.1(w)
<PAGE>

<TABLE>
<CAPTION>
Payee                                                                Subsidiaries
-----------------------------------------------------------------------------------------------------------
<S>                                                        <C>
Alco Controls, Division of Emerson Electric Co.            Florida Cooling Supply

American Distributors of Texas, Inc.                       ACR Supply

CertainTeed Corporation                                    ACR Supply, Total Supply, Heating
                                                           and Cooling Supply

Deutsche Financial Services Corporation                    Heating and Cooling Supply,
                                                           Florida
                                                           Cooling Supply

Enterprise Fleet Services                                  ACR Supply

Evcon Industries, Inc.                                     ACR Supply

GMC Sales Corp.                                            Total Supply, Heating and Cooling
                                                           Supply, Valley Supply

Goodman Manufacturing Company, L.P.                        Total Supply, Heating and Cooling
                                                           Supply

International Comfort Products, Inc.                       ACR Supply, Heating and Cooling
                                                           Supply, Florida Cooling Supply

Knauf FiberGlass GmbH                                      Florida Cooling Supply

Mueller Industries, Inc.                                   Valley Supply

Phoenix Manufacturing, Inc.                                Heating and Cooling Supply

TransAmerica Distribution Finance                          ACH Supply, CAC Distributors, Inc.
                                                           (f/k/a Times Energy Systems Southwest, Inc.)
</TABLE>

SCHEDULE 10.3 - Page 1
<PAGE>

Guaranties executed by ACR Group, Inc. to suppliers on behalf of subsidiaries:

ACR Group, Inc. in the ordinary course of business has guaranteed lease
obligations of certain of its subsidiaries with respect to facilities occupied
by branch operations.

SCHEDULE 10.3 - Page 2

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