<PAGE>

BANK OF AMERICA
BANK OF AMERICA BUSINESS CREDIT

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



                           LOAN AND SECURITY AGREEMENT

                                      among

                               COMPUSA STORES L.P.

              THE OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO



                                NATIONSBANK, N.A.
                                       as
                              ADMINISTRATIVE AGENT
                                  and a Lender

                                       and

                         CONGRESS FINANCIAL CORPORATION
                                       as
                               DOCUMENTATION AGENT

                                       and

                            THE CHASE MANHATTAN BANK
                                       and
                          FOOTHILL CAPITAL CORPORATION
                                  AS CO-AGENTS

                                       and

            THE OTHER LENDERS, IF ANY, FROM TIME TO TIME PARTY HERETO


                            Dated as of June 30, 1999



                                NATIONSBANK, N.A.
                       LEAD ARRANGER AND SOLE BOOK RUNNER

<PAGE>

                                             TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>         <C>                                                                                <C>
ARTICLE 1 - DEFINITIONS..........................................................................1
            Section 1.1    DEFINITIONS...........................................................1
            Section 1.2    GENERAL..............................................................43
            Section 1.3    EXHIBITS AND SCHEDULES...............................................44

ARTICLE 2 - REVOLVING CREDIT FACILITY...........................................................44
            Section 2.1    REVOLVING CREDIT LOANS...............................................44
            Section 2.2    MANNER OF BORROWING REVOLVING CREDIT LOANS...........................44
            Section 2.3    REPAYMENT OF REVOLVING CREDIT LOANS..................................46
            Section 2.4    REVOLVING CREDIT NOTE................................................46
            Section 2.5    BORROWING BASE.......................................................46
            Section 2.6    EXTENSION OF REVOLVING CREDIT FACILITY...............................47

ARTICLE 3 - LETTER OF CREDIT FACILITY...........................................................47
            Section 3.1    AGREEMENT TO ISSUE...................................................47
            Section 3.2    AMOUNTS..............................................................47
            Section 3.3    CONDITIONS...........................................................47
            Section 3.4    ISSUANCE OF LETTERS OF CREDIT........................................48
            Section 3.5    DUTIES OF L/C ISSUER.................................................49
            Section 3.6    PAYMENT OF REIMBURSEMENT OBLIGATIONS.................................49
            Section 3.7    PARTICIPATIONS.......................................................50
            Section 3.8    INDEMNIFICATION, EXONERATION.........................................51
            Section 3.9    L/C CASH COLLATERAL ACCOUNT..........................................53
            Section 3.10   SUPPORTING LETTER OF CREDIT..........................................55
            Section 3.11   EXISTING LETTERS OF CREDIT...........................................55

ARTICLE 4 - RESERVED............................................................................55

ARTICLE 5 - GENERAL LOAN PROVISIONS.............................................................55
            Section 5.1    PROCEDURE FOR BORROWING AND DISBURSEMENT OF LOANS....................55
            Section 5.2    INTEREST.............................................................56
            Section 5.3    INTEREST RATE OPTION.................................................57
            Section 5.4    CERTAIN FEES.........................................................58
            Section 5.5    MANNER OF PAYMENT....................................................59
            Section 5.6    GENERAL..............................................................59
            Section 5.7    LOAN ACCOUNTS; STATEMENTS OF ACCOUNT.................................59
            Section 5.8    TERMINATION OF AGREEMENT.............................................60
            Section 5.9    MAKING OF LOANS......................................................60
            Section 5.10   SETTLEMENT AMONG LENDERS.............................................62
            Section 5.11   MANDATORY PREPAYMENTS................................................65
            Section 5.12   PREPAYMENT AND TERMINATION...........................................65


                                                 i

<PAGE>

ARTICLE 6 - CHANGE OF CIRCUMSTANCES.............................................................66
             Section 6.1   INCREASED COST AND REDUCED RETURN....................................66
             Section 6.2   LIMITATION ON TYPES OF LOANS.........................................67
             Section 6.3   ILLEGALITY...........................................................68
             Section 6.4   TREATMENT OF AFFECTED LOANS..........................................68
             Section 6.5   COMPENSATION.........................................................69
             Section 6.6   TAXES................................................................69

ARTICLE 7 - CONDITIONS PRECEDENT................................................................71
            Section 7.1    CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT..................71
            Section 7.2    ALL LOANS; ISSUANCE OF LETTERS OF CREDIT.............................75

ARTICLE 8 - REPRESENTATIONS AND WARRANTIES......................................................76
            Section 8.1    REPRESENTATIONS AND WARRANTIES.......................................76
            Section 8.2    SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC......................87

ARTICLE 9 - SECURITY............................................................................88
            Section 9.1    SECURITY INTEREST....................................................88
            Section 9.2    PERFECTION AND CONTINUED PRIORITY OF SECURITY INTEREST...............89
            Section 9.3    GUARANTIES; LOAN PARTY JOINDER.......................................90
            Section 9.4    LIMITATION IN RESPECT OF CERTAIN LOAN PARTIES........................90

ARTICLE 10 - COLLATERAL COVENANTS...............................................................91
            Section 10.1   COLLECTION OF RECEIVABLES............................................91
            Section 10.2   VERIFICATION AND NOTIFICATION........................................92
            Section 10.3   DISPUTES, RETURNS AND ADJUSTMENTS....................................92
            Section 10.4   INVOICES.............................................................92
            Section 10.5   DELIVERY OF INSTRUMENTS..............................................93
            Section 10.6   SALES OF INVENTORY...................................................93
            Section 10.7   OWNERSHIP AND DEFENSE OF TITLE.......................................93
            Section 10.8   INSURANCE............................................................93
            Section 10.9   LOCATION OF OFFICES AND COLLATERAL...................................94
            Section 10.10  RECORDS RELATING TO COLLATERAL.......................................94
            Section 10.11  INSPECTION; APPRAISALS...............................................95
            Section 10.12  INFORMATION AND REPORTS..............................................96
            Section 10.13  POWER OF ATTORNEY....................................................97
            Section 10.14  ADDITIONAL REAL ESTATE AND LEASES....................................98
            Section 10.15  ASSIGNMENT OF CLAIMS ACT.............................................98
            Section 10.16  VOTING RIGHTS, DISTRIBUTIONS, ETC., IN RESPECT OF
            INVESTMENT PROPERTY.................................................................98

ARTICLE 11 - AFFIRMATIVE COVENANTS..............................................................99
             Section 11.1   PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.......................99
             Section 11.2   COMPLIANCE WITH APPLICABLE LAW.....................................100


                                                ii
<PAGE>

            Section 11.3   MAINTENANCE OF PROPERTY.............................................100
            Section 11.4   CONDUCT OF BUSINESS.................................................100
            Section 11.5   INSURANCE...........................................................100
            Section 11.6   PAYMENT OF TAXES AND CLAIMS.........................................100
            Section 11.7   ACCOUNTING METHODS AND FINANCIAL RECORDS............................101
            Section 11.8   USE OF PROCEEDS.....................................................101
            Section 11.9   HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL REQUIREMENTS..........101

ARTICLE 12 - INFORMATION.......................................................................102
            Section 12.1   FINANCIAL STATEMENTS................................................102
            Section 12.2   RESERVED............................................................103
            Section 12.3   OFFICER'S CERTIFICATE...............................................103
            Section 12.4   COPIES OF OTHER REPORTS.............................................104
            Section 12.5   NOTICE OF LITIGATION AND OTHER MATTERS..............................104
            Section 12.6   ERISA...............................................................105
            Section 12.7   ACCURACY OF INFORMATION.............................................106
            Section 12.8   REVISIONS OR UPDATES TO SCHEDULES...................................106
            Section 12.9   YEAR 2000 COMPLIANCE................................................106
            Section 12.10  ANNUAL PROJECTIONS..................................................106

ARTICLE 13 - NEGATIVE COVENANTS................................................................106
            Section 13.1   FIXED CHARGE COVERAGE RATIO.  ......................................107
            Section 13.2   INDEBTEDNESS........................................................107
            Section 13.3   GUARANTIES..........................................................108
            Section 13.4   INVESTMENTS.........................................................108
            Section 13.5   RESTRICTED DIVIDEND PAYMENTS, RESTRICTED PAYMENTS AND RESTRICTED
            PURCHASES..........................................................................108
            Section 13.6   LIQUIDATION, DISPOSITION OR ACQUISITION OF ASSETS, MERGER, NEW
            SUBSIDIARIES.......................................................................108
            Section 13.7   TRANSACTIONS WITH AFFILIATES........................................110
            Section 13.8   LIENS...............................................................110
            Section 13.9   CAPITAL EXPENDITURES.  .............................................110
            Section 13.10  PLANS...............................................................110
            Section 13.11  SALES AND LEASEBACKS................................................111

ARTICLE 14 - DEFAULT...........................................................................112
            Section 14.1   EVENTS OF DEFAULT...................................................112
            Section 14.2   REMEDIES............................................................115
            Section 14.3   APPLICATION OF PROCEEDS.............................................118
            Section 14.4   POWER OF ATTORNEY...................................................118
            Section 14.5   MISCELLANEOUS PROVISIONS CONCERNING REMEDIES........................119
            Section 14.6   REGISTRATION RIGHTS; PRIVATE SALES; ETC.............................120

ARTICLE 15 - ASSIGNMENTS.......................................................................122


                                               iii
<PAGE>

            Section 15.1   ASSIGNMENTS AND PARTICIPATIONS......................................122
            Section 15.2   REPRESENTATION OF LENDERS...........................................123

ARTICLE 16 - AGREEMENTS AMONG CREDIT PARTIES...................................................124
            Section 16.1   APPOINTMENT, POWERS, AND IMMUNITIES.................................124
            Section 16.2   RELIANCE BY AGENT...................................................125
            Section 16.3   DEFAULTS............................................................125
            Section 16.4   RIGHTS AS LENDER....................................................125
            Section 16.5   LIMITATION OF LIABILITY; INDEMNIFICATION............................126
            Section 16.7   LENDER CREDIT DECISION; NON-RELIANCE ON AGENT AND OTHER LENDERS.....127
            Section 16.8   RESIGNATION OF AGENT................................................127

ARTICLE 17 - MISCELLANEOUS.....................................................................128
            Section 17.1   NOTICES.............................................................128
            Section 17.2   EXPENSES............................................................128
            Section 17.3   STAMP AND OTHER TAXES...............................................130
            Section 17.4   RIGHT OF SET-OFF; ADJUSTMENTS.......................................130
            Section 17.5   LITIGATION; WAIVER OF TRIAL BY JURY.................................131
            Section 17.6   CONSENT TO ADVERTISING AND PUBLICITY................................131
            Section 17.7   REVERSAL OF PAYMENTS................................................132
            Section 17.8   INJUNCTIVE RELIEF...................................................132
            Section 17.9   ACCOUNTING MATTERS..................................................132
            Section 17.10  AMENDMENTS; WAIVERS.................................................132
            Section 17.11  ASSIGNMENT..........................................................134
            Section 17.12  PERFORMANCE OF DUTIES...............................................134
            Section 17.13  INDEMNIFICATION.....................................................134
            Section 17.14  ALL POWERS COUPLED WITH INTEREST....................................135
            Section 17.15  SURVIVAL............................................................135
            Section 17.16  TITLES AND CAPTIONS.................................................136
            Section 17.17  SEVERABILITY OF PROVISIONS..........................................136
            Section 17.18  GOVERNING LAW.......................................................136
            Section 17.19  COUNTERPARTS........................................................136
            Section 17.20  REPRODUCTION OF DOCUMENTS...........................................136
            Section 17.21  TERM OF AGREEMENT...................................................137
            Section 17.22  PRO-RATA PARTICIPATION..............................................137
            Section 17.23  INTEREST LIMITATION.................................................138
            Section 17.24  MUTUAL BENEFIT......................................................138
            Section 17.25  EXPRESS WAIVERS BY LOAN PARTIES IN RESPECT OF CROSS GUARANTIES AND
            CROSS COLLATERALIZATION............................................................139
            Section 17.26  DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING.................140
            Section 17.27  EXCEPTION TO COVENANTS..............................................141
            Section 17.28  JUDGMENT CURRENCY...................................................141
            Section 17.29  REPLACEMENT/RESTATEMENT OF EXISTING CREDIT AGREEMENT................141
</TABLE>

                                                iv
<PAGE>

                                    EXHIBITS

EXHIBIT "A"            Form of Revolving Credit Note
-----------
EXHIBIT "B"             Reserved
-----------
EXHIBIT "C"            Form of Borrowing Base Certificate
-----------
EXHIBIT "D"            Form of Assignment and Acceptance
-----------
EXHIBIT "E"            Form of Notice of Borrowing, Conversion or Continuation
-----------
EXHIBIT "F"            Form of Compliance Certificate
-----------
EXHIBIT "G"            Form of Joinder Agreement
-----------


                                    SCHEDULES

Schedule 1.1A          Existing Letters of Credit
Schedule 1.1B          Parent's Investment Policy
Schedule 1.1C          Permitted Investments
Schedule 1.1D          Permitted Liens
Schedule 8.1(a)        Organization, Qualifications
Schedule 8.1(d)        Subsidiaries; Ownership of Stock
Schedule 8.1(f)        No Conflicts
Schedule 8.1(h)        Governmental Approvals; Applicable Law
Schedule 8.1(i)        Title to Properties
Schedule 8.1(k)        Indebtedness for Money Borrowed and Guaranties
Schedule 8.1(l)        Litigation
Schedule 8.1(m)        Tax Returns and Payments
Schedule 8.1(o)        Material Liabilities
Schedule 8.1(q)        ERISA
Schedule 8.1(u)        FIT No.; Location of Chief Executive Office; Records
Schedule 8.1(v)        Location of Inventory
Schedule 8.1(y)        Corporate Name
Schedule 8.1(bb)       Employee Relations
Schedule 8.1(cc)       Proprietary Rights
Schedule 8.1(dd)       Trade Names
Schedule 8.1(gg)       Existing Store Locations
Schedule 8.1(hh)       Deposit Accounts and Merchant Account Agreements
Schedule 9.2           Purchase Money Liens


<PAGE>

                           LOAN AND SECURITY AGREEMENT


         THIS LOAN AND SECURITY AGREEMENT ("AGREEMENT"), dated as of June 30,
1999 is executed and entered into by and among COMPUSA STORES L.P., a Texas
limited partnership ("BORROWER"), COMPUSA INC., a Delaware corporation
("PARENT") and each of the other Loan Parties (as defined hereinbelow) from
time to time party hereto (Borrower, Parent and each such other Loan Party,
individually a "LOAN PARTY" and collectively the "LOAN PARTIES"), each of the
lending institutions which is a party hereto or any permitted successor or
assignee thereof permitted pursuant to SECTION 15.1 (individually, a "LENDER"
and collectively, the "LENDERS"), the L/C Issuer (as such term is defined
herein) and NATIONSBANK, N.A., a national banking association, as
administrative agent for itself and the other Lenders (in such capacity,
together with its successors and assigns in such capacity, "AGENT").

                                    RECITALS:

         A.       Borrower has requested that the Lenders extend a credit
facility to Borrower for revolving loans and letters of credit.

         B.       The Lenders have agreed to provide such loan facilities
upon and subject to the terms and conditions set forth in this Agreement and
the other Loan Documents (as defined 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. As used in this Agreement, the following
terms have the following meanings:

         "ACCOUNTS" means, with respect to a Person, all of such Person's now
owned and hereafter acquired rights to payment for goods sold or leased or
for services rendered which is not evidenced by an instrument or chattel
paper, whether or not it has been earned by performance, and any other
property or interest in property that is classified as an account pursuant to
the UCC.

         "ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.

         "ACQUIRE" or "ACQUISITION", as to a Loan Party or Restricted
Subsidiary, means any transaction pursuant to which such Loan Party or
Restricted Subsidiary, (a) whether by means of a capital contribution or
purchase or other acquisition of Capital Stock, (i) acquires (or after giving
effect to such transaction owns) more than 50% of the Capital Stock in any
other Person pursuant to a solicitation by such Loan Party or Restricted
Subsidiary of tenders of equity securities of such

LOAN AND SECURITY AGREEMENT - Page 1
<PAGE>

Person, or through one or more negotiated block, market, private or other
transactions (other than formation and capitalization of a new Wholly-Owned
Subsidiary of such Loan Party or Restricted Subsidiary), or a combination of
any of the foregoing, or (ii) makes any Person a Subsidiary of such Loan
Party or Restricted Subsidiary, or causes any Person, other than a Loan Party
or Restricted Subsidiary, to be merged into such Loan Party or Restricted
Subsidiary (or agrees to be merged into any other Person other than a Loan
Party), or (b) purchases in one transaction or a series of related
transactions all or any part of the business or assets of any Person.

         "ACQUISITION CONSIDERATION" means the consideration given by a Loan
Party for an Acquisition, including but not limited to the sum of (without
duplication) (a) the fair market value of any cash, property (including
capital stock or other equity securities or interests) or services given,
PLUS (b) consideration paid with proceeds of Indebtedness permitted pursuant
to this Agreement, PLUS (c) the amount of any Indebtedness and Operating
Leases (calculated to be the product of annual rentals multiplied by six)
assumed, incurred or guaranteed in connection with such Acquisition by a
Person that is a Loan Party prior to such Acquisition.

         "ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by Agent to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar Loan for
such Interest Period by (b) one (1) minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.

         "AFFECTED LOANS" has the meaning set forth in SECTION 6.4 of this
Agreement

         "AFFECTED TYPE" has the meaning set forth in SECTION 6.4 of this
Agreement.

         "AFFILIATE" means, with respect to any Person, (a) any shareholder
or partner (if record or beneficial owner of more than twenty percent (20.0%)
of the outstanding Capital Stock of such Person), officer, director, employee
or managing agent of such Person, (b) any Subsidiary of such Person, (c) any
other Person (other than a Subsidiary) that, (i) directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person, (ii) directly or indirectly beneficially
owns or holds twenty percent (20.0%) or more of any class of Voting Stock of
such Person or any Subsidiary of such Person, or (iii) twenty percent (20.0%)
or more of the Voting Stock of which is directly or indirectly beneficially
owned or held by such Person or a Subsidiary of such Person and (d) without
limiting the foregoing, with respect to a Loan Party also includes each other
Loan Party. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person, whether through ownership of Voting Stock, by contract or
otherwise.

         "AGENCY ACCOUNT" means an account of Parent for itself and the other
Loan Parties maintained by it with a Clearing Bank pursuant to an Agency
Account Agreement.

         "AGENCY ACCOUNT AGREEMENT" means any agreement (required pursuant to
SECTION 10.1) among the Loan Parties, Agent and a Clearing Bank, in form and
substance satisfactory to Agent,

LOAN AND SECURITY AGREEMENT - Page 2
<PAGE>

which designates an Agency Account for the deposit of checks and items
constituting proceeds of Receivables or any other Collateral, and establishes
the terms for transferring balances therein to Agent.

         "AGENT" means NationsBank in its capacity as administrative agent
for the Credit Parties as provided by this Agreement, or any successor in
such capacity.

         "AGREEMENT" means and includes this Agreement and all exhibits,
schedules, addenda and other attachments hereto, and any renewal, extension,
amendment, modification, restatement or supplement hereof.

         "AGREEMENT DATE" means the date as of which this Agreement is dated
in the preamble.

         "APPLICABLE LAW" means, with respect to any Person, all provisions
of constitutions, statutes, rules, regulations and orders of any Governmental
Authority applicable to such Person or its property, including, without
limitation, all orders and decrees of all courts and arbitrators in
proceedings or actions to which such Person is a party. In respect of
contracts relating to interest or finance charges that are made or performed
in the State of Texas, "Applicable Law" shall mean the laws of the U.S.,
including without limitation 12 USC Sections 85 and 86(a), as amended from
time to time, and any other statute of the U.S. now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit,
and the laws of the State of Texas, including, without limitation, Art. 1H,
if applicable, and if Art. 1H is not applicable, Art. 1D, and any other
statute of the State of Texas now or at any time hereafter prescribing
maximum rates of interest on loans and extensions of credit; provided that
the parties hereto agree pursuant to Texas Finance Code Section 346.004 that
the provisions of Chapter 346 of the Texas Finance Code shall not apply to
Loans, this Agreement, the Notes or any other Loan Documents. As used herein,
"ART. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of Texas,
as amended, and "ART. 1H" means Article 5069-1H, Title 79, Revised Civil
Statutes of Texas, as amended.

         "APPLICABLE LENDING OFFICE" means, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or of an Affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or an Affiliate of such Lender) as such
Lender may from time to time specify to Agent and Borrower by written notice
in accordance with the terms hereof as the office by which its Loans of such
Type are to be made and maintained.

         "APPLICABLE MARGIN" means, as of the Agreement Date, two percent
(2.00%) with respect to Eurodollar Loans and zero percent (0%) with respect
to Base Rate Loans, subject to adjustment in the case of Eurodollar Loans
from time to time thereafter to the percentage specified corresponding to the
Leverage Ratio as set forth below, respectively:

<TABLE>
<CAPTION>

======================================================================
           Leverage Ratio                           Eurodollar Loans
======================================================================
<S>                                                 <C>
Greater than 4.0 to 1.0                                   2.50%
----------------------------------------------------------------------

LOAN AND SECURITY AGREEMENT - Page 3
<PAGE>

======================================================================
               Leverage Ratio                       Eurodollar Loans
======================================================================
<S>                                                 <C>
Less than or equal to 4.0 to 1.0 but                      2.25%
greater than 3.0 to 1.0
----------------------------------------------------------------------
Less than or equal to 3.0 to 1.0 but                      2.00%
greater than 2.5 to 1.0
----------------------------------------------------------------------
Less than or equal to 2.5 to 1.0 but                      1.75%
greater than 2.1 to 1.0
----------------------------------------------------------------------
Less than or equal 2.1 to 1.0 but                         1.50%
greater than 1.7 to 1.0
----------------------------------------------------------------------
Less than or equal to 1.7                                 1.25%
======================================================================
</TABLE>

For the purpose of determining the Applicable Margin, the Leverage Ratio
shall be determined based upon Parent's Consolidated financial statements for
each respective Fiscal Quarter delivered to Agent as required by SECTION
12.1, and any resulting change, if any, in the Applicable Margin for
Eurodollar Loans shall become effective as of the date (on or after the first
day of the calendar month following the calendar month in which such
financial statements are delivered to Agent) when any such Eurodollar Loan is
made, Continued or Converted, as the case may be.

         "APPLICABLE RATE" means, at any time, (i) the Base Rate PLUS the
Applicable Margin with respect to Base Rate Loans, and (ii) the Adjusted
Eurodollar Rate PLUS the Applicable Margin with respect to Eurodollar Loans,
as the case may be, in effect at any time pursuant to a Notice of Borrowing
or otherwise pursuant to the terms of this Agreement.

         "APPRAISED GOB VALUE" means, with respect to Eligible Inventory, the
net liquidation value thereof determined on an orderly going-out-of-business-
sale basis, net of all commissions, associated costs, fees and expenses
associated with such liquidation, as determined by a credentialed appraiser
satisfactory to Agent.

         "AR ADVANCE RATE" means a percentage, subject to SECTION 2.5, equal
to eighty five percent (85.0%).

         "ASSET DISPOSITION" means, with respect to any Person, the
disposition of any asset of such Person other than (i) sales of Inventory in
the ordinary course of business, (ii) Permitted Investments listed in CLAUSES
(a) AND (b) of the definition of Permitted Investments in SECTION 1.1 and
(iii) disposition of assets by a Loan Party to another Loan Party.

         "ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
Agreement in the form attached hereto as EXHIBIT "D" assigning all or a
portion of a Lender's interests, rights and obligations under this Agreement
to an Eligible Assignee pursuant to SECTION 15.1.

LOAN AND SECURITY AGREEMENT - Page 4
<PAGE>

         "AUTHORIZED SIGNATORY" means, with respect to any Loan Party or
General Partner, its chief executive officer, senior vice president-finance,
vice president-finance, chief financial officer or senior vice president-
general counsel, and in any event with respect to any Loan Party or
General Partner, such other Person as may be duly authorized and designated
in writing by such Loan Party or General Partner to act on its behalf
pursuant to the Loan Documents.

         "AVAILABILITY" means, as of the date of any determination thereof,
(a) the Borrowing Base at such time, MINUS (b) the aggregate outstanding
principal balance of all Revolving Credit Loans as of such date.

         "BASE RATE" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) or (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Federal Funds Rate or the Prime Rate shall be
effective on the effective date of such change in the Federal Funds Rate or
the Prime Rate; PROVIDED that, changes, if any, in the Applicable Rate
resulting from any change in the Base Rate shall become effective as provided
in SECTION 5.2(d).

         "BASE RATE LOAN" means any Loan that bears interest at a rate based
on the Base Rate.

         "BENEFIT PLAN" means, with respect to any Person, an "employee
pension benefit plan" as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan) in respect of which such Person or any ERISA Affiliate
is, or within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA, including, without limitation, such plans
as may be established after the Agreement Date.

         "BENEFITTED LENDER" has the meaning set forth in SECTION 17.4(b).

         "BORROWER" means CompUSA Stores L.P., a Texas limited partnership
(federal tax identification number 75-2652809) with its chief executive
office and principal place of business located at 14951 North Dallas Parkway,
Dallas, Texas 75240, and its successors and permitted assigns.

         "BORROWING BASE" means, at any time, an amount equal to the lesser of:

                  (a)      Five Hundred Million Dollars ($500,000,000), MINUS
                           the Letter of Credit Reserve and an amount
                           determined by Agent in its reasonable discretion
                           in respect of all obligations owing by any Loan
                           Party to any Lender in respect of Interest Rate
                           Protection Agreements

                  or

                  (b)      an amount equal to the sum of

LOAN AND SECURITY AGREEMENT - Page 5
<PAGE>

                           (i)      an amount determined by multiplying the
                                    AR Advance Rate by the face value of
                                    Eligible Receivables due and owing at
                                    such time LESS, at any time when the
                                    aggregate outstanding balance of all
                                    Revolving Credit Loans plus the Letter
                                    of Credit Reserve exceeds the Threshold
                                    Usage Amount, the Reserve, if any, in
                                    respect of Eligible Receivables, PLUS

                           (ii)     the lesser of

                                    (x)      the lesser of (A) an amount
                                             determined by multiplying the
                                             INV Advance Rate by the lower of
                                             the cost or market value of
                                             Eligible Inventory, as
                                             determined by the accounting
                                             methods of Parent and its
                                             Consolidated Subsidiaries all in
                                             accordance with GAAP or (B) 85%
                                             of Appraised GOB Value of
                                             Eligible Inventory; LESS, in
                                             either such case, at any time
                                             when the aggregate outstanding
                                             balance of all Revolving Credit
                                             Loans plus the Letter of Credit
                                             Reserve exceeds the Threshold
                                             Usage Amount, the Reserve, if
                                             any, in respect of Eligible
                                             Inventory, or

                                    (y)      $400,000,000, MINUS

                           (iii)    the Letter of Credit Reserve and an
                           amount determined by Agent in its reasonable
                           discretion in respect of all obligations owing by
                           any Loan Party to any Lender in respect of
                           Interest Rate Protection Agreements

                           (PROVIDED, that no more than 10% of the Borrowing
                           Base may result from calculations with respect to
                           Eligible Receivables or Eligible Inventory owned
                           by CompUSA PC).

         "BORROWING BASE CERTIFICATE" means a certificate, signed by an
authorized representative of Borrower, in substantially the form attached
hereto as EXHIBIT "C".

         "BORROWING BASE PARTY" means Borrower, Parent and CompUSA PC
(provided that it is a Wholly-Owned Subsidiary of Parent).

         "BROKER" means any "broker," as such term is defined in Chapter 8
(or Article 8) of the UCC, and in any event shall include, but not be limited
to, any Person defined as a broker or dealer under the federal securities
laws, but without excluding a bank acting in that capacity.

         "BUSINESS DAY" means (a) any calendar day other than Saturday,
Sunday or other day on which banks in Dallas, Texas are authorized to close,
and (b) with respect to all Loans, payments, Conversions, Continuations,
Interest Periods and notices in connection with any Eurodollar Loan,

LOAN AND SECURITY AGREEMENT - Page 6
<PAGE>

any day which is a Business Day described in CLAUSE (a) above and which is
also a day on which dealings in Dollar deposits are carried out in the London
interbank Eurodollar market.

         "CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets
(other than assets which constitute an Acquisition of all or substantially
all of the assets constituting the business, or an operating unit thereof, of
any Person) which are not, in accordance with GAAP, treated as expense items
for such Person in the year made or incurred or as a prepaid expense
applicable to a future year or years.

         "CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, limited partnership interests, membership interests,
equity interests, rights, securities or other equivalent evidences of
ownership (however designated) issued by any entity (whether a corporation,
partnership, limited liability company, limited partnership, business trust
or other type of entity).

         "CAPITALIZED LEASE" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.

         "CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.

         "CASH COLLATERAL" means Collateral consisting of cash or Cash
Equivalents.

         "CASH EQUIVALENTS" means marketable direct obligations issued or
unconditionally guaranteed by the U.S. or issued by any agency thereof and
backed by the full faith and credit of the U.S., commercial paper having a
rating of at least A-1 from Standard & Poor's Corporation or at least P-1
from Moody's Investors Service, Inc., certificates of deposit or bankers'
acceptances issued in Dollar denominations issued by any commercial bank
organized under the laws of the U.S. or any state thereof or the District of
Columbia, and any other such item the liquidity and transferability of which
is generally regarded and accepted in common practice as equivalent to cash.

         "CHANGE OF CONTROL" means the occurrence of any of the following:
(a) the adoption of a plan relating to the liquidation or dissolution of
Parent or Borrower, (b) the acquisition by any Person or group (as such term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) of a direct or indirect majority in interest (more than 50%) of the
voting power of the voting stock of Parent by way of merger or consolidation
or otherwise, (c) the first day on which a majority of the members of the
Board of Directors of Parent or Borrower are not Continuing Directors, (d)
Borrower shall cease to be a Wholly-Owned Subsidiary of Parent or (e) Parent
or a Wholly-Owned Subsidiary of Parent shall cease to be the sole general
partner of Borrower.

         "CHATTEL PAPER" means, with respect to a Person, all writing or
writings now owned and hereafter acquired by such Person which evidence both
a monetary obligation and a security interest in or a lease of specific
goods, and any other property or interest in property classified as chattel
paper pursuant to the UCC.

LOAN AND SECURITY AGREEMENT - Page 7
<PAGE>

         "CLEARING BANK" means any banking institution with which an Agency
Account has been established pursuant to an Agency Account Agreement.

         "COLLATERAL" means and includes all of each respective Loan Party's
right, title and interest in and to each of the following, wherever located
and whether now or hereafter existing or now owned or hereafter acquired or
arising:

                  (a)      all Receivables;

                  (b)      all Inventory;

                  (c)      all Instruments;

                  (d)      all Documents;

                  (e)      all Deposit Accounts;

                  (f)      all General Intangibles;

                  (g)      all Investment Property, EXCLUDING (i) Capital
                           Stock issued by CompUSA Net.com and (ii) Capital
                           Stock issued by InfoSource, Inc.; PROVIDED, that
                           with respect to any direct Foreign Subsidiary
                           owned by a Loan Party, the amount of Capital Stock
                           of such Foreign Subsidiary included in the
                           Collateral shall be limited to 65% of the issued
                           and outstanding Capital Stock of such Foreign
                           Subsidiary;

                  (h)      all goods and other property, whether or not
                           delivered,

                           (i)      the sale or lease of which gives or
                  purports to give rise to any Receivable, including, but not
                  limited to, all merchandise returned or rejected by or
                  repossessed from customers, or

                           (ii)     securing any Receivable,

         including, without limitation, all rights as an unpaid vendor or
         lienor (including, without limitation, stoppage in transit, replevin
         and reclamation) with respect to such goods and other property;

                  (k)      all mortgages, deeds to secure debt and deeds of
         trust on real or personal property, guaranties, leases, security
         agreements and other agreements and property which secure any
         Receivable or other obligation included in the Collateral, or are
         acquired for the purpose of securing and enforcing same;

LOAN AND SECURITY AGREEMENT - Page 8
<PAGE>

                  (l)      all files, correspondence, computer programs,
         tapes, discs and related data processing software which contain
         information identifying or pertaining to any Receivables or any
         Account Debtor, or showing the amounts thereof or payments thereon
         or otherwise necessary or helpful in the realization thereon or the
         collection thereof;

                  (m)      all Money and Cash Equivalents;

                  (n)      all Receivables Guaranties;

                  (o)      all Receivables L/C's; and

                  (p)      any and all proceeds or products of any of the
         foregoing (including, but not limited to, any claim to any item
         referred to in this definition, and any claim against any Person for
         loss of, damage to or destruction of any or all of, the Collateral
         or for proceeds payable under, or unearned premiums with respect to,
         policies of insurance) in whatever form;

PROVIDED, that notwithstanding the foregoing (but subject to the further
proviso following and without impairing SECTION 13.8), "Collateral" does not
include any General Intangible or Proprietary Right to the extent the grant
by any Loan Party of the Security Interest therein is prohibited by any
agreement or restriction pursuant to any grant from, or agreement with, any
Person evidencing such Loan Party's interest therein for so long as (but only
for so long as) the consent of such Person to such grant has not been
obtained, PROVIDED FURTHER, however, that the foregoing limitation shall not
in any event apply to, affect, limit, restrict or otherwise impair the grant
by any Loan Party of the Security Interest in any (i) Accounts; (ii)
Inventory; (iii) Proprietary Rights specifically scheduled in a Patent
Security Agreement, Trademark Security Agreement or Copyright Security
Agreement; (iv) Money due or to become due to a Loan Party (and proceeds
thereof) under any Merchant Account or Merchant Account Agreement; or (v) any
other Receivables, any General Intangibles or any other Proprietary Rights to
the extent any purported prohibition affecting property identified in this
CLAUSE (v) is unenforceable pursuant to Section 9.318(d) of the UCC or other
Applicable Law.

         "COMMITMENT" means, as to each Lender, the amount set forth opposite
such Lender's name on the signature pages hereof representing such Lender's
obligation, upon and subject to the terms and conditions of this Agreement,
to make Revolving Credit Loans and to purchase participations in Letters of
Credit or, from and after the date hereof, in the Register representing such
Lender's obligation to make Revolving Credit Loans and to purchase
participations in Letters of Credit.

         "COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
obtained by dividing such Lender's Commitment by the Total Commitment.

         "COMPLIANCE CERTIFICATE" means a certificate of an Authorized
Signatory of Parent, in substantially the form of EXHIBIT "F", containing the
information required by SECTION 12.3.

LOAN AND SECURITY AGREEMENT - Page 9
<PAGE>

         "COMPUSA NET.COM" means CompUSA Net.com Inc., a Delaware corporation
and, as of the Agreement Date, a Wholly-Owned Subsidiary of Parent.

         "COMPUSA PC" means CompUSA PC Operating Company, a Delaware business
trust, and as of the Agreement Date, an indirect Wholly-Owned Subsidiary of
Parent.

         "CONSOLIDATED", when used in connection with any accounting term
with reference to a Person, means such accounting term determined with
reference to such Person and its Subsidiaries, as consolidated according to
GAAP (and, in the case of Net Income, after appropriate deductions for any
minority interests in any Subsidiaries).

         "CONSOLIDATED SUBSIDIARIES" means, as to a Person, the Subsidiaries
of such Person whose accounts are at the time in question, in accordance with
GAAP, consolidated with those of such Person.

         "CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste as may
be controlled or regulated by Applicable Law.

         "CONTINUE", "CONTINUATION" and "CONTINUED" mean the continuation
pursuant to SECTION 5.3(b) of a Eurodollar Loan as a Eurodollar Loan from one
Interest Period to the next Interest Period.

         "CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of Parent or Borrower who (a) was a member
of such Board of Directors on the Agreement Date or (b) was nominated for
election or elected to such Board of Directors with the affirmative vote of a
majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.

         "CONTRACT RIGHTS" means any rights under contracts not yet earned by
performance and not evidenced by an instrument or chattel paper, whether now
existing or hereafter arising, to the extent that such rights may be lawfully
assigned.

         "CONTRIBUTED ASSETS" means the sum (without duplication) of the
aggregate net book value, as reflected on the books of a Loan Party or
Restricted Subsidiary, as the case may be, of assets (whether of Capital
Stock or other property, services or Money, including the proceeds of Loans
or other Indebtedness incurred by such Loan Party or Restricted Subsidiary)
contributed on and after the Agreement Date by a Loan Party or any Restricted
Subsidiary to or for the benefit of CompUSA Net.com.

         "CONTRIBUTED INDEBTEDNESS " means, at any time, the aggregate amount
of Indebtedness owing by CompUSA Net.com to any and all of the Loan Parties
or any Restricted Subsidiary.

LOAN AND SECURITY AGREEMENT - Page 10
<PAGE>

         "CONVERT", "CONVERSION" and "CONVERTED" mean a conversion pursuant
to SECTION 5.3(c), or ARTICLE 6 of one Type of Loan into another Type of Loan.

         "COPYRIGHT SECURITY AGREEMENT" means a Copyright Security Agreement
executed by one or more of the Loan Parties in favor of Agent, for the
benefit of the Credit Parties, as such agreement may be amended, modified,
restated or supplemented from time to time.

         "COPYRIGHTS" means and includes, with respect to any Person, all of
such Person's right, title and interest in and to the following, in each case
whether now existing or hereafter arising:

                  (a)      all copyrights, rights and interests in
         copyrights, works protectable by copyright, copyright registrations
         and copyright applications;

                  (b)      all renewals of any of the foregoing;

                  (c)      all income, royalties, damages and payments now or
         hereafter due and/or payable under any of the foregoing, including,
         without limitation, damages or payments for past or future
         infringements of any of the foregoing;

                  (d)      the right to sue for past, present and future
         infringements of any of the foregoing; and

                  (e)      all rights corresponding to any of the foregoing
         under Applicable Law.

         "CREDIT PARTY" means each of Agent, L/C Issuer and the Lenders, and
"Credit Parties" means all of such Persons, collectively.

         "DEFAULT" means any of the events specified in SECTION 14.1 which
with the passage of time or giving of notice or both would constitute an
Event of Default.

         "DEFAULT MARGIN" means three percent (3%).

         "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account maintained with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a certificate of
deposit, and includes, without limitation any L/C Cash Collateral Account.

         "DISBURSEMENT ACCOUNT" means one or more accounts maintained by and
in the name of Borrower with a Disbursing Bank for the purposes of depositing
Revolving Credit Loan proceeds pursuant to this Agreement.

         "DISBURSING BANK" means any commercial bank with which a
Disbursement Account is maintained after the Agreement Date.

LOAN AND SECURITY AGREEMENT - Page 11
<PAGE>

         "DIVIDENDS" means, as to any Person, any declaration or payment of
any dividend or the making of any distribution, loan, advance or investment
on or with respect to any shares of a Person's Capital Stock (other than
dividends or distributions payable solely in shares or other evidence of
ownership of such Person's Capital Stock).

         "DOCUMENTS" means, with respect to a Person, all of such Person's
now owned and hereafter acquired documents of title issued by or addressed to
a bailee which purport to cover goods in the bailee's possession which are
either identified or are fungible portions of an identified mass, including
without limitation a bill of lading, dock warrant, dock receipt, warehouse
receipt or order for the delivery of goods, or other document, and which in
the regular course of business or financing is treated as adequately
evidencing that a Person in possession of it is entitled to receive, hold and
dispose of the document and the goods it covers, and any other property or
interest in property classified as a document pursuant to the UCC.

         "DOLLAR" and "$" each means freely transferable U.S. dollars.

         "DOMESTIC SUBSIDIARY" means each direct or indirect Subsidiary of
Parent formed under the laws of the U.S. or any state thereof.

         "EBITDA" means Net Income, PLUS, for each Fiscal Period to the
extent deducted in the determination of Net Income, each of the following:
(i) Interest Expense; (ii) income taxes; (iii) depreciation and amortization
expense, (iv) other non-cash charges and (v) restructuring charges relating
to Management's Restructuring Plan.

         "EFFECTIVE DATE" means the later of:

                  (a)      the Agreement Date; or

                  (b)      the first date on which all of the conditions set
         forth in SECTION 7.1 and SECTION 7.2 shall have been fulfilled or
         waived in accordance with the provisions of SECTION 17.10.

         "EFFECTIVE INTEREST RATE" means the rate of interest per annum on
the Revolving Credit Loans in effect from time to time pursuant to the
provisions of SECTIONS 5.2(a), (b) and (c).

         "ELIGIBLE ASSIGNEE" means (i) a Lender, (ii) any Affiliate of a
Lender, and (iii) any other Person approved by Agent and, unless an Event of
Default has occurred and is continuing at the time any assignment is effected
in accordance with SECTION 15.1, Borrower, such approval not to be
unreasonably withheld or delayed by Borrower and such approval to be deemed
given by Borrower if no objection from Borrower is received by the assigning
Lender and Agent within four (4) Business Days after notice of such proposed
assignment has been provided to Borrower by Agent or the assigning Lender;
PROVIDED, HOWEVER, that neither Borrower nor an Affiliate of Borrower shall
qualify as an Eligible Assignee.

LOAN AND SECURITY AGREEMENT - Page 12
<PAGE>

         "ELIGIBLE INVENTORY" means Inventory of a Borrowing Base Party which
Agent, in its reasonable discretion determines to meet all of the following
requirements:

                  (a)  such Inventory is owned by such Borrowing Base Party,
         has been received and is stored at a location listed on SCHEDULE 8.1(v)
         ("Location of Inventory") or is in such Borrowing Base Party's control
         and is in transit from any of such locations to another of such
         locations, is subject to the Security Interest which is perfected as to
         such Inventory and is subject to no other Lien other than a Permitted
         Landlords Lien or Permitted Warehouseman's Lien;

                  (b)  such Inventory consists of finished goods and not
         work-in-process or supplies;

                  (c)  such Inventory is in good condition and meets all
         standards imposed by any Governmental Authority having regulatory
         authority over such goods, their use or sale;

                  (d)  such Inventory is currently either usable or salable,
         at prices approximating at least the cost of such Inventory, in the
         normal course of such Borrowing Base Party's business and is not slow
         moving or stale;

                  (e)  such Inventory is not obsolete or returned, repossessed
         or used goods taken in trade;

                  (f)  such Inventory is located within the U.S.;

                  (g)  such Inventory is in the possession and control of
         such Borrowing Base Party and not any third party, or if such Inventory
         is held by a third party bailee and a negotiable instrument has not
         been issued with respect thereto and the aggregate outstanding balance
         of all Revolving Credit Loans plus the Letter of Credit Reserve exceeds
         the Threshold Usage Amount, Agent shall have established a reasonable
         amount in the Reserve (not exceeding an amount equal to the aggregate
         amount payable to such bailee for a period of sixty (60) days) in
         respect of the warehouse agreement or other agreement under which such
         bailee is in possession of such Inventory, unless a waiver and access
         agreement, in form and substance satisfactory to Agent, shall have been
         executed and delivered to Agent by such bailee and such Borrowing Base
         Party and such other steps shall have been taken as Agent may
         reasonably require in order to establish and preserve the priority of
         the Security Interest in such Inventory;

                  (h)  unless such Borrowing Base Party shall have delivered
         to Agent landlord's or mortgagee's waiver and consent agreements, in
         form and substance satisfactory to Agent and duly executed on behalf of
         the landlord or mortgagee, as the case may be, of Real Estate or other
         real property on which any such Inventory is located in any state in
         which Applicable Law provides for a statutory Lien for the benefit of
         lessors of real property which,


LOAN AND SECURITY AGREEMENT - Page 13
<PAGE>

         under such Applicable Law, has or may have priority over the
         Security Interest, at any time when the aggregate outstanding
         balance of all Revolving Credit Loans plus the Letter of Credit
         Reserve exceeds the Threshold Usage Amount, Agent shall have
         established a reasonable amount in the Reserve (not exceeding an
         amount equal to the aggregate amount payable to such landlord or
         mortgagee for a period of sixty (60) days) in respect of the lease
         or other agreement under which such Borrowing Base Party occupies
         such Real Estate; and

                  (i)  such Inventory is not determined by Agent, on behalf
         of the Lenders, in its reasonable discretion in the exercise of
         reasonable credit judgment to be ineligible for any other reason.

         "ELIGIBLE RECEIVABLE" means a Receivable of a Borrowing Base Party that
consists of the unpaid portion of the obligation stated on the invoice issued to
an Account Debtor with respect to Inventory sold and shipped to or services
performed for such Account Debtor in the ordinary course of such Borrowing Base
Party's business, net of any credits or rebates owed by such Borrowing Base
Party to such Account Debtor and net of any commissions payable by such
Borrowing Base Party to third parties and that Agent, in its reasonable
discretion determines to meet all of the following requirements:

                  (a)  such Receivable is owned by such Borrowing Base Party
         and represents a complete bona fide transaction which requires no
         further act under any circumstances on the part of such Borrowing Base
         Party to make such Receivable payable by the Account Debtor;

                  (b)  such Receivable is not more than ninety (90) days past
         due from the stated due date of the original invoice;

                  (c)  not more than one hundred twenty (120) days have
         elapsed from the date of the original invoice;

                  (d)  the goods the sale of which gave rise to such Receivable
         were shipped or delivered to the Account Debtor on an absolute sale
         basis and not on a bill and hold sale basis, a consignment sale
         basis, a guaranteed sale basis, a sale or return basis or on the
         basis of any other similar understanding, and no material part of
         such goods has been returned or rejected;

                  (e)  such Receivable is not evidenced by chattel paper or
         an instrument of any kind unless such chattel paper or instrument has
         been collaterally assigned to Agent, for the benefit of the Credit
         Parties, pursuant to an assignment in form and substance satisfactory
         to Agent and is in the possession of Agent;

                  (f)  the Account Debtor with respect to such Receivable is
         not insolvent or the subject of any bankruptcy or insolvency
         proceedings of any kind or of any other proceeding or action,
         threatened or pending, which might, in Agent's reasonable judgment,
         have a


LOAN AND SECURITY AGREEMENT - Page 14
<PAGE>

         material adverse effect on such Account Debtor, and is not, in the
         reasonable discretion of Agent, deemed ineligible for credit or
         other reasons;

                  (g)  such Receivable is not owing by an Account Debtor
         having fifty percent (50.0%) or more in face value of its then existing
         aggregate total accounts owing to all Loan Parties, in the aggregate,
         which do not meet the requirements of CLAUSE (b) or CLAUSE (c) above;

                  (h)  such Receivable is not owing by an Account Debtor
         whose then existing accounts owing to all Loan Parties, in the
         aggregate, exceed in face amount fifteen percent (15%) of all Loan
         Parties' total Eligible Receivables;

                  (i)  if such Receivable arises from the performance of
         services, such services have been fully rendered and do not relate to
         any warranty claim or obligation;

                  (j)  such Receivable is not owing by an Account Debtor
         that is located outside of the U.S.;

                  (k)  such Receivable is a valid, legally enforceable
         obligation of the Account Debtor with respect thereto and is not
         subject to any present or contingent (and no facts exist which are the
         basis for any future) offset, deduction or counterclaim, dispute or
         other defense on the part of such Account Debtor, unless any such
         offset, deduction or counterclaim, dispute or other defense is noted in
         the Borrowing Base Certificate and a reasonable amount satisfactory to
         Agent has been deducted from such Receivable in respect thereof;

                  (l)  such Receivable is subject to the Security Interest,
         which is perfected as to such Receivable in form and substance
         satisfactory to Agent, and is subject to no other Lien whatsoever;

                  (m)  such Receivable is evidenced by an invoice or other
         documentation in form acceptable to Agent;

                  (n)  if such Receivable is subject to the Assignment of
         Claims Act of 1940, as amended from time to time, or any Applicable Law
         now or hereafter existing similar in effect thereto, or to any other
         prohibition (under Applicable Law, by contract or otherwise) against
         its assignment or requiring notice of or consent to such assignment, if
         requested by Agent all such required notices have been given, all such
         required consents have been received and all other procedures have been
         complied with such that such Receivable shall have been duly and
         validly assigned to Agent, for the benefit of the Credit Parties, in
         form satisfactory to Agent;

                  (o)  the goods giving rise to such Receivable were not, at
         the time of the sale thereof, subject to any Lien, except the Security
         Interest and Permitted Liens which do not attach to such Receivable as
         proceeds thereof;


LOAN AND SECURITY AGREEMENT - Page 15
<PAGE>

                  (p)  Such Borrowing Base Party is not in breach of any
         express or implied representation or warranty with respect to the goods
         the sale of which gave rise to such Receivable nor in breach of any
         representation or warranty, covenant or other agreement contained in
         the Loan Documents with respect to such Receivable;

                  (q)  such Receivable does not arise out of any transaction
         with a Borrowing Base Party or any other Affiliate, creditor, tenant,
         lessor or supplier of a Borrowing Base Party, PROVIDED, that with
         respect to any such Receivable that arose out of a transaction with any
         such creditor, tenant, lessor or supplier that is not a Loan Party or
         an Affiliate of a Loan Party (i) the amount of such Receivable
         excludable under this SUBPARAGRAPH (q) shall not exceed the aggregate
         amount, if any, owing from time to time to such Person by such
         Borrowing Base Party and (ii) such Receivable will not be excluded
         under this SUBPARAGRAPH (q) if such Person has executed and
         delivered to such Borrowing Base Party and Agent, for the benefit of
         the Credit Parties, an agreement, in form and substance satisfactory
         to Agent, pursuant to which such Person agrees that it will not
         setoff against such Receivable, or assert as a defense to payment
         thereof, any claim or other amount at any time owing to such Person
         by such Borrowing Base Party;

                  (r)  Such Borrowing Base Party is not the beneficiary of
         any letter of credit, nor has any bond or other undertaking by a
         guarantor or surety been obtained, supporting such Receivable and the
         Account Debtor's obligations in respect thereof unless any such letter
         of credit, bond or undertaking, together with such Receivable, is
         specifically identified in each Borrowing Base Certificate which
         includes any such Receivable and, if required by Agent (i) is issued by
         a Person satisfactory to Agent, in form satisfactory to Agent and by
         its terms does not prohibit transfer or assignment to Agent of the
         rights to enforce payment thereunder, (ii) is irrevocable with respect
         to such Receivable and otherwise is in form and substance satisfactory
         to Agent, (iii) to Agent's satisfaction, is subject to a first
         priority, perfected security interest, lien and collateral assignment
         in favor of Agent, for the benefit of the Credit Parties (iv) if
         requested by Agent, written notice of such security interest, lien and
         collateral assignment, duly executed by Agent and such Borrowing Base
         Party, shall have been given to and acknowledged in writing by the
         Person obligated on such letter of credit, bond or undertaking, in form
         and substance satisfactory to Agent, and (v) Agent shall have received
         all documentation as Agent may reasonably request in connection with
         the foregoing;

                  (s)  such Receivable does not arise out of finance or
         similar charges or other fees for the time value of Money;

                  (t)  the Account Debtor with respect to such Receivable is
         not located in any other state denying creditors access to its courts
         in the absence of qualification to transact business in such state or
         the filing of a notice of business activities report or other similar
         filing, unless (i) such Borrowing Base Party has either qualified as a
         foreign corporation authorized to transact business in such state or
         has filed any such notice or similar filing with the applicable
         Governmental Authority for the then current year, or (ii) such
         Borrowing Base


LOAN AND SECURITY AGREEMENT - Page 16
<PAGE>

         Party is not required to be so qualified as a condition to allowing
         its creditors access to such courts; and

                  (u)  neither the Account Debtor with respect to such
         Receivable, nor such Receivable, is determined by Agent in its
         reasonable discretion in the exercise of reasonable credit judgment to
         be ineligible for any other reason.

         "ENTITLEMENT HOLDER" means any Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary.

         "ENVIRONMENTAL COMPLIANCE RESERVES" means reserves for the cost of
Remedial Action, as determined by Agent from time to time in its reasonable
discretion based upon the reports delivered pursuant to SECTION 11.9(b) and such
other advice, analysis and engineering studies as it reasonably deems
appropriate.

         "ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws
now or hereafter in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, Releases or
threatened Releases of pollutants, Contaminants, chemicals or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport or handling of pollutants, Contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, and any and all
regulations, notices or demand letters issued, entered, promulgated or approved
thereunder, including, but not limited to, the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 ET SEQ., as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 6901
ET SEQ., as amended, the Toxic Substances Control Act, 15 U.S.C. Section 2601
ET SEQ., as amended, the Clean Air Act, 46 U.S.C. Section 7401 ET SEQ., as
amended, and state and federal lien and environmental cleanup programs.

         "ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of Contaminant into the environment.

         "ERISA" means the Employee Retirement Income Security Act of 1974 (as
amended), as in effect from time to time, any regulation promulgated thereunder
and any successor statute.

         "ERISA AFFILIATE" means, with respect to any Person, any (i)
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal Revenue Code) as any such
Person or any of its Subsidiaries, (ii) partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with any such Person or any of its
Subsidiaries, or (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code)


LOAN AND SECURITY AGREEMENT - Page 17
<PAGE>

as any such Person or any of its Subsidiaries, any corporation described in
CLAUSE (i) above or any partnership, trade or business described in CLAUSE
(ii) above.

         "EURODOLLAR BUSINESS DAY" means a Business Day on which dealings in
Dollars are carried out in the London interbank Eurodollar market.

         "EURODOLLAR LOANS" means Loans that bear interest at rates based upon
the Adjusted Eurodollar Rate.

         "EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two (2) Eurodollar Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the term "Eurodollar Rate" shall mean, for
any Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Eurodollar Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; PROVIDED, HOWEVER, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%).

         "EVENT OF DEFAULT" means any of the events specified in SECTION 14.1,
PROVIDED that any requirement for notice or lapse of time as required by this
Agreement or any of the other Loan Documents has been satisfied.

         "EXISTING CREDIT AGREEMENT" means the certain Second Amended and
Restated Credit Agreement dated March 12, 1998 among Parent, NationsBank, N.A.,
as Administrative Lender, certain co-agents and the "Lenders" (as defined
therein) party thereto, as amended, modified or supplemented from time to time
through the Agreement Date.

         "EXISTING LETTERS OF CREDIT" means those "Letters of Credit" (as
defined by the Existing Agreement) issued pursuant to the Existing Credit
Agreement and outstanding on the Agreement Date, as listed in SCHEDULE 1.1A
("Existing Letters of Credit").

         "EXISTING LOAN DOCUMENTS" means the "Loan Documents" as defined by the
Existing Credit Agreement.

         "EXISTING STORE LOCATIONS" means the store locations owned by Borrower
or, if specifically identified therein, by any other Loan Party, on the
Agreement Date and described on SCHEDULE 8.1(gg).

         "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds


LOAN AND SECURITY AGREEMENT - Page 18
<PAGE>

transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; PROVIDED that (a) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published
on the next succeeding Business Day, and (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to Agent (in its individual capacity) on
such day on such transactions as determined by Agent.

         "FINANCIAL ASSET" means any financial asset, and in any event shall
include, but not be limited to, any (i) Security, (ii) obligation of a Person or
a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment, (iii) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Chapter 8 (or Article 8) of
the UCC and (iv) any other property or interest in property, or means by which a
Persons claim to any such property or interest in property is evidenced, which
is classified as a "financial asset" pursuant to Chapter 8 (or Article 8) of the
UCC.

         "FINANCING STATEMENTS" means any and all UCC financing statements, as
requested by and in form and substance satisfactory to Agent, executed and
delivered by a Loan Party to Agent, naming Agent as secured party and such Loan
Party as debtor, in connection with this Agreement.

         "FISCAL PERIOD" means one of the three fiscal periods in a Fiscal
Quarter, the first of such periods comprised of five weeks and the second and
third of such periods comprised of four weeks, with each of the weeks in a
Fiscal Quarter ending on the close of business on a Saturday. There are twelve
Fiscal Periods in a Fiscal Year.

         "FISCAL QUARTER" means one of four thirteen week quarters in a Fiscal
Year, with the first of such quarters beginning on the first day of a Fiscal
Year and ending on the Saturday of the thirteenth week in such quarter.

         "FISCAL YEAR" means the fiscal year beginning on the Sunday following
the last Saturday in June of each year and ending on the last Saturday in June
of the following year.

         "FIXED CHARGE COVERAGE RATIO" means the ratio of (i) EBITDA MINUS
Unfunded Capital Expenditures MINUS Non-Stock Acquisition Consideration MINUS
Treasury Stock Purchases MINUS income taxes actually paid in cash to (ii) the
aggregate amount of Interest Expense PLUS principal amount paid in respect of
Money Borrowed (other than the Revolving Loans) PLUS Dividends paid, in each
case determined for Parent and its Consolidated Subsidiaries (excluding CompUSA
Net.com) as of the end of any Fiscal Period as required by this Agreement (x)
with respect to the end of each of the first eleven Fiscal Periods ending after
the Agreement Date, for the period from the Agreement Date through the end of
such Fiscal Period and (y) with respect to the end of all other Fiscal Periods,
for the preceding twelve (12) Fiscal Periods.


LOAN AND SECURITY AGREEMENT - Page 19
<PAGE>

         "FIXED CHARGE RATIO COVENANT TEST DATE" means, in relation to any date
on which Availability is less than the Minimum Availability Requirement, the
last day of the preceding Fiscal Period for which financial statements are
required to have been delivered pursuant to SECTION 12.1.

         "FOREIGN SUBSIDIARY" means each direct or indirect Subsidiary of Parent
that is not a Domestic Subsidiary.

         "GAAP" means generally accepted accounting principles (existing as of
the Agreement Date as promulgated by opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements of the
Financial Accounting Standards Board, including without limitation, principles
of purchase accounting) consistently applied and maintained throughout the
period indicated and, when used with reference to Borrower or any other Loan
Party, consistent with the prior financial practice of Borrower or such Loan
Party, as reflected on the financial statements referred to in SECTION 8.1(o);
PROVIDED, that for purposes of (i) the definition of "Applicable Margin" in
SECTION 1.1, (ii) the definition of "Unused Commitment Fee Percentage" in
SECTION 1.1 and (iii) SECTION 13.1, in the event that, after the Agreement Date,
changes shall be mandated by the Financial Accounting Standards Board or any
similar accounting authority of comparable standing, or shall be recommended by
Borrower's or any Loan Party's independent public accountants, the Loan Parties
and Agent agree to enter into negotiations with the desired objective that
such provisions be adjusted or otherwise modified to fairly take into account
any such change, PROVIDED FURTHER, that any such negotiated changes shall be
effective, for purposes of such provisions, only from and after such date as
the Loan Parties, the Required Lenders and Agent shall have amended this
Agreement in accordance with SECTION 17.10, to the extent necessary to
reflect any such negotiated changes.

         "GENERAL INTANGIBLES" means, with respect to a Person, all general
intangibles, choses in action and causes of action, whether arising in contract,
tort or otherwise and whether or not the subject of litigation, and all
judgments in favor of such Person, including without limitation each of the
following, in any case both now owned and hereafter acquired: (a) all rights to
payment or other forms of consideration and all other personal property, other
than goods, of every kind and nature (and not otherwise included in Receivables,
Chattel Paper, Documents, Instruments or Investment Property), including,
without limitation, all rights under Merchant Accounts and Merchant Account
Agreements, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, goodwill, computer software,
customer lists, registrations, licenses, franchises, tax refunds and tax refund
claims, reversions or any rights thereto and any other amounts payable to such
Person from any Plan or other employee benefit plan, rights and claims against
carriers and shippers, rights and claims under warranties, rights to
indemnification, rights under contracts of insurance or surety, including
without limitation business interruption, property, casualty, liability and
other insurance and proceeds thereof, any letter of credit and the right to
claim and receive payment thereunder, rights to payment under any and each
Receivables Guaranty, Receivables L/C and each other Guaranty, security and Lien
for payment of any Receivables, and drafts, acceptances and other debts,
obligations and liabilities owing to such Person; and (b) any other property or
interest in property classified as a "general intangible" pursuant to the UCC.


LOAN AND SECURITY AGREEMENT - Page 20
<PAGE>

         "GENERAL PARTNER" means CompUSA GP, acting in its capacity as the sole
general partner of Borrower, and its successors and permitted assigns.

         "GOVERNMENT ACTS" has the meaning set forth in SECTION 3.8(a)(ii).

         "GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, any
Governmental Authority, whether federal, state, local or foreign national or
provincial.

         "GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, county, municipal, parish, provincial or other political subdivision
thereof and any department, commission, board, court, agency or other
instrumentality or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

         "GUARANTOR" means each Person that executes and delivers to Agent a
Guaranty Agreement pursuant to this Agreement or becomes a party to a Guaranty
Agreement by executing and delivering to Agent a Joinder Agreement pursuant to
SECTION 9.3.

         "GUARANTY", "GUARANTEED" or to "GUARANTEE" as applied to any obligation
of another Person shall mean and include:

                  (a)  any guaranty (other than by endorsement of negotiable
         instruments for collection in the ordinary course of business),
         directly or indirectly, in any manner, of any part or all of such
         obligation of such other Person; and

                  (b)  any agreement, direct or indirect, contingent or
         otherwise, and whether or not constituting a guaranty, the practical
         effect of which is to assure the payment or performance (or payment of
         damages in the event of nonperformance) of any part or all of such
         obligation of such other Person whether by

                       (i)    the purchase of securities or obligations,

                       (ii)   the purchase, sale or lease (as lessee or
                  lessor) of property or the purchase or sale of services
                  primarily for the purpose of enabling the obligor with respect
                  to such obligation to make any payment or performance (or
                  payment of damages in the event of nonperformance) of or on
                  account of any part or all of such obligation, or to assure
                  the owner of such obligation against loss,

                       (iii)  the supplying of funds to or in any other
                  manner investing in the obligor with respect to such
                  obligation,

                       (iv)   repayment of amounts drawn down by beneficiaries
                  of letters of credit, or


LOAN AND SECURITY AGREEMENT - Page 21
<PAGE>

                       (v)    the supplying of funds to or investing in a
                  Person on account of all or any part of such Person's
                  obligation under a Guaranty of any obligation or indemnifying
                  or holding harmless, in any way, such Person against any part
                  or all of such obligation.

         "GUARANTY AGREEMENT" means the Parent Guaranty or the Subsidiary
Guaranty, as the case may be, in each case as may be renewed, extended, amended,
modified, restated or supplemented from time to time.

         "IRS" means the Internal Revenue Service.

         "INDEBTEDNESS" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:

                  (a)  all obligations for Money Borrowed or for the
         deferred purchase price of property or services;

                  (b)  all obligations (including, during the noncancellable
         term of any lease in the nature of a title retention agreement, all
         future payment obligations under such lease discounted to their present
         value in accordance with GAAP) secured by any Lien to which any
         property or asset owned or held by such Person is subject, whether or
         not the obligation secured thereby shall have been incurred or assumed
         by such Person;

                  (c)  all obligations of other Persons which such Person
         has Guaranteed, including, but not limited to, all obligations of such
         Person consisting of recourse liability with respect to accounts
         receivable sold or otherwise disposed of by such Person;

                  (d)  all obligations of such Person in respect of Interest
         Rate Protection Agreements; and

                  (e)  in the case of Borrower (without duplication) all
         obligations under the Revolving Credit Loans.

         "INDEMNIFIED PARTY" has the meaning set forth in SECTION 17.13.

         "INDENTURE" means the certain Indenture dated as of June 17, 1993
between Parent and U.S. Trust Company of Texas, N.A., as Trustee pursuant to
which the Senior Subordinated Notes are issued, as the same may be amended,
supplemented or otherwise modified.

         "INSTRUMENTS" means, with respect to a Person, all of such Person's now
owned and hereafter acquired negotiable instruments (as defined by Section 3.104
(or Article 3-104) of the UCC) and any other writing which evidences a right to
the payment of Money and is not itself a security agreement or lease and is of a
type which is in the ordinary course of business transferred by delivery with
any


LOAN AND SECURITY AGREEMENT - Page 22
<PAGE>

necessary indorsement or assignment, excluding Investment Property, and any
other property or interest in property classified as an instrument pursuant
to the UCC.

         "INTEREST EXPENSE" means, for any period, the interest expense of
Parent and its Consolidated Subsidiaries for such period (including, without
limitation, interest on Indebtedness and the interest portion of payments under
Capital Lease Obligations), determined on a consolidated basis in accordance
with GAAP.

         "INTEREST PAYMENT DATE" means, after the Agreement Date with respect to
Base Rate Loans, the Business Day following the last day of each calendar month,
and with respect to Eurodollar Loans, the last day of each corresponding
Interest Period (and in the case of an Interest Period of greater than three (3)
months, at three-month intervals after the first day of such Interest Period),
continuing until the Secured Obligations have been irrevocably paid in full.

         "INTEREST PERIOD" means the period beginning on the day any Eurodollar
Loan is established, Continued or Converted and ending one (1), two (2), three
(3) or six (6) months thereafter (as Borrower may designate pursuant to a Notice
of Borrowing); PROVIDED, HOWEVER:

                  (a)  if any Interest Period would otherwise end on a day
         which is not a Eurodollar Business Day, such Interest Period shall be
         extended to the next succeeding Eurodollar Business Day, unless the
         result of such extension would be to extend such Interest Period into
         another calendar month, in which event such Interest Period shall end
         on the immediately preceding Eurodollar Business Day;

                  (b)  any Interest Period with respect to a Eurodollar Loan
         that begins on the last Eurodollar Business Day of a calendar month (or
         on a day for which there is no numerically corresponding day in the
         calendar month at the end of such Interest Period) shall end on the
         last Eurodollar Business Day of such calendar month; and

                  (c)  Borrower may not select any Interest Period which ends
         after the date of a scheduled principal payment on the Loans unless,
         after giving effect to such selection, the aggregate unpaid principal
         amount of the Eurodollar Loans for which Interest Periods end after
         such scheduled principal payment shall be equal to or less than the
         principal amount to which the Loans are required to be reduced after
         such scheduled principal payment is made.

         "INTEREST RATE PROTECTION AGREEMENT" means an agreement between a
Person and any Lender, or any Affiliate of such Lender, now existing or
hereafter entered into and with respect to which notice thereof has been given
to Agent, which provides for an interest rate swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross-currency rate swap, currency
option or any combination of, or option with respect to, any such or similar
transactions, for the purpose of hedging such Person's exposure to fluctuations
in interest rates or currency valuations.

         "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.


LOAN AND SECURITY AGREEMENT - Page 23
<PAGE>

         "INV ADVANCE RATE" means a percentage, subject to SECTION 2.5, equal to
(i) sixty five percent (65.0%).

         "INVENTORY" means, with respect to a Person, all of such Person's
inventory and shall include, without limitation:

                  (a)  all goods held or intended for sale or lease, or for
         display or demonstration, or furnished or to be furnished under
         contracts of service;

                  (b)  all work-in-process;

                  (c)  all raw materials;

                  (d)  all other materials and supplies of every nature and
         description used or which might be used in connection with the
         manufacture, packing, shipping, advertising, selling, leasing or
         furnishing of such goods or otherwise used or consumed in such Person's
         business;

                  (e)  all documents evidencing and general intangibles relating
         to any of the foregoing; and

                  (f)  all other goods that are classified as "inventory"
         pursuant to the UCC.

         "INVESTMENT" means, with respect to any Person:

                  (a)  the acquisition or ownership by such Person of any
         share of Capital Stock, evidence of Indebtedness or other security
         issued by any other Person;

                  (b)  any loan, advance or extension of credit to, or
         contribution to the capital of, any other Person, excluding advances to
         employees in the ordinary course of business for business expenses;

                  (c)  any Guaranty of the obligations of any other Person; and

                  (d)  any other investment (other than an Acquisition) in any
         other Person.

         "INVESTMENT PROPERTY" means any investment property, now owned or
hereafter acquired, and, in any event, shall include, without limitation, each
of the following: (a) any Security, whether certificated or uncertificated, (b)
any Security Entitlement, (c) any Securities Account, (d) any commodity contract
or commodity account and (e) any other property or interest in property that is
classified as "investment property" pursuant to the UCC.

         "IRS" means the Internal Revenue Service.


LOAN AND SECURITY AGREEMENT - Page 24
<PAGE>


         "ISSUER" means any "issuer," as such term is defined in Chapter 8 (or
Article 8) of the UCC, and in any event shall include, without limitation, any
Person that (i) places or authorizes the placing of its name on a Security
Certificate, other than as authenticating trustee, registrar, transfer agent or
the like, to evidence a share, participation or other interest in its property
or in an enterprise, or to evidence its duty to perform an obligation
represented by the certificate, (ii) creates a share, participation or other
interest in its property or in an enterprise, or undertakes an obligation, that
is an Uncertificated Security; (iii) directly or indirectly creates a fractional
interest in its rights or property, if the fractional interest is represented by
a Security Certificate, or (iv) becomes responsible for, or in the place of,
another Issuer.

         "JOINDER AGREEMENT" means a Joinder Agreement in form as appears in
EXHIBIT "G", or otherwise in form satisfactory to Agent, by which a Person
becomes a Loan Party and a Guarantor pursuant to SECTION 9.3.

         "L/C CASH COLLATERAL ACCOUNT" means a Deposit Account established
pursuant to SECTION 3.9(a) or (b).

         "L/C ISSUER" means NationsBank and any Affiliate of NationsBank that
issues any Letter of Credit pursuant to this Agreement.

         "LENDER" means, at any time, any financial institution party to this
Agreement at such time, including any Person a party hereto pursuant to the
provisions of ARTICLE 15, and in each case its successors and assigns, and
"LENDERS" means, at any time, all such Persons and their successors and assigns.

         "LETTER OF CREDIT" means (i) any letter of credit issued by L/C Issuer
at the request of Borrower pursuant to ARTICLE 3, (ii) the Existing Letters of
Credit and (iii) any renewal, extension, modification, amendment, restatement or
replacement of any thereof.

         "LETTER OF CREDIT AMOUNT" means, with respect to any Letter of Credit,
the aggregate maximum amount at any time available for drawing under such Letter
of Credit.

         "LETTER OF CREDIT FACILITY" means the facility provided under ARTICLE 3
of this Agreement for maintenance or issuance of Letters of Credit in an
aggregate face amount not to exceed $100,000,000 at any time.

         "LETTER OF CREDIT OBLIGATIONS" means, at any time, the sum of (a) the
Reimbursement Obligations at such time, PLUS (b) the aggregate of all Letter of
Credit Amounts outstanding at such time, PLUS (c) the aggregate of all Letter of
Credit Amounts of Letters of Credit the issuance of which has been authorized by
L/C Issuer pursuant to SECTION 3.4(b) but that have not yet been issued, in each
case as determined by Agent.


LOAN AND SECURITY AGREEMENT - Page 25
<PAGE>


         "LETTER OF CREDIT RESERVE" means, at any time, an amount equal to the
Letter of Credit Obligations at such time, other than Letter of Credit
Obligations that are fully secured by Cash Collateral.

         "LEVERAGE RATIO" means the ratio determined for Parent and its
Consolidated Subsidiaries (excluding CompUSA Net.com) as of the end of any
Fiscal Period of (i) Indebtedness for Money Borrowed to (ii) EBITDA for the
preceding twelve (12) Fiscal Periods.

         "LIABILITIES" means, with respect to any Person, all items (excluding
Capital Stock, additional paid-in capital, retained earnings and general
contingency items and deferred tax reserves) which in accordance with GAAP would
be included in determining total liabilities as shown on a balance sheet of such
Person as at the date for which Liabilities are to be determined.

         "LICENSES" means and includes, with respect to any Person, in each case
whether now existing or hereinafter arising, all of such Person's right, title
and interest in and to (a) any and all licensing agreements or similar
arrangements in and to any Patents, Copyrights or Trademarks; (b) all income,
royalties, damages, claims and payments now or hereafter due and/or payable
under and with respect thereto, including, without limitation, damages and
payments for past and future breaches thereof; and (c) all rights to sue for
past, present and future breaches thereof.

         "LIEN" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment, lease constituting
a Capitalized Lease Obligation or other encumbrance of any kind in respect of
such property, whether or not choate, vested or perfected.

         "LOAN" means any Revolving Credit Loan, as well as all such loans
collectively, as the context requires, and in any case includes, without
limitation, any and all renewals, extensions, modifications or replacements
thereof.

         "LOAN ACCOUNT" and "LOAN ACCOUNTS" shall have the meanings ascribed
thereto in SECTION 5.7.

         "LOAN DOCUMENTS" means collectively this Agreement, each Joinder
Agreement, if any, each Reimbursement Agreement, the Notes, the Security
Documents, the Postclosing Agreement, if any, and each other instrument,
agreement, certificate or document executed by any Loan Party in connection with
this Agreement whether prior to, on or after the Agreement Date and each other
instrument, agreement, certificate or document referred to herein or
contemplated hereby, and any and all renewals, extensions, amendments,
modifications or restatements of any of the foregoing.

         "LOAN PARTY" means each of the following, respectively: Borrower,
Parent, CompUSA GP Holdings Company, a Delaware business trust, CompUSA Holdings
Company, a Delaware business trust, CompUSA Holdings I Inc., a Delaware
corporation, CompUSA Holdings II Inc., a Delaware corporation, CompTeam, Inc., a
Delaware corporation, CompUSA PC Inc., a Delaware corporation, CompUSA PC
Operating Company, a Delaware business trust, CompUSA Management Co., a Delaware
business trust, and each Person that becomes a party to this Agreement pursuant
to SECTION


LOAN AND SECURITY AGREEMENT - Page 26
<PAGE>


9.3 after the Agreement Date by execution and delivery of a Joinder
Agreement, and their respective successors and assigns, and "LOAN PARTIES"
means all of such Persons, collectively.

         "LOAN YEAR" means each annual period commencing on the last day of a
Fiscal Year (in the case of Loan Year 1, being June 26, 1999) and ending on the
day preceding the last day of the next Fiscal Year.

         "LOCKBOX" means a U.S. post office box specified in, or pursuant to, an
Agency Account Agreement or a Lockbox Agreement.

         "LOCKBOX AGREEMENT" means any agreement established between Agent, a
Loan Party and a Clearing Bank concerning the establishment of a Lockbox for the
receipt and collection of checks and other items constituting proceeds of
Receivables.

         "MANAGEMENT'S RESTRUCTURING PLAN" means management's restructuring plan
for Parent and its Consolidated Subsidiaries developed as of the end of Parent's
Fiscal Year ending June 26, 1999, as detailed in the notes or management's
discussion and analysis to the financial statements referenced in SECTION 8.1(o)
or as otherwise disclosed to Agent in writing prior to the Agreement Date.

         "MARGIN STOCK" means margin stock as defined in Section 221.1(h) of
Regulation U.

         "MATERIALLY ADVERSE EFFECT" means a materially adverse effect upon the
business, assets, liabilities, financial condition or results of operations, of
Borrower, Parent or of the Loan Parties taken as a whole, or upon the ability of
Borrower, Parent or of the Loan Parties taken as a whole to perform its
respective obligations under any Loan Document to which it is a party, or upon
the enforceability of such obligations against Borrower or Parent or against the
Loan Parties taken as a whole.

         "MAXIMUM RATE" means, at any time, the maximum rate of interest Lenders
may lawfully contract for, charge or receive in respect of the Secured
Obligations as allowed by Applicable Law. For purposes of determining the
Maximum 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 Art. 1D.003, Title 79, Revised Civil Statutes
of Texas, as amended or (b) if the parties subsequently contract as allowed by
Applicable Law, the quarterly ceiling or the annualized ceiling computed
pursuant to Art. 1D.008, Title 79, Revised Civil Statutes of Texas, as amended;
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 Art. 1D.009(a) or Art. 1D.009(b), Title 79,
Revised Civil Statutes of Texas, as amended, shall control for purposes of such
determination, as applicable.

         "MERCHANT ACCOUNT" means, in respect of a Loan Party, any account,
agreement or arrangement between such Loan Party and another Person pursuant to
which such other Person


LOAN AND SECURITY AGREEMENT - Page 27
<PAGE>


gives or makes available credit to such Loan Party in respect of credit card
transactions generated by such Loan Party.

         "MERCHANT ACCOUNT AGREEMENT" means an agreement evidencing a Merchant
Account, and any renewal, extension, modification, amendment or restatement
thereof.

         "MINIMUM AVAILABILITY REQUIREMENT" means at any time $75,000,000.

         "MONEY" means any medium of exchange authorized or adopted by a
domestic or foreign government and any other property or interest in property
classified as money pursuant to the UCC.

         "MONEY BORROWED" means, as applied to Indebtedness:

                  (a)      Indebtedness for Money borrowed;

                  (b)      Subordinated Indebtedness

                  (c)      Indebtedness, whether or not in any such case the
         same was for Money borrowed,

                           (i)      represented by notes payable, or drafts
                  accepted, that represent extensions of credit, including
                  without limitation Indebtedness which is convertible into
                  Capital Stock or Indebtedness for the deferred purchase price
                  of property,

                           (ii)     constituting obligations evidenced by bonds,
                  debentures, notes or similar instruments, or

                           (iii)    upon which interest charges are customarily
                  paid or that was issued, incurred or assumed as full or
                  partial payment for property (other than trade credit that is
                  incurred in the ordinary course of business);

                  (d)      Indebtedness that constitutes a Capitalized Lease
         Obligation, and

                  (e)      Indebtedness described by CLAUSE (c) of the
         definition of "Indebtedness" in this SECTION 1.1, but only to the
         extent that the obligations Guaranteed are obligations that would
         constitute Indebtedness for Money borrowed;

PROVIDED, that Money Borrowed does not include (a) accounts payable (or notes in
exchange thereof) or accrued liabilities incurred in the ordinary course of
business, including without limitation advances from customers and trade
payables financed through floor plan arrangements in the ordinary course of
business or (b) current or deferred income taxes.


LOAN AND SECURITY AGREEMENT - Page 28
<PAGE>


         "MULTIEMPLOYER PLAN" means, with respect to any Person, a
"multiemployer plan" as defined in Section 3(37) or Section 4001(a)(3) of ERISA
to which such Person or any ERISA Affiliate is required to contribute or has
contributed within the immediately preceding six (6) years.

         "NATIONSBANK" means NationsBank, N.A., a national banking association
with an office located at 901 Main Street, Dallas, Dallas County, Texas 75202
and whose principal office is located in Charlotte, North Carolina, and each of
its successors and assigns.

         "NEGATIVE PLEDGE" means any agreement, contract or other arrangement
whereby any Loan Party or any Restricted Subsidiary is prohibited from, or would
otherwise be in default as a result of, creating, assuming, incurring or
suffering to exist, directly or indirectly, any Lien on any of its assets in
favor of Agent for the benefit of the Credit Parties under this Agreement.

         "NET INCOME" means, as applied to any Person, the net income (or net
loss) of such Person for the period in question after giving effect to deduction
of or provision for all operating expenses, all taxes and reserves (including
without limitation, reserves for deferred taxes) and all other proper
deductions, all determined in accordance with GAAP, PROVIDED that there shall be
excluded:

                  (a)      the net income (or net loss) of any Person accrued
         prior to the date it becomes a Subsidiary of, or is merged into or
         Consolidated with, the Person whose Net Income is being determined or a
         Consolidated Subsidiary of such Person;

                  (b)      any net gains or losses on the sale or other
         disposition, not in the ordinary course of business, of Investments and
         other capital assets, PROVIDED that there shall also be excluded any
         related charges for taxes thereon;

                  (c)      any net gain arising from the collection of the
         proceeds of any insurance policy;

                  (d)      any write-up or write-down of any asset; and

                  (e)      any other extraordinary item as defined by GAAP.

         "NET OUTSTANDINGS" of any Lender means, at any time, the sum of (a) all
principal amounts made available by such Lender to Agent in respect of Revolving
Credit Loans funded under this Agreement, MINUS (b) all amounts which are
received by Agent and which, pursuant to this Agreement, are paid over to such
Lender for application in reduction of the outstanding principal balance of such
Revolving Credit Loans.

         "NET PROCEEDS" means proceeds received by any Loan Party or Restricted
Subsidiary from any Asset Disposition (including, without limitation, payments
under notes or other debt securities received in connection with any Asset
Disposition), net of: (a) the transaction costs of such Asset Disposition; (b)
any tax liability arising from such Asset Disposition; and (c) amounts applied
to


LOAN AND SECURITY AGREEMENT - Page 29
<PAGE>


repayment of Indebtedness (other than the Secured Obligations) secured by a
Lien on the asset or property disposed of.

         "NET WORTH" means, for Parent and its Consolidated Subsidiaries,
determined in accordance with GAAP, the sum of: (a) Capital Stock taken at
stated or par value, plus (b) paid in capital plus (c) retained earnings, less
(d) treasury stock.

         "NON-RATABLE LOAN" means a Revolving Credit Loan made by NationsBank in
accordance with the provisions of SECTION 5.10(B)(II).

         "NON-STOCK ACQUISITION CONSIDERATION" means Acquisition Consideration
other than Capital Stock.

         "NOTE" means any of the Revolving Credit Notes, and "NOTES" means more
than one such Note or all of such Notes, collectively, as the context may
indicate.

         "NOTICE OF BORROWING" means a Notice of Borrowing, Prepayment,
Conversion or Continuation, signed by an Authorized Signatory of Borrower, in
substantially the form attached hereto as EXHIBIT "E".

         "OPERATING LEASE" means any lease of real or personal property,
excluding any lease constituting a Capitalized Lease Obligation.

         "OTHER TAXES" shall have the meaning set forth in SECTION 6.6(b).

         "PARENT" means CompUSA Inc., a Delaware corporation (federal tax
identification number 75-2261497) with its chief executive office and principal
place of business located at 14951 North Dallas Parkway, Dallas, Texas 75240,
and its successors and assigns.

         "PARENT GUARANTY" means a Guaranty Agreement dated as of the Agreement
Date executed by Parent, General Partner and CompUSA Holdings Company, pursuant
to this Agreement.

         "PATENT SECURITY AGREEMENT" means a Patent Security Agreement executed
by one or more of the Loan Parties in favor of Agent, for the benefit of the
Credit Parties, as such agreement may be amended, modified, restated or
supplemented from time to time.

         "PATENTS" means and includes, with respect to any Person, all of such
Person's right, title and interest in and to the following, in each case whether
now existing or hereafter arising:

                  (a)      any and all patents and patent applications;

                  (b)      all inventions and improvements described and claimed
         therein;


LOAN AND SECURITY AGREEMENT - Page 30
<PAGE>


                  (c)      all reissues, divisions, continuations, renewals,
         extensions and continuations-in-part thereof;

                  (d)      all income, royalties, damages, claims and payments
         now or hereafter due and/or payable under and with respect thereto,
         including, without limitation, damages and payments for past and future
         infringements thereof;

                  (e)      all rights to sue for past, present and future
         infringements thereof; and

                  (f)      all rights corresponding to any of the foregoing
         under Applicable Law.

         "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

         "PERMITTED CASH EQUIVALENTS" means, with respect to a Loan Party,
Investments permitted to be made pursuant to the Investment Policy of Parent
which is attached as SCHEDULE 1.1B ("Parent's Investment Policy").

         "PERMITTED INVESTMENTS" means Investments of a Loan Party in:

                  (a)      Permitted Cash Equivalents;

                  (b)      Investments in CompUSA Net.com to the extent not
         prohibited by SECTION 13.12, PROVIDED that no Default or Event of
         Default is in existence at the time of making such Investment or would
         result therefrom;

                  (c)      Investments in a Person that is a Loan Party on the
         Agreement Date or that is a Wholly-Owned Subsidiary of a Loan Party
         formed by such Loan Party after the Agreement Date;

                  (d)      Receivables arising in the ordinary course of
         business and payable on standard terms;

                  (e)      Investments described on SCHEDULE 1.1C ("Permitted
         Investments") on the Agreement Date;

                  (f)      loans to directors, officers and employees of any
         Loan Party during any Fiscal Year (calculated net of repayments
         thereon) which, together with Guaranties of Indebtedness of such
         directors, officers and employees permitted under SECTION 13.3
         during such Fiscal Year, do not exceed $1,000,000 in the aggregate,
         PROVIDED that no Default or Event of Default is in existence at the
         time of making any such Investment or would result therefrom;


LOAN AND SECURITY AGREEMENT - Page 31
<PAGE>


                  (g)      shares of Capital Stock, evidence of Indebtedness or
         other security acquired in consideration for or as evidence of past due
         or restructured Receivables in an aggregate face amount of such
         Receivables at any time not to exceed $5,000,000;

                  (h)      Acquisitions permitted by SECTION 13.14; and

                  (i)      Investments (calculated on a net basis by taking into
         account any proceeds received by a Loan Party in liquidation or
         replacement of any such Investment) not otherwise described in CLAUSES
         (A) through (H) above and not otherwise prohibited by this Agreement,
         the net aggregate amount of which does not at any time exceed 15% of
         Net Worth in the aggregate for all such Investments under this CLAUSE
         (i), PROVIDED, that no Default or Event of Default is in existence at
         the time of making such Investment or would result therefrom and
         Availability shall equal or exceed the Minimum Availability Requirement
         at the time of making any such Investment and after giving effect
         thereto.

         "PERMITTED LANDLORDS LIEN" means (i) a Lien provided by statute under
Applicable Law of any state for the benefit of a lessor of Real Property
occupied by a Loan Party or (ii) a contractual Lien created pursuant to, and
securing amounts due under, the lease or other agreement under which such Loan
Party occupies such Real Estate, PROVIDED that (x) such Loan Party is not in
breach or default under the lease or other agreement under which such Loan Party
occupies such Real Estate and (y) any such contractual Lien described in CLAUSE
(ii) preceding remains unperfected and is subordinated to the Security Interest
in form and substance satisfactory to Agent.

         "PERMITTED LIEN" means, as applied to any Person:

                  (a)      The Security Interest;

                  (b)      (i) Liens created by lease agreements or statute,
         rule or regulation to secure the payments of rental amounts and other
         sums not yet due or that are being diligently contested in good faith
         by appropriate proceedings and for which adequate reserves shall have
         been set aside on such Person's books, but only so long as no
         foreclosure, restraint, sale or similar proceedings have been commenced
         with respect thereto (PROVIDED that such Liens shall at all times be
         confined to the assets located on any such leased premises), (ii) Liens
         on leasehold interests created by the lessor (other than a Loan Party
         or Restricted Subsidiary) in favor of any mortgagee of the leased
         premises, and (iii) Liens for taxes, assessments, governmental charges,
         levies or claims (excluding Environmental Liens or Liens imposed
         pursuant to ERISA) but only if payment shall not at the time be
         required to be made in accordance with SECTION 11.6 and no foreclosure,
         restraint, sale or similar proceedings have been commenced with respect
         thereto;

                  (c)      Liens of carriers, warehousemen, mechanics, laborers
         and materialmen and other similar Liens incurred in the ordinary course
         of business but only if payment shall not at the time be required to be
         made in accordance with SECTION 11.6;


LOAN AND SECURITY AGREEMENT - Page 32
<PAGE>

                  (d)      Liens incurred in the ordinary course of business in
         connection with workers' compensation, unemployment insurance or
         similar legislation;

                  (e)      Easements, right-of-way, restrictions, title
         imperfections, leases to others and other encumbrances on the use of
         real property which do not interfere with the ordinary conduct of the
         business of such Person;

                  (f)      (A) Purchase Money Liens securing Purchase Money
         Indebtedness permitted by SECTION 13.2 and incurred for (i) the
         purchase of Inventory, PROVIDED that such Lien expressly excludes all
         proceeds of such Inventory other than insurance proceeds for theft or
         casualty thereof and proceeds received upon disposition of such
         property upon foreclosure pursuant to such Lien, and Agent received
         prior written notice thereof, (ii) the purchase of equipment or leased
         equipment used or acquired for use in the ordinary course of business
         or (iii) the purchase and/or construction of new store locations
         acquired and/or constructed for use in the ordinary course of business,
         (B) Liens on Existing Store Locations which are identified in Schedule
         8.1(gg) as owned by a Loan Party, securing Indebtedness which in each
         case does not exceed the unpaid balance of the original cost of
         acquiring and/or constructing such Existing Store Location and (C)
         Liens constituting leases which are Capitalized Lease Obligations.

                  (g)      Liens in respect of judgments or awards for which
         appeals or proceedings for review are being prosecuted and in respect
         of which a stay of execution upon any such appeal or proceeding for
         review shall have been secured, PROVIDED that (i) such Person shall
         have established adequate reserves for such judgments or awards, (ii)
         such judgments or awards shall be fully insured and the insurer shall
         not have denied coverage, or (iii) such judgments or awards shall have
         been bonded to the satisfaction of the Required Lenders;

                  (h)      Liens, if any, which are described on SCHEDULE 1.1D
         ("Permitted Liens") on the Agreement Date and Liens resulting from the
         refinancing of the related Indebtedness, PROVIDED that such refinancing
         is on the same or substantially similar terms, the Indebtedness secured
         thereby shall not be increased and the Liens shall not cover additional
         assets;

                  (i)      Liens to secure performance or payment bonds,
         performance of bids, construction, supply of materials or similar
         contracts, statutory obligations, and other similar obligations, in
         each case arising in the ordinary course of business and not made in
         connection with Money Borrowed or the deferred purchase price of goods
         or services;

                  (j)      inchoate Liens in respect of pending proceedings or
         claims not yet due and payable and for which reserves have been
         established in accordance with GAAP; and

                  (k)      bank setoff rights arising by operation of law,


LOAN AND SECURITY AGREEMENT - Page 33
<PAGE>


PROVIDED, that unless otherwise expressly provided elsewhere in this Agreement
the characterization of any Lien as a "Permitted Lien" shall not impair or waive
any provision of the Loan Documents in respect of priority of the Security
Interest.

         "PERMITTED WAREHOUSEMAN'S LIEN" means (i) a Lien provided by statute
under Applicable Law of any state for the benefit of a Person who is in the
business of storing goods for hire or (ii) a contractual Lien created pursuant
to, and securing amounts due under, a warehouse agreement or other agreement
under which goods of a Loan Party are stored with a Person who is in the
business of storing goods for hire, PROVIDED that (x) such Loan Party is not in
breach or default under the warehouse agreement or other agreement under which
such goods are stored with such Person and (y) any such contractual Lien
described in CLAUSE (ii) preceding remains unperfected and is subordinated to
the Security Interest in form and substance satisfactory to Agent.

         "PERSON" means any individual, corporation, limited liability company,
joint venture, general partnership, limited partnership, association, trust,
business trust, unincorporated organization or Governmental Authority, or other
similar entity.

         "PLAN" means, with respect to any Person, any employee benefit plan as
defined in Section 3(3) of ERISA in respect of which such Person or any ERISA
Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA, including without limitation, a
Multiemployer Plan and a Benefit Plan.

         "POSTCLOSING AGREEMENT" means a Postclosing Agreement (if any), dated
as of the Agreement Date, among the Loan Parties, Agent and the Lenders on the
Agreement Date, as modified, amended, restated or supplemented from time to
time.

         "PRIME RATE" means the per annum rate of interest established from time
to time by NationsBank as its "prime rate", which rate may not be the lowest
rate of interest charged by NationsBank to its customers.

         "PRINCIPAL OFFICE" means the office of Agent specified in or determined
in accordance with the provisions of SECTION 17.1.

         "PROPRIETARY RIGHTS" means, with respect to any Person, all of such
Person's now owned and hereafter arising or acquired: Patents, Copyrights,
Trademarks and Licenses and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations and
continuations-in-part of any of the foregoing, and all rights to sue for past,
present and future infringement of any of the foregoing.

         "PURCHASE MONEY INDEBTEDNESS" means:

                  (a)      Indebtedness created solely in consideration of all
         or any part of (i) the purchase price of Inventory, including without
         limitation in respect of Indebtedness to manufacturers, vendors and
         floor plan financiers of such Inventory, or equipment or (ii) the


LOAN AND SECURITY AGREEMENT - Page 34
<PAGE>


         acquisition and/or construction of new store locations, in each case
         purchased, acquired and/or constructed for use in the ordinary course
         of business; and

                  (b)      Indebtedness incurred solely for the purpose of
         financing all or any part of the purchase price of Inventory or
         equipment acquired for use in the ordinary course of business which is
         incurred at the time of or within thirty (30) days prior to or after
         such acquisition;

         in each case the aggregate principal amount of which does not exceed an
         amount equal to 100% of the lesser of (i) the purchase price or
         acquisition and/or construction cost of the property acquired in
         consideration of such Indebtedness or (ii) the fair value of such
         property at the time of its acquisition, and

                  (c) any renewals, extensions or refinancings of any of the
         foregoing (but not any increases) in the principal amounts thereof
         outstanding at the time of any such renewal, extension or refinancing.

         "PURCHASE MONEY LIEN" means a Lien securing Purchase Money
Indebtedness, but only if such Lien at all times is confined solely to the
property the purchase price or acquisition and/or construction of which was
financed through the incurrence of the Purchase Money Indebtedness secured by
such Lien and, in the case of Inventory, other Inventory supplied on credit by
the same manufacturer or vendor or by a floor plan financier in respect of
Inventory of an identified manufacturer or vendor, PROVIDED that any such other
Inventory bears the name, trademark or service mark of such manufacturer or
vendor or is otherwise clearly identified as having been supplied by such
manufacturer or vendor (plus, proceeds thereof, and in the case of real
property, any fixtures thereon, PROVIDED, however, that with respect to
Inventory, any Lien in such proceeds expressly excludes all proceeds of such
Inventory other than insurance proceeds for theft or casualty thereof and
proceeds received upon disposition of such property upon foreclosure pursuant to
such Lien).

         "REAL ESTATE" means, with respect to a Person, all of such Person's now
or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with all of such
Person's now or hereafter owned or leased interests in the improvements and
emblements thereon, the fixtures attached thereto and the easements appurtenant
thereto.

         "RECEIVABLES" means, with respect to a Person, all of the following,
now owned and hereafter acquired:

                  (a)      all Accounts, Chattel Paper and Contract Rights of
         such Person;

                  (b)      any and all other rights to the payment of Money or
         other forms of consideration of any kind owing to such Person (to the
         extent, if any, not otherwise included in Instruments, General
         Intangibles or Investment Property);


LOAN AND SECURITY AGREEMENT - Page 35
<PAGE>


                  (c)      all goods, whether now owned or hereafter acquired,
         and whether sold, delivered, undelivered, in transit or returned, which
         may be represented by, or the sale or lease of which may have given
         rise to, any Receivables; and

                  (d)      all proceeds of any of the foregoing.

         "RECEIVABLES GUARANTY" means a Guaranty or indemnity agreement issued
by a Person guaranteeing the prompt payment and performance of a Receivable, or
indemnifying against loss by reason of nonpayment thereof, together with and
including all rights of such Loan Party to payment thereunder and all proceeds
thereof.

         "RECEIVABLES L/C" means a letter of credit issued by a Person as
support for payment and performance of any Receivable(s), together with and
including all rights to payment thereunder and all proceeds thereof.

         "REGISTER" has the meaning set forth in SECTION 15.1(b).

         "REGULATION D" means Regulation D as promulgated by the Board of
Governors of the Federal Reserve System (or any successor Governmental
Authority), as the same may be amended or supplemented from time to time.

         "REGULATION U" means Regulation U as promulgated by the Board of
Governors of the Federal Reserve System (or any successor Governmental
Authority), as the same may be amended or supplemented from time to time.

         "REIMBURSEMENT AGREEMENT" means, with respect to a Letter of Credit,
such form of application and form of reimbursement agreement therefor (whether
in a single or separate documents) as L/C Issuer may employ in the ordinary
course of business for its own account, with such modifications thereto as may
be agreed upon by L/C Issuer and, in addition, each letter of credit
reimbursement agreement in respect of the Existing Letters of Credit.

         "REIMBURSEMENT OBLIGATIONS" means the reimbursement or repayment
obligations of Borrower to the Credit Parties pursuant to SECTION 3.6 or
pursuant to a Reimbursement Agreement with respect to amounts that have been
drawn under Letters of Credit.

         "RELATED COMPANY" means, with respect to the Borrower or any
Subsidiary, any (i) corporation which is a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as the Borrower or any of its Subsidiaries, (ii) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Borrower or any
of its Subsidiaries, or (iii) member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as the
Borrower or any of its Subsidiaries, any corporation described in CLAUSE (i)
above or any partnership, trade or business described in CLAUSE (ii) above.


LOAN AND SECURITY AGREEMENT - Page 36
<PAGE>

         "RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including,
without limitation, the movement of Contaminants through or in the air, soil,
surface water or groundwater.

         "REMEDIAL ACTION" means actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment,
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment, or (iii) perform
pre-remedial studies and investigations and post-remedial monitoring and care.

         "REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for
thirty (30) days' notice to the PBGC is waived under applicable regulations.

         "REQUIRED LENDERS" means, at any time, any combination of Lenders whose
Commitment Percentages at such time equals or exceeds, in the aggregate, fifty
one percent (51%).

         "RESERVE" at any time means the sum of (i) amounts established by Agent
pursuant to SECTION 2.5 as a reserve in respect of costs, expenses, liens,
risks, claims, contingencies or other potential factors which, in the event they
should occur, could adversely affect or otherwise reduce the anticipated net
amount which could be timely realized upon liquidation of Eligible Receivables
or Eligible Inventory for application to the Secured Obligations, (ii) any
reserve established as specifically provided by this Agreement, including
without limitation pursuant to PARAGRAPHS (g) or (h) of the definition of
Eligible Inventory in SECTION 1.1 and (ii) any Environmental Compliance Reserve.

         "RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Eurodollar Loans, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.

         "RESTRICTED DIVIDEND PAYMENT" means any Dividend, excluding any
Dividend by a Loan Party to another Loan Party or by any Subsidiary of a Loan
Party to such Loan Party.

         "RESTRICTED PAYMENT" means (a) any redemption, payment or prepayment or
other retirement, prior to the stated maturity thereof or prior to the due date
of any regularly scheduled payment,


LOAN AND SECURITY AGREEMENT - Page 37

<PAGE>

installment or amortization of, or any defeasance, redemption, purchase,
repurchase or other acquisition or retirement for value, in whole or in part,
of, any Indebtedness for Money Borrowed (other than Secured Obligations) or
of any Indebtedness that is junior and subordinate in right of payment to the
Secured Obligations, or any payment thereon which is prohibited by the terms
thereof or by any provision of this Agreement, (b) the payment by any Person
of the principal amount of or interest on any Indebtedness (other than
current amounts owing on trade debt incurred in the ordinary course of
business or other Indebtedness allowed by SECTION 13.2 and, to the extent
applicable, incurred in accordance with SECTION 13.7) owing to a shareholder,
partner or equity holder of such Person or to any Affiliate (other than a
Loan Party) of any such shareholder, partner or equity holder and (c) payment
of any management, consulting or similar fee by any Person to any Affiliate
(other than a Loan Party) of such Person.

         "RESTRICTED PURCHASE" means any payment on account of the purchase,
redemption or other acquisition or retirement by a Person of any (a) shares of
such Person's Capital Stock (except shares acquired on the conversion or
exchange thereof into or for other shares of Capital Stock of such Person).

         "RESTRICTED SUBSIDIARY" means any Subsidiary, other than a Loan Party
and CompUSA Net.com, of any Loan Party that (notwithstanding the requirements of
SECTION 9.3, but without impairing or waiving such requirements) has not yet
become a Loan Party, and "RESTRICTED SUBSIDIARIES" means all of such Persons.

         "REVOLVING CREDIT FACILITY" means the facility provided by ARTICLE 2 of
this Agreement for Revolving Credit Loans up to the maximum principal sum of
Five Hundred Million Dollars ($500,000,000).

         "REVOLVING CREDIT LOANS" means the Loans made to Borrower pursuant to
SECTION 2.1, and each of such Loans, respectively, as the context requires.

         "REVOLVING CREDIT NOTE" means a Revolving Credit Note made by Borrower
payable to the order of a Lender evidencing the obligation of Borrower to pay
the aggregate unpaid principal amount of the Revolving Credit Loans made to it
by such Lender (and any promissory note or notes that may be issued from time to
time in substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection with a
Person becoming a Lender after the Agreement Date or otherwise) substantially in
the form of EXHIBIT "A" hereto, with all blanks properly completed, either as
originally executed or as may be renewed, extended, modified, amended,
supplemented or restated from time to time.

         "SCHEDULE OF INVENTORY" means a schedule delivered by Borrower to Agent
pursuant to SECTION 10.12(b).

         "SCHEDULE OF RECEIVABLES" means a schedule delivered by Borrower to
Agent pursuant to SECTION 10.12(a).


LOAN AND SECURITY AGREEMENT - Page 38

<PAGE>

         "SECURED OBLIGATIONS" means, in each case whether now in existence or
hereafter arising:

                  (a)      the principal of, and interest and premium, if any,
         on, the Loans;

                  (b)      the Reimbursement Obligations and all other
         obligations owing to L/C Issuer or any other Credit Party arising in
         connection with any Letter of Credit;

                  (c)      all obligations of any Loan Party under any Interest
         Rate Protection Agreement;

                  (d)      all obligations of any Loan Party for losses,
         damages, expenses or any other liabilities of any kind that any Credit
         Party may suffer by reason of a breach by such Loan Party of any
         obligation, covenant or undertaking with respect to any Loan Document;
         and

                  (e)      all indebtedness, liabilities, obligations, covenants
         and duties of any Loan Party to the Credit Parties, or any of them, of
         every kind, nature and description arising under or in respect of this
         Agreement, the Notes or any of the other Loan Documents, whether direct
         or indirect, absolute or contingent, due or not due, contractual or
         tortious, liquidated or unliquidated, and whether or not evidenced by
         any note, and whether or not for the payment of Money, including,
         without limitation, fees required to be paid under ARTICLE 5 and
         expenses required to be paid or reimbursed pursuant to SECTION 17.2.

         "SECURITIES ACCOUNT" means any account to which a Financial Asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise the rights that comprise the Financial Asset.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.

         "SECURITIES INTERMEDIARY" means any (i) clearing corporation, as such
term is defined in Chapter 8 (or Article 8) of the UCC, or (ii) Person,
including a bank or Broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.

         "SECURITY" means any "security," as such term is defined in Chapter 8
(or Article 8) of the UCC and, in any event, shall include, but not be limited
to, any obligation of an Issuer or a share, participation or other interest in
an Issuer or in property or an enterprise of an Issuer: (i) which is represented
by a Security Certificate in bearer or registered form, or the transfer of which
may be registered upon books maintained for that purpose by or on behalf of the
Issuer; (ii) which is one of a class or series or by its terms is divisible into
a class or series of shares, participations, interests or obligations; and (iii)
which (a) is, or is of a type, dealt in or traded on securities exchanges or
securities markets or (b) is a medium for investment and by its terms expressly
provides that it is a security governed by Chapter 8 (or Article 8) of the UCC.

         "SECURITY CERTIFICATE" means any certificate representing a Security.


LOAN AND SECURITY AGREEMENT - Page 39

<PAGE>

         "SECURITY DOCUMENTS" means each of the following:

                  (a)      each Financing Statement;

                  (b)      any Patent Security Agreement;

                  (c)      any Trademark Security Agreement;

                  (d)      any Copyright Security Agreement;

                  (e)      each Guaranty Agreement;

                  (f)      each other writing executed and delivered by any Loan
                           Party or any other Person securing or Guaranteeing
                           the Secured Obligations, or any part thereof; and

                  (g)      any and all renewals, extensions, modifications,
                           amendments, supplements or restatements of any of the
                           foregoing.

         "SECURITY ENTITLEMENT" means any of the rights and property interests
of an Entitlement Holder with respect to a Financial Asset.

         "SECURITY INTEREST" means the Liens of Agent, for the benefit of the
Credit Parties, on and in the Collateral pursuant to this Agreement and the
Security Documents or any other Loan Document.

         "SENIOR SUBORDINATED NOTES" means Parent's $110,000,000 9-1/2% Senior
Subordinated Notes due 2000.

         "SETTLEMENT DATE" means each Business Day after the Effective Date
selected by Agent pursuant to SECTION 5.10(b)(i) as of which a Settlement Report
is delivered by Agent and on which settlement is to be made among the Lenders in
accordance with the provisions of SECTION 5.10.

         "SETTLEMENT REPORT" means each report, in form satisfactory to and
prepared by Agent and delivered to each Lender, setting forth, among other
things, as of the Settlement Date indicated thereon and as of the next preceding
Settlement Date, the aggregate principal balance of all Revolving Credit Loans
outstanding, each Lender's Commitment Percentage thereof, each Lender's Net
Outstandings and all Non-Ratable Loans made, and all payments of principal,
interest and fees received by Agent from Borrower during the period beginning on
such next preceding Settlement Date and ending on such Settlement Date.

         "SOLVENT" means, as to a Person, as of any date, that on and as of such
date (both before and after effecting the transactions contemplated by this
Agreement and making any Loans or taking any actions permitted by this Agreement
proposed to be taken as of such date) (a) the sum of such


LOAN AND SECURITY AGREEMENT - Page 40

<PAGE>

Person's debts is not greater than all of such Person's property, at a fair
valuation, (b) the sum of such Person's debts is not greater than all of such
Person's assets, at a fair valuation, (c) such Person is generally paying its
debts as they become due, (d) such person is not engaged or about to engage
in any business or any transaction for which (i) its property is an
unreasonably small capital or (ii) the remaining assets of such Person are
unreasonably small in relation to any such business or transaction, (e) such
Person does not intend to incur, and does not believe that it will incur,
debts that are or would be beyond its ability to pay as such debts mature or
become due, and (f) such Person does not intend to hinder, delay or defraud
any creditor of such Person. For this purpose (i) "debts" includes anything
included within the definition of "debt" as used in Section 548 of the United
States Bankruptcy Code or as defined or used by Section 24.002 or Section
24.003 of the Texas Uniform Fraudulent Transfer Act, and "assets" has the
meaning defined or used by Section 24.002 of the Texas Uniform Fraudulent
Transfer Act. Contingent, unliquidated or disputed obligations or liabilities
(if any) are valued at the amount which, in light of all relevant facts and
circumstances, is reasonably expected to become absolute, liquidated or
mature.

         "SPOT RATE" means, as of any date of determination with respect to the
conversion of an amount denominated in one currency (the "ORIGINAL CURRENCY") to
another currency (the "OTHER CURRENCY"), the rate of exchange at which, in
accordance with customary banking procedures and at such time and in such
foreign exchange market as Agent shall determine consistent with such
procedures, Agent on such date could purchase such amount of the Original
Currency with such Other Currency.

         "SUBORDINATED INDEBTEDNESS" means (i) the Senior Subordinated Notes,
(ii) the certain subordinated promissory note dated August 31, 1998 executed by
Parent payable to Tandy Corporation and (iii) other Indebtedness of any Loan
Party or any Restricted Subsidiary of a Loan Party which has maturities and
terms, and which is subordinated to payment of the Secured Obligations in a
manner, approved in writing by the Required Lenders, and in each such case any
renewals, modifications or amendments thereof which are approved in writing by
Agent and the Required Lenders.

         "SUBSIDIARY" shall

                  (a)      when used to determine the relationship of a Person
         to another Person, mean a Person of which an aggregate of more than
         fifty percent (50%) of the Capital Stock is owned of record or
         beneficially by such other Person, or by one or more Subsidiaries of
         such other Person, or by such other Person and one or more Subsidiaries
         of such Person,

                           (i)      if the holders of such Capital Stock (A) are
                  ordinarily, in the absence of contingencies, entitled to vote
                  for the election of a majority of the directors (or other
                  individuals performing similar functions) of such Person, even
                  though the right so to vote has been suspended by the
                  happening of such a contingency, or (B) are entitled, as such
                  holders, to vote for the election of a majority of the
                  directors (or individuals performing similar functions) of
                  such Person, whether or not the right so to vote exists by
                  reason of the happening of a contingency, or


LOAN AND SECURITY AGREEMENT - Page 41

<PAGE>

                           (ii)     in the case of Capital Stock which is not
                  issued by a corporation, if such ownership interests
                  constitute a majority voting interest, and

                  (b)      when used with respect to a Plan, ERISA or a
         provision of the Internal Revenue Code pertaining to employee benefit
         plans, also mean any corporation, trade or business (whether or not
         incorporated) which is under common control with Borrower and is
         treated as a single employer with Borrower under Section 414(b) or (c)
         of the Internal Revenue Code and the regulations thereunder.

         "SUBSIDIARY GUARANTY" means a Guaranty Agreement dated as of the
Agreement Date executed by each Loan Party other than Borrower, Parent, General
Partner and CompUSA Holdings Company.

         "SUPPORTING LETTER OF CREDIT" shall have the meaning set forth in
SECTION 3.10.

         "TAXES" shall have the meaning set forth in SECTION 6.6(a).

         "TERMINATION DATE" means (i) the day that is the third anniversary of
the Agreement Date or such later date as to which such date may be extended
pursuant to the provisions of SECTION 2.6, or (ii) or such earlier date as of
when all Secured Obligations shall have been irrevocably paid in full and the
Commitments and the Revolving Credit Facility shall have been terminated.

         "TERMINATION EVENT" means

                  (a)      a Reportable Event, or

                  (b)      the filing of a notice of intent to terminate a Plan,
         or the treatment of a Plan amendment as a termination, under Section
         4041 of ERISA, or

                  (c)      the institution of proceedings to terminate a Plan by
         the PBGC under Section 4042 of ERISA, or the appointment of a trustee
         to administer any Plan under Section 4042 of ERISA.

         "THRESHOLD USAGE AMOUNT" means an amount equal to fifty percent (50%)
of the Borrowing Base as calculated under the definition of "Borrowing Base" in
SECTION 1.1 but without making any deductions therefrom in respect of the
Reserve or the Letter of Credit Reserve.

         "TOTAL COMMITMENT" means the sum of the Commitments.

         "TRADEMARK SECURITY AGREEMENT" means a Trademark Security Agreement
executed by one or more of the Loan Parties in favor of Agent, for the benefit
of the Credit Parties, as may be amended, modified, restated or supplemented
from time to time.


LOAN AND SECURITY AGREEMENT - Page 42

<PAGE>

         "TRADEMARKS" means and includes, with respect to any Person, all of
such Person's right, title and interest in and to the following, in each case
whether now existing or hereafter arising:

                  (a) all trademarks (including service marks), trade names and
         trade styles and the registrations and applications (excluding "intent
         to use" applications") for registration thereof and the goodwill of the
         business symbolized by such trademarks;

                  (b)      all licenses of the foregoing, whether as licensee or
         licensor;

                  (c)      all renewals of the foregoing;

                  (d)      all income, royalties, damages and payments now or
         hereafter due and/or payable with respect thereto, including, without
         limitation, damages, claims and payments for past and future
         infringements thereof;

                  (e)      all rights to sue for past, present and future
         infringements of the foregoing, including the right to settle suits
         involving claims and demands for royalties owing; and

                  (f)      all rights corresponding to any of the foregoing
         under Applicable Law.

         "TREASURY STOCK PURCHASE" means, with respect to any Person, any
purchase, redemption, or other acquisition for value by such Person of any
shares of the Capital Stock of such Person as treasury stock.

         "TYPE" means any type of Loan (i.e., Base Rate Loan or a Eurodollar
Loan).

         "UCC" means (i) the Uniform Commercial Code as in effect from time to
time in the State of Texas, as amended from time to time, and (ii) the Uniform
Commercial Code as in effect from time to time in such other states as any
Collateral may be located, as and to the extent applicable.

         "U.S." means the United States of America.

         "UNCERTIFICATED SECURITY" means any "uncertificated security," as such
term is defined in Chapter 8 (or Article 8) of the UCC, and in any event shall
include, but not be limited to, any Security that is not represented by a
certificate.

         "UNFUNDED CAPITAL EXPENDITURES" means Capital Expenditures which are
paid for by a Person (i) with proceeds of Revolving Credit Loans, or (ii)
otherwise, from sources other than Indebtedness for Money Borrowed.

         "UNFUNDED VESTED ACCRUED BENEFITS" means with respect to any Plan at
any time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan.


LOAN AND SECURITY AGREEMENT - Page 43

<PAGE>

         "UNUSED COMMITMENT FEE PERCENTAGE" means, as of the Agreement Date,
three-eighths percent (0.375%), subject to adjustment thereafter from time to
time to the percentage specified corresponding to the Leverage Ratio as set
forth below, respectively:

<TABLE>
<CAPTION>

==================================================================
               Leverage Ratio                          Percentage
==================================================================
<S>                                                    <C>
Greater than 4.0 to 1.0                                  0.500%
------------------------------------------------------------------
Less than or equal to 4.0 to 1.0 but                     0.500%
greater than 3.0 to 1.0
------------------------------------------------------------------
Less than or equal to 3.0 to 1.0 but                     0.375%
greater than 2.5 to 1.0
------------------------------------------------------------------
Less than or equal to 2.5 to 1.0 but                     0.375%
greater than 2.1 to 1.0
------------------------------------------------------------------
Less than or equal 2.1 to 1.0 but                        0.250%
greater than 1.7 to 1.0
------------------------------------------------------------------
Less than or equal to 1.7                                0.250%
==================================================================
</TABLE>

For the purpose of determining the Unused Commitment Percentage the Leverage
Ratio shall be determined based upon Parent's Consolidated financial statements
for its respective Fiscal Quarters delivered to Agent as required by SECTION
12.1, and any resulting change, if any, in the Unused Commitment Percentage
shall become effective as of the first day of the calendar month following the
month in which such financial statements are delivered to Agent.

         "VOTING STOCK" means Capital Stock of a Person having ordinary voting
power for the election of a majority of the members of its board of directors or
other governing body (not including shares having such power only in the event
of a contingency).

         "WHOLLY-OWNED SUBSIDIARY" when used to determine the relationship of a
Subsidiary to a Person, means a Subsidiary all of the issued and outstanding
Capital Stock (other than directors' qualifying shares) of which shall at the
time be owned by such Person or one or more of such Person's Wholly-Owned
Subsidiaries or by such Person and one or more of such Person's Wholly-Owned
Subsidiaries.

         "YEAR 2000 COMPLIANT" has the meaning set forth in SECTION 8.1(ff).

         "YEAR 2000 PROBLEM" has the meaning set forth in SECTION 8.1(ff).


LOAN AND SECURITY AGREEMENT - Page 44

<PAGE>

         Section 1.2 GENERAL. All terms of an accounting nature not
specifically defined herein shall have the meaning ascribed thereto by GAAP.
The generic terms accounts, chattel paper, documents, equipment, instruments,
general intangibles, inventory and investment property, as and when used in
this Agreement or the Security Documents, shall have the meanings given those
terms in the UCC. Unless otherwise specified, a reference in this Agreement
to a particular section, subsection, Schedule or Exhibit is a reference to
that section, subsection, Schedule or Exhibit of this Agreement, and the
words "hereof," "herein," "hereunder" and words of similar import, when used
in this Agreement, refer to this Agreement as a whole and not to any
particular provision, section or subsection of this Agreement. Wherever from
the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Words denoting individuals include corporations,
limited liability companies, partnerships, joint ventures and other business
entities and vice versa. References to any legislation or statute or code, or
to any provisions of any legislation or statute or code, shall include any
modification or reenactment of, or any legislative, statutory or code
provision substituted for, such legislation, statute or code or provision
thereof. References to any document or agreement (including this Agreement)
shall include references to such document or agreement as amended, restated,
novated, supplemented, modified or replaced from time to time, so long as and
to the extent that such amendment, restatement, novation, supplement,
modification or replacement is either not prohibited by the terms of this
Agreement or is consented to by the Required Lenders and Agent. References to
any Person include its successor or permitted substitutes and assigns.
Standards of "reasonableness," or requirements of similar import, and the
conduct of any Credit Party or any Loan Party in connection with the Loan
Documents shall be measured according to applicable standards prescribed by
the UCC. Where used in this Agreement, the phrase "in its reasonable
discretion in the exercise of reasonable credit judgment", in reference to
Agent, shall be measured according to that discretion that would be exercised
by a reasonably prudent Person that is a lender in the asset based lending
industry and is acting in its capacity as administrative agent in the same or
substantially similar circumstances.

         Section 1.3 EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached
hereto are incorporated fully herein by reference thereto.

                                    ARTICLE 2

                            REVOLVING CREDIT FACILITY

         Section 2.1 REVOLVING CREDIT LOANS. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Lender agrees, severally, but not jointly, to make
Revolving Credit Loans to Borrower from time to time from the Effective Date to
but not including the Termination Date, as requested or deemed requested by
Borrower in accordance with the terms of SECTION 2.2, in amounts equal to such
Lender's Commitment Percentage of each such Loan requested or deemed requested
hereunder up to an aggregate amount at any one time outstanding equal to such
Lender's Commitment Percentage of the Borrowing Base; PROVIDED, HOWEVER, that
(i) the aggregate principal amount of all outstanding


LOAN AND SECURITY AGREEMENT - Page 45

<PAGE>

Revolving Credit Loans (after giving effect to the Loans requested) shall not
exceed the Borrowing Base and (ii) the aggregate amount of Revolving Credit
Loans plus the aggregate amount of Reimbursement Obligations plus an amount
determined by Agent in its reasonable discretion in respect of all
obligations owing by any Loan Party to any Lender in respect of Interest Rate
Protection Agreements shall not exceed $500,000,000. It is expressly
understood and agreed that the Lenders may and at present intend to use the
Borrowing Base as a maximum ceiling on Revolving Credit Loans to Borrower;
PROVIDED, HOWEVER, that it is agreed that should the Revolving Credit Loans
exceed the ceiling so determined or any other limitation set forth in this
Agreement such Revolving Credit Loans shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof and
security therefor. The principal amount of any Revolving Credit Loan which is
repaid pursuant to SECTION 2.3(c) may be reborrowed by Borrower, subject to
the terms and conditions of this Agreement, in accordance with the terms of
this SECTION 2.1. Agent's and each Lender's books and records reflecting the
date and the amount of each Revolving Credit Loan and each repayment of
principal thereof shall constitute prima facie evidence of the accuracy of
the information contained therein, subject to the provisions of SECTION 5.10.

         Section 2.2 MANNER OF BORROWING REVOLVING CREDIT LOANS. Borrowings
under the Revolving Credit Facility shall be made as follows:

                  (a)      REQUESTS FOR BORROWING. A request for a borrowing
         shall be made, or shall be deemed to be made, in the following manner:

                           (i)      requests for a Revolving Credit Loan shall
                  be made in the manner prescribed by ARTICLE 5;

                           (ii)     whenever a check or other item is presented
                  to a Disbursing Bank for payment against a Disbursement
                  Account in an amount greater than the then available balance
                  in such account then, unless payment is otherwise timely made
                  within three (3) Business Days, such Disbursing Bank shall,
                  and is hereby irrevocably authorized by Borrower to, give
                  Agent notice thereof, which notice shall be deemed to be a
                  request for a Revolving Credit Loan on the date of such notice
                  in an amount equal to the excess of such check or other item
                  over such available balance;

                           (iii)    unless payment is otherwise timely made
                  within three (3) Business Days, the becoming due of any amount
                  required to be paid under this Agreement or any of the Notes
                  as interest shall be deemed to be a request for a Revolving
                  Credit Loan on the due date in the amount required to pay such
                  interest;

                           (iv)     unless payment is otherwise timely made
                  within three (3) Business Days, the becoming due of any other
                  Secured Obligation shall be deemed to be a request for a
                  Revolving Credit Loan on the due date in the amount then so
                  due, and such request shall be irrevocable; and


LOAN AND SECURITY AGREEMENT - Page 46

<PAGE>

                           (v)      the receipt by Agent of notification from
                  L/C Issuer to the effect that a drawing has been made under a
                  Letter of Credit and that Borrower has failed to reimburse L/C
                  Issuer therefor in accordance with the terms of the applicable
                  Reimbursement Agreement and ARTICLE 3 shall be deemed to be a
                  request for a Revolving Credit Loan on the date such
                  notification is received in the amount of such drawing which
                  is so unreimbursed.

                  (b)      DISBURSEMENT OF LOANS. Borrower hereby irrevocably
         authorizes Agent to disburse the proceeds of each borrowing requested,
         or deemed to be requested, pursuant to this SECTION 2.2 as follows:

                           (i)      the proceeds of each borrowing requested
                  under SECTION 2.2(a)(i) shall be disbursed by Agent in Dollars
                  in immediately available funds, (a) in the case of the initial
                  borrowing under the Revolving Credit Facility, in accordance
                  with the terms of the certificate from Borrower to Agent
                  referred to in SECTION 7.1(a)(xi), and (b) in the case of each
                  subsequent borrowing, by wire transfer to a Disbursement
                  Account or, in the absence of a Disbursement Account, by wire
                  transfer to such other account as may be agreed upon by
                  Borrower and Agent from time to time;

                           (ii)     the proceeds of each borrowing deemed
                  requested under SECTION 2.2(a)(ii), (iii) or (iv) shall be
                  disbursed by Agent by way of direct payment of the relevant
                  amount, interest or Secured Obligation referenced therein, as
                  the case may be, PROVIDED that Agent and the Lenders shall
                  have no obligation to make any such Loan; and

                           (iii)    the proceeds of each borrowing deemed
                  requested under SECTION 2.2(a)(v) shall be disbursed by Agent
                  directly to L/C Issuer in payment of the Reimbursement
                  Obligations referenced therein.

         Section 2.3 REPAYMENT OF REVOLVING CREDIT LOANS. Borrower hereby agrees
to pay the Revolving Credit Loans as follows:

                  (a)      Whether or not any Default or Event of Default has
         occurred, the outstanding principal amount of all the Revolving Credit
         Loans is due and payable, and shall be repaid by Borrower in full, on
         the Termination Date;

                  (b)      If at any time the aggregate outstanding unpaid
         principal amount of the Revolving Credit Loans exceeds the Borrowing
         Base in effect at such time, Borrower shall repay the Revolving Credit
         Loans in an amount sufficient to reduce the aggregate unpaid principal
         amount of such Revolving Credit Loans by an amount equal to such
         excess, together with accrued and unpaid interest on the amount so
         repaid to the date of repayment; and


LOAN AND SECURITY AGREEMENT - Page 47

<PAGE>

                  (c)      Borrower hereby instructs Agent to repay the
         Revolving Credit Loans outstanding on any day in an amount equal to the
         amount received by Agent on such day pursuant to SECTION 10.1(b).

         Section 2.4 REVOLVING CREDIT NOTE. Each Lender's Revolving Credit Loans
and the obligation of Borrower to repay such Revolving Credit Loans shall be
evidenced by a Revolving Credit Note payable to the order of such Lender. Each
Revolving Credit Note shall be dated the Agreement Date, or with respect to any
Lender which is a party to an Assignment and Acceptance the date of such
Assignment and Acceptance, and be duly and validly executed and delivered by
Borrower.

         Section 2.5 BORROWING BASE. At any time after the occurrence, and
during the continuance, of an Event of Default, the percentages specified in
this Agreement for determination of the Borrowing Base may be adjusted from time
to time based upon such considerations as Agent may deem appropriate in its
reasonable discretion (PROVIDED, that any such reduction shall be eliminated,
and such percentages shall be restored, at such time, if any, as any such Event
of Default is cured or waived in accordance with SECTION 17.10). Percentages
used from time to time in calculating the Borrowing Base are for the sole
purpose of determining the maximum amount of Revolving Credit Loans that may be
outstanding from time to time under this Agreement and shall not be evidentiary
of or binding upon the Credit Parties with respect to the market value or
liquidation value of any Collateral. Agent shall have the right in its
reasonable discretion in the exercise of reasonable credit judgment to establish
a Reserve at any time when the aggregate outstanding balance of all Revolving
Credit Loans plus the Letter of Credit Reserve exceeds the Threshold Usage
Amount. Funding of Revolving Credit Loans hereunder shall at all times remain
subject to confirmation of Eligible Receivables, Eligible Inventory and the
Borrowing Base, in Agent's discretion. Any request for a Revolving Credit Loan
which, if funded, would result in the unpaid balance of the Revolving Credit
Loans being in excess of the amount allowed by this Agreement may be declined by
Agent in its sole discretion without prior notice.

         Section 2.6 EXTENSION OF REVOLVING CREDIT FACILITY. Borrower may notify
Agent in writing by May 1 of each year while this Agreements in effect,
commencing May 1, 2000, of its desire to extend the Termination Date for an
additional 12 months beyond the then present Termination Date. If such notice is
given by Borrower, Agent by the immediately following June 15 of such year will
notify Borrower in writing if the Credit Parties agree to such extension.
Extension of the Termination Date shall be at the sole option and discretion of
the Credit Parties, and the decision to extend the Termination Date shall
require the consent of all Credit Parties. If either Borrower or the Agent fails
to give such notice within the time prescribed above, then the Termination Date
shall not be extended and shall remain as the then present Termination Date. An
extension of the Termination Date pursuant to this SECTION 2.6 shall not require
any renewal Note or amendment of or supplement to this Agreement or any other
Loan Document unless otherwise required by Agent.


LOAN AND SECURITY AGREEMENT - Page 48

<PAGE>

                                    ARTICLE 3

                            LETTER OF CREDIT FACILITY

         Section 3.1 AGREEMENT TO ISSUE. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, L/C Issuer agrees to issue for the account of Borrower
or, at the request of Borrower, any other Loan Party, one or more Letters of
Credit in accordance with this ARTICLE 3, from time to time during the period
commencing on the Effective Date and ending on the Termination Date.

         Section 3.2 AMOUNTS. L/C Issuer shall not have any obligation to issue
any Letter of Credit at any time:

                  (a)      if, after giving effect to the issuance of the
         requested Letter of Credit, (i) the aggregate Letter of Credit
         Obligations would exceed the maximum amount of the Letter of Credit
         Facility then in effect or (ii) the aggregate principal amount of the
         Revolving Credit Loans outstanding would exceed the Borrowing Base
         (after reduction for the Letter of Credit Reserve in respect of such
         Letter of Credit) or (iii) the aggregate amount of the Revolving
         Credit Loans outstanding plus the aggregate amount of Reimbursement
         Obligations plus an amount determined by Agent in its reasonable
         discretion in respect of all obligations owing by any Loan Party to any
         Lender in respect of Interest Rate Protection Agreements would exceed
         $500,000,000; or

                  (b)      which has a term longer than two (2) calendar years
         or an expiration date after the last Business Day that is more than
         thirty (30) days prior to the Termination Date.

         Section 3.3 CONDITIONS. The obligation of L/C Issuer to issue any
Letter of Credit is subject to the satisfaction of (i) the conditions precedent
contained in ARTICLE 7 and (ii) the following additional conditions precedent in
a manner satisfactory to Agent and L/C Issuer:

                  (a)      Borrower shall have delivered to L/C Issuer and
         Agent, at such times and in such manner as L/C Issuer or Agent may
         prescribe, an application in form and substance satisfactory to L/C
         Issuer and Agent for the issuance of the proposed Letter of Credit, a
         Reimbursement Agreement and such other documents as may be required
         pursuant to the terms thereof, and the form and terms of the proposed
         Letter of Credit shall be satisfactory to L/C Issuer and Agent
         (PROVIDED, that in the event any terms of such Reimbursement Agreement
         or other documents are inconsistent with the terms of this Agreement,
         then the terms of this Agreement shall control); and

                  (b)      as of the date of issuance, no order of any court,
         arbitrator or other Governmental Authority having jurisdiction or
         authority over L/C Issuer shall purport by its terms to enjoin or
         restrain banks generally from issuing letters of credit of the type and
         in the amount of the proposed Letter of Credit, and no law, rule or
         regulation applicable to banks generally and no request or directive
         (whether or not having the force of law) from any


LOAN AND SECURITY AGREEMENT - Page 49

<PAGE>

         Governmental Authority with jurisdiction over banks generally shall
         prohibit or request that L/C Issuer refrain from the issuance of
         letters of credit generally or the issuance of such Letter of Credit.

                  (c)      L/C Issuer shall have received from Agent
         authorization to issue the requested Letter of Credit.

         Section 3.4 ISSUANCE OF LETTERS OF CREDIT.

                  (a)      REQUEST FOR ISSUANCE. Borrower shall give L/C Issuer
         and Agent written notice of each request for the issuance of a Letter
         of Credit no later than three (3) Business Days prior to the proposed
         date of issuance of the Letter of Credit. Such notice shall be
         irrevocable and shall specify the original face amount of the Letter of
         Credit requested, the effective date (which date shall be a Business
         Day) of issuance of such requested Letter of Credit, whether such
         Letter of Credit may be drawn in a single or in multiple draws, the
         date on which such requested Letter of Credit is to expire (which date
         shall be a Business Day that is more than thirty (30) days prior to the
         Termination Date), the purpose for which such Letter of Credit is to be
         issued and the beneficiary of the requested Letter of Credit. Borrower
         shall attach to such notice the form of the Letter of Credit that
         Borrower requests to be issued.

                  (b)      RESPONSIBILITIES OF AGENT; ISSUANCE. Agent shall
         determine, as of the Business Day immediately preceding the requested
         effective date of issuance of the Letter of Credit set forth in the
         notice from Borrower pursuant to SECTION 3.4(a), the amount of the
         unused portion of the Letter of Credit Facility and the Borrowing Base.
         If (i) the form of the Letter of Credit delivered by Borrower to Agent
         is acceptable to L/C Issuer and Agent, (ii) the undrawn face amount of
         the requested Letter of Credit is less than or equal to the lesser of
         (A) the amount of the unused portion of the Letter of Credit Facility
         and (B) the unused Borrowing Base, and (iii) Agent has received a
         certificate from Borrower stating that the applicable conditions set
         forth in ARTICLE 7 have been satisfied, then, subject to the terms of
         this Agreement, L/C Issuer will cause the Letter of Credit to be
         issued. NationsBank in its discretion may cause any Affiliate of
         NationsBank to issue any requested Letter of Credit, whereupon such
         Affiliate shall be L/C Issuer with respect to such Letter of Credit and
         shall have all of the rights, benefits and interests of L/C Issuer as
         are specified by the Loan Documents in connection therewith. Each such
         Affiliate, if any, shall be a third party beneficiary of the Loan
         Documents and shall be entitled to rely upon all representations,
         warranties and covenants contained herein and therein. The Loan Parties
         hereby authorize NationsBank and Agent to deliver or otherwise disclose
         to L/C Issuer copies of any of the Loan Documents and any other
         information from time to time in NationsBank's or Agent's possession
         concerning any of the Loan Parties or the transactions contemplated by
         the Loan Documents.

                  (c)      NOTICE OF ISSUANCE. Promptly after the issuance of
         any Letter of Credit, L/C Issuer shall give Agent written or facsimile
         notice, or telephonic notice confirmed promptly


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         thereafter in writing, of the issuance of such Letter of Credit, and
         Agent shall give each Lender written or facsimile notice, or telephonic
         notice confirmed promptly thereafter in writing, of the issuance of
         such Letter of Credit; PROVIDED that any failure or delay in giving or
         confirming any such notice shall not impair the obligations of L/C
         Issuer, any Lender or Borrower with respect to any such Letter of
         Credit.

                  (d)      NO EXTENSION OR AMENDMENT. No Letter of Credit shall
         be extended or amended unless the requirements of this SECTION 3.4 are
         met as though a new Letter of Credit were being requested and issued.

         Section 3.5 DUTIES OF L/C ISSUER. Any action taken or omitted to be
taken by L/C Issuer under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct,
shall not result in any liability of L/C Issuer to any Lender or relieve any
Lender of its obligations hereunder to L/C Issuer. In determining whether to
pay under any Letter of Credit, L/C Issuer shall have no obligation to any
Lender other than to confirm that any documents required to be delivered
under such Letter of Credit in connection with such drawing have been
presented and appear on their face to comply with the requirements of such
Letter of Credit.

         Section 3.6 PAYMENT OF REIMBURSEMENT OBLIGATIONS.

                  (a)      PAYMENT TO ISSUER. Borrower agrees to reimburse L/C
         Issuer for any drawings (whether partial or full) under each Letter of
         Credit and agrees to pay to L/C Issuer the amount of all other
         Reimbursement Obligations and other amounts payable to L/C Issuer under
         or in connection with such Letter of Credit immediately when due,
         irrespective of any claim, set-off, defense or other right which
         Borrower may have at any time against L/C Issuer or any other Person.

                  (b)      RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any
         payment by or on behalf of any Loan Party with respect to any Letter of
         Credit or any Reimbursement Obligation relating thereto received by L/C
         Issuer, or by Agent, and distributed by Agent to the Lenders on account
         of their respective participations therein, is thereafter set aside,
         avoided or recovered from L/C Issuer or Agent in connection with any
         receivership, liquidation or bankruptcy proceeding, the Lenders shall,
         upon demand by Agent pay to Agent, for the account of Agent or L/C
         Issuer, their respective Commitment Percentages of such amount set
         aside, avoided or recovered together with interest at the rate required
         to be paid by L/C Issuer, or by Agent, upon the amount required to be
         repaid by it.

                  (c)      EXISTING LETTERS OF CREDIT. All Reimbursement
         Obligations or other obligations of any Loan Party under any
         Reimbursement Agreement in respect of the Existing Letters of Credit
         are hereby reaffirmed and continued in full force and effect. All
         obligations of any Loan Party for payment in respect of Reimbursement
         Obligations or other obligations in respect of the Existing Letters of
         Credit, as provided by the Existing Credit


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         Agreement or the "Loan Documents" as defined therein, are hereby
         renewed, continued, and reaffirmed under the terms of this
         Agreement and the other Loan Documents.

         Section 3.7 PARTICIPATIONS.

                  (a)      PURCHASE OF PARTICIPATIONS. On the Agreement Date
         with respect to the Existing Letters of Credit and Immediately upon
         issuance by L/C Issuer of any other Letter of Credit, each Lender shall
         be deemed to have irrevocably and unconditionally purchased and
         received without recourse or warranty, an undivided interest and
         participation in such Letter of Credit, equal to such Lender's
         Commitment Percentage of the face amount thereof (including, without
         limitation, all obligations of Borrower with respect thereto).

                  (b)      SHARING OF LETTER OF CREDIT PAYMENTS. In the event
         that L/C Issuer makes a payment under any Letter of Credit and L/C
         Issuer shall not have been repaid such amount pursuant to SECTION 3.6,
         then NationsBank may, in its discretion without obligation to do so,
         make such repayment to L/C Issuer and thereupon be deemed to have made
         a Non-Ratable Loan in the amount of such repayment, and notwithstanding
         the occurrence or continuance of a Default or Event of Default at the
         time of such repayment, such Non-Ratable Loan shall be subject to the
         provisions of SECTION 5.10(c) and the absolute obligations of the
         Lenders to pay for their respective participation interests therein.

                  (c)      SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS.
         Whenever L/C Issuer receives a payment from or on behalf of Borrower on
         account of a Reimbursement Obligation as to which Agent has previously
         received for the account of L/C Issuer payment from a Lender pursuant
         to this SECTION 3.7, L/C Issuer shall promptly pay to Agent, for the
         benefit of such Lender, such Lender's Commitment Percentage of the
         amount of such payment from Borrower in Dollars. Each such payment
         shall be made by L/C Issuer on the Business Day on which L/C Issuer
         receives immediately available funds pursuant to the immediately
         preceding sentence, if received prior to 11:00 a.m. (Dallas, Texas
         time) on such Business Day and otherwise on the next succeeding
         Business Day.

                  (d)      DOCUMENTATION. Upon the request of any Lender, Agent
         shall furnish to such Lender copies of any Letter of Credit,
         Reimbursement Agreement or application for any Letter of Credit and
         such other documentation as may reasonably be requested by such Lender.

                  (e)      OBLIGATIONS IRREVOCABLE. The obligations of each
         Lender to make payments to Agent with respect to any Letter of Credit
         and their participations therein pursuant to this Agreement and the
         obligations of Borrower to make payments to L/C Issuer or to Agent, for
         the account of the Lenders, pursuant to SECTION 3.6 or otherwise, in
         each case shall be irrevocable and not subject to any qualification or
         exception whatsoever, and shall be made in accordance with the terms
         and conditions of this Agreement (assuming, in the case of the
         obligations of the Lenders to make such payments, that the Letter of
         Credit has been issued


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         in accordance with SECTION 3.4), including, without limitation, any of
         the following circumstances:

                           (i)      Any lack of validity or enforceability of
                  this Agreement or any of the other Loan Documents;

                           (ii)     The existence of any claim, set-off, defense
                  or other right which Borrower may have at any time against a
                  beneficiary named in a Letter of Credit or any transferee of
                  any Letter of Credit (or any Person for whom any such
                  transferee may be acting), any Lender, Agent, L/C Issuer or
                  any other Person, whether in connection with this Agreement,
                  any Letter of Credit, the transactions contemplated herein or
                  any unrelated transactions (including any underlying
                  transactions between Borrower or any other Person and the
                  beneficiary named in any Letter of Credit);

                           (iii)    Any draft, certificate or any other document
                  presented under the Letter of Credit upon which payment has
                  been made according to its terms proving to be forged,
                  fraudulent, invalid or insufficient in any respect or any
                  statement therein being untrue or inaccurate in any respect;

                           (iv)     The surrender or impairment of any
                  Collateral or any other security for the Secured Obligations
                  or the performance or observance of any of the terms of any of
                  the Loan Documents;

                           (v)      The occurrence of any Default or Event of
                  Default; or

                           (vi)     Agent's failure to deliver to the Lenders
                  the notice provided for in SECTION 3.4(c).

         Section 3.8 INDEMNIFICATION, EXONERATION.

                  (a)      INDEMNIFICATION BY BORROWER. WITHOUT LIMITING SECTION
         17.13 AND IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE PROVIDED IN THIS
         ARTICLE 3, BORROWER JOINTLY AND SEVERALLY AGREES TO PROTECT, INDEMNIFY,
         PAY AND SAVE EACH OF THE CREDIT PARTIES HARMLESS FROM AND AGAINST ANY
         AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES
         AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY CREDIT
         PARTY MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECTLY OR
         INDIRECTLY, OF ANY OF THE FOLLOWING: (i) THE ISSUANCE OF ANY LETTER OF
         CREDIT, OTHER THAN AS A RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL
         MISCONDUCT, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION, OR (ii)
         THE FAILURE OF L/C ISSUER TO HONOR A DRAWING UNDER ANY LETTER OF CREDIT
         AS A RESULT OF ANY ACT OR OMISSION, WHETHER RIGHTFUL OR WRONGFUL, OF
         ANY


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<PAGE>

         PRESENT OR FUTURE DE JURE OR DE FACTO GOVERNMENTAL AUTHORITY (ALL SUCH
         ACTS OR OMISSIONS BEING HEREINAFTER REFERRED TO COLLECTIVELY AS
         "GOVERNMENT ACTS").

                  (b)      ASSUMPTION OF RISK BY LOAN PARTIES. As among the Loan
         Parties and the Credit Parties, the Loan Parties assume all risks of
         the acts and omissions of, or misuse of any of the Letters of Credit
         by, the respective beneficiaries of such Letters of Credit. In
         furtherance and not in limitation of the foregoing, subject to the
         provisions of the applications for the issuance of Letters of Credit,
         the Credit Parties shall not be responsible for:

                           (i)      the form, validity, sufficiency, accuracy,
                  genuineness or legal effect of any document submitted by any
                  Person in connection with the application for and issuance of
                  and presentation of drafts with respect to any of the Letters
                  of Credit, even if it should prove to be in any or all
                  respects invalid, insufficient, inaccurate, fraudulent or
                  forged;

                           (ii)     the validity or sufficiency of any
                  instrument transferring or assigning or purporting to transfer
                  or assign any Letter of Credit or the rights or benefits
                  thereunder or proceeds thereof, in whole or in part, which may
                  prove to be invalid or ineffective for any reason;

                           (iii)    errors, omissions, interruptions or delays
                  in transmission or delivery of any messages, by mail, cable,
                  telegraph, telex or otherwise, whether or not they be in
                  cipher;

                           (iv)     errors in interpretation of technical terms;

                           (v)      any loss or delay in the transmission or
                  otherwise of any document required in order to make a drawing
                  under any Letter of Credit or of the proceeds thereof;

                           (vi)     the misapplication by the beneficiary of any
                  Letter of Credit of the proceeds of any drawing under such
                  Letter of Credit; or

                           (vii)    any consequences arising from causes beyond
                  the control of any Credit Party, including, without
                  limitation, any Government Acts.

         None of the foregoing shall affect, impair or prevent the vesting of
         any rights or powers of any of any Credit Party under this SECTION 3.8.

                  (c)      EXONERATION. In furtherance and extension, and not in
         limitation, of the specific provisions set forth above, any action
         taken or omitted by the Credit Parties under or in connection with any
         of the Letters of Credit or any related certificates, if taken or


LOAN AND SECURITY AGREEMENT - Page 54

<PAGE>

         omitted in good faith, shall not result in any liability of any Credit
         Party to any Loan Party or relieve any Loan Party of any of its
         obligations hereunder to any such Person.

                  (d)      INDEMNIFICATION BY LENDERS. WITHOUT LIMITING SECTION
         16.5, THE LENDERS AGREE TO INDEMNIFY L/C ISSUER (TO THE EXTENT NOT
         REIMBURSED UNDER SECTION 17.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF
         BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH THEIR
         RESPECTIVE COMMITMENTS, FOR ANY AND ALL LIABILITIES, OBLIGATIONS,
         LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES
         (INCLUDING ATTORNEYS' FEES) OR DISBURSEMENTS OF ANY KIND AND NATURE
         WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST L/C
         ISSUER (INCLUDING BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT
         OF ANY LETTER OF CREDIT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY
         ACTION TAKEN OR OMITTED BY L/C ISSUER UNDER ANY LETTER OF CREDIT OR ANY
         LOAN DOCUMENT IN CONNECTION THEREWITH (INCLUDING ANY OF THE FOREGOING
         ARISING FROM THE NEGLIGENCE OF L/C ISSUER); PROVIDED THAT NO LENDER
         SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT IT ARISES FROM
         THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
         INDEMNIFIED. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO
         REIMBURSE L/C ISSUER PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY
         COSTS OR EXPENSES PAYABLE BY BORROWER TO L/C ISSUER UNDER SECTION 17.2,
         TO THE EXTENT THAT L/C ISSUER IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS
         AND EXPENSES BY BORROWER. THE AGREEMENTS CONTAINED IN THIS SECTION
         SHALL SURVIVE PAYMENT IN FULL OF ALL SECURED OBLIGATIONS.

         Section 3.9       L/C CASH COLLATERAL ACCOUNT.

                  (a)      Upon the occurrence and during the continuance of an
         Event of Default and demand by the Agent pursuant to SECTION 14.2(c)
         (but in the case of an Event of Default pursuant to SECTION 14.1(g) or
         SECTION 14.1(h), without any demand or the taking of any other action
         by Agent or any Lender), Borrower will promptly pay to Agent in
         immediately available funds an amount equal to the maximum amount then
         available to be drawn under all Letters of Credit then outstanding.

                  (b)      If, notwithstanding the provisions of SECTION 3.2(b),
         any Letter of Credit is outstanding on the Termination Date then,
         unless an L/C Cash Collateral Account has already been established for
         such Letter of Credit under SECTION 3.9(a), on or prior to such
         Termination Date Borrower shall, promptly on demand by Agent, pay to
         Agent in immediately available funds an amount equal to the maximum
         amount then available to be drawn under such Letters of Credit.


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<PAGE>

                  (c)      Amounts paid to Agent pursuant to SECTION 3.9(a) or
         SECTION 3.9(b) shall be deposited by Agent to a cash collateral account
         ("the L/C CASH COLLATERAL ACCOUNT") which shall be included in the
         Collateral. The L/C Cash Collateral Account shall be under the sole
         dominion and control of Agent, and the Loan Parties shall have no right
         to withdraw or to cause Agent to withdraw any funds deposited in the
         L/C Cash Collateral Account.

                  (d)      Agent shall (A) apply any funds in the L/C Cash
         Collateral Account on account of Reimbursement Obligations as and when
         they become due and payable if and to the extent that Borrower shall
         fail to timely pay such Reimbursement Obligations as required by this
         Agreement and (B) on or after the Termination Date, apply any proceeds
         remaining in the L/C Cash Collateral Account first to pay any unpaid
         Secured Obligations then outstanding hereunder and then to refund any
         remaining amount to Borrower.

                  (e)      At Borrower's request and direction (no more than
         once per calendar month), but subject to Agent's reasonable approval,
         Agent shall cause the Cash Collateral in the L/C Cash Collateral
         Account to be invested in Permitted Cash Equivalents. Any commissions,
         expenses and penalties incurred by Agent in connection with any
         investment and redemption of such Cash Collateral shall be Secured
         Obligations hereunder secured by the Collateral, shall bear interest
         pursuant to SECTION 5.2(c) and shall be charged to Borrower's Loan
         Accounts or, at Agent's option, shall be paid out of the proceeds of
         any earnings received by Agent from the investment of such Cash
         Collateral as provided herein or out of such cash itself. Agent makes
         no representation or warranty as to, and shall not be responsible for,
         the rate of return, if any, earned on any Cash Collateral. Any earnings
         on Cash Collateral shall be held as additional Cash Collateral subject
         to this Agreement. Borrower recognizes that any losses or taxes with
         respect to such investments shall be borne solely by Borrower, and
         Borrower agrees to hold the Credit Parties harmless from any and all
         such losses and taxes. Agent may liquidate any investment held in the
         L/C Cash Collateral Account in order to apply the proceeds of such
         investment on account of the Reimbursement Obligations (or on account
         of any other Secured Obligation then due and payable, as the case may
         be) without regard to whether such investment has matured and without
         liability for any penalty or other fee incurred (with respect to which
         Borrower hereby agrees to reimburse Agent) as a result of such
         application.

                  (f)      After establishment of the L/C Cash Collateral
         Account pursuant to SECTIONS 3.9(a) or 3.9(b) Borrower shall pay to
         Agent the reasonable and customary fees with respect to the maintenance
         of accounts similar to the L/C Cash Collateral Account.

                  (g)      At such time, if any, that the amount of the L/C Cash
         Collateral Account exceeds the aggregate amount of the outstanding
         Reimbursement Obligations and any other Secured Obligations due and
         payable, Agent shall promptly distribute to Borrower funds from the L/C
         Cash Collateral Account in an amount equal to such excess.


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         Section 3.10 SUPPORTING LETTER OF CREDIT. With respect to any Letter of
Credit referenced in SECTION 3.9(b), Borrower may propose to Agent that Borrower
shall deposit with Agent, for the ratable benefit of the Credit Parties, with
respect to each such Letter of Credit, a standby letter of credit (a "SUPPORTING
LETTER OF CREDIT") in form and substance satisfactory to Agent, issued by an
issuer reasonably satisfactory to Agent in an amount equal to the greatest
amount for which such Letter of Credit may be drawn, under which Supporting
Letter of Credit Agent is entitled to draw amounts necessary to reimburse the
Credit Parties for payments made by the Credit Parties resulting from any
drawing under such Letter of Credit or under any reimbursement or guaranty
agreement with respect thereto. Agent in its discretion may accept such
Supporting Letter of Credit in lieu of the L/C Cash Collateral Account required
by SECTION 3.9(b), PROVIDED that Agent shall not be obligated to do so. Any such
Supporting Letter of Credit shall be held by Agent for the benefit of the Credit
Parties, as security for, and to provide for the payment of, the Reimbursement
Obligations in respect of the Letter of Credit which is the subject of such
Supporting Letter of Credit.

         Section 3.11 EXISTING LETTERS OF CREDIT. On and after the Agreement
Date the Existing Letters of Credit and related Reimbursement Agreements (i)
shall be deemed to have been issued under, and the Reimbursement Obligations in
respect thereof shall be governed by and have the benefits of, this Agreement
and other Loan Documents, PROVIDED, that in the event any provision of such
Reimbursement Agreements in respect of Existing Letters of Credit are
inconsistent with this Agreement, the provisions of this Agreement shall control
and (ii) shall be deemed included as a part of the Letter of Credit Facility
(including without limitation each Lender's Commitment in respect thereof).


                                    ARTICLE 4

                                    RESERVED


                                    ARTICLE 5

                             GENERAL LOAN PROVISIONS

         Section 5.1 PROCEDURE FOR BORROWING AND DISBURSEMENT OF LOANS.

                  (a)      In order to receive any Loan, Borrower shall notify
         Agent of a request for a Loan by means of a Notice of Borrowing or
         other notice on behalf of Borrower acceptable to Agent, therein
         designating the amount of the Loan requested and the date on which
         funding is requested. Each request for a Loan shall be delivered to
         Agent not later than 11:00 a.m. (Dallas, Texas time) (i) in the case of
         a Base Rate Loan on the Business Day on which funding of such Loan is
         requested and (ii) in the case of a Eurodollar Loan, at least two (2)
         Eurodollar Business Days prior to the Business Day on which funding of
         such Loan is requested. Such notice may be made in any manner
         prescribed by SECTION 17.1, PROVIDED that for this purpose each Loan
         Party irrevocably authorizes Agent to rely upon any Person whom Agent
         believes to be an authorized officer of Borrower and for purposes of
         this


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         Agreement any such officer shall be deemed to be authorized to request
         any such Loan on behalf of Borrower. Any such notice shall be
         irrevocable upon receipt by Agent. Without limiting the other terms and
         conditions of this Agreement, at the time of each borrowing hereunder,
         Borrower must be current in the delivery of all Compliance Certificates
         and Borrowing Base Certificates required to be delivered to Agent and
         the Lenders pursuant to this Agreement.

                  (b)      Unless Agent has elected periodic settlements
         pursuant to SECTION 5.10, Agent shall promptly notify the Lenders of
         any Notice of Borrowing given or deemed given pursuant to this
         Agreement. Not later than 2:00 p.m. (Dallas, Texas time) on the
         proposed borrowing date, each Lender will make available to Agent, for
         the account of Borrower, at Agent's Principal Office in funds
         immediately available to Agent, an amount equal to such Lender's
         Commitment Percentage of the Revolving Credit Loans to be made on such
         date.

         Section 5.2       INTEREST.

                  (a)      Subject to the provisions of SECTION 5.2(b), Borrower
         agrees to pay interest on the unpaid principal amount of the Loans, for
         each day from the day each such Loan was made until such Loan is due
         (whether upon demand, at maturity, by reason of acceleration or
         otherwise) at a rate per annum equal to the lesser of the Applicable
         Rate or the Maximum Rate. Interest shall be payable monthly in arrears
         as it accrues on each Interest Payment Date.

                  (b)      If Borrower shall fail to pay when due (whether upon
         demand, at maturity, by reason of acceleration or otherwise) all or any
         portion of the principal amount of any Loan or if there shall occur any
         other Event of Default, at Agent's election the balance of the Loans
         shall no longer bear interest in accordance with the terms of SECTION
         5.2(a), but rather shall bear interest for each day from the date of
         such failure to pay or other Event of Default, as the case may be,
         until such failure to pay or other Event of Default shall have been
         cured or waived in compliance with the terms of this Agreement, at a
         rate per annum equal to the lesser of (i) the sum of (1) the Default
         Margin and (2) the Applicable Rate, or (ii) the Maximum Rate, payable
         on demand. The interest rate provided for in the preceding sentence
         shall, to the extent permitted by Applicable Law, apply to and accrue
         on the amount of any judgment entered with respect to any Secured
         Obligation and shall continue to accrue at such rate during any
         proceeding described in SECTION 14.1(g) or SECTION 14.1(h).

                  (c)      Borrower agrees, to the extent permitted by
         Applicable Law, to pay interest on the unpaid principal amount of any
         Secured Obligation that is due and payable other than the Loans in
         accordance with SECTION 5.2(a) or SECTION 5.2(b), as applicable, as if
         such Secured Obligation were a Loan.

                  (d)      Subject to SECTION 5.2(e) and SECTION 17.23, the
         interest rates provided for in SECTIONS 5.2(a), 5.2(b) and 5.2(c) shall
         be computed on the basis of a year of 360 days and the actual number of
         days elapsed. With respect to any Base Rate Loan, any change in the


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<PAGE>

         Applicable Rate resulting from a change in the Base Rate shall be
         adjusted automatically as of the effective date of such change in the
         Base Rate. Any change in the Applicable Rate resulting from any change
         in the Maximum Rate shall be effective as of the effective date of any
         such change in the Maximum Rate.

                  (e)      It is not intended by the Lenders, and nothing
         contained in this Agreement or the Notes shall be deemed, to establish
         or require the payment of a rate of interest in excess of the Maximum
         Rate . If, in any month, the Effective Interest Rate, absent such
         limitation, would have exceeded the Maximum Rate, then the Effective
         Interest Rate for that month shall be the Maximum Rate, and if in
         future months the Effective Interest Rate would otherwise be less than
         the Maximum Rate, then the Effective Interest Rate shall remain at the
         Maximum Rate until such time as the amount of interest paid hereunder
         equals the amount of interest which would have been paid if the same
         had not been limited by the Maximum Rate. In the event, upon payment in
         full of the Secured Obligations, the total amount of interest paid or
         accrued under the terms of this Agreement is less than the total amount
         of interest which would have been paid or accrued if the Effective
         Interest Rate had at all times been in effect, then Borrower shall, to
         the extent permitted by Applicable Law, pay to the Lenders an amount
         equal to the excess, if any, of (i) the lesser of (A) the amount of
         interest which would have been charged if the Maximum Rate had, at all
         times, been in effect and (B) the amount of interest which would have
         accrued had the Effective Interest Rate, at all times, been in effect,
         and (ii) the amount of interest actually paid or accrued under this
         Agreement. In the event the Lenders receive, collect or apply as
         interest any sum in excess of the Maximum Rate, such excess amount
         shall be applied to the reduction of the principal balance of the
         Secured Obligations, and if no such principal is then outstanding, such
         excess or part thereof remaining, shall be paid to Borrower.

         Section 5.3 INTEREST RATE OPTION. Subject to the provisions hereof,
Borrower shall have the option to have designated portions of the Loans bear
interest at an Applicable Rate determined according to the Base Rate or the
Adjusted Eurodollar Rate; PROVIDED, HOWEVER, that any portion of the Loans
designated to bear interest at an Applicable Rate determined according to the
Adjusted Eurodollar Rate for any particular Interest Period shall not be for
less than $1,000,000 of unpaid principal or an integral multiple of $100,000 in
excess thereof, and no more than ten (10) Interest Periods shall be allowed to
exist at any one time. Any such option shall be exercised in the manner provided
below:

                  (a)      AT TIME OF BORROWING. Contemporaneously with each
         request for a Loan, Borrower shall give Agent a Notice of Borrowing
         indicating the interest rate option selected with respect to the
         principal balance of such Loan. If the required Notice of Borrowing
         shall not have been timely received by Agent, Borrower shall be deemed
         to have designated the Base Rate and to have given Agent notice of such
         designation. Notwithstanding the foregoing, any request for a Revolving
         Credit Loan made pursuant to CLAUSES (ii), (iii), (iv) or (v) of
         SECTION 2.2(a) shall be deemed to be a request for a Base Rate Loan.


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                  (b)      AT EXPIRATION OF INTEREST PERIODS. Not less than two
         (2) Eurodollar Business Days prior to the termination of any Interest
         Period for any Eurodollar Loan, Borrower shall give Agent a Notice of
         Borrowing indicating the interest rate option to be applicable to such
         Eurodollar Loan upon the expiration of such Interest Period if Borrower
         elects to have such Loan Continued as a Eurodollar Loan. If the
         required Notice of Borrowing shall not have been timely received by
         Agent prior to the expiration of such Interest Period, Borrower shall
         be deemed to have selected a rate based upon the Base Rate to be
         applicable to such Eurodollar Loan upon the expiration of such Interest
         Period and to have given Agent notice of such selection.

                  (c)      CONVERSION FROM BASE RATE. Subject to the other
         provisions of this Agreement, during any period in which any Base Rate
         Loan is in existence, Borrower shall have the right, on any Eurodollar
         Business Day, to Convert all or a portion thereof to a Eurodollar Loan
         by giving Agent a Notice of Borrowing of such Conversion not less than
         two (2) Eurodollar Business Days prior to the date of such Conversion.

Agent, at its option, may accept telephonic instructions as a Notice of
Borrowing (PROVIDED that without limiting the validity of any such notice by
telephonic instruction, Borrower agrees that any such telephonic request shall
promptly be confirmed to Agent by Borrower delivering a written Notice of
Borrowing to Agent) and Agent hereby is authorized and directed, at Agent's
option, to honor any or all such telephonic or other oral notices from any
Person whom Agent believes to be an authorized officer of Borrower, and for
purposes of this Agreement, any such officer shall be deemed to be authorized to
make any such notice on behalf of Borrower. Borrower agrees to indemnify and
hold Agent and the Lenders harmless from any loss or liability incurred by any
of them in connection with honoring any telephonic or other oral notices. All
written Notices of Borrowing are effective only upon receipt by Agent. Each
Notice of Borrowing, whether written or oral, shall be irrevocable and binding
upon Borrower.



LOAN AND SECURITY AGREEMENT - Page 60

<PAGE>

         Section 5.4       CERTAIN FEES.

                  (a)      UNUSED COMMITMENT FEE. Subject to SECTION 17.23, in
         connection with and as consideration for the holding available for the
         use of Borrower hereunder the full amount of the Revolving Credit
         Facility, Borrower will pay a fee to Agent, for the ratable benefit of
         the Lenders, for each day on and after the Agreement Date, in an amount
         equal to the product of the Unused Commitment Fee Percentage multiplied
         by the unused portion of the Revolving Credit Facility for such day.
         Such fee shall be payable monthly in arrears on each Interest Payment
         Date for Base Rate Loans and on the date of any permanent reduction in
         the Revolving Credit Facility and, subject to SECTION 17.23, shall be
         fully earned when due and payable and shall not be subject to refund or
         rebate. Such fee is not, and shall not be deemed to be, interest or a
         charge for the use, forbearance or detention of Money.

                  (b)      LETTER OF CREDIT FEES.















LOAN AND SECURITY AGREEMENT - Page 61

<PAGE>

                           (i)      Borrower agrees to pay to Agent for the
                  ratable benefit of the Lenders Letter of Credit fees equal to
                  the Applicable Margin with respect to Eurodollar Loans as in
                  effect at the time of issuance, renewal or extension of any
                  Letter of Credit, based on the average daily aggregate Letter
                  of Credit Amount of all Letters of Credit from time to time
                  outstanding during the term of this Agreement. Such fees shall
                  be payable to Agent, for the ratable benefit of the Lenders in
                  accordance with their respective Commitment Percentages,
                  monthly in arrears on the first Business Day of each calendar
                  month, and shall be calculated according to the average daily
                  Letter of Credit Amount outstanding based on a year of 360
                  days and for the actual number of days elapsed, subject to
                  SECTION 17.23.

                           (ii)     Borrower agrees to pay to Agent, for the
                  account of L/C Issuer, on the same days and calculated on the
                  same basis as the fees provided by CLAUSE (i) above, a
                  fronting fee equal to one-eighth percent (0.125%) per annum
                  PLUS the standard fees and charges of L/C Issuer for issuing,
                  administering, amending, renewing, paying and canceling
                  Letters of Credit, as and when assessed.

                  (c)      OTHER FEES. Subject to SECTION 17.23, Borrower agrees
         to pay all other fees and expenses set forth in the certain letter
         agreement, dated as of the Agreement Date among Agent, Borrower and the
         other Loan Parties.

         Section 5.5       MANNER OF PAYMENT.

                  (a)      Except as provided in SECTION 10.1(b), each payment
         (including prepayments) by Borrower on account of the principal of or
         interest on the Loans or of any other amounts payable under this
         Agreement, any Note or any other Loan Document shall be made not later
         than 12:00 noon (Dallas, Texas time) on the date specified for payment
         under this Agreement to Agent, for the account of the Lenders, at
         Agent's Principal Office, in Dollars, in immediately available funds
         and shall be made without any set-off, counterclaim or deduction
         whatsoever. Any payment received after such time but before 1:00 p.m.
         (Dallas, Texas time) on such day shall be deemed a payment on such date
         for the purposes of SECTION 14.1, but for all other purposes shall be
         deemed to have been made on the next succeeding Business Day.

                  (b)      Borrower hereby irrevocably authorizes each Lender
         and each Affiliate of such Lender and each participant herein to charge
         any account of Borrower maintained with such Lender or such Affiliate
         or participant with such amounts as may be necessary from time to time
         to pay any Secured Obligations (whether or not owed to such Lender,
         Affiliate or participant) which are not paid (i) when due in the case
         of Secured Obligations described in SUBPARAGRAPHS (a), (b) and (c) of
         the definition thereof in SECTION 1.1 and (ii) when due if an Event of
         Default has occurred or otherwise within five (5) Business Days after
         they become due, in the case of any other Secured Obligations.


LOAN AND SECURITY AGREEMENT - Page 62

<PAGE>

         Section 5.6 GENERAL. If any payment under this Agreement or any Note
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing interest and fees, if any, as
applicable, in accordance with such payment.

         Section 5.7 LOAN ACCOUNTS; STATEMENTS OF ACCOUNT.


                  (a)      Each Lender shall open and maintain on its books a
         loan account in Borrower's name (each, a "LOAN ACCOUNT" and
         collectively, the "LOAN ACCOUNTS"). Each such Loan Account shall show
         as debits thereto each Loan made under this Agreement by such Lender to
         Borrower and as credits thereto all payments received by such Lender
         and applied to principal of such Loan, so that the balance of the Loan
         Account at all times reflects the principal amount due such Lender from
         Borrower.

                  (b)      Agent shall maintain on its books a control account
         for Borrower in which shall be recorded (i) the amount of each
         disbursement made hereunder, (ii) the amount of any principal or
         interest due or to become due from Borrower hereunder, and (iii) the
         amount of any sum received by Agent hereunder from Borrower and each
         Lender's ratable share therein.

                  (c)      The entries made in the accounts pursuant to
         SUBSECTIONS (a) and (b) preceding shall be prima facie evidence, in the
         absence of manifest error, of the existence and amounts of the
         obligations of Borrower therein recorded and in case of discrepancy
         between such accounts, in the absence of manifest error, the accounts
         maintained pursuant to SUBSECTION (b) shall be controlling.

                  (d)      Agent will account separately to Borrower monthly
         with a statement of Loans, charges and payments made to and by Borrower
         pursuant to this Agreement, and such accounts rendered by Agent shall
         be deemed final, binding and conclusive, save for manifest error,
         unless Agent is notified by Borrower in writing to the contrary within
         thirty (30) days of the date the account to Borrower was so rendered.
         Such notice by Borrower shall be deemed an objection to only those
         items specifically objected to therein. Failure of Agent to render such
         account shall in no way affect the rights of Agent or of the Lenders
         hereunder.

         Section 5.8 TERMINATION OF AGREEMENT. Borrower shall have the right, at
any time, to terminate this Agreement upon not less than thirty (30) Business
Days' prior written notice of its intention to terminate this Agreement, which
notice shall specify the effective date of such termination. Upon receipt of
such notice, Agent shall promptly notify each Lender thereof. On the date
specified in such notice, such termination shall be effected, PROVIDED, that
Borrower shall, on or prior to such date, pay to Agent, for the account of the
Lenders, in same day funds, an amount equal to all Secured Obligations then
outstanding, including, without limitation, all (i) accrued interest thereon,
(ii) all accrued fees provided for hereunder, and (iii) any amounts payable to
the Lenders pursuant to SECTIONS 17.2, 17.3 and 17.14, and, in addition thereto,
shall deliver to Agent, in respect of each outstanding Letter of Credit, either
a Supporting Letter of Credit or the Cash


LOAN AND SECURITY AGREEMENT - Page 63

<PAGE>

Collateral as provided in SECTION 3.9. Following the date specified in a
notice of termination as provided for in this SECTION 5.8 and upon payment in
full of the amounts specified in this SECTION 5.8, this Agreement shall be
terminated and the Credit Parties and Borrower shall have no further
obligations to any other party hereto except for the obligations to Agent and
the Lenders pursuant to SECTION 3.8 and SECTION 17.13.

         Section 5.9 MAKING OF LOANS.

                  (a)      NATURE OF OBLIGATIONS OF LENDERS TO MAKE LOANS. The
         obligations of the Lenders under this Agreement to make the Loans are
         several and are not joint or joint and several.

                  (b)      ASSUMPTION BY AGENT. Subject to the provisions of
         SECTION 5.10 and notwithstanding the occurrence or continuance of a
         Default or Event of Default or other failure of any condition to the
         making of Revolving Credit Loans hereunder subsequent to the Revolving
         Credit Loans to be made on the Effective Date, unless Agent shall have
         received notice from a Lender in accordance with the provisions of
         SECTION 5.9(c) prior to a proposed borrowing date that such Lender will
         not make available to Agent such Lender's ratable portion of the amount
         to be borrowed on such date, Agent may assume that such Lender will
         make such portion available to Agent in accordance with SECTION 2.2(a),
         and Agent may, in reliance upon such assumption, make available to
         Borrower on such date a corresponding amount. If and to the extent such
         Lender shall not make such ratable portion available to Agent, such
         Lender and Borrower severally agree to repay to Agent forthwith on
         demand such corresponding amount, together with interest thereon for
         each day from the date such amount is made available to Borrower until
         the date such amount is repaid to Agent at a rate equal to the lesser
         of the Effective Interest Rate or the Maximum Rate. If such Lender
         shall repay to Agent such corresponding amount, the amount so repaid
         shall constitute such Lender's Commitment Percentage of the Loan made
         on such borrowing date for purposes of this Agreement. The failure of
         any Lender to make its Commitment Percentage of any Loan available
         shall not (without regard to whether Borrower shall have returned the
         amount thereof to Agent in accordance with this SECTION 5.9) relieve it
         or any other Lender of its obligation, if any, hereunder to make its
         Commitment Percentage of such Loan available on such borrowing date,
         but no Lender shall be responsible for the failure of any other Lender
         to make its Commitment Percentage of such Loan available on the
         borrowing date.

                  (c)      DELEGATION OF AUTHORITY TO AGENT. Without limiting
         the generality of SECTION 16.1, each Lender expressly authorizes Agent
         to determine on behalf of such Lender (i) any reduction or increase of
         advance rates applicable to the Borrowing Base, so long as such advance
         rates do not at any time exceed the rates set forth in the Borrowing
         Base definition, (ii) the creation or elimination of any amount of the
         Reserve, (iii) whether or not Inventory or Receivables shall be deemed
         to constitute Eligible Inventory or Eligible Receivables and (iv)
         whether to grant or withhold consent, or to take or refrain from taking
         any action, in the exercise of its discretion as allowed by the Loan
         Documents. Unless and


LOAN AND SECURITY AGREEMENT - Page 64

<PAGE>

         until Agent shall have received three (3) Business Days prior written
         notice from the Required Lenders as to the existence of a Default, an
         Event of Default or any other circumstance which would relieve the
         Lenders of their respective obligations to make Loans hereunder, which
         notice shall be in writing and shall be signed by the Required Lenders
         and shall expressly state that the Required Lenders do not intend to
         make available to Agent such Lenders' ratable share of Loans made after
         the effective date of such notice, Agent shall be entitled to continue
         to make the assumptions described in SECTION 5.9(b) and may in reliance
         upon such assumption, but without obligation to do so, make Loans
         available to Borrower. Without limiting the foregoing, Agent shall not
         be required to make any Loan as to which it shall have received notice
         by a Lender of such Lender's intention not to make its ratable portion
         of such Loan available to Agent. No such notice shall affect the
         validity of any Loans made prior to the expiration of three (3)
         Business Days after Agent's receipt thereof.

         Section 5.10      SETTLEMENT AMONG LENDERS.

                  (a)      REVOLVING CREDIT LOANS. It is agreed that each
         Lender's Net Outstandings are intended by the Lenders to be equal at
         all times to such Lender's Commitment Percentage of the aggregate
         principal amount of all Revolving Credit Loans outstanding.
         Notwithstanding such agreement, the several and not joint obligation of
         each Lender to fund Revolving Credit Loans ratably in accordance with
         such Lender's Commitment Percentage and each Lender's right to receive
         its ratable share of principal payments on Revolving Credit Loans in
         accordance with its Commitment Percentage, the Lenders agree that in
         order to facilitate the administration of this Agreement and the Loan
         Documents, settlement among them may take place on a periodic basis in
         accordance with the provisions of this SECTION 5.10.

                  (b)      SETTLEMENT PROCEDURES AS TO REVOLVING CREDIT LOANS.
         To the extent and in the manner hereinafter provided in this SECTION
         5.10, settlement among the Lenders as to Revolving Credit Loans may
         occur periodically on Settlement Dates determined from time to time by
         Agent, which may occur before or after the occurrence or during the
         continuance of a Default or Event of Default and whether or not all of
         the conditions set forth in SECTIONS 7.1 and 7.2 have been met. On each
         Settlement Date payments shall be made by or to the Lenders in the
         manner provided in this SECTION 5.10 in accordance with the Settlement
         Report delivered by Agent pursuant to the provisions of this SECTION
         5.10 in respect of such Settlement Date so that as of each Settlement
         Date, and after giving effect to the transactions to take place on such
         Settlement Date, each Lender's Net Outstandings shall equal such
         Lender's Commitment Percentage of the Revolving Credit Loans
         outstanding.

                           (i)      SELECTION OF SETTLEMENT DATES. If Agent
                  elects, in its discretion, but subject to the consent of
                  NationsBank, to settle accounts among the Lenders with respect
                  to principal amounts of Revolving Credit Loans less frequently
                  than each Business Day, then Agent shall designate periodic
                  Settlement Dates which may occur on any Business Day after the
                  Effective Date; PROVIDED, HOWEVER, that Agent shall designate
                  as a Settlement Date any Business Day which is an Interest
                  Payment Date;


LOAN AND SECURITY AGREEMENT - Page 65

<PAGE>

                  and PROVIDED FURTHER, that a Settlement Date shall occur at
                  least once during each seven day period. Agent shall designate
                  a Settlement Date by delivering to each Lender a Settlement
                  Report not later than 12:00 noon (Dallas, Texas time) on the
                  proposed Settlement Date, which Settlement Report will be with
                  respect to the period beginning on the preceding Settlement
                  Date and ending on such designated Settlement Date.

                           (ii)     NON-RATABLE LOANS AND PAYMENTS. Between
                  Settlement Dates, Agent shall request and NationsBank may (but
                  shall not be obligated to) advance to Borrower out of
                  NationsBank's own funds, the entire principal amount of any
                  Revolving Credit Loan requested or deemed requested pursuant
                  to SECTION 2.2(a) (any such Revolving Credit Loan being
                  referred to as a "NON-RATABLE LOAN"). The making of each
                  Non-Ratable Loan by NationsBank shall be deemed to be a
                  purchase by NationsBank of a 100% participation in each other
                  Lender's Commitment Percentage of the amount of such
                  Non-Ratable Loan. All payments of principal, interest and any
                  other amount with respect to such Non-Ratable Loan shall be
                  payable to and received by Agent for the account of
                  NationsBank. Upon demand by NationsBank, with notice thereof
                  to Agent, each other Lender shall pay to NationsBank, as the
                  repurchase of such participation, an amount equal to one
                  hundred percent (100%) of such Lender's Commitment Percentage
                  of the principal amount of such Non-Ratable Loan. Any payments
                  received by Agent between Settlement Dates which in accordance
                  with the terms of this Agreement are to be applied to the
                  reduction of the outstanding principal balance of Revolving
                  Credit Loans, shall be paid over to and retained by
                  NationsBank for such application, and such payment to and
                  retention by NationsBank shall be deemed, to the extent of
                  each other Lender's Commitment Percentage of such payment, to
                  be a purchase by each such other Lender of a participation in
                  the Non-Ratable Loans held by NationsBank. Upon demand by
                  another Lender, with notice thereof to Agent, NationsBank
                  shall pay to Agent, for the account of such other Lender, as a
                  repurchase of such participation, an amount equal to such
                  other Lender's Commitment Percentage of any such amounts
                  (after application thereof to the repurchase of any
                  participations of NationsBank in such other Lender's
                  Commitment Percentage of any Non-Ratable Loans) paid only to
                  NationsBank by Agent.

                           (iii)    NET DECREASE IN OUTSTANDINGS. If on any
                  Settlement Date the increase, if any, in the amount of any
                  Lender's Net Outstandings which is required to comply with the
                  first sentence of SECTION 5.10(b) is less than such Lender's
                  Commitment Percentage of amounts received by Agent but paid
                  only to NationsBank since the next preceding Settlement Date,
                  such Lender and Agent, in their respective records, shall
                  apply such Lender's Commitment Percentage of such amounts to
                  the increase in such Lender's Net Outstandings, and
                  NationsBank shall pay to Agent, for the account of such
                  Lender, the excess allocable to such Lender.


LOAN AND SECURITY AGREEMENT - Page 66

<PAGE>

                           (iv)     NET INCREASE IN OUTSTANDINGS. If on any
                  Settlement Date the increase, if any, in the amount of any
                  Lender's Net Outstandings which is required to comply with the
                  first sentence of SECTION 5.10(b) exceeds such Lender's
                  Commitment Percentage of amounts received by Agent but paid
                  only to NationsBank since the next preceding Settlement Date,
                  such Lender and Agent, in their respective records, shall
                  apply such Lender's Commitment Percentage of such amounts to
                  the increase in such Lender's Net Outstandings, and such
                  Lender shall pay to Agent, for the account of NationsBank, any
                  excess.

                           (v)      NO CHANGE IN OUTSTANDINGS. If a Settlement
                  Report indicates that no Revolving Credit Loans have been made
                  during the period since the next preceding Settlement Date,
                  then such Lender's Commitment Percentage of any amounts
                  received by Agent but paid only to NationsBank shall be paid
                  by NationsBank to Agent, for the account of such Lender. If a
                  Settlement Report indicates that the increase in the amount of
                  a Lender's Net Outstandings which is required to comply with
                  the first sentence of SECTION 5.10(b) is exactly equal to such
                  Lender's Commitment Percentage of amounts received by Agent
                  but paid only to NationsBank since the next preceding
                  Settlement Date, such Lender and Agent, in their respective
                  records, shall apply such Lender's Commitment Percentage of
                  such amounts to the increase in such Lender's Net
                  Outstandings.

                           (vi)     RETURN OF PAYMENTS. If any amounts received
                  by NationsBank in respect of the Secured Obligations are later
                  required to be returned or repaid by NationsBank to Borrower
                  or any other obligor or their respective representatives or
                  successors in interest, whether by court order, settlement or
                  otherwise, in excess of NationsBank's Commitment Percentage of
                  all such amounts required to be returned by all Lenders, each
                  other Lender shall, upon demand by NationsBank with notice to
                  Agent, pay to Agent for the account of NationsBank, an amount
                  equal to the excess of such Lender's Commitment Percentage of
                  all such amounts required to be returned by all Lenders over
                  the amount, if any, returned directly by such Lender.

                           (vii)    PAYMENTS TO AGENT, LENDERS.

                                    (A)      Payment by any Lender to Agent
                           shall be made not later than 2:00 p.m. (Dallas, Texas
                           time) on the Business Day such payment is due,
                           PROVIDED that if such payment is due on demand by
                           another Lender, such demand is made on the paying
                           Lender not later than 10:00 a.m. (Dallas, Texas time)
                           on such Business Day. Payment by Agent to any Lender
                           shall be made by wire transfer, promptly following
                           Agent's receipt of funds for the account of such
                           Lender and in the type of funds received by Agent,
                           PROVIDED that if Agent receives such funds at or
                           prior to 1:00 p.m. (Dallas, Texas time), Agent shall
                           pay such funds to such Lender by 2:00 p.m. (Dallas,
                           Texas time) on such Business Day. If a demand for
                           payment is made after the applicable


LOAN AND SECURITY AGREEMENT - Page 67

<PAGE>

                           time set forth above, the payment due shall be made
                           by 2:00 p.m. (Dallas, Texas time) on the first
                           Business Day following the date of such demand.

                                    (B)      If a Lender shall, at any time,
                           fail to make any payment to Agent required hereunder,
                           Agent may, but shall not be required to, retain
                           payments that would otherwise be made to such Lender
                           hereunder and apply such payments to such Lender's
                           defaulted obligations hereunder, at such time, and in
                           such order, as Agent may elect in its sole
                           discretion.

                                    (C)      With respect to the payment of any
                           funds under this SECTION 5.10(b), whether from Agent
                           to a Lender or from a Lender to Agent, the party
                           failing to make full payment when due pursuant to the
                           terms hereof shall, upon demand by the other party,
                           pay such amount together with interest on such amount
                           at the Federal Funds Rate.

                  (c)      SETTLEMENT OF OTHER SECURED OBLIGATIONS. All other
         amounts received by Agent on account of, or applied by Agent to the
         payment of, any Secured Obligation that are received by Agent on or
         prior to 1:00 p.m. (Dallas, Texas time) on a Business Day will be paid
         by Agent to each Lender on the same Business Day, and any such amounts
         that are received by Agent after 1:00 p.m. (Dallas, Texas time) will be
         paid by Agent to each Lender on the following Business Day. Unless
         otherwise stated herein, Agent shall distribute fees payable to the
         Lenders pursuant to SECTIONS 5.4(a) and (b) ratably to the Lenders
         based on each Lender's Commitment Percentage and shall distribute
         proceeds from the sale of, or other realization upon, all or any part
         of the Collateral following an Event of Default ratably to the Lenders
         based on the amount of the Secured Obligations owing to each Lender as
         of the time of such distribution.

         Section 5.11 MANDATORY PREPAYMENTS. At any time when (i) any Loans are
outstanding and (ii) Availability is less than the Minimum Availability
Requirement, then to the extent required to cause Availability to equal or
exceed the Minimum Availability Requirement:

                  (a)      PREPAYMENTS FROM ASSET DISPOSITIONS. Immediately upon
         receipt by Borrower or any of its Restricted Subsidiaries of the Net
         Proceeds of any Asset Disposition, Borrower shall apply, or caused to
         be applied, such Net Proceeds in prepayment of the Loans as provided in
         SECTION 5.11(c); PROVIDED, that Borrower shall not be required to make
         such prepayment to the extent that the Net Proceeds from Asset
         Dispositions during any Fiscal Year of Borrower do not exceed, in the
         aggregate, $10,000,000. Concurrently with the making of any such
         payment, Borrower shall deliver to Agent a certificate of an Authorized
         Signatory of the applicable Loan Party demonstrating the calculations
         of the amount required to be paid.

                  (b)      PREPAYMENTS FROM EQUITY OFFERINGS. In the event that
         at any time after the Agreement Date, Borrower issues Capital Stock or
         other securities or receives an additional capital contribution in
         respect of existing Capital Stock or other securities, no later than
         the


LOAN AND SECURITY AGREEMENT - Page 68

<PAGE>

         third Business Day following the date of receipt of the proceeds from
         such issuance, Borrower shall apply such proceeds, net of
         underwriting discounts and commissions and other reasonable costs
         associated therewith, in prepayment of the Loans as provided in SECTION
         5.11(c).

                  (c)      APPLICATION OF PROCEEDS OF PREPAYMENTS. All
         prepayments pursuant to this SECTION 5.11 shall be accompanied by an
         appropriate Notice of Borrowing and, except as provided otherwise by
         SECTION 5.11(a), shall be applied first to the outstanding Revolving
         Credit Loans to the extent thereof, with any excess to be deposited
         with Agent to be held as Cash Collateral for the Secured Obligations
         and applied by Agent from time to time to outstanding Revolving Credit
         Loans promptly upon the making of such Revolving Credit Loans or other
         Secured Obligations in such manner as Agent shall determine in its
         discretion.

         Section 5.12 PREPAYMENT AND TERMINATION. Subject to the provisions of
SECTION 17.23, if Borrower prepays the Loans in whole and terminates this
Agreement prior to the Termination Date, for any reason other than refinancing
of the Loans with NationsBank or any of its Affiliates, Borrower shall pay to
Agent, for the ratable benefit of the Lenders, on the date of such prepayment,
as liquidated damages and compensation for the costs of making funds available
to Borrower under this Agreement, and not as a penalty, an amount equal to the
percentage amount specified below for the Loan Year in which such prepayment is
made multiplied by $500,000,000:

<TABLE>
<CAPTION>

                           Loan Year                          Percent
                           ---------                          -------
                           <S>                                <C>
                               1                                0.50%
                               2                                0.25%
                           any Loan Year thereafter             0.00%
</TABLE>

                                    ARTICLE 6

                             CHANGE OF CIRCUMSTANCES

         Section 6.1 INCREASED COST AND REDUCED RETURN.

                  (a)      If, after the date hereof, the adoption of any
         Applicable Law or any change in any Applicable Law or any change in the
         interpretation or administration thereof by any Governmental Authority
         (including, without limitation, any central bank or comparable agency)
         charged with the interpretation or administration thereof, or
         compliance by any Lender (or its Applicable Lending Office) with any
         request or directive (whether or not having the force of law) of any
         such Governmental Authority:

                           (i)      shall subject such Lender (or its Applicable
                  Lending Office) to any tax, duty or other charge with respect
                  to any Eurodollar Loans, its Notes, or its obligation to make
                  Eurodollar Loans, or change the basis of taxation of any
                  amounts payable to such Lender (or its Applicable Lending
                  Office) under this Agreement or its Note in respect of any
                  Eurodollar Loans (other than taxes imposed on the overall


LOAN AND SECURITY AGREEMENT - Page 69

<PAGE>

                  net income of such Lender by the jurisdiction in which such
                  Lender has its principal office or such Applicable Lending
                  Office);

                           (ii)     shall impose, modify or deem applicable any
                  reserve, special deposit, assessment, compulsory loan or
                  similar requirement (other than the Reserve Requirement
                  utilized in the determination of the Adjusted Eurodollar Rate)
                  relating to any extensions of credit or other assets of, or
                  any deposits with or other liabilities or commitments of, such
                  Lender (or its Applicable Lending Office), including the
                  Commitment of such Lender hereunder; or

                           (iii)    shall impose on such Lender (or its
                  Applicable Lending Office) or on the London interbank market
                  any other condition affecting this Agreement or its Notes or
                  any of such extensions of credit or liabilities or
                  commitments;

         and the result of any of the foregoing is to increase the cost to such
         Lender (or its Applicable Lending Office) of making, Converting into,
         Continuing or maintaining any Eurodollar Loans or to reduce any sum
         received or receivable by such Lender (or its Applicable Lending
         Office) under this Agreement or its Notes with respect to any
         Eurodollar Loans, then Borrower shall pay to such Lender on demand such
         amount or amounts as will compensate such Lender for such increased
         cost or reduction. If any Lender requests compensation by Borrower
         under this SECTION 6.1(a), Borrower may, by notice to such Lender (with
         a copy to Agent), suspend the obligation of such Lender to make or
         Continue Loans of the Type with respect to which such compensation is
         requested, or to Convert Loans of any other Type into Loans of such
         Type, until the event or condition giving rise to such request ceases
         to be in effect, in which case the provisions of SECTION 6.4 shall be
         applicable; PROVIDED that such suspension shall not affect the right of
         such Lender to receive the compensation so requested.

                  (b)      If, after the date hereof, any Lender shall have
         determined that the adoption of any Applicable Law, rule or regulation
         regarding capital adequacy or any change therein or in the
         interpretation or administration thereof by any Governmental Authority
         (including, without limitation, any central bank or comparable agency)
         charged with the interpretation or administration thereof, or any
         request or directive regarding capital adequacy (whether or not having
         the force of law) of any such Governmental Authority has or would have
         the effect of reducing the rate of return on the capital of such Lender
         or any corporation controlling such Lender as a consequence of such
         Lender's obligations hereunder to a level below that which such Lender
         or such corporation could have achieved but for such adoption, change,
         request or directive (taking into consideration its policies with
         respect to capital adequacy), then, from time to time upon demand,
         Borrower shall pay to such Lender such additional amount or amounts as
         will compensate such Lender for such reduction, to the extent that such
         Lender reasonably determines in good faith that such increase in
         capital is allocable to the existence of such Lender's Commitment, but
         only to the extent that such Lender has not been compensated therefor
         by any increase in the Adjusted Eurodollar Rate.


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                  (c)      Each Lender shall promptly notify Borrower and Agent
         of any event of which it has knowledge, occurring after the date
         hereof, which will entitle such Lender to compensation pursuant to this
         Section and will designate a different Applicable Lending Office if
         such designation will avoid the need for, or reduce the amount of, such
         compensation and will not, in the judgment of such Lender, be otherwise
         disadvantageous to it. Any Lender claiming compensation under this
         Section shall furnish to Borrower and Agent a statement setting forth
         the additional amount or amounts to be paid to it hereunder which shall
         be conclusive in the absence of manifest error. In determining such
         amount, such Lender may use any reasonable averaging and attribution
         methods.

         Section 6.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first
day of any Interest Period for any Eurodollar Loan:

                  (a)      Agent determines (which determination shall be
         conclusive) that by reason of circumstances affecting the London
         interbank Eurodollar market, adequate and reasonable means do not exist
         for ascertaining the Eurodollar Rate for such Interest Period; or

                  (b)      the Required Lenders determine (which determination
         shall be conclusive) and notify Agent that the Adjusted Eurodollar Rate
         will not adequately and fairly reflect the cost to the Lenders of
         funding Eurodollar Loans for such Interest Period;

then Agent shall give Borrower prompt notice thereof specifying the relevant
Type of Loans and the relevant amounts or periods, and so long as such condition
remains in effect, the Lenders shall be under no obligation to make additional
Loans of such Type, Continue Loans of such Type, or to Convert Loans of any
other Type into Loans of such Type and Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding Loans of the affected Type,
either prepay such Loans or Convert such Loans into another Type of Loan in
accordance with the terms of this Agreement.

         Section 6.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain or fund Eurodollar Loans hereunder,
then such Lender shall promptly notify Borrower thereof and such Lender's
obligation to make or Continue Eurodollar Loans, and to Convert other Types of
Loans into Eurodollar Loans, shall be suspended until such time as such Lender
may again make, maintain and fund Eurodollar Loans (in which case the provisions
of SECTION 6.4 shall be applicable).

         Section 6.4 TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make Loans of a particular Type, or to Continue or Convert Loans of
any other Type into Loans of a particular Type, shall be suspended pursuant
to SECTION 6.1 or SECTION 6.3 (Loans of such Type being herein called
"AFFECTED LOANS" and such Type being herein called the "AFFECTED TYPE"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for the Affected
Loans (or, in the case of a Conversion required by SECTION 6.3, on such
earlier date as such Lender may specify to Borrower with a copy to Agent)
and,


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<PAGE>

unless and until such Lender gives notice as provided below that the
circumstances specified in SECTION 6.1 or SECTION 6.3 that gave rise to such
Conversion no longer exist:

                  (a)      to the extent that such Lender's Affected Loans have
         been so Converted, all payments and prepayments of principal that would
         otherwise be applied to such Lender's Affected Loans shall be applied
         instead to its Base Rate Loans; and

                  (b)      all Loans that would otherwise be made or Continued
         by such Lender as Loans of the Affected Type shall be made or Continued
         instead as Base Rate Loans, and all Loans of such Lender that would
         otherwise be Converted into Loans of the Affected Type shall be
         Converted instead into (or shall remain as) Base Rate Loans.

If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in SECTION 6.1 or SECTION 6.3 that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this SECTION 6.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective Commitments.

         Section 6.5 COMPENSATION. Upon the request of any Lender (with a copy
to Agent), Borrower shall pay to such Lender such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense (including loss of anticipated profits) incurred by it as
a result of:

                  (a)      any payment, prepayment or Conversion of a Eurodollar
         Loan for any reason (including, without limitation, the acceleration of
         the Loans pursuant to SECTION 14.2) on a date other than the last day
         of the Interest Period for such Loan; or

                  (b)      any failure by Borrower for any reason (including,
         without limitation, the failure of any condition precedent specified in
         ARTICLE 7 to be satisfied) to borrow, Convert, Continue or prepay a
         Eurodollar Loan on the date for such borrowing, Conversion,
         Continuation or prepayment specified in the relevant Notice of
         Borrowing under this Agreement.

Such Lender's good faith determination of the amount of such losses or
out-of-pocket expenses, calculated in its usual fashion, absent manifest
error, shall be controlling. Such losses shall include, without limiting the
generality of the foregoing, reasonable expenses incurred by such Lender in
connection with the re-employment of funds prepaid, repaid prior to the end
of the applicable Interest Period, Converted and not borrowed, or Converted
and paid prior to the end of the applicable Interest Period, as the case may
be, but shall not include lost profits. Upon request of Borrower,


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such Lender shall provide a certificate setting forth the amount to be paid
to it by Borrower hereunder and calculations therefor.

         Section 6.6       TAXES.

                  (a)      Any and all payments by Borrower to or for the
         account of any Credit Party hereunder or under any other Loan Document
         shall be made free and clear of, and without deduction for, any and all
         present or future taxes, duties, levies, imposts, deductions, charges
         or withholdings, and all liabilities with respect thereto, EXCLUDING,
         in the case of each Credit Party, taxes imposed on its income, and
         franchise taxes imposed on it, by the jurisdiction under the laws of
         which any such Lender (or its Applicable Lending Office), L/C Issuer or
         Agent, as the case may be, is organized or any political subdivision
         thereof (all such non- excluded taxes, duties, levies, imposts,
         deductions, charges, withholdings and liabilities being hereinafter
         referred to as "TAXES"). If Borrower shall be required by law to deduct
         any Taxes from or in respect of any sum payable under this Agreement or
         any other Loan Document to any Credit Party, (i) the sum payable shall
         be increased as necessary so that after making all required deductions
         (including deductions applicable to additional sums payable under this
         SECTION 6.6) such Credit Party receives an amount equal to the sum it
         would have received had no such deductions been made, (ii) Borrower
         shall make such deductions, (iii) Borrower shall pay the full amount
         deducted to the relevant taxation authority or other authority in
         accordance with Applicable Law, and (iv) Borrower shall furnish to
         Agent, at its address referred to in SECTION 17.1, the original or a
         certified copy of a receipt evidencing payment thereof.

                  (b)      In addition, Borrower agrees to pay any and all
         present or future stamp or documentary taxes and any other excise or
         property taxes or charges or similar levies which arise from any
         payment made under this Agreement or any other Loan Document or from
         the execution or delivery of, or otherwise with respect to, this
         Agreement or any other Loan Document (hereinafter referred to as "OTHER
         TAXES").

                  (c)      BORROWER AGREES TO INDEMNIFY EACH CREDIT PARTY FOR
         THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, WITHOUT
         LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY
         JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 6.6) PAID BY SUCH
         CREDIT PARTY (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING
         PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
         THERETO.

                  (d)      Each Lender organized under the laws of a
         jurisdiction outside the U.S., on or prior to the date of its execution
         and delivery of this Agreement in the case of each Lender listed on the
         signature pages hereof and on or prior to the date on which it becomes
         a Lender in the case of each other Lender, and from time to time
         thereafter if requested in writing by Borrower or Agent (but only so
         long as such Lender remains lawfully able to do so), shall provide
         Borrower and Agent with (i) IRS Form 1001 or 4224, as appropriate, or
         any


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<PAGE>

         successor form prescribed by the IRS, certifying that such Lender is
         entitled to benefits under an income tax treaty to which the U.S. is a
         party which reduces the rate of withholding tax on payments of interest
         or certifying that the income receivable pursuant to this Agreement is
         effectively connected with the conduct of a trade or business in the
         U.S., (ii) IRS Form W-8 or W-9, as appropriate, or any successor form
         prescribed by the IRS, and (iii) any other form or certificate required
         by any taxing authority (including any certificate required by Sections
         871(h) and 881(c) of the Internal Revenue Code), certifying that such
         Lender is entitled to an exemption from or a reduced rate of tax on
         payments pursuant to this Agreement or any of the other Loan Documents.

                  (e)      For any period with respect to which a Lender has
         failed to provide Borrower and Agent with the appropriate form pursuant
         to SECTION 6.6(d) (unless such failure is due to a change in treaty,
         law or regulation occurring subsequent to the date on which a form
         originally was required to be provided), such Lender shall not be
         entitled to indemnification under SECTION 6.6(a) or 6.6(b) with respect
         to Taxes or Other Taxes imposed by the U.S.; PROVIDED, HOWEVER, that
         should a Lender, which is otherwise exempt from or subject to a reduced
         rate of withholding tax, become subject to Taxes or Other Taxes because
         of its failure to deliver a form required hereunder, Borrower shall
         take such steps as such Lender shall reasonably request to assist such
         Lender to recover such Taxes or Other Taxes.

                  (f)      If Borrower is required to pay additional amounts to
         or for the account of any Lender pursuant to this SECTION 6.6, then
         such Lender will agree to use reasonable efforts to change the
         jurisdiction of its Applicable Lending Office or take other reasonable
         steps, if available, so as to eliminate or reduce any such additional
         payment which may thereafter accrue if such change, in the judgment of
         such Lender, is not otherwise disadvantageous to such Lender.

                  (g)      Within thirty (30) days after the date of any payment
         of Taxes or Other Taxes, Borrower shall furnish to Agent the original
         or a certified copy of a receipt evidencing such payment.

                  (h)      Without prejudice to the survival of any other
         agreement of Borrower hereunder, the agreements and obligations of
         Borrower contained in this SECTION 6.6 shall survive the termination of
         the Commitments and the payment in full of the Notes.

         Section 6.7 REPLACEMENT OF AFFECTED LENDER. Within thirty (30) days
after receipt by Borrower of written notice and demand from any Lender for any
payment under the terms of SECTION 6.1 or SECTION 6.6, or within thirty (30)
days of Borrower becoming aware that a Lender has become insolvent, or its
assets subject to a receiver, liquidator, trustee, custodian or other similar
Person or it or its assets are otherwise subject to insolvency proceedings, or
if a Lender fails to make Loans required to be made hereunder, then, subject to
this SECTION 6.7, Borrower may, at its option notify Agent and such Lender (the
"AFFECTED LENDER") of its intention to obtain, at Borrower's expense, a
replacement Lender ("REPLACEMENT LENDER") to purchase the Affected Lender's
Loans and its obligations under the Loan Documents. Subject to this SECTION 6.7,
Borrower shall,


LOAN AND SECURITY AGREEMENT - Page 74

<PAGE>


within thirty (30) days following the delivery of such notice from Borrower
cause the Replacement Lender to purchase (and the Affected Lender hereby
agrees to sell and convey to such Replacement Lender) the Loans of the
Affected Lender and assume the Affected Lender's Commitment and obligations
hereunder in accordance with the terms of an Assignment and Acceptance for
cash in an aggregate amount equal to the aggregate unpaid principal of the
Loans held by such Affected Lender, all unpaid interest and fees accrued
thereon or with respect thereto, and all other Secured Obligations owed to
such Affected Lender including amounts owed under SECTION 6.1 or SECTION 6.6
(but excluding any amount pursuant to SECTION 5.12). Notwithstanding the
foregoing, (i) Borrower shall continue to be obligated to pay to the Affected
Lender in full all amounts then demanded and due under SECTION 6.1 or SECTION
6.6 in accordance with the terms thereof, (ii) neither Agent nor any Lender
shall have any obligation to find a Replacement Lender, (iii) the Replacement
Lender must be acceptable to Agent in its reasonable discretion and (iv)
NationsBank, N.A. may not be replaced under this SECTION 6.7 without its
consent.

                                    ARTICLE 7

                              CONDITIONS PRECEDENT

         Section 7.1 CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT.
Notwithstanding any other provision of this Agreement, no Credit Party shall
have any obligation to make the initial Loan or to issue the initial Letter of
Credit, as the case may be, until the fulfillment of each of the following
conditions, and with respect to any reports, appraisals, reviews or similar
items, Agent's and each Lender's satisfaction with the contents thereof, prior
to or contemporaneously with the making of such Loan or issuance of such Letter
of Credit, PROVIDED, that the conditions listed in CLAUSES (i) through (vii) and
CLAUSES (xii) through (xvii) of SECTION 7.1(a) and in SECTIONS 7.1(d), (e), (f)
and (g) (in the case of SECTIONS 7.1(e) and (g), to the extent applicable on the
Agreement Date) shall be fulfilled on the Agreement Date.

                  (a)      CLOSING DOCUMENTS. Agent shall have received each of
         the following documents, all of which shall be satisfactory in form and
         substance to Agent and the Lenders:

                           (i)      each of the following:

                                    (A)      a copy of the certificate of
                           limited partnership of Borrower with all amendments,
                           if any, certified by the appropriate Governmental
                           Authority and a true and complete copy of the limited
                           partnership agreement of Borrower with all
                           amendments, if any, in each case certified by the
                           General Partner as true and correct and in effect on
                           the Agreement Date;

                                    (B)      copies of the certificate of
                           incorporation or comparable organizational document
                           of each of General Partner, Parent and each of the
                           other Loan Parties (other than Borrower) with all
                           amendments, if any, certified by the appropriate
                           Governmental Authority and the bylaws of each


LOAN AND SECURITY AGREEMENT - Page 75
<PAGE>


                           of such Person, in each case certified by the
                           corporate secretary or comparable authorized
                           representative of each such Person, respectively,
                           as true and correct and in effect on the
                           Agreement Date;

                           (ii)     certificates of incumbency and specimen
                  signatures with respect to each of the officers of (i) General
                  Partner, authorized to execute and deliver this Agreement and
                  the other Loan Documents and to request Loans on behalf of
                  Borrower, (ii) Parent and each other Loan Party (other than
                  Borrower) authorized to execute and deliver this Agreement and
                  the other Loan Documents on behalf of each such Loan Party,
                  respectively, and (iii) each other Person executing any
                  document, certificate or instrument to be delivered in
                  connection with this Agreement and the other Loan Documents;

                           (iii)    a certificate evidencing the existence of
                  General Partner and each Loan Party, and certificates
                  evidencing good standing of General Partner and each Loan
                  Party in the jurisdiction of its incorporation or organization
                  and in each other jurisdiction in which it is required to be
                  qualified as a foreign business entity to transact its
                  business as presently conducted (PROVIDED, that without
                  impairing SECTION 8.1(a) a certificate of existence for
                  CompUSA PC Inc., a newly formed Wholly-Owned Subsidiary of
                  Parent, and certificates of good standing for any Loan Party
                  in any state (other than its state of organization), to the
                  extent not provided on the Agreement Date may be provided
                  after the Agreement Date);

                           (iv)     certified copies of all action taken by
                  General Partner and each Loan Party to authorize the
                  execution, delivery and performance of this Agreement, the
                  other Loan Documents and the borrowings under this Agreement;

                           (v)      each of the items referred to in SECTION
                  8.1(o) and meeting the requirements thereof;

                           (vi)     certificates or binders of insurance
                  relating to policies of insurance with loss payable clauses as
                  required by SECTION 10.8;

                           (vii)    a certificate of each Loan Party signed by
                  an Authorized Signatory on its behalf stating that:

                                    (A)      all of the representations and
                           warranties made or deemed to be made under this
                           Agreement are true and correct as of the Agreement
                           Date, after giving effect to the Loans to be made at
                           such time and the application of the proceeds
                           thereof,

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


LOAN AND SECURITY AGREEMENT - Page 76
<PAGE>


                                    (C)      as to such other factual matters as
                           may be reasonably requested by Agent;

                           (viii)   a Borrowing Base Certificate (predicated
                  upon an appraisal of Inventory reflecting the Appraised GOB
                  Value thereof, prepared by a credentialed appraiser acceptable
                  to Agent within six (6) months preceding the date of making
                  such Loan or issuing such Letter of Credit) and a Schedule of
                  Receivables and a Schedule of Inventory, in each case prepared
                  as of the Business Day preceding the day on which any such
                  requested Loan is to be funded or any such requested Letter of
                  Credit is to be issued;

                           (ix)     RESERVED

                           (x)      each Agency Account Agreement duly executed
                  by a Loan Party and the Clearing Bank party thereto;

                           (xi)     (A) a certificate from Borrower to Agent
                  requesting the initial Loans or the issuance of a Letter of
                  Credit and, in the case of the initial Loans, specifying the
                  method of disbursement pursuant to SECTION 11.8 (and if the
                  proceeds of such Loan are to be used to discharge the Senior
                  Subordinated Notes, directing Agent to disburse such proceeds
                  directly to the trustee under the Indenture), (B) a
                  certificate signed by an Authorized Signatory of Borrower and
                  Parent stating that the incurrence of "Indebtedness" as
                  defined by the Indenture resulting from such initial Loans or
                  such Letter of Credit is permitted by the Indenture, or
                  alternatively, stating either that all obligations under the
                  Indenture have been (or, upon application of the proceeds of
                  such initial Loan as directed in CLAUSE (A) preceding, will
                  be) discharged pursuant to the terms thereof or that all
                  covenants under the Indenture have been defeased pursuant to
                  the terms thereof and (C) a certificate of each Loan Party
                  signed by an Authorized Signatory on its behalf stating that,
                  as of the date thereof, all of the representations and
                  warranties made or deemed to be made under this Agreement are
                  true and correct after giving effect to any such Loans to be
                  made, or any such Letter of Credit to be issued, and the
                  application of the proceeds of any such Loans, and that no
                  Default or Event of Default is in existence as of such date;

                           (xii)    a Revolving Credit Note payable to the order
                  of each Lender, duly executed and delivered by Borrower,
                  complying with the requirements of SECTION 2.4;

                           (xiii)   each of the Security Documents to be
                  executed by any of the Loan Parties, as follows:

                                    (A)      Financing Statements with respect
                           to all Collateral as may be requested by Agent, duly
                           executed by each Person a party thereto as required
                           by this Agreement and the Security Documents, and
                           acknowledgment copies


LOAN AND SECURITY AGREEMENT - Page 77
<PAGE>


                           evidencing the filing of such Financing Statements
                           in each jurisdiction where such filing may be
                           necessary or appropriate to perfect the Security
                           Interest;

                                    (B)      a Patent Security Agreement, a
                           Trademark Security Agreement and a Copyright Security
                           Agreement, each duly executed by each Loan Party, as
                           applicable, with respect to all Proprietary Rights,
                           if any, owned by each such Loan Party which must
                           be registered to protect its use by such Loan Party;

                                    (C)      a Guaranty Agreement, duly executed
                           and delivered by each Person required pursuant to
                           SECTION 9.3;

                           (xiv)    With respect to all Investment Property
                  subject to the Security Interest (i) stock certificates and
                  stock powers (duly executed in blank) for all Capital Stock
                  (to the extent certificated) in each Loan Party other than
                  Parent, together with acknowledgments executed by the
                  respective issuers thereof, in form and substance satisfactory
                  to Agent and (ii) "control" agreements (pursuant to the UCC),
                  each duly executed, as Agent may request with respect to any
                  Investment Property listed in Schedule 8.1(ee);

                           (xv)     A copy of all Merchant Account Agreements;

                           (xvi)    counterparts of each of the other Security
                  Documents and other Loan Documents required by Agent, duly
                  executed by the parties thereto, together with evidence
                  satisfactory to Agent of the due authorization and binding
                  effect of each such Loan Document on such party;

                           (xvii)   signed opinions of counsel for the Loan
                  Parties, opining as to such matters in connection with the
                  transactions contemplated by this Agreement as Agent may
                  reasonably request, in each case in form and substance
                  satisfactory to Agent; and

                           (xviii)  such other documents and instruments as
                  Agent or any Lender may reasonably request.

                  (b)      SECURITY INTERESTS. Agent shall have received
         satisfactory evidence that Agent (for the benefit of the Credit
         Parties) has a valid, exclusive and perfected first priority (subject
         to SECTION 9.2(a)(i)) security interest, lien, collateral assignment
         and pledge as of such date in all Collateral and other property, if
         any, covered by the Security Interest.

                  (c)      RELEASE OF SECURITY INTERESTS. Agent shall have
         received evidence satisfactory to it of the release and termination of
         all Liens other than Permitted Liens.


LOAN AND SECURITY AGREEMENT - Page 78
<PAGE>


                  (d)      AVAILABILITY. Agent shall be provided with evidence
                           satisfactory to it confirmed by a certificate of an
         Authorized Signatory of Borrower that as of the Agreement Date the
         Availability, after giving effect to the reasonably expected amount of
         the Letter of Credit Reserve in effect 60 days after the Agreement
         Date, is equal to or greater than $75,000,000.

                  (e)      FEES. All of the fees and expenses payable under the
         Loan Documents on the Agreement Date and as of the date of funding such
         Loan or issuing such Letter of Credit shall have been paid.

                  (f)      NO INJUNCTIONS, ETC. No action, proceeding,
         investigation, regulation or legislation shall have been instituted,
         threatened or proposed by or before any Governmental Authority to
         enjoin, restrain or prohibit, or to obtain damages in respect of, or
         which is related to or arises out of this Agreement or the consummation
         of the transactions contemplated by this Agreement or which, in Agent's
         or the Lenders' reasonable discretion, would make it inadvisable to
         consummate the transactions contemplated by this Agreement.

                  (g)      MATERIAL ADVERSE CHANGE. Except as disclosed in
         writing to Agent and the Lenders on or before the Agreement Date, as of
         the Agreement Date and as of the date of funding such Loan or issuing
         such Letter of Credit, there shall not have occurred any change which
         is materially adverse to the assets, liabilities, businesses,
         operations or financial condition of Borrower and the other Loan
         Parties in comparison to such conditions as presented by the financial
         statements referenced in SECTION 8.1(o), previously delivered to Agent
         and the Lenders, and no Materially Adverse Effect shall have occurred.

         Section 7.2 ALL LOANS; ISSUANCE OF LETTERS OF CREDIT. At the time of
making of each Loan, including the initial Loans and all subsequent Loans, and
the issuance of each Letter of Credit (in addition to all other requirements of
SECTION 7.1):

                  (a)      no Default or Event of Default shall be in existence
         and all of the representations and warranties made or deemed to be made
         under this Agreement shall be true and correct at such time, in the
         case of the initial Loan if the proceeds thereof are to be used to
         discharge the Senior Subordinated Notes, upon application of the
         proceeds of such Loan and, in the case of each other Loan, both with
         and without giving effect to the Loan to be made at such time and the
         application of the proceeds thereof;

                  (b)      the actions referred to in SECTION 7.1(a)(iv) shall
         remain in full force and effect and the incumbency of officers shall be
         as stated in the certificates of incumbency delivered pursuant to
         SECTION 7.1(a)(ii) or as subsequently modified and reflected in a
         certificate of incumbency delivered to Agent; and

                  (c)      each request or deemed request for any borrowing or
         the issuance of any Letter of Credit hereunder shall be deemed to be a
         certification by the Loan Parties to the Credit Parties as to the
         matters set forth in SECTION 7.2(a) and (b) and Agent may, without


LOAN AND SECURITY AGREEMENT - Page 79
<PAGE>


         waiving either condition, consider the conditions specified in SECTIONS
         7.2(a) and (b) fulfilled and a representation by the Loan Parties to
         such effect made, if no written notice to the contrary is received by
         Agent prior to the making of the Loan, or the issuance of the Letter of
         Credit then requested.

                                    ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES

         Section 8.1 REPRESENTATIONS AND WARRANTIES. Each Loan Party, as
applicable represents and warrants to each of the Credit Parties as follows:

                  (a)      ORGANIZATION; POWER; QUALIFICATION. Borrower is a
         Texas limited partnership, Parent is a Delaware corporation and each
         other Loan Party is an entity of the type and is organized under
         Applicable Laws of the jurisdiction as specified in SCHEDULE 8.1(a), in
         each case duly organized, validly existing and in good standing under
         the laws of its jurisdiction of organization, having the power and
         authority to own its properties and to carry on its business as now
         being and hereafter proposed to be conducted, and is duly qualified and
         authorized to do business in each jurisdiction in which the character
         of its properties or the nature of its business requires such
         qualification or authorization except where the failure to be so
         qualified or authorized would not have a Materially Adverse Effect. The
         jurisdictions in which each Loan Party is organized and qualified to do
         business as a foreign business enterprise are listed on SCHEDULE
         8.1(a). As of the Agreement Date, (i) each of General Partner, CompUSA
         Holdings Company, CompUSA PC and CompUSA Management Company is a
         Delaware business trust and has full power and authority to contract in
         the State of Texas, (ii) General Partner is the sole general partner of
         Borrower and CompUSA Holdings Company is the sole limited partner of
         Borrower, and no Person other than General Partner and CompUSA Holdings
         Company has any equity interest or management power in Borrower, (iii)
         neither Borrower, General Partner, CompUSA Holdings Company or any
         former general partner or limited partner of Borrower has taken any
         action, voluntarily or involuntarily, to cause (or that has caused) the
         dissolution of Borrower and (iv) neither the shareholders nor the
         regular managers of General Partner or of CompUSA Holdings Company has
         taken any action to cause (or that has caused) the dissolution of
         General Partner or of CompUSA Holdings Company, respectively.

                  (b)      RESERVED

                  (c)      RESERVED

                  (d)      SUBSIDIARIES. SCHEDULE 8.1(d) correctly sets forth
         the name of each Subsidiary of each Loan Party, its jurisdiction of
         incorporation, the name of its immediate parent or parents, and the
         percentage of its issued and outstanding Capital Stock owned by such
         Loan Party or any other Subsidiary of such Loan Party and indicating
         whether such Subsidiary is a Consolidated Subsidiary. Except as set
         forth on SCHEDULE 8.1(d),


LOAN AND SECURITY AGREEMENT - Page 80
<PAGE>


                           (i)      no such Subsidiary has issued any securities
                  convertible into shares or other evidence of ownership of such
                  Subsidiary's Capital Stock or any options, warrants or other
                  rights to acquire any shares or other evidence of ownership or
                  securities convertible into such Capital Stock,

                           (ii)     the outstanding Capital Stock and other
                  securities of each such Subsidiary are owned by a Loan Party
                  or a Wholly-Owned Subsidiary of a Loan Party or by a Loan
                  Party and one or more of its Wholly-Owned Subsidiaries, free
                  and clear of all Liens, warrants, options and rights of others
                  of any kind whatsoever, and

                           (iii)    The Loan Parties have no other Subsidiaries.

         The outstanding Capital Stock of each Subsidiary of a Loan Party has
         been duly and validly issued and is fully paid and nonassessable by the
         issuer, and the number and owners of the shares or other evidence of
         ownership of such Capital Stock are set forth on SCHEDULE 8.1(d).

                  (e)      AUTHORIZATION OF AGREEMENT, NOTES, LOAN DOCUMENTS AND
         BORROWING. Each Loan Party 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 and each of the other Loan Documents
         have been duly executed and delivered by the duly authorized officers
         of the Loan Party that is party thereto and each is, or each when
         executed and delivered in accordance with this Agreement will be, a
         legal, valid and binding obligation of each such Loan Party,
         enforceable in accordance with its terms, except as may be limited by
         bankruptcy, insolvency and similar laws of general application.

                  (f)      NO CONFLICTS. Except as set forth on SCHEDULE 8.1(f),
         the execution, delivery and performance of this Agreement and each of
         the other Loan Documents in accordance with their respective terms and
         the borrowings hereunder do not and will not, by the passage of time,
         the giving of notice or otherwise,

                           (i)      require any Governmental Approval or violate
                  any Applicable Law relating to any Loan Party or of any of its
                  Subsidiaries,

                           (ii)     conflict with, result in a breach of or
                  constitute a default under the articles or certificate of
                  incorporation or bylaws, or other constituent documents, of
                  any Loan Party or of any of its Subsidiaries,

                           (iii)    conflict with, result in a breach of or
                  constitute a default under any material provisions of any
                  indenture (including without limitation, the Indenture),
                  agreement or other instrument to which any Loan Party or of
                  any of its Subsidiaries is a party or by which any Loan Party
                  or of any of its Subsidiaries or its respective


LOAN AND SECURITY AGREEMENT - Page 81
<PAGE>


                  property may be bound or any Governmental Approval relating
                  to any Loan Party or any of its Subsidiaries, or

                           (iv)     result in or require the creation or
                  imposition of any Lien upon or with respect to any property
                  now owned or hereafter acquired by any Loan Party or of any of
                  its Restricted Subsidiaries other than the Security Interest.

                  (g)      BUSINESS. The Loan Parties, respectively, are engaged
         principally in the sale, manufacture, assembly, repair and distribution
         of computer hardware, computer accessories and software products,
         consumer electronic products, general office business equipment and
         related telecommunications and multi-media electronics products and
         equipment, and other products, training and services that are related
         to or complementary to all or any of the foregoing.

                  (h)      COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS.

                           (i)      Except as set forth in SCHEDULE 8.1(h), each
                  Loan Party and each of its Subsidiaries:

                                    (A)      has all Governmental Approvals,
                           including permits relating to federal, state and
                           local Environmental Laws, ordinances and regulations,
                           required by any Applicable Law for it to conduct its
                           business, each of which is in full force and effect,
                           is final and not subject to review on appeal and, to
                           the knowledge of any Loan Party, is not the subject
                           of any pending or threatened claim by any
                           Governmental Authority relating to its business or
                           properties, and

                                    (B)      is in compliance with each
                           Governmental Approval applicable to it and in
                           compliance with all other Applicable Laws relating to
                           it, including, without being limited to, all
                           Environmental Laws and all occupational health and
                           safety laws applicable to any Loan Party or of any of
                           its Subsidiaries or their respective properties,

                  except for instances of noncompliance which would not, singly
                  or in the aggregate, cause a Default or Event of Default or
                  have a Materially Adverse Effect and in respect of which
                  reserves in respect of reasonably anticipated liability
                  therefor have been established in accordance with GAAP.

                           (ii)     Each Loan Party has notified Agent of the
                  receipt by it or by any of its Subsidiaries of any notice of a
                  material violation of any Environmental Laws and occupational
                  health and safety laws applicable to such Loan Party, any of
                  its Subsidiaries or any of their respective properties, to the
                  extent, in any such case, that any such notice relates to a
                  violation that could cause a Material Adverse Effect.


LOAN AND SECURITY AGREEMENT - Page 82
<PAGE>


                  (i)      TITLE TO PROPERTIES. Except as set forth in SCHEDULE
         8.1(i), each Loan Party and each of its Subsidiaries has valid and
         legal title to or leasehold interest in all personal property
         (including, without limitation, with respect to each Borrowing Base
         Party, all Eligible Receivables and Eligible Inventory included in each
         Borrowing Base Certificate), Real Estate owned and other assets used in
         and which are material to the operation of its business.

                  (j)      LIENS. None of the properties and assets of any Loan
         Party or any of its Restricted Subsidiaries is subject to any Lien,
         except Permitted Liens. Other than the Financing Statements or with
         respect to Permitted Liens or precautionary financing statements
         covering equipment leased to a Loan Party (and not owned by a Loan
         Party) under an Operating Lease, no financing statement under the UCC
         or other instrument evidencing a Lien which names any Loan Party or any
         of its Restricted Subsidiaries as debtor has been filed (and has not
         been terminated) with any Governmental Authority and no Loan Party or
         any of its Restricted Subsidiaries has signed any such financing
         statement or other instrument or any security agreement authorizing any
         secured party thereunder to file any such financing statement or
         instrument.

                  (k)      INDEBTEDNESS AND GUARANTIES. SCHEDULE 8.1(k) is a
         complete and correct listing, for each Loan Party and Restricted
         Subsidiary, of all Indebtedness for Money Borrowed and Guaranties. As
         of the Agreement Date, each Loan Party has performed and is in
         compliance with all of the terms of such Indebtedness and Guaranties
         and all instruments and agreements relating thereto, and no default or
         event of default, or event or condition which with notice or lapse of
         time or both would constitute such a default or event of default,
         exists with respect to any such Indebtedness or Guaranty.

                  (l)      LITIGATION. Except as set forth on SCHEDULE 8.1(l)
         (it being agreed that such disclosure shall not constitute a disclosure
         or limitation for purposes of the condition set forth in SECTION
         7.1(g)), there are no actions, suits or proceedings pending (nor, to
         the current actual knowledge of any Loan Party, are there any actions,
         suits or proceedings threatened, nor are there any material unasserted
         possible claims which would require disclosure in a financial statement
         according to GAAP) against or in any other way directly and adversely
         relating to or affecting any Loan Party or any of its Subsidiaries or
         any of their respective properties in any court or before any
         arbitrator of any kind or before or by any Governmental Authority,
         except actions, suits or proceedings which would not singly or in the
         aggregate have a Materially Adverse Effect, and there are no strikes or
         walkouts in progress, pending or contemplated relating to any labor
         contracts to which any Loan Party or any of its Subsidiaries is a
         party, relating to any labor contracts being negotiated, or otherwise.

                  (m)      TAX RETURNS AND PAYMENTS. Except as set forth on
         SCHEDULE 8.1(m), all U.S. federal, state and local as well as foreign
         national, provincial and local and other tax returns of each Loan Party
         and each of its Subsidiaries required by Applicable Law to be filed
         have been duly filed, or extensions have been timely filed, and all
         U.S. federal, state and local and foreign national, provincial and
         local and other taxes, assessments and other governmental


LOAN AND SECURITY AGREEMENT - Page 83
<PAGE>


         charges or levies upon each Loan Party and each of its Subsidiaries
         and each Loan Party's and any of its Subsidiaries' property, income,
         profits and assets which are due and payable have been paid, except
         any such nonpayment which is at the time permitted under SECTION 11.6.
         The charges, accruals and reserves on the books of each Loan Party and
         each of its Subsidiaries in respect of U.S. federal, state and local
         and foreign national, provincial and local taxes for all Fiscal Years
         and portions thereof since the organization of such Loan Party or any
         such Subsidiary are in the judgment of Parent adequate, and no Loan
         Party knows of any reason to anticipate any additional assessments for
         any of such years which, singly or in the aggregate, is reasonably
         expected to have a Materially Adverse Effect.

                  (n)      BURDENSOME PROVISIONS. No Loan Party nor any of its
         Subsidiaries is a party to any indenture, agreement, lease or other
         instrument, or subject to any charter or corporate restriction,
         Governmental Approval or Applicable Law compliance with the terms of
         which would reasonably be expected to have a Materially Adverse Effect.

                  (o)      FINANCIAL STATEMENTS.

                           (i)      Parent has delivered to Agent the audited
                  financial statements for Parent and its Consolidated
                  Subsidiaries as of, and for its Fiscal Year ending June 26,
                  1998, and the interim financial statements for Parent and its
                  Consolidated Subsidiaries for the interim Fiscal Period ending
                  March 27, 1999. All such financial statements have been
                  prepared in accordance with GAAP, and present fairly, the
                  consolidated financial condition of Parent and its
                  Consolidated Subsidiaries, as of the respective dates
                  indicated therein and the results of operations for the
                  respective periods indicated therein, subject to normal
                  period-end adjustments in the case of such interim financial
                  statements. Neither Parent nor any of the Consolidated
                  Subsidiaries has any material contingent liabilities,
                  liabilities for taxes, unusual forward or long-term
                  commitments, or unrealized or anticipated losses from any
                  unfavorable commitments except as referred to or reflected in
                  such financial statements. As of the Agreement Date, Parent
                  and its Subsidiaries taken as a whole have no material
                  liabilities, contingent or otherwise, liabilities for taxes,
                  unusual forward or long-term commitments, or unrealized or
                  anticipated losses nor material losses, except as (i) set
                  forth in the June 28, 1998 audited Fiscal Year financial
                  statements and March 27, 1999 unaudited Fiscal Period
                  financial statements, and Borrower's Form 10-K and 10-Q for
                  such respective periods, and (ii) shown on SCHEDULE 8.1(o).

                           (ii)     Parent has furnished to Agent and the
                  Lenders copies of Management's Restructuring Plan.
                  Management's Restructuring Plan has been be prepared in light
                  of the past and anticipated operations of the business of
                  Parent and its Subsidiaries and represents as of the date
                  thereof the good faith opinion of Parent and its senior
                  management concerning the restructuring plan described
                  therein.


LOAN AND SECURITY AGREEMENT - Page 84
<PAGE>


                  (p)      ADVERSE CHANGE. Except with respect to restructuring
         charges relating to Management's Restructuring Plan or as disclosed
         pursuant to SECTION 12.5, since the date of the last financial
         statements delivered to Agent pursuant to SECTION 8.1(o)(i),

                           (i)      no material adverse change has occurred in
                  the business, assets, liabilities, financial condition or
                  results of operations of any Loan Party, and

                           (ii)     no event has occurred or failed to occur
                  which has had (or, as of the Agreement Date, may have), singly
                  or in the aggregate, a Materially Adverse Effect.

                  (q)      ERISA. Except as described in SCHEDULE 8.1(q):

                           (i)      Neither Borrower nor any Related Company
                  maintains or contributes to any Benefit Plan covered under or
                  in any manner subject to either (i) Title IV of ERISA or (ii)
                  Section 302 of ERISA or Section 412 of the Internal Revenue
                  Code, other than those listed in SCHEDULE 8.1(q).

                           (ii)     Except in compliance with Applicable Law,
                  (i) no Benefit Plan of Borrower or any Related Company has
                  been terminated or partially terminated, (ii) no Multiemployer
                  Plan listed in SCHEDULE 8.1(q) is insolvent or in
                  reorganization, and (iii) no proceedings have been instituted
                  to terminate any Benefit Plan or to reorganize any
                  Multiemployer Plan.

                           (iii)    Neither Borrower nor any Related Company has
                  withdrawn from any Benefit Plan or Multiemployer Plan pursuant
                  to Title IV of ERISA, nor has a condition occurred which if
                  continued would result in any such withdrawal.

                           (iv)     Neither Borrower nor any Related Company has
                  incurred any withdrawal liability, including contingent
                  withdrawal liability, to any Multiemployer Plan pursuant to
                  Title IV of ERISA.

                           (v)      Neither Borrower nor any Related Company has
                  incurred any liability to the PBGC other than for required
                  insurance premiums which have been paid when due.

                           (vi)     No Reportable Event has occurred with
                  respect to a Plan of Borrower or any Related Company.

                           (vii)    No Benefit Plan listed in SCHEDULE 8.1(q)
                  subject to the provisions of Section 302 of ERISA or Section
                  412 of the Internal Revenue Code has an "accumulated funding
                  deficiency" (whether or not waived) as defined in Section 302
                  of ERISA or in Section 412 of the Internal Revenue Code.


LOAN AND SECURITY AGREEMENT - Page 85
<PAGE>


                           (viii)   Each Plan of Borrower or any Related Company
                  is in substantial compliance with ERISA, the Internal Revenue
                  Code and all Applicable Law, and neither Borrower nor any
                  Related Company has received any communication from a
                  Governmental Authority asserting that a Plan is not in
                  compliance with ERISA, the Internal Revenue Code and all
                  Applicable Law.

                           (ix)     Each Plan of Borrower or any Related Company
                  which is intended to be a qualified Plan has been determined
                  by the IRS to be qualified under Section 401(a) of the
                  Internal Revenue Code as currently in effect or will be
                  submitted to the IRS for such determination prior to the end
                  of the remedial amendment period under Section 401(b) of the
                  Internal Revenue Code and the regulations promulgated
                  thereunder and neither Borrower nor any Related Company knows
                  or has reason to know why each such Plan should not continue
                  to be so qualified, and each trust related to such Plan that
                  has been submitted to the IRS for determination of exempt
                  status has been determined to be exempt from federal income
                  tax under Section 501(a) of the Internal Revenue Code or will
                  be submitted to the IRS for a determination of exempt status.

                           (x)      Neither Borrower nor any Related Company
                  maintains or contributes to any employee welfare benefit plan
                  within the meaning of Section 3(l) of ERISA which provides
                  benefits to employees after termination of employment other
                  than as required by Section 601 of ERISA.

                           (xi)     The Schedule B to the most recent annual
                  report filed with the IRS with respect to each Benefit Plan
                  listed in SCHEDULE 8.1(q), to the extent that such Schedule B
                  is required to be filed by the IRS, is complete and accurate.
                  Since the date of each such Schedule B, there has been no
                  adverse change in funding status or financial condition of the
                  Benefit Plan relating to such Schedule B.

                           (xii)    Neither Borrower nor any Related Company has
                  failed to make a required installment under Subsection (m) of
                  Section 412 of the Internal Revenue Code or any other payment
                  required under Section 412 of the Internal Revenue Code on or
                  before the due date for such installment or other payment.

                           (xiii)   Neither Borrower nor any Related Company is
                  required to provide security to a Benefit Plan under Section
                  401(a)(29) of the Internal Revenue Code due to a Benefit Plan
                  amendment that results in an increase in current liability for
                  the plan year.

                           (xiv)    Neither Borrower, nor any Related Company,
                  nor any other "party-in-interest" or "disqualified person" has
                  engaged in a nonexempt "prohibited transaction," as such terms
                  are defined in Section 4975 of the Internal Revenue Code and
                  Section 406 of ERISA, in connection with any Plan which would
                  subject


LOAN AND SECURITY AGREEMENT - Page 86
<PAGE>


                  Borrower or any Related Company to any material liability, or
                  has taken or failed to take any action which would constitute
                  or result in a Termination Event.

                           (xv)     Neither Borrower nor any Related Company has
                  failed to comply with the health care continuation coverage
                  requirements of Section 4980B of the Internal Revenue Code in
                  respect of employees and former employees of such Borrower or
                  such Related Company and their dependents and beneficiaries
                  which alone or in the aggregate would subject Borrower, any
                  Loan Party or any of their respective Subsidiaries to any
                  material liability.

                           (xvi)    Neither Borrower nor any Related Company has
                  (i) failed to make a required contribution or payment to a
                  Multiemployer Plan or (ii) made a complete or partial
                  withdrawal under Sections 4203 or 4205 of ERISA from a
                  Multiemployer Plan. Except as provided on SCHEDULE 8.1(q),
                  to the best knowledge of Borrower after due inquiry, neither
                  Borrower nor any Related Company shall have any obligation to
                  (A) make contributions to any Multiemployer Plan on or after
                  the Effective Date, or (B) pay withdrawal liability to any
                  Multiemployer Plan in an amount in excess of a "de minimis
                  amount" as such term is defined in Section 4209 of ERISA.

                  (r)      ABSENCE OF DEFAULTS. No Loan Party nor any of its
         Subsidiaries is in default under its articles or certificate of
         incorporation or bylaws or other governing instruments and no event has
         occurred, which has not been remedied, cured or waived,

                           (i)      which constitutes a Default or an Event of
                  Default, or

                           (ii)     as of the Agreement Date, which constitutes,
                  or which with the passage of time or giving of notice or both
                  would constitute, a default or event of default by any Loan
                  Party or any of its Subsidiaries under any material agreement
                  (other than this Agreement) or judgment, decree or order to
                  any Loan Party or any of its Subsidiaries is a party or by
                  which any Loan Party or any of its Subsidiaries or any of its
                  respective Subsidiaries' properties may be bound or which
                  would require any Loan Party or any of its Subsidiaries to
                  make any payment under any such agreement prior to the
                  scheduled maturity date therefor, except, in the case only of
                  any such agreement, for alleged defaults which are being
                  contested in good faith by appropriate proceedings and with
                  respect to which reserves in respect of such Loan Party's or
                  such Subsidiary's reasonably anticipated liability have been
                  established on its books.

                  (s)      ACCURACY AND COMPLETENESS OF INFORMATION.

                           (i)      All written information, reports and other
                  papers and data produced by or on behalf of any Loan Party and
                  furnished to any Credit Party were, at the time the same were
                  so furnished, complete and correct in all material respects,
                  to the


LOAN AND SECURITY AGREEMENT - Page 87
<PAGE>


                  extent necessary to give the recipient a true and accurate
                  knowledge of the subject matter. As of the Agreement Date no
                  fact is known to any Loan Party which has had, or may in the
                  future have (so far as any such Person can foresee), a
                  Materially Adverse Effect which has not been set forth in the
                  financial statements or disclosure delivered prior to the
                  Effective Date, in each case referred to in SECTION 8.1(o), or
                  in such written information, reports or other papers or data
                  or otherwise disclosed in writing to Agent and the Lenders
                  prior to the Agreement Date.

                           (ii)     No document furnished or written statement
                  made to any Credit Party by any Loan Party in connection with
                  the negotiation, preparation or execution of this Agreement or
                  any of the Loan Documents contains or will contain any untrue
                  statement of a fact material to the creditworthiness of any
                  Loan Party or omits or will omit to state a material fact
                  necessary in order to make the statements contained therein
                  not misleading.

                  (t)      SOLVENCY. In each case after giving effect to the
         Indebtedness represented by the Loans outstanding and to be incurred
         and the transactions contemplated by this Agreement (i) each of the
         Borrowing Base Parties, respectively, is Solvent and (ii) the Loan
         Parties on a Consolidated Basis are Solvent.

                  (u)      RECEIVABLES.

                           (i)      STATUS.

                                    (A)      Each Receivable reflected in the
                           computations included in any Borrowing Base
                           Certificate meets the criteria enumerated in CLAUSES
                           (a) through (t) of the definition of Eligible
                           Receivables, EXCEPT as disclosed in such Borrowing
                           Base Certificate or as disclosed in a timely manner
                           in a subsequent Borrowing Base Certificate or
                           otherwise in writing to Agent.

                                    (B)      The Borrowing Base Parties have no
                           knowledge of any fact or circumstance not disclosed
                           to Agent in a Borrowing Base Certificate or otherwise
                           in writing which would impair the validity or
                           collectibility of any Account of $5,000,000 or more
                           or of Accounts which (regardless of the individual
                           amount thereof) aggregate $10,000,000 or more.

                           (ii)     CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION
                  NUMBER. The Federal tax identification number of each Loan
                  Party is as specified for such Loan Party in SCHEDULE 8.1(u).
                  The chief executive office of each Loan Party and the books
                  and records relating to its Receivables are located at the
                  address or addresses set forth on SCHEDULE 8.1(u) or as
                  disclosed pursuant to SECTION 12.8. No Loan Party has
                  maintained its chief executive office or books and records
                  relating to any of its Receivables at any other address at any
                  time during the five years immediately preceding the Agreement
                  Date except as disclosed on SCHEDULE 8.1(u).


LOAN AND SECURITY AGREEMENT - Page 88
<PAGE>


                  (v)      INVENTORY.

                           (i)      SCHEDULE OF INVENTORY. All Inventory
                  included in any Schedule of Inventory or Borrowing Base
                  Certificate delivered to Agent pursuant to SECTION 10.12 meets
                  the criteria enumerated in CLAUSES (a) through (h) of the
                  definition of Eligible Inventory, EXCEPT as disclosed in such
                  Schedule of Inventory or Borrowing Base Certificate or in a
                  subsequent Schedule of Inventory or Borrowing Base
                  Certificate, or as otherwise specifically disclosed in writing
                  to Agent.

                           (ii)     CONDITION. All Inventory included in any
                  Schedule of Inventory or Borrowing Base Certificate delivered
                  to Agent pursuant to SECTION 10.12 is in good condition, meets
                  all standards imposed by any Governmental Authority having
                  regulatory authority over such goods, their use or sale, and
                  is currently either usable or salable in the normal course of
                  business, EXCEPT to the extent reserved against in
                  the financial statements referred to in SECTION 8.1(o) or
                  delivered pursuant to ARTICLE 12 or as disclosed on a Schedule
                  of Inventory delivered to Agent pursuant to SECTION 10.12(b).

                           (iii)    LOCATION. All Inventory of any Loan Party
                  included within the Collateral is located on the premises set
                  forth for such Loan Party on SCHEDULE 8.1(v) or is Inventory
                  in transit to one of such locations, except as otherwise
                  disclosed in writing to Agent. During the previous twelve (12)
                  months, no such Inventory has been located at premises other
                  than those set forth on SCHEDULE 8.1(v).

                  (w)      RESERVED

                  (x)      REAL PROPERTY. Each Loan Party owns no Real Estate
         and leases no Real Estate other than that described on SCHEDULE 8.1(x)
         and other than Real Estate acquired or leased after the Agreement Date
         for which Borrower has complied with the requirements of SECTION 10.14.

                  (y)      CORPORATE NAME. Except as otherwise disclosed on
         SCHEDULE 8.1(y), during the five (5) year period preceding the
         Agreement Date, no Loan Party nor any predecessor thereof has been
         known as or used any name other than its corporate name on the
         Agreement Date as provided for such Loan Party in ARTICLE 1 or a trade
         name listed in SCHEDULE 8.1(dd).

                  (z)      FEDERAL RESERVE REGULATIONS. No Loan Party nor any of
         its Subsidiaries is engaged and none will engage, principally or as one
         of its important activities, in the business of extending credit for
         the purpose of "purchasing" or "carrying" any "margin stock" (as each
         of the quoted terms is defined or used in Regulation U of the Board of
         Governors of the Federal Reserve System). No part of the proceeds of
         any of the Loans will be used for so purchasing or carrying margin
         stock or, in any event, for any purpose which


LOAN AND SECURITY AGREEMENT - Page 89
<PAGE>

         violates, or which would be inconsistent with, the provisions of
         Regulation T, U or X of such Board of Governors. If requested by
         Agent or any Lender, any such Loan Party will furnish to Agent and
         the Lenders a statement or statements in conformity with the
         requirements of said Regulation T, U or X to the foregoing effect.

                  (aa)     INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
         COMPANY ACT. No Loan Party nor any of its Subsidiaries is an
         "investment company" or a company "controlled" by an "investment
         company" (as each of the quoted terms is defined or used in the
         Investment Company Act of 1940, as amended). No Loan Party nor any
         of its Subsidiaries is a "holding company" or a "subsidiary company"
         of a "holding company" or an "affiliate" of a "holding company" or a
         "public utility" within the meaning of the Public Utility Holding
         Company Act of 1935, as amended.

                  (bb)     EMPLOYEE RELATIONS. Each Loan Party and each of
         its Subsidiaries has a stable work force in place and is not, except
         as set forth on SCHEDULE 8.1(bb), party to any collective bargaining
         agreement nor has any labor union been recognized as the
         representative of any Loan Party's or any of its Subsidiaries'
         employees, and no Loan Party knows of any pending, threatened or
         contemplated strikes, work stoppage or other labor disputes
         involving any Loan Party's or any of its Subsidiaries' employees.

                  (cc)     PROPRIETARY RIGHTS. SCHEDULE 8.1(cc) sets forth a
         correct and complete list of all Proprietary Rights owned by each
         Loan Party which must be registered in order to protect its use by
         such Loan Party. None of such Proprietary Rights is subject to any
         licensing agreement or similar arrangement except as set forth on
         SCHEDULE 8.1(cc) or as entered into in the sale or distribution of
         Inventory or rendering of services in the ordinary course of
         business. To the best knowledge of the Loan Parties, none of such
         Proprietary Rights infringes on or conflicts with any other Person's
         property and, except matters which could not cause a Materially
         Adverse Effect, no other Person's property infringes on or conflicts
         with such Proprietary Rights. The Proprietary Rights described on
         SCHEDULE 8.1(cc) constitute all of the property of such type
         necessary to the current and anticipated future conduct of business
         of the Loan Parties and which must be registered in order to protect
         its use by any such Loan Party.

                  (dd)     TRADE NAMES. All trade names or styles under which
         Borrower sells Inventory or creates Receivables, or to which
         instruments in payment of Receivables are made payable, or under
         which any other Loan Party conducts any material portion of its
         business, are listed on SCHEDULE 8.1(dd).

                  (ee)     INVESTMENT PROPERTY. SCHEDULE 8.1(ee) sets forth a
         correct and complete list of all Investment Property owned by each
         Loan Party. Each such Loan Party is the legal and beneficial owner
         of such Investment Property, as so reflected, free and clear of any
         Lien (other than Permitted Liens), and has not sold, granted any
         option with respect to, assigned or transferred or otherwise
         disposed of any of its rights or interest therein.

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                  (ff)     YEAR 2000 COMPLIANCE. Parent has (i) undertaken a
         detailed review and assessment of all areas within the business and
         operations of it and its Subsidiaries that could be adversely
         affected by the "YEAR 2000 PROBLEM" (that is, the risk that computer
         applications used by the Loan Parties may be unable to recognize and
         perform properly date-sensitive functions involving certain dates
         prior to and any date after December 31, 1999), (ii) developed a
         detailed plan and timeline for addressing the Year 2000 Problem on a
         timely basis, and (iii) to date, implemented that plan substantially
         in accordance with that timetable. Each of the Loan Parties
         reasonably anticipates that all computer applications that are
         material to the business and operations of it and its Subsidiaries
         will on a timely basis be able to perform properly date-sensitive
         functions for all dates before and after January 1, 2000 (that is,
         be "YEAR 2000 COMPLIANT") and would not cause a Materially Adverse
         Effect. Parent is currently making inquiry of each of the key
         suppliers, vendors and customers of it and its Subsidiaries as to
         whether such Persons will on a timely basis be Year 2000 Compliant
         in all material respects and, on the basis of that inquiry, believes
         that all such Persons will be so compliant and would not cause a
         Materially Adverse Effect. For purposes hereof, "key suppliers,
         vendors and customers" refers to those suppliers, vendors and
         customers of Parent and its Subsidiaries the business failure of
         which would with reasonable probability be expected to have a
         Material Adverse Effect.

                  (gg)     EXISTING STORE LOCATIONS. All locations at which a
         Loan Party operates retail stores on the Agreement Date are listed
         in SCHEDULE 8.1(gg).

                  (hh)     DEPOSIT ACCOUNTS; MERCHANT ACCOUNT AGREEMENTS. All
         Deposit Accounts and Merchant Account Agreements, respectively,
         maintained by a Loan Party are listed in SCHEDULE 8.1(hh).

                  (ii)     COMMON ENTERPRISE. The successful operation and
         condition of Borrower is dependent on the continued successful
         performance of the functions of the group as a whole and the
         successful operation of each Loan Party other than Borrower is
         dependent on the successful performance and operation of Borrower.
         Borrower expects to derive benefit (and its board of directors has
         determined that it may reasonably be expected to derive benefit),
         directly and indirectly, from successful operations of Parent and
         its Subsidiaries. Each Loan Party (other than Borrower) and its
         Subsidiaries expect to derive benefit (and the boards of directors
         or other governing body of each such Loan Party have determined that
         it may reasonably be expected to derive benefit), directly and
         indirectly, from the credit extended by Lenders hereunder, both in
         their separate capacities and as members of the group of companies.
         Each Loan Party has determined that execution, delivery and
         performance of this Agreement and any other Loan Documents to be
         executed by such Loan Party is within its corporate purpose, will be
         of direct and indirect benefit to such Loan Party and is in its best
         interest.

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         Section 8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties set forth in this ARTICLE 8 and all statements
contained in any certificate, financial statement, or other instrument,
delivered by or on behalf of any Loan Party pursuant to or in connection with
this Agreement or any of the other Loan Documents (including, but not limited
to, any such representation, warranty or statement made in or in connection
with any amendment thereto) shall constitute representations and warranties
made under this Agreement. All representations and warranties made under this
Agreement shall be made or deemed to be made at and as of the Agreement Date,
the Effective Date, the effective date of each Borrowing Base Certificate and
at and as of the date of each Loan, except that representations and
warranties which, by their terms are applicable only to one such date shall
be deemed to be made only at and as of such date. All representations and
warranties made or deemed to be made under this Agreement shall survive and
not be waived by the execution and delivery of this Agreement, any
investigation made by or on behalf of the Credit Parties or any borrowing
hereunder.

                                    ARTICLE 9

                                    SECURITY

         Section 9.1 SECURITY INTEREST.

                  (a)      To secure the payment, observance and performance
         of the Secured Obligations, each Loan Party, respectively, hereby
         mortgages, pledges and assigns all of its right, title and interest
         in the Collateral to Agent, for the benefit of the Credit Parties,
         and grants to Agent, for the benefit of the Credit Parties, a
         continuing security interest and collateral assignment in, and a
         continuing Lien upon, the Collateral.

                  (b)      As additional security for all of the Secured
         Obligations, each Loan Party, respectively, grants to Agent, for the
         benefit of the Credit Parties, a security interest and collateral
         assignment in, and assigns to Agent, for the benefit of itself as
         Agent and the other Credit Parties, all of its right, title and
         interest in and to, any deposits or other sums at any time credited
         by or due from each Credit Party and each Affiliate of any Credit
         Party to such Loan Party or credited by or due from any participant
         of any Credit Party to such Loan Party, with the same rights therein
         as if the deposits or other sums were credited by or due from such
         Credit Party, but specifically excluding any controlled disbursement
         payroll account or tax, trust or other special deposit accounts
         which are segregated and designated as such and into which no
         deposits have been made other than for the specific purposes so
         designated. Borrower hereby authorizes each Credit Party and each
         Affiliate of such Credit Party and each participant to pay or
         deliver to Agent, for the account of the Credit Parties, without any
         necessity on Agent's or any Credit Party part to resort to other
         security or sources of reimbursement for the Secured Obligations, at
         any time during the continuation of any Event of Default with
         respect to any Secured Obligations which are due and payable, or on
         and after the sending of any notice of intention to accelerate or
         notice of acceleration under SECTION 14.2 with respect to any other
         Secured Obligations, in each case without further notice (such
         notice being expressly waived), any of the aforesaid deposits or
         other

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         sums for application to any Secured Obligation, irrespective
         of whether any demand has been made or whether such Secured
         Obligation is mature, and the rights given the Credit Parties, their
         Affiliates and participants hereunder are cumulative with such
         Person's other rights and remedies, including other rights of
         set-off. Agent may give notice of the above grant of a security
         interest in and assignment of the aforesaid deposits and other sums,
         and authorization, to, and make any suitable arrangements with, any
         Credit Party, any such Affiliate of any Credit Party or participant
         for effectuation thereof, and each Loan Party hereby irrevocably
         appoints Agent as its attorney to collect any and all such deposits
         or other sums to the extent any such payment is not made to Agent or
         any Credit Party by such Credit Party, Affiliate or participant.

         Section 9.2 PERFECTION AND CONTINUED PRIORITY OF SECURITY INTEREST.

                  (a)      The Security Interest granted by each Loan Party
         shall at all times, be valid, perfected and enforceable against such
         Loan Party and all third parties in accordance with the terms of
         this Agreement, as security for the Secured Obligations, and the
         Collateral shall not at any time be subject to (i) any Liens that
         are prior to the Security Interest, other than (x) Purchase Money
         Liens and any renewals or extensions thereof described in CLAUSE
         (f)(a)(i) of the definition of "Permitted Liens" in SECTION 1.1 and
         which are listed in SCHEDULE 9.2 ("Purchase Money Liens") on the
         Agreement Date or (y) Liens of the type described under the
         definitions of Permitted Landlords Liens and Permitted
         Warehouseman's Liens in SECTION 1.1 (but without limiting the
         requirements for inclusion of Inventory as Eligible Inventory or the
         obligations of the Loan Parties under SECTION 9.2(b)(ii)), PROVIDED,
         that any financing statement (if any) in respect of any such Lien is
         terminated within five (5) Business Days after notice by Agent and
         the effect of excluding any Inventory from Eligible Inventory as a
         result of any such Lien does not cause Availability to be less than
         the Minimum Availability Requirement), or (ii) any Liens that are on
         a parity with or junior to the Security Interest, other than
         Permitted Liens.

                  (b)      Each Loan Party shall, at its sole cost and
         expense, take all action that Agent may reasonably request (such
         action to be promptly commenced upon written request by Agent and
         pursued with reasonable diligence), so as at all times to maintain
         the validity, perfection, enforceability and rank of the Security
         Interest in the Collateral in conformity with the requirements of
         SECTION 9.2(a), or to enable Agent and the other Credit Parties to
         exercise or enforce their rights hereunder, including, but not
         limited to:

                           (i)      paying all taxes, assessments and other
                  claims lawfully levied or assessed on any of the Collateral,
                  except to the extent that such taxes, assessments and other
                  claims constitute Permitted Liens or that non-payment is
                  permitted under SECTION 11.6;

                           (ii)     using its best commercially reasonable
                  efforts to obtain and deliver to Agent third party consents,
                  landlords', bailee's, mortgagees' and mechanic's and
                  materialmen's releases, subordinations or waivers (it being
                  understood that to the

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                  extent that each such Loan Party, after using its best
                  commercially reasonable efforts, shall be unable to obtain
                  and deliver to Agent any such third party consents, land
                  lords', bailee's, mortgagees' and mechanic's and
                  materialmen's releases, subordinations or waivers, as the
                  case may be, such inability to obtain and deliver any such
                  item shall not constitute an Event of Default);

                           (iii)    delivering to Agent, for the benefit of the
                  Credit Parties, endorsed or accompanied by such instruments
                  of assignment as Agent may specify, and stamping or marking,
                  in such manner as Agent may specify, any and all chattel
                  paper, instruments, letters and advices of guaranty and
                  documents evidencing or forming a part of the Collateral; and

                           (iv)     executing and delivering any additional
                  Security Documents, notices and assignments in each case in
                  form and substance satisfactory to Agent required for the
                  creation, validity, perfection, maintenance or continuation
                  of the Security Interest under the UCC or other Applicable
                  Law.

                  (c)      Agent is hereby irrevocably authorized to file one
         or more financing or continuation statements or amendments thereto
         without the signature of or in the name of any Loan Party for any
         purpose described in SECTION 9.2(b). A carbon, photographic,
         xerographic or other reproduction of this Agreement or of any of the
         Security Documents filed in connection with this Agreement is
         sufficient as a financing statement.

                  (d)      Each Loan Party shall mark its books and records
         as may be necessary or appropriate to evidence, protect and perfect
         the Security Interest.

                  (e)      On or after the Termination Date and upon full and
         final, indefeasible payment of all of the Secured Obligations and
         termination of all of the obligations of Agent, L/C Issuer and any
         Lender under this Agreement and all other Loan Documents, Agent
         shall, upon the written request of and at the sole expense of
         Borrower, execute such releases and terminations of the Security
         Interest as Borrower may reasonably request.

         Section 9.3 GUARANTIES; LOAN PARTY JOINDER. Each Loan Party other
than Borrower shall guarantee payment and performance of the Secured
Obligations pursuant to a Guaranty Agreement, duly executed by each such
Person and dated as of the Agreement Date. Promptly upon creation or
acquisition of any Domestic Subsidiary of a Loan Party such Loan Party shall
and shall cause each of its Subsidiaries, as applicable, to cause each such
newly created or acquired Subsidiary to become a Loan Party and a Guarantor
by executing and delivering to Agent a Joinder Agreement. Upon execution and
delivery of a Joinder Agreement any such newly created or acquired Subsidiary
shall automatically become a Loan Party and a Guarantor and thereupon shall
have all of the rights, benefits, duties and obligations of a Loan Party and
a Guarantor under the Loan Documents.

LOAN AND SECURITY AGREEMENT - Page 94
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         Section 9.4 LIMITATION IN RESPECT OF CERTAIN LOAN PARTIES.
Notwithstanding anything in this Agreement or any of the other Loan
Documents, the liability of each Loan Party other than Borrower, Parent,
General Partner and CompUSA Holdings Company under this Agreement and the
other Loan Documents shall be limited to a maximum aggregate amount equal to
the largest amount that would not render its obligations hereunder and
thereunder subject to avoidance as a fraudulent transfer or conveyance under
any Applicable Law, in each case after giving effect to all other liabilities
of each such Person, contingent or otherwise, that are relevant under such
laws, and after giving effect to the value, as assets (as determined under
the applicable provisions of such laws) of any rights of each such Person to
subrogation or contribution from any other Loan Party or other Person
pursuant to Applicable Law or any agreement providing for an equitable
allocation among such Person and any such other Loan Party or other Person of
their respective obligations hereunder and thereunder. This SECTION 9.4 shall
not apply to limit the liability under the Loan Documents of Borrower,
Parent, General Partner and CompUSA Holdings Company.

                                   ARTICLE 10

                              COLLATERAL COVENANTS

         Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless the Required Lenders shall
otherwise consent in the manner provided in SECTION 17.10:

         Section 10.1 COLLECTION OF RECEIVABLES.

                  (a)      Each Loan Party will cause all monies, checks,
         notes, drafts and other payments relating to or constituting
         proceeds of trade accounts receivable to be forwarded to a Lockbox
         for deposit in an Agency Account in accordance with the procedures
         set out in the corresponding Agency Account Agreement. Each Loan
         Party will promptly cause all monies, checks, notes, drafts and
         other payments relating to or constituting proceeds of other
         Receivables, of any other Collateral and of any trade accounts
         receivable that are not forwarded to a Lockbox, to be transferred to
         or deposited in an Agency Account. In particular, each Loan Party
         will:

                           (i)      advise each Account Debtor on trade
                  accounts receivable to address all remittances with respect
                  to amounts payable on account thereof to a specified Lockbox;

                           (ii)     advise each other Account Debtor that
                  makes payment to such Loan Party by wire transfer, automated
                  clearinghouse transfer or similar means to make payment
                  directly to an Agency Account; and

                           (iii)    stamp or otherwise mark all invoices
                  relating to trade accounts receivable with a legend
                  satisfactory to Agent indicating that payment is to be made
                  to such Loan Party via a specified Lockbox.

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<PAGE>

                  (b)      For so long as no Event of Default shall have
         occurred and remain in existence and Availability shall equal or
         exceed the Minimum Availability Requirement, all collected balances
         in each Agency Account may be transmitted daily by wire transfer,
         depository transfer check or other means in accordance with the
         procedures set forth in the corresponding Agency Account Agreement,
         directly to the Loan Parties for use in the ordinary course of
         business, subject to the terms of this Agreement. At any time when
         any Event of Default is existence or at any time when Availability
         is less than the Minimum Availability Requirement, Agent in its
         discretion may notify the Loan Parties and each Clearing Bank and
         instruct such Clearing Bank, effective upon its receipt of such
         notice, to cause all balances in each Agency Account to be
         transmitted daily to Agent by wire transfer, depository transfer
         check or other means in accordance with the procedures set forth in
         the corresponding Agency Account Agreement, to Agent at its
         Principal Office for application as provided in SECTION 2.3(c),
         SECTION 14.2, and SECTION 14.3, such credits to be entered as of the
         Business Day they are received if they are received prior to 1:30
         p.m. (Dallas, Texas time) and to be conditioned upon final payment
         in cash or solvent credits of the items giving rise to them.

                  (c)      Any monies, checks, notes, drafts or other
         payments referred to in SUBSECTION (a) of this SECTION 10.1 which,
         notwithstanding the terms of such subsection, are received by or on
         behalf of any Loan Party will be held in trust for Agent and will be
         delivered to Agent or a Clearing Bank, as promptly as possible, in
         the exact form received, together with any necessary endorsements
         for application by Agent directly to the Secured Obligations or, if
         applicable, for deposit in the Agency Account maintained with a
         Clearing Bank and processing in accordance with the terms of this
         Agreement and the corresponding Agency Account Agreement.

         Section 10.2 VERIFICATION AND NOTIFICATION. Agent shall have the
right at any time and from time to time,

                  (a)      in the name of Agent, the Lenders or in the name
         of the Loan Parties, or any of them, to verify the validity, amount
         or any other matter relating to any Receivables by mail, telephone,
         telegraph or otherwise,

                  (b)      to review, audit and make extracts from all
         records and files related to any of the Receivables, and

                  (c)      at any time when any Event of Default is in
         existence, to notify the Account Debtors or obligors under any
         Receivables of the assignment of such Receivables to Agent, for the
         benefit of the Credit Parties.

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         Section 10.3 DISPUTES, RETURNS AND ADJUSTMENTS. A Loan Party may, in
the ordinary course of business and consistent with past business practices,
unless an Event of Default has occurred and is continuing, grant any
extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit or
discount whatsoever therein; PROVIDED that at any time when Availability is
less than the Minimum Availability Requirement, (i) no such action results in
the reduction of more than $7,500,000 in the amount payable with respect to
any Account (in each case, excluding the allowance of credits or discounts
generally available to Account Debtors in the ordinary course of business and
appropriate adjustments to the accounts of Account Debtors in the ordinary
course of business), and (ii) Agent is notified of the amount of such
adjustments and the Receivable(s) affected thereby, (x) promptly if the
amount of such adjustment equals or exceeds $2,500,000 or (y) otherwise on
the next succeeding Schedule of Receivables or Borrowing Base Certificate, as
the case may be, in the case of any adjustment of a smaller amount.

         Section 10.4 INVOICES. Upon the request of Agent, the Loan Parties
shall deliver to Agent, at their expense, copies of customers' invoices or
the equivalent, original shipping and delivery receipts or other proof of
delivery, customers' statements (if any), customer address lists, the
original copy of all documents, including, without limitation, repayment
histories and present status reports, relating to Receivables and such other
documents and information relating to the Receivables as Agent shall specify,
any of such items to be delivered, if no Event of Default is in existence, as
promptly as reasonably possible and in any event within three (3) Business
Days after any such request, or if any Event of Default is in existence, upon
Agent's request.

         Section 10.5 DELIVERY OF INSTRUMENTS. Each Loan Party will promptly
notify Agent in the event any of its Receivables in excess of $1,000,000 is
at any time evidenced by a promissory note, trade acceptance or any other
instrument for the payment of Money, and upon request by Agent, such Loan
Party will promptly thereafter deliver such instrument to Agent,
appropriately endorsed to Agent, for the benefit of the Credit Parties.

         Section 10.6 SALES OF INVENTORY. All sales of Inventory will be made
in compliance with all requirements of Applicable Law except for instances of
noncompliance that do not give rise to a Lien on such Inventory or result in
a material diminution in the value thereof or impair Agent's access thereto
or cause a Materially Adverse Effect.

         Section 10.7 OWNERSHIP AND DEFENSE OF TITLE.

                  (a)      Except for Permitted Liens, the Loan Parties,
         respectively, shall at all times be the sole owner of each and every
         item of Collateral and shall not create any Lien on, or sell, lease,
         exchange, assign, transfer, pledge, hypothecate, grant a security
         interest or security title in, grant a license in or otherwise
         dispose of, any of the Collateral or any interest therein, except
         for sales of Inventory in the ordinary course of business, for cash
         or on open account or on terms of payment ordinarily extended to its
         customers, and except for dispositions that are otherwise expressly
         permitted under this Agreement (including without limitation,
         SECTION 13.6). The inclusion of "proceeds" of the Collateral under
         the Security

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         Interest shall not be deemed a consent by Agent or the Lenders to
         any other sale or other disposition of any part or all of the
         Collateral.

                  (b)      The Loan Parties will promptly notify Agent of,
         and at Agent's request shall defend its interest in and to and the
         Security Interest in the Collateral against, any claims or demands
         of any Person other than the Credit Parties.

         Section 10.8 INSURANCE.

                  (a)      The Loan Parties shall at all times maintain
         insurance on its Inventory against loss or damage by fire, theft,
         burglary, pilferage, loss in transit and such other hazards as Agent
         shall reasonably specify, in amounts not to exceed those obtainable
         at commercially reasonable rates and under policies issued by
         insurers as is customarily maintained by similar businesses or as
         may be required by Applicable Law. All premiums on such insurance
         shall be paid by the Loan Parties and, if requested by Agent, copies
         of the policies shall be delivered to Agent. The Loan Parties will
         not use or permit the Inventory to be used in any manner which might
         render inapplicable any insurance coverage.

                  (b)      All insurance policies required under SECTION
         10.8(a) covering any Collateral shall name Agent, for the benefit of
         the Credit Parties, as an additional insured and shall contain loss
         payable clauses in form and substance satisfactory to Agent, naming
         Agent, for the benefit of the Credit Parties, as loss payee, as its
         interests may appear, and providing that:

                           (i)      all proceeds thereunder shall be payable
                  to Agent, for the benefit of the Credit Parties;

                           (ii)     no such insurance shall be affected by any
                  act or neglect of the insured or owner of the property
                  described in such policy; and

                           (iii)    such policy and loss payable clauses may
                  be canceled, amended or terminated only upon at least ten
                  (10) days' prior written notice given to Agent.

                  (c)      Any proceeds of insurance referred to in this
         SECTION 10.8 shall be paid to Agent for application to the Secured
         Obligations (i) to the extent, if any, required to cause
         Availability to equal or exceed the Minimum Availability Requirement
         and (ii) in full at any time when any Default or Event of Default is
         in existence, or if Availability exceeds the Minimum Availability
         Requirement and no Default or Event of Default is in existence,
         disbursed to Borrower for the Loan Parties.

         Section 10.9 LOCATION OF OFFICES AND COLLATERAL.

                  (a)      No Loan Party will change the location of its
         chief executive office or the place where it keeps its books and
         records relating to the Collateral or change its name, identity or
         entity structure without giving Agent thirty (30) days' prior
         written notice thereof.

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<PAGE>

                  (b)      All Inventory, other than Inventory in transit,
         will at all times be kept (i) as to Borrower and Parent, only at the
         locations for Borrower or Parent as reflected in such SCHEDULE
         8.1(v) and (ii) as to any other Loan Party, only at the locations,
         if any, reflected for each such Loan party in such SCHEDULE 8.1(v),
         and shall not, without the prior written consent of Agent, be
         removed therefrom except pursuant to sales of Inventory permitted
         under SECTION 10.7(a), PROVIDED, that SCHEDULE 8.1(v) may not be
         amended or supplemented without giving at least thirty (30) days
         prior written notice to Agent.

                  (c)      If any Inventory is in the possession or control
         of any agent or processor, the applicable Loan Party shall notify
         each such agent or processor of the Security Interest (and shall
         promptly provide copies of any such notice to Agent and the Lenders)
         and, upon the occurrence of an Event of Default, shall instruct them
         (and cause them to acknowledge such instruction) to hold all such
         Inventory for the account of the Credit Parties, subject to the
         instructions of Agent.

         Section 10.10 RECORDS RELATING TO COLLATERAL.

                  (a)      Each Loan Party will at all times:

                           (i)      keep complete and accurate records of its
                  Inventory on a basis consistent with past practices so as to
                  permit comparison of Inventory records relating to different
                  time periods, itemizing and describing the kind, type and
                  quantity of Inventory, cost therefor and a current price
                  list for such Inventory; and

                           (ii)     keep complete and accurate records of all
                  other Collateral.

                  (b)      Each Loan Party will prepare a physical listing of
         all Inventory, wherever located, at least annually and provide a copy
         thereof to Agent.

         Section 10.11 INSPECTION; APPRAISALS. Agent and, with the consent of
and accompanied by Agent, any Lender (by any of their officers, employees or
agents) shall have the right, to the extent that the exercise of such right
shall be within the control of any Loan Party, at any time or times to:

                  (a)      visit the properties of each Loan Party, inspect the
         Collateral and the other assets of each Loan Party and inspect and
         make extracts from its books and records, including, but not limited
         to, management letters prepared by independent accountants, all during
         customary business hours at such premises;

                  (b)      discuss any Loan Party's business, assets,
         liabilities, financial condition, results of operations and business
         prospects, insofar as the same are reasonably related to the rights
         of Agent or the Lenders hereunder or under any of the other Loan
         Documents, with any Loan Party's principal officers, independent
         accountants and any other Person (except

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<PAGE>

         that any such discussion with any third parties shall be conducted
         only in accordance with Agent's or such Lender's standard operating
         procedures relating to confidentiality);

                  (c)      verify the amount, quantity, value and condition
         of, or any other matter relating to, any of the Collateral and in
         this connection to review, audit and make extracts from all records
         and files related to any of the Collateral.

At Agent's request, each Loan Party will deliver to Agent, for the benefit of
the Lenders, any instrument necessary for it to obtain records from any
service bureau maintaining records on behalf of such Loan Party. At Agent's
request Borrower will furnish to Agent an appraisal or updated appraisal of
any Collateral, prepared by a credentialed appraiser acceptable to Agent, or
Agent may obtain any such appraisal at any time, in each case at Borrower's
expense as provided by SECTION 17.2. Without limiting the foregoing, Borrower
will deliver to Agent an appraisal of Inventory, prepared by a credentialed
appraiser acceptable to Agent, reflecting the Appraised GOB Value thereof at
any time at Agent's request, or otherwise (i) at least once during each
twelve (12) calendar months for so long as no Loans are outstanding in
respect of amounts calculated under CLAUSE (b)(ii) of the definition of
Borrowing Base in SECTION 1.1 or (ii) at least once during each six (6)
calendar months during any time when any Loans are outstanding in respect of
amounts calculated under such CLAUSE (b)(ii).

         Section 10.12 INFORMATION AND REPORTS.

                  (a)      SCHEDULE OF RECEIVABLES. Except as provided in
         Section (e) below, Borrower shall deliver to Agent, on or before the
         Agreement Date and not later than the twentieth (20th) day of each
         Fiscal Period thereafter, and at any other time as may be requested by
         Agent, a Schedule of Receivables which

                           (i)      shall be as of the last Business Day of
                  the immediately preceding Fiscal Period,

                           (ii)     except with respect to the Schedule of
                  Receivables delivered on the Agreement Date, shall be
                  reconciled to the Borrowing Base Certificate as of such last
                  Business Day, and

                           (iii)    shall set forth (i) a summary aged trial
                  balance for the first two Fiscal Periods of a Fiscal Quarter
                  and (ii) a detailed aged trial balance for the last Fiscal
                  Period of a Fiscal Quarter, in each such case of all then
                  existing Receivables of each Loan Party, specifying the
                  names and balance due for each Account Debtor obligated on a
                  Receivable so listed.

                  (b)      SCHEDULE OF INVENTORY. Except as provided in
         Section (e) below, Borrower shall deliver to Agent on or before the
         Agreement Date and not later than the twentieth day of each Fiscal
         Period, and at any other time as may be requested by Agent, a
         Schedule of Inventory as of the last Business Day of the immediately
         preceding Fiscal Period itemizing

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         and describing the kind, type and quantity of all Inventory of each
         Loan Party, the cost thereof and the location thereof.

                  (c)      BORROWING BASE CERTIFICATE. Except as provided in
         Section (e) below, Borrower shall deliver to Agent Borrowing Base
         Certificates, as follows:

                           (A)      With respect to (and prior to) each
                  funding of any Loan or each issuance of any Letter of Credit
                  at any time when Availability is, at the time of making such
                  Loan or issuing such Letter of Credit or after giving effect
                  thereto, less than the Minimum Availability Requirement,
                  Borrower shall, at a minimum, deliver to Agent a Borrowing
                  Base Certificate prepared as of the close of business on the
                  Business Day preceding the Business Day on which such
                  Borrowing Base Certificate is delivered to Agent;

                           (B)      At any time when the aggregate outstanding
                  balance of all Revolving Credit Loans plus the Letter of
                  Credit Reserve exceeds the Threshold Usage Amount, Borrower
                  shall, at a minimum, deliver to Agent a Borrowing Base
                  Certificate on the Wednesday of each calendar week prepared
                  as of the close of business on the Business Day preceding
                  the Business Day on which such Borrowing Base Certificate is
                  delivered to Agent;

                           (C)      At any time when the aggregate outstanding
                  balance of all Revolving Credit Loans plus the Letter of
                  Credit Reserve is less than the Threshold Usage Amount,
                  Borrower shall, at a minimum, deliver to Agent a Borrowing
                  Base Certificate on the twentieth (20th) day of each Fiscal
                  Period prepared as of the close of business on the last day
                  of the preceding Fiscal Period;

         PROVIDED, that unless otherwise requested by Agent no Borrowing Base
         Certificate shall be required by the foregoing at any time when the
         sum of Loans outstanding and the Letter of Credit Reserve
         outstanding is less than $50,000,000. Each such Borrowing Base
         Certificate shall include a schedule of "ineligibles" (I.E.,
         Receivables other than Eligible Receivables and Inventory other than
         Eligible Inventory) prepared as of the effective date of each such
         Borrowing Base Certificate (unless Agent shall request that such
         schedule be prepared as of a more recent date, in which case such
         schedule will be prepared as of the date so requested).

                  (d)      NOTICE OF DIMINUTION OF VALUE. At the time of
         delivery of each Compliance Certificate under SECTION 12.3 or, if
         earlier, with reasonable promptness, the Loan Parties shall notify
         Agent if any such Loan Party has knowledge of any matter or event
         which has resulted in, or may result in, the diminution in excess of
         $10,000,000 in the value of any of the Collateral, except for any
         such diminution in the value of any Receivables or Inventory in the
         ordinary course of business which has been appropriately reserved
         against, as reflected in financial statements previously delivered
         to Agent and the Lenders pursuant to ARTICLE 12.

LOAN AND SECURITY AGREEMENT - Page 101
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                  (e)      ADDITIONAL INFORMATION. Agent may in its
         discretion from time to time request that Borrower deliver any
         Schedule of Receivables, Schedule of Inventory or Borrowing Base
         Certificate described in SECTIONS 10.12(a), (b) and (c) more or less
         often and on different schedules than specified in such Sections and
         Borrower will comply with such requests. The Loan Parties will
         furnish to Agent such other information with respect to the
         Collateral as Agent may from time to time reasonably request.

         Section 10.13 POWER OF ATTORNEY. Each Loan Party hereby appoints
Agent as its attorney, with power to

                  (a)      endorse its name on any checks, notes,
         acceptances, money orders, drafts or other forms of payment or
         security that may come into Agent's or any Credit Party's
         possession, and

                  (b)      sign its name on any invoice or bill of lading
         relating to any Receivable, Inventory or other Collateral, on any
         drafts against customers related to letters of credit, on notices of
         assignment, financing statements and other public records relating
         to the perfection or priority of the Security Interest,
         verifications of account and notices to or from customers.

         Section 10.14 ADDITIONAL REAL ESTATE AND LEASES. At the time of
delivery of each Compliance Certificate for the end of a Fiscal Quarter under
SECTION 12.3 the Loan Parties shall notify Agent in writing of the
acquisition of any interest (including a leasehold interest) in any Real
Estate, therein specifying the address and location of such Real Estate and
the nature of any such interest.

         Section 10.15 ASSIGNMENT OF CLAIMS ACT. Upon each request of Agent,
each Loan Party shall promptly execute any documents or instruments and shall
take such steps or actions reasonably required by Agent so that all monies
due or to become due under any contract with the U.S., the District of
Columbia or any other Governmental Authority, will be assigned to Agent, for
the benefit the Credit Parties, and notice given thereof in accordance with
the requirements of the Assignment of Claims Act of 1940, as amended, or any
other laws, rules or regulations relating to the assignment of any such
contract and monies due to or to become due.

         Section 10.16 VOTING RIGHTS, DISTRIBUTIONS, ETC., IN RESPECT OF
INVESTMENT PROPERTY.

                  (a)      So long as no Event of Default shall have occurred
         and be continuing (i) each Loan Party shall be entitled to exercise
         any and all voting and other consensual rights (including, without
         limitation, the right to give consents, waivers and notifications in
         respect of any Security) pertaining to its Investment Property or
         any part thereof; PROVIDED, HOWEVER, that without the prior written
         consent of Agent and Required Lenders, no vote shall be cast or
         consent, waiver or ratification given or action taken which would
         (A) be inconsistent with or violate any provision of this Agreement
         or any other Loan Document or (B) amend, modify or waive any
         material term, provision or condition of the certificate of
         incorporation,

LOAN AND SECURITY AGREEMENT - Page 102
<PAGE>

         bylaws, certificate of formation or other charter document or other
         agreement relating to, evidencing, providing for the issuance of or
         securing any such Investment Property, in any manner that would
         impair such Investment Property, the transferability thereof or the
         Security Interest therein, or, and (ii) each Loan Party shall be
         entitled to receive and retain any and all dividends and interest
         paid in respect of any of such Investment Property (unless otherwise
         required by this Agreement).

                  (b)      Upon the occurrence and during the continuance of
         an Event of Default, (i) Agent may, without notice to any Loan
         Party, transfer or register in the name of Agent or any of its
         nominees, for the ratable benefit of the Credit Parties, any or all
         of the Collateral consisting of Investment Property, the proceeds
         thereof (in cash or otherwise) and all liens, security, rights,
         remedies and claims of any Loan Party with respect thereto (as used
         in this Section collectively, the "PLEDGED COLLATERAL") held by
         Agent hereunder, and Agent or its nominee may thereafter, after
         delivery of notice to the applicable Loan Party, exercise all voting
         and corporate rights at any meeting of any corporation, partnership
         or other business entity issuing any of the Pledged Collateral and
         any and all rights of conversion, exchange, subscription or any
         other rights, privileges or options pertaining to any of the Pledged
         Collateral as if it were the absolute owner thereof, including,
         without limitation, the right to exchange at its discretion any and
         all of the Pledged Collateral upon the merger, consolidation,
         reorganization, recapitalization or other readjustment of any
         corporation, partnership or other business entity issuing any of
         such Pledged Collateral or upon the exercise by any such issuer or
         Agent of any right, privilege or option pertaining to any of the
         Pledged Collateral, and in connection therewith, to deposit and
         deliver any and all of the Pledged Collateral with any committee,
         depositary, transfer agent, registrar or other designated agency
         upon such terms and conditions as it may determine, all without
         liability except to account for property actually received by it,
         but Agent shall have no duty to exercise any of the aforesaid
         rights, privileges or options, and Agent shall not be responsible
         for any failure to do so or delay in so doing, (ii) after Agent's
         giving of the notice specified in CLAUSE (i) of this SECTION
         10.16(b), all rights of Borrower to exercise the voting and other
         consensual rights which it would otherwise be entitled to exercise
         pursuant to SECTION 10.16(a)(i) and to receive the dividends,
         interest and other distributions which it would otherwise be
         authorized to receive and retain thereunder shall be suspended until
         such Event of Default shall no longer exist, and all such rights
         shall, until such Event of Default shall no longer exist, thereupon
         become vested in Agent which shall thereupon have the sole right to
         exercise such voting and other consensual rights and to receive and
         hold as Pledged Collateral such dividends, interest and other
         distributions, (iii) all dividends, interest and other distributions
         which are received by any Loan Party contrary to the provisions of
         this SECTION 10.16(b) shall be received in trust for the benefit of
         Agent, shall be segregated from other funds of such Loan Party and
         shall be forthwith paid over to Agent as Collateral in the same form
         as so received (with any necessary endorsement), and (iv) each Loan
         Party shall execute and deliver (or cause to be executed and
         delivered) to Agent all such proxies and other instruments as Agent
         may reasonably request for the purpose of enabling Agent to exercise
         the voting and other rights which it is entitled to exercise
         pursuant to this SECTION 10.16(b) and to receive the dividends,
         interest and other distributions which it is

LOAN AND SECURITY AGREEMENT - Page 103
<PAGE>

         entitled to receive and retain pursuant to this SECTION 10.16(b).
         The foregoing shall not in any way limit Agent's power and authority
         granted pursuant to SECTION 10.13.

                                    ARTICLE 11

                              AFFIRMATIVE COVENANTS

         Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless the Required Lenders shall
otherwise consent in the manner provided for in SECTION 17.10, each Loan
Party will keep the following covenants.

         Section 11.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. Each
Loan Party will, and will cause each of its Subsidiaries to (i) preserve and
maintain its existence, rights, franchises, licenses and privileges in the
jurisdiction of its incorporation, organization or formation (as applicable),
except as otherwise may be allowed pursuant to SECTION 13.6 and (ii) except
for instances of any noncompliance which could not reasonably be expected to
have a Materially Adverse Effect, qualify and remain qualified as a foreign
business enterprise and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification or authorization.

         Section 11.2 COMPLIANCE WITH APPLICABLE LAW. Each Loan Party will,
and will cause each of its Subsidiaries to, comply with all Applicable Laws
relating to it except instances of any noncompliance which could not
reasonably be expected to have a Materially Adverse Effect and with respect
to which reserves in respect of reasonably anticipated liability therefor has
been appropriately established.

         Section 11.3 MAINTENANCE OF PROPERTY. In addition to, and not in
derogation of, the requirements of SECTION 10.7 and of the Security
Documents, each Loan Party will:

                  (a)      protect and preserve all property and interests in
         property material to its business and maintain in good repair,
         working order and condition in all material respects, with
         reasonable allowance for wear and tear, all tangible properties used
         in or otherwise material to its business, and

                  (b)      from time to time make or cause to be made all
         needed and appropriate repairs, renewals, replacements and additions
         to such properties necessary for the conduct of its business, so
         that the business carried on in connection therewith may be properly
         conducted at all times, except for instances of any noncompliance
         which could not reasonably be expected to have a Materially Adverse
         Effect.

LOAN AND SECURITY AGREEMENT - Page 104
<PAGE>

         Section 11.4 CONDUCT OF BUSINESS. Borrower and the other Loan
Parties will engage only the business described in SECTION 8.1(g) and any
other business which is incidental to, or results from, the conduct of any
such business.

         Section 11.5 INSURANCE. Each Loan Party will maintain, in addition
to the coverage required by SECTION 10.8 and the Security Documents,
insurance with responsible insurance companies against such risks (including
without limitation, business interruption insurance) and in such amounts as
is customarily maintained by similar businesses or as may be required by
Applicable Law, and from time to time deliver to Agent upon its request a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.

         Section 11.6 PAYMENT OF TAXES AND CLAIMS. Each Loan Party will, and
will cause each of its Subsidiaries to, pay or discharge when due

                  (a)      all taxes, assessments and governmental charges or
         levies imposed upon it or upon its income or profits or upon any
         properties belonging to it, except that real property ad valorem
         taxes shall be deemed to have been so paid or discharged if the same
         are paid before they become delinquent, and

                  (b)      all lawful claims of materialmen, mechanics,
         carriers, warehousemen and landlords for labor, materials, supplies
         and rentals and other claims which, if unpaid, might become a Lien
         on any properties of any Loan Party or any Subsidiary of any Loan
         Party;

EXCEPT that this SECTION 11.6 shall not require the payment or discharge of
any such tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings and with respect to which no Lien or
notice of Lien has been filed which would cause an Event of Default and with
respect to which reserves in respect of the reasonably anticipated liability
therefor have been appropriately established.

         Section 11.7 ACCOUNTING METHODS AND FINANCIAL RECORDS. Each Loan
Party will, and will cause each of its Subsidiaries to, maintain a system of
accounting, and keep such books, records and accounts (which shall be true
and complete), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP.

         Section 11.8 USE OF PROCEEDS.

                  (a)      Borrower will use the proceeds of Loans for
         general business purposes, including without limitation (i) working
         capital, (ii) funding of Reimbursement Obligations, (iii)
         repurchasing or redeeming the Senior Subordinated Notes, (iv)
         Capital Expenditures and (v) Acquisitions, in each case subject to
         the terms of this Agreement, and for no other purpose.

LOAN AND SECURITY AGREEMENT - Page 105
<PAGE>

                  (b)      Borrower will not use any part of such proceeds to
         purchase or, to carry or reduce or retire or refinance any credit
         incurred to purchase or carry, any "margin stock" (within the meaning
         of Regulation U of the Board of Governors of the Federal Reserve
         System) or, in any event, for any purpose which in either case would
         involve a violation of such Regulation U or of Regulation T or X of
         such Board of Governors, or for any purpose prohibited by law or by the
         terms and conditions of this Agreement.

         Section 11.9 HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL
REQUIREMENTS.

                  (a)      In addition to, and not in derogation of, the
         requirements of SECTION 11.2 and of the Security Documents, each Loan
         Party will, and will cause each of its Subsidiaries to, (i) comply with
         all Environmental Laws and all Applicable Laws relating to occupational
         health and safety (except for instances of noncompliance that would not
         reasonably be expected to have a Materially Adverse Effect and that are
         being contested in good faith by appropriate proceedings if reserves in
         respect of reasonably anticipated liability therefor have been
         appropriately established), (ii) promptly notify Agent of its receipt
         of any notice of a violation of any such Environmental Laws or such
         other Applicable Laws that would reasonably be expected to have a
         Materially Adverse Effect and (iii) indemnify and hold each Credit
         Party harmless from all loss, cost, damage, liability, claim and
         expense incurred by or imposed upon any Credit Party on account of
         failure to perform its obligations under this SECTION 11.9.

                  (b)      Whenever any Loan Party or any of its Subsidiaries
         gives notice to Agent pursuant to SECTION 11.9(a)(ii) with respect to
         any matter that reasonably could be expected to result in liability to
         any Loan Party in excess of $10,000,000 in the aggregate, such Loan
         Party will, or will cause such Subsidiary to, at Agent's request and at
         such Loan Party's or such Subsidiary's expense, (i) cause an
         independent credentialed environmental engineer acceptable to Agent to
         conduct an assessment meeting all requirements of Agent and Applicable
         Law, including tests where necessary, feasible and appropriate of the
         site where the noncompliance or alleged noncompliance with
         Environmental Law has occurred and prepare and deliver to Agent a
         report setting forth the results of such assessment, a proposed plan to
         bring such Loan Party into compliance with such Environmental Law (if
         such assessment indicates noncompliance) and an estimate of the costs
         thereof, and (iii) provide to Agent a supplemental report of such
         engineer whenever the scope of the noncompliance, or the response
         thereto or the estimated costs thereof, shall materially adversely
         change.

                                   ARTICLE 12

                                   INFORMATION

         Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless the Required Lenders shall
otherwise consent in the manner set forth in SECTION 17.10, the Loan Parties
will provide the following information to Agent and to each Lender


LOAN AND SECURITY AGREEMENT - Page 106

<PAGE>

at the offices then designated for such notices pursuant to SECTION 17.1 and
keep the other covenants contained in this ARTICLE 12.

         Section 12.1 FINANCIAL STATEMENTS.

                  (a)      ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
         end of each Fiscal Year, a copy of (i) the consolidated balance sheets
         of Parent and its Consolidated Subsidiaries, as of the end of the
         current and prior Fiscal Years and (ii) the consolidated statements of
         operations and consolidated statements of stockholders' equity, and
         consolidated statements of changes in cash flows as of and through the
         end of such Fiscal Year, all of which are prepared in accordance with
         GAAP applied consistently throughout the periods reflected therein, and
         certified by independent certified public accountants acceptable to
         Agent and the Lenders, whose opinion shall be in scope and substance in
         accordance with generally accepted auditing standards and shall be
         unqualified.

                  (b)      FISCAL QUARTER FINANCIAL STATEMENTS AND INFORMATION.
         Within 45 days after the end of each Fiscal Quarter (except the last
         Fiscal Quarter) of each Fiscal Year, a consolidated balance sheet of
         Parent and its Consolidated Subsidiaries as at the end of such Fiscal
         Period and the related consolidated statement of operations for such
         Fiscal Quarter and for the elapsed portion of the year ended with the
         last day of such Fiscal Quarter, and a consolidated statement of cash
         flows for the elapsed portion of the year ended with the last day of
         such Fiscal Quarter, all of which shall be certified by the president,
         chief financial officer, senior vice president-finance, vice president-
         finance or vice president-controller of Parent, to be, in his or her
         opinion acting solely in his or her capacity as an officer of
         Parent, complete and correct in all material respects and to present
         fairly, in accordance with GAAP applied consistently throughout the
         periods reflected therein, the financial position and results of
         operations of Parent and its Consolidated Subsidiaries as at the end
         of and for such Fiscal Quarter, and for the elapsed portion of the
         year ended with the last day of such Fiscal Quarter, subject only to
         normal year-end adjustments.

                  (c)      FISCAL PERIOD FINANCIAL STATEMENTS AND INFORMATION.
         Within 20 days after the end of each Fiscal Period of each Fiscal Year
         (except for any Fiscal Period that is the last Fiscal Period of a
         Fiscal Quarter), an internally prepared consolidated balance sheet of
         Parent and its Consolidated Subsidiaries as at the end of such Fiscal
         Period and the related consolidated statement of operations for such
         Fiscal Period for the elapsed portion of the year ended with the last
         day of such Fiscal Period, and a consolidated statement of cash flows
         for the elapsed portion of the year ended with the last day of such
         Fiscal Period, all of which shall be certified by the president,
         chief financial officer, senior vice president-finance, vice president-
         finance or vice president-controller of Parent, to be a true copy of
         Parent's routine internally prepared financial statements prepared for
         Parent's management in the ordinary course of business for such Fiscal
         Period.

                  (d)      CONSOLIDATING FINANCIAL STATEMENTS. Together with
         each of the financial statements required to be delivered under SECTION
         12.1(a), (b) and (c), the associated


LOAN AND SECURITY AGREEMENT - Page 107

<PAGE>

         consolidating financial statements for CompUSA Net.com, which in each
         case shall be included within the respective certifications required to
         be delivered under such Sections.

         Section 12.2 RESERVED

         Section 12.3 OFFICER'S CERTIFICATE. At the time that Parent provides
the financial statements pursuant to SECTION 12.1 for any Fiscal Period, Parent
shall also provide a Compliance Certificate which:

                  (a)      sets forth as at the end of such Fiscal Period, (i) a
         listing of Investments made pursuant to SUBPARAGRAPH (i) of the
         definition of "Permitted Investments" and (ii) the calculations
         required to establish compliance with the requirements of SECTIONS
         13.1, 13.9 and 13.12 as at the end of each respective period,

                  (b)      if any Loan Party has made any payment or payments of
         principal of, or interest or premium on, any Subordinated Indebtedness
         since the last preceding date as of which a Compliance Certificate was
         required to be delivered hereunder, sets forth a statement (i)
         identifying the Subordinated Indebtedness which was the subject of such
         payment, (ii) specifying the amount of each such payment, and whether
         such payments were in respect of principal, interest or premium and
         (iii) certifying that no Default or Event of Default was in existence
         as of the time of making, or after giving effect to, each such payment,

                  (c)      states that the information on the schedules to this
         Agreement is complete and accurate as of the date of such certificate
         or, if such is not the case, attaches to such certificate updated
         schedules, and

                  (d)      states that, based on a reasonably diligent
         examination, no Default or Event of Default has occurred or exists, or,
         if such is not the case, specifies such Default or Event of Default and
         its nature, when it occurred, whether it is continuing and the steps
         taken or being taken by the Loan Parties with respect to such Default
         or Event of Default.

         Section 12.4 COPIES OF OTHER REPORTS. The Loan Parties will provide
Agent and the Lenders the following:

                  (a)      Promptly upon receipt thereof, copies of all reports,
         if any, submitted to any Loan Party or its Board of Directors by its
         independent public accountants, including, without limitation, any
         management report;

                  (b)      As soon as practicable, copies of all financial
         statements and reports that any Loan Party sends to its shareholders
         generally and of all registration statements and all regular or
         periodic reports which any Loan Party files with the Securities and
         Exchange Commission or any successor commission;


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<PAGE>

                  (c)      From time to time and as soon as reasonably
         practicable following each request, such forecasts, data, certificates,
         reports, statements, opinions of counsel, documents or further
         information regarding the business, assets, liabilities, financial
         condition or results of operations of any Loan Party or any of its
         Subsidiaries as Agent or any Lender may reasonably request and that any
         such Loan Party has or (except in the case of legal opinions relating
         to the perfection or priority of the Security Interest) without
         unreasonable expense can obtain; PROVIDED, HOWEVER, that the Lenders
         shall, to the extent reasonably practicable, coordinate examinations of
         the Loan Parties' records by their respective internal auditors; and
         PROVIDED FURTHER, that no such opinion of counsel shall be required to
         be so provided to the extent such counsel has determined (and has so
         advised Agent in writing) that matters that would be required to be
         disclosed in any such opinion would waive an attorney-client privilege
         or attorney work product privilege of a Loan Party as to significant
         privileged information of such Loan Party.

                  (d)      If requested by Agent or any Lender, Borrower will
         provide to Agent and the Lenders statements in conformity with the
         requirements of Federal Reserve Form U-1 referred to in Regulation U of
         the Board of Governors of the Federal Reserve System.

The rights of Agent and the Lenders under this SECTION 12.4 are in addition to
and not in derogation of their rights under any other provision of this
Agreement or of any other Loan Document.

         Section 12.5 NOTICE OF LITIGATION AND OTHER MATTERS. Each Loan Party
will provide Agent and the Lenders prompt notice of each of the following:

                  (a)      promptly upon receipt thereof, (i) notices (and
         information with respect thereto and copies thereof) any received from
         any Governmental Authority that relates to a breach of or noncompliance
         with any Applicable Law, or might result in the liability or obligation
         of any Loan Party or any of its Subsidiaries in an amount of
         $10,000,000 or more in the aggregate, or otherwise have a Materially
         Adverse Effect, or result in the loss or suspension of any Governmental
         Approval which is necessary for operation of a significant portion of
         its business and (ii) promptly becoming aware thereof, the commencement
         of any proceeding or investigation by or before any Governmental
         Authority or any action or proceeding before any Governmental Authority
         against or in any other way relating to or affecting any Loan Party or
         any of its Subsidiaries or any of such Loan Party's or Subsidiary's
         properties, assets or businesses, which might, singly or in the
         aggregate, result in the occurrence of a Default or an Event of
         Default, or have a Materially Adverse Effect;

                  (b)      any amendment of the articles of incorporation or
         bylaws of any Loan Party or any of its Subsidiaries;

                  (c)      any change (i) in the business, assets, liabilities,
         financial condition or results of operations of any Loan Party or any
         of its Subsidiaries which has had or may have, singly or in the
         aggregate, a Materially Adverse Effect; and


LOAN AND SECURITY AGREEMENT - Page 109

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                  (d)      promptly upon becoming aware thereof, that (i) the
         holder(s) of any note(s) or other evidence of Indebtedness or other
         security of any Loan Party in excess of $10,000,000 in the aggregate
         has given notice or taken any action with respect to a breach, failure
         to perform, claimed default or event of default thereunder, (ii) any
         party to any Capitalized Lease Obligation in excess of $10,000,000 or
         any party to any obligations in respect of any Operating Lease, the
         termination or default with respect to which could reasonably be
         expected to have a Materially Adverse Effect, has given notice or taken
         any action with respect to a breach, failure to perform, claimed
         default or event of default thereunder, (iii) any occurrence or
         non-occurrence of any event which constitutes or which with the passage
         of time or giving of notice or both could constitute a breach by any
         Loan Party under any agreement or instrument other than this Agreement
         to which such Loan Party is a party or by which any of its properties
         may be bound, if any such event could reasonably be expected to have a
         Materially Adverse Effect, or (iv) any event, circumstance or condition
         which could reasonably be expected to cause a Material Adverse Effect
         with respect to any Loan Party, such notice to specify the details
         thereof (or the nature of any claimed default or event of default) and
         what action is being taken or is proposed to be taken with respect
         thereto.

         Section 12.6 ERISA. As soon as possible and in any event within thirty
(30) days after any Loan Party knows, or has reason to know, that

                  (a)      any Termination Event with respect to a Plan listed
         in SCHEDULE 8.1(q) has occurred or will occur, or

                  (b)      the aggregate present value of the Unfunded Vested
         Accrued Benefits under all Plans listed in SCHEDULE 8.1(q) subject to
         either Title IV of ERISA or the provisions of Section 302 of ERISA or
         Section 412 of the Internal Revenue Code is equal to an amount in
         excess of $0, or

                  (c)      Any Loan Party or any of its Subsidiaries is in
         "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
         payments to a Multiemployer Plan required by reason of such Loan
         Party's or Subsidiary's complete or partial withdrawal (as described in
         Section 4203 or 4205 of ERISA) from such Multiemployer Plan,

such Loan Party will provide Agent and the Lenders a certificate of its
Authorized Signatory setting forth the details of such event and the action
which is proposed to be taken with respect thereto, together with any notice or
filing which may be required by the PBGC or other Governmental Authority with
respect to such event.

         Section 12.7 ACCURACY OF INFORMATION. All written information, reports,
statements and other papers and data provided to Agent or any Lender, whether
pursuant to this ARTICLE 12 or any other provision of this Agreement or of any
other Loan Document, shall be, at the time the same is so provided, complete and
correct in all material respects to the extent necessary to give Agent and the
Lenders true and accurate knowledge of the subject matter.


LOAN AND SECURITY AGREEMENT - Page 110

<PAGE>

         Section 12.8 REVISIONS OR UPDATES TO SCHEDULES. Should any of the
information or disclosures provided on any of the Schedules originally attached
hereto become outdated or incorrect in any material respect, the Loan Parties
shall deliver to Agent and the Lenders as part of the officer's certificate
required pursuant to SECTION 12.3(b) such revisions or updates to such
Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s), PROVIDED that no such revisions or updates to SCHEDULES 1.1B, 1.1C,
8.1(f), 8.1(h), 8.1(i), 8.1(l), 8.1(m), 8.1(o), 8.1(y), 8.1(bb), 8.1(gg) or 9.2
shall be deemed to have amended, modified or superseded any such Schedules as
originally attached hereto, or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedules, unless and until the Required Lenders shall have accepted in writing
such revisions or updates to any such Schedules.

         Section 12.9 YEAR 2000 COMPLIANCE. The Loan Parties will promptly
notify the Agent in the event Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant on a timely basis, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect on Borrower or the Loan
Parties.

         Section 12.10 ANNUAL PROJECTIONS. As soon as available, but in any
event within 90 days following the end of each Fiscal Year, Parent shall deliver
to Agent and the Lenders a copy of the annual consolidated operating budget of
Parent and its Subsidiaries for the succeeding Fiscal Year.

                                   ARTICLE 13

                               NEGATIVE COVENANTS

         Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless the Required Lenders shall
otherwise consent in the manner set forth in SECTION 17.11:

         Section 13.1 FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
Ratio calculated as of any Fixed Charge Coverage Ratio Test Date shall not be
less than 1.0 to 1.0.

         Section 13.2 INDEBTEDNESS. No Loan Party will, nor will it permit any
Restricted Subsidiary to, directly or indirectly, create, assume or otherwise
become or remain obligated in respect of, or permit or suffer to exist or to be
created, assumed or incurred or to be outstanding any Indebtedness, except that
this SECTION 13.2 shall not apply to:

                  (a)      Indebtedness under the Loan Documents;

                  (b)      Purchase Money Indebtedness incurred for the purchase
         of Inventory in the ordinary course of business, and accounts payable
         and accrued liabilities incurred in the ordinary course of business and
         not otherwise expressly prohibited by this Agreement;


LOAN AND SECURITY AGREEMENT - Page 111

<PAGE>

                  (c)      Guaranties to the extent permitted under SECTION
         13.3;

                  (d)      (i) Indebtedness for the purpose of acquiring and/or
         constructing new store locations, PROVIDED that no Default or Event of
         Default shall be in existence and Availability shall exceed the Minimum
         Availability Requirement, in each case at the time of incurring and
         after giving effect to such Indebtedness, (ii) Indebtedness secured by
         Existing Store Locations and which does not exceed the original cost of
         acquiring and/or constructing such Existing Store Locations and (iii)
         refinancings (but not increases) of Indebtedness described in CLAUSES
         (i) and (ii) of this SECTION 13.2(d) on terms not materially different
         than those existing on the date such Indebtedness was incurred in the
         case of CLAUSE (i) or on the Agreement Date in the case of Indebtedness
         described in CLAUSE (ii);

                  (e)      Indebtedness of a Loan Party or a Restricted
         Subsidiary to a Loan Party;

                  (f)      Indebtedness which is described on SCHEDULE 8.1(k) on
         the Agreement Date, including renewals and refinancings (but no
         increases) thereof on terms not materially different than those
         existing on the Agreement Date;

                  (g)      Subordinated Indebtedness, including renewals and
         refinancings thereof which constitute Subordinated Indebtedness, not
         exceeding $250,000,000 in the aggregate at any time outstanding;

                  (h)      Indebtedness in respect of deferred income taxes,
         deferred revenues, commitments, contingencies and reserves, in each
         case to the extent set forth on the balance sheet of Parent and its
         Subsidiaries in accordance with GAAP; and

                  (i)      Indebtedness not otherwise permitted pursuant to
         CLAUSES (a) through (h) above, not to exceed $150,000,000 in the
         aggregate, PROVIDED that no Default or Event of Default shall be in
         existence at the time of incurring and after giving effect to such
         Indebtedness; and

         Section 13.3 GUARANTIES. The Loan Parties shall not, and shall not
permit any Restricted Subsidiary to, at any time make or issue any Guaranty, or
assume, be obligated with respect to, or permit to be outstanding any Guaranty
of any obligation of any other Person except (a) under a Guaranty Agreement
pursuant to the Loan Documents, (b) a Guaranty of obligations of a Loan Party
that are not prohibited by this Agreement, (c) endorsement in the ordinary
course of business of negotiable instruments for deposit or collection, (d)
Guaranty of any Indebtedness permitted by SECTION 13.2, (e) a Guaranty that is a
Permitted Investment under CLAUSE (i) of the definition of Permitted Investments
in SECTION 1.1 and (f) the Guaranty of Indebtedness of directors, officers and
employees of a Loan Party or a Subsidiary of a Loan Party during any Fiscal Year
not to exceed, together with the loans to officers and employees permitted
pursuant to SECTION 13.4 (calculated net of loan repayments) for such Fiscal
Year, $1,000,000 in aggregate amount, PROVIDED that no Default or Event of
Default shall be in existence at the time of incurring and after giving effect
to such Guaranty under this CLAUSE (f).


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<PAGE>

         Section 13.4 INVESTMENTS. No Loan Party will, nor will it permit any of
its Restricted Subsidiaries to, directly or indirectly, acquire or maintain any
Investment other than Permitted Investments and Guaranties permitted by SECTION
13.3.

         Section 13.5 RESTRICTED DIVIDEND PAYMENTS, RESTRICTED PAYMENTS AND
RESTRICTED PURCHASES. No Loan Party will, nor will it permit any Restricted
Subsidiary to, directly or indirectly, declare or make any Restricted Dividend
Payment, Restricted Payment or Restricted Purchase, PROVIDED, that for so long
as no Default or Event of Default has occurred and is continuing or would exist
after giving effect thereto, (i) a Loan Party or a Restricted Subsidiary may
declare and pay Dividends to a Loan Party, (ii) Parent may defease, redeem,
repurchase or repay the Senior Subordinated Notes in part or in full, (iii)
Parent may prepay the certain subordinated promissory note dated August 31, 1998
executed by Parent payable to Tandy Corporation, PROVIDED that such prepayment
is made with proceeds of Subordinated Indebtedness or of newly issued Capital
Stock, or of the sale of treasury Capital Stock, of Parent, (iv) Parent may make
Treasury Stock Purchases if Availability both at the time of any such Treasury
Stock Purchase and after giving effect thereto equals or exceeds an amount equal
to the sum of the Minimum Availability Requirement at such time, PROVIDED that
such Treasury Stock Purchases shall not exceed $100,000,000 (net of cash
proceeds received by Parent upon any resales thereof) in the aggregate during
any Fiscal Year of Parent and (v) Restricted Payments on Indebtedness, excluding
Subordinated Indebtedness, allowed under SECTION 13.2.

         Section 13.6 LIQUIDATION, DISPOSITION OR ACQUISITION OF ASSETS, MERGER,
NEW SUBSIDIARIES. The Loan Parties shall not, and shall not permit any
Restricted Subsidiary to, at any time:

                  (a)      liquidate or dissolve itself (or suffer any
         liquidation or dissolution) or otherwise wind up; or sell, lease,
         abandon, transfer or otherwise dispose of all or any part of its
         assets, properties or business other than (i) inventory and other
         assets sold in the ordinary course of business (ii) sales or closures
         of stores or distribution centers in the normal course of business, and
         disposition of Inventory located at such locations on reasonable terms
         consistent with such Loan Party's usual practice in connection with
         such sales or closures (PROVIDED that disposition of other Collateral
         at any such store or distribution center shall otherwise be subject to
         this SECTION 13.6), (iii) transfers of assets from a Loan Party to a
         Loan Party or from a Subsidiary to a Loan Party (PROVIDED, that a
         Borrowing Base Party may not transfer Inventory to a Loan Party that is
         not a Borrowing Base party without the prior consent of Agent, unless a
         Financing Statement reflecting the transferee Loan Party as debtor and
         Agent as secured party has been signed by the transferee Loan Party and
         has been filed with the appropriate Governmental Authority in each
         jurisdiction in which such Inventory is located and Agent shall have
         received acknowledgment of such filing from such Governmental
         Authority), (iv) liquidation, sale or other disposition of Permitted
         Investments described in CLAUSE (a) and (b) of the definition of
         Permitted Investments in SECTION 1.1, (v) any transaction permitted by
         SECTION 13.11, (vi) sales of Capital Stock in CompUSA Net.com, (vii)
         transfer of assets to CompUSA Net.com to the extent not prohibited by
         SECTION 13.12, (viii) liquidation or dissolution of a Loan Party into
         another Loan Party, (ix) any sale, lease, abandonment, transfer or
         disposition of assets not otherwise allowed by


LOAN AND SECURITY AGREEMENT - Page 113

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         CLAUSES (i) through (viii) hereof, in any Fiscal Year (other than
         Receivables, Inventory or Proprietary Rights listed in a Schedule to a
         Trademark Security Agreement, Copyright Security Agreement or Patent
         Security Agreement, or Capital Stock of a Loan Party whose Receivables
         or Inventory are included in the most recent Borrowing Base Certificate
         delivered to Agent) for full and fair consideration and which assets do
         not in aggregate amount exceed 5% of Net Worth as of the end of the
         immediately preceding Fiscal Year (in the case of Capital Stock of a
         Restricted Subsidiary, measured by the net worth (determined according
         to GAAP) thereof, and in the case of any other assets, measured by the
         fair value thereof net of any associated liabilities assumed by the
         purchaser thereof), in each of the foregoing cases subject to SECTION
         5.11(a) to the extent applicable;

                  (b)      enter into any merger or consolidation (i) unless
         with respect to a merger or consolidation, Parent or Borrower shall be
         the surviving corporation, unless the merger or consolidation involves
         a Loan Party or Restricted Subsidiary and neither Parent nor Borrower
         is merging or consolidating with another Person, and either (A) such
         Restricted Subsidiary shall be the surviving corporation and is or
         becomes a Loan Party, (B) the survivor of the merger becomes a Loan
         Party or (C) the entity formed in the consolidation becomes a Loan
         Party, (ii) if such transaction is being utilized to circumvent
         compliance with any term or provision herein, (iii) unless no Default
         or Event of Default shall be then in existence or shall occur as a
         result of such transaction, (iv) unless Availability shall be equal or
         greater than the Minimum Availability Requirement at the time of such
         transaction and after giving effect thereto, except in the case of a
         merger or consolidation of a Loan Party or a Subsidiary of a Loan Party
         with and into a Loan Party, and (v) unless Agent shall have received a
         certificate signed by an Authorized Signatory of Borrower certifying
         that no Default or Event of Default is in existence or would result
         from such merger or consolidation, together with confirmation of
         Availability referenced in CLAUSE (iv) preceding in form and substance
         satisfactory to Agent; or

                  (c)      create or acquire any Subsidiary except as permitted
         by SECTION 13.14.

         Section 13.7 TRANSACTIONS WITH AFFILIATES. Except for this Agreement or
a Guaranty Agreement a Loan Party shall not, and shall not permit any Restricted
Subsidiary to, at any time engage in any transaction with an Affiliate (other
than a Loan Party), nor make an assignment or other transfer of any of its
assets or properties to any Affiliate (other than a Loan Party) other than
Investments permitted to be made pursuant to SECTION 13.4, on terms materially
less advantageous to such Loan Party than would be the case if such transaction
had been effected with a non-Affiliate (other than advances to employees in the
ordinary course of business). Notwithstanding the foregoing, Borrower may loan
the proceeds of a Loan to another Loan Party or Subsidiary of a Loan Party so
long as (a) such proposed loan, or the transfer to such Loan Party of the
proceeds of such Loan, is not otherwise prohibited by this Agreement and there
shall exist no Default or Event of Default prior to or after giving effect to
any such proposed loan and (b) such loan is a bona fide loan evidenced by
appropriate documentation and entries in the financial records of Borrower and
such borrowing Loan Party or Subsidiary are made to accurately reflect such
loans and repayments thereof.


LOAN AND SECURITY AGREEMENT - Page 114

<PAGE>

         Section 13.8 LIENS. No Loan Party will, nor will it permit any of its
Restricted Subsidiaries to, create, assume or permit or suffer to exist or to be
created or assumed any Lien on any of its assets or property, other than in
favor of Agent, for the benefit of the Credit Parties, or Permitted Liens. No
Loan Party or Restricted Subsidiary will enter into or become subject to any
Negative Pledge (other than as described in the proviso following the definition
of Collateral in SECTION 1.1).

         Section 13.9 CAPITAL EXPENDITURES. The Loan Parties will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, make or incur
any Capital Expenditures in the aggregate (for all Loan Parties and any such
Restricted Subsidiary) in excess of the amount set forth below for the Fiscal
Year of Parent set forth opposite such amount:

<TABLE>
<CAPTION>

                           Fiscal Years                          Amount
                           ------------                          ------
                           <S>                                <C>
                               2000                           $175,000,000
                               2001                           $125,000,000
                               2002                           $150,000,000
</TABLE>

PROVIDED, that to the extent Capital Expenditures paid during any Fiscal Year
are less than the amount allowed for such Fiscal Year as provided above, then an
amount equal to the difference between the amount so allowed and the actual
amount so paid may be carried forward and added to the amount allowed for the
next succeeding Fiscal Year as provided above, PROVIDED FURTHER that (i) no such
amount may be carried forward beyond such next succeeding Fiscal Year and (ii)
Capital Expenditures paid during such next succeeding Fiscal Year shall be
deemed to apply first in reduction of amounts allowed for such Fiscal Year and
then against amounts so carried forwarded from such previous Fiscal Year.

         Section 13.10 PLANS. No Loan Party will, nor will it permit any of its
Subsidiaries to, (i) permit any condition to exist in connection with any Plan
listed in SCHEDULE 8.1(q) which might constitute grounds for the PBGC to
institute proceedings to have such Plan terminated or for the PBGC to have a
trustee appointed to administer such Plan, or (ii) permit to exist any other
condition, event or transaction with respect to any Plan listed in SCHEDULE
8.1(q) which could result in the incurrence by any Loan Party or any of its
Subsidiaries of either (A) any material liability which is not satisfied in full
or which remains outstanding after the date payment for such liability is due
and owing or (B) any other material fine or penalty.

         Section 13.11 SALES AND LEASEBACKS. If a Default or Event of Default
shall occur and be continuing, a Loan Party shall not, and shall not permit any
Restricted Subsidiary to, enter into any arrangement whereby it sells or
transfers any of its assets, and thereafter rents or leases such assets.


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         Section 13.12 CONTRIBUTED ASSETS AND CONTRIBUTED INDEBTEDNESS. The sum
of Contributed Assets and Contributed Indebtedness shall not at any time exceed
the aggregate amount of $60,000,000.

         Section 13.13 AMENDMENT AND MODIFICATION OF SUBORDINATED DEBT
DOCUMENTS. Parent shall not, and shall not permit any other Loan Party or any
Restricted Subsidiary to, directly or indirectly, amend, modify, supplement,
waive compliance with, or assent to noncompliance with, any term, provision or
condition of any of the documents governing or evidencing any Subordinated Debt
which (i) the Required Lenders deem material (including, without limitation,
provisions relating to events of default, acceleration rights, interest rates,
maturity date, redemption price, subordination, payment dates, guaranties,
collateral, covenants and the definitions with respect thereto (including,
without limitation, the definition of "Change of Control")) or (ii) places any
further restrictions on any Loan Party or Restricted Subsidiary or increases the
obligations of a Loan Party or any Restricted Subsidiary thereunder or confers
on the holders thereof any additional rights.

         Section 13.14 ACQUISITIONS. A Loan Party shall not, and shall not
permit any Restricted Subsidiary to, make any Acquisition; PROVIDED, HOWEVER, if
immediately prior to and after giving effect to the proposed Acquisition there
shall not exist a Default or Event of Default, a Loan Party may make
Acquisitions so long as (i) such Acquisition shall not be opposed by the board
of the directors of the Person being acquired, (ii) the Non-Stock Acquisition
Consideration for such Acquisition does not exceed $150,000,000, (iii) the
assets, property or business acquired shall be within the description contained
in SECTION 8.1(g), (iv) if the Acquisition results in a new Restricted
Subsidiary, (A) at the time of such Acquisition such Subsidiary shall become a
Loan Party and a Guarantor by executing and delivering a Joinder Agreement
pursuant to SECTION 9.3 and (B) the Agent receives within five (5) calendar days
after the consummation of such Acquisition such board resolutions, officer's
certificates and opinions of counsel as Agent shall reasonably request in
connection with such Acquisition, (v) Availability shall equal or exceed the
Minimum Availability Requirement at the time of such Acquisition and after
giving effect thereto and (vi) Agent shall have received a certificate signed by
an Authorized Signatory of Borrower certifying that no Default or Event of
Default is in existence or would result from such Acquisition, together with
confirmation of Availability referenced in CLAUSE (v) preceding in form and
substance satisfactory to Agent.


                                   ARTICLE 14

                                     DEFAULT

         Section 14.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or nongovernmental body:

                  (a)      DEFAULT IN PAYMENT. Borrower shall default in any
         payment of principal of or interest on any Loan or any Note when and as
         due (whether at maturity, by reason of acceleration or otherwise).


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<PAGE>

                  (b)      OTHER PAYMENT DEFAULT. Borrower or any other Loan
         Party shall default in the payment, as and when due, of principal of or
         interest on, any other Secured Obligation, and such default shall
         continue for a period of ten (10) days after written notice thereof has
         been given to Borrower or such Loan Party by Agent.

                  (c)      MISREPRESENTATION. Any representation or warranty
         made or deemed to be made by any Loan Party under this Agreement or any
         other Loan Document, or any amendment hereto or thereto, shall at any
         time prove to have been incorrect or misleading in any material respect
         when made.

                  (d)      DEFAULT IN PERFORMANCE. Any Loan Party shall default
         in the performance or observance of any term, covenant, condition or
         agreement to be performed by it, contained in

                           (i)      ARTICLES 9, 10, 12 or 13, or SECTION 11.1
                  (insofar as it requires the preservation of the corporate
                  existence of the Loan Parties), or SECTION 11.8, and Agent
                  shall have delivered to Borrower written notice of such
                  default, PROVIDED, that with respect to any such default under
                  SECTIONS 10.14, or 12.5(b), thirty (30) days shall have
                  expired since the date of occurrence thereof, or

                           (ii)     this Agreement or any other Loan Document
                  (other than as specifically provided for otherwise in this
                  SECTION 14.1) and such default shall continue for a period of
                  thirty (30) days after written notice thereof has been given
                  to Borrower by Agent.

                  (e)      INDEBTEDNESS CROSS-DEFAULT.

                           (i)      Any Loan Party shall fail to pay when due
                  and payable the principal of or interest on any Indebtedness
                  for Money Borrowed (other than the Loans) in an amount in
                  excess of $10,000,000, PROVIDED that failure to make a payment
                  of the principal of or interest on Subordinated Indebtedness
                  solely on account of the operation of the subordination
                  provisions thereof shall not be an Event of Default, or

                           (ii)     the maturity of any such Indebtedness shall
                  have (A) been accelerated in accordance with the provisions of
                  any indenture, contract or instrument providing for the
                  creation of or concerning such Indebtedness, or (B) been
                  required to be prepaid prior to the stated maturity thereof,
                  or

                           (iii)    any event shall have occurred and be
                  continuing which would permit any holder or holders of such
                  Indebtedness, any trustee or agent acting on behalf of such
                  holder or holders or any other Person so to accelerate such
                  maturity, and the


LOAN AND SECURITY AGREEMENT - Page 117

<PAGE>

                  Loan Parties shall have failed to cure such default prior to
                  the expiration of any applicable cure or grace period.

                  (f)      OTHER CROSS-DEFAULTS. Any Loan Party or any of its
         Restricted Subsidiaries shall default in the payment when due, or in
         the performance or observance, of any obligation or condition of any
         agreement, contract or lease (other than this Agreement, the Security
         Documents or any such agreement, contract or lease relating to
         Indebtedness for Money Borrowed) (and the Loan Parties shall have
         failed to cure such default prior to the expiration of any applicable
         cure period) if the existence of any such defaults, singly or in the
         aggregate would, during any period of twelve (12) months, result in
         losses which would exceed an amount equal to 15% of Net Worth
         (excluding, for these purposes, CompUSA Net.com) as reflected on the
         most recent financial statements delivered under SECTION 12.1.

                  (g)      VOLUNTARY BANKRUPTCY PROCEEDING. Any Loan Party or
         any of its Restricted Subsidiaries shall

                           (i)      commence a voluntary case under the federal
                  bankruptcy laws (as now or hereafter in effect),

                           (ii)     file a petition seeking to take advantage of
                  any other laws, domestic or foreign, relating to bankruptcy,
                  insolvency, reorganization, winding up or composition for
                  adjustment of debts,

                           (iii)    consent to or fail to contest in a timely
                  and appropriate manner any petition filed against it in an
                  involuntary case under such bankruptcy laws or other laws,

                           (iv)     apply for or consent to, or fail to contest
                  in a timely and appropriate manner, the appointment of, or the
                  taking of possession by, a receiver, custodian, trustee or
                  liquidator of itself or of a substantial part of its property,
                  domestic or foreign,

                           (v)      admit in writing its inability to pay its
                  debts as they become due,

                           (vi)     make a general assignment for the benefit of
                  creditors, or

                           (vii)    take any corporate action for the purpose of
                  authorizing any of the foregoing.

                  (h)      INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other
         proceeding shall be commenced against any Loan Party or any of its
         Restricted Subsidiaries in any court of competent jurisdiction seeking


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<PAGE>

                           (i)      relief under the federal bankruptcy laws (as
                  now or hereafter in effect) or under any other laws, domestic
                  or foreign, relating to bankruptcy, insolvency,
                  reorganization, winding up or adjustment of debts,

                           (ii)     the appointment of a trustee, receiver,
                  custodian, liquidator or the like of any Loan Party or any of
                  its Subsidiaries or of all or any substantial part of the
                  assets, domestic or foreign, of any Loan Party or any of its
                  Subsidiaries,

         and such case or proceeding shall continue undismissed or unstayed for
         a period of sixty (60) consecutive calendar days, or an order granting
         the relief requested in such case or proceeding (including, but not
         limited to, an order for relief under such federal bankruptcy laws)
         shall be entered.

                  (i)      FAILURE OF AGREEMENTS. Any Loan Party shall challenge
         the validity and binding effect of any provision of any Loan Document
         after delivery thereof hereunder or shall state in writing its
         intention to make such a challenge, or any Security Document, after
         delivery thereof hereunder, shall for any reason (except to the extent
         permitted by the terms thereof) cease to create a valid, exclusive
         (except for Permitted Liens) and perfected first priority (except as
         otherwise allowed under SECTION 9.2(a)(i)) Lien on, or security
         interest in, the Collateral.

                  (j)      JUDGMENT. A final, unappealable judgment or order for
         the payment of Money in an amount that exceeds the uncontested
         insurance available therefor by an amount equal to or exceeding 15% of
         Net Worth (excluding, for these purposes, CompUSA Net.com) as reflected
         on the most recent financial statements delivered under SECTION 12.1
         shall be entered against any Loan Party by any court or other
         Governmental Authority and such judgment or order shall continue
         undischarged or unstayed for thirty (30) days.

                  (k)      ATTACHMENT. A warrant or writ of attachment or
         execution or similar process which equals or exceeds an amount equal to
         15% of Net Worth (excluding, for these purposes, CompUSA Net.com) as
         reflected on the most recent financial statements delivered under
         SECTION 12.1 shall be issued against any property of any Loan Party or
         any of its Subsidiaries and such warrant or process shall continue
         undischarged or unstayed for thirty (30) days.

                  (l)      ERISA.

                           (i)      Any Termination Event with respect to a Plan
                  listed in Schedule 8.1(q) shall occur that, after taking into
                  account the excess, if any, of (A) the fair market value of
                  the assets of any other Plan with respect to which a
                  Termination Event occurs on the same day (but only to the
                  extent that such excess is the property of Borrower) over (B)
                  the present value on such day of all vested nonforfeitable
                  benefits under such other Plan listed in Schedule 8.1(q),
                  results in an Unfunded Vested Accrued Benefit in excess of $0,
                  or


LOAN AND SECURITY AGREEMENT - Page 119

<PAGE>

                           (ii)     any Plan listed in Schedule 8.1(q) subject
                  to the provisions of Section 302 of ERISA or Section 412 of
                  the Internal Revenue Code shall incur an "accumulated funding
                  deficiency" (as defined in Section 412 of the Internal Revenue
                  Code or Section 302 of ERISA) for which a waiver has not been
                  obtained in accordance with the applicable provisions of the
                  Internal Revenue Code and ERISA, or

                           (iii)    any Loan Party is in "default" (as defined
                  in Section 4219(c)(5) of ERISA) with respect to payments to a
                  Multiemployer Plan resulting from such Loan Party's complete
                  or partial withdrawal (as described in Section 4203 or 4205 of
                  ERISA) from such Multiemployer Plan.

                  (m)      CHANGE IN CONTROL. The occurrence of a Change of
         Control.

                  (n)      INDENTURE. An event of default (as defined in the
         Indenture) shall occur under the Indenture prior to the discharge
         thereof.

         Section 14.2 REMEDIES.

                  (a)      AUTOMATIC ACCELERATION AND TERMINATION OF
         COMMITMENTS. Upon the occurrence of an Event of Default specified in
         SECTION 14.1(g) or (h), (i) the principal of and the interest on the
         Loans and any Note at the time outstanding, and all other amounts owed
         to Agent or the Lenders under this Agreement or any of the other Loan
         Documents and all other Secured Obligations, shall thereupon become due
         and payable without presentment, demand, protest or other notice of any
         kind, all of which are expressly waived, anything in this Agreement or
         any of the other Loan Documents to the contrary notwithstanding, and
         (ii) the Commitments, and the Revolving Credit Facility and the right
         of Borrower to request borrowings and Letters of Credit under this
         Agreement, shall immediately terminate.

                  (b)      OTHER REMEDIES. If any Event of Default shall have
         occurred, and during the continuance of any such Event of Default,
         Agent may, and at the direction of the Required Lenders in their sole
         and absolute discretion shall, do any of the following:

                           (i)      declare the principal of and interest on the
                  Loans and any Note at the time outstanding, and all other
                  amounts owed to Agent or the Lenders under this Agreement or
                  any of the other Loan Documents and all other Secured
                  Obligations, to be forthwith due and payable, whereupon the
                  same shall immediately become due and payable without
                  presentment, demand, protest or other notice of any kind, all
                  of which are expressly waived, anything in this Agreement or
                  the other Loan Documents to the contrary notwithstanding;

                           (ii)     terminate the Revolving Credit Facility and
                  any other right of Borrower to request borrowings thereunder;


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<PAGE>

                           (iii)    notify, or request any Loan Party to notify,
                  in writing or otherwise, any Account Debtor or obligor with
                  respect to any one or more of the Receivables to make payment
                  to Agent, for the benefit of the Lenders, or any agent or
                  designee of Agent, at such address as may be specified by
                  Agent and if, notwithstanding the giving of any notice, any
                  Account Debtor or other such obligor shall make payments to
                  any Loan Party, such Loan Party shall hold all such payments
                  it receives in trust for Agent, for the account of the
                  Lenders, without commingling the same with other funds or
                  property of, or held by, such Loan Party and shall deliver the
                  same to Agent or any such agent or designee of Agent
                  immediately upon receipt by such Loan Party in the identical
                  form received, together with any necessary endorsements;

                           (iv)     settle or adjust disputes and claims
                  directly with Account Debtors and other obligors on
                  Receivables for amounts and on terms which Agent considers
                  advisable and in all such cases only the net amounts received
                  by Agent, for the account of the Lenders, in payment of such
                  amounts, after deductions of costs and attorneys' fees, shall
                  constitute Collateral and the Loan Parties shall have no
                  further right to make any such settlements or adjustments or
                  to accept any returns of merchandise;

                           (v)      enter upon any premises in which any
                  Collateral may be located and, without resistance or
                  interference by Borrower, take physical possession of any or
                  all thereof and maintain such possession on such premises or
                  move the same or any part thereof to such other place or
                  places as Agent shall choose, without being liable to any Loan
                  Party on account of any loss, damage or depreciation that may
                  occur as a result thereof, so long as Agent shall act
                  reasonably and in good faith;

                           (vi)     require the Loan Parties to and the Loan
                  Parties shall, without charge to Agent or any Lender, assemble
                  the tangible Collateral and maintain or deliver it into the
                  possession of Agent or any agent or representative of Agent at
                  such place or places as Agent may designate and as are
                  reasonably convenient to both Agent and the Loan Parties;

                           (vii)    without notice, demand or other process, and
                  without payment of any rent or any other charge, enter any of
                  Loan Party's premises and, without breach of the peace, until
                  Agent, on behalf of the Lenders, completes the enforcement of
                  its rights in the Collateral, take possession of such premises
                  or place custodians in exclusive control thereof, remain on
                  such premises and use the same and any of Loan Party's
                  equipment, for the purpose of (A) completing any work in
                  process, preparing any Inventory for disposition and disposing
                  thereof, and (B) collecting any Receivable, and Agent, for the
                  benefit of the Lenders, is hereby granted a license or
                  sublicense and all other rights as may be necessary,
                  appropriate or desirable to use the Proprietary Rights in
                  connection with the foregoing, and the rights of the Loan
                  Parties under all licenses, sublicenses and franchise
                  agreements shall inure to Agent,


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                  for the benefit of the Lenders (PROVIDED, HOWEVER, that any
                  use of any federally registered trademarks as to any goods
                  shall be subject to the control as to the quality of such
                  goods of the owner of such trademarks and the goodwill of the
                  business symbolized thereby);

                           (viii)   exercise any and all of its rights under any
                  and all of the Security Documents;

                           (ix)     apply any Collateral consisting of cash to
                  the payment of the Secured Obligations in any order in which
                  Agent, on behalf of the Lenders, may elect or use such cash in
                  connection with the exercise of any of its other rights
                  hereunder or under any of the Security Documents;

                           (x)      establish or cause to be established one or
                  more Lockboxes or other arrangement for the deposit of
                  proceeds of Receivables, and, in such case, each Loan Party
                  shall cause to be forwarded to Agent at its Principal Office,
                  on a daily basis, copies of all checks and other items of
                  payment and deposit slips related thereto deposited in such
                  Lockboxes, together with collection reports in form and
                  substance satisfactory to Agent; and

                           (xi)     exercise all of the rights and remedies of a
                  secured party under the UCC and under any other Applicable
                  Law, including, without limitation, the right, without notice
                  except as specified below and with or without taking the
                  possession thereof, to sell the Collateral or any part thereof
                  in one or more parcels at public or private sale, at any
                  location chosen by Agent, for cash, on credit or for future
                  delivery, and at such price or prices and upon such other
                  terms as Agent may deem commercially reasonable. Each Loan
                  Party agrees that, to the extent notice of sale shall be
                  required by law, at least ten (10) days' notice of the time
                  and place of any public sale or the time after which any
                  private sale is to be made shall constitute reasonable
                  notification, but notice given in any other reasonable manner
                  or at any other reasonable time shall constitute reasonable
                  notification. Agent shall not be obligated to make any sale of
                  Collateral regardless of notice of sale having been given.
                  Agent may adjourn any public or private sale from time to time
                  by announcement at the time and place fixed therefor, and such
                  sale may, without further notice, be made at the time and
                  place to which it was so adjourned.

                  (c)      L/C CASH COLLATERAL ACCOUNT. Without limitation of,
         and in addition to, any of the foregoing remedies, if any Letter of
         Credit shall be then outstanding, Agent may make demand upon Borrower
         to, and forthwith upon such demand (but in the case of an Event of
         Default specified in SECTION 14.1(g) or (h) hereof, without any demand
         or taking of any other action by Agent or any Lender), Borrower shall,
         pay to Agent in same day funds at the office of Agent for deposit in an
         L/C Cash Collateral Account, an amount equal to the maximum amount
         available to be drawn under the Letters of Credit then outstanding.


LOAN AND SECURITY AGREEMENT - Page 122

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         Section 14.3 APPLICATION OF PROCEEDS. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default shall be applied or paid over as follows:

                  (a)   FIRST: to the payment of all costs and expenses incurred
         in connection with such sale or other realization, including reasonable
         attorneys' fees;

                  (b)   SECOND: to the payment of the Secured Obligations
         (with Borrower remaining liable for any deficiency) as Agent may elect;
         and

                  (c)   THIRD: the balance (if any) of such proceeds shall be
         paid to Borrower, subject to any duty imposed by law, or otherwise to
         whomsoever shall be entitled thereto.

BORROWER SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY REMAINING
IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST THEREON AT A RATE
PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON SUCH SECURED
OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE SECURED OBLIGATIONS.

         Section 14.4 POWER OF ATTORNEY. In addition to the authorizations
granted to Agent under SECTION 10.13, SECTION 10.16 or under any other provision
of this Agreement or of any other Loan Document, during the continuance of an
Event of Default, each Loan Party hereby irrevocably designates, makes,
constitutes and appoints Agent (and all Persons designated by Agent from time to
time) as such Loan Party's true and lawful attorney, and agent in fact, and
Agent, or any such Person, may, without notice to any Loan Party, and at such
time or times as Agent, or any such Person in its sole discretion may determine,
in the name of such Loan Party, Agent or the Lenders,

                           (i)     demand payment of the Loan Parties'
                  Receivables,

                           (ii)    enforce payment of the Loan Parties'
                  Receivables by legal proceedings or otherwise,

                           (iii)   exercise all of the Loan Parties' rights and
                  remedies with respect to the collection of Receivables,

                           (iv)    settle, adjust, compromise, extend or renew
                  any or all of the Loan Parties' Receivables,

                           (v)     settle adjust or compromise any legal
                  proceedings brought to collect the Loan Parties' Receivables,

                           (vi)    discharge and release the Loan Parties'
                  Receivables or any of them,


LOAN AND SECURITY AGREEMENT - Page 123
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                           (vii)   prepare, file and sign the name of any Loan
                  Party on any proof of claim in bankruptcy or any similar
                  document against any Account Debtor,

                           (viii)  prepare, file and sign the name of any Loan
                  Party on any notice of Lien, assignment or satisfaction of
                  Lien, or similar document in connection with any of the
                  Collateral,

                           (ix)    endorse the name of any Loan Party upon any
                  chattel paper, document, instrument, notice, freight bill,
                  bill of lading or similar document or agreement relating such
                  Loan Parties' Receivables or any other Collateral,

                           (x)     use the stationery of any Loan Party and
                  sign the name of such Loan Party to verifications of such Loan
                  Party's Receivables and on any notice to the Account Debtors,

                           (xi)    open any Loan Party's mail,

                           (xii)   notify the post office authorities to change
                  the address for delivery of any Loan Party's mail to an
                  address designated by Agent, and

                           (xiii)  use the information recorded on or contained
                  in any data processing equipment and computer hardware and
                  software relating to any Loan Party's Receivables or other
                  Collateral to which such Loan Party has access.

         Section 14.5 MISCELLANEOUS PROVISIONS CONCERNING REMEDIES.

                  (a)      RIGHTS CUMULATIVE. The rights and remedies of the
         Credit Parties under this Agreement, the Notes and each of the other
         Loan Documents shall be cumulative and not exclusive of any rights or
         remedies which it or they would otherwise have. In exercising such
         rights and remedies the Credit Parties may be selective and no failure
         or delay by the Credit Parties in exercising any right shall operate as
         a waiver of it, nor shall any single or partial exercise of any power
         or right preclude its other or further exercise or the exercise of any
         other power or right.

                  (b)      WAIVER OF MARSHALING. Each Loan Party hereby waives
         any right to require any marshaling of assets and any similar right.

                  (c)      LIMITATION OF LIABILITY. Nothing contained in this
         Article or elsewhere in this Agreement or in any of the other Loan
         Documents shall be construed as requiring or obligating any Credit
         Party or any agent or designee of any Credit Party to make any demand
         or to make any inquiry as to the nature or sufficiency of any payment
         received by it, or to present or file any claim or notice or take any
         action, with respect to any Receivable or any other Collateral or the
         monies due or to become due thereunder or in connection therewith, or
         to take any steps necessary to preserve any rights against prior
         parties, and the Credit


LOAN AND SECURITY AGREEMENT - Page 124
<PAGE>

         Parties and their agents or designees shall have no liability to any
         Loan Party for actions taken pursuant to this Article, any other
         provision of this Agreement or any of the other Loan Documents so long
         as such Credit Party shall act reasonably and in good faith.

                  (d)      APPOINTMENT OF RECEIVER. In any action under this
         Article, Agent shall be entitled during the continuance of an Event of
         Default to the appointment of a receiver, without notice of any kind
         whatsoever, to take possession of all or any portion of the Collateral
         and to exercise such power as the court shall confer upon such receiver
         in accordance with Applicable Law.

         Section 14.6 REGISTRATION RIGHTS; PRIVATE SALES; ETC.

                  (a)      Each Loan Party recognizes that Agent may be unable
         to effect a public sale of any or all of the Collateral or other
         property to be sold by reason of certain prohibitions contained in the
         laws of any jurisdiction outside the U.S. or in the Securities Act and
         applicable state securities laws but may be compelled to resort to one
         or more private sales thereof to a restricted group of purchasers who
         will be obliged to agree, among other things, to acquire such
         Collateral or other property to be sold for their own account for
         investment and not with a view to the distribution or resale thereof.
         Each Loan Party acknowledges and agrees that any such private sale may
         result in prices and other terms less favorable to the seller than if
         such sale were a public sale and, notwithstanding such circumstances,
         agrees that any such private sale shall, to the extent permitted by
         law, be deemed to have been made in a commercially reasonable manner.
         Unless required by Applicable Law, Agent shall not be under any
         obligation to delay a sale of any of the Collateral or other property
         to be sold for the period of time necessary to permit the Issuer of
         such securities to register such securities under the laws of any
         jurisdiction outside the U.S., under the Securities Act or under any
         applicable state securities laws, even if such Issuer would agree to do
         so.

                  (b)      Each Loan Party further agrees to do or cause to be
         done, to the extent that such Loan Party may do so under Applicable
         Law, all such other acts and things as may be necessary to make such
         sales or resales under SECTION 14.6(a) of any portion or all of the
         Collateral or other property to be sold valid and binding and in
         compliance with any and all Applicable Laws of any and all Governmental
         Authorities having jurisdiction over any such sale or sales, all at the
         Loan Parties' expense. Each Loan Party further agrees that a breach of
         any of the covenants contained in this SECTION 14.6 will cause
         irreparable injury to the Credit Parties and that the Credit Parties
         have no adequate remedy at law in respect of such breach and, as a
         consequence, agrees that each and every covenant contained in this
         SECTION 14.6 shall be specifically enforceable against such Loan Party
         and such Loan Party hereby waives and agrees, to the fullest extent
         permitted by law, not to assert as a defense against an action for
         specific performance of such covenants that (i) such Loan Party's
         failure to perform such covenants will not cause irreparable injury to
         the Credit Parties or (ii) the Credit Parties have an adequate remedy
         at law in respect of such breach. Each Loan Party further acknowledges
         the impossibility of ascertaining the amount of damages which would
         be suffered by the Credit Parties by reason of a breach of any of
         the covenants contained in


LOAN AND SECURITY AGREEMENT - Page 125
<PAGE>

         this SECTION 14.6 and, consequently, agrees that, if such Loan Party
         shall breach any of such covenants and the Credit Parties shall sue for
         damages for such breach, such Loan Party shall pay to the Credit
         Parties, as liquidated damages and not as a penalty, an aggregate
         amount equal to the value of the Collateral or other property to be
         sold on the date Agent shall demand compliance with this SECTION 14.6.

                  (c)      EACH LOAN PARTY HEREBY AGREES TO INDEMNIFY, PROTECT
         AND SAVE HARMLESS THE CREDIT PARTIES AND ANY CONTROLLING PERSONS
         THEREOF WITHIN THE MEANING OF THE SECURITIES ACT FROM AND AGAINST ANY
         AND ALL LIABILITIES, SUITS, CLAIMS, COSTS AND EXPENSES (INCLUDING
         COUNSEL FEES AND DISBURSEMENTS) ARISING UNDER THE SECURITIES ACT, THE
         SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, ANY APPLICABLE STATE
         SECURITIES STATUTE, OR AT COMMON LAW, OR PURSUANT TO ANY OTHER
         APPLICABLE LAW IN CONNECTION WITH THE ABOVE REFERENCED DISPOSITION
         UNDER SECTION 14.6(a), INSOFAR AS SUCH LIABILITIES, SUITS, CLAIMS,
         COSTS AND EXPENSES ARISE OUT OF, OR ARE BASED UPON, ANY UNTRUE
         STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN
         ANY STATEMENT MADE BY A LOAN PARTY RELATING TO ANY PART OF THE
         COLLATERAL OR OTHER PROPERTY TO BE SOLD, OR ARISES OUT OF, OR IS BASED
         UPON, THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT
         REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
         THEREIN NOT MISLEADING; PROVIDED, THAT SUCH LOAN PARTY SHALL NOT BE
         LIABLE IN ANY SUCH CASE TO THE EXTENT THAT ANY SUCH LIABILITIES, SUITS,
         CLAIMS, COSTS AND EXPENSES ARISE OUT OF, OR ARE BASED UPON, ANY UNTRUE
         STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION
         MADE IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION
         FURNISHED TO SUCH LOAN PARTY BY ANY CREDIT PARTY SPECIFICALLY FOR
         INCLUSION THEREIN. THE FOREGOING INDEMNITY AGREEMENT IS IN ADDITION TO
         ANY INDEBTEDNESS, LIABILITY OR OBLIGATION THAT SUCH LOAN PARTY MAY
         OTHERWISE HAVE TO ANY CREDIT PARTY OR ANY SUCH CONTROLLING PERSON.


LOAN AND SECURITY AGREEMENT - Page 126
<PAGE>

                                   ARTICLE 15

                                   ASSIGNMENTS

         Section 15.1 ASSIGNMENTS AND PARTICIPATIONS.

                  (a)      Each Lender may assign to one or more Eligible
         Assignees all or a portion of its rights and obligations under this
         Agreement (including, without limitation, all or a portion of its
         Loans, its Notes and its Commitment); PROVIDED, HOWEVER, that:

                           (i)     each such assignment shall be to an Eligible
                  Assignee;

                           (ii)    except in the case of an assignment to
                  another Lender or an assignment of all of a Lender's rights
                  and obligations under this Agreement, any such partial
                  assignment shall be in an amount at least equal to $15,000,000
                  or an integral multiple of $5,000,000 in excess thereof;
                  PROVIDED that no such assignment may result in a reduction of
                  such Lender's Commitment to less than $15,000,000;

                           (iii)   each such assignment by a Lender shall be of
                  a constant, and not varying, percentage of all of its rights
                  and obligations under this Agreement and the Notes;

                           (iv)    the parties to such assignment shall execute
                  and deliver to Agent for its acceptance an Assignment and
                  Acceptance in the form of EXHIBIT "C" hereto, together with
                  any Notes subject to such assignment and a processing fee of
                  $3,500; and

                           (v)     the prior written consent of Agent (such
                  consent to not be unreasonably withheld) shall be required.

         Upon execution, delivery and acceptance of an Assignment and
         Acceptance, the assignee thereunder shall be a party hereto and, to the
         extent of such assignment, have the obligations, rights and benefits of
         a Lender hereunder and the assigning Lender shall, to the extent of
         such assignment, relinquish its rights and be released from its
         obligations under this Agreement. Upon the consummation of any
         assignment pursuant to this Section, the assignor, Agent and Borrower
         shall make appropriate arrangements so that, if required, new Notes are
         issued to the assignor and the assignee. If the assignee is not
         incorporated under the laws of the U.S., or a state thereof, it shall
         deliver to Borrower and Agent certification as to exemption from
         deduction or withholding of Taxes in accordance with SECTION 6.6.

                  (b)      Agent shall maintain at its address referred to in
         SECTION 17.1 a copy of each Assignment and Acceptance delivered to and
         accepted by it and a register for the recordation of the names and
         addresses of the Lenders and the Commitment of, and principal amount of


LOAN AND SECURITY AGREEMENT - Page 127
<PAGE>

         the Loans owing to, each Lender from time to time (the "REGISTER").
         The entries in the Register shall be conclusive and binding for all
         purposes, absent manifest error, and Borrower, Agent and the Lenders
         may treat each Person whose name is recorded in the Register as a
         Lender hereunder for all purposes of this Agreement. The Register
         shall be available for inspection by Borrower or any Lender at any
         reasonable time and from time to time upon reasonable prior notice.

                  (c)      Upon its receipt of an Assignment and Acceptance
         executed by the parties thereto, together with any Note subject to such
         Assignment and Acceptance and payment of the processing fee, Agent
         shall, if such Assignment and Acceptance has been completed and is in
         substantially the form of EXHIBIT "D" hereto, (i) accept such
         Assignment and Acceptance, (ii) record the information contained
         therein in the Register and (iii) give prompt notice thereof to the
         parties thereto.

                  (d)      Each Lender may sell participations to one or more
         Persons in all or a portion of its rights, obligations or rights and
         obligations under this Agreement (including all or a portion of its
         Commitment or its Loans); PROVIDED, HOWEVER, that (i) such Lender's
         obligations under this Agreement shall remain unchanged, (ii) such
         Lender shall remain solely responsible to the other parties hereto for
         the performance of such obligations, (iii) the participant shall be
         entitled to the benefit of the yield protection provisions contained in
         ARTICLE 6 and the right of set-off contained in SECTION 17.4, and (iv)
         the Loan Parties shall continue to deal solely and directly with such
         Lender in connection with such Lender's rights and obligations under
         this Agreement, and such Lender shall retain the sole right to enforce
         the obligations of Borrower relating to its Loans and its Notes and to
         approve any amendment, modification or waiver of any provision of this
         Agreement (other than amendments, modifications or waivers decreasing
         the amount of principal of or the rate at which interest is payable on
         such Loans or Notes, extending any scheduled principal payment date or
         date fixed for the payment of interest on such Loans or Notes, or
         extending its Commitment).

                  (e)      Notwithstanding any other provision set forth in this
         Agreement, any Lender may at any time assign and pledge all or any
         portion of its Loans and its Notes to any Federal Reserve Bank as
         collateral security pursuant to Regulation A and any Operating Circular
         issued by such Federal Reserve Bank. No such assignment shall release
         the assigning Lender from its obligations hereunder.

                  (f)      Any Lender may furnish any information concerning any
         Loan Party in the possession of such Lender from time to time to
         assignees and participants (including prospective assignees and
         participants).


LOAN AND SECURITY AGREEMENT - Page 128
<PAGE>

         Section 15.2 REPRESENTATION OF LENDERS. Each Lender hereby represents
that it will make each Loan hereunder as a commercial loan for its own account
in the ordinary course of its business; PROVIDED, HOWEVER, that subject to
SECTION 15.1, the disposition of the Notes or other evidence of the Secured
Obligations held by any Lender shall at all times be within its exclusive
control.


                                   ARTICLE 16

                         AGREEMENTS AMONG CREDIT PARTIES

         Section 16.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender and L/C
Issuer hereby irrevocably appoints and authorizes Agent to act as its nominee as
administrative agent under this Agreement and the other Loan Documents with such
powers and discretion as are specifically delegated to Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto, including without limitation, to receive all
documents and items to be furnished hereunder; to act as nominee for and on
behalf of all Lenders under the Loan Documents; to, except as otherwise
expressly set forth herein, take such action as may be requested by the Required
Lenders, PROVIDED that, unless and until Agent shall have received any such
request, Agent Lender may take such administrative action, or refrain from
taking such administrative action, as it may deem advisable; to arrange the
means whereby the proceeds of amounts made available by the Lenders to Agent for
Loans are to be made available to Borrower; and to deliver to Borrower requests,
demands, approvals and consents received from the Lenders. The duties of Agent
under this Agreement and the other Loan Documents are mechanical and
administrative in nature and Agent shall have no fiduciary relationship in
respect of any Lender by reason of this Agreement or any other Loan Document.
Agent (which term as used in this sentence and in SECTION 16.5 and the first
sentence of SECTION 16.6 shall include its Affiliates and Subsidiaries, and its
own and its Affiliates' and Subsidiaries', officers, directors, employees and
agents):

                  (a)      shall not have any duties or responsibilities except
         those expressly set forth in this Agreement and shall not be a trustee
         or fiduciary for any Lender or L/C Issuer;

                  (b)      shall not be responsible to the Lenders or L/C Issuer
         for any recital, statement, representation or warranty (whether written
         or oral) made in or in connection with any Loan Document or any
         certificate or other document referred to or provided for in, or
         received by any of them under, any Loan Document, or for the value,
         validity, effectiveness, genuineness, enforceability or sufficiency of
         any Loan Document, or any other document referred to or provided for
         therein or for any failure by any Loan Party or any other Person to
         perform any of its obligations thereunder;

                  (c)      shall not be responsible for or have any duty to
         ascertain, inquire into or verify the performance or observance of any
         covenants or agreements by any Loan Party or the satisfaction of any
         condition or to inspect the property (including the books and records)
         of any Loan Party or any of its Subsidiaries or Affiliates;


LOAN AND SECURITY AGREEMENT - Page 129
<PAGE>

                  (d)      except in accordance with SECTION 16.2, shall not be
         required to initiate or conduct any litigation or collection
         proceedings under any Loan Document; and

                  (e)      shall not be responsible for any action taken or
         omitted to be taken by it under or in connection with any Loan
         Document, except for its own gross negligence or willful misconduct.

Agent may perform its duties by or through officers, directors, employees,
attorneys or agents, and shall be entitled to (and shall be protected in relying
upon) advice of counsel concerning all matters pertaining to its duties
hereunder. Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.

         Section 16.2 RELIANCE BY AGENT. Agent and its officers, directors,
employees, attorneys and agents shall be entitled to rely upon and shall be
fully protected in relying on any writing, instrument, resolution, notice,
consent, certificate, affidavit, letter, electronic mail, cablegram, telegram,
telex or teletype message, statement, order, or other document, conversation
(including without limitation conversations by telephone) or communication
reasonably believed by it or them to be genuine and correct and to have been
signed or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Loan Party),
independent accountants and other experts selected by Agent. Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until Agent receives and accepts an Assignment and Acceptance executed in
accordance with SECTION 15.1. As to any matters not expressly provided for by
this Agreement, Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; PROVIDED, HOWEVER, that Agent shall not be required to take any action
that exposes Agent to personal liability or that is contrary to any Loan
Document or Applicable Law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.

         Section 16.3 DEFAULTS. Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or a Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default." In the
event that Agent receives such a notice of the occurrence of a Default or Event
of Default, Agent shall give prompt notice thereof to the Lenders. Agent shall
(subject to SECTION 16.2) take such action with respect to such Default or Event
of Default as shall reasonably be directed by the Required Lenders, PROVIDED
that, unless and until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Credit Parties.


LOAN AND SECURITY AGREEMENT - Page 130
<PAGE>

         Section 16.4 RIGHTS AS LENDER. With respect to its Commitment and the
Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its Affiliates or Subsidiaries may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to and generally engage in any kind of
lending, trust or other business with any Loan Party or any of its Affiliates or
Subsidiaries as if it were not acting as Agent, and NationsBank (and any
successor acting as Agent) and its Affiliates or Subsidiaries may accept fees
and other consideration from any Loan Party or any of its Affiliates or
Subsidiaries for services in connection with this Agreement or otherwise
without having to account for the same to the other Lenders.

         Section 16.5 LIMITATION OF LIABILITY; INDEMNIFICATION. Neither Agent
nor any of its officers, directors, employees, attorneys, agents or Affiliates
shall be liable for any action taken or omitted to be taken by it or them
hereunder in good faith and believed by it or them to be within the discretion
or power conferred to it or them by the Loan Documents or be responsible for the
consequences of any error of judgment, except for its or their own gross
negligence or willful misconduct. Agent shall not be compelled to do any act
hereunder or to take any action towards the execution or enforcement of the
powers hereby created or to prosecute or defend any suit in respect hereof,
unless indemnified to its satisfaction against loss, cost, liability and
expense. Agent shall not be responsible in any manner to any Lender for the
effectiveness, enforceability, genuineness, validity or due execution of any of
the Loan Documents, or for any representation, warranty, document, certificate,
report or statement made herein or furnished in connection with any Loan
Documents, or be under any obligation to any Lender to ascertain or to inquire
as to the performance or observation of any of the terms, covenants or
conditions of any Loan Documents on the part of the Borrower. THE LENDERS AGREE
TO INDEMNIFY AGENT (TO THE EXTENT NOT REIMBURSED UNDER SECTION 17.2, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE LOAN PARTIES UNDER SUCH SECTION) RATABLY IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, FOR ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) OR DISBURSEMENTS OF
ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED
AGAINST AGENT (INCLUDING BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF
ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN
OR OMITTED BY AGENT UNDER ANY LOAN DOCUMENT (INCLUDING ANY OF THE FOREGOING
ARISING FROM THE NEGLIGENCE OF AGENT); PROVIDED THAT NO LENDER SHALL BE LIABLE
FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITATION OF THE
FOREGOING, EACH LENDER AGREES TO REIMBURSE AGENT PROMPTLY UPON DEMAND FOR ITS
RATABLE SHARE OF ANY COSTS OR EXPENSES PAYABLE BY THE LOAN PARTIES UNDER SECTION
17.2, TO THE EXTENT THAT AGENT IS NOT PROMPTLY


LOAN AND SECURITY AGREEMENT - Page 131
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REIMBURSED FOR SUCH COSTS AND EXPENSES BY ANY LOAN PARTY. THE AGREEMENTS
CONTAINED IN THIS SECTION SHALL SURVIVE PAYMENT IN FULL OF THE LOANS AND ALL
OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT.

         Section 16.6 EXPENSES. Each Lender shall pay its pro rata share, based
on its Commitment Percentage, of any expenses paid by Agent in connection with
performance of its duties hereunder if Agent does not receive reimbursement
therefor from other sources within 60 days after the date incurred. Any amount
so paid by the Lenders to Agent shall be returned by Agent pro rata to each
paying Lender to the extent later paid to Agent by a Loan Party or any other
Person on a Loan Party's behalf, or received by Agent as proceeds of Collateral
pursuant to this Agreement.

         Section 16.7 LENDER CREDIT DECISION; NON-RELIANCE ON AGENT AND OTHER
LENDERS. Each Credit Party agrees that it has, independently and without
reliance on any other Credit Party, and based on such documents and information
as it has deemed appropriate, made its own credit analysis of the Loan Parties
and decision to enter into this Agreement and that it will, independently and
without reliance upon any other Credit Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports and other documents and information expressly
required to be furnished to the Credit Parties by Agent hereunder, Agent shall
not have any duty or responsibility to provide any Credit Party with any credit
or other information concerning the affairs, financial condition or business of
any Loan Party or any of its Affiliates or Subsidiaries that may come into the
possession of Agent or any of its Affiliates or Subsidiaries.

         Section 16.8 RESIGNATION OF AGENT. Agent may resign at any time by
giving notice thereof to the Lenders and Borrower. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the other Credit Parties, appoint a successor Agent which shall be a
commercial bank organized under the laws of the U.S. having combined capital and
surplus of at least $100,000,000. Any such appointment of a successor Agent
shall require consent of Borrower unless a Default or Event of Default has
occurred and is continuing at the time any such appointment is effected, such
approval not to be unreasonably withheld or delayed by Borrower and such
approval to be deemed given by Borrower if no objection from Borrower is
received by the resigning Agent or such Required Lenders, as the case may be,
within two (2) Business Days after notice of such proposed appointment has been
provided to Borrower by Agent or such Required Lenders, as the case may be. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.


LOAN AND SECURITY AGREEMENT - Page 132
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         Section 16.9 ENFORCEMENT. Each of the Lenders and L/C Issuer agrees
that it shall not take any legal action, nor institute any actions or
proceedings, in respect of the Secured Obligations or against or with respect to
any Collateral without the prior written consent of Agent. Without limiting the
generality of the foregoing, no Lender may accelerate or otherwise enforce its
portion of the Secured Obligations, or terminate its Commitment except in
accordance with SECTION 14.2(b) or a set-off permitted under SECTION 17.4.

         Section 16.10 BENEFITS OF ARTICLE 16. None of the provisions of this
ARTICLE 16 shall inure to the benefit of any Person other than the Credit
Parties. No Person shall be entitled to rely upon, or to raise as a defense, in
any manner whatsoever, the failure of any Credit Party to comply with any of
such provisions.

                                   ARTICLE 17

                                  MISCELLANEOUS

         Section 17.1               NOTICES.

                  (a)      METHOD OF COMMUNICATION. Except as specifically
         provided in this Agreement or in any of the other Loan Documents, all
         notices and the communications hereunder and thereunder shall be in
         writing or by telephone, subsequently confirmed in writing. Notices in
         writing shall be delivered personally or sent by certified or
         registered mail, postage prepaid, or by overnight courier, telex or
         facsimile transmission and shall be deemed received in the case of
         personal delivery, when delivered, in the case of mailing, when
         receipted for, in the case of overnight delivery, on the next Business
         Day after delivery to the courier, and in the case of telex and
         facsimile transmission, upon transmittal, PROVIDED that in the case of
         notices to Agent, notice shall be deemed to have been given only when
         such notice is actually received by Agent. A telephonic notice to
         Agent, as understood by Agent, will be deemed to be the controlling and
         proper notice in the event of a discrepancy with or failure to receive
         a confirming written notice.

                  (b)      ADDRESSES FOR NOTICES. Notices to any party shall be
         sent to it at the address of such party set forth on the signature
         pages hereof, in any Assignment and Acceptance or any other address of
         which all the other parties are notified in writing.

                  (c)      PRINCIPAL OFFICE. Agent hereby designates its office
         located at 901 Main Street, Dallas, Dallas County, Texas 75202, or any
         subsequent office which shall have been specified for such purpose by
         written notice to Borrower, as the office to which payments due are to
         be made and at which Loans will be disbursed.


LOAN AND SECURITY AGREEMENT - Page 133
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         Section 17.2 EXPENSES. Borrower agrees to pay or reimburse on demand
all costs and expenses incurred ((i) with respect to SUBSECTION (a) below, by
Agent or L/C Issuer at any time, (ii) with respect to SUBSECTIONS (b) through
(f) below, by Agent or L/C Issuer at any time and by any other Credit Party at
any time when any Default or Event of Default is in existence and (iii) with
respect to SUBSECTIONS (g) and (h), by any Credit Party at any time), in
connection with the following:

                  (a)      the negotiation, preparation, execution, delivery,
         administration, enforcement and termination of this Agreement and each
         of the other Loan Documents, whenever the same shall be executed and
         delivered, including, without limitation, the following:

                           (i)     the out-of-pocket costs and expenses
                  incurred in connection with the administration and
                  interpretation of this Agreement and the other Loan Documents;

                           (ii)    the costs and expenses of appraisals of the
                  Collateral;

                           (iii)   the costs and expenses of lien and title
                  searches; and

                           (iv)    taxes, fees and other charges for filing the
                  Financing Statements and continuations and the costs and
                  expenses of taking other actions to perfect, protect and
                  continue the Security Interests;

                  (b)      the preparation, execution and delivery of any
         waiver, amendment, supplement or consent by Agent and the Lenders
         relating to this Agreement or any of the other Loan Documents;

                  (c)      sums paid or incurred to pay any amount or take any
         action required of the Loan Parties under the Loan Documents that the
         Loan Parties fail to pay or take;

                  (d)      costs of inspections and verifications of the
         Collateral, including, without limitation, standard per diem fees
         charged by Agent, travel, lodging and meals (all of such travel,
         lodging and meals to be charged in conformity with NationsBank's
         internal policies and procedures) for inspections of the Collateral and
         the Loan Parties' operations and books and records by Agent's agents up
         to four (4) times per year and whenever an Event of Default exists;

                  (e)      costs and expenses of forwarding loan proceeds,
         collecting checks and other items of payment, and establishing and
         maintaining each Disbursement Account, Agency Account and Lockbox;

                  (f)      costs and expenses of preserving and protecting the
         Collateral;

                  (g)      consulting, after the occurrence of a Default, with
         one or more Persons, including appraisers, accountants and lawyers,
         concerning the value of any Collateral for the Secured Obligations or
         related to the nature, scope or value of any right or remedy of Agent


LOAN AND SECURITY AGREEMENT - Page 134
<PAGE>

         or any Lender hereunder or under any of the Loan Documents, including
         any review of factual matters in connection therewith, which expenses
         shall include the fees and disbursements of such Persons;

                  (h)      reasonable costs and expenses paid or incurred to
         obtain payment of the Secured Obligations, enforce the Security
         Interests, sell or otherwise realize upon the Collateral, and otherwise
         enforce the provisions of the Loan Documents, or to prosecute or defend
         any claim in any way arising out of, related to or connected with this
         Agreement or any of the other Loan Documents, which expenses shall
         include the reasonable fees and disbursements of counsel and of experts
         and other consultants retained by Agent or any Lender; and

in each such case, all reasonable attorney's fees and expenses (including,
without limitation, the cost of internal counsel) incurred in connection with
any of the foregoing other than attorneys' fees and expenses incurred by a
Person in becoming a Lender hereunder not covered pursuant to SECTION 17.2(a).
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by Borrower. Borrower hereby
authorizes Agent to debit Borrower's Loan Accounts (by increasing the principal
amount of the Revolving Credit Loan) in the amount of any such costs and
expenses owed by Borrower when due, unless such costs and expenses are otherwise
timely made. Without prejudice to the survival of any other agreement hereunder,
the agreements and obligations contained in this SECTION 17.2 shall survive
the payment in full of the Loans and all other amounts payable under this
Agreement.

         Section 17.3 STAMP AND OTHER TAXES. Borrower will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify the Credit Parties against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges, which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any of
the other Loan Documents or the perfection of any rights or security interest
thereunder, including, without limitation, the Security Interest.

         Section 17.4      RIGHT OF SET-OFF; ADJUSTMENTS.

                  (a)      Upon the occurrence and during the continuance of any
         Event of Default, each Lender (and each of its Affiliates and
         Subsidiaries) is hereby authorized at any time and from time to time,
         to the fullest extent permitted by law, to set-off and apply any and
         all deposits (general or special, time or demand, provisional or final)
         at any time held and other Indebtedness at any time owing by such
         Lender (or any of its Affiliates or Subsidiaries) to or for the credit
         or the account of any Loan Party against any and all of the obligations
         of Borrower now or hereafter existing under this Agreement and the
         Notes held by such Lender, irrespective of whether Agent or such Lender
         shall have made any demand under this Agreement or such Notes and
         although such obligations may be unmatured. The rights of each Lender
         under this SECTION 17.4 are in addition to other rights and remedies
         (including, without limitation, other rights of set-off) that such
         Lender may have.


LOAN AND SECURITY AGREEMENT - Page 135
<PAGE>

                  (b)      If any Lender (a "BENEFITTED LENDER") shall at any
         time receive any payment of all or part of the Loans owing to it, or
         interest thereon, or receive any collateral in respect thereof (whether
         voluntarily or involuntarily, by set-off or otherwise), in a greater
         proportion than any such payment to or collateral received by any other
         Lender, if any, in respect of such other Lender's Loans owing to it, or
         interest thereon, such Benefitted Lender shall purchase for cash from
         the other Lenders a participating interest in such portion of each such
         other Lender's Loans owing to it, or shall provide such other Lenders
         with the benefits of any such collateral, or the proceeds thereof, as
         shall be necessary to cause such Benefitted Lender to share the excess
         payment or benefits of such collateral or proceeds ratably with each of
         the Lenders; PROVIDED, HOWEVER, that if all or any portion of such
         excess payment or benefit is thereafter recovered from such Benefitted
         Lender, such purchase shall be rescinded, and the purchase price and
         benefits returned, to the extent of such recovery, but without
         interest. Borrower agrees that any Lender so purchasing a participation
         from a Lender pursuant to this SECTION 17.4 may, to the fullest extent
         permitted by law, exercise all of its rights of payment (including the
         right of set-off) with respect to such participation as fully as if
         such Person were the direct creditor of Borrower in the amount of such
         participation.


         Section 17.5 LITIGATION; WAIVER OF TRIAL BY JURY. EACH LOAN PARTY AND
CREDIT PARTY HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN
ACTION MAY BE COMMENCED BY OR AGAINST ANY LOAN PARTY OR CREDIT PARTY ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, THE COLLATERAL OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN
OR AMONG ANY LOAN PARTY OR CREDIT PARTY OF ANY KIND OR NATURE. EACH SUCH PARTY
ACKNOWLEDGES THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF
THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY AND WITH THE BENEFIT OF
ADVICE OF COUNSEL OF ITS CHOOSING. EACH LOAN PARTY AND CREDIT PARTY HEREBY
AGREES THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF TEXAS AND THE FEDERAL
COURTS IN ANY OTHER JURISDICTION WHERE A MATERIAL AMOUNT OF THE COLLATERAL IS
LOCATED SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN OR AMONG ANY OF THE LOAN PARTIES AND THE CREDIT PARTIES,
PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS
OR TO ANY MATTER ARISING THEREFROM. EACH OF THE LOAN PARTIES EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS. WITHOUT LIMITING THE APPLICABILITY OF ANY LAW
PROVIDING FOR SERVICE OF PROCESS UPON A STATUTORY AGENT AND NOTIFICATION THEREOF
BY MAIL, EACH LOAN PARTY HEREBY WAIVES (TO THE FULLEST EXTENT ALLOWED BY LAW)
PERSONAL SERVICE OF THE SUMMONS AND


LOAN AND SECURITY AGREEMENT - Page 136
<PAGE>

COMPLAINT OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND AGREES (TO THE
FULLEST EXTENT ALLOWED BY LAW) THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR
OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED
TO SUCH LOAN PARTY AT THE ADDRESS OF SUCH LOAN PARTY SET FORTH ON THE
SIGNATURE PAGES HEREOF. THE NONEXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.

         Section 17.6 CONSENT TO ADVERTISING AND PUBLICITY. With the prior
written consent of Borrower, which consent shall not be unreasonably withheld,
Agent, on behalf of the Credit Parties, may issue and disseminate to the public
information describing the credit accommodation entered into pursuant to this
Agreement, including the name and address of the Loan Parties, the amount,
interest rate, maturity, collateral and a general description of Loan Parties'
business.

         Section 17.7 REVERSAL OF PAYMENTS. Agent and each Lender shall have the
continuing and exclusive right to apply, reverse and re-apply any and all
payments to any portion of the Secured Obligations in a manner consistent with
the terms of this Agreement. To the extent Borrower makes a payment or payments
to Agent, for the account of the Credit Parties, or any Credit Party receives
any payment or proceeds of the Collateral for Borrower's benefit, which
payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Secured Obligations or part thereof intended
to be satisfied shall be revived and continued in full force and effect, as if
such payment or proceeds had not been received by Agent or such other Credit
Party.

         Section 17.8 INJUNCTIVE RELIEF. Each of the Loan Parties expressly
acknowledges and agrees that an action for damages for any breach of the
requirements of SECTION 10.1 shall not be an adequate remedy at law. In the
event of any such breach, each of the Loan Parties agrees to the fullest extent
allowed by law that Agent shall be entitled to injunctive relief to restrain
such breach and require compliance with such requirements.

         Section 17.9 ACCOUNTING MATTERS. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized to
determine compliance with any covenant contained herein, shall, unless this
Agreement otherwise provides or unless Required Lenders shall otherwise consent
in writing, be performed in accordance with GAAP.


LOAN AND SECURITY AGREEMENT - Page 137
<PAGE>

         Section 17.10  AMENDMENTS; WAIVERS.

                  (a) Except as set forth in SUBSECTIONS (b) and (c) below, any
         term, covenant, agreement or condition of this Agreement or any of the
         other Loan Documents may be amended or waived, and any departure
         therefrom may be consented to by the Required Lenders, if, but only if,
         such amendment, waiver or consent is in writing signed by the Required
         Lenders and, in the case of an amendment (other than an amendment
         described in SECTION 17.10(e)), by each of the Loan Parties, and in any
         such event, the failure to observe, perform or discharge any such term,
         covenant, agreement or condition (whether such amendment is executed or
         such waiver or consent is given before or after such failure) shall not
         be construed as a breach of such term, covenant, agreement or condition
         or as a Default or an Event of Default. Unless otherwise specified in
         such waiver or consent, a waiver or consent given hereunder shall be
         effective only in the specific instance and for the specific purpose
         for which given. In the event that any such waiver or amendment is
         requested by Borrower, Agent and the Lenders may require and charge a
         fee in connection therewith and consideration thereof in such amount as
         shall be determined by Agent and the Required Lenders in their
         discretion.

                  (b)      Except as otherwise set forth in this Agreement,

                           (i)      without the prior unanimous written consent
                  of the Lenders,

                                    (A)      no amendment, consent or waiver
                           shall affect the amount or extend the time of the
                           obligation of the Lenders to make Loans or extend the
                           originally scheduled time or times of payment of the
                           principal of any Loan or alter the time or times of
                           payment of interest on any Loan or the amount of the
                           principal thereof or the rate of interest thereon or
                           the amount of any commitment fee payable hereunder,
                           or other fees payable ratably to the Lenders
                           hereunder, or permit any subordination of the
                           principal or interest on such Loan, permit the
                           subordination of the Security Interests in any
                           material Collateral (except with respect to Purchase
                           Money Liens described in CLAUSE (f)(a)(i) of the
                           definition of "Permitted Liens" in SECTION 1.1, which
                           shall be governed by SECTION 17.10(a)) or amend the
                           provisions of ARTICLE 14 or of this SECTION 17.10(b)
                           or (c),

                                    (B)      the definition of "Borrowing Base",
                           "AR Advance Rate", "INV Advance Rate" and "Minimum
                           Availability Requirement", respectively, shall not be
                           amended,

                                    (C)      no material Collateral shall be
                           released by Agent other than as specifically
                           permitted in this Agreement (including, without
                           limitation, SECTION 17.10(c)), PROVIDED that no
                           consent of a Credit Party other than Agent shall be
                           required in order to release Collateral which is
                           transferred by a Loan


LOAN AND SECURITY AGREEMENT - Page 138
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                           Party in a transaction which is specifically allowed
                           by this Agreement (including, without limitation,
                           SECTION 13.6 and SECTION 17.10(c)),

                                    (D)      no Loan Party shall be released of
                           its obligations under this Agreement or any other
                           Loan Document; PROVIDED that no consent of a Credit
                           Party other than Agent shall be required in order to
                           release the obligations of a Loan Party all of whose
                           Capital Stock is sold to a Person who is not a Loan
                           Party in a transaction permitted under SECTION
                           13.6(a)(ix);

                                    (E)      the definition of "Required
                           Lenders" shall not be amended; and

                                    (F)      the Termination Date may not be
                           amended;

         PROVIDED, HOWEVER, that anything herein to the contrary
         notwithstanding, Required Lenders shall have the right to waive any
         Default or Event of Default and the consequences hereunder of such
         Default or Event of Default and shall have the right to enter into an
         agreement with any Loan Party providing for the forbearance from the
         exercise of any remedies provided hereunder or under the other Loan
         Documents without waiving any Default or Event of Default.

                  (c)      Notwithstanding any provision of this Agreement or
         the other Loan Documents to the contrary, Agent in its sole discretion
         (i) without requirement of consent by any other Credit Party, may
         release any Collateral, the aggregate value of which (determined by
         Agent on any reasonable valuation basis and not including Collateral
         disposed of in a disposition allowed by CLAUSES (i) through (viii)
         of SECTION 13.6(a)) does not exceed $25,000,000 and (ii) with the
         prior written consent of any combination of Lenders whose Commitment
         Percentages at such time equals or exceeds, in the aggregate,
         seventy-five percent (75%), may release any Collateral, the
         aggregate value of which, together with any Collateral previously
         released by Agent pursuant to CLAUSE (i) preceding (determined by
         Agent on any reasonable valuation basis and not including Collateral
         disposed of in a disposition allowed by CLAUSES (i) through (viii)
         of SECTION 13.6(a)) does not exceed $100,000,000.

                  (d)      The making of Loans hereunder by the Lenders, or the
         issuance of any Letter of Credit by L/C Issuer, during the existence of
         a Default or Event of Default shall not be deemed to constitute a
         waiver of such Default or Event of Default.

                  (e)      Notwithstanding any provision of this Agreement or
         the other Loan Documents to the contrary, no consent, written or
         otherwise, of any Loan Party shall be necessary or required in
         connection with any amendment to ARTICLE 16 or SECTION 5.10, and any
         amendment to such provisions shall be effected solely by and among
         Agent and the Lenders, PROVIDED that no such amendment shall impose any
         obligation on Borrower.


LOAN AND SECURITY AGREEMENT - Page 139
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         Section 17.11 ASSIGNMENT. All the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Loan Parties may not assign or transfer
any of their rights under this Agreement.

         Section 17.12 PERFORMANCE OF DUTIES.

                  (a)      The Loan Parties obligations under this Agreement and
         each of the Loan Documents shall be performed by the Loan Parties at
         their sole cost and expense.

                  (b)      If any Loan Party shall fail to do any act or thing
         which it has covenanted to do under this Agreement or any of the other
         Loan Documents, Agent, on behalf of the Credit Parties, may (but shall
         not be obligated to) do the same or cause it to be done either in the
         name of Agent or the other Credit Parties or in the name and on behalf
         of any Loan Party, and each Loan Party hereby irrevocably authorizes
         Agent so to act.

         Section 17.13 INDEMNIFICATION.

                  (a)      EACH LOAN PARTY AGREES TO INDEMNIFY AND HOLD HARMLESS
         AGENT AND EACH OTHER CREDIT PARTY AND EACH OF THEIR AFFILIATES AND
         SUBSIDIARIES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
         AGENTS AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY
         AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS AND EXPENSES
         (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND
         EXPENSES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY
         INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH
         OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH
         ANY INVESTIGATION, LITIGATION OR PROCEEDING OR PREPARATION OF
         DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE
         TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF
         THE PROCEEDS OF THE LOANS (INCLUDING ANY OF THE FOREGOING ARISING
         FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT
         SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE IS FOUND IN A
         FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION
         TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR
         WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR
         OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 17.13
         APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
         INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY ANY LOAN
         PARTY, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED
         PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A
         PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
         HEREBY ARE


LOAN AND SECURITY AGREEMENT - Page 140
<PAGE>

         CONSUMMATED. EACH LOAN PARTY AGREES NOT TO ASSERT ANY CLAIM AGAINST
         AGENT, ANY OTHER CREDIT PARTY, ANY OF THEIR AFFILIATES OR
         SUBSIDIARIES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
         EMPLOYEES, ATTORNEYS, AGENTS AND ADVISERS, ON ANY THEORY OF
         LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
         ARISING OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF
         THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE
         OF THE PROCEEDS OF THE LOANS.

                  (b)      WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER
         AGREEMENT OF THE LOAN PARTIES HEREUNDER, THE AGREEMENTS AND OBLIGATIONS
         OF THE LOAN PARTIES CONTAINED IN THIS SECTION 17.13 SHALL SURVIVE THE
         PAYMENT IN FULL OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS
         AGREEMENT.

         Section 17.14 ALL POWERS COUPLED WITH INTEREST. All powers of attorney
and other authorizations granted to Agent and the other Credit Parties and any
Persons designated by Agent or the other Credit Parties pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the Secured
Obligations remain unpaid or unsatisfied.

         Section 17.15 SURVIVAL. Notwithstanding any termination of this
Agreement,


                  (a)      until all Secured Obligations have been irrevocably
         paid in full or otherwise satisfied, Agent, for the benefit of the
         Credit Parties, shall retain its Security Interest and shall retain all
         rights under this Agreement and each of the Security Documents with
         respect to such Collateral as fully as though this Agreement had not
         been terminated,

                  (b)      the indemnities to which Agent and the other Credit
         Parties are entitled under the provisions of this ARTICLE 17 and any
         other provision of this Agreement and the other Loan Documents shall
         continue in full force and effect and shall protect Agent and the other
         Credit Parties against events arising after such termination as well as
         before, and

                  (c)      in connection with the termination of this Agreement
         and the release and termination of the Security Interests, Agent, on
         behalf of itself as agent and the other Credit Parties, may require
         such assurances and indemnities as it shall reasonably deem necessary
         or appropriate to protect Agent and the other Credit Parties against
         loss on account of such release and termination, including, without
         limitation, with respect to credits previously applied to the Secured
         Obligations that may subsequently be reversed or revoked.


LOAN AND SECURITY AGREEMENT - Page 141
<PAGE>

         Section 17.16 TITLES AND CAPTIONS. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.

         Section 17.17 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

         Section 17.18 GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS, PROVIDED THAT TO THE EXTENT FEDERAL LAW WOULD ALLOW A HIGHER
RATE OF INTEREST THAN WOULD BE ALLOWED BY THE LAWS OF THE STATE OF TEXAS, THEN
WITH RESPECT TO THE PROVISIONS OF ANY LAWS WHICH PURPORT TO LIMIT THE AMOUNT OF
INTEREST THAT MAY BE CONTRACTED FOR, CHARGED OR RECEIVED IN CONNECTION WITH ANY
OF THE SECURED OBLIGATIONS, SUCH FEDERAL LAW SHALL APPLY.

         Section 17.19 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.

         Section 17.20 REPRODUCTION OF DOCUMENTS. This Agreement, each of the
other Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by Agent or any other Credit Party, and (c)
financial statements, certificates and other information previously or hereafter
furnished to Agent or any other Credit Party, may be reproduced by Agent or such
other Credit Party by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and such Person may destroy any
original document so produced. Each party hereto stipulates that, to the extent
permitted by Applicable Law, any such reproduction shall be as admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original shall be in existence and whether or not such
reproduction was made by Agent or such other Credit Party in the regular course
of business), and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

         Section 17.21 TERM OF AGREEMENT. This Agreement shall remain in effect
from the Agreement Date through the Termination Date and thereafter until all
Secured Obligations shall have been irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.


LOAN AND SECURITY AGREEMENT - Page 142
<PAGE>

         Section 17.22     PRO-RATA PARTICIPATION.

                  (a)      Each Lender agrees that

                           (i)      if it or any of its Affiliates or
                  Subsidiaries shall exercise any right of counterclaim,
                  set-off, banker's lien or similar right, or if under any
                  applicable bankruptcy, insolvency or other similar law it
                  receives a secured claim the security for which is a debt owed
                  by it to any Loan Party, it shall apportion the amount
                  thereof, on a pro rata basis, between (A) amounts at the time
                  owed to it by Borrower under this Agreement, and (B) amounts
                  otherwise owed to it by any Loan Party, and

                           (ii)     if, as a result of the exercise of a right
                  or the receipt of a secured claim and the apportionment
                  thereof described in CLAUSE (i) of this SECTION 17.21(a) or
                  otherwise, it shall receive payment of a proportion of the
                  aggregate amount of principal and interest due with respect to
                  the Secured Obligations owed to it under this Agreement
                  greater than the proportion of such amounts then received by
                  any other Lender, such Lender shall purchase a participation
                  (which it shall be deemed to have purchased simultaneously
                  upon the receipt of such payment) in the Secured Obligations
                  then held by the other Lenders so that all such recoveries of
                  principal and interest with respect to all Secured Obligations
                  owed to each Lender shall be pro rata on the basis of its
                  respective amount of the Secured Obligations owed to all
                  Lenders, PROVIDED that if all or part of such proportionately
                  greater payment received by such purchasing Lender is
                  thereafter recovered by or on behalf of any Borrower from such
                  Lender, such purchase shall be rescinded and the purchase
                  price paid for such participation shall be returned to such
                  Lender to the extent of such recovery, but without interest.

                  (b)      Each Lender which receives such a secured claim shall
         exercise its rights in respect of such secured claim in a manner
         consistent with the rights of the Lenders entitled under this SECTION
         17.21 to share in the benefits of any recovery on such secured claim.

                  (c)      Each Loan Party expressly consents to the foregoing
         arrangements and agrees that any holder of a participation in any
         Secured Obligation so purchased or otherwise acquired may exercise any
         and all rights of banker's lien, set-off or counterclaim with respect
         to any and all monies owing by any Loan Party to such holder as fully
         as if such holder were a holder of such Secured Obligation in the
         amount of the participation held by such holder.

         Section 17.23 INTEREST LIMITATION. In no contingency or event
whatsoever shall the amount of interest under the Loan Documents paid by
Borrower, received by the Lenders, agreed to be paid by Borrower, or requested
or demanded to be paid by the Lenders, exceed the Maximum Rate. In the event any
such sums paid to the Lenders by Borrower would exceed the Maximum Rate, the
Lenders shall automatically apply such excess to any unpaid amount of the
Secured Obligations or, if the amount of such excess exceeds said unpaid amount,
such excess shall be paid to Borrower, as applicable. All sums paid, or agreed
to be paid, by Borrower which are or hereafter may be


LOAN AND SECURITY AGREEMENT - Page 143
<PAGE>

construed to be compensation for the use, forbearance or detention of money
shall be amortized, prorated, spread and allocated in respect of the Secured
Obligations throughout the full term of this Agreement until the Secured
Obligations are paid in full. Notwithstanding any provisions contained in the
Loan Documents, or in any Notes or other related documents executed pursuant
hereto, the Lenders shall never be entitled to receive, collect or apply as
interest any amount in excess of the Maximum Rate and, in the event any
Lender ever receives, collects or applies any amount in respect of Borrower
that otherwise would be in excess of the Maximum Rate, such amount shall
automatically be deemed to be applied in reduction of the unpaid principal
balance of the Secured Obligations and, if such principal balance is paid in
full, any remaining excess shall forthwith be paid to Borrower, as
applicable. In determining whether or not the interest paid or payable under
any specific contingency exceeds the Maximum Rate, Borrower and the Lenders
shall, to the maximum extent permitted under Applicable Law, (i) characterize
any non-principal payment as a standby fee, commitment fee, prepayment
charge, delinquency charge or reimbursement for a third-party expense rather
than as interest, (ii) exclude voluntary prepayments and the effect thereof,
and (iii) amortize, prorate, allocate and spread in equal parts throughout
the entire period during which the Secured Obligations were outstanding the
total amount of interest at any time contracted for, charged or received.
Nothing herein contained shall be construed or so operate as to require
Borrower to pay any interest, fees, costs or charges greater than is
permitted by Applicable Law. Subject to the foregoing, Borrower hereby agrees
that the actual effective rate of interest from time to time existing with
respect to Loans made by the Lenders to Borrower, including all amounts
agreed to by Borrower or charged or received by the Lenders, which may be
deemed to be interest under Applicable Law, shall be deemed to be a rate
which is agreed to and stipulated by Borrower and the Lenders in accordance
with Applicable Law.

         Section 17.24 MUTUAL BENEFIT. Each of the Loan Parties is part of a
combined enterprise the success and prosperity of which is dependent, in part,
on the operations of each Loan Party. Each Loan Party has determined that
entering into this Agreement is necessary or convenient to the conduct,
promotion or attainment of the business of such Loan Party, and that executing
and entering into this Agreement and the other Loan Documents is within its
corporate purpose, will be of direct and indirect benefit to, will result in a
reasonably equivalent value to, such Loan Party and is in its best interest.

         Section 17.25 EXPRESS WAIVERS BY LOAN PARTIES IN RESPECT OF CROSS
GUARANTIES AND CROSS COLLATERALIZATION. Each Loan Party agrees as follows:

                  (a)      Each Loan Party hereby waives: (1) notice of
         acceptance of this Agreement; (2) notice of the making of any Loans,
         the issuance of any Letter of Credit or any other financial
         accommodations made or extended under the Loan Documents or the
         creation or existence of any Secured Obligations; (3) notice of the
         amount of the Secured Obligations, subject, however, to such Loan
         Party's right to make inquiry of Agent to ascertain the amount of the
         Secured Obligations at any reasonable time; (4) notice of any adverse
         change in the financial condition of any other Loan Party or of any
         other fact that might increase such Loan Party's risk with respect to
         such other Loan Party under this Agreement;


LOAN AND SECURITY AGREEMENT - Page 144
<PAGE>

         (5) notice of presentment for payment, demand, protest and notice
         thereof as to any promissory notes or other instruments among the
         Loan Documents; and (7) all other notices (except if such notice is
         specifically required to be given to such Loan Party hereunder or
         under any of the other Loan Documents to which such Loan Party is a
         party) and demands to which such Loan Party might otherwise be
         entitled.

                  (b)      Each Loan Party hereby waives the right by statute or
         otherwise to require any Credit Party to institute suit against any
         other Loan Party or to exhaust any rights and remedies which such
         Credit Party has or may have against any other Loan Party. Each Loan
         Party further waives any defense arising by reason of any disability or
         other defense of any other Loan Party (other than the defense that the
         Secured Obligations shall have been fully and finally performed and
         indefeasibly paid) or by reason of the cessation from any cause
         whatsoever of the liability of any such Loan Party in respect thereof.

                  (c)      Each Loan Party hereby waives and agrees not to
         assert against any Credit Party: (i) any defense (legal or equitable),
         set-off, counterclaim or claim which such Loan Party may now or at any
         time hereafter have against any other Loan Party or any other party
         liable to the Credit Parties; (ii) any defense, set-off, counterclaim
         or claim of any kind or nature available to any other Loan Party
         against any Credit Party, arising directly or indirectly from the
         present or future lack of perfection, sufficiency, validity or
         enforceability of the Secured Obligations or any security therefor;
         (iii) any right or defense arising by reason of any claim or defense
         based upon an election of remedies by any Credit Party under any
         applicable law; (iv) the benefit of any statute of limitations
         affecting any other Loan Party's liability hereunder.

                  (d)      In addition to the foregoing waivers, each Loan Party
         hereby waives outright and absolutely, any right of subrogation such
         Loan Party has or may have against any other Loan Party with respect to
         the Secured Obligations. In addition, each Loan Party hereby waives any
         right to proceed against any other Loan Party, now or hereafter, for
         contribution, indemnity, reimbursement and any other suretyship rights
         and claims, whether direct or indirect, liquidated or contingent,
         whether arising under express or implied contract or by operation of
         law, which such Loan Party may now have or hereafter have as against
         any such other Loan Party with respect to the Secured Obligations. Each
         Loan Party also hereby waives any rights of recourse to or with respect
         to any asset of any other Loan Party. Each Loan Party agrees that in
         light of the immediately foregoing waivers, the execution of this
         Agreement shall not be deemed to make such Loan Party a "creditor" of
         any other Borrower, and that for purposes of Sections 547 and 550 of
         the Bankruptcy Code such Loan Party shall not be deemed a "creditor" of
         any other Loan Party.

                  (e)      Each Loan Party consents and agrees that, without
         notice to or by such Loan Party and without affecting or impairing the
         obligations of such Loan Party hereunder, the Credit Parties may, by
         action or inaction: (a) compromise, settle, extend the duration or the
         time for the payment of, or discharge the performance of, or may refuse
         to or otherwise not


LOAN AND SECURITY AGREEMENT - Page 145
<PAGE>

         enforce the Loan Documents; (b) release all or any one or more
         parties to any one or more of the Loan Documents or grant other
         indulgences to any other Loan Party in respect thereof; (c) amend or
         modify in any manner and at any time (or from time to time) any of
         the Loan Documents; or (d) release or substitute any Guarantor or
         other Person liable for payment of the Secured Obligations, if any,
         or enforce, exchange, release or waive any security for the Secured
         Obligations or any Guaranty of the Secured Obligations.

                  (f)      The Credit Parties shall have the right to seek
         recourse against any Loan Party to the fullest extent provided for
         herein, and no election by any Credit Party to proceed in one form of
         action or proceeding, or against any party, or on any obligation, shall
         constitute a waiver of such Credit Party's right to proceed in any
         other form of action or proceeding or against other parties unless such
         Credit Party has expressly waived such right in writing. Specifically,
         but without limiting the generality of the foregoing, no action or
         proceeding by any Credit Party under any document or instrument
         evidencing the Secured Obligations shall serve to diminish the
         liability of any Loan Party under this Agreement or any other Loan
         Document except to the extent that the Credit Parties finally and
         unconditionally shall have realized indefeasible payment by such action
         or proceeding.

                  (g)      Each Loan Party represents and warrants to the Credit
         Parties that such Loan Party is currently informed of the financial
         condition of all other Loan Parties (including, without limitation, all
         other Guarantors) of all other circumstances which a diligent inquiry
         would reveal and which bear upon the risk of nonpayment of the Secured
         Obligations. Each Loan Party further represents and warrants to the
         Credit Parties that such Loan Party has read and understands the terms
         and conditions of the Loan Documents. Each Loan Party hereby covenants
         that such Loan Party will continue to keep informed of the financial
         condition of all other Loan Parties, and of all other circumstances
         which bear upon the risk of nonpayment or nonperformance of the
         Secured Obligations.

         Section 17.26 DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING. Any
calculation or material determination required or expressly permitted to be made
by any Credit Party under this Agreement shall be made in its reasonable
judgment and in good faith, and shall when made, absent manifest error, be
controlling.

         Section 17.27 EXCEPTION TO COVENANTS. No Loan Party nor any Subsidiary
shall be deemed to be permitted to take any action or fail to take any action
which is permitted as an exception to any of the covenants contained herein or
which is within the permissible limits of any of the covenants contained herein
if such action or omission would result in the breach of any other covenant
contained herein.


LOAN AND SECURITY AGREEMENT - Page 146
<PAGE>

         Section 17.28 JUDGMENT CURRENCY. The payment obligations of any Loan
Party under this Agreement or any of the other Loan Documents shall not be
discharged by an amount paid in any currency other than Dollars, or in any other
place than required by this Agreement or any such Loan Documents, to the extent
that the amount so paid on conversion to Dollars and transferred to Agent in
Dallas, Dallas County, Texas, U.S., under normal banking procedures does not
yield the amount of Dollars due under this Agreement or any such other Loan
Document. If for the purpose of obtaining judgment in any court it is necessary
to convert a sum due under this Agreement or any of the other Loan Documents in
any currency to another currency (the "OTHER CURRENCY"), then the rate of
exchange which shall be applied shall be the Spot Rate, determined as of the
Business Day preceding the date on which such judgment is signed by the judge or
other Person acting on behalf of such court. The payment obligations of any Loan
Party in respect of any such amount due by it to any Credit Party pursuant to
such judgment, notwithstanding the rate of exchange actually applied in
rendering such judgment, shall be discharged only to the extent that on the
Business Day following receipt by such Credit Party of any such sum in the Other
Currency pursuant to such judgment, such Credit Party in accordance with normal
banking procedures may purchase and transfer to Dallas, Dallas County, U.S.,
Dollars with the amount of the Other Currency so received.

         Section 17.29 REPLACEMENT/RESTATEMENT OF EXISTING CREDIT AGREEMENT.
This Agreement and the other Loan Documents amends and restates in its
entirety the Existing Credit Agreement and the Existing Loan Documents. All
rights, benefits, indebtedness, interest, liabilities, and obligations of the
parties to the Existing Loan Documents are hereby amended, restated, and
superseded in their entirety according to the terms and provisions set forth
in this Agreement and in the other Loan Documents. All "Obligations" as
defined by the Existing Credit Agreement and all "Notes" as defined by the
Existing Credit Agreement are hereby replaced and renewed in their entirety
by this Agreement, the Notes, and the other Loan Documents and shall, from
and after the Agreement Date, be included in the Secured Obligations and
governed by this Agreement and the other Loan Documents. The existing liens
and security interests in all "Collateral" as defined by the Existing Credit
Agreement and the Existing Loan Documents are hereby expressly renewed and
continued by, and as a part of, the Security Interest and shall remain in
full force and effect, hereafter governed by this Agreement and the other
Loan Documents and as security for the Secured Obligations. Each Loan Party
represents and warrants that as of the date hereof there are no claims or
offsets against, or defenses or counterclaims to, its obligations under the
Existing Agreement or any of the Existing Loan Documents, as amended and
restated by this Agreement and the other Loan Documents. To induce the Credit
Parties to enter into this Agreement, each Loan Party waives any and all such
claims, offsets, defenses, or counterclaims, whether known or unknown,
arising prior to the date hereof and relating to the Existing Credit
Agreement or the Existing Loan Documents. As of the Agreement Date (i) no
"Advances" as defined by the Existing Credit Agreement are outstanding
thereunder and (ii) no "Letters of Credit" as defined by the Existing Credit
Agreement are outstanding thereunder other than the Existing Letters of
Credit.

         THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
         BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
         EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL


LOAN AND SECURITY AGREEMENT - Page 147

<PAGE>

         AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL
         AGREEMENTS BETWEEN THE PARTIES.

                    Remainder of Page Blank Signatures Follow












LOAN AND SECURITY AGREEMENT - Page 148

<PAGE>

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


                                        COMPUSA STORES L.P.
                                        By: CompUSA GP Holdings Company
                                            Its sole General Partner



Address for Notice:                         By: /s/ J. Robert Gary
14951 North Dallas Parkway                     ----------------------------
Dallas, Texas  75240                               J. Robert Gary
                                                   Vice President

                                        COMPUSA INC.



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Senior Vice President

                                        COMPUSA GP HOLDINGS COMPANY



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President

                                        COMPUSA HOLDINGS COMPANY



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President


LOAN AND SECURITY AGREEMENT - Page 149

<PAGE>


                                        COMPUSA HOLDINGS I INC.



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President


                                        COMPUSA HOLDINGS II INC.



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President


                                        COMPUSA PC INC.



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President

                                        COMPUSA PC OPERATING COMPANY



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President

                                        COMPTEAM INC.



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 --------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President


LOAN AND SECURITY AGREEMENT - Page 150

<PAGE>



                                        COMPUSA MANAGEMENT COMPANY



Address for Notice:                     By: /s/ J. Robert Gary
14951 North Dallas Parkway                 ---------------------------------
Dallas, Texas  75240                         J. Robert Gary
                                             Vice President















LOAN AND SECURITY AGREEMENT - Page 151

<PAGE>

                                        AGENT:

                                        NATIONSBANK, N.A.
                                        In its capacity as administrative agent


                                        By: /s/ Phillip A. Worden
                                           ---------------------------------
                                             Phillip A. Worden
                                             Vice President

         Address:
         NationsBank, N.A.
         Bank of America Plaza, 6th Floor
         901 Main Street
         Dallas, Texas 75202
         Attention:  Bank of America Business Credit
                     URGENT: Division Manager


LOAN AND SECURITY AGREEMENT - Page 152

<PAGE>

                                        LENDERS:

Commitment                              NATIONSBANK, N.A.
Amount:  $230,555,556

ADDRESS: 901 Main Street, 6th Floor     By: /s/ Phillip A. Worden
         Dallas, Texas  75202              ---------------------------------
         Attn: Bank of America               Phillip A. Worden
                Business Credit              Vice President
         Facsimile No.: 214-209-3501

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
NationsBank, N.A.
Bank of America Plaza, 6th Floor
901 Main Street
Dallas, Texas 75202

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
NationsBank, N.A.
Bank of America Plaza, 6th Floor
901 Main Street
Dallas, Texas 75202







LOAN AND SECURITY AGREEMENT - Page 153

<PAGE>



Commitment                                  CONGRESS FINANCIAL CORPORATION
Amount: $69,444,444

ADDRESS: 1201 Main Street                   By: /s/ M. Galovicor
         P.O. Box 50728                        -------------------------------
         Attn: Mark Galovick                     M. Galovicor
               Facsimile No.: 214-748-9118       Vice President

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
Congress Financial Corporation
1201 Main Street, Suite 1625
P.O. Box 50728
Dallas, TX 75202
Attn: Mark Galovick

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
Congress Financial Corporation
1201 Main Street, Suite 1625
P.O. Box 50728
Dallas, TX 75202
Attn: Mark Galovick






<PAGE>



Commitment                                  THE CHASE MANHATTAN BANK
Amount: $50,000,000

ADDRESS: 600 Fifth Avenue                   By: /s/ Michael W. Lewis
         New York, NY 10020                    -------------------------------
         Attn: Credit Deputy                Name: Michael W. Lewis
               Asset Based Lending               -----------------------------
               Facsimile No.: 212-332-4297  Title: Vice President
                                                  ----------------------------

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
The Chase Manhattan Bank
200 Jericho Quad
Jericho, NY 11753-2790
Attn: Diane Butler

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
The Chase Manhattan Bank
200 Jericho Quad
Jericho, NY 11753-2790
Attn: Diane Butler





LOAN AND SECURITY AGREEMENT

<PAGE>



Commitment                                   FOOTHILL CAPITAL CORPORATION
Amount:  $50,000,000

ADDRESS: 11111 Santa Monica Blvd.            By: /s/ Michael P. Sadilek
         Suite 1500                             -----------------------------
         Los Angeles, CA  90025                   Michael P. Sadilek
         Attn: Michael P. Sadilek                 Senior Vice President
               Facsimile No.: 310-479-8952

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
Foothill Capital Corporation
11111 Santa Monica Blvd., Suite 1500
Los Angeles, CA  90025
Attn: Michael P. Sadilek

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
Foothill Capital Corporation
11111 Santa Monica Blvd., Suite 1500
Los Angeles, CA  90025
Attn: Michael P. Sadilek









LOAN AND SECURITY AGREEMENT

<PAGE>



Commitment                                  HELLER FINANCIAL, INC.
Amount: $35,000,000

ADDRESS: 150 East 42nd Street, 7th Floor    By: /s/ Albert J. Forzano
         New York, NY 10017                    -------------------------------
         Attn: Albert J. Forzano                 Albert J. Forzano
               Facsimile No.: 212-880-7002       Vice President

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
Heller Financial, Inc.
500 West Monroe Street, 13th Floor
Chicago, IL 60661
Attn: Kris Krishnan

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
Heller Financial, Inc.
500 West Monroe Street, 13th Floor
Chicago, IL 60661
Attn: Kris Krishnan






LOAN AND SECURITY AGREEMENT

<PAGE>

Commitment                                  PNC BANK NATIONAL ASSOCIATION
Amount: $25,000,000

ADDRESS: Two PNC Plaza, 18th Floor          By: /s/ Rose Crump
         620 Liberty Avenue                    -------------------------------
         Pittsburg, PA 15222                     Rose Crump
         Attn: Rose Crump                        Vice President
         Facsimile No.: 412-768-4369

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
PNC Business Credit
Two Tower Center Blvd., 8th Floor
East Brunswick, NY 08816
Attn: Gurdatt Jagnanan

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
PNC Business Credit
Two Tower Center Blvd., 8th Floor
East Brunswick, NY 08816
Attn: Susan Padgett





LOAN AND SECURITY AGREEMENT

<PAGE>

Commitment                                  AMSOUTH BANK
Amount: $20,000,000

ADDRESS: 350 Park Avenue                    By: /s/ Kevin R. Rogers
         New York, NY 10022                    -------------------------------
         Attn: Kevin R. Rogers                   Kevin R. Rogers
         Facsimile No.: 212-935-7458             Attorney-in-Fact

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
AmSouth Bank
1900 Fifth Avenue North
Birmingham, AL 35203

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
AmSouth Bank
1900 Fifth Avenue North
Birmingham, AL 35203






LOAN AND SECURITY AGREEMENT

<PAGE>

Commitment                                  IBJ WHITEHALL BUSINESS CREDIT
Amount: $20,000,000                         CORPORATION


ADDRESS: One State Street                   By: /s/ Thomas M. Bayer
         New York, NY 10004                    -------------------------------
         Attn: Yolanda Lopez                     Thomas M. Bayer
         Facsimile No.: 212-858-2936             Senior Vice President

APPLICABLE LENDING OFFICE FOR BASE RATE LOANS:
IBJ Whitehall Business Credit Corporation
One State Street
New York, NY 10004
Attn: Yolanda Lopez

APPLICABLE LENDING OFFICE FOR EURODOLLAR LOANS:
IBJ Whitehall Business Credit Corporation
One State Street
New York, NY 10004
Attn: Yolanda Lopez





LOAN AND SECURITY AGREEMENT


<PAGE>

                                   EXHIBIT "A"
                                       to
                           LOAN AND SECURITY AGREEMENT



                          FORM OF REVOLVING CREDIT NOTE


EXHIBIT "A", Cover Page

<PAGE>

                              REVOLVING CREDIT NOTE


$_______                                                      Dated as of ______


         For value received, COMPUSA STORES L.P., a Texas limited partnership
("BORROWER"), hereby promises to pay to the order of __________________, a
____________________, with its principal office located at______________________
("PAYEE") the principal amount of ____________ DOLLARS ($________) or such
lesser amount as may from time to time be advanced and remain unpaid and
outstanding hereunder, together with accrued interest as provided hereinbelow.

         This promissory note ("NOTE") is executed and delivered by Borrower
pursuant to the certain Loan and Security Agreement dated as of _________ among
Borrower, the other Loan Parties from time to time party thereto, NationsBank,
N.A., as administrative agent for the Lenders as provided therein, and each of
the Lenders (including, without limitation, Payee) from time to time party
thereto (as such agreement may be renewed, extended, modified, amended,
supplemented or restated from time to time, the "LOAN AND SECURITY AGREEMENT"),
and is a Revolving Credit Note as defined therein. Unless otherwise defined
herein, capitalized terms used in this Note which are defined in the Loan and
Security Agreement, wherever used herein, shall have the same meanings as are
prescribed by the Loan and Security Agreement.

         All Loans from time to time requested by Borrower, and from time to
time made and outstanding hereunder, are subject to the terms and provisions of
the Loan and Security Agreement. Reference hereby is made to the Loan and
Security Agreement for a statement of the obligations of Borrower and the rights
of Payee in relation thereto, PROVIDED that nothing shall impair the absolute
and unconditional obligation of Borrower to pay the outstanding principal and
unpaid accrued interest on this Note when due.

         The unpaid principal from day to day outstanding under this Note shall
bear interest at the applicable rate prescribed for Revolving Credit Loans as
provided by the Loan and Security Agreement. Agent's and Payee's books and
records shall be prima facie evidence of Revolving Credit Loans, interest
accruals and payments hereunder.

         Borrower promises to pay all principal of and accrued interest on the
Revolving Credit Loans from time to time outstanding under this Note as
prescribed by the Loan and Security Agreement. On or after each Interest Payment
Date, to the extent that any accrued interest hereunder is not paid as specified
by the Loan and Security Agreement, Agent may at its option (but with no
obligation to do so) add the amount of such accrued interest to the Revolving
Credit Facility, in which event such accrued interest will be deemed paid and
the aggregate amount thereof shall be treated as a Revolving Credit Loan to
Borrower by Payee under the Revolving Credit Facility and outstanding under this
Note.



REVOLVING CREDIT NOTE - Page 1

<PAGE>

         Any Event of Default shall be a default under this Note. All rights and
remedies of Payee, and of Agent for the benefit of Payee, with respect to this
Note (including, without limitation, Agent's right, at its option or at the
direction of the Required Lenders, to accelerate the entire unpaid principal
balance and unpaid accrued interest hereunder to be immediately due and payable)
as provided by the Loan and Security Agreement are incorporated herein by
reference. All obligations and indebtedness from time to time evidenced by this
Note are secured by the Security Interest as provided by the Loan and Security
Agreement and the other Security Documents.

         No delay or omission by Payee or Agent in exercising of any power,
right, or remedy hereunder shall operate as a waiver or impair Payee's powers,
rights, and remedies under this Note or the other Loan Documents. Except as
specifically provided in the Loan and Security Agreement, Borrower and each
other party ever liable hereunder severally hereby expressly waives presentment,
demand, notice of intention to accelerate, notice of acceleration, protest,
notice of protest, and any other notice of any kind, and agrees that its
liability hereunder shall not be affected by any renewals, extensions, or
modifications, from time to time, of the time or manner of payment hereof, or by
any release or modification of or with respect to the Security Interest or any
other party liable hereunder.

         Borrower hereby promises to pay to Agent, for the benefit of Agent and
Payee, all fees, costs, and expenses incurred by Agent or Payee in enforcement
and collection of any amounts under this Note, including, without limitation,
reasonable attorneys' fees and expenses.

         In no contingency or event whatsoever shall the amount of interest
under this Note paid by Borrower, received by Payee, agreed to be paid by
Borrower, or requested or demanded to be paid by Payee, exceed the Maximum Rate.
In the event any such sums paid to Payee by Borrower would exceed the Maximum
Rate, Payee shall automatically apply such excess to any unpaid amount of the
Secured Obligations or, if the amount of such excess exceeds said unpaid amount,
such excess shall be paid to Borrower. All sums paid, or agreed to be paid, by
Borrower which are or hereafter may be construed to be compensation for the use,
forbearance, or detention of money shall be amortized, prorated, spread, and
allocated in respect of the Secured Obligations throughout the full term of this
Note until the Secured Obligations are paid in full. Notwithstanding any
provisions contained in this Note or any other Loan Document or other related
documents executed pursuant to the Loan and Security Agreement, Payee shall
never be entitled to receive, collect, or apply as interest any amount in excess
of the Maximum Rate and, in the event Payee ever receives, collects, or applies
any amount in respect of Borrower that otherwise would be in excess of the
Maximum Rate, such amount shall automatically be deemed to be applied in
reduction of the unpaid principal balance of the Secured Obligations and, if
such principal balance is paid in full, any remaining excess shall forthwith be
paid to Borrower. In determining whether or not the interest paid or payable
under any specific contingency exceeds the Maximum Rate, Borrower and Payee
shall, to the maximum extent permitted under Applicable Law, (i) characterize
any non-principal payment as a standby fee, commitment fee, prepayment charge,
delinquency charge, or reimbursement for a third-party expense rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii)
amortize, prorate, allocate, and spread in equal parts throughout the entire
period during which the Secured Obligations were outstanding the total amount of
interest at any time contracted for, charged, or received. Nothing herein
contained shall be construed or so operate as to require Borrower to pay any
interest, fees, costs, or charges greater than is permitted by Applicable Law.



REVOLVING CREDIT NOTE - Page 2

<PAGE>

Subject to the foregoing, Borrower hereby agrees that the actual effective rate
of interest from time to time existing with respect to Loans made by Payee to
Borrower, including all amounts agreed to by Borrower or charged or received by
Payee, which may be deemed to be interest under Applicable Law, shall be deemed
to be a rate which is agreed to and stipulated by Borrower and Payee in
accordance with Applicable Law.

         This Note may not be changed, amended, or modified except in writing
executed by Payee and Borrower in the manner prescribed by the Loan and Security
Agreement.

         [This Note is in renewal of and is issued in amendment and restatement
of (but, not in extinguishment of) part of the indebtedness evidenced by that
certain Revolving Credit Note dated ________, ____ previously executed and
delivered by Borrower payable to the order of ____________________, in the face
amount of $__________, and the portion of such indebtedness represented hereby
shall hereafter be governed by and payable in accordance with the terms hereof.]
(Insert language, modified as appropriate into Notes issued after the Closing
Date.)

         THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF TEXAS, PROVIDED, THAT TO THE EXTENT FEDERAL LAW WOULD ALLOW
A HIGHER RATE OF INTEREST THAN WOULD BE ALLOWED BY THE LAWS OF THE STATE OF
TEXAS, THEN WITH RESPECT TO THE PROVISIONS OF ANY LAW WHICH PURPORTS TO LIMIT
THE AMOUNT OF INTEREST THAT MAY BE CONTRACTED FOR, CHARGED, OR RECEIVED IN
CONNECTION WITH THIS NOTE, SUCH FEDERAL LAW SHALL APPLY.

         This Note shall be binding upon Borrower and its successors and
assigns.

         EXECUTED as of the date first written above.

                                   COMPUSA STORES L.P.

                                   By:  CompUSA GP Holdings  Company, a
                                        Delaware business trust, General Partner

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________


REVOLVING CREDIT NOTE - Page 3