DELL COMPUTER CORP, 10-Q, 1996-09-06

DELL COMPUTER CORP
10-Q, 1996-09-06
ELECTRONIC COMPUTERS

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<PAGE> 1

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JULY 28, 1996

COMMISSION FILE NUMBER:0-17017

DELL COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 74-2487834
(State of incorporation) (I.R.S. Employer ID No.)

2214 WEST BRAKER LANE, SUITE D
AUSTIN, TEXAS 78758-4053
(Address of principal executive offices)
(512) 338-4400
(Telephone number)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING TWELVE MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]

AS OF SEPTEMBER 4, 1996, 90,063,822 SHARES OF THE REGISTRANT'S COMMON STOCK,
PAR VALUE $.01 PER SHARE, WERE OUTSTANDING.

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

<PAGE> 2

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IN MILLIONS, EXCEPT SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
ASSETS
JULY 28, JANUARY 28,
1996 1996
------------ -------------
<S> <C> <C>
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46 $ 55
Marketable securities . . . . . . . . . . . . . . . . . . . 910 591
Accounts receivable, net . . . . . . . . . . . . . . . . . 828 726
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 204 429
Other current assets . . . . . . . . . . . . . . . . . . . 153 156
------------ -------------
Total current assets . . . . . . . . . . . . . . . . 2,141 1,957
Property, plant and equipment, net . . . . . . . . . . . . . . 212 179
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 11 12
------------ -------------
$ 2,364 $ 2,148
============ =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 709 $ 466
Accrued and other liabilities . . . . . . . . . . . . . . . 463 473
------------ -------------
Total current liabilities . . . . . . . . . . . . . 1,172 939
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 13 113
Deferred profit on warranty contracts . . . . . . . . . . . . 173 116
Other liabilities . . . . . . . . . . . . . . . . . . . . . . 13 7
Commitments and contingencies . . . . . . . . . . . . . . . . -- --
------------ -------------
Total liabilities . . . . . . . . . . . . . . . . . 1,371 1,175
------------ -------------
Put options . . . . . . . . . . . . . . . . . . . . . . . . . 181 --
------------ -------------

Stockholders' equity:
Preferred stock and capital in excess of $.01 par value; shares
authorized: 5,000,000; shares issued and outstanding:
60,000 . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6
Common stock and capital in excess of $.01 par value; shares
authorized: 300,000,000; shares issued: 93,558,701 and
93,446,607, respectively . . . . . . . . . . . . . . . . 266 430
Retained earnings . . . . . . . . . . . . . . . . . . . . . 742 570
Common treasury stock, at cost: 4,453,284 shares . . . . . (172) --
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (33)
------------ -------------
Total stockholders' equity . . . . . . . . . . . . . 812 973
------------ -------------
$ 2,364 $ 2,148
============ =============
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

1
<PAGE> 3

DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- ----------------------------
JULY 28, JULY 30, JULY 28, JULY 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales.................................... $ 1,690 $ 1,206 $ 3,328 $ 2,342
Cost of sales................................ 1,317 943 2,636 1,843
------------- ------------- ------------- -------------
Gross margin................................ 373 263 692 499
------------- ------------- ------------- -------------
Operating expenses:
Selling, general and administrative......... 195 147 377 274
Research, development and engineering....... 28 25 53 46
------------- ------------- ------------- -------------
Total operating expenses................... 223 172 430 320
------------- ------------- ------------- -------------
Operating income........................... 150 91 262 179

7 1 11 --
Financing and other income (expense), net.... ------------- ------------- ------------- -------------
Income before income taxes and
extraordinary loss......................... 157 92 273 179
Provision for income taxes................... 45 27 79 52
------------- ------------- ------------- -------------
Income before extraordinary loss............ 112 65 194 127

Extraordinary loss, net of taxes............. (9) -- (9) --
------------- ------------- ------------- -------------
Net income.................................. 103 65 185 127

Preferred stock dividends.................... -- -- -- 12
------------- ------------- ------------- -------------
Net income available to common
stockholders................................ $ 103 $ 65 $ 185 $ 115
============= ============= ============= =============

Earnings per common share:
Income before extraordinary loss............ $ 1.15 $ .66 $ 1.99 $ 1.22
Extraordinary loss, net of taxes............ (.10) -- (.10) --
------------- ------------- ------------- -------------
Earnings per common share................... $ 1.05 $ .66 $ 1.89 $ 1.22
============= ============= ============= =============
Weighted average shares outstanding 97.3 98.2 97.7 94.6
============= ============= ============= =============

</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

2
<PAGE> 4

DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------------
JULY 28, JULY 30,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income.................................................... $ 185 $ 127
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................... 21 18
Other....................................................... 12 8
Changes in:
Operating working capital................................... 335 (82)
Non-current assets and liabilities.......................... 64 5
----------- -----------
Net cash provided by operating activities................ 617 76
----------- -----------
Cash flows from investing activities:
Marketable securities:
Purchases................................................... (4,305) (2,106)
Maturities and other redemptions............................ 3,412 2,071
Sales....................................................... 574 20
Capital expenditures.......................................... (57) (46)
----------- -----------
Net cash used in investing activities.................... (376) (61)
----------- -----------
Cash flows from financing activities:
Repurchase of 11% Senior Notes............................... (68) --
Preferred stock dividends paid................................ -- (13)
Issuance of common stock under employee plans................. 19 29
Purchases of treasury stock................................... (199) --
----------- -----------
Net cash provided by (used in) financing activities...... (248) 16
----------- -----------

Effect of exchange rate changes on cash......................... (2) (7)
----------- -----------
Net increase (decrease) in cash................................. (9) 24
Cash at beginning of period..................................... 55 43
----------- -----------
Cash at end of period........................................... $ 46 $ 67
=========== ===========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

3
<PAGE> 5

DELL COMPUTER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
of Dell Computer Corporation (the "Company") should be read in conjunction with
the consolidated financial statements and notes thereto filed with the
Securities and Exchange Commission in the Company's Annual Report on Form 10-K
for the fiscal year ended January 28, 1996. In the opinion of management, the
accompanying condensed consolidated financial statements reflect all
adjustments (consisting only of normal recurring accruals) considered necessary
to present fairly the financial position of Dell Computer Corporation and its
consolidated subsidiaries at July 28, 1996 and January 28, 1996 and the results
of their operations for the three-month and six-month periods ended July 28,
1996 and July 30, 1995. Certain amounts from prior periods have been
reclassified to conform to current period presentation. All share and per
share information for fiscal 1996 has been retroactively restated to reflect
the two-for-one common stock split which took place during the third quarter of
fiscal 1996.

NOTE 2 -- REPURCHASE OF DEBT

On May 23, 1996, the Company commenced an offer to purchase for cash
the entire $100 million principal amount of its outstanding 11% Senior Notes
Due August 15, 2000 (the "Senior Notes"). This offer was completed on June
26, 1996, with the Company repurchasing $68 million principal amount of Senior
Notes. On July 22, 1996, the Company commenced a second offer to purchase the
remaining $32 million principal amount of Senior Notes and classified the
$32 million principal amount of Senior Notes as current liabilities at July 28,
1996. The second offer was completed on August 21, 1996, with the Company
repurchasing an additional $27 million principal amount. The remaining $5
million principal amount of Senior Notes will be reclassified to long-term debt
during the third quarter of fiscal 1997. As a result of these repurchases, the
Company recorded an extraordinary loss of $9.3 million (net of tax benefit of
$5.0 million) during the second quarter of fiscal 1997 and will record an
additional extraordinary loss of $3.6 million (net of tax benefit of $1.9
million) during the third quarter of fiscal 1997.

In connection with the second repurchase, the indenture under which
the Senior Notes were issued (and which will continue to govern the remaining
$5 million principal amount) was amended to eliminate certain covenants,
including restrictive financial and operating covenants.

NOTE 3 -- FINANCING ARRANGEMENTS

On June 6, 1996, the Company entered into a $100 million 364-day
revolving credit facility and a $150 million 3-year revolving credit facility.
These facilities replace the Company's $200 million bilateral lines of credit,
which expired or were terminated on that date. Under the new credit
agreements, the Company is subject to covenants based on net
debt-to-capitalization and interest coverage ratios. Advances under the
facilities bear interest at a defined "Base Rate" or at a specified margin over
a defined "Eurodollar Rate," depending on the type of advance. Both facility
fees and the specified margin on Eurodollar Rate advances vary from time to
time depending on the Company's credit ratings and cash conversion rates. No
borrowings were outstanding under these facilities during the second quarter of
fiscal 1997.

NOTE 4 -- STOCK REPURCHASE PROGRAM

During the second quarter of fiscal 1997, the Board of Directors of
the Company increased the maximum number of shares that may be repurchased
under its stock repurchase program from 12 million to 16 million shares. From
inception on February 22, 1996 through July 28, 1996, the Company repurchased
a total of 5.2 million shares of common stock under the program for an
aggregate purchase price of $199 million. All such shares were purchased in
open market transactions. Approximately .7 million shares of stock
repurchased under this program were re-issued in connection with employee
stock-based benefit plans.

4
<PAGE> 6

At July 28, 1996, the Company held equity option arrangements with
respect to an aggregate of 5.3 million additional shares of common stock. These
arrangements provide the Company the ability to purchase shares at an average
price of $36.50 per share. During the first six months of fiscal 1997, the
premiums received with respect to the equity options sold of $53 million,
equaled the premiums paid for options purchased. Consequently, there was no
exchange of cash for equity options sold or options purchased during the first
six months of fiscal 1997. The options generally give the Company the choice of
net cash settlement, physical settlement or settlement in additional shares of
common stock. Each option is exercisable only at expiration and the various
expiration dates range from the third quarter of fiscal 1997 to the first
quarter of fiscal 1998. The Company's potential repurchase obligation under
put options issued in these arrangements, which totaled $181 million at July 28,
1996, has been reclassified from stockholders' equity to put options. The put
options did not have a materially dilutive effect on earnings per common share
for the second quarter and first six months of fiscal 1997.

Subsequent to July 28, 1996, the Company entered into additional
option arrangements with respect to 1.6 million shares of common stock, giving
the Company the right to purchase stock at an average price of $64.43 per
share.

NOTE 5 -- CONVERSION OF PREFERRED STOCK

Effective August 20, 1996, all 60,000 outstanding shares of Series A
Convertible Preferred Stock were converted into common stock in accordance with
their terms, resulting in the issuance of an additional 505,266 shares of
common stock.

NOTE 6 -- COMMITMENTS AND CONTINGENCIES

The Company has been named as a defendant in approximately 30
repetitive stress injury lawsuits, most of which are in New York state courts
or U.S. District Courts for the New York City area. Several are in state
courts in New Jersey, one is in the U.S. District Court for the Eastern
District of Pennsylvania and one is in U.S. District Court in Kansas. Each
plaintiff alleges that he or she suffers from symptoms generally known as
"repetitive stress injury," which allegedly were caused by the design or
manufacture of the keyboard supplied with the computer the plaintiff used. The
Company is vigorously defending the suits, which are just a few of many
lawsuits of this type that have been filed against various suppliers of
keyboards. On August 1, 1996, an appellate court in New York ruled that the
applicable statute of limitations had expired with respect to any suit that was
filed more than three years after the plaintiff first used the keyboard. If
the ruling is upheld on appeal, more than half of these cases against the
Company will probably be dismissed. Overall, the Company does not believe that
the outcome of these suits will have a material adverse effect on the Company's
financial condition or results of operations.

In August 1993, the Company received a subpoena from the United States
Department of Commerce (the "DOC") requiring the Company to provide documents
relating to exports of 486/66 computers or related components to Russia,
Ireland, Iran or Iraq from January 1992 through August 1993. The subpoena was
issued in connection with an investigation to enforce regulations under the
Export Administration Act of 1979. The Company has cooperated fully with the
DOC. The investigation has been closed, with no findings of wrongdoing by the
Company, with respect to the Company's shipments to Russia, Ireland and Iraq,
and the Company is awaiting a response from the DOC regarding shipments to
Iran. While the government could file civil or criminal charges against the
Company if the DOC alleges that the Company violated applicable export
regulations, the Company does not believe that the investigation or its outcome
will have a material adverse effect on the Company's financial condition or
results of operations.

5
<PAGE> 7

have been consolidated before a single judge. In July 1996, that judge
dismissed virtually all of the plaintiffs' claims, ruling that a previously
concluded investigation by the California Attorney General's office superseded
private causes of action under California law. Some of the same plaintiffs,
with others, have filed a similar action in New Jersey. There can be no
assurance that an adverse determination would not have a material adverse
effect on the Company's financial condition or results of operations.

In June 1995, the Company was named in a class action complaint filed
in State District Court in Travis County, Texas. The complaint alleges that
the Company has included "used parts" in its "new" computer systems and has
failed to adequately inform its customers and prospective customers of that
practice. According to the complaint, these facts constitute fraud, negligent
misrepresentation, breach of contract and breach of warranty. The plaintiffs
seek refund of the purchase price for computer systems purchased from the
Company, damages in an unspecified amount, injunctive relief, interest and
attorneys' fees. The Company plans to vigorously contest the allegations of
the complaint. To date, no discovery has occurred and it is too early for the
Company to adequately evaluate the likelihood of the plaintiffs' prevailing on
their claims. There can be no assurance that an adverse determination in this
litigation would not have a material adverse effect on the Company's financial
condition or results of operations.

NOTE 7 -- EARNINGS PER COMMON SHARE

Earnings per common share are computed by dividing net income
available to common stockholders by the weighted average number of common
shares and common stock equivalents (if dilutive) outstanding during each
period. Common stock equivalents include stock options. The Series A
Convertible Preferred Stock is not a common stock equivalent for purposes of
computing earnings per common share. The number of common stock equivalents
outstanding is computed using the treasury stock method. Dual presentation of
primary and fully diluted earnings per share has not been made because the
differences are insignificant.

NOTE 8 -- SUPPLEMENTAL FINANCIAL INFORMATION (IN MILLIONS)

Supplemental Condensed Consolidated Statement of Financial Position
Information:

<TABLE>
<CAPTION>
JULY 28, JANUARY 28,
1996 1996
------------ -------------
<S> <C> <C>
Inventories:
Production materials......................................... $ 167 $ 390
Work-in-process and finished goods........................... 37 39
------------ -------------
$ 204 $ 429
============ =============
Accrued and other liabilities:
Royalties and licensing...................................... $ 36 $ 51
Accrued compensation......................................... 61 52
Accrued warranty costs....................................... 92 78
Taxes other than income taxes................................ 56 76
Deferred profit on warranty contracts........................ 80 67
Book overdrafts.............................................. 6 59
Other........................................................ 132 90
------------ -------------
$ 463 $ 473
============ =============
</TABLE>

6
<PAGE> 8

Supplemental Condensed Consolidated Statement of Income Information:

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------ ------------------------
JULY 28, JULY 30, JULY 28, JULY 30,
1996 1995 1996 1995
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Financing and other income (expense), net:
Investment income, net.............................. $ 10 $ 6 $ 17 $ 11
Interest expense.................................... (2) (4) (5) (8)
Foreign currency transactions....................... -- (1) 1 (2)
Other............................................... (1) -- (2) (1)
--------- --------- --------- ---------
$ 7 $ 1 $ 11 $ --
========= ========= ========= =========
</TABLE>

Supplemental Condensed Consolidated Statement of Cash Flows Information:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------------------
JULY 28, JULY 30,
1996 1995
----------- -----------
<S> <C> <C>
Changes in operating working capital accounts:
Accounts receivable, net..................................... $ (105) $ (118)
Inventories.................................................. 225 (87)
Accounts payable............................................. 244 27
Accrued and other liabilities................................ (53) 88
Other, net................................................... 24 8
----------- -----------
$ 335 $ (82)
=========== ===========

Changes in non-current assets and liabilities:
Other assets................................................. $ 1 $ (4)
Other liabilities............................................ 63 9
----------- -----------
$ 64 $ 5
=========== ===========

</TABLE>

The Company accounts for highly liquid investments with maturities of
three months or less at date of acquisition as marketable securities and
reflects the related cash flows as investing cash flows. As a result, a
significant portion of its gross marketable securities purchases and maturities
disclosed as investing cash flows is related to highly liquid investments.

7
<PAGE> 9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

All percentage amounts and ratios were calculated using the underlying data in
thousands. Operating results for the three-month and six-month periods ended
July 28, 1996 are not necessarily indicative of the results that may be
expected for the full fiscal year. The conversion of shares of Series A
Convertible Preferred Stock into common stock during the first quarter of
fiscal 1996, discussed more fully in the Company's Annual Report on Form 10-K
for the fiscal year ended January 28, 1996, had the effect of reducing primary
earnings per common share by $0.18 for the six-month period ended July 30,
1995.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the
percentage of consolidated net sales represented by certain items in the
Company's condensed consolidated statement of income.

<TABLE>
<CAPTION>
PERCENTAGE OF CONSOLIDATED NET SALES
-----------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------- -----------------------
JULY 28, JULY 30, JULY 28, JULY 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales:
Americas................................................ 67.5% 64.8% 66.3% 63.4%
Europe.................................................. 25.9 27.0 27.2 28.8
Asia Pacific and Japan.................................. 6.6 8.2 6.5 7.8
------ ------ ------ ------
Consolidated net sales................................ 100.0 100.0 100.0 100.0
Cost of sales............................................ 77.9 78.2 79.2 78.7
------ ------ ------ ------
Gross margin.......................................... 22.1 21.8 20.8 21.3
Operating expenses:
Selling, general and administrative..................... 11.5 12.2 11.3 11.7
Research, development and engineering................... 1.7 2.1 1.6 2.0
------ ------ ------ ------
Total operating expenses.............................. 13.2 14.3 12.9 13.7
------ ------ ------ ------
Operating income...................................... 8.9 7.5 7.9 7.6
Financing and other income (expense), net................ 0.4 0.1 0.3 0.0
------ ------ ------ ------
Income before income taxes and extraordinary loss.. 9.3 7.6 8.2 7.6
Provision for income taxes............................... 2.7 2.2 2.4 2.2
------ ------ ------ ------
Income before extraordinary loss........................ 6.6 5.4 5.8 5.4
Extraordinary loss, net of taxes......................... (0.5) 0.0 (0.3) 0.0
------ ------ ------ ------
Net income.............................................. 6.1 5.4 5.5 5.4
Preferred stock dividends................................ 0.0 0.0 0.0 0.5
------ ------ ------ ------
Net income available to common stockholders.............. 6.1% 5.4% 5.5% 4.9%
====== ====== ====== ======
</TABLE>

Net Sales. The second quarter of fiscal 1997 marked the Company's
tenth consecutive quarter of sequential growth in consolidated net sales.
Consolidated net sales increased 40% and 42% in the second quarter and the
first six months, respectively, of fiscal 1997 over the comparable periods of
fiscal 1996, and increased 3% over the first quarter of fiscal 1997. The
increases are attributable to increased units sold. Unit volumes increased
53% and 48%, respectively, for the second quarter and first six months of
fiscal 1997 over the comparable periods of fiscal 1996, mainly as a result of
strong demand for the Company's products across all product lines. This demand
reflects the Company's aggressive sales efforts, including pricing actions,
aimed at winning new customer accounts and increasing the penetration of
existing customer accounts. The effect of the increased unit volumes on net
sales was offset by a decline in average revenue per unit, which decreased 8%
on a sequential basis, 7% when comparing the second quarter of fiscal 1997 to
the second quarter of fiscal 1996 and 2% when comparing the first six months of
fiscal 1997 to the comparable period of fiscal 1996. The decline in average
revenue per unit resulted primarily from the Company's pricing actions
following significant component cost declines.

8
<PAGE> 10

Net sales grew in all regions for the second quarter and first six
months of fiscal 1997 compared with the same periods of fiscal 1996. The
Americas region and the Asia-Pacific region (including Japan) both experienced
sequential growth, but European net sales, consistent with historical seasonal
patterns, declined from the first quarter of fiscal 1997. After taking into
account the results of the Company's foreign currency hedging activities,
consolidated net sales (expressed in United States dollars) were not
significantly affected in the second quarter or first six months of fiscal 1997
as a result of fluctuations in foreign currency exchange rates from the
comparable periods of the prior fiscal year.

At July 28, 1996, backlog was $161 million, compared with $118 million
at the end of the first quarter of fiscal 1997 and $186.5 million at the end of
the second quarter of fiscal 1996. Supply constraint on high resolution TFT
screens, used in certain of the Company's notebook computer systems,
contributed to the backlog for the second quarter of fiscal 1997. The Company
does not believe that backlog is a meaningful indicator of sales that can be
expected for any period, and there can be no assurance that the backlog at any
point in time will translate into sales in any subsequent period, particularly
in light of the Company's policy of allowing customers to cancel or reschedule
orders without penalty prior to commencement of manufacturing.

Gross Margin. Gross margin increased $110.4 million in the second
quarter of fiscal 1997 and $193.5 million in the first six months of fiscal
1997 from the comparable periods in the prior fiscal year primarily as a result
of increased unit volumes. The Company's gross margin as a percentage of
consolidated net sales increased to 22.1% for the second quarter of fiscal
1997, compared to 21.8% for the second quarter of fiscal 1996. However, the
gross margin percentage decreased to 20.8% for the first six months of fiscal
1997 from 21.3% for the comparable period of the prior year. The decline in
gross margin percentage from the first six months of fiscal 1996 is
attributable to the first quarter of fiscal 1997 when the Company
experienced a more competitive pricing environment in Europe and a relatively
higher mix of sales to small-to-medium businesses and experienced consumers,
which generally carry lower margins. In addition to these negative impacts on
gross margin, royalties increased as a percentage of consolidated net sales,
primarily due to increased software royalty costs.

Gross margin as a percentage of consolidated net sales increased from
19.5% in the first quarter of fiscal 1997 to 22.1% in the second quarter of
fiscal 1997. This increase is the result of several factors, including
component cost declines, product mix shift within the desktop products and a
relatively lower mix of sales to small-to-medium businesses and experienced
consumers, which generally carry lower margins. During the second quarter of
fiscal 1997, the Company continued to improve its inventory position, reducing
its days in inventory to 14 days at the end of the second quarter of fiscal
1997 compared to 17 days at the end of the first quarter of fiscal 1997 and 31
days at the end of the fourth quarter of fiscal 1996. This enabled the Company
to capitalize on significant declines in the cost of certain components, such
as memory, during the second quarter of fiscal 1997. These positive
impacts on gross margin were partially offset by pricing actions taken during
the second quarter of fiscal 1997 in an effort to pass the component cost
declines through to customers.

Operating Expenses. The Company's goal is to manage operating
expenses, over time, in relation to gross margin. Over the last year, the
Company has continued to increase staffing worldwide to meet the demands of its
growth and to expand its international presence, resulting in increased
compensation-related expenses. The Company has also increased spending related
to its key global information systems project, which it began in late fiscal
1995 and expects to complete in fiscal 1999. These infrastructure expenditures
contributed in an increase in selling, general and administrative expenses of
32% and 37% in the second quarter and first six months, respectively, of fiscal
1997 from the comparable periods of the prior fiscal year. However, selling,
general and administrative expenses as a percentage of consolidated net sales
decreased in both the second quarter and the first six months of fiscal 1997
over the same periods in the prior year. Selling, general and administrative
expenses increased to 11.5% for the second quarter of fiscal 1997 compared to
11.1% reported for the first quarter of fiscal 1997.

Research, development and engineering expenses increased 14% and 17%,
respectively, in the second quarter and first six months of fiscal 1997 over
the comparable periods in the prior year, primarily as a result of the
Company's increased staffing levels and prototype costs to support increased
product development activities.

9
<PAGE> 11

The Company believes that its ability to manage operating costs is an
important factor in its ability to remain price competitive. However, the
Company will continue to invest in information systems and infrastructure to
manage and support its growth.

Financing and Other Income (Expense), Net. The increase in financing
and other income (expense), net in the second quarter and first six months of
fiscal 1997 from the comparable periods of the prior fiscal year was primarily
due to increased investment income due to higher average investment balances
and decreased interest expense resulting from the repurchase of $68 million
of principal amount of its 11% Senior Notes Due August 15, 2000 (the "Senior
Notes") in the second quarter of fiscal 1997. See Note 8 of Notes to Condensed
Consolidated Financial Statements for detail regarding financing and other
income (expense), net. See Note 2 of Notes to Condensed Consolidated Financial
Statements for additional information regarding the repurchase of the Senior
Notes.

Income Tax. The Company's effective tax rate for the second quarter
and first six months of both fiscal 1997 and 1996 was 29%.

HEDGING ACTIVITIES

The results of the Company's international operations are affected by
changes in exchange rates between certain foreign currencies and the United
States dollar. Consequently, the Company conducts a foreign currency hedging
program to reduce its exposure to the risk that the dollar-value equivalent of
anticipated cash flows will be adversely affected by changes in foreign
currency exchange rates. The Company uses foreign currency purchased option
contracts and forward contracts in an effort to reduce its exposure to currency
fluctuations involving anticipated, but not firmly committed, transactions and
transactions with firm foreign currency commitments. For a discussion
regarding how the results of the Company's international operations are
affected by changes in exchange rates between certain foreign currencies and
the U.S. dollar and a discussion regarding the Company's hedging program,
including the accounting for transactions conducted under such program, see
Note 1 and Note 4 included in "Item 8 -- Financial Statements and Supplementary
Data" and "Hedging Activities" in "Item 7 -- Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the fiscal year ended January 28, 1996.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities for the first six months of
fiscal 1997 of $617 million represented the Company's primary source of cash
during the first half of the fiscal year. Operating cash flows for the first
six months of fiscal 1997 benefited from the decline in inventory levels to 14
days at the end of the second quarter of fiscal 1997 from 31 days at the end of
fiscal 1996. The decreased days in inventory resulted from tighter inventory
management and declining component costs. Operating cash flows further
benefited from increased days in accounts payable to 48 days at the end the
second quarter of fiscal 1997 from 33 days at the end of fiscal 1996. Working
capital totaled $969 million at July 28, 1996 compared with $1,018 million at
January 28, 1996. Days in accounts receivable at the end of the second quarter
of fiscal 1997 increased slightly to 44 days from 42 days at the end of fiscal
1996.

The Company incurred $57 million of capital expenditures during the
first six months of fiscal 1997, primarily to construct facilities, to acquire
information systems (principally hardware and third-party software licenses)
and to acquire personal computer office equipment. Capital expenditures for
fiscal 1997 are expected to be approximately $130 million, due primarily to the
construction of facilities, the acquisition of information systems and the
acquisition of computer equipment for internal use. The Company believes that
its cash and marketable securities and cash flows from operating activities
will be adequate to fund its planned fiscal 1997 capital expenditures.

The Company instituted a stock repurchase program during the first
quarter of fiscal 1997, and through July 28, 1996 had repurchased a total of
5.2 million shares of common stock for an aggregate purchase price of $199
million. For further discussion regarding the Company's stock repurchase
program, see Note 4 of Notes to Condensed Consolidated Financial Statements.

10
<PAGE> 12

The Company repurchased $68 million principal amount of its Senior
Notes on June 26, 1996 and repurchased an additional $27 million principal
amount on August 21, 1996. As a result of these repurchases, the Company
recorded an extraordinary loss of $9.3 million (net of tax benefit of $5.0
million) during the second quarter of fiscal 1997 and will record an additional
extraordinary loss of $3.6 million (net of tax benefit of $1.9 million) during
the third quarter of fiscal 1997. See Note 2 of Notes to Condensed
Consolidated Financial Statements.

On June 6, 1996, the Company entered into a $100 million 364-day
revolving credit facility and a $150 million 3-year revolving credit facility.
These facilities replace the Company's $200 million bilateral lines of credit,
which expired or were terminated on that date. Under the new credit agreements,
the Company is subject to covenants based on net debt-to-capitalization and
interest coverage ratios. Advances under the facilities bear interest at a
defined "Base Rate" or at a specified margin over a defined "Eurodollar Rate",
depending on the type of advance. Both facility fees and the specified margin
on Eurodollar Rate advances vary from time to time depending on the Company's
credit ratings and cash conversion rates. No borrowings were outstanding
under the facilities during the second quarter of fiscal 1997.

Several of the Company's subsidiaries sell certain accounts receivable
and related assets to Dell Receivables L.P. ("Dell Receivables"), a
wholly-owned subsidiary of the Company. Dell Receivables transfers such
accounts receivable and related assets to the Dell Trade Receivables Master
Trust (the "Master Trust"). The Master Trust issues certificates evidencing
fractional undivided interests therein, which certificates may be sold to
investors. This arrangement gives Dell Receivables the ability to raise up to
$150 million through the sale of certificates of interest in the Master Trust.
Dell Receivables is obligated to pay a commitment fee on the unused portion of
the facility. During the second quarter of fiscal 1997, this facility was
unused.

The Company's commitments to use cash include the obligation for the
outstanding Senior Notes (see Note 2 of Notes to Condensed Consolidated
Financial Statements), the repayment of the outstanding balance of a $14 million
secured loan, the payment of operating lease commitments and the Company's
potential obligation under its stock repurchase program.

Management believes that the Company will have sufficient resources
available to meet its cash requirements through at least the next twelve
months. Cash requirements for periods beyond the next twelve months depend on
the Company's profitability, its ability to manage working capital requirements
and its rate of growth.

FACTORS AFFECTING THE COMPANY'S BUSINESS AND PROSPECTS

Statements in this Report that relate to future results or events are
based on the Company's current expectations. There are many factors that
affect the Company's business and the results of its operations and may cause
the actual results of operations in future periods to differ materially from
those currently expected or desired. These factors include general economic
and business conditions; the level of demand for personal computers; the level
and intensity of competition in the personal computer industry and the pricing
pressures that may result; the ability of the Company to timely and effectively
manage periodic product transitions and component availability; the ability of
the Company to develop new products based on new or evolving technology and the
market's acceptance of those products; the ability of the Company to manage its
inventory levels to minimize excess inventory, declining inventory values and
obsolescence; the product, customer and geographic sales mix of any particular
period; and the Company's ability to continue to improve its infrastructure
(including personnel and systems) to keep pace with the growth in its overall
business activities. For a discussion of these and other factors affecting the
Company's business and prospects, see "Item 1 -- Business -- Factors Affecting
the Company's Business and Prospects" in the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1996.

The computer industry is characterized by continuing improvements in
technology, which result in the frequent introduction of new products, short
product life cycles and continual improvement in product price/performance
characteristics. Achieving a successful product transition is one of the
biggest challenges facing

11
<PAGE> 13

computer companies, and the Company anticipates several significant product
transitions during the remainder of fiscal 1997. Although the Company has
instituted several refinements to its internal processes in an attempt to avoid
the types of product transition problems it experienced during the fourth
quarter of fiscal 1996, there can be no assurance that the Company will not
experience similar problems in the upcoming product transitions. A failure on
the part of the Company to effectively manage the periodic transitions will
directly affect the demand for the Company's products and the profitability of
the Company's operations.

The Company's ability to maintain a low inventory level and achieve a
high number of inventory turns is dependent on many factors, including market
demand for the Company's products and the price and availability of component
supplies. Some of these factors are beyond the Company's control. Although
the Company was successful in managing its inventory to low levels during the
first and second quarters of fiscal 1997, there can be no assurance that the
Company will be able to achieve similar success in future periods.

The Company's ability to maintain low inventory levels during the
first half of fiscal 1997 enabled the Company to capitalize on significant
declines in the cost of certain components, such as memory, which, among
other things, contributed to a significant sequential increase in gross margin
percentage from the first quarter of fiscal 1997 to the second quarter of
fiscal 1997 despite aggressive pricing. The Company is likely to experience
some gross margin pressure during future quarters as competitors begin to
realize the effects of the decreased component costs.

12
<PAGE> 14

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In May 1995, the Company was named, along with two other computer
manufacturers and one computer monitor vendor, in a class action complaint
filed in the California Superior Court for Marin County. Subsequently, several
other similar actions were filed in California Superior Courts for other
counties, naming a total of 48 defendants, including the Company. The
complaints in all of these cases allege that each of the defendants has engaged
in false or misleading advertising with regard to the size of computer monitor
screens. The plaintiffs seek restitution in the form of refunds or product
exchange, damages, punitive damages and attorneys' fees. The cases have been
consolidated before a single judge. In July 1996, that judge dismissed
virtually all of the plaintiffs' claims, ruling that a previously concluded
investigation by the California Attorney General's office superseded private
causes of action under California law. Some of the same plaintiffs, with
others, have filed a similar action in New Jersey. There can be no assurance
that an adverse determination would not have a material adverse effect on the
Company's financial condition or results of operations.

13
<PAGE> 15

ITEM 2. CHANGES IN SECURITIES

On July 22, 1996, the Company commenced a tender offer to purchase the
$32,249,000 principal amount of its Senior Notes then outstanding. In
connection with that offer, the Company also sought consents to certain
amendments to the indenture under which the Senior Notes were issued to
eliminate certain covenants. The tender offer expired on August 16, 1996, and
the Company accepted for payment and paid for $26,764,000 principal amount of
Senior Notes. Because the Senior Notes tendered to, and purchased by, the
Company pursuant to the tender offer constituted a majority of the Senior Notes
outstanding at the commencement of the offer, the supplemental indenture
reflecting the proposed amendments was approved and executed on August 16,
1996, and the provisions thereof resulting in the elimination of the covenants
became effective on August 21, 1996. A copy of the supplemental indenture is
filed as Exhibit 4 to this Report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of the Company's stockholders was held on July 12,
1996. At that meeting, two proposals were submitted to a vote of the Company's
stockholders. Proposal 1 was a proposal to elect three Class II directors
(with Michael S. Dell, Michael H. Jordan and Klaus S. Luft being the nominees).
Proposal 2 was a proposal to ratify the selection of Price Waterhouse LLP as
the Company's independent accountants for fiscal 1997.

At the close of business on the record date for the meeting (which was
May 17, 1996), there were 90,492,004 shares of common stock issued and
outstanding and entitled to vote at the meeting. Holders of 79,442,797 shares
of common stock (representing a like number of votes) were present at the
meeting, either in person or by proxy. The following table sets forth the
results of the voting on each of the proposals (including, in the case of
Proposal 1, the results of the voting with respect to each nominee):

<TABLE>
<CAPTION>
NUMBER OF VOTES
-------------------------------------------------------------
BROKER
PROPOSAL FOR AGAINST (a) ABSTAIN NON-VOTE
- --------------------------------------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Proposal 1 -- Election of directors:

Michael S. Dell.................... 75,492,824 3,949,973 -- --

Michael H. Jordan.................. 75,492,816 3,949,981 -- --

Klaus S. Luft...................... 75,493,676 3,949,121 -- --

Proposal 2 -- Ratification of selection of
independent accountants............ 79,320,217 51,757 70,823 --
</TABLE>

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

(a) In the case of Proposal 1, constitutes number of votes cast to withhold
authority to vote in favor of the nominees.

Consequently, both of the proposals were passed by the stockholders.

14
<PAGE> 16

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

The following exhibits are filed as part of this Report:

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<S> <C>
4 First Supplemental Indenture, dated as of August 16, 1996, between the Company and State
Street Bank and Trust Company, as successor trustee to The First National Bank of Boston,
regarding the Company's 11% Senior Notes Due August 15, 2000

10.1 Credit Agreement, dated as of June 6, 1996, among the Company (as Borrower), Citibank, N.A.
(as Administrative Agent), Chemical Bank (as Co-Agent), and the banks named therein relating
to a $100,000,000 364-Day Revolving credit Facility

10.2 Credit Agreement, dated as of June 6, 1996, among the Company (as borrower), Citibank, N.A.
(as Administrative Agent), Chemical Bank (as Co-Agent), and the banks named therein relating
to a $150,000,000 Three-Year Revolving Credit Facility

11 Statement Re Computation of Per Share Earnings

27 Financial Data Schedule
</TABLE>

(b) Reports on Form 8-K.

On May 23, 1996, the Company filed a Current Report on Form 8-K
reporting under Item 5 the commencement by the Company of a tender offer for
all $100 million principal amount of its 11% Senior Notes Due August 15, 2000.
No financial statements were included in such Current Report.

15
<PAGE> 17

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

DELL COMPUTER CORPORATION

September 6, 1996 /s/ Catherine P. Thompson
------------------------------------
Catherine P. Thompson
Vice President, Corporate Controller
(On behalf of the registrant and as
chief accounting officer)

16
<PAGE> 18

INDEX TO EXHIBITS

11 Statement Re Computation of Per Share Earnings

27 Financial Data Schedule
</TABLE>

<PAGE> 1
EXHIBIT 4

FIRST SUPPLEMENTAL INDENTURE

This First Supplemental Indenture, dated as of August 16, 1996, is entered
into between Dell Computer Corporation, a Delaware corporation (the "Company")
having its principal office at 2214 West Braker Lane, Suite D, Austin, Texas
78758-4053, and State Street Bank and Trust Company, a Massachusetts trust
company duly organized and existing under the laws of the Commonwealth of
Massachusetts, as successor trustee to The First National Bank of Boston (the
"Trustee").

RECITALS

A. The Company and the Trustee have heretofore executed and delivered an
Indenture, dated as of August 15, 1993 (the "Indenture"), pursuant to which the
Company issued its 11% Senior Notes Due August 15, 2000 in the aggregate
principal amount of $100,000,000 (the "Securities"). All capitalized terms
used herein that are not otherwise defined herein shall have the respective
meanings ascribed to them in the Indenture.

B. Section 902 of the Indenture provides that with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indenture supplemental to the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of modifying in any manner the rights
of the Holders under the Indenture (with certain exceptions not relevant to
this First Supplemental Indenture).

C. The Company desires and has requested the Trustee to join with it in
entering into this First Supplemental Indenture for the purpose of amending the
Indenture in certain respects as permitted by said Section 902.

D. The Company has been soliciting consents to the substance of this First
Supplemental Indenture upon the terms and subject to the conditions set forth
in its Offer to Purchase dated July 22, 1996 and in the related Letter of
Transmittal and Consent (which together constitute the "Offer").

E. The Company has (1) filed with the Trustee consents to the substance of
this First Supplemental Indenture executed and delivered by the Holders of not
less than a majority in principal amount of the Outstanding Securities of
record as of July 22, 1996 (the record date fixed under Section 104(c) of the
Indenture for the purpose of determining the Holders entitled to give such
consents), (2) delivered to the Trustee an Opinion of Counsel relating to this
First Supplemental Indenture as contemplated by Section 903 of the Indenture
and (3) satisfied all other conditions required under Article Nine of the
Indenture to enable the Company and the Trustee to enter into this First
Supplemental Indenture.

<PAGE> 2

Now, therefore, for and in consideration of the foregoing, the Company and
the Trustee agree for the benefit of the other and for the equal and ratable
benefit of the Holders of the Securities as follows:

SECTION 1 -- AMENDMENT OF INDENTURE. The Indenture and the provisions
thereof are hereby amended as follows:

If the Company notifies the Trustee in writing that it has
accepted for payment and paid for all Securities validly tendered
pursuant to the Offer and not withdrawn prior to the expiration of
the Offer, then (and only then) the following provisions shall
automatically become effective (without further act by any
Person):

(a) The Company shall be released from its obligations under
Sections 1005 through 1018, inclusive, and Clauses (3), (4) and
(5) of Section 801 of the Indenture; and

(b) The occurrence of an event specified in Sections 501(3),
501(4) (with respect to Clauses (1), (3), (4) or (5) of Section
801), 501(5) (with respect to any of Sections 1005 through 1018,
inclusive), 501(6), 501(7) and 501(8) shall not be deemed to be an
"Event of Default" under the Indenture.

For this purpose, the preceding sentence means that the Company
may omit to comply with and shall have no liability with respect
to any term, condition or limitation set forth in any Section or
Clause referred to therein, whether directly or indirectly by
reason of any reference elsewhere in the Indenture to any such
Section or Clause or by reason of any reference in any such
Section or Clause to any other provision in the Indenture or in
any other document, and such omission to comply shall not
constitute a default or Event of Default under Section 501 of the
Indenture or otherwise but the remainder of the Indenture and the
Securities shall be unaffected thereby.

SECTION 2 -- TRUSTEE DISCLAIMER. The Trustee has accepted the amendment
of the Indenture effected by this First Supplemental Indenture and agrees to
execute the trust created by the Indenture as hereby amended, but only upon the
terms and conditions set forth in the Indenture, including the terms and
provisions defining and limiting the liabilities and responsibilities of the
Trustee, and without limiting the generality of the foregoing, the Trustee
shall not be responsible in any manner whatsoever for or with respect to any of
the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company, or for or with respect to (a) the
validity or sufficiency of this First Supplemental Indenture or any of the
terms or provisions hereof, (b) the proper authorization hereof by the Company
by corporate action or otherwise, (c) the due execution hereof by the Company,
(d) the consequences (direct or indirect and whether deliberate or inadvertent)
of any

<PAGE> 3

amendment herein provided for, and the Trustee makes no representation with
respect to any such matters and (e) the validity or sufficiency of the Offer or
the consent solicitation materials or procedure in connection therewith.

SECTION 3 -- MISCELLANEOUS.

(a) Except as amended hereby, the Indenture shall remain in full force and
effect in accordance with its terms.

(b) All references in the Indenture to the "Indenture" (and terms therein
such as "hereof" or "herein") shall be deemed to be references to the Indenture
as modified by this First Supplemental Indenture.

(c) This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

In witness whereof, the parties hereby have caused this First Supplemental
Indenture to be duly executed as of the date first above written.

DELL COMPUTER CORPORATION

By: /s/ ALEX C. SMITH
--------------------------------
Alex C. Smith,
Vice President, Treasurer

STATE STREET BANK AND TRUST COMPANY,
as Trustee

By: /s/ JILL OLSEN
---------------------------------
Name: Jill Olsen
Title: Assistant Vice President

<PAGE> 4

STATE OF TEXAS

COUNTY OF TRAVIS

On August 16, 1996, before me personally appeared Alex C. Smith, to me
known, who, being by me duly sworn, did depose and say that he is the Vice
President, Treasurer of Dell Computer Corporation, a Delaware corporation, one
of the parties described in and that executed the foregoing instrument, and
that he signed his name thereto by authority of the Board of Directors on
behalf of such corporation.

/s/ STEPHANIE J. SALMON
-------------------------------------
Notary Public in and for the
State of Texas

4
<PAGE> 5
COMMONWEALTH OF MASSACHUSETTS

COUNTY OF SUFFOLK

On August 16, 1996, before me personally appeared Jill Olsen, to me known,
who, being by me duly sworn, did depose and say that he is the Assistant Vice
President of State Street Bank and Trust Company, a Massachusetts trust company
duly organized and existing under the laws of the Commonwealth of
Massachusetts, one of the parties described in and that executed the foregoing
instrument, and that he signed his name thereto by authority of the Board of
Directors on behalf of such banking association.

/s/ JOAO G. CORREIA
--------------------------------------
Notary Public in and for the
Commonwealth of Massachusetts

<PAGE> 1
EXHIBIT 10.1

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

$100,000,000

364-DAY REVOLVING CREDIT FACILITY

CREDIT AGREEMENT

DATED AS OF JUNE 6, 1996

AMONG

DELL COMPUTER CORPORATION

AS BORROWER,

THE BANKS NAMED HEREIN

AS BANKS,

CITIBANK, N.A.

AS ADMINISTRATIVE AGENT,

AND

CHEMICAL BANK,

AS CO-AGENT

CITICORP SECURITIES, INC., ARRANGER

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

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

2.01. The Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.02. The Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.03. The Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.04. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.05. Terminations and Reductions of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.06. Repayment of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.07. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.08. Additional Interest on Eurodollar Rate
Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.09. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.10. Prepayments of Revolving Credit Advances and
Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.11. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.13. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.14. Optional Conversion of Revolving Credit
Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.15. Extension of Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

ARTICLE III

MAKING THE ADVANCES

3.01. Making the Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.02. Making the Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.03. Making the Swing Line Advances, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.04. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.05. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.06. Right to Replace Affected Person or Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.07. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE IV

CONDITIONS OF LENDING

4.01. Conditions Precedent to Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C> <C>
4.02. Conditions Precedent to Each Revolving Credit Borrowing and Swing Line Borrowing . . . . . . . . . . 55
4.03. Conditions Precedent to Each Competitive Bid Borrowing . . . . . . . . . . . . . . . . . . . . . . . 55
4.04. Conditions Precedent to Extension of Termination Date . . . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.01. Representations and Warranties of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE VI

COVENANTS OF THE BORROWER

6.01. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.02. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.03. Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

ARTICLE VII

EVENTS OF DEFAULT

7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

ARTICLE VIII

THE ADMINISTRATIVE AGENT

8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.02. Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.03. Agents and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.04. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.06. Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

ARTICLE IX

MISCELLANEOUS

9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.06. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.07. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.10. Jurisdiction, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.11. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
</TABLE>

ii
<PAGE> 4

SCHEDULES
- ---------

Schedule I - List of Applicable Lending Offices
Schedule II - Existing Liens

EXHIBITS
- --------

Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Notice of Revolving Credit Borrowing
Exhibit B-2 - Notice of Competitive Bid Borrowing
Exhibit C-1 - Form of Assignment and Acceptance
Exhibit C-2 - Form of Assumption Agreement
Exhibit D - Form of Opinion of Counsel to the Borrower
Exhibit E - Form of Opinion of Special New York
Counsel to the Administrative Agent

iii
<PAGE> 5

CREDIT AGREEMENT
Dated as of June 6, 1996

DELL COMPUTER CORPORATION, a Delaware corporation (the
"Borrower"), the banks listed on the signature pages hereof under the heading
"Banks" (the "Banks"), CITIBANK, N.A. ("Citibank"), as administrative agent for
the Lenders hereunder (in such capacity, the "Administrative Agent"), CHEMICAL
BANK ("Chemical"), as co-agent for such Lenders (in such capacity, the
"Co-Agent"), and CITICORP SECURITIES, INC., as Arranger (in such capacity, the
"Arranger").

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.

"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at its office at 1
Court Square, Long Island City, New York, New York 11120, Account No. 36852248,
Attention: John Makrinos (or his/her successor), or such other account
maintained by the Administrative Agent as may be designated by the
Administrative Agent in a written notice to the Lenders and the Borrower.

"Advances" means, collectively, the Revolving Credit Advances,
the Swing Line Advances, and the Competitive Bid Advances.

"Affected Person" has the meaning specified in Sections
2.12(i), 3.04(c) and 3.05.

"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a partner, member, director or officer of such Person.
For purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 10% or more of
the Voting Stock of such Person or

Dell Computer Credit Agreement

<PAGE> 6
-2-

to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.

"Agreement Value" means, with respect to any Hedge Agreement
at any date of determination, the amount, if any, that would be payable to any
counterparty thereunder in respect of the "agreement value" under such Hedge
Agreement if such Hedge Agreement were terminated on such date, calculated as
provided in the International Swap Dealers Association, Inc. Code of Standard
Wording, Assumptions and Provisions for Swaps, 1986 Edition.

"Annual Audited Financial Statements" means the annual
Consolidated financial statements of the Borrower, including all notes thereto,
which statements shall include a balance sheet and a statement of stockholders'
equity as of the end of the relevant fiscal year and an income statement and a
statement of cash flows for such fiscal year, all setting forth in comparative
form the corresponding figures from the previous fiscal year, all prepared in
conformity with GAAP and accompanied by an unqualified report and opinion of
independent certified public accountants with an accounting firm of national
standing and reputation, which shall state that such financial statements, in
the opinion of such accountants, present fairly, in all material respects, the
Consolidated financial position of the Borrower and its Subsidiaries as of the
date thereof and the results of its operations and cash flows for the period
covered thereby in conformity with GAAP, consistently applied.

"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Administrative Agent as its Applicable
Lending Office with respect to such Competitive Bid Advance.

"Applicable Margin" means, as of any date, with respect to any
Eurodollar Rate Advance, a percentage per annum equal to the applicable
percentage per annum for the applicable Debt/Credit Rating and Liquidity Rating
for such date (which in the case of the Liquidity Rating shall be established
by the compliance certificate delivered pursuant to Section 4.01(a)(vi) or
6.01(i)(viii), as the case may be), set forth below in Column A; provided,
however, that, if on any date the aggregate outstanding principal amount of all
Advances exceeds an amount equal to 50% of the aggregate Commitments, the
Applicable Margin

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<PAGE> 7
-3-

on such date with respect to any such Eurodollar Rate Advance shall be the
applicable percentage per annum for the Debt/Credit Rating and Liquidity Rating
set forth below under Column B:

===================================================================================================================================
Applicable Margin (p.a.)
-------------------------------------------------------------------------------------------------
Liquidity Rating 1 Liquidity Rating 2 Liquidity Rating 3
--------- ------ - --------- ------ - --------- ------ -
Debt/Credit Rating
S & P/Moody's Column A Column B Column A Column B Column A Column B
----------- ------ - ------ - ------ - ------ - ------ - ------ -
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Level 1 .225% .25% .275% .30% .35% .375%
----- -
BBB-/Baa3
or higher
- -----------------------------------------------------------------------------------------------------------------------------------
Level 2 .3125% .375% .375% .4375% .5625% .625%
----- -
BB+ or BB/
Ba1 or Ba2
- -----------------------------------------------------------------------------------------------------------------------------------
Level 3 .6875% .75% .875% 1.0% 1.0% 1.25%
----- -
Less than
Level 2
===================================================================================================================================
</TABLE>
Any change in the Applicable Margin shall become effective on such date of the
receipt of such compliance certificate by the Administrative Agent.

"Applicable Facility Fee Percentage" means, as of any date,
the applicable percentage per annum set forth below based upon the
Debt/Credit Rating and Liquidity Rating in effect on such date (which
in the case of the Liquidity Rating shall be established by the
compliance certificate delivered pursuant to Section 4.01(a)(vi) or
6.01(i)(viii), as the case may be):

Dell Computer Credit Agreement
<PAGE> 8
-4-

<TABLE>
<CAPTION>
================================================================================
Facility Fee (percent p.a.)
Debt/Credit ---------------------------------------------------
Rating Liquidity Liquidity Liquidity
S&P/Moody's Rating 1 Rating 2 Rating 3
================================================================================
<S> <C> <C> <C>
Level 1 .07% .085% .10%
----- -
BBB-/Baa3 or
higher
- --------------------------------------------------------------------------------
Level 2 .10% .125% .1875%
----- -
BB+ or BB/
Ba1 or Ba2
- --------------------------------------------------------------------------------
Level 3 .20% .275% .325%
----- -
Less than Level 2
================================================================================
</TABLE>

Any change in the Applicable Facility Fee Percentage shall become effective on
such date of the receipt of such compliance certificate by the Administrative
Agent.

"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee accepted by the
Administrative Agent in accordance with Section 9.07(d), in substantially the
form of Exhibit C-1.

"Assuming Lender" has the meaning specified in Section 2.15.

"Assumption Agreement" means an assumption agreement entered
into between a Non-Consenting Lender and an Assuming Lender, accepted by the
Administrative Agent and the Borrower pursuant to Section 2.15, in
substantially the form of Exhibit C-2.

"Arranger" has the meaning specified in the recital of parties
to this Agreement.

"Banks" has the meaning specified in the recital of parties to
this Agreement.

"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of:

Dell Computer Credit Agreement
<PAGE> 9
-5-

(a) the rate of interest announced publicly by Citibank in
New York, New York, from time to time, as Citibank's base rate;

(b) 0.50% per annum above the Federal Funds Rate; and

(c) the sum (adjusted to the nearest 1/16 of one percent or,
if there is no nearest 1/16 of one percent, to the next higher 1/16 of
one percent) of (i) 0.50% per annum plus (ii) the rate obtained by
dividing (x) the latest three-week moving average of secondary market
morning offering rates in the United States for three-month
certificates of deposit of major United States money center banks,
such three-week moving average (adjusted to the basis of a year of 360
days) being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank by (y) a
percentage equal to 100% minus the average of the daily percentages
specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month U.S. dollar non-personal time deposits
in the United States plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment rate payable by
Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the United
States.

Each change in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the time of such
change in the Base Rate.

"Base Rate Advance" means a Revolving Credit Advance or a
Swing Line Advance, as the case may be, that in accordance with

Dell Computer Credit Agreement
<PAGE> 10
-6-

Section 3.01, Section 3.03 or Section 2.14, bears interest as provided in
Section 2.07(a)(i).

"Base Rate Swing Line Advance" has the meaning specified in
Section 3.03(b).

"Borrower" has the meaning specified in the recital of parties
to this Agreement.

"Borrower's Account" means the account of the Borrower
maintained with Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 40574121, or such other account as may be maintained by the
Borrower with Citibank in New York, New York and designated by the Borrower in
a written notice to the Administrative Agent.

"Borrowing" means a Revolving Credit Borrowing, a Swing Line
Borrowing or a Competitive Bid Borrowing.

"Business Day" means a day on which banks are not required or
authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in
the London interbank market.

"Capitalization" means the sum of (i) debt of the Borrower and
its Subsidiaries, determined in accordance with GAAP, plus (ii) the par value
(or value stated on the books of the Borrower) of the issued and outstanding
capital stock of all classes of the Borrower, plus (or minus in the case of a
surplus deficit) (iii) the amount of the Consolidated surplus, whether capital
or earned, of the Borrower and its Subsidiaries, adjusted to exclude the excess
of (x) the cost of post-retirement benefits other than pensions recognized on
an accrual basis over (y) the cost which would have been recognized on a cash
basis.

"Cash Days" means, for any fiscal quarter of any fiscal year
of the Borrower, with respect to the Borrower, the number equal to:

(a) the quotient obtained by dividing (i) the total
amount of accounts receivable as of the end of such fiscal quarter, as
shown on the Borrower's Consolidated balance sheet as of the end of
such fiscal quarter, by (ii) the quotient obtained by dividing the
total amount of revenues for such fiscal quarter, as shown on the
Borrower's Consolidated statement of operations for such fiscal
quarter, by 90; plus

Dell Computer Credit Agreement
<PAGE> 11
-7-

(b) the quotient obtained by dividing (i) the total
amount of inventory on hand as of the end of such fiscal quarter, as
shown on the Borrower's Consolidated balance sheet as of the end of
such fiscal quarter, by (ii) the quotient obtained by dividing the
total cost of goods sold for such fiscal quarter, as shown on the
Borrower's Consolidated statement of operations for such fiscal
quarter, by 90; minus

(c) the quotient obtained by dividing (i) the total
amount of accounts payable as of the end of such fiscal quarter, as
shown on the Borrower's Consolidated balance sheet as of the end of
such fiscal quarter, by (ii) the quotient obtained by dividing the
total cost of goods sold for such fiscal quarter, as shown on the
Borrower's Consolidated statement of operations for such fiscal
quarter, by 90.

"Change in Control" means:

(i) any "person" or "group" (as such terms are used in
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended), other than Mr. Michael Dell or his "affiliates" (as such
term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended) becomes the "beneficial owner" (as defined in Rule
13d-3 of the Securities Exchange Act of 1934, as amended), directly or
indirectly, of Voting Stock of the Borrower (or other securities
convertible into such Voting Stock) representing not less than 30% of
the combined voting power of all Voting Stock of the Borrower; or

(ii ) during any period of up to 24 consecutive months,
commencing on the date of this Agreement, individuals who at the
beginning of such 24-month period were directors of the Borrower
(together with any new director whose election by the board of
directors or whose nomination for election by the stockholders of the
Borrower was approved by a vote of at least two-thirds of the
directors then in office who either were directors at the beginning of
such period or whose election or nomination for election was
previously so approved) shall cease for any reason (other than solely
as a result of (a) death or disability or (b) voluntary retirement of
any individual in the ordinary course and not for reasons related to
an actual or proposed change in control of the Borrower) to constitute
a majority of the board of directors of the Borrower; or

Dell Computer Credit Agreement
<PAGE> 12
-8-

(iii) any Person or two or more Persons acting in concert
(excluding Mr. Michael Dell and his "affiliates" (as such term is
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended)) have acquired the power to exercise, directly or indirectly,
effective control for any purpose over Voting Stock of the Borrower
(or other securities convertible into such securities) representing
not less than 30% of the combined voting power of all Voting Stock of
the Borrower.

"Citibank" has the meaning specified in the recital of parties
to this Agreement.

"Co-Agent" has the meaning specified in the recital of parties
to this Agreement.

"Commitment" means, as to any Lender, (i) the amount set forth
opposite its name on the signature pages hereof or (ii) if such Lender has
entered into one or more Assignments and Acceptances, the amount set forth for
such Lender in the Register, in each case as the same may be reduced pursuant
to Section 2.05.

"Competitive Bid Advance" means a loan by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the auction
bidding procedure described in Section 3.02.

"Competitive Bid Advance Reduction" has the meaning specified
in Section 2.01.

"Competitive Bid Borrowing" means a borrowing from each of the
Lenders whose offer to make one or more Competitive Bid Advances as part of
such borrowing has been accepted by the Borrower under the auction bidding
procedure described in Section 3.02.

"Competitive Bid Note" means a promissory note of the Borrower
payable to the order of a Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender resulting
from a Competitive Bid Advance made by such Lender.

Dell Computer Credit Agreement
<PAGE> 13
-9-

information that (i) is or becomes generally available to the public or (ii) is
or becomes available to such Person or Persons from a source other than the
Borrower or any of its Subsidiaries, unless such Person has actual knowledge
that (a) such source is bound by a confidentiality agreement or (b) such
information has been previously furnished to such Person on a confidential
basis.

"Consent Date" has the meaning specified in Section 2.15(a).

"Consenting Lender" has the meaning specified in Section
2.15(b).

"Consolidated" refers to the consolidation of accounts of the
Borrower and its Subsidiaries in accordance with GAAP.

"Consolidated EBIT" means the sum of the following on a
Consolidated basis: (i) net earnings of the Borrower and its Subsidiaries
before extraordinary items, plus (ii) income taxes, plus (iii) Gross Interest
Expense.

"Conversion", "Convert" and "Converted" each refer to a
conversion of Revolving Credit Advances of one Type into Revolving Credit
Advances of the other Type pursuant to Section 2.14.

"Corporate Credit Rating" means, as of any date, the highest
corporate credit rating that has been most recently announced by either S&P or
Moody's, as the case may be, with respect to the Borrower.

"Debt/Credit Rating" means a Public Debt Rating or, if no such
rating is available from either S&P or Moody's, a Corporate Credit Rating. For
purposes of the foregoing:

(a) if no Public Debt Rating and, for a period of 60
consecutive days, no Corporate Credit Rating shall be available from
either S&P or Moody's, the Applicable Margin and the Applicable
Facility Fee Percentage will be set in accordance with Level 3 under
the definition of "Applicable Margin" or "Applicable Facility Fee
Percentage", as the case may be;

(b) if only one of S&P and Moody's shall have in effect a
Debt/Credit Rating, the Applicable Margin and the Applicable Facility
Fee Percentage shall be determined by reference to the available
rating;

Dell Computer Credit Agreement
<PAGE> 14
-10-

(c) if the ratings established by S&P and Moody's shall fall
within different levels, the Applicable Margin and the Applicable
Facility Fee Percentage shall be based upon the higher rating,
provided that if the lower ratings fall more than one level below the
higher rating, then the Applicable Margin and the Applicable Facility
Fee Percentage shall be based on the rating set forth in the level
under the definition of "Applicable Margin" or "Applicable Facility
Fee Percentage" immediately above the level for such lower ratings;
and

(d) if any rating established by S&P or Moody's shall be
changed, such change shall be effective as of the date on which such
change is first announced publicly by the rating agency making such
change.

"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.

"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender, or such other office of such Lender as such Lender
may from time to time specify to the Administrative Agent.

"Effective Date" means the date on which the conditions
precedent set forth in Section 4.01 are satisfied.

"Eligible Assignee" means:

(i) a Lender and any Affiliate of such Lender;

(ii) a commercial bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$500,000,000;

(iii) a savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$500,000,000;

(iv) a commercial bank organized under the laws of any
other country which is a member of the OECD or a political subdivision of any
such country, and having total assets in excess of $500,000,000;

Dell Computer Credit Agreement
<PAGE> 15
-11-

(v) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership or other
entity) which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business, and having total
assets in excess of $100,000,000; and

(vi) any other Person (other than the Borrower or an
Affiliate of the Borrower) approved by the Borrower and the Administrative
Agent provided that no such approval by the Borrower shall be required while a
Default has occurred and is continuing.

"Environmental Action" means any administrative, regulatory or
judicial suit, demand, demand letter, claim, notice of non-compliance or
violation, consent order or consent agreement relating in any way to any
violation of or liability under any Environmental Law or any Environmental
Permit, including without limitation (a) any claim by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any Environmental Law, (b) any claim by
any third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to the environment and (c) any notice
by any governmental or regulatory authority alleging that the Borrower or any
of its Subsidiaries is or may be responsible for, or is a potentially
responsible party with respect to, any cleanup, removal, response, remedial or
other actions or damages pursuant to any Environmental Law.

"Environmental Law" means any federal, state or local
governmental law, rule, regulation, order, writ, judgment, injunction or decree
relating to pollution or protection of the environment or the treatment,
storage, disposal, release, threatened release or handling of Hazardous
Materials, including, without limitation, Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act and the Federal Insecticide, Fungicide and Rodenticide Act,
in each case, as amended from time to time.

Dell Computer Credit Agreement
<PAGE> 16
-12-

"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

"ERISA Affiliate" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of Sections
414(b), (c), (m) and (o) of the Internal Revenue Code.

"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived
pursuant to regulations under Section 4043 of ERISA and excluding a reportable
event under Section 4043(b)(7) of ERISA; (b) the provision by the administrator
of any Plan of such Person or any of its ERISA Affiliates of a notice of intent
to terminate such Plan pursuant to Section 4041(c) of ERISA as a distress
termination; (c) the cessation of operations at a facility of such Person or
any of its ERISA Affiliates in the circumstances described in Section 4062(e)
of ERISA; (d) the withdrawal by such Person or any of its ERISA Affiliates from
a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e) the satisfaction of
the conditions set forth in Sections 302(f)(1)(A) and (B) of ERISA to the
creation of a lien upon property or rights to property of such Person or any
ERISA Affiliate for failure to make a required payment to a Plan; (f) the
adoption of an amendment to a Plan of such Person or any of its ERISA
Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.

"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.

Dell Computer Credit Agreement
<PAGE> 17
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"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent.

"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing,
an interest rate per annum equal to the arithmetic average (rounded upward to
the nearest 1/16 of one percent) of the rates per annum at which deposits in
U.S. dollars are offered by the principal office of each of the Reference Banks
in London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount approximately equal to such Reference Bank's Eurodollar Rate Advance
comprising part of such Revolving Credit Borrowing to be outstanding during
such Interest Period. The Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing
shall be determined by the Administrative Agent on the basis of applicable
rates furnished to and received by the Administrative Agent from the Reference
Banks two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.09.

"Eurodollar Rate Advance" means a Revolving Credit Advance
that, in accordance with Section 3.01 or Section 2.14, bears interest as
provided in Section 2.07(a)(ii).

"Eurodollar Rate Reserve Percentage" means, with respect to
any Lender for any Interest Period for any Eurodollar Rate Advance made by such
Lender, the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.

Dell Computer Credit Agreement
<PAGE> 18
-14-

"Events of Default" has the meaning specified in Section 7.01.

"Existing Credit Agreements" means, collectively, (a) the
Committed Credit Line Agreement, dated as of June 8, 1995, by and between the
Borrower, certain of its Subsidiaries and Chemical Bank, (b) the Committed
Credit Line Agreement, dated as of June 8, 1995, by and between the Borrower,
certain of its Subsidiaries and Barclays Bank, PLC, (c) the Committed Credit
Line Agreement, dated as of June 8, 1995, by and between the Borrower, certain
of its Subsidiaries and Credit Lyonnais New York Branch, (d) the Committed
Credit Line Agreement, dated as of June 8, 1995, by and between the Borrower,
certain of its Subsidiaries and First Interstate Bank of Texas, N.A., (e) the
Committed Credit Line Agreement, dated as of June 8, 1995, by and between the
Borrower, certain of its Subsidiaries and NationsBank of Texas, N.A., (f) the
Committed Credit Line Agreement, dated as of June 8, 1995, by and between the
Borrower, certain of its Subsidiaries and Royal Bank of Canada, (g) the
Committed Credit Line Agreement, dated as of September 8, 1995, by and between
the Borrower, certain of its Subsidiaries and Bank of Tokyo, Ltd. and (h) the
Committed Credit Line Agreement, dated as of September 8, 1995, by and between
the Borrower, certain of its Subsidiaries and Sanwa Bank Limited, each of which
agreements establishes a committed credit line in the maximum principal amount
of $25,000,000.

"Extension Date" has the meaning specified in Section 2.15(b).

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

"Fixed Rate Advances" has the meaning specified in Section
3.02(a).

"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time,

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except that, with respect to the determination of compliance by the Borrower
with the covenants set forth in Sections 6.03(a) and (b), "GAAP" shall mean
such principles in the United States of America as in effect as of the date of,
and used in, the preparation of the audited financial statements of the
Borrower referred to in Section 5.01(b).

"Gross Interest Expense" means total gross interest expense
determined on a Consolidated basis for the Borrower and its Subsidiaries in
accordance with GAAP.

"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could
become friable, and radon gas, (b) any substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants" or "pollutants", or words of
similar meaning and regulatory effect, under any Environmental Law and (c) any
other substance exposure to which is regulated under any Environmental Law.

"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements.

"Indebtedness" means, with respect to any Person (without
duplication):

(a) all indebtedness of such Person for borrowed money;

(b) all obligations of such Person for the deferred purchase
price of Property or services (other than trade payables incurred in
the ordinary course of such Person's business but only if and for so
long as the same remain payable on customary trade terms);

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lender under such agreement in the event of default are limited to
repossession or sale of such Property);

(e) all obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as
capital leases;

(f) all obligations, contingent or otherwise, of such Person
in respect of acceptances, letters of credit or similar extensions of
credit (excluding trade payables to the extent excluded from clause
(b) above);

(g) all obligations of such Person in respect of Hedge
Agreements, valued at the Agreement Value thereof;

(h) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any
Mandatorily Redeemable Stock, valued at the greater of (i) its
voluntary or involuntary liquidation preference and (ii) the aggregate
amount payable therefor upon purchase, redemption, defeasance or
payment therefor;

(i) all Indebtedness of other Persons referred to in clauses
(a) through (h) above or clause (j) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (ii) to purchase, sell or
lease (as lessee or lessor) Property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such Indebtedness against
loss, (iii) to supply funds to, or in any other manner to invest in,
the debtor (including any agreement to pay for Property or services
irrespective of whether such property or assets are received or such
services are rendered) or (iv) otherwise to assure a creditor against
loss; and

(j) all Indebtedness referred to in clause (a) through (i)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.

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"Indemnified Party" has the meaning specified in Section
9.04(b).

"Insufficiency" means, with respect to any Plan at any time,
the amount, if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.

"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing and for each LIBO Rate
Advance comprising part of the same Competitive Bid Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or such LIBO Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, with respect to
any such Eurodollar Rate Advance, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months,
in each case as the Borrower may, upon notice received by the Administrative
Agent in accordance with the applicable provisions of Sections 3.01(a) and
3.02(a), as the case may be, select; provided, however, that:

(i) the Borrower may not select any Interest Period which
ends after the Termination Date;

(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving Credit
Borrowing and for LIBO Rate Advances comprising part of the same
Competitive Bid Borrowing shall be of the same duration;

(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, in the case of any Interest Period for a
Eurodollar Rate Advance, that if such extension would cause the last
day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day; and

(iv) whenever the first day of an Interest Period occurs
on the last day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate

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subsequent calendar month), such Interest Period shall end on the last
Business Day of the appropriate subsequent calendar month.

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

"Lenders" means, collectively, the Banks listed on the
signature pages hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 9.07.

"LIBO Rate" means, for any Interest Period for each LIBO Rate
Advance comprising part of the same Competitive Bid Borrowing, an interest rate
per annum equal to the arithmetic average (rounded upward to the nearest 1/16
of one percent) of the rates per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks in London,
England to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to the amount that would be the Reference Banks' pro
rata share of such Competitive Bid Borrowing if such Borrowing were a Revolving
Credit Borrowing to be outstanding during such Interest Period and for a period
equal to such Interest Period. The LIBO Rate for any Interest Period for each
LIBO Rate Advance comprising part of the same Competitive Bid Borrowing shall
be determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the Reference Banks
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.09.

"LIBO Rate Advances" has the meaning specified in Section
3.02(a).

"Lien" means, with respect to any Property, any lien,
mortgage, security interest, collateral assignment or other encumbrance or
restriction of any kind, including, without limitation, the lien or retained
security title of a conditional vendor or lessor arising out of the acquisition
or agreement to acquire such Property under any conditional sale agreement,
lease, sale and leaseback arrangement or other similar title retention
agreement.

"Liquidity Rating" means, as of any date, a rating of
Liquidity Rating 1, Liquidity Rating 2 or Liquidity Rating 3 for

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such date, which rating shall be based upon the number of Cash Days in the
fiscal quarter ending on or immediately prior to such date.

"Liquidity Rating 1" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is less than 30.

"Liquidity Rating 2" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is equal to or greater than 30 but less than 45.

"Liquidity Rating 3" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is equal to or greater than 45.

"Mandatorily Redeemable Stock" means, at any date of
determination, with respect to any Person, any shares of capital stock of (or
other similar ownership interest in) such Person or any other Person that, at
such date, (i) are redeemable, payable or required to be purchased or otherwise
retired or extinguished, or are convertible into any Indebtedness or other
liability of such Person, whether mandatorily or at the option of the holder
thereof (except if an event must occur to cause or permit the holder thereof to
require redemption or repurchase of such capital stock (or such other ownership
interest) and such event has not occurred at such date), prior to the then
scheduled Termination Date or (ii) are convertible into any shares of capital
stock (or other similar ownership interest) of the types referred to in clause
(i) above.

"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, Property or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the
legality, binding nature, validity or enforceability of this Agreement or any
Note or (c) the ability of the Borrower to perform its obligations under this
Agreement and the Notes.

"Material Subsidiary" means any Subsidiary of the Borrower
having (i) at least 5% of the total Consolidated assets of the Borrower and its
Subsidiaries (determined as of the last day of the most recent fiscal quarter
of the Borrower) or (ii) at least 5% of the Consolidated revenues of the
Borrower and its Subsidiaries for the fiscal year of the Borrower then most
recently ended.

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<PAGE> 24
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"Moody's" means Moody's Investors Service, Inc., or any
successor to its business.

"Multiemployer Plan" of any Person means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an obligation
to make contributions.

"Multiple Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one Person
other than such Person and its ERISA Affiliates or (b) was so maintained and in
respect of which such Person or any of its ERISA Affiliates has or would have
liability under Section 4064 or 4069 of ERISA in the event such plan has been
or were to be terminated.

"Net Debt" means, at any time, for the Borrower and its
Subsidiaries on a Consolidated basis, the excess (if any) of (i) the aggregate
outstanding principal amount of debt thereof, determined in accordance with
GAAP, plus the aggregate outstanding face amount of the Investor Certificates
(as defined in the Pooling and Servicing Agreement referred to in the
definition of "Receivables Financing") issued pursuant to the Receivables
Financing, over (ii) the aggregate amount of cash and Permitted Investments.

"Non-Consenting Lender" has the meaning specified in Section
2.15(a).

"Note" means a Revolving Credit Note or a Competitive Bid
Note.

"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 3.02(a).

"Notice of Revolving Credit Borrowing" has the meaning
specified in Section 3.01(a).

"Notice of Swing Line Borrowing" has the meaning specified in
Section 3.03(a).

"OECD" means the Organization for Economic Cooperation and
Development.

Dell Computer Credit Agreement
<PAGE> 25
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"Other Taxes" has the meaning specified in Section 2.12(b).

"PBGC" means the Pension Benefit Guaranty Corporation or any
successor.

"Permitted Investments" means, for purposes of the definition
of "Net Debt", (a) direct obligations of the United States of America, or of
any agency thereof, or obligations guaranteed as to principal and interest
thereby, in either case maturing not more than 13 months from the date of
computation, (b) certificates of deposit issued by, and repurchase and reverse
repurchase agreements with, any Lender and any bank or trust company organized
under the laws of the United States of America or any state thereof having
capital, surplus and undivided profits of at least $500,000,000 and whose
unsecured, unguaranteed long-term senior debt obligations are rated investment
grade by S&P and by Moody's, maturing in not more than 13 months from the date
of computation, and (c) commercial paper rated investment grade by S&P and
Moody's and maturing not more than 13 months from the date of computation.

"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced (or, if such a proceeding has been commenced, such proceeding is
being contested in good faith by appropriate proceedings and enforcement of any
Lien has been and is stayed):

(a) Liens for taxes, assessments and governmental changes and
Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens, statutory landlord's Liens and other
similar Liens arising in the ordinary course of business securing
obligations that are not overdue or which are being contested in good
faith and by appropriate legal proceedings diligently conducted,
provided that adequate reserves or other appropriate provisions, if
any, are maintained with respect thereto, as are required by GAAP,

(b) (1) pledges or deposits in connection with obligations
under workers' compensation, unemployment insurance and other social
security legislation laws or similar legislation, (2) deposits
securing liability to insurance carriers under insurance or
self-insurance arrangements and (3) bank offset rights arising by
operation of law,

Dell Computer Credit Agreement
<PAGE> 26
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(c) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in each case in the ordinary
course of business, and

(d) easements, encroachments, covenants, rights of way, and
other similar encumbrances incurred in the ordinary course of
business, which in the aggregate are not substantial in amount and
which do not, in any case, materially detract from the value of the
property subject thereto or materially interfere with the use of such
property for the purpose for which it is held by the owner thereof.

"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company, or other entity, or a
government or any political subdivision or agency thereof.

"Plan" means a shall mean an employee benefit or other plan
established or maintained by the Borrower or any ERISA Affiliate and that is
covered by Title IV of ERISA or a Multiple Employer Plan.

"Property" or "Properties" means any right or interest in or
to property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.

"Public Debt Rating" means, as of any date, the rating that
has been most recently announced by either S&P or Moody's, as the case may be,
for any class of long-term senior unsecured debt issued by the Borrower.

"Purchase Money Lien" means any Lien on Property, real or
personal, acquired or constructed by the Borrower or any Subsidiary of the
Borrower after January 28, 1996:

(i) to secure the purchase price of such Property;

(ii) that was existing on such Property at the time of
acquisition thereof by the Borrower or such Subsidiary and assumed in
connection with such acquisition;

(iii) to secure Indebtedness otherwise incurred to finance
the acquisition or construction of such Property

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(including, without limitation, Indebtedness incurred to finance the
cost of acquisition or construction of such Property within 24 months
after such acquisition or the completion of such construction); or

(iv) to secure any Indebtedness incurred in connection with
any extension, refunding or refinancing of Indebtedness (whether or
not secured and including Indebtedness under this Agreement) incurred,
maintained or assumed in connection with, or otherwise related to, the
acquisition or construction of such Property;

provided in each case that (1) such Liens do not extend to or cover or
otherwise encumber any Property other than Property acquired or constructed by
the Borrower and its Subsidiaries after January 28, 1996, (2) such Liens do not
cover current assets of the Borrower or any of its Subsidiaries other than
current assets that relate solely to other Property subject to such Lien and
(3) the principal amount of the Indebtedness secured by such Lien does not
exceed the aggregate cost to the Borrower to acquire or construct the Property
subject to such Lien.

"Quoted Rate Swing Line Advance" has the meaning specified in
Section 3.03(b).

"Receivables Financing" means the accounts receivable purchase
program established and evidenced by (a) that certain Receivables Purchase
Agreement, dated as of November 21, 1995, between Dell Marketing L.P., a Texas
limited partnership and a wholly-owned Subsidiary of the Borrower, as Seller,
and Dell Receivables L.P., a Texas limited partnership and a wholly-owned
Subsidiary of the Borrower ("Dell Receivables"), as Purchaser, (b) that certain
Receivables Purchase Agreement, dated as of November 21, 1995, between Dell
Direct Sales L.P., a Texas limited partnership and a wholly-owned Subsidiary of
the Borrower, as Seller, and Dell Receivables, as Purchaser, (c) that certain
Pooling and Servicing Agreement, dated as of November 21, 1995, among Dell
Receivables, as Transferor, Dell USA L.P., a Texas limited partnership and a
wholly-owned Subsidiary of the Borrower, as Servicer, and Norwest Bank
Minnesota, National Association, as Trustee, and the supplements thereto, and
(d) the other documents related to and entered into in connection with the
foregoing.

"Reference Banks" means Citibank, The Chase Manhattan Bank
(National Association) and Barclays Bank plc.

Dell Computer Credit Agreement
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"Register" has the meaning specified in Section 9.07(c).

"Required Lenders" means at any time Lenders holding at least
51% of the then aggregate unpaid principal amount of the Revolving Credit
Advances or, if no such principal amount is then outstanding, Lenders having at
least 51% of the aggregate amount of the Commitments.

"Revolving Credit Advance" means an Advance by a Lender to the
Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
Advance or a Eurodollar Rate Advance, each of which shall be a "Type" of
Revolving Credit Advance.

"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of the
Lenders pursuant to Section 2.01.

"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of a Lender, in substantially the form of Exhibit
A-1 hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.

"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or any successor to its business.

"Subsidiary" of any Person means any corporation, partnership,
joint venture, or any other type of business entity of which more than 50% of
the issued and outstanding capital stock, partnership interests, or other
indicia of equity rights issued by such business entity is at the time directly
or indirectly owned or controlled by such Person.

"Swing Line Advance" means an Advance made by a Swing Line
Bank or a Lender pursuant to Section 3.03.

"Swing Line Bank" means each of Citibank and Chemical or, as
to any Swing Line Bank, such other Lender as shall, with the consent of such
Swing Line Bank, the Administrative Agent and the Borrower, have assumed the
obligations of such Swing Line Bank with respect to any or all of such Swing
Line Bank's Swing Line Advances (and its ability to make Swing Line Advances)
hereunder.

"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by a Swing Line Bank.

Dell Computer Credit Agreement
<PAGE> 29
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"Swing Line Facility" means, as to any Swing Line Bank, an
aggregate amount not to exceed $10,000,000 at any time outstanding and, as to
all Swing Line Banks collectively, an aggregate amount not to exceed
$20,000,000 at any time outstanding.

"Swing Line Advance Rate" has the meaning specified in Section
3.03.

"Swing Line Advance Reduction" has the meaning specified in
Section 2.01.

"Taxes" has the meaning specified in Section 2.12(a).

"Termination Date" means the earlier of (a) June 5, 1997,
subject to extension with respect to each Consenting Lender pursuant to Section
2.15, and (b) the date of termination in whole of the Commitments pursuant to
Section 2.05 or 7.01.

"Type" has the meaning specified in the definition of
"Revolving Credit Advance."

"Unused Commitments" means, at any time, the aggregate amount
of the Commitments then unused and outstanding after giving effect to the
Competitive Bid Advance Reduction and the Swing Line Advance Reduction.

"Voting Stock" means capital stock issued by a corporation or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
to so vote has been suspended by the happening of such contingency.

"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.

"Withdrawal Liability" has the meaning specified in Part 1 of
Subtitle E of Title IV of ERISA.

SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" mean "to but excluding".

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SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Revolving Credit Advances.

(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Credit Advances to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Termination Date in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided that the aggregate
amount of the Commitments of the Lenders shall be deemed used from time to time
to the extent of (i) the aggregate amount of Competitive Bid Advances then
outstanding and (ii) the aggregate amount of Swing Line Advances then
outstanding, and such deemed uses of the aggregate amount of the Commitments
shall be applied to the Lenders ratably according to their respective
Commitments (such deemed uses of the aggregate amount of the Commitments with
respect to (a) Competitive Bid Advances being a "Competitive Bid Advance
Reduction" and (b) Swing Line Advances being a "Swing Line Advance Reduction").

(b) Each Revolving Credit Borrowing shall be in an aggregate
amount not less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Revolving Credit Advances of the same Type
made on the same day by the Lenders ratably according to their respective
Commitments. Within the limits of each Lender's Commitment (and subject to the
proviso in Section 2.01(a)), the Borrower may from time to time borrow, repay
pursuant to Section 2.06 or prepay pursuant to Section 2.10 and reborrow under
this Section 2.01.

SECTION 2.02. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may request Competitive Bid Borrowings from
time to time on any Business Day during the period from the date hereof until
the date occurring 30 days prior to the Termination Date in the manner set
forth in Section 3.02, provided that, following the making of each Competitive
Bid Borrowing, the aggregate amount of the Advances then outstanding shall not
exceed the aggregate amount of the Commitments of the Lenders (computed for
purposes of this Section

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2.02(a) without regard to any Competitive Bid Advance Reduction or any Swing
Line Advance Reduction).

(b) Within the limits and on the conditions set forth in this
Section 2.02, the Borrower may from time to time borrow under this Section
2.02, repay pursuant to subsection (c) below, and reborrow under this Section
2.02, provided that a Competitive Bid Borrowing shall not be made within three
Business Days of the date of any other Competitive Bid Borrowing. The Borrower
shall have no right to prepay any principal amount of any Competitive Bid
Advance.

(d) The Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the date of such Competitive Bid
Advance to the date the principal amount of such Competitive Bid Advance is
repaid in full, at the rate of interest for such Competitive Bid Advance
specified by the Lender making such Competitive Bid Advance in its notice with
respect thereto delivered pursuant to Section 3.02, payable on the interest
payment date or dates specified by the Borrower for such Competitive Bid
Advance in the related Notice of Competitive Bid Borrowing delivered pursuant
to Section 3.02, as provided in the Competitive Bid Note evidencing such
Competitive Bid Advance. All computations of interest payable in respect of
any Competitive Bid Advance shall be made on the basis of a year of 360 days
and the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest is payable.

(e) The indebtedness of the Borrower resulting from each
Competitive Bid Advance made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of the Borrower
payable to the order of the Lender making such Competitive Bid Advance.

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Line Borrowing shall be in an amount of $500,000 or an integral multiple of
$100,000 in excess thereof and shall bear interest at the Base Rate or at the
Swing Line Advance Rate for such Advance as provided in Section 3.03. Within
the limits of the Swing Line Facility and the Unused Commitments, the Borrower
may borrow under this Section 2.03, repay pursuant to Section 2.06 or prepay
pursuant to Section 2.10 and reborrow under this Section 2.03.

SECTION 2.04. Fees. (a) Facility Fees. The Borrower agrees
to pay to the Administrative Agent for the account of each Lender a facility
fee on the average daily amount (whether used or unused) of such Lender's
Commitment (computed without regard to any Competitive Bid Advance Reduction or
any Swing Line Advance Reduction) from the date of this Agreement (in the case
of each Bank), and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender (in the case of each other
Lender), until the Termination Date, payable in arrears on the last Business
Day of each calendar quarter during the term of such Lender's Commitment, and
on the Termination Date, at a rate per annum equal to the Applicable Facility
Fee Percentage in effect from time to time.

(b) Competitive Bid Advance Fee. The Borrower agrees to pay
to the Administrative Agent for its own account such fees as may from time to
time be agreed between the Borrower and the Administrative Agent in respect of
each Competitive Bid Borrowing.

(c) Administrative Agent's Fees. The Borrower agrees to pay
to the Administrative Agent for its account such fees as from time to time may
be agreed between the Borrower and the Administrative Agent.

SECTION 2.05. Terminations and Reductions of the Commitments.

(i) The Borrower shall have the right, upon at least three
Business Days' notice to the Administrative Agent, to terminate in
whole or reduce ratably in part the aggregate Unused Commitments of
the Lenders, provided that the aggregate amount of the Commitments of
the Lenders shall not be reduced to an amount which is less than the
aggregate principal amount of the Advances then outstanding, and
provided further that each partial reduction shall be in an aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof.

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(ii) The Commitments shall automatically terminate on the
date of any Change in Control.

SECTION 2.06. Repayment of Advances. (a) Revolving Credit
Advances.

(i) On the Termination Date, subject to clause (ii) below,
the Borrower shall repay to the Administrative Agent for the account
of each Lender the principal amount of each Revolving Credit Advance
made by such Lender.

(ii) On the date three Business Days after the date of the
occurrence of a Change in Control, the Borrower shall prepay to the
Administrative Agent for the account of each Lender the principal
amount of each Revolving Credit Advance made by such Lender, together
with interest accrued thereon to the date of prepayment.

(iii) On any day on which the aggregate outstanding principal
amount of the Advances exceeds the aggregate amount of the
Commitments, the Borrower shall immediately prepay to the
Administrative Agent for the account of each Lender the principal
amount of the Advances in an aggregate amount equal to the amount of
such excess, together with interest accrued thereon to the date of
prepayment.

(b) Competitive Bid Advances. On the earlier of (i) the
maturity date therefor, if such Competitive Bid Advance is a Fixed Rate
Advance, or the last day of the Interest Period therefor if such Competitive
Bid Advance is a LIBO Rate Advance (in each case as specified by the Borrower
in the related Notice of Competitive Bid Borrowing delivered pursuant to
Section 3.02, if applicable, and provided in the Competitive Bid Note
evidencing such Competitive Bid Advance), and (ii) the Termination Date, the
Borrower shall repay to the Administrative Agent for the account of each Lender
which has made a Competitive Bid Advance, or each other holder of a Competitive
Bid Note, the then unpaid principal amount of such Competitive Bid Advance.

(c) Swing Line Advances. On the earlier of (i) the maturity
date specified in the applicable Notice of Swing Line Borrowing (which maturity
date shall be no later than the seventh day after the requested date of such
Borrowing) and (ii) the Termination Date, the Borrower shall repay to each
Swing Line Bank (with notice to the Administrative Agent), and to the
Administrative Agent for the account of each other Lender that

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has made a Swing Line Advance, the outstanding principal amount of each Swing
Line Advance made by each of them.

SECTION 2.07. Interest. (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Competitive
Bid Advance as provided in Section 2.02(d). The Borrower shall pay interest on
the unpaid principal amount of each Revolving Credit Advance and Swing Line
Advance made by each Lender from the date of such Revolving Credit Advance or
such Swing Line Advance, until such principal amount shall be paid in full, at
the following rates per annum:

(i) Base Rate Advances and Swing Line Advances. If such
Revolving Credit Advance or Swing Line Advance (other than a Quoted
Rate Swing Line Advance) is a Base Rate Advance, a rate per annum
equal at all times to the Base Rate in effect from time to time, and
if it is a Quoted Rate Swing Line Advance, a rate per annum equal to
the rate provided for in Section 3.03(b)(ii), in each case payable in
arrears on the last Business Day of each calendar quarter during such
period as such Revolving Credit Advance or Swing Line Advance is
outstanding and, in each case, on the date such Revolving Credit
Advance or Swing Line Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances. If such Revolving Credit
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Revolving Credit Advance to
the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin, payable on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months,
on the day which is three months after the first day of such Interest
Period.

(b) Default Interest. Notwithstanding the foregoing, if any
Default described under Section 7.01(a) shall have occurred and be continuing,
the Borrower shall pay interest on:

(i) the unpaid principal amount of each Revolving Credit
Advance and Swing Line Advance owing to each Lender payable in arrears
on the dates referred to in Section 2.07(a)(i) or (a)(ii) above, at a
rate per annum equal at all times to two percent (2%) per annum above
the rate per annum required to be paid on such Advance pursuant to
said Section 2.07(a)(i) or (a)(ii), as applicable;

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(ii) the unpaid principal amount of each Competitive Bid
Advance owing to each Lender payable in arrears on the date or dates
interest is payable on such Competitive Bid Advance, at a rate per
annum equal at all times to two percent (2%) per annum above the rate
per annum required to be paid on such Competitive Bid Advance in the
offer made by such Lender pursuant to Section 3.02(b) and accepted by
the Borrower under Section 3.02(c) and, if applicable, provided in the
Competitive Bid Note evidencing such Competitive Bid Advance; and

(iii) the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall
be due until such amount shall be paid in full, payable in arrears on
the date such amount shall be paid in full and on demand, at a rate
per annum equal at all times to two percent (2%) per annum above the
rate per annum required to be paid on Base Rate Advances pursuant to
Section 2.07(a)(i) above.

SECTION 2.08. Additional Interest on Eurodollar Rate
Advances. The Borrower shall pay to each Lender, so long as such Lender shall
be required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Eurodollar Rate Advance until such principal amount is paid in full, at
an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the Interest Period for such Eurodollar
Rate Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Lender for such Interest Period, payable on each date on which interest is
payable on such Eurodollar Rate Advance. Such additional interest shall be
determined by such Lender and notified to the Borrower through the
Administrative Agent.

SECTION 2.09. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Administrative Agent timely information
for the purpose of determining each Eurodollar Rate and each LIBO Rate set
forth in Section 1.01. If any one or more of the Reference Banks shall not
furnish such timely information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent

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shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Banks.

(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.07(a)(i) or (ii), and the
applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section 2.07(a)(ii).

(c) If fewer than two Reference Banks furnish timely
information to the Administrative Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances or the LIBO Rate for any LIBO Rate Advances,

(i) the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be determined
for such Eurodollar Rate Advances or such LIBO Rate Advances, as the
case may be,

(ii) with respect to each Eurodollar Rate Advance, each such
Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate
Advance, and

(iii) the obligation of the Lenders to make, or to Convert Base
Rate Advances into, Eurodollar Rate Advances, or to make LIBO Bid
Advances, shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

(d) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Required Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon

(i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance, and

(ii) the obligation of the Lenders to make, or to Convert Base
Rate Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall

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notify the Borrower and such Lenders that the circumstances causing
such suspension no longer exist.

(e) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Administrative Agent will forthwith so notify the Borrower and the Lenders
and such Advances will automatically, on the last day of the then existing
Interest Period therefor, Convert into Base Rate Advances.

SECTION 2.10. Prepayments of Revolving Credit Advances and
Swing Line Advances. (a) The Borrower shall have no right to prepay any
principal amount of any Advance other than as provided in subsection (b) below.

(b) The Borrower may, upon (i) at least two Business Days'
prior notice to the Administrative Agent received not later than 12:00 noon
(New York City time) in the case of any Eurodollar Rate Advance and (ii) the
same Business Day's notice to the Administrative Agent received not later than
12:00 noon (New York City time) in the case of any Base Rate Advance, in either
case stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given, the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part of the same
Revolving Credit Borrowing or Swing Line Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment of
Revolving Credit Advances shall be in an aggregate principal amount not less
than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, (y)
each partial prepayment of any Swing Line Advance shall be in a principal
amount not less than $500,000 and (z) if any prepayment of any Eurodollar Rate
Advances shall be made on a date which is not the last day of an Interest
Period for such Advances, the Borrower shall also pay any amounts owing to each
Lender pursuant to Section 9.04(c).

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pursuant to Section 2.02, 2.08, 2.12 or 3.04) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

(b) All computations of interest based on the Base Rate shall
be made by the Administrative Agent on the basis of a year of 365 or 366 days,
as the case may be, and all computations of interest based on the Eurodollar
Rate and of fees shall be made by the Administrative Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

(c) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or facility
fee, as the case may be; provided, however, that if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.

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not have so made such payment in full to the Administrative Agent, each Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Rate.

SECTION 2.12. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with Section
2.11, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender, the
Administrative Agent and the Co-Agent, taxes imposed on its net income and
franchise taxes imposed on it, by the jurisdiction under the laws of which it
is organized or any political sub-division thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of the Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under any Notes to any such Person,
(i) the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Person receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.

(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").

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the case may be) and any liability (including, without limitation, penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. The Lender or the Administrative Agent (as the case may be) shall use
its commercially reasonable efforts to contest such Tax or Other Tax that is in
its opinion incorrectly asserted. This indemnification shall be made within 30
days from the date such Lender or the Administrative Agent (as the case may be)
makes written demand therefor.

(d) Within 30 days after the date of any payment of Taxes by
the Borrower, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 9.02, the original or a certified copy of a
receipt evidencing payment thereof.

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party to this Agreement indicates a United States interest withholding tax rate
in excess of zero (or if the Lender cannot provide at such time such form
because it is not entitled to reduced withholding under a treaty, the payments
are not effectively connected income and the payments do not qualify as
portfolio interest), withholding tax at such rate (or at the then existing U.S.
statutory rate if the Lender cannot provide the form) shall be excluded from
Taxes unless and until such Lender provides the appropriate form certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be excluded from Taxes for periods governed by such form; provided, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
assignee becomes a party to this Agreement, the Lender assignor was entitled to
payments under subsection (a) in respect of United States withholding tax with
respect to interest paid at such date, then, to the extent such tax results in
liability for such payments, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States interest withholding tax, if any, applicable
with respect to the Lender assignee on such date.

(f) For any period with respect to which a Person has failed
to provide the Borrower with the appropriate form described in Section 2.12(e)
or notice that it cannot provide such form (other than if such failure is due
to a change in law occurring subsequent to the date on which a form originally
was required to be provided, or if such form otherwise is not required under
the first sentence of subsection (e) above), such Person shall not be entitled
to indemnification under Section 2.12(a) with respect to Taxes imposed by the
United States; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such Lender
to recover such Taxes.

(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.12 shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to file any certificate
or document requested by the Borrower or to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

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(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.12 shall survive the payment in full of principal
and interest hereunder and under the Notes and the termination of the
Commitments.

(i) If the Borrower is required to pay any Lender any Taxes
under Section 2.12(c), such Lender shall be an "Affected Person", and the
Borrower shall have the rights set forth in Section 3.06 to replace such
Affected Person.

SECTION 2.13. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Revolving Credit Advances or
the Swing Line Advances made by it (other than pursuant to Section 2.08, 2.12
or 3.04) in excess of its ratable share of payments on account of the Revolving
Credit Advances or the Swing Line Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Revolving Credit Advances or the Swing Line Advances made by them as shall
be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that, if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.

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another Interest Period and (y) the first Business Day prior to the date of the
proposed Conversion in the case of a Conversion into Base Rate Advances, and,
in each case, subject to the provisions of Sections 2.09 and 3.04, Convert all
or any portion of the Revolving Credit Advances of one Type comprising the same
Revolving Credit Borrowing into Revolving Credit Advances of the other Type;
provided, however, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances and any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 3.01(b).

(b) Each notice of Conversion delivered under the preceding
paragraph shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Revolving Credit Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Revolving Credit Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.

SECTION 2.15. Extension of Termination Date. (a) At least 60
days but not more than 90 days prior to the Termination Date then in effect,
the Borrower, by written notice to the Administrative Agent, may request an
extension of the Termination Date for an additional 364 days from the Consent
Date (as defined below). The Administrative Agent shall promptly notify each
Lender of such request, and each Lender shall in turn, in its sole discretion,
on a date (the "Consent Date") specified by the Administrative Agent after
consultation with the Borrower which shall be not earlier than 30 nor less than
21 days prior to the Termination Date and, subject to the next sentence, no
earlier than ten days prior to such Consent Date, notify the Administrative
Agent in writing as to whether such Lender will consent to such extension.
Each Lender that determines not to so extend the Termination Date (each a
"Non-Consenting Lender") shall promptly notify the Administrative Agent in
writing (who shall then notify the Borrower) of such determination. If any
Lender shall fail to notify the Administrative Agent in writing of its consent
to, or refusal of, any such request for extension of the Termination Date as
specified above, such Lender shall be deemed to be a Non-Consenting Lender with
respect to such request. The Administrative Agent shall, not later than 20
days prior to the Termination Date, notify the Borrower of the decision of the
Lenders regarding the Borrower's request for an extension of such Termination
Date. It is understood and agreed

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that no Lender shall have any obligation whatsoever to agree to any request
made by the Borrower for an extension of the Termination Date.

(b) If all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.15 and upon
fulfillment of the applicable conditions set forth in Article IV, the
Termination Date shall, effective as at the Termination Date (hereinafter, the
"Extension Date"), be extended for 364 days from the Consent Date. If less
than all of the Lenders consent in writing to any such request in accordance
with subsection (a) of this Section 2.15, the Termination Date shall, upon
fulfillment of the applicable conditions set forth in Article IV, effective as
at the applicable Extension Date, be extended as to those Lenders that so
consented (each, a "Consenting Lender") but shall not be extended as to any
Non-Consenting Lender, provided that Lenders having at least 51% of the
aggregate Commitments at such time (after giving effect to any assumptions of
the Commitments of Non-Consenting Lenders in accordance with subsection (c) of
this Section 2.15) consent in writing to such request for extension of the
Termination Date. To the extent that the Termination Date is not extended as
to any Lender pursuant to this Section 2.15 and the Commitment of such Lender
is not assumed in accordance with Section 2.15(c) on or prior to the applicable
Extension Date, the Commitment of such Non-Consenting Lender shall
automatically terminate in whole on such Termination Date without any further
notice or other action by the Borrower, such Lender or any other Person;
provided that such Non-Consenting Lender's rights under Sections 2.12, 3.04 and
9.04, and its obligations under Section 8.05, shall survive the Termination
Date for such Lender as to matters occurring prior to such date.

(c) If less than all of the Lenders consent to any such
request pursuant to subsection (a) of this Section 2.15, the Borrower may
arrange for one or more Consenting Lenders or, to the extent such Consenting
Lenders are unwilling to assume all of the Commitments of such Non-Consenting
Lenders, other Eligible Assignees to assume, effective as of the Extension
Date, any Non-Consenting Lender's Commitment and all of the rights and
obligations of such Non-Consenting Lender under this Agreement thereafter
arising (each Eligible Assignee assuming the Commitment of one or more
Non-Consenting Lenders pursuant to this Section 2.15 being an "Assuming
Lender"), without recourse to or warranty by, or expense to, such
Non-Consenting Lender; provided, however, that:

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(i) any such Consenting Lender or Assuming Lender shall have
paid to such Non-Consenting Lender the aggregate principal amount of,
and any interest accrued and unpaid to the effective date of such
assumption on, the outstanding Advances, if any, of such
Non-Consenting Lender;

(ii) any accrued and unpaid Facility Fees owing to such
Non-Consenting Lender as of the effective date of such assumption, and
all other accrued and unpaid amounts owing to such Non-Consenting
Lender under this Agreement and the Notes as of the effective date of
such assumption, shall have been paid to such Non-Consenting Lender by
the Borrower or such Consenting Lender or Assuming Lender; and

(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 9.07(a) shall
have been paid.

At least three Business Days prior to any Extension Date, (A) each such
Assuming Lender, if any, shall have delivered to the Borrower and the
Administrative Agent an Assumption Agreement, duly executed by such Assuming
Lender, such Non-Consenting Lender, the Borrower and the Administrative Agent,
(B) each such Consenting Lender, if any, shall have delivered written
confirmation satisfactory to the Borrower and the Administrative Agent as to
any increase in the amount of its Commitment resulting from its assumption of
one or more Commitments of the Non-Consenting Lenders and (C) each
Non-Consenting Lender being replaced pursuant to this Section 2.15(c) shall
have delivered to the Administrative Agent any Note or Notes held by such
Non-Consenting Lender. Upon the payment or prepayment of all amounts referred
to in clauses (i) through (iii) of this Section 2.15(c), each such Consenting
Lender or Assuming Lender, as of the Extension Date, will be substituted for
the applicable Non-Consenting Lender(s) under this Agreement and shall be a
Lender for all purposes of this Agreement, without any further acknowledgment
by or the consent of any of the other Lenders, and the obligations of each such
Non-Consenting Lender hereunder shall, by the provisions hereof, be released
and discharged.

(d) If Lenders having at least 51% of the aggregate
Commitments (after giving effect to any assumptions pursuant to subsection (c)
of this Section 2.15) consent in writing to a requested extension of the
Termination Date (whether by execution and delivery of an Assumption Agreement
or otherwise) not later than one Business Day prior to the Consent Date, the
Administrative Agent shall so notify the Borrower, and, upon

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fulfillment of the applicable conditions set forth in Article IV, the
Termination Date shall be extended for an additional 364 days from the Consent
Date and all references in this Agreement and in the Notes to the "Termination
Date" shall, with respect to each Consenting Lender and each Assuming Lender,
refer to the Termination Date as so extended. The Administrative Agent shall
notify the Lenders (including, without limitation, each Assuming Lender) of the
extension of the Termination Date and shall thereupon record in the Register
the relevant information with respect to each such Consenting Lender and each
such Assuming Lender.

(e) Within ten Business Days after each Extension Date, the
Borrower shall, at its own expense, execute and deliver to the Administrative
Agent Revolving Credit Notes payable to the order of each Consenting Lender in
exchange for the Revolving Credit Note surrendered by such Consenting Lender to
the Administrative Agent), if any, and each Assuming Lender, if any, in each
case dated such Extension Date and in substantially the form of Exhibit A-1
hereto and in an amount equal to the Commitment of such Consenting Lender or
Assuming Lender, as the case may be, after giving effect to such extension of
the Termination Date. The Administrative Agent, upon receipt of such Revolving
Credit Notes, shall promptly deliver such Revolving Credit Notes to the
respective Consenting Lenders and Assuming Lenders.

ARTICLE III

MAKING THE ADVANCES

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Credit Borrowing (which shall be a Business Day), (ii) the requested Type of
Revolving Credit Advance comprising such Revolving Credit Borrowing, (iii) the
requested aggregate amount of such Revolving Credit Borrowing, and (iv) in the
case of a Revolving Credit Borrowing comprised of Eurodollar Rate Advances, the
requested initial Interest Period for each such Revolving Credit Advance. Each
Lender shall (A) before 12:00 noon (New York City time) on the date of such
Borrowing (in the case of a Eurodollar Rate Borrowing) and (B) before 1:00 p.m.
(New York City time) on the date of such Borrowing (in the case of a Base Rate
Borrowing), make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Revolving Credit Borrowing. After
the Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article IV, the Administrative Agent will
make such funds available to the Borrower at the Borrower's Account; provided,
however, that the Administrative Agent shall first make a portion of such funds
equal to the aggregate principal amount of any Swing Line Advance as to which
the Borrower has received timely notice made by the Swing Line Bank and by any
other Lender and outstanding on the date of such Revolving Credit Borrowing,
plus interest accrued and unpaid thereon to and as of such date, available to
the Swing Line Bank and such other Lenders for repayment of such Swing Line
Advances.

(b) Anything in subsection (a) above to the contrary
notwithstanding, the aggregate amount of each Revolving Credit Borrowing shall
be an amount equal to or greater than $10,000,000 and thereafter in integral
multiples of $1,000,000.

(c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Revolving Credit
Borrowing which the related Notice of Revolving Credit Borrowing specifies is
to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Revolving Credit Borrowing for such Revolving Credit Borrowing the applicable
conditions set forth in Article IV, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Revolving Credit Advance to be made by such Lender as part
of such Revolving Credit Borrowing when such Revolving Credit Advance, as a
result of such failure, is not made on such date.

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(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Revolving Credit Borrowing that
such Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Revolving Credit Borrowing, the Administrative Agent
may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Revolving Credit Borrowing in
accordance with Section 3.01(a) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Revolving Credit Advances
comprising such Revolving Credit Borrowing and (ii) in the case of such Lender,
the higher of (A) the Federal Funds Rate and (B) the cost of funds incurred by
the Administrative Agent in respect of such amount, provided that the Borrower
retains its rights against such Lender with respect to any damages it may incur
as a result of such Lender's failure to fund, and notwithstanding anything
herein to the contrary, in no event shall the Borrower be liable to such Lender
or any other Person for the interest payable by such Lender to the
Administrative Agent pursuant to this sentence. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Credit Advance as part of such Revolving
Credit Borrowing for purposes of this Agreement.

(e) The failure of any Lender to make the Revolving Credit
Advance to be made by it as part of any Revolving Credit Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Revolving Credit Advance to be made by such other Lender on the date of any
Revolving Credit Borrowing.

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Borrowing (a "Notice of Competitive Bid Borrowing"), in substantially the form
of Exhibit B-2 hereto, specifying therein (A) the date of such proposed
Competitive Bid Borrowing (which shall be a Business Day), (B) the requested
aggregate amount of such proposed Competitive Bid Borrowing, (C) whether such
proposed Competitive Bid Borrowing shall consist of Fixed Rate Advances or LIBO
Rate Advances, (D) in the case of a Competitive Bid Borrowing consisting of (1)
LIBO Rate Advances, the requested Interest Period for each such LIBO Rate
Advance and (2) Fixed Rate Advances, the requested maturity date for repayment
of each such Fixed Rate Advance to be made as part of such Competitive Bid
Borrowing (which maturity date may not be earlier than the date occurring 30
days after the date of such Competitive Bid Borrowing nor later than 180 days
or six months, as applicable, after the date of such Competitive Bid Borrowing
(or, if earlier, the Termination Date)), (E) the requested interest payment
date or dates relating thereto, and (F) any other terms to be applicable to
such Competitive Bid Borrowing, not later than (i) 10:00 A.M. (New York City
time) at least one Business Day prior to the date of the proposed Competitive
Bid Borrowing, if the Borrower shall specify in the Notice of Competitive Bid
Borrowing that the rates of interest to be offered by the Lenders shall be
fixed rates per annum (the Advances comprising any such Competitive Bid
Borrowing being referred to herein as "Fixed Rate Advances") and (ii) 12:00
noon (New York City time) at least four Business Days prior to the date of the
proposed Competitive Bid Borrowing, if the Borrower shall instead specify in
the Notice of Competitive Bid Borrowing that the Advances comprising such
proposed Competitive Bid Borrowing are to be based on the LIBO Rate (the
Advances comprising any such Competitive Bid Borrowing being referred to herein
as "LIBO Rate Advances"); provided, however, the Borrower may not request more
than one Competitive Bid Borrowing on any Business Day. Each Notice of
Competitive Bid Borrowing shall be irrevocable and binding on the Borrower
except to the extent provided below. Anything in the foregoing to the contrary
notwithstanding, the aggregate amount of each Competitive Bid Borrowing shall
be in an amount at least equal to $10,000,000 and thereafter in integral
multiples of $1,000,000. The Administrative Agent shall in turn promptly
notify each Lender of each request for a Competitive Bid Borrowing received by
it from the Borrower by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.

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specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to the Borrower),
before 10:00 A.M. (New York City time) (i) on the date of such proposed
Competitive Bid Borrowing, in the case of a proposed Competitive Bid Borrowing
consisting of Fixed Rate Advances and (ii) three Business Days before the date
of such proposed Competitive Bid Borrowing, in the case of a proposed
Competitive Bid Borrowing consisting of LIBO Rate Advances, of the minimum
amount and maximum amount of each Competitive Bid Advance which such Lender
would be willing to make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first sentence of Section
2.02(a), exceed such Lender's Commitment), the rate or rates of interest
therefor and such Lender's Applicable Lending Office with respect to such
Competitive Bid Advance; provided that if the Administrative Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer at least 30 minutes before
the time and on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect not to
make such an offer, such Lender shall so notify the Administrative Agent,
before 10:00 A.M. (New York City time) on the date on which notice of such
election is to be given to the Administrative Agent by the other Lenders, and
such Lender shall not be obligated to, and shall not, make any Competitive Bid
Advance as part of such Competitive Bid Borrowing; provided that the failure by
any Lender to give such notice shall not cause such Lender to be obligated to
make any Competitive Bid Advance as part of such proposed Competitive Bid
Borrowing.

(c) The Borrower shall, in turn, (i) before 11:30 A.M. (New
York City time) on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances and (ii)
before 11:00 A.M. (New York City time) three Business Days before the date of
such proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Advances, either:

(A) cancel such Competitive Bid Borrowing by giving
the Administrative Agent notice to that effect, or

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and equal to or less than the maximum amount, notified to the Borrower
by the Administrative Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (b) above) to be made by
each Lender as part of such Competitive Bid Borrowing, and reject any
remaining offers made by Lenders pursuant to paragraph (b) above by
giving the Administrative Agent notice to that effect; provided,
however, that the Borrower may not accept offers that, in the
aggregate, exceed the amount of the proposed Competitive Bid Borrowing
specified in the related Notice of Competitive Bid Borrowing. The
Borrower shall accept the offers made by any Lender or Lenders to make
Competitive Bid Advances in order of the lowest to the highest rates
of interest offered by such Lenders for a particular Competitive Bid
Borrowing. If two or more Lenders have offered the same interest rate
for a particular Competitive Bid Borrowing, the amount to be borrowed
at such interest rate will be allocated among such Lenders ratably
according to the amount that each such Lender offered at such interest
rate.

(d) If the Borrower notifies the Administrative Agent that
such Competitive Bid Borrowing is canceled pursuant to Section 3.02(c)(A)
above, the Administrative Agent shall give prompt notice thereof to the Lenders
and such Competitive Bid Borrowing shall not be made.

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the preceding sentence or any later time when such Lender shall have received
notice from the Administrative Agent pursuant to clause (iii) of the preceding
sentence, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, such Lender's
portion of such Competitive Bid Borrowing, in same day funds. Upon fulfillment
of the applicable conditions set forth in Article IV and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make such
funds available to the Borrower at the Borrower's Account. Promptly after each
Competitive Bid Borrowing the Administrative Agent will notify each Lender of
the amount of the Competitive Bid Borrowing, the consequent Competitive Bid
Advance Reduction and the dates upon which such Competitive Bid Advance
Reduction commenced and will terminate.

(f) If the Borrower notifies the Administrative Agent that it
accepts one or more of the offers made by any Lender or Lenders pursuant to
Section 3.02(c)(B), such notice of acceptance shall be irrevocable and binding
on the Borrower. The Borrower shall indemnify each Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill
on or before the date specified in the Notice of Competitive Bid Borrowing for
such Competitive Bid Borrowing the applicable conditions set forth in Article
IV, including, without limitation, any loss (excluding any loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Competitive Bid
Advance to be made by such Lender as part of such Competitive Bid Borrowing
when such Competitive Bid Advance, as a result of such failure, is not made on
such date.

(g) Following the making of each Competitive Bid Borrowing,
the Borrower shall be in compliance with the limitation set forth in the
proviso to the first sentence of Section 2.02(a).

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Day), (iii) amount of such Borrowing, (iv) maturity of such Borrowing (which
maturity shall be no later than the seventh day after the requested date of
such Borrowing) and (v) account of the Borrower to which the proceeds of such
Borrowing are to be made available.

(b) The relevant Swing Line Bank may, if, in its sole
discretion, it elects to do so, irrevocably offer to make such Swing Line
Advance to the Borrower by telephonic notice, such notice specifying whether
such Swing Line Advance will bear interest (i) at the rate of interest
specified in Section 2.07(a)(i) (such Swing Line Advance, a "Base Rate Swing
Line Advance") or (ii) at a different rate of interest specified in such notice
by such Swing Line Bank in its sole discretion (such Swing Line Advance, a
"Quoted Rate Swing Line Advance"). If such Swing Line Bank shall elect not to
make such an offer, such Swing Line Bank shall so notify the Administrative
Agent and the Borrower; provided that the failure by such Swing Line Bank to
give such notice shall not cause such Swing Line Bank to be obligated to make
such Swing Line Advance.

(c) If such Swing Line Bank shall have offered to make a
Swing Line Advance as provided in paragraph (b) above, the Borrower shall, in
turn, before the earlier of one hour after its receipt of such offer and 2:30
P.M. (New York City time) on the date of the proposed Swing Line Borrowing
either (A) cancel such Swing Line Borrowing or (B) accept such offer, in each
case by giving notice to such effect to the Administrative Agent and such Swing
Line Bank.

(d) If the Borrower cancels such Swing Line Borrowing
pursuant to paragraph (c)(A) above, such Swing Line Borrowing shall not be
made. If the Borrower accepts such offer pursuant to paragraph (c)(B) above,
the relevant Swing Line Bank will (subject to the applicable conditions set
forth in Article IV) make the amount of such Swing Line Advance available to
the Borrower at the account specified in the relevant Notice of Swing Line
Borrowing.

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Swing Line Advance Rate Confirmation shall for all purposes be the interest
rate payable in respect of such Quoted Rate Swing Line Advance notwithstanding
any disagreement by the Borrower with the contents of such written
confirmation.

(f) Upon demand by a Swing Line Bank through the
Administrative Agent, each other Lender shall purchase from such Swing Line
Bank, and such Swing Line Bank shall sell and assign to each other Lender, such
other Lender's pro rata share of each outstanding Swing Line Advance made by
such Swing Line Bank, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of such Swing Line
Bank by deposit to the Administrative Agent at its aforesaid address, in same
day funds, an amount equal to the sum of (x) the portion of the outstanding
principal amount of such Swing Line Advances to be purchased by such Lender
plus (y) interest accrued and unpaid to and as of such date on such portion of
the outstanding principal amount of such Swing Line Advances. Each Lender's
obligations to make such payments to the Administrative Agent for account of
the Swing Line Banks under this paragraph (f), and each Swing Line Bank's right
to receive the same, shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation, the
failure of any other Lender to make its payment under this paragraph (f), the
financial condition of the Borrower (or any other account party), the existence
of any Default, the failure of any of the conditions set forth in Article IV to
be satisfied, or the termination of the Commitments. Each such payment to a
Swing Line Bank shall be made without any offset, abatement, withholding or
reduction whatsoever. Each Lender agrees to purchase its pro rata share of
such outstanding Swing Line Advances on (i) the Business Day on which demand
therefor is made by such Swing Line Bank, provided that notice of such demand
is given not later than 11:00 a.m. (New York City time) on such Business Day or
(ii) the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by a Swing Line Bank
to any other Lender of a portion of such Swing Line Bank's Swing Line Advances,
such Swing Line Bank represents and warrants to such other Lender that such
Swing Line Bank is the legal and beneficial owner of such interest being
assigned by it, but makes no other representation or warranty and assumes no
responsibility with respect to such Swing Line Advance, this Agreement or the
Notes or any party thereto. If and to the extent that any Lender shall not
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent for
the account of such Swing Line Bank

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forthwith on demand such amount together with interest thereon, for each day
from the date of demand by such Swing Line Bank until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such amount for the account of such Swing
Line Bank, such amount so paid in respect of principal shall constitute a Swing
Line Advance by such Lender for purposes of this Agreement, and the outstanding
principal amount of the Swing Line Advances made by such Swing Line Bank shall
be reduced by such amount.

SECTION 3.04. Increased Costs. (a) If, due to either (i)
the introduction of or any change (other than any change by way of imposition
or increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage, in each case as of the date of determination thereof) in or in the
interpretation of any law or regulation, in each case as of the date hereof or
(ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) which
implements any introduction or change specified in clause (i) above, there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances, then the Borrower shall from
time to time, within ten Business Days after written demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender and showing in reasonable detail the basis
for the calculation thereof shall be conclusive and binding on the Borrower in
the absence of manifest error.

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account of such Lender additional amounts sufficient to compensate such Lender
or such corporation in the light of such circumstances to the extent that such
Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend or Advances hereunder. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender and showing in reasonable detail the basis for the
calculation thereof conclusive and binding on the Borrower in the absence of
manifest error.

(c) If the Borrower is required to pay any Lender any amounts
under this Section 3.04, the applicable Lender shall be an "Affected Person",
and the Borrower shall have the rights set forth in Section 3.06 to replace
such Affected Person.

SECTION 3.05. Illegality. Notwithstanding any other
provision of this Agreement, if any Lender shall notify the Administrative
Agent that the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or LIBO Rate Advances or to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, then, subject to the provisions of Section
3.06, (i) the obligation of such Lender to make Eurodollar Rate Advances and
LIBO Rate Advances hereunder and to Convert Revolving Credit Advances into
Eurodollar Rate Advances shall be suspended until the first date on which the
circumstances causing such suspension cease to exist, (ii) any Eurodollar Rate
Advances and LIBO Rate Advances made or to be made by such Lender shall
forthwith (or on such later date as may be permitted by applicable law) be
converted automatically to Base Rate Advances and (iii) such Lender shall be an
"Affected Person", and the Borrower shall have the right set forth in Section
3.06 to replace such Affected Person. In the event of such a suspension, such
Lender shall review the circumstances giving rise to such suspension at least
weekly and shall notify the Borrower, the Administrative Agent and the Lenders
promptly of the end of such suspension, and thereafter the Borrower shall be
entitled, subject to the terms and conditions hereof, to borrow Eurodollar Rate
Advances and LIBO Rate Advances from such Lender.

SECTION 3.06. Right to Replace Affected Person or Lender. If
the Borrower is required to pay any Taxes with respect to an Affected Person
pursuant to Section 2.12(c) or any

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amounts with respect to an Affected Person pursuant to Section 3.04, or
receives a notice from an Affected Person pursuant to Section 3.05, the
Borrower may elect, if such amounts continue to be charged or such notice is
still effective, to replace such Affected Person as a party to this Agreement,
provided that, no Default or Event of Default shall have occurred and be
continuing at the time of such replacement and, provided, further, that
concurrently with such replacement, (i) another financial institution which is
an Eligible Assignee and is reasonably satisfactory to the Borrower and the
Administrative Agent (or if the Lender then serving as Administrative Agent is
the Person to be replaced and the Administrative Agent has resigned its
position, the Lender becoming the successor Administrative Agent) shall agree,
as of such date, to purchase for cash the Advances of the Affected Person
pursuant to an Assignment and Acceptance and to become a Lender for all
purposes under this Agreement and to assume all obligations (including all
outstanding Advances) of the Affected Person to be terminated as of such date
and to comply with the requirements of Section 9.07 applicable to assignments,
and (ii) the Borrower shall pay to such Affected Person in same day funds on
the day of such replacement all principal, interest, fees and other amounts
then due and owing to such Affected Person by the Borrower hereunder to and
including the date of termination, including without limitation payments due
such Affected Person under Section 2.12 and costs incurred under Section 3.04.

SECTION 3.07. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
for general corporate purposes of the Borrower and its Subsidiaries, provided
that neither the Administrative Agent nor any Lender shall have any
responsibility as to the use of any such proceeds.

ARTICLE IV

CONDITIONS OF LENDING

SECTION 4.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender to make an Advance on the occasion of the initial
Borrowing is subject to the following conditions precedent being satisfied:

(a) The Administrative Agent shall have received on or before
the day of the initial Borrowing the following in form and substance
satisfactory to the Administrative Agent,

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each dated the Effective Date, and (except for the Notes) in
sufficient copies for each Lender:

(i) The Revolving Credit Notes payable to the order
of the Lenders, respectively.

(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower authorizing and approving this
Agreement and the Notes, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement and the Notes.

(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the Notes and the other documents to be
delivered hereunder.

(iv) A favorable opinion of counsel to the Borrower,
which may be the Borrower's internal counsel, substantially in
the form of Exhibit D and covering such other matters relating
hereto as any Lender, through the Administrative Agent, may
reasonably request.

(v) A favorable opinion of Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Administrative Agent,
substantially in the form of Exhibit E.

(vi) A certificate of the chief financial officer or
treasurer of the Borrower demonstrating in detail the total
number of Cash Days for the fiscal quarter ending on or
immediately prior to the Effective Date.

(b) The Administrative Agent shall have received evidence
that, prior to or simultaneously with such initial Borrowing, the
Borrower shall have (i) repaid in full the outstanding principal
amount of each of the outstanding "Loans" as defined in the Existing
Credit Agreements together with all accrued and unpaid interest
thereon, all fees payable in respect thereof and all other amounts
payable thereunder, and (ii) canceled each of the "Commitments" as
defined therein, and any instruments

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relating to such indebtedness shall have been canceled or terminated.

(c) The Borrower shall have paid all accrued fees and
expenses of the Administrative Agent and the Co- Agent and the fees of
the Lenders (including the fees and expenses of counsel to the
Administrative Agent to the extent then payable).

SECTION 4.02. Conditions Precedent to Each Revolving Credit
Borrowing and Swing Line Borrowing. The obligation of each Lender to make a
Revolving Credit Advance or a Swing Line Advance on the occasion of each
Borrowing (including the initial Borrowing), and the right of the Borrower to
request a Swing Line Borrowing, shall be subject to the further conditions
precedent that on the date of such Borrowing, the following statements shall be
true (and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing such statements are true):

(a) The representations and warranties contained in Section
5.01 are correct on and as of the date of such Borrowing or request,
before and after giving effect to such Borrowing or request and to the
application of the proceeds therefrom, as though made on and as of
such date;

(b) No event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom,
which constitutes a Default;

(d) The Administrative Agent shall have received such other
documents, opinions and other information as any Lender may reasonably
request.

SECTION 4.03. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender which is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing (including the initial
Competitive Bid Borrowing) to make such Competitive Bid Advance as part of such
Competitive Bid Borrowing is subject to the conditions precedent that:

(a) The Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto;

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(b) On or before the date of such Competitive Bid Borrowing,
but prior to such Competitive Bid Borrowing, the Administrative Agent
shall have received a Competitive Bid Note payable to the order of
such Lender for each of the one or more Competitive Bid Advances to be
made by such Lender as part of such Competitive Bid Borrowing, in a
principal amount equal to the principal amount of the Competitive Bid
Advance to be evidenced thereby and otherwise on such terms as were
agreed to for such Competitive Bid Advance in accordance with Sections
2.02 and 3.02; and

(c) On the date of such Competitive Bid Borrowing the
following statements shall be true (and the acceptance by the Borrower
of the proceeds of such Competitive Bid Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Competitive Bid Borrowing such statements are true):

(i) The representations and warranties contained in
Section 5.01 are correct on and as of the date of such
Competitive Bid Borrowing, before and after giving effect to
such Competitive Bid Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date;

(ii) No event has occurred and is continuing, or would
result from such Competitive Bid Borrowing or from the
application of the proceeds therefrom, which constitutes a
Default; and

(iii) No Change in Control has occurred.

SECTION 4.04. Conditions Precedent to Extension of
Termination Date. The obligation of each Consenting Lender and each Assuming
Lender to extend the Termination Date pursuant to Section 2.15 is subject to
the conditions precedent that (a) the Administrative Agent shall have accepted
all of the Assumption Agreements of the Assuming Lenders and received all of
the written confirmations of increases in the Commitments of the Consenting
Lenders for the applicable Extension Date, and all of the Non-Consenting
Lenders shall have received all of the amounts required to have been paid to
them under Section 2.15(c) on or prior to such Extension Date, and (b) on such
Extension Date the following statements shall be true (and a duly authorized
officer of the Borrower shall certify the completeness and accuracy of such
statements to the Administrative Agent and the Lenders on and as of such
Extension Date):

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(i) No event or development has occurred or failed to occur,
and no action has been taken or failed to have been taken, by or on
behalf of the Borrower or any of its Subsidiaries that, either
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect since January 28, 1996, and
no fact or circumstance is known by the Borrower that, either
individually or in the aggregate, has had or could reasonably be
expected to have (so far as the Borrower can reasonably foresee) a
Material Adverse Effect since January 28, 1996;

(ii) The representations and warranties contained in Section
5.01 are correct on and as of such Extension Date, before and after
giving effect to such Extension Date as though made on and as of such
Extension Date;

(iii) No event has occurred and is continuing, or would result
from the occurrence of such Extension Date, that constitutes a
Default; and

(iv) No Change in Control has occurred.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

SECTION 5.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:

(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
(ii) is duly qualified and in good standing as a foreign corporation
in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would
not have a Material Adverse Effect and (iii) has all the requisite
corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted except where
the failure to do so would not have a Material Adverse Effect.

(b) The Borrower has heretofore furnished to each of the
Lenders the Annual Audited Financial Statements of the Borrower and
its Consolidated Subsidiaries as at January 28,

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1996. All such financial statements are complete and correct and
fairly present the Consolidated financial condition of the Borrower
and its Subsidiaries as at said date and the Consolidated results of
their operations for the fiscal year ended on said date, all in
accordance with GAAP, consistently applied. Since January 28, 1996,
there has been no material adverse change in the Consolidated
financial condition or results of operations or prospects of the
Borrower and its Subsidiaries.

(c) The execution, delivery and performance by the Borrower
of this Agreement and the Notes, and the consummation of the
transactions contemplated hereby and thereby, are within the
Borrower's corporate powers and have been duly authorized by all
necessary corporate action on the part of the Borrower. This
Agreement is, and the Notes when delivered hereunder will be, legal,
valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).

(d) Neither the execution, delivery and performance of this
Agreement or the Notes nor the consummation of the transactions
contemplated hereby or thereby will (i) contravene the Borrower's
certificate of incorporation or by-laws, (ii) violate or conflict with
any material judgment, decree or order or any law, rule, regulation,
statute or determination or award, (iii) conflict with or result in
the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Borrower or any of its
Subsidiaries or any of their properties, except if such conflict,
breach or default would not have a Material Adverse Effect, or (iv)
result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of the Borrower or its
Subsidiaries.

(e) No authorization or consent, approval, permit or license
of, or filing with, any governmental or public body or authority or
regulatory body or any Lender or any other

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third party is required to authorize, or for the due execution,
delivery and performance by the Borrower of, this Agreement or the
Notes, or for consummation of the transactions contemplated hereby or
thereby.

(f) No portion of any Advance under this Agreement shall be
used by the Borrower in violation of Regulation G, Regulation U,
Regulation T, or Regulation X of the Board of Governors of the Federal
Reserve System or any other Regulation of such Board or in violation
of the Securities Exchange Act of 1934, as amended, in each case as in
effect on the date or dates of such Advance and such use of proceeds.

(g) No information, exhibit or report furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in
connection with this Agreement and the Notes contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein taken as a whole, in the
light of the circumstances under and the time at which they were made,
not misleading.

(h) Except as described in the Borrower's Annual Report on
Form 10-K for the fiscal year ended January 28, 1996, there is no
pending or threatened action, suit, claim, dispute or proceeding to
which the Borrower or any of its Subsidiaries is a party, or by which
the Borrower or any of its Subsidiaries may be bound, before any
court, governmental agency or arbitrator which (i) would individually
or in the aggregate have a Material Adverse Effect if determined in a
manner adverse to the Borrower or such Subsidiary (taking into account
the reasonable likelihood of an adverse determination and the
availability of contributions from other potentially responsible
parties) or (ii) purports to affect this Agreement or the Notes or the
transactions contemplated hereby or thereby.

(i) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has resulted or could reasonably
be expected to result in a liability to the Borrower or its ERISA
Affiliates in excess of $5,000,000.

(j) Neither the Borrower nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan that it has
incurred any Withdrawal

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Liability, and neither the Borrower nor any of its ERISA Affiliates,
to the best of the Borrower's knowledge and belief, is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan,
in each case other than any Withdrawal Liability that would not have a
Material Adverse Effect; and neither the Borrower nor any of its
Affiliates has been notified by the sponsor of a Multiemployer Plan or
any of its Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV
of ERISA, except where such reorganization or termination would not
have a Material Adverse Effect.

(k) The Borrower and each of its Subsidiaries have filed,
have caused to be filed or have been included in all tax returns
(federal, state, local and foreign) required to be filed and have paid
(or have accrued any taxes shown that are not due with the filing of
such returns) all taxes shown thereon to be due, together with
applicable interest and penalties, except in any case where the
failure to file any such return or pay any such tax is not in any
respect material to the Borrower or the Borrower and its Subsidiaries
taken as a whole.

(l) Neither the Borrower nor any of its Subsidiaries is an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.

(m) (i) The operations and properties of the Borrower and
each of its Subsidiaries comply with all applicable Environmental Laws
and Environmental Permits, except to the extent the failure to so
comply, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect; (ii) all Environmental
Actions against the Borrower or any of its Subsidiaries for
noncompliance with such Environmental Laws and Environmental Permits
that have been resolved have been resolved without any ongoing
obligations or costs that, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect; and
(iii) to the best knowledge of the Borrower or any of its
Subsidiaries, no circumstances exist that (A) could form the basis of
an Environmental Action against such Borrower or any of its
Subsidiaries that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or (B) could
cause any of their respective properties to be

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subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that, either individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

(n) There have been no releases, discharges or disposals of
Hazardous Materials on any property owned or operated by the Borrower
or any of its Subsidiaries or, to the best knowledge of the Borrower
or any such Subsidiary, on any property formerly owned or operated by
the Borrower or any of its Subsidiaries that (taking into account,
among other things, the reasonable likelihood of an adverse
determination and the availability of contributions from other
potentially responsible parties), either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.

(o) Neither the Borrower nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together
with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the
order of any governmental or regulatory authority or the requirements
of any Environmental Law, that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect; and all Hazardous Materials generated, used, treated, handled
or stored at, or transported to or from, any property owned or
operated by the Borrower or any of its Subsidiaries have been disposed
of in a manner that, either individually or in the aggregate, could
not reasonably be expected (taking into account, among other things,
the reasonable likelihood of an adverse determination and the
availability of contributions from other potentially responsible
parties) to have a Material Adverse Effect.

ARTICLE VI

COVENANTS OF THE BORROWER

SECTION 6.01. Affirmative Covenants. So long as any
obligations under this Agreement or any Note shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will:

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(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA, the Securities Act of 1933
and all Environmental Laws, except, in each case, any non-compliance
which would not have a Material Adverse Effect.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, all taxes, assessments, claims and governmental charges or
levies imposed upon it or upon its property, except to the extent that
any failure to do so would not have a Material Adverse Effect;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, claim or charge that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained.

(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, appropriate and adequate insurance with
responsible and reputable insurance companies or associations or with
self-insurance programs to the extent consistent with prudent
practices of the Borrower and its Subsidiaries or otherwise customary
in their respective industries in such amounts and covering such risks
as is customary in the industries in which the Borrower or such
Subsidiary operates.

(d) Payment of Welfare Plans. Pay, and cause each of its
Subsidiaries to pay, when due the aggregate annualized cost
(including, without limitation, the cost of insurance premiums) with
respect to post-retirement benefits under Welfare Plans for which the
Borrower and its Subsidiaries are liable.

(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and
franchises; provided, however, that (i) the Borrower and its
Subsidiaries may consummate any transaction permitted under Section
6.02(b) and (ii) neither the Borrower nor such Subsidiary shall be
required to preserve or maintain its corporate existence (other than
the corporate existence of the Borrower) or any right or franchise
when, in the good faith business judgment of the

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Borrower, such preservation or maintenance is neither necessary nor
appropriate for the prudent management of the business of the
Borrower.

(f) Visitation Rights. At any reasonable time during normal
business hours and upon reasonable prior notice and from time to time,
permit the Administrative Agent or any of the Lenders or any agents or
representatives thereof to examine and, with respect to information
that is not Confidential Information (or with respect to any
information while an Event of Default has occurred and is continuing),
make copies of and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of the Borrower and
any of its Subsidiaries with any of their officers or directors and,
at any time when an Event of Default has occurred and is continuing,
with their independent certified public accountants (and the
Administrative Agent or such Lender will give prior notice to the
Borrower of any such discussion with such accountants).

(g) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account as are
necessary to prepare Consolidated financial statements in accordance
with GAAP, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and
each such Subsidiary in accordance with GAAP.

(h) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of
its properties that are used or useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted,
except where failure to do so would not have a Material Adverse
Effect.

(i) Reporting Requirements. Furnish to the Lenders:

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year and ending with the end of such quarter and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending
with the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all
certified by the chief financial officer or the chief accounting
officer of the Borrower (or another appropriate officer of the
Borrower designated by such officer) and (B) certificates as to
compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance
with Sections 6.02(a)(ix) and 6.03(a) and (b), provided that in the
event of any change in GAAP used in preparation of such financial
statements, the Borrower shall also provide, if necessary for the
determination of compliance with such Sections, a statement of
reconciliation conforming any information in such certificates with
GAAP;

(ii) as soon as available and in any event
within 120 days after the end of each fiscal year of the
Borrower, the Annual Audited Financial Statements of the
Borrower and its Consolidated Subsidiaries with respect to
such fiscal year;

(iii) as soon as possible and in any event
within five Business Days after the Borrower obtains actual
knowledge of the occurrence of each Event of Default and each
Default continuing on the date of such statement, a statement
of the chief financial officer, treasurer or chief accounting
officer of the Borrower setting forth details of such Event of
Default or Default and the action which the Borrower has taken
and proposes to take with respect thereto;

(iv) within a reasonable time after filing
thereof, copies of all registration statements and all annual,
quarterly and monthly reports filed by the Borrower with the
Securities and Exchange Commission and promptly upon the
mailing thereof to the shareholders of the Borrower generally,
copies of all financial statements, reports and proxy
statements so mailed;

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(v) promptly after the Borrower or any ERISA
Affiliate knows or should reasonably know that any ERISA Event
has occurred with respect to which the liability or potential
liability of the Borrower or any of its ERISA Affiliates
exceeds or could reasonably be expected to exceed $10,000,000,
a statement of the chief financial officer, treasurer or chief
accounting officer of the Borrower describing such ERISA Event
and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;

(vi) promptly after receipt thereof by the
Borrower or any ERISA Affiliate, copies of each notice from
the PBGC stating its intention to terminate any Plan or to
have a trustee appointed to administer any Plan where such
action would have a Material Adverse Effect;

(vii) promptly after request therefor, such
other business and financial information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request;
and

(viii) within 10 days after the last day of each
fiscal quarter of each fiscal year of the Borrower, a
certificate of the chief financial officer, the treasurer or the
chief accounting officer of the Borrower demonstrating in detail
the number of Cash Days occurring in such fiscal quarter.

(j) Use of Proceeds. The Borrower will use the proceeds of
the Advances hereunder for general corporate purposes; provided that
neither the Administrative Agent nor any Lender shall have any
responsibility as to the use of any such proceeds.

SECTION 6.02. Negative Covenants. So long as any obligations
under this Agreement or any Note shall remain unpaid or any Lender shall have
any Commitment hereunder, the Borrower will not:

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acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, other than:

(i) Permitted Liens;

(ii) Liens outstanding on the date of this
Agreement and described in Schedule II;

(iii) Purchase Money Liens;

(iv) Liens on any property or assets of any
Subsidiary of the Borrower securing Indebtedness owed to the
Borrower;

(v) Liens arising pursuant to any order of
attachment, distraint or similar legal process arising in
connection with court proceedings, so long as a subsisting
stay of execution or enforcement of any such Lien has been
obtained and the claims secured thereby are being contested in
good faith by appropriate proceedings and adequate provision
has been made for the discharge thereof if adversely
determined;

(vi) Liens in favor of any Person or entity on
all documents of title arising out of any trade letter of
credit permitted hereunder;

(vii) Liens in connection with the Receivables
Financing;

(viii) any Lien renewing, extending or refunding
any Lien permitted by clauses (ii) through (vii) above,
provided that the principal amount secured is not increased,
and the Lien is not extended to other property; and

(ix) Liens not otherwise permitted under this
Section 6.02(a) securing obligations in an aggregate amount
not to exceed $20,000,000.

(b) Restrictions on Fundamental Changes. Merge or
consolidate, or permit any of its Subsidiaries to merge or
consolidate, with or into any other Person, or convey, transfer, lease
or otherwise dispose of or permit any of its Subsidiaries to convey,
transfer, lease or otherwise dispose of (whether in one transaction or
a series of transactions), all or substantially all of the Property
(whether now owned

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or hereafter acquired) of the Borrower, or of the Borrower and its
Subsidiaries taken as a whole, to any other Person, except that:

(i) the Borrower and any of its Subsidiaries
may merge into or consolidate with a Subsidiary or
Subsidiaries of the Borrower or the Borrower (in the case of a
Subsidiary of the Borrower), provided that (A) any such
Subsidiary was either a Subsidiary of the Borrower on the date
of this Agreement or was newly incorporated or established by
the Borrower or a Subsidiary of the Borrower thereafter, (B)
no such Subsidiary had, prior to such merger or consolidation,
merged into or consolidated with any other entity after the
Effective Date that was not on the date of this Agreement an
Affiliate of the Borrower or a Subsidiary of the Borrower and
(C) in the case of a merger or consolidation of the Borrower,
(x) the Borrower shall be the continuing or surviving entity
or the surviving entity expressly assumes by an amendment to
this Agreement duly executed by such surviving entity all of
the Borrower's obligations hereunder and under the Notes in a
manner satisfactory to the Administrative Agent and the
Required Lenders and (y) immediately after giving effect to
such merger or consolidation no Default or Event of Default
shall have occurred and be continuing; and

(ii) the Borrower or any of its Subsidiaries
may transfer accounts receivable and related assets in
connection with the Receivables Financing and any Subsidiary
of the Borrower may sell, lease, transfer or otherwise dispose
of all or substantially all of its properties or assets to the
Borrower or one or more other Subsidiaries of the Borrower.

Notwithstanding anything to the contrary in the foregoing, no such
sale, lease, transfer or other disposition permitted hereunder shall
have the effect of releasing the Borrower from its liabilities
hereunder or under the Notes.

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except on terms that are fair and reasonable to the Borrower and its
Subsidiaries and on terms no less favorable to the Borrower or such
Subsidiary (considered as a whole in conjunction with all other
existing arrangements and relationships with such Affiliate) than the
Borrower or such Subsidiary would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.

(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its
business as carried on as of the date hereof which would have a
Material Adverse Effect.

(e) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.

SECTION 6.03. Financial Covenants. So long as any
obligations under this Agreement or any Note shall remain unpaid or any
Lender shall have any Commitment hereunder, the Borrower covenants and
agrees that:

(a) Interest Coverage. The Borrower will not permit the
ratio of (x) Consolidated EBIT for any period of four consecutive
fiscal quarters (commencing with the period of four consecutive fiscal
quarters ending July 28, 1996) of the Borrower to (y) Gross Interest
Expense for such period to be less than 8.00 to 1.00.

(b) Net Debt to Capitalization. The Borrower will not at
any time permit the ratio of (x) the aggregate principal amount of Net
Debt of the Borrower and its Subsidiaries (as would appear on a
Consolidated balance sheet of the Borrower and its Subsidiaries
prepared at such time) at such time to (y) Capitalization as at the end
of the fiscal quarter ending on or immediately prior to such time (as
reported on the latest quarterly Consolidated balance sheet of the
Borrower and its Subsidiaries) to exceed 0.10 to 1.00.

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ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:

(a) (i) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or (ii) the Borrower
shall fail to pay any interest on any Advance, or any other payment
under this Agreement or any Note, for a period of three Business Days
after the same becomes due and payable; or

(b) Any representation or warranty made by the Borrower
herein or by the Borrower (or any of its officers) under or in
connection with this Agreement or any Note shall prove to have been
incorrect in any material respect when made; or

(c) The Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 6.02(b), (c) or (d)
or in Section 6.03(a) or (b) or (ii) any other term, covenant or
agreement contained in this Agreement on its part to be performed or
observed if the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the
Administrative Agent or the Required Lenders; or

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Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment,
including, without limitation, a prepayment required in connection
with the sale of the sole asset or all assets securing such
Indebtedness), redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be
made, in each case prior to the stated maturity thereof; or

(e) The Borrower or any of its Material Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its
property) shall occur; or the Borrower or any of its Material
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or

(f) Any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against the Borrower or any of its
Material Subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

(g) Any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of

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occurrence of such ERISA Event) of the Insufficiency of such Plan and
the Insufficiency of any and all other Plans with respect to which an
ERISA Event shall have occurred and then exist (or the liability of
the Borrower or any ERISA Affiliate related to such ERISA Event)
exceeds $20,000,000; or

(h) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds $20,000,000 or requires payments exceeding $10,000,000 per
annum; or

(i) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of
the Borrower and its ERISA Affiliates to all Multiemployer Plans which
are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the respective plan years of such Multiemployer Plans immediately
preceding the plan year in which the reorganization or termination
occurs by an amount exceeding $20,000,000; or

(j) The Borrower shall be prevented or relieved by any
governmental or regulatory authority from performing or observing any
monetary payment or repayment obligation evidenced by this Agreement
or the Notes;

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waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall be automatically terminated and (B) the Advances and the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are delegated
to the Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes), the Administrative 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 upon all Lenders and all holders of Notes; provided that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement. Chemical Bank, as Co-Agent, and Citicorp Securities,
Inc., as Arranger, in their capacities as such, shall have no duties,
responsibilities or liabilities whatsoever under this Agreement.

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the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 9.07; (ii) may consult with legal
counsel (including counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken
or omitted to be taken in good faith by them in accordance with the advice of
such counsel, accountants or experts; (iii) makes no warranty or representation
to any Lender and shall not be responsible to any of them for any statements,
warranties or representations made in or in connection with this Agreement or
the Notes; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the Notes on the part of the Borrower or to inspect the property
(including the books and records) of the Borrower; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Notes or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement or the Notes by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.

SECTION 8.03. Agents and Affiliates. With respect to its
respective Commitments, the Advances made by it and the Notes issued to it,
each of Citibank and Chemical shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not the
Administrative Agent or Co-Agent, as the case may be; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank and
Chemical, each in its individual capacity. Each of Citibank and Chemical and
their respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures for, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries, any of its Affiliates and any Person who may do business with or
own securities of the Borrower or any such Subsidiary or Affiliate, all as if
Citibank or Chemical, as the case may be, were not the Administrative Agent or
Co-Agent, as the case may be, and without any duty to account therefor to the
Lenders.

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Section 5.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or the Co-Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.

SECTION 8.05. Indemnification. The Lenders agree to
indemnify the Administrative Agent and the Co- Agent (to the extent not
promptly reimbursed by the Borrower), ratably according to the principal
amounts of the Notes then held by each of them (or if no Advances are at the
time outstanding, ratably according to the amounts of their Commitments), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against any
of them in any way relating to or arising out of this Agreement or the Notes or
any action taken or omitted by any of them hereunder or under the Notes;
provided, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses payable by the Borrower under
Section 9.04 of this Agreement, to the extent that the Administrative Agent is
not promptly reimbursed for such costs and expenses by the Borrower.

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on behalf of the Lenders, appoint a successor Administrative Agent, which shall
be a commercial bank organized under the laws of the United States of America
or of any State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of
the following: (a) waive any of the conditions specified in Section 4.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the
Revolving Credit Notes or any fees or other amounts payable hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Revolving Credit Notes or any fees or other amounts payable hereunder, (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Revolving Credit Notes, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action hereunder or (f)
amend this Section 9.01; and provided further that (1) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent or a
Swing Line Bank, as the case may be, in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent or
such Swing Line Bank, as the case may be, under this Agreement or any Note and
(2) no amendment,

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waiver or consent shall, unless in writing and signed by a Lender that has made
a Competitive Bid Advance, in addition to the Lenders required above to take
such action, affect the rights or duties of such Lender in respect of such
Competitive Bid Advance.

SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopy,
telegraphic, telex or cable communication) and mailed, telegraphed, telecopied,
telexed, cabled or delivered, if to the Borrower, to its address at 2214 W.
Braker Lane, Suite D, Austin, Texas 78758-4063, Attention: Alex C. Smith,
Vice President, Treasurer; if to any Bank, to its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender, to
its Domestic Lending Office specified in the Assignment and Acceptance pursuant
to which it became a Lender; and if to the Administrative Agent, to its address
at 399 Park Avenue, New York, New York 10043, Attention: Michael Mandracchia;
or to the Borrower or the Administrative Agent, at such other address as shall
be designated by such party in a written notice to the other parties and, to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent. Each such
notice or communication shall, (a) when mailed, be effective three Business
Days after the same is deposited in the mails, (b) when mailed for next day
delivery by a reputable freight company or reputable overnight courier service,
be effective one Business Day thereafter, and (c) when sent by telegraph,
telecopy, telex or cable, be effective when the same is telegraphed, telecopied
and receipt thereof is confirmed by telephone or return telecopy, confirmed by
telex answerback or delivered to the cable company, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VIII shall not be effective until received by the Administrative Agent.

SECTION 9.03. No Waiver; Remedies. No failure on the part of
any Lender or the Administrative Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees
to pay, whether or not any of the transactions contemplated hereby are
consummated, on demand (x) all reasonable

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costs and expenses (including reasonable legal fees of counsel to the
Administrative Agent) in connection with the preparation (excluding normal
travel and related expenses incurred by the personnel of the Administrative
Agent), execution, delivery, administration (excluding those which are
customarily borne by the Administrative Agent), modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
and (y) the reasonable fees and expenses of counsel to the Administrative Agent
with respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement. The Borrower further agrees to pay on
demand all reasonable expenses of the Lenders (including, without limitation,
reasonable counsel (including, without duplication, internal counsel) fees and
expenses) in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, reasonable
counsel (including, without duplication, internal counsel) fees and expenses in
connection with the enforcement of rights under this Section 9.04(a).

(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel, including, without duplication, internal counsel) that may be incurred
by or asserted or awarded against any Indemnified Party in its agent or lending
capacity under, or otherwise in connection with, this Agreement, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement, the proposed
or actual use of the proceeds of the Advances or any of the other transactions
contemplated hereby, whether or not such investigation, litigation or
proceeding is brought by the Borrower, its shareholders or creditors or an
Indemnified Party or any other Person or an Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability 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. The Borrower hereby acknowledges that the indemnification
provided for by this Subsection (b) includes indemnification of an Indemnified
Party for claims, damages,

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losses, liabilities or expenses resulting in whole or in part from such
Indemnified Party's negligence (other than gross negligence).

(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or any payment of principal of any LIBO Rate Advance is
made other than on the last day of an Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.10 or 2.14 (in the case
of Eurodollar Rate Advances) or 3.05 or acceleration of the maturity of the
Notes pursuant to Section 7.01 or for any other reason, then the Borrower
shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Revolving Credit Advance.

SECTION 9.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default or (ii) the making of the
request or the granting of the consent specified by Section 7.01 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each Lender 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 (other than deposits at any account with respect to which such
account states that the Borrower is acting in a fiduciary capacity) and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and any Note held by such
Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender may
have.

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SECTION 9.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Bank that such Bank has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.

SECTION 9.07. Assignments and Participations. (a) Each
Lender may assign to one or more banks or other entities all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that:

(i) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under this
Agreement (other than any Competitive Bid Advances or Competitive Bid
Notes),

(ii) the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment other than an
assignment to another Lender or an assignment of all of the Commitment
of the assigning Lender (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 and shall be an integral multiple of $1,000,000
in excess thereof,

(iii) each such assignment shall be to an Eligible
Assignee, and (unless such assignment shall be to a Subsidiary of the
assigning Lender or to a Subsidiary of the bank holding company of
which the assigning Lender is a Subsidiary) the Borrower and the
Administrative Agent shall have consented to such assignment (which
consents shall not be unreasonably withheld or delayed) provided, that
no such consent shall be required from the Borrower while a Default
has occurred and is continuing,

(iv) no such assignment may be made unless the assigning
Lender makes a proportional assignment to the same assignee of its
commitment and advances under the $150,000,000 three-year Credit
Agreement dated as of the date hereof among the Borrower, certain
lenders, Citibank,

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N.A., as Administrative Agent, Chemical Bank, as Co-Agent, and
Citicorp Securities, Inc., as Arranger, and

(v) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation
fee of $3,000.

Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall relinquish its rights and be released from its
obligations under this Agreement, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance.

(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 5.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, the Co-Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee

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appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are delegated
to the Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.

(c) The Administrative Agent shall maintain at its address
referred to in Section 9.02 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 the
Revolving Credit Advances 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 the Borrower, the Administrative 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 the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice. The Administrative Agent
shall provide the Borrower with a copy of the Register upon request.

(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C-1 hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Revolving Credit Note or Notes a new Revolving
Credit Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Revolving Credit Note to the order of the assigning Lender in an amount equal
to the Commitment retained by it hereunder. Such new Revolving Credit Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Revolving Credit Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-l hereto. Such surrendered Revolving

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Credit Note or Notes shall be marked "canceled" and shall be returned promptly
to the Borrower.

(e) Each Lender may sell participations to one or more banks
or other entities in or to a portion of its rights and obligations under this
Agreement (including, without limitation, a portion of its Commitment, the
Advances owing to it and the Note or Notes held by it); provided, however, that
(i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) the parties to each such participation
shall execute a participation agreement, and (vi) no participant under any such
participation shall have any right to approve any amendment to or waiver of any
provision of this Agreement or the Notes, or any consent to any departure by
the Borrower therefrom, except to the extent that such amendment, waiver or
consent would alter the principal of, or interest on, the Advance or Advances
in which such participant is participating or any fees or other amounts payable
to the Lenders hereunder, or postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder.

(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information, including Confidential Information, relating to
the Borrower furnished to such Lender by or on behalf of the Borrower; provided
that, prior to any such disclosure of Confidential Information, the assignee or
participant or proposed assignee or participant shall be informed of the
confidential nature of such Confidential Information and shall agree to be
bound by the provisions of Section 9.12 with respect thereto.

(g) Notwithstanding any other provision in this Section 9.07,
no Lender may assign its interest to an Eligible Assignee if, as of the
effective date of such assignment, such assignment would increase the amount of
taxes or increased costs payable under Section 2.12 or 3.04, respectively.

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(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may (without notice to the Borrower or the Administrative
Agent and without payment of any fee) at any time (i) create a security
interest in all or any portion of its rights under this Agreement (including,
without limitation, the Advances owing to it and the Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System and (ii) assign all or any portion of
its rights under this Agreement and its Advances, Notes and Commitment to an
affiliate.

SECTION 9.08. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.

SECTION 9.09. Execution in 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 all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement.

SECTION 9.10. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits (solely for the benefit
of the Administrative Agent and each Lender), for itself and its Property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the Notes, or for recognition or enforcement of any judgment
relating hereto or thereto, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.

(b) The Borrower hereby irrevocably appoints and designates
CT Corporation System, whose address is 1633 Broadway,

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New York, New York 10019, as its true and lawful attorney and duly authorized
agent for service of legal process of the Borrower. The Borrower hereby agrees
that service of legal process in any proceeding referred to in the preceding
clause (a) may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address specified in Section 9.02 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto.

(c) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any document related thereto in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

SECTION 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE ADMINISTRATIVE AGENT, THE CO-AGENT AND THE LENDERS HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTES, THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE
AGENT, THE CO-AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

SECTION 9.12. Confidentiality. Each Lender agrees that it
will not, without the prior written consent of the Borrower (which shall not be
unreasonably withheld or delayed), disclose (other than to its affiliates and
to its and its affiliates' directors, employees, auditors and counsel) any
Confidential Information with respect to the Borrower furnished to it under
this Agreement, except (i) as may be required to comply with any applicable law
or regulation or pursuant to legal process or otherwise as required in
connection with litigation (and each Lender agrees that it will, to the extent
reasonably practicable and if permitted by applicable law and regulation, give
the Borrower prior notice of such disclosure reasonably sufficient to permit
the Borrower to contest such disclosure), (ii) in accordance with any ruling or
regulatory practice of any bank regulatory agency, and (iii) to a proposed
assignee or participant permitted under Section 9.07 (provided that such
proposed assignee or participant agrees to be bound by the provisions of this
Section 9.12).

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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

DELL COMPUTER CORPORATION

By /s/ Alex C. Smith
----------------------------------
Title: Vice President, Treasurer

Administrative Agent
--------------------

CITIBANK, N.A.,
as Administrative Agent

By /s/ Alan J. Berenbaum
----------------------------------
Title: Attorney-in-Fact

Co-Agent
--------

CHEMICAL BANK, as Co-Agent

By /s/ Ann B. Kerns
----------------------------------
Title: Vice President

Arranger
--------

CITICORP SECURITIES, INC., as
Arranger

By /s/ Steven Victorin
----------------------------------
Title: Vice President

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Lenders
-------

CITIBANK, N.A.
Commitment
- ----------
$15,520,000
By /s/ Alan J. Berenbaum
--------------------------------
Title: Attorney in Fact

CHEMICAL BANK
Commitment
- ----------
$12,080,000
By /s/ Ann B. Kerns
--------------------------------
Title: Vice President

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Commitment
- ----------
$9,200,000
By /s/ Kevin McMahon
--------------------------------
Title: Vice President

THE BANK OF TOKYO-MITSUBISHI, LTD.
Commitment
- ----------
$9,200,000
By /s/ J. Mearns
--------------------------------
Title: Vice President and
Manager

BZW DIVISION OF BARCLAYS BANK PLC
Commitment
- ----------
$9,200,000
By /s/ Robert R. Morton
--------------------------------
Title: Director

CREDIT LYONNAIS NEW YORK BRANCH
Commitment
- ----------
$9,200,000
By /s/ Robert Ivosevich
--------------------------------
Title: Senior Vice President

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DRESDNER BANK AG NEW YORK AND GRAND
CAYMAN BRANCHES
Commitment
- ----------
$9,200,000
By /s/ B. Craig Erickson
-----------------------------
Title: Vice President

By /s/ Lucas Massong
-----------------------------
Title: Assistant Treasurer

ROYAL BANK OF CANADA
Commitment
- ----------
$9,200,000
By /s/ Tom J. Oberaigner
-----------------------------
Title: Manager

STANDARD CHARTERED BANK
Commitment
- ----------
$9,200,000
By /s/ Rita Raychaudhury
-----------------------------
Title: Vice President

SOCIETE GENERALE, SOUTHWEST AGENCY
Commitment
- ----------
$8,000,000
By /s/ Richard Gould
-----------------------------
Title: Vice President

Dell Computer Credit Agreement
<PAGE> 92
SCHEDULES

The following schedules have been omitted from this filing:

Schedule I -- List of Applicable Lending Offices
Schedule II -- Existing Liens

The registrant hereby undertakes to furnish supplementary a copy of
either of such schedules to the Commission upon request.

<PAGE> 93

EXHIBIT A-1

FORM OF REVOLVING CREDIT NOTE

$________________
Dated: ___________, 199_

FOR VALUE RECEIVED, the undersigned, DELL COMPUTER
CORPORATION, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of _________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to
below) on the Termination Date (as so defined) the aggregate principal amount
of $________________ or, if less, the aggregate principal amount of the
Revolving Credit Advances (as defined below) owing to the Lender by the
Borrower pursuant to the Credit Agreement (as defined below) on the Termination
Date.

The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of such Revolving Credit
Advance until such principal amount is paid in full, at such interest rates,
and payable at such times, as are specified in the Credit Agreement.

Both principal and interest are payable not later than 12:00
noon (New York City time) on the day due in lawful money of the United States
of America to Citibank, N.A. ("Citibank"), as Administrative Agent, or any
successor to Citibank in such capacity, for the account of the Lender at the
Administrative Agent's Account (as defined in the Credit Agreement referred to
below), in same day funds. Each Revolving Credit Advance made by the Lender to
the Borrower and the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Revolving
Credit Note.

This Revolving Credit Note is one of the Revolving Credit
Notes referred to in, and is entitled to the benefits of, the Credit Agreement
dated as of June 6, 1996 (said Agreement, as amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement"), among the Borrower,
Citibank, in its capacity as Administrative Agent, Chemical Bank, in its
capacity as Co-Agent, Citicorp Securities, Inc., in its capacity as Arranger
and the Lender and certain other banks parties thereto. The Credit Agreement,
among other things, (i) provides for the making of advances (the "Revolving
Credit Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each
such Revolving Credit Advance being evidenced by this Revolving Credit Note,
and (ii) contains provisions for

A1-1
<PAGE> 94

acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.

The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.

This Revolving Credit Note shall be governed by, and construed
in accordance with, the laws of the State of New York.

DELL COMPUTER CORPORATION

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

A1-2
<PAGE> 95

REVOLVING CREDIT ADVANCE AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
Amount Amount of
and Type of Principal Unpaid
Revolving Credit Paid or Principal Notation
Date Advance Prepaid Balance Made By
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

</TABLE>

A1-3
<PAGE> 96

EXHIBIT A-2

FORM OF COMPETITIVE BID NOTE

$____________
Dated: __________, 199_

FOR VALUE RECEIVED, the undersigned, DELL COMPUTER
CORPORATION, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of _________________________ the ("Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to
below), on ___________, 199_, the principal amount of _________ Dollars
($__________).

The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:

Interest Rate: ____% per annum (calculated on the basis of a
year of ___ days for the actual number of days elapsed).

Interest Payment Date or Dates: __________________.

Both principal and interest are payable not later than 12:00
noon (New York City time) on the day due in lawful money of the United States
of America to Citibank, N.A. ("Citibank"), as Administrative Agent, or any
successor to Citibank in such capacity, for the account of the Lender at the
Administrative Agent's Account (as defined in the Credit Agreement referred to
herein) (or at the office of such successor, if applicable), in same day funds,
free and clear and without any deduction, with respect to the payee named
above, for any and all present and future taxes, deductions, charges or
withholdings, and all liabilities with respect thereto.

This Competitive Bid Note is one of the Competitive Bid Notes
referred to in, and is entitled to the benefits of, the Credit Agreement dated
as of June 6, 1996 (said agreement, as amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement"), among the Borrower,
Citibank, in its capacity as Administrative Agent, Chemical Bank, in its
capacity as Co-Agent, Citicorp Securities, Inc., in its capacity as Arranger,
the Lender and certain other banks parties thereto. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.

A2-1
<PAGE> 97

This Competitive Bid Note shall be governed by, and construed
in accordance with, the laws of the State of New York.

DELL COMPUTER CORPORATION

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

A2-2
<PAGE> 98

EXHIBIT B-1

FORM OF NOTICE OF REVOLVING CREDIT BORROWING

Citibank, N.A., as
Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]

Attention: _____________

Ladies and Gentlemen:

The undersigned, Dell Computer Corporation, refers to the
Credit Agreement dated as of June 6, 1996 (said agreement, as amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the undersigned, Citibank, N.A. ("Citibank"), in its capacity as
Administrative Agent, Chemical Bank, in its capacity as Co-Agent, Citicorp
Securities, Inc., in its capacity as Arranger, and certain Lenders parties
thereto, and hereby gives you notice, irrevocably (subject to the terms of
Sections 2.09 and 3.05 of the Credit Agreement), pursuant to Section 3.01 of
the Credit Agreement that the undersigned hereby requests a Revolving Credit
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Revolving Credit Advance Borrowing (the
"Proposed Revolving Credit Borrowing") as required by Section 3.01(a) of the
Credit Agreement:

(i) The Business Day of the Proposed Revolving Credit
Borrowing is ____________, 19__.

(ii) The Type of Revolving Credit Advances comprising the
Proposed Revolving Credit Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].

(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $____________.

B1-1
<PAGE> 99

*[(iv) The initial Interest Period for each Revolving Credit
Advance made as part of the Proposed Revolving Credit Borrowing is
_____ month[s].]

Very truly yours,

DELL COMPUTER CORPORATION

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

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

* To be used in the case of a Revolving Credit Borrowing comprised of
Eurodollar Rate Advances.

B1-2
<PAGE> 100

EXHIBIT B-2

FORM OF NOTICE OF COMPETITIVE BID BORROWING

Citibank, N.A., as
Administrative Agent,
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]

Attention: ______________

Ladies and Gentlemen:

The undersigned, Dell Computer Corporation, refers to the
Credit Agreement dated as of June 6, 1996 (said agreement, as amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement"), the terms defined therein being used herein as therein defined),
among the undersigned, Citibank, N.A. ("Citibank"), in its capacity as
Administrative Agent, Chemical Bank, in its capacity as Co-Agent, Citicorp
Securities, Inc., in its capacity as Arranger, and certain Lenders parties
thereto, and hereby gives you notice pursuant to Section 3.02 of the Credit
Agreement that the undersigned hereby requests a Competitive Bid Borrowing
under the Credit Agreement, and in that connection sets forth below the terms
on which such Competitive Bid Borrowing (the "Proposed Competitive Bid
Borrowing") is requested to be made:

(A) Business Day of
Competitive Bid
Borrowing _______________________

(B) Aggregate amount of
Competitive Bid
Borrowing _______________________

(D) Maturity date* _______________________

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

* The maturity date may not be earlier than the date occurring 30 days
after the date of such Competitive Bid Borrowing or later than 180
days or six months, as applicable, after the date of the Competitive
Bid Borrowing or, if earlier, the Termination Date.

B2-1
<PAGE> 101

(E) Interest payment
date(s) ________________________

(F) _________________* ________________________

The undersigned hereby confirms that the Proposed Competitive
Bid Borrowing is to be made pursuant to the terms of the Credit Agreement.

Very truly yours,

DELL COMPUTER CORPORATION

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

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

* Any other terms to be applicable to the Competitive Bid Borrowing.

B2-2
<PAGE> 102

EXHIBIT C-1

FORM OF ASSIGNMENT AND ACCEPTANCE

Reference is made to the Credit Agreement dated as of June 6,
1996 (said agreement, as amended, supplemented or otherwise modified from time
to time, being the "Credit Agreement"), among Dell Computer Corporation, a
Delaware corporation (the "Borrower"), Citibank, N.A. ("Citibank"), in its
capacity as administrative agent (the "Administrative Agent"), Chemical Bank,
in its capacity as Co-Agent (the "Co-Agent"), Citicorp Securities, Inc., in its
capacity as Arranger (the "Arranger"), and certain Lenders parties thereto.
Terms defined in the Credit Agreement are used herein with the same meaning.

_________________ (the "Assignor") and _______________ (the
"Assignee") agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of the
date hereof without recourse equal to the percentage interest specified on
Schedule 1. After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Advances owing to the Assignee will be as set
forth in Schedule 1.

2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iv) certifies that as of
the date hereof there are no taxes or increased costs payable under Sections
2.12 and 3.04 of the Credit Agreement, respectively, with respect to its
interest being assigned by it hereunder [except as disclosed on Schedule 1
hereto]; and (v) attaches the Note or Notes and requests that the
Administrative Agent exchange such Note or Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the order of the Assignor in an amount equal to
the Commitment retained by the

C1-1
<PAGE> 103

Assignor under the Credit Agreement, respectively, as specified on Schedule 1.

3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 5.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Co-Agent, the Arranger, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iii) confirms that
it is an Eligible Assignee; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) specifies as its address for its Domestic
Lending Office and Eurodollar Lending Office the offices set forth beneath its
name on the signature pages hereof; (vii) attaches any U.S. Internal Revenue
Service forms required under Section 2.12 of the Credit Agreement; (viii)
certifies that as of the Effective Date there are no taxes or increased costs
payable under Sections 2.12 and 3.04 of the Credit Agreement [except as
disclosed on Schedule 1 hereto, which taxes or increased costs do not increase
the amount of taxes or increased costs payable under Sections 2.12 or 3.04,
respectively]; and (ix) confirms that it will maintain the confidentiality of
any confidential information delivered to it hereunder or as a Lender under the
Credit Agreement.

4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance and recording
by the Administrative Agent. The effective date for this Assignment and
Acceptance (the "Effective Date") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule 1.

5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of, and be deemed for all purposes under the
Credit Agreement to be, a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance,

C1-2
<PAGE> 104

relinquish its rights and be released from its obligations under the Credit
Agreement.

6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Notes for periods prior to the Effective
Date directly between themselves.

7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.

8. This Assignment and Acceptance 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 both of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of Schedule 1 to this Agreement and
Acceptance by telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.

C1-3
<PAGE> 105

SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE

Percentage of Commitment
being assigned: _____________%

Assignee's Commitment: $____________

Aggregate outstanding principal
amount of Advances assigned: $____________

Principal amount of Note
payable to Assignee: $____________

Principal amount of Note
payable to Assignor: $____________

[Amount of Taxes or Increased
Costs of Assignor:] $____________

[Amount of Taxes or Increased
Costs of Assignee:] $____________

Effective Date (if other than
date of acceptance by the
Administrative Agent): ______, 199_*

[NAME OF ASSIGNOR], as Assignor

By:___________________________
Title:

Dated: __________, 199_

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

* This date should be no earlier than five Business Days after delivery
of this Assignment and Acceptance to the Administrative Agent.

C1-4
<PAGE> 106

[NAME OF ASSIGNEE], as Assignee

By:____________________________
Title:

Domestic Lending Office:

Eurodollar Lending Office:

Accepted this ____ day
of __________, 199_

CITIBANK, N.A.,
as Administrative Agent

By:_______________________
Title:

C1-5
<PAGE> 107

EXHIBIT C-2

FORM OF ASSUMPTION AGREEMENT

[Date]

Dell Computer Corporation
2214 W. Braker Lane
Suite D
Austin, Texas 78758-4063
Attention:

Citibank, N.A., as
Administrative Agent under
the below mentioned
Credit Agreement
399 Park Avenue
New York, New York
Attention:

Ladies and Gentlemen:

Reference is made herein to the Credit Agreement dated as of
June 6, 1996 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"; terms defined therein being used herein as therein
defined) among Dell Computer Corporation (the "Borrower"), Citibank, N.A., in
its capacity as Administrative Agent (the "Administrative Agent"), Chemical
Bank, in its capacity as Co-Agent (the "Co-Agent"), Citicorp Securities, Inc.,
in its capacity as Arranger (the "Arranger"), and the Lenders party from time
to time thereto.

_________ (the "Non-Consenting Lender") and _________ (the
"Assuming Lender") agree as follows:

1. The Assuming Lender proposes to become an Assuming Lender
pursuant to Section 2.15(c) of the Credit Agreement and, in that
connection, hereby agrees with the Administrative Agent and the
Borrower that it shall become a Lender for all purposes of the Credit
Agreement on the applicable Extension Date. In connection therewith,
the Non-Consenting Lender hereby sells and assigns to the Assuming
Lender, and the Assuming Lender hereby purchases and assumes from the
Non-Consenting Lender all interest in and to the Non-Consenting
Lender's rights and obligations under the Credit Agreement as of the
applicable Extension Date, which interest is equal to ____% of all
outstanding rights and obligations of the Lenders under the Credit
Agreement on such Extension Date. After giving effect to such sale
and assignment, the Assuming Lender's Commitment will be $________ and
the aggregate principal amount of all

C2-1
<PAGE> 108

outstanding Revolving Credit Advances owing to the Assuming Lender
will be as set forth on Schedule 1 hereto.

2. The Non-Consenting Lender (a) represents and warrants that
it is the legal and beneficial owner of the interest being sold and
assigned by it hereunder and that such interest is free and clear of
any adverse claim; (b) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any Note, or any other
instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of any Borrower or the performance or
observance by any Borrower of any of its obligations under the Credit
Agreement or any Note, or any other instrument or document furnished
pursuant thereto; and (d) attaches the Revolving Credit Note held by
the Non-Consenting Lender and requests that the Administrative Agent
exchange such Revolving Credit Note for a new Revolving Credit Note
payable to the order of the Assuming Lender in an amount equal to the
Commitment assumed by the Assuming Lender under the Credit Agreement.

3. The undersigned (a) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial
statements referred to in Section 5.01(b) thereof and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assumption Agreement;
(b) agrees that it will, independently and without reliance upon the
Administrative Agent, the Co-Agent, the Arranger, the Non-Consenting
Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit
Agreement; (c) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers
and discretion under the Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; (d) agrees that
it will perform in accordance with their terms all of the obligations
that by the terms of the Credit Agreement are required to be performed
by it as a Lender; (e) confirms that it is an Eligible Assignee; (f)
specifies as its Applicable Lending Offices the offices set forth
below its name on the signature page hereof; and (g) attaches any U.S.
Internal

C2-2
<PAGE> 109

Revenue Service forms or any certificates required to be provided by
it under Section 2.12 of the Credit Agreement.

4. Following the execution of this Assumption Agreement, it
will be delivered to the Administrative Agent for acceptance and
recording by the Administrative Agent. The effective date for this
Assumption Agreement (the "Effective Date") shall be the applicable
Extension Date.

5. Upon satisfaction of the applicable conditions set forth
in Section 2.15 and in Article III and upon such acceptance and
recording by the Administrative Agent, as of the Effective Date, the
Assuming Lender shall be a party to the Credit Agreement and have all
of the rights and obligations of a Lender thereunder and, subject to
the proviso set forth below, the Non-Consenting Lender shall cease to
be a party thereto; provided, however, that the Non-Consenting
Lender's rights and obligations under Sections 3.04, 3.05 and 9.04,
and its obligations under Section 8.05, of the Credit Agreement shall
survive the assumption of all of the Non- Consenting Lender's rights
and obligations under the Credit Agreement pursuant to this Assumption
Agreement as to matters occurring prior to the Effective Date.

6. This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

7. This Assumption 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
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Assumption
Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Assumption Agreement.

Very truly yours,

NAME OF ASSUMING LENDER]

By________________________
Name:
Title:

Date: __________, ____

[Address]

C2-3
<PAGE> 110

Eurodollar Lending Office

[Address]

Acknowledged and Agreed to as
of this ____ day of _________:

[NAME OF NON-CONSENTING LENDER]

By____________________________
Name:
Title:

Accepted [and Approved]* this
__ day of __________, ____:

CITIBANK, N.A., as Administrative Agent

By___________________________
Name:
Title:

[Approved this ____ day of
_________, ____:

DELL COMPUTER CORPORATION

By___________________________
Name:
Title]*

__________________________________

* Required if the Assuming Lender is an Eligible Assignee solely by
reason of clause (vi) of, or the proviso to, the definition of
"Eligible Assignee" set forth in Section 1.01 of the Credit Agreement.

C2-4
<PAGE> 111

SCHEDULE 1
to
ASSUMPTION AGREEMENT

Assumed Advances and Discounted Notes

Aggregate outstanding principal
amount of Revolving Credit Advances
in U.S. Dollars assumed:
U.S. $__________

Principal amount of Revolving Credit Note
payable to Assuming Lender:
U.S. $__________

Effective Date: _______________, ____

C2-5
<PAGE> 112

EXHIBIT D

FORM OF OPINION OF COUNSEL FOR THE BORROWER

June __, 1996

To each of the Banks party
to the Credit Agreement
referred to below and

Citibank, N.A., as Administrative
Agent for said Banks

Re: Credit Agreement-
$100,000,000 364-Day Revolving Credit Facility

I am the General Corporate Counsel of Dell Computer
Corporation, a Delaware corporation (the "Borrower"), I have acted as counsel
to the Borrower in connection with the Credit Agreement, dated as of June 6,
1996, among the Borrower, the Banks party thereto, Citibank, N.A. (as
Administrative Agent for such Banks), Chemical Bank, (as Co-Agent for such
Banks), and Citicorp Securities, Inc. (as Arranger), relating to a $100,000,000
364-Day Revolving Credit Facility. Such Credit Agreement is referred to herein
as the "Credit Agreement," and terms not otherwise defined herein have the
respective meanings ascribed to them in the Credit Agreement.

I have examined an executed copy of the Credit Agreement and
the Notes and executed copies (certified by applicable public officials, as
appropriate) of the Certificate of Incorporation and the Bylaws of the
Borrower. I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such other corporate records of the Borrower,
certificates of public officials and officers of the Borrower and such other
agreements, instruments and documents, and have made such investigations of
fact and law, all as I have deemed appropriate as a basis for the opinions
expressed below.

In all such examinations, I have assumed the genuineness of
signatures on original documents (other than the signatures of representatives
of the Borrower) and the conformity to such original documents of all copies
submitted to me as certified, conformed, photocopied or telecopied copies, and
I have assumed all certificates and telegraphic and telephonic

D-1
<PAGE> 113

confirmations given by public officials to have been properly given and to be
accurate. As to all matters of fact material to my opinions, I have, when
relevant facts were not independently established, relied upon certificates
furnished to me.

Based upon the foregoing and subject to further assumptions,
qualifications and limitations hereinafter set forth, I am of the opinion that:

A. The Borrower (1) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (2) is duly qualified and in good standing as a foreign
corporation in the State of Texas.

B. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Notes, and the consummation of the
transactions contemplated thereby, are within the Borrower's corporate
powers and have been duly authorized by all necessary corporate action
on the part of the Borrower. The Credit Agreement and the Notes have
been duly executed and delivered by the Borrower.

C. Under Texas conflict of laws principles, the stated choice
of New York law to govern the Credit Agreement and the Notes will be
honored by the courts of the State of Texas and the Credit Agreement
and the Notes will be construed in accordance with, and will be
treated as being governed by, the law of the State of New York. If,
however, the Credit Agreement and the Notes were stated to be governed
by and construed in accordance with the law of the State of Texas, or
if a Texas court were to apply the law of the State of Texas to the
Credit Agreement and the Notes, the Credit Agreement and the Notes
would be legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective
terms (assuming due authorization, execution and delivery of the
Credit Agreement by the other parties thereto).

D. Neither the execution, delivery and performance of the
Credit Agreement or the Notes nor the consummation of the transactions
contemplated thereby will (1) contravene the Certificate of
Incorporation or By-laws of the Borrower, (2) violate or conflict with
any material judgment, decree or order, or any law, rule, regulation,
statute or determination or award, to which the Borrower or any of its
Subsidiaries is subject, (3) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Borrower or any of its Subsidiaries or any of
their properties and of which I have knowledge (after due inquiry),
except if such

D-2
<PAGE> 114

conflict, breach or default would not have a Material Adverse Effect
or (4) result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of the Borrower or its
Subsidiaries.

E. No authorization or consent, approval, permit or license
of, or filing with any governmental, regulatory or public body or
authority is required for the due execution, delivery and performance
by the Borrower of the Credit Agreement or the Notes or for
consummation of the transactions contemplated thereby, other than
routine filings after the date hereof with the Securities and Exchange
Commission.

F. Except as described in the Borrower's Annual Report on
Form 10-K for the fiscal year ended January 28, 1996, there is no
pending or, to the best of my knowledge, threatened action, suit,
claim, dispute or proceeding to which the Borrower or any of its
Subsidiaries is a party, or by which the Borrower or any of its
Subsidiaries may be bound, before any court, governmental agency or
arbitrator that (1) would individually or in the aggregate have a
Material Adverse Effect if determined in a manner adverse to the
Borrower or such Subsidiary (taking into account the reasonable
likelihood of an adverse determination and the availability of
contributions from other potentially responsible parties) or (2)
purports to affect the Credit Agreement or the Notes or the
transactions contemplated hereby or thereby.

G. Neither the Borrower nor any of its Subsidiaries is an
"investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.

The opinion expressed in the second sentence of Paragraph C
above with respect to the enforceability of the Credit Agreement and the Notes
is subject to the following qualifications and limitations:

(1) The enforceability of the Credit Agreement and the Notes
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights
and the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(2) The State of Texas has various laws limiting the amount
of interest, fees and other charges that may be imposed by lenders, and I
express no opinion as to the effect such laws may have on the enforcement of
obligations of the Borrower in respect

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of interest, fees or other charges under the Credit Agreement or the Notes.

(3) The enforceability of Section 9.04(b) of the Credit
Agreement may be limited by laws rendering unenforceable (a) indemnification
contrary to federal or state securities laws and the public policy underlying
such laws and (b) the release of a party from, or the indemnification of a
party against, liability for its own wrongful or negligent acts under certain
circumstances.

(4) The enforceability of provisions in the Credit Agreement
to the effect that terms may not be waived or modified except in writing may be
limited under certain circumstances.

(5) I express no opinion as to the enforceability of the
second sentence of Section 2.13 of the Credit Agreement.

(6) I express no opinion as to the enforceability of Section
9.10(a) of the Credit Agreement insofar as such provision relates to the
subject matter jurisdiction of a federal court of the United States of America
sitting in New York City to adjudicate any controversy related to the Credit
Agreement and the Notes.

(7) I express no opinion as to the enforceability of Section
9.10(c) insofar as such provision relates to the waiver of the defense of
inconvenient forum with respect to proceedings in a federal court of the United
States of America sitting in New York City.

The foregoing opinions are limited in all respects to the
federal laws of the United States of America, the laws of the State of Texas
and the General Corporation Law of the State of Delaware, each as in effect on
the date hereof, and no opinion is expressed herein as to any matters governed
by the laws of any other jurisdiction. I undertake no obligation or
responsibility to update or supplement this opinion letter in response to
subsequent changes in the law or future events affecting any of the
transactions contemplated by the Credit Agreement.

This opinion letter is being delivered pursuant to Section
4.01(a)(iv) of the Credit Agreement, is solely for your benefit in connection
with the transactions consummated on the date hereof pursuant to the Credit
Agreement and may not be quoted or relied on by, nor may copies be delivered
to, any other

D-4
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person, or used for any other purpose, without my prior written consent.

Very truly yours,

Thomas H. Welch, Jr.
General Corporate Counsel

D-5
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EXHIBIT E

FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE BANKS

June ___, 1996

Each of the Banks party
to the Credit Agreement
referred to below and

Citibank, N.A.,
as Administrative Agent
for said Banks

Ladies and Gentlemen:

We have acted as your special New York counsel in connection
with the Credit Agreement dated as of June 6, 1996 (the "Credit Agreement")
among Dell Computer Corporation (the "Borrower"), the Banks party thereto (the
"Banks"), Citibank, N.A., as administrative agent for said Banks (in such
capacity, the "Administrative Agent"), Chemical Bank, as Co-Agent, and Citicorp
Securities, Inc., as Arranger. Terms defined in the Credit Agreement are used
herein as defined therein. This opinion is being delivered pursuant to Section
4.01(a)(v) of the Credit Agreement.

In rendering the opinion expressed below, we have examined the
Credit Agreement and the Notes.

In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with authentic original documents of all documents submitted to
us as copies. When relevant facts were not independently established, we have
relied upon representations made in or pursuant to the Credit Agreement.

In rendering the opinions expressed below, we have assumed,
with respect to the Credit Agreement and the Notes, that:

(i) such documents have been duly authorized by, have been duly
executed and delivered by, and (except to the extent set forth
in the opinions below as to the Borrower) constitute legal,
valid, binding and enforceable obligations of, all of the
parties to such documents;

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<PAGE> 118

(ii) all signatories to such documents have been duly authorized;
and

(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.

Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that each of the Credit Agreement and
the Notes constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally and except as
the enforceability of the Credit Agreement and the Notes is subject to the
application of general principles of equity (regardless of whether considered
in a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good faith
and fair dealing.

The foregoing opinion is subject to the following comments and
qualifications:

(A) The enforceability of Section 9.04(b) of the Credit
Agreement may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws and the
public policy underlying such laws and (ii) the release of a party
from, or the indemnification of a party against, liability for its own
wrongful or negligent acts under certain circumstances.

(B) The enforceability of provisions in the Credit Agreement
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.

(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the State of
New York) that limit the interest, fees or other charges such Bank may
impose, (ii) the second sentence of Section 2.13 of the Credit
Agreement, (iii) Section 9.10(a) of the Credit Agreement, insofar as
such section relates to the subject matter jurisdiction of a federal
court of the United States of America sitting in New York City to
adjudicate any controversy related to the

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<PAGE> 119

Credit Agreement and the Notes, and (v) the waiver of inconvenient
forum set forth in Section 9.10(c) of the Credit Agreement with
respect to proceedings in a federal court of the United States of
America sitting in New York City.

The foregoing opinions are limited to matters involving the Federal
laws of the United States of America and the law of the State of New York, and
we do not express any opinion as to the laws of any other jurisdiction.

This opinion letter is, pursuant to Section 4.01(a)(v) of the Credit
Agreement, provided to you by us in our capacity as your special New York
counsel and may not be relied upon by any Person for any purpose other than in
connection with the transactions contemplated by the Credit Agreement without,
in each instance, our prior written consent.

Very truly yours,

WFC/RMG

E-3

<PAGE> 1
EXHIBIT 10.2

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

$150,000,000

THREE-YEAR REVOLVING CREDIT FACILITY

CREDIT AGREEMENT

DATED AS OF JUNE 6, 1996

AMONG

DELL COMPUTER CORPORATION

AS BORROWER,

THE BANKS NAMED HEREIN

AS BANKS,

CITIBANK, N.A.

AS ADMINISTRATIVE AGENT,

AND

CHEMICAL BANK,

AS CO-AGENT

CITICORP SECURITIES, INC., ARRANGER

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

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.02. The Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.03. The Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.04. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.05. Terminations and Reductions of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.06. Repayment of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.07. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.08. Additional Interest on Eurodollar Rate Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.09. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.10. Prepayments of Revolving Credit Advances and Swing Line Advances . . . . . . . . . . . . . . . . . . . 32
2.11. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.13. Sharing of Payments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.14. Optional Conversion of Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE III

MAKING THE ADVANCES

3.01. Making the Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.02. Making the Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.03. Making the Swing Line Advances, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.04. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.05. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.06. Right to Replace Affected Person or Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.07. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

ARTICLE IV

CONDITIONS OF LENDING
4.01. Conditions Precedent to Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.02. Conditions Precedent to Each Revolving Credit Borrowing and Swing Line Borrowing . . . . . . . . . . 51
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C> <C>
4.03. Conditions Precedent to Each Competitive Bid Borrowing . . . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE V

REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE VI

COVENANTS OF THE BORROWER
6.01. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.02. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.03. Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

ARTICLE VII

EVENTS OF DEFAULT
7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

ARTICLE VIII

THE ADMINISTRATIVE AGENT
8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.02. Reliance, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.03. Agents and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.04. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.06. Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

ARTICLE IX

MISCELLANEOUS
9.01. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.02. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.06. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.07. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.10. Jurisdiction, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.11. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>

SCHEDULES
- ---------

Schedule I - List of Applicable Lending Offices
Schedule II - Existing Liens

ii
<PAGE> 4

EXHIBITS

Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Notice of Revolving Credit Borrowing
Exhibit B-2 - Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel to the Borrower
Exhibit E - Form of Opinion of Special New York
Counsel to the Administrative Agent

iii
<PAGE> 5

CREDIT AGREEMENT
Dated as of June 6, 1996

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.

"Advances" means, collectively, the Revolving Credit Advances,
the Swing Line Advances, and the Competitive Bid Advances.

"Affected Person" has the meaning specified in Sections
2.12(i), 3.04(c) and 3.05.

Dell Computer 3-Year Credit Agreement
<PAGE> 6
-2-

to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.

Dell Computer 3-Year Credit Agreement
<PAGE> 7
-3-

on such date with respect to any such Eurodollar Rate Advance shall be the
applicable percentage per annum for the Debt/Credit Rating and Liquidity Rating
set forth below under Column B:

<TABLE>
<CAPTION>
=============================================================================================================================
Applicable Margin (p.a.)
=============================================================================================================================
Debt/Credit Rating Liquidity Rating 1 Liquidity Rating 2 Liquidity Rating 3
--------- ------ - --------- ------ - --------- ------ -
S&P/Moody's Column A Column B Column A Column B Column A Column B
----------- ------ - ------ - ------ - ------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Level 1 .225% .25% .275% .30% .35% .375%
----- -
BBB-/Baa3
or higher
- -----------------------------------------------------------------------------------------------------------------------------
Level 2 .3125% .375% .375% .4375% .5625% .625%
----- -
BB+ or BB/
Ba1 or Ba2
- -----------------------------------------------------------------------------------------------------------------------------
Level 3 .6875% .75% .875% 1.0% 1.0% 1.25%
----- -
Less than
Level 2
=============================================================================================================================
</TABLE>
Any change in the Applicable Margin shall become effective on such date of the
receipt of such compliance certificate by the Administrative Agent.

Dell Computer 3-Year Credit Agreement
<PAGE> 8
-4-

<TABLE>
<CAPTION>
================================================================================
Facility Fee (percent p.a.)
Debt/Credit =======================================================
Rating Liquidity Liquidity Liquidity
S&P/Moody's Rating 1 Rating 2 Rating 3
================================================================================
<S> <C> <C> <C>
Level 1 .085% .10% .125%
----- -
BBB-/Baa3 or
higher
- --------------------------------------------------------------------------------
Level 2 .125% .15% .25%
BB+ or BB/
Ba1 or Ba2
- --------------------------------------------------------------------------------
Level 3 .25% .325% .375%
----- -
Less than Level 2
================================================================================
</TABLE>

Any change in the Applicable Facility Fee Percentage shall become effective on
such date of the receipt of such compliance certificate by the Administrative
Agent.

"Arranger" has the meaning specified in the recital of parties
to this Agreement.

"Banks" has the meaning specified in the recital of parties to
this Agreement.

"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of:

(a) the rate of interest announced publicly by Citibank in
New York, New York, from time to time, as Citibank's base rate;

(b) 0.50% per annum above the Federal Funds Rate; and

Dell Computer 3-Year Credit Agreement
<PAGE> 9
-5-

the next higher 1/16 of one percent) of (i) 0.50% per annum plus (ii)
the rate obtained by dividing (x) the latest three-week moving average
of secondary market morning offering rates in the United States for
three- month certificates of deposit of major United States money
center banks, such three-week moving average (adjusted to the basis of
a year of 360 days) being determined weekly on each Monday (or, if
such day is not a Business Day, on the next succeeding Business Day)
for the three-week period ending on the previous Friday by Citibank on
the basis of such rates reported by certificate of deposit dealers to
and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank by (y) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States plus (iii) the average
during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment rate
payable by Citibank to the Federal Deposit Insurance Corporation (or
any successor) for insuring U.S. dollar deposits of Citibank in the
United States.

Each change in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the time of such
change in the Base Rate.

"Base Rate Advance" means a Revolving Credit Advance or a
Swing Line Advance, as the case may be, that in accordance with Section 3.01,
Section 3.03 or Section 2.14, bears interest as provided in Section 2.07(a)(i).

"Base Rate Swing Line Advance" has the meaning specified in
Section 3.03(b).

"Borrower" has the meaning specified in the recital of parties
to this Agreement.

Dell Computer 3-Year Credit Agreement
<PAGE> 10
-6-

"Borrowing" means a Revolving Credit Borrowing, a Swing Line
Borrowing or a Competitive Bid Borrowing.

"Cash Days" means, for any fiscal quarter of any fiscal year
of the Borrower, with respect to the Borrower, the number equal to:

Dell Computer 3-Year Credit Agreement
<PAGE> 11
-7-

"Change in Control" means:

(ii) during any period of up to 24 consecutive months,
commencing on the date of this Agreement, individuals who at the
beginning of such 24-month period were directors of the Borrower
(together with any new director whose election by the board of
directors or whose nomination for election by the stockholders of the
Borrower was approved by a vote of at least two-thirds of the
directors then in office who either were directors at the beginning of
such period or whose election or nomination for election was
previously so approved) shall cease for any reason (other than solely
as a result of (a) death or disability or (b) voluntary retirement of
any individual in the ordinary course and not for reasons related to
an actual or proposed change in control of the Borrower) to constitute
a majority of the board of directors of the Borrower; or

Dell Computer 3-Year Credit Agreement
<PAGE> 12
-8-

not less than 30% of the combined voting power of all Voting Stock of
the Borrower.

"Citibank" has the meaning specified in the recital of parties
to this Agreement.

"Co-Agent" has the meaning specified in the recital of parties
to this Agreement.

"Competitive Bid Advance" means a loan by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the auction
bidding procedure described in Section 3.02.

"Competitive Bid Advance Reduction" has the meaning specified
in Section 2.01.

"Confidential Information" means information that the Borrower
or any of its Subsidiaries or Affiliates furnishes to the Administrative Agent
or any Lender on a confidential basis by informing the recipient that such
information is confidential or marking such information as such, but does not
include any such information that (i) is or becomes generally available to the
public or (ii) is or becomes available to such Person or Persons from a source
other than the Borrower or any of its Subsidiaries, unless such Person has
actual knowledge that (a) such source is bound by a confidentiality agreement
or (b) such information has been previously furnished to such Person on a
confidential basis.

Dell Computer 3-Year Credit Agreement
<PAGE> 13
-9-

"Consolidated" refers to the consolidation of accounts of the
Borrower and its Subsidiaries in accordance with GAAP.

"Conversion", "Convert" and "Converted" each refer to a
conversion of Revolving Credit Advances of one Type into Revolving Credit
Advances of the other Type pursuant to Section 2.14.

"Corporate Credit Rating" means, as of any date, the highest
corporate credit rating that has been most recently announced by either S&P or
Moody's, as the case may be, with respect to the Borrower.

"Debt/Credit Rating" means a Public Debt Rating or, if no such
rating is available from either S&P or Moody's, a Corporate Credit Rating. For
purposes of the foregoing:

Dell Computer 3-Year Credit Agreement
<PAGE> 14
-10-

"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.

"Effective Date" means the date on which the conditions
precedent set forth in Section 4.01 are satisfied.

"Eligible Assignee" means:

(i) a Lender and any Affiliate of such Lender;

(ii) a commercial bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$500,000,000;

(iii) a savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$500,000,000;

(iv) a commercial bank organized under the laws of any
other country which is a member of the OECD or a political subdivision of any
such country, and having total assets in excess of $500,000,000;

(vi) any other Person (other than the Borrower or an
Affiliate of the Borrower) approved by the Borrower and the Administrative
Agent (provided that no such approval by the

Dell Computer 3-Year Credit Agreement
<PAGE> 15
-11-

Borrower shall be required while a Default has occurred and is continuing).

"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

"ERISA Affiliate" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such

Dell Computer 3-Year Credit Agreement
<PAGE> 16
-12-

Person, within the meaning of Sections 414(b), (c), (m) and (o) of the Internal
Revenue Code.

"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.

"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing,
an interest rate per annum equal to

Dell Computer 3-Year Credit Agreement
<PAGE> 17
-13-

the arithmetic average (rounded upward to the nearest 1/16 of one percent) of
the rates per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount approximately
equal to such Reference Bank's Eurodollar Rate Advance comprising part of such
Revolving Credit Borrowing to be outstanding during such Interest Period. The
Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing shall be determined by
the Administrative Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.09.

"Eurodollar Rate Advance" means a Revolving Credit Advance
that, in accordance with Section 3.01 or Section 2.14, bears interest as
provided in Section 2.07(a)(ii).

"Events of Default" has the meaning specified in Section 7.01.

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June 8, 1995, by and between the Borrower, certain of its Subsidiaries and
First Interstate Bank of Texas, N.A., (e) the Committed Credit Line Agreement,
dated as of June 8, 1995, by and between the Borrower, certain of its
Subsidiaries and NationsBank of Texas, N.A., (f) the Committed Credit Line
Agreement, dated as of June 8, 1995, by and between the Borrower, certain of
its Subsidiaries and Royal Bank of Canada, (g) the Committed Credit Line
Agreement, dated as of September 8, 1995, by and between the Borrower, certain
of its Subsidiaries and Bank of Tokyo, Ltd. and (h) the Committed Credit Line
Agreement, dated as of September 8, 1995, by and between the Borrower, certain
of its Subsidiaries and Sanwa Bank Limited, each of which agreements
establishes a committed credit line in the maximum principal amount of
$25,000,000.

"Fixed Rate Advances" has the meaning specified in Section
3.02(a).

"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, except that, with
respect to the determination of compliance by the Borrower with the covenants
set forth in Sections 6.03(a) and (b), "GAAP" shall mean such principles in the
United States of America as in effect as of the date of, and used in, the
preparation of the audited financial statements of the Borrower referred to in
Section 5.01(b).

"Gross Interest Expense" means total gross interest expense
determined on a Consolidated basis for the Borrower and its Subsidiaries in
accordance with GAAP.

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substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any Environmental Law and (c) any other substance exposure to
which is regulated under any Environmental Law.

"Indebtedness" means, with respect to any Person (without
duplication):

(a) all indebtedness of such Person for borrowed money;

(d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect
to Property acquired by such Person (even though the rights and
remedies of the seller or the lender under such agreement in the event
of default are limited to repossession or sale of such Property);

(e) all obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as
capital leases;

(g) all obligations of such Person in respect of Hedge
Agreements, valued at the Agreement Value thereof;

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"Indemnified Party" has the meaning specified in Section
9.04(b).

"Insufficiency" means, with respect to any Plan at any time,
the amount, if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.

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thereafter, with respect to any such Eurodollar Rate Advance, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, in each case as the Borrower may, upon notice
received by the Administrative Agent in accordance with the applicable
provisions of Sections 3.01(a) and 3.02(a), as the case may be, select;
provided, however, that:

(i) the Borrower may not select any Interest Period which
ends after the Termination Date;

(iv) whenever the first day of an Interest Period occurs
on the last day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month), such Interest Period shall end on the last Business Day of the
appropriate subsequent calendar month.

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

"Lenders" means, collectively, the Banks listed on the
signature pages hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 9.07.

"LIBO Rate" means, for any Interest Period for each LIBO Rate
Advance comprising part of the same Competitive Bid Borrowing, an interest rate
per annum equal to the arithmetic

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average (rounded upward to the nearest 1/16 of one percent) of the rates per
annum at which deposits in U.S. dollars are offered by the principal office of
each of the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the amount that
would be the Reference Banks' pro rata share of such Competitive Bid Borrowing
if such Borrowing were a Revolving Credit Borrowing to be outstanding during
such Interest Period and for a period equal to such Interest Period. The LIBO
Rate for any Interest Period for each LIBO Rate Advance comprising part of the
same Competitive Bid Borrowing shall be determined by the Administrative Agent
on the basis of applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.09.

"LIBO Rate Advances" has the meaning specified in Section 3.02
(a).

"Liquidity Rating" means, as of any date, a rating of
Liquidity Rating 1, Liquidity Rating 2 or Liquidity Rating 3 for such date,
which rating shall be based upon the number of Cash Days in the fiscal quarter
ending on or immediately prior to such date.

"Liquidity Rating 1" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is less than 30.

"Liquidity Rating 2" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is equal to or greater than 30 but less than 45.

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"Liquidity Rating 3" means, for any date, that the number of
Cash Days occurring in the fiscal quarter ending on or immediately prior to
such date is equal to or greater than 45.

"Moody's" means Moody's Investors Service, Inc., or any
successor to its business.

"Multiple Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that

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(a) is maintained for employees of such Person or any of its ERISA Affiliates
and at least one Person other than such Person and its ERISA Affiliates or (b)
was so maintained and in respect of which such Person or any of its ERISA
Affiliates has or would have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.

"Note" means a Revolving Credit Note or a Competitive Bid
Note.

"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 3.02(a).

"Notice of Revolving Credit Borrowing" has the meaning
specified in Section 3.01(a).

"Notice of Swing Line Borrowing" has the meaning specified in
Section 3.03(a).

"OECD" means the Organization for Economic Cooperation and
Development.

"Other Taxes" has the meaning specified in Section 2.12(b).

"PBGC" means the Pension Benefit Guaranty Corporation or any
successor.

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profits of at least $500,000,000 and whose unsecured, unguaranteed long-term
senior debt obligations are rated investment grade by S&P and by Moody's,
maturing in not more than 13 months from the date of computation, and (c)
commercial paper rated investment grade by S&P and Moody's and maturing not
more than 13 months from the date of computation.

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"Plan" means an employee benefit or other plan estabilished or
maintained by the Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA or a Multiple Employer Plan.

"Property" or "Properties" means any right or interest in or
to property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.

"Purchase Money Lien" means any Lien on Property, real or
personal, acquired or constructed by the Borrower or any Subsidiary of the
Borrower after January 28, 1996:

(i) to secure the purchase price of such Property;

(ii) that was existing on such Property at the time of
acquisition thereof by the Borrower or such Subsidiary and assumed in
connection with such acquisition;

(iii) to secure Indebtedness otherwise incurred to finance
the acquisition or construction of such Property (including, without
limitation, Indebtedness incurred to finance the cost of acquisition
or construction of such Property within 24 months after such
acquisition or the completion of such construction); or

provided in each case that (1) such Liens do not extend to or cover or
otherwise encumber any Property other than Property acquired or constructed by
the Borrower and its Subsidiaries

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after January 28, 1996, (2) such Liens do not cover current assets of the
Borrower or any of its Subsidiaries other than current assets that relate
solely to other Property subject to such Lien and (3) the principal amount of
Indebtedness secured by such Lien does not exceed the aggregate cost to the
Borrower to acquire or construct the Property subject to such Lien.

"Quoted Rate Swing Line Advance" has the meaning specified in
Section 3.03(b).

"Reference Banks" means Citibank, The Chase Manhattan Bank
(National Association) and Barclays Bank plc.

"Register" has the meaning specified in Section 9.07(c).

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"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of the
Lenders pursuant to Section 2.01.

"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or any successor to its business.

"Swing Line Advance" means an Advance made by a Swing Line
Bank or a Lender pursuant to Section 3.03.

"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by a Swing Line Bank.

"Swing Line Advance Rate" has the meaning specified in Section
3.03.

"Swing Line Advance Reduction" has the meaning specified in
Section 2.01.

"Taxes" has the meaning specified in Section 2.12(a).

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"Termination Date" means the earlier of (a) June 6, 1999 and
(b) the date of termination in whole of the Commitments pursuant to Section
2.05 or 7.01.

"Type" has the meaning specified in the definition of
"Revolving Credit Advance."

"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.

"Withdrawal Liability" has the meaning specified in Part 1 of
Subtitle E of Title IV of ERISA.

SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Revolving Credit Advances.

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in an aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided that the aggregate amount of the Commitments of
the Lenders shall be deemed used from time to time to the extent of (i) the
aggregate amount of Competitive Bid Advances then outstanding and (ii) the
aggregate amount of Swing Line Advances then outstanding, and such deemed uses
of the aggregate amount of the Commitments shall be applied to the Lenders
ratably according to their respective Commitments (such deemed uses of the
aggregate amount of the Commitments with respect to (a) Competitive Bid
Advances being a "Competitive Bid Advance Reduction" and (b) Swing Line
Advances being a "Swing Line Advance Reduction").

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SECTION 2.03. The Swing Line Advances. The Borrower may
request each Swing Line Bank to make, and each Swing Line Bank may from time to
time, in its sole discretion, make, on the terms and conditions hereinafter set
forth, Swing Line Advances to the Borrower from time to time on any Business
Day during the period from the Effective Date until the date 20 days before the
Termination Date (a) in an aggregate amount not to exceed at any time
outstanding the lesser of (i) the Swing Line Facility and (ii) the Unused
Commitments on such Business Day. Each Swing Line Borrowing shall be in an
amount of $500,000 or an integral multiple of $100,000 in excess thereof and
shall bear interest at the Base Rate or at the Swing Line Advance Rate for such
Advance as provided in Section 3.03. Within the limits of the Swing Line
Facility and the Unused Commitments, the Borrower may borrow under this Section
2.03, repay pursuant to Section 2.06 or prepay pursuant to Section 2.10 and
reborrow under this Section 2.03.

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Assignment and Acceptance pursuant to which it became a Lender (in the case of
each other Lender), until the Termination Date, payable in arrears on the last
Business Day of each calendar quarter during the term of such Lender's
Commitment, and on the Termination Date, at a rate per annum equal to the
Applicable Facility Fee Percentage in effect from time to time.

(c) Administrative Agent's Fees. The Borrower agrees to pay
to the Administrative Agent for its account such fees as from time to time may
be agreed between the Borrower and the Administrative Agent.

SECTION 2.05. Terminations and Reductions of the Commitments.

(ii) The Commitments shall automatically terminate on the
date of any Change in Control.

SECTION 2.06. Repayment of Advances. (a) Revolving Credit
Advances.

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made by such Lender, together with interest accrued thereon to the
date of prepayment.

(i) Base Rate Advances and Swing Line Advances. If such
Revolving Credit Advance or Swing Line Advance (other than a Quoted
Rate Swing Line Advance) is a Base Rate

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Advance, a rate per annum equal at all times to the Base Rate in
effect from time to time, and if it is a Quoted Rate Swing Line
Advance, a rate per annum equal to the rate provided for in Section
3.03(b)(ii), in each case payable in arrears on the last Business Day
of each calendar quarter during such period as such Revolving Credit
Advance or Swing Line Advance is outstanding and, in each case, on the
date such Revolving Credit Advance or Swing Line Advance shall be
Converted or paid in full.

(b) Default Interest. Notwithstanding the foregoing, if any
Default described under Section 7.01(a) shall have occurred and be continuing,
the Borrower shall pay interest on:

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paid in full and on demand, at a rate per annum equal at all times to
two percent (2%) per annum above the rate per annum required to be
paid on Base Rate Advances pursuant to Section 2.07(a)(i) above.

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(i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance, and

(ii) the obligation of the Lenders to make, or to Convert Base
Rate Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and such Lenders
that the circumstances causing such suspension no longer exist.

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SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 12:00 noon
(New York City time) on the day when due in U.S. dollars to the Administrative
Agent at the Administrative Agent's Account in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest or facility fees ratably
(other than amounts payable pursuant to Section 2.02, 2.08, 2.12 or 3.04) to
the Lenders for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 9.07(d), from and after the
effective date specified in such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

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(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.

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under the laws of which it is organized or any political sub-division thereof
and, in the case of each Lender, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of the Lender's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
any Notes to any such Person, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.12) such Person
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.12) paid in good faith by such Lender or
the Administrative Agent (as the case may be) and any liability (including,
without limitation, penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. The Lender or the Administrative Agent (as
the case may be) shall use its commercially reasonable efforts to contest such
Tax or Other Tax that is in its opinion incorrectly asserted. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.

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(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement (in the case of each Bank) and on the date of the
Assignment and Acceptance pursuant to which it became a Lender (in the case of
each other Lender), and from time to time thereafter if requested in writing by
the Borrower or the Administrative Agent (but only so long as such Lender
remains lawfully able to do so after the date such Lender becomes a Lender
hereunder), provide the Administrative Agent and the Borrower with either (i)
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
and the Notes or certifying that the income receivable pursuant to this
Agreement and the Notes is effectively connected with the conduct of a trade or
business in the United States or (ii) Internal Revenue Service form W-8, upon
which the Borrower is entitled to rely, from a Lender that has not at the time
such Lender becomes a Lender hereunder been named in any notice issued by the
Secretary of the Treasury (or such Secretary's authorized delegate) pursuant to
Sections 881(c)(2)(B) or 871(h)(5) of the Internal Revenue Code, or any
successor form or statement prescribed by the Internal Revenue Service in order
to establish that such Lender is entitled to treat the interest payments under
this Agreement and the Notes as portfolio interest that is exempt from
withholding tax under the Internal Revenue Code, together with a certificate
stating that such Lender is not described in Section 881(c)(3) of the Internal
Revenue Code. If the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero (or if the Lender cannot provide at such
time such form because it is not entitled to reduced withholding under a
treaty, the payments are not effectively connected income and the payments do
not qualify as portfolio interest), withholding tax at such rate (or at the
then existing U.S. statutory rate if the Lender cannot provide the form) shall
be excluded from Taxes unless and until such Lender provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be excluded from Taxes for periods governed by such
form; provided, that, if at the date of the Assignment and Acceptance pursuant
to which a Lender assignee becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to the
extent such

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tax results in liability for such payments, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States interest withholding tax,
if any, applicable with respect to the Lender assignee on such date.

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it (other than pursuant to Section 2.08, 2.12 or 3.04) in excess of its ratable
share of payments on account of the Revolving Credit Advances or the Swing Line
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the Revolving Credit Advances or the
Swing Line Advances made by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided,
however, that, if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

SECTION 2.14. Optional Conversion of Revolving Credit
Advances. (a) The Borrower may on any Business Day on which no Default shall
have occurred and be continuing, upon notice given to the Administrative Agent
not later than 12:00 noon (New York City time) on (x) the third Business Day
prior to the date of the proposed Conversion in the case of a Conversion of
Base Rate Advances into Eurodollar Rate Advances or of Eurodollar Rate Advances
of one Interest Period into Eurodollar Rate Advances of another Interest Period
and (y) the first Business Day prior to the date of the proposed Conversion in
the case of a Conversion into Base Rate Advances, and, in each case, subject to
the provisions of Sections 2.09 and 3.04, Convert all or any portion of the
Revolving Credit Advances of one Type comprising the same Revolving Credit
Borrowing into Revolving Credit Advances of the other Type; provided, however,
that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall
be made only on the last day of an Interest Period for such Eurodollar Rate
Advances and any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in Section
3.01(b).

(b) Each notice of Conversion delivered under the preceding
paragraph shall, within the restrictions specified

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above, specify (i) the date of such Conversion, (ii) the Revolving Credit
Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for such Revolving Credit
Advances. Each notice of Conversion shall be irrevocable and binding on the
Borrower.

ARTICLE III

MAKING THE ADVANCES

SECTION 3.01. Making the Revolving Credit Advances. (a)
Each Revolving Credit Borrowing shall be made on notice, given not later than
(x) 12:00 noon (New York City time) on the third Business Day prior to the date
of the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing comprised of Eurodollar Rate Advances, and (y) 12:00 noon (New York
City time) on the day of a Revolving Credit Borrowing comprised of Base Rate
Advances, by the Borrower to the Administrative Agent, and the Administrative
Agent shall give to each Lender prompt notice thereof by telecopier, telex or
cable. Each such notice of a Revolving Credit Borrowing (a "Notice of
Revolving Credit Borrowing") shall be made in writing, or orally and confirmed
immediately in writing, by telecopier, telex or cable, in substantially the
form of Exhibit B-l hereto, specifying therein (i) the requested date of such
Revolving Credit Borrowing (which shall be a Business Day), (ii) the requested
Type of Revolving Credit Advance comprising such Revolving Credit Borrowing,
(iii) the requested aggregate amount of such Revolving Credit Borrowing, and
(iv) in the case of a Revolving Credit Borrowing comprised of Eurodollar Rate
Advances, the requested initial Interest Period for each such Revolving Credit
Advance. Each Lender shall (A) before 12:00 noon (New York City time) on the
date of such Borrowing (in the case of a Eurodollar Rate Borrowing) and (B)
before 1:00 p.m. (New York City time) on the date of such Borrowing (in the
case of a Base Rate Borrowing), make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Revolving Credit Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
IV, the Administrative Agent will make such funds available to the Borrower at
the Borrower's Account; provided, however, that the Administrative Agent shall
first make a portion of such funds equal to the aggregate principal amount of
any Swing Line Advance as to which

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the Borrower has received timely notice made by the Swing Line Bank and by any
other Lender and outstanding on the date of such Revolving Credit Borrowing,
plus interest accrued and unpaid thereon to and as of such date, available to
the Swing Line Bank and such other Lenders for repayment of such Swing Line
Advances.

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Borrowing and (ii) in the case of such Lender, the higher of (A) the Federal
Funds Rate and (B) the cost of funds incurred by the Administrative Agent in
respect of such amount, provided that the Borrower retains its rights against
such Lender with respect to any damages it may incur as a result of such
Lender's failure to fund, and notwithstanding anything herein to the contrary,
in no event shall the Borrower be liable to such Lender or any other Person for
the interest payable by such Lender to the Administrative Agent pursuant to
this sentence. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Revolving Credit Advance as part of such Revolving Credit Borrowing for
purposes of this Agreement.

SECTION 3.02. Making the Competitive Bid Advances. (a) The
Borrower may request a Competitive Bid Borrowing under this Section 3.02 by
delivering to the Administrative Agent a notice (made in writing, or orally and
confirmed immediately in writing, by telecopier, telex or cable) of a
Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying therein (A) the date
of such proposed Competitive Bid Borrowing (which shall be a Business Day), (B)
the requested aggregate amount of such proposed Competitive Bid Borrowing, (C)
whether such proposed Competitive Bid Borrowing shall consist of Fixed Rate
Advances or LIBO Rate Advances, (D) in the case of a Competitive Bid Borrowing
consisting of (1) LIBO Rate Advances, the requested Interest Period for each
such LIBO Rate Advance and (2) Fixed Rate Advances, the requested maturity date
for repayment of each such Fixed Rate Advance to be made as part of such
Competitive Bid Borrowing (which maturity date may not be earlier than the date
occurring 30 days after the date of such Competitive Bid Borrowing nor later
than 180 days or six months, as applicable, after the date of such Competitive
Bid Borrowing (or, if earlier, the Termination Date)), (E) the requested
interest payment date or dates relating thereto, and (F) any other terms to be
applicable to such Competitive Bid Borrowing, not later than (i) 10:00 A.M.
(New York City time) at least one Business Day prior

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to the date of the proposed Competitive Bid Borrowing, if the Borrower shall
specify in the Notice of Competitive Bid Borrowing that the rates of interest
to be offered by the Lenders shall be fixed rates per annum (the Advances
comprising any such Competitive Bid Borrowing being referred to herein as
"Fixed Rate Advances") and (ii) 12:00 noon (New York City time) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing, if
the Borrower shall instead specify in the Notice of Competitive Bid Borrowing
that the Advances comprising such proposed Competitive Bid Borrowing are to be
based on the LIBO Rate (the Advances comprising any such Competitive Bid
Borrowing being referred to herein as "LIBO Rate Advances"); provided, however,
the Borrower may not request more than one Competitive Bid Borrowing on any
Business Day. Each Notice of Competitive Bid Borrowing shall be irrevocable
and binding on the Borrower except to the extent provided below. Anything in
the foregoing to the contrary notwithstanding, the aggregate amount of each
Competitive Bid Borrowing shall be in an amount at least equal to $10,000,000
and thereafter in integral multiples of $1,000,000. The Administrative Agent
shall in turn promptly notify each Lender of each request for a Competitive Bid
Borrowing received by it from the Borrower by sending such Lender a copy of the
related Notice of Competitive Bid Borrowing.

(b) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Competitive Bid Advances to the
Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates
of interest specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to the Borrower),
before 10:00 A.M. (New York City time) (i) on the date of such proposed
Competitive Bid Borrowing, in the case of a proposed Competitive Bid Borrowing
consisting of Fixed Rate Advances and (ii) three Business Days before the date
of such proposed Competitive Bid Borrowing, in the case of a proposed
Competitive Bid Borrowing consisting of LIBO Rate Advances, of the minimum
amount and maximum amount of each Competitive Bid Advance which such Lender
would be willing to make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first sentence of Section
2.02(a), exceed such Lender's Commitment), the rate or rates of interest
therefor and such Lender's Applicable Lending Office with respect to such
Competitive Bid Advance; provided that if the Administrative Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer at least 30 minutes before
the time and on the date on which notice of such election is to be given

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to the Administrative Agent by the other Lenders. If any Lender shall elect
not to make such an offer, such Lender shall so notify the Administrative
Agent, before 10:00 A.M. (New York City time) on the date on which notice of
such election is to be given to the Administrative Agent by the other Lenders,
and such Lender shall not be obligated to, and shall not, make any Competitive
Bid Advance as part of such Competitive Bid Borrowing; provided that the
failure by any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Advance as part of such proposed
Competitive Bid Borrowing.

(A) cancel such Competitive Bid Borrowing by giving
the Administrative Agent notice to that effect, or

(B) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (b) above, in its sole
discretion but subject to the next succeeding sentences of this clause
(B), by giving notice to the Administrative Agent of the amount of
each Competitive Bid Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Administrative Agent on behalf
of such Lender for such Competitive Bid Advance pursuant to paragraph
(b) above) to be made by each Lender as part of such Competitive Bid
Borrowing, and reject any remaining offers made by Lenders pursuant to
paragraph (b) above by giving the Administrative Agent notice to that
effect; provided, however, that the Borrower may not accept offers
that, in the aggregate, exceed the amount of the proposed Competitive
Bid Borrowing specified in the related Notice of Competitive Bid
Borrowing. The Borrower shall accept the offers made by any Lender or
Lenders to make Competitive Bid Advances in order of the lowest to the
highest rates of interest offered by such Lenders for a particular
Competitive Bid Borrowing. If two or more Lenders have offered the
same interest rate for a particular Competitive Bid Borrowing, the
amount to be borrowed at such interest rate will be allocated among
such Lenders ratably according

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to the amount that each such Lender offered at such interest rate.

(e) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to Section 3.02(c)(B) above in respect of such
Competitive Bid Borrowing, the Administrative Agent shall in turn promptly
notify (i) each Lender that has made an offer as described in paragraph (b)
above, of the date and aggregate amount of such Competitive Bid Borrowing and
whether or not any offer or offers made by such Lender pursuant to paragraph
(b) above have been accepted by the Borrower, (ii) each Lender that is to make
a Competitive Bid Advance as part of such Competitive Bid Borrowing, of the
amount of each Competitive Bid Advance to be made by such Lender as part of
such Competitive Bid Borrowing, and (iii) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, upon
receipt, that the Administrative Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in Article IV. Each
Lender that is to make a Competitive Bid Advance as part of such Competitive
Bid Borrowing shall, before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (i) of the preceding sentence or any
later time when such Lender shall have received notice from the Administrative
Agent pursuant to clause (iii) of the preceding sentence, make available for
the account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, such Lender's portion of such Competitive Bid
Borrowing, in same day funds. Upon fulfillment of the applicable conditions
set forth in Article IV and after receipt by the Administrative Agent of such
funds, the Administrative Agent will make such funds available to the Borrower
at the Borrower's Account. Promptly after each Competitive Bid Borrowing the
Administrative Agent will notify each Lender of the amount of the Competitive
Bid Borrowing, the consequent Competitive Bid Advance Reduction and the dates
upon which such Competitive Bid Advance Reduction commenced and will terminate.

(f) If the Borrower notifies the Administrative Agent that it
accepts one or more of the offers made by any Lender or

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Lenders pursuant to Section 3.02(c)(B), such notice of acceptance shall be
irrevocable and binding on the Borrower. The Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in the Notice of
Competitive Bid Borrowing for such Competitive Bid Borrowing the applicable
conditions set forth in Article IV, including, without limitation, any loss
(excluding any loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Competitive Bid Advance to be made by such Lender as part of
such Competitive Bid Borrowing when such Competitive Bid Advance, as a result
of such failure, is not made on such date.

(g) Following the making of each Competitive Bid Borrowing,
the Borrower shall be in compliance with the limitation set forth in the
proviso to the first sentence of Section 2.02(a).

SECTION 3.03. Making the Swing Line Advances, Etc. (a) The
Borrower may request a Swing Line Borrowing from a Swing Line Bank under this
Section 3.03 by delivering to the Administrative Agent and such Swing Line
Bank, no later than 2:00 P.M. (New York City time) on the date of the proposed
Swing Line Borrowing, a notice of a Swing Line Borrowing (a "Notice of Swing
Line Borrowing"), which shall be made in writing, or orally and confirmed
immediately in writing, by telecopier, telex or cable, and shall specify
therein the requested (i) Swing Line Bank, (ii) date of such Borrowing (which
shall be a Business Day), (iii) amount of such Borrowing, (iv) maturity of such
Borrowing (which maturity shall be no later than the seventh day after the
requested date of such Borrowing) and (v) account of the Borrower to which the
proceeds of such Borrowing are to be made available.

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to give such notice shall not cause such Swing Line Bank to be obligated to
make such Swing Line Advance.

(e) If the Borrower accepts an offer by a Swing Line Bank for
a Quoted Rate Swing Line Advance as provided above, such Swing Line Bank will
provide the Borrower and the Administrative Agent with written confirmation (a
"Swing Line Advance Rate Confirmation") of the agreed interest rate (the "Swing
Line Advance Rate") for such Quoted Rate Swing Line Advance by the Business Day
next succeeding the date on which the related Notice of Swing Line Borrowing
was given, and the rate specified in such Swing Line Advance Rate Confirmation
shall for all purposes be the interest rate payable in respect of such Quoted
Rate Swing Line Advance notwithstanding any disagreement by the Borrower with
the contents of such written confirmation.

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Lender's obligations to make such payments to the Administrative Agent for
account of the Swing Line Banks under this paragraph (f), and each Swing Line
Bank's right to receive the same, shall be absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, without limitation,
the failure of any other Lender to make its payment under this paragraph (f),
the financial condition of the Borrower (or any other account party), the
existence of any Default, the failure of any of the conditions set forth in
Article IV to be satisfied, or the termination of the Commitments. Each such
payment to a Swing Line Bank shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Lender agrees to purchase its pro
rata share of such outstanding Swing Line Advances on (i) the Business Day on
which demand therefor is made by such Swing Line Bank, provided that notice of
such demand is given not later than 11:00 a.m. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by a
Swing Line Bank to any other Lender of a portion of such Swing Line Bank's
Swing Line Advances, such Swing Line Bank represents and warrants to such other
Lender that such Swing Line Bank is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation or warranty
and assumes no responsibility with respect to such Swing Line Advance, this
Agreement or the Notes or any party thereto. If and to the extent that any
Lender shall not have so made the amount of such Swing Line Advance available
to the Administrative Agent, such Lender agrees to pay to the Administrative
Agent for the account of such Swing Line Bank forthwith on demand such amount
together with interest thereon, for each day from the date of demand by such
Swing Line Bank until the date such amount is paid to the Administrative Agent,
at the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such amount for the account of such Swing Line Bank, such amount so paid
in respect of principal shall constitute a Swing Line Advance by such Lender
for purposes of this Agreement, and the outstanding principal amount of the
Swing Line Advances made by such Swing Line Bank shall be reduced by such
amount.

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other governmental authority (whether or not having the force of law) which
implements any introduction or change specified in clause (i) above, there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances, then the Borrower shall from
time to time, within ten Business Days after written demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender and showing in reasonable detail the basis
for the calculation thereof shall be conclusive and binding on the Borrower in
the absence of manifest error.

(b) If any Lender determines that compliance with (i) the
introduction of or any change in or in the interpretation of, any law or
regulation, in each case after the date hereof, or (ii) any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) which implements any introduction or change specified
in clause (i) above, affects or would affect the amount of capital required to
be maintained by such Lender or any corporation controlling such Lender and
that the amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend or Advances hereunder and other commitments
and advances of such type, then, within ten Business Days after written demand
by such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's commitment to lend or Advances hereunder. A certificate as to such
amounts submitted to the Borrower and the Administrative Agent by such Lender
and showing in reasonable detail the basis for the calculation thereof
conclusive and binding on the Borrower in the absence of manifest error.

SECTION 3.05. Illegality. Notwithstanding any other
provision of this Agreement, if any Lender shall notify the

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Administrative Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for such Lender or
its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or LIBO Rate Advances or to fund or maintain
Eurodollar Rate Advances or LIBO Rate Advances hereunder, then, subject to the
provisions of Section 3.06, (i) the obligation of such Lender to make
Eurodollar Rate Advances and LIBO Rate Advances hereunder and to Convert
Revolving Credit Advances into Eurodollar Rate Advances shall be suspended
until the first date on which the circumstances causing such suspension cease
to exist, (ii) any Eurodollar Rate Advances and LIBO Rate Advances made or to
be made by such Lender shall forthwith (or on such later date as may be
permitted by applicable law) be converted automatically to Base Rate Advances
and (iii) such Lender shall be an "Affected Person", and the Borrower shall
have the right set forth in Section 3.06 to replace such Affected Person. In
the event of such a suspension, such Lender shall review the circumstances
giving rise to such suspension at least weekly and shall notify the Borrower,
the Administrative Agent and the Lenders promptly of the end of such
suspension, and thereafter the Borrower shall be entitled, subject to the terms
and conditions hereof, to borrow Eurodollar Rate Advances and LIBO Rate
Advances from such Lender.

SECTION 3.06. Right to Replace Affected Person or Lender. If
the Borrower is required to pay any Taxes with respect to an Affected Person
pursuant to Section 2.12(c) or any amounts with respect to an Affected Person
pursuant to Section 3.04, or receives a notice from an Affected Person pursuant
to Section 3.05, the Borrower may elect, if such amounts continue to be charged
or such notice is still effective, to replace such Affected Person as a party
to this Agreement, provided that, no Default or Event of Default shall have
occurred and be continuing at the time of such replacement and, provided,
further, that concurrently with such replacement, (i) another financial
institution which is an Eligible Assignee and is reasonably satisfactory to the
Borrower and the Administrative Agent (or if the Lender then serving as
Administrative Agent is the Person to be replaced and the Administrative Agent
has resigned its position, the Lender becoming the successor Administrative
Agent) shall agree, as of such date, to purchase for cash the Advances of the
Affected Person pursuant to an Assignment and Acceptance and to become a Lender
for all purposes under this Agreement and to assume all obligations (including
all outstanding Advances) of the Affected Person to be terminated as of such
date and to

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comply with the requirements of Section 9.07 applicable to assignments, and
(ii) the Borrower shall pay to such Affected Person in same day funds on the
day of such replacement all principal, interest, fees and other amounts then
due and owing to such Affected Person by the Borrower hereunder to and
including the date of termination, including without limitation payments due
such Affected Person under Section 2.12 and costs incurred under Section 3.04.

ARTICLE IV

CONDITIONS OF LENDING

(a) The Administrative Agent shall have received on or before
the day of the initial Borrowing the following in form and substance
satisfactory to the Administrative Agent, each dated the Effective
Date, and (except for the Notes) in sufficient copies for each Lender:

(i) The Revolving Credit Notes payable to the order of
the Lenders, respectively.

(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the

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Notes and the other documents to be delivered hereunder.

(v) A favorable opinion of Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Administrative Agent,
substantially in the form of Exhibit E.

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by the Borrower that on the date of such Borrowing such statements are true):

(b) No event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom,
which constitutes a Default;

(d) The Administrative Agent shall have received such other
documents, opinions and other information as any Lender may reasonably
request.

(a) The Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto;

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(ii) No event has occurred and is continuing, or would
result from such Competitive Bid Borrowing or from the
application of the proceeds therefrom, which constitutes a
Default; and

(iii) No Change in Control has occurred.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

SECTION 5.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:

(b) The Borrower has heretofore furnished to each of the
Lenders the Annual Audited Financial Statements of the Borrower and
its Consolidated Subsidiaries as at January 28, 1996. All such
financial statements are complete and correct and fairly present the
Consolidated financial condition of the Borrower and its Subsidiaries
as at said date and the Consolidated results of their operations for
the fiscal year ended on said date, all in accordance with GAAP,
consistently applied. Since January 28, 1996, there has been no
material adverse change in the Consolidated financial condition or
results of operations or prospects of the Borrower and its
Subsidiaries.

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(e) No authorization or consent, approval, permit or license
of, or filing with, any governmental or public body or authority or
regulatory body or any Lender or any other third party is required to
authorize, or for the due execution, delivery and performance by the
Borrower of, this Agreement or the Notes, or for consummation of the
transactions contemplated hereby or thereby.

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Exchange Act of 1934, as amended, in each case as in effect on the
date or dates of such Advance and such use of proceeds.

(j) Neither the Borrower nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan that it has
incurred any Withdrawal Liability, and neither the Borrower nor any of
its ERISA Affiliates, to the best of the Borrower's knowledge and
belief, is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan, in each case other than any Withdrawal
Liability that would not have a Material Adverse Effect; and neither
the Borrower nor any of its Affiliates has been notified by the
sponsor of a Multiemployer Plan or any of its Affiliates that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, except

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where such reorganization or termination would not have a Material
Adverse Effect.

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or any of its Subsidiaries that (taking into account, among other
things, the reasonable likelihood of an adverse determination and the
availability of contributions from other potentially responsible
parties), either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

ARTICLE VI

COVENANTS OF THE BORROWER

SECTION 6.01. Affirmative Covenants. So long as any
obligations under this Agreement or any Note shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will:

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examine and, with respect to information that is not Confidential
Information (or with respect to any information while an Event of
Default has occurred and is continuing), make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and, at any time when an Event of
Default has occurred and is continuing, with their independent
certified public accountants (and the Administrative Agent or such
Lender will give prior notice to the Borrower of any such discussion
with such accountants).

(i) Reporting Requirements. Furnish to the Lenders:

(i) as soon as available and in any event within
50 days after the end of each of the first three quarters of
each fiscal year of the Borrower, (A) a Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of
such quarter, Consolidated statements of income of the
Borrower and its Subsidiaries for such fiscal quarter and for
the period commencing at the end of the previous fiscal year
and ending with the end of such quarter and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries
for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, setting forth
in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified by the chief

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financial officer or the chief accounting officer of the Borrower (or
another appropriate officer of the Borrower designated by such
officer) and (B) certificates as to compliance with the terms of this
Agreement and setting forth in reasonable detail the calculations
necessary to demonstrate compliance with Sections 6.02(a)(ix) and
6.03(a) and (b), provided that in the event of any change in GAAP used
in preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with such
Sections, a statement of reconciliation conforming any information in
such certificates with GAAP;

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the action, if any, which the Borrower or such ERISA Affiliate
proposes to take with respect thereto;

(viii) within 10 days after the last day of
each fiscal quarter of each fiscal year of the Borrower, a
certificate of the chief financial officer, the treasurer or
the chief accounting officer of the Borrower demonstrating in
detail the number of Cash Days occurring in such fiscal
quarter.

SECTION 6.02. Negative Covenants. So long as any obligations
under this Agreement or any Note shall remain unpaid or any Lender shall have
any Commitment hereunder, the Borrower will not:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than:

(i) Permitted Liens;

(ii) Liens outstanding on the date of this
Agreement and described in Schedule II;

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(iii) Purchase Money Liens;

(iv) Liens on any property or assets of any
Subsidiary of the Borrower securing Indebtedness owed to the
Borrower;

(vi) Liens in favor of any Person or entity on
all documents of title arising out of any trade letter of
credit permitted hereunder;

(vii) Liens in connection with the Receivables
Financing;

(ix) Liens not otherwise permitted under this
Section 6.02(a) securing obligations in an aggregate amount
not to exceed $20,000,000.

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(A) any such Subsidiary was either a Subsidiary of the Borrower
on the date of this Agreement or was newly incorporated or
established by the Borrower or a Subsidiary of the Borrower
thereafter, (B) no such Subsidiary had, prior to such merger or
consolidation, merged into or consolidated with any other
entity after the Effective Date that was not on the date of
this Agreement an Affiliate of the Borrower or a Subsidiary of
the Borrower and (C) in the case of a merger or consolidation
of the Borrower, (x) the Borrower shall be the continuing or
surviving entity or the surviving entity expressly assumes by
an amendment to this Agreement duly executed by such surviving
entity all of the Borrower's obligations hereunder and under
the Notes in a manner satisfactory to the Administrative Agent
and the Required Lenders and (y) immediately after giving
effect to such merger or consolidation no Default or Event of
Default shall have occurred and be continuing; and

(c) Transactions with Affiliates. Enter into, or permit any
of its Subsidiaries to enter into, any transaction with an Affiliate
of the Borrower (other than the Borrower's Subsidiaries) that would be
material in relation to the Borrower and its Subsidiaries, taken as a
whole, even if otherwise permitted under this Agreement, except on
terms that are fair and reasonable to the Borrower and its
Subsidiaries and on terms no less favorable to the Borrower or such
Subsidiary (considered as a whole in conjunction with all other
existing arrangements and relationships with such Affiliate) than the
Borrower or such Subsidiary would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.

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(e) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.

SECTION 6.03. Financial Covenants. So long as any
obligations under this Agreement or any Note shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower covenants and agrees that:

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:

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(d) The Borrower or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Indebtedness which is
outstanding in a principal amount of at least $25,000,000 in the
aggregate of the Borrower or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Indebtedness; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Indebtedness
and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be
declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment, including, without
limitation, a prepayment required in connection with the sale of the
sole asset or all assets securing such Indebtedness), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case
prior to the stated maturity thereof; or

Dell Computer 3-Year Credit Agreement
<PAGE> 70
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by or against the Borrower or any of its Material Subsidiaries seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of
60 days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall
occur; or the Borrower or any of its Material Subsidiaries shall take
any corporate action to authorize any of the actions set forth above
in this subsection (e); or

(g) Any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of occurrence of such
ERISA Event) of the Insufficiency of such Plan and the Insufficiency
of any and all other Plans with respect to which an ERISA Event shall
have occurred and then exist (or the liability of the Borrower or any
ERISA Affiliate related to such ERISA Event) exceeds $20,000,000; or

Dell Computer 3-Year Credit Agreement
<PAGE> 71
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then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the express consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the express consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the Notes to be forthwith due and payable,
whereupon the Advances and the Notes, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal
Bankruptcy Code, (A) the obligation of each Lender to make Advances shall be
automatically terminated and (B) the Advances and the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

Dell Computer 3-Year Credit Agreement
<PAGE> 72
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SECTION 8.02. Reliance, Etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the Notes, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by them in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Lender and shall not be
responsible to any of them for any statements, warranties or representations
made in or in connection with this Agreement or the Notes; (iv) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the Notes on the
part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible

Dell Computer 3-Year Credit Agreement
<PAGE> 73
-69-

to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Notes or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement or the Notes by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.

SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or the Co-Agent or the Arranger or any other Lender and
based on the financial statements referred to in Section 5.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or the Co-Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.

Dell Computer 3-Year Credit Agreement
<PAGE> 74
-70-

any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against any of them
in any way relating to or arising out of this Agreement or the Notes or any
action taken or omitted by any of them hereunder or under the Notes; provided,
that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses payable by the Borrower under
Section 9.04 of this Agreement, to the extent that the Administrative Agent is
not promptly reimbursed for such costs and expenses by the Borrower.

SECTION 8.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Administrative
Agent (subject, so long as no Default or Event of Default has occurred and is
continuing, to the consent of the Borrower, which consent shall not be
unreasonably withheld). If no successor Administrative Agent shall have been
so appointed by the Required Lenders (and if so required by the preceding
sentence, consented to by the Borrower) and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.

Dell Computer 3-Year Credit Agreement
<PAGE> 75
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ARTICLE IX

MISCELLANEOUS

Dell Computer 3-Year Credit Agreement
<PAGE> 76
-72-

Park Avenue, New York, New York 10043, Attention: Michael Mandracchia; or to
the Borrower or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, to each
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent. Each such notice
or communication shall, (a) when mailed, be effective three Business Days after
the same is deposited in the mails, (b) when mailed for next day delivery by a
reputable freight company or reputable overnight courier service, be effective
one Business Day thereafter, and (c) when sent by telegraph, telecopy, telex or
cable, be effective when the same is telegraphed, telecopied and receipt
thereof is confirmed by telephone or return telecopy, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Administrative Agent pursuant to Article II, III or
VIII shall not be effective until received by the Administrative Agent.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees
to pay, whether or not any of the transactions contemplated hereby are
consummated, on demand (x) all reasonable costs and expenses (including
reasonable legal fees of counsel to the Administrative Agent) in connection
with the preparation (excluding normal travel and related expenses incurred by
the personnel of the Administrative Agent), execution, delivery, administration
(excluding those which are customarily borne by the Administrative Agent),
modification and amendment of this Agreement, the Notes and the other documents
to be delivered hereunder, and (y) the reasonable fees and expenses of counsel
to the Administrative Agent with respect to advising the Administrative Agent
as to its rights and responsibilities under this Agreement. The Borrower
further agrees to pay on demand all reasonable expenses of the Lenders
(including, without limitation, reasonable counsel (including, without
duplication, internal counsel) fees and expenses) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the Notes and the other documents

Dell Computer 3-Year Credit Agreement
<PAGE> 77
-73-

to be delivered hereunder, including, without limitation, reasonable counsel
(including, without duplication, internal counsel) fees and expenses in
connection with the enforcement of rights under this Section 9.04(a).

(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel, including, without duplication, internal counsel) that may be incurred
by or asserted or awarded against any Indemnified Party in its agent or lending
capacity under, or otherwise in connection with, this Agreement, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement, the proposed
or actual use of the proceeds of the Advances or any of the other transactions
contemplated hereby, whether or not such investigation, litigation or
proceeding is brought by the Borrower, its shareholders or creditors or an
Indemnified Party or any other Person or an Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability 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. The Borrower hereby acknowledges that the indemnification
provided for by this subsection (b) includes indemnification of an Indemnified
Party for claims, damages, losses, liabilities or expenses resulting in whole
or in part from such Indemnified Party's negligence (other than gross
negligence).

Dell Computer 3-Year Credit Agreement
<PAGE> 78
-74-

such payment, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Revolving Credit Advance.

Dell Computer 3-Year Credit Agreement
<PAGE> 79
-75-

(i) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under this
Agreement (other than any Competitive Bid Advances or Competitive Bid
Notes),

(iv) no such assignment may be made unless the assigning
Lender makes a proportional assignment to the same assignee of its
commitment and advances under the $100,000,000 364-day Credit
Agreement dated as of the date hereof among the Borrower, certain
lenders, Citibank, N.A., as Administrative Agent, Chemical Bank, as
Co-Agent, and Citicorp Securities, Inc., as Arranger, and

(v) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with
any Note or Notes subject to such assignment and a processing and
recordation fee of $3,000.

Dell Computer 3-Year Credit Agreement
<PAGE> 80
-76-

that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance.

Dell Computer 3-Year Credit Agreement
<PAGE> 81
-77-

Borrower, the Administrative 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 the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. The Administrative Agent shall provide the Borrower with a copy of the
Register upon request.

(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Revolving Credit Note or Notes a new Revolving
Credit Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Revolving Credit Note to the order of the assigning Lender in an amount equal
to the Commitment retained by it hereunder. Such new Revolving Credit Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Revolving Credit Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-l hereto. Such surrendered Revolving
Credit Note or Notes shall be marked "canceled" and shall be returned promptly
to the Borrower.

Dell Computer 3-Year Credit Agreement
<PAGE> 82
-78-

Agreement, (v) the parties to each such participation shall execute a
participation agreement, and (vi) no participant under any such participation
shall have any right to approve any amendment to or waiver of any provision of
this Agreement or the Notes, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
alter the principal of, or interest on, the Advance or Advances in which such
participant is participating or any fees or other amounts payable to the
Lenders hereunder, or postpone any date fixed for any payment of principal of,
or interest on, the Advances or any fees or other amounts payable hereunder.

SECTION 9.08. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.

SECTION 9.09. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by

Dell Computer 3-Year Credit Agreement
<PAGE> 83
-79-

different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.

(b) The Borrower hereby irrevocably appoints and designates
CT Corporation System, whose address is 1633 Broadway, New York, New York
10019, as its true and lawful attorney and duly authorized agent for service of
legal process of the Borrower. The Borrower hereby agrees that service of
legal process in any proceeding referred to in the preceding clause (a) may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address
specified in Section 9.02 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto.

Dell Computer 3-Year Credit Agreement
<PAGE> 84
-80-

extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

Dell Computer 3-Year Credit Agreement
<PAGE> 85
-81-

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

DELL COMPUTER CORPORATION

By /s/ Alex C. Smith
--- ---- -- -----
Title: Vice President/Treasurer

Administrative Agent
-------------- -----

CITIBANK, N.A.,
as Administrative Agent

By /s/ Alan J. Berenbaum
--- ---- -- ---------
Title: Attorney-in-Fact

Co-Agent
--------

CHEMICAL BANK, as Co-Agent

By /s/ Ann B. Kerns
--- --- -- -----
Title: Vice President

Arranger
--------

CITICORP SECURITIES, INC., as
Arranger

By /s/ Steven Victorin
--- ------ --------
Title: Vice President

Dell Computer 3-Year Credit Agreement
<PAGE> 86
- 82 -

Lenders
-------

CITIBANK, N.A.
Commitment
- ----------
$23,280,000

By /s/ Alan J. Berenbaum
--- ---- -- ---------
Title: Attorney-in-Fact

CHEMICAL BANK
Commitment
- ----------
$18,120,000

By /s/ Ann B. Kerns
--- --- -- -----
Title: Vice President

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Commitment
- ----------
$13,800,000

By /s/ Kevin McMahon
--- ----- -------
Title: Vice President

THE BANK OF TOKYO-MITSUBISHI, LTD.
Commitment
- ----------
$13,800,000

By /s/ J. Mearns
--- -- ------
Title: Vice President and
Manager

BZW DIVISION OF BARCLAYS BANK PLC
Commitment
- ----------
$13,800,000

By /s/ Robert R. Morton
--- ------ -- ------
Title: Director

Dell Computer 3-Year Credit Agreement
<PAGE> 87
- 83 -

CREDIT LYONNAIS NEW YORK BRANCH
Commitment
- ----------
$13,800,000

By /s/ Robert Ivosevich
--- ------ ---------
Title: Senior Vice President

DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES
Commitment
- ----------
$13,800,000

By /s/ B. Craig Erickson
--- -- ----- --------
Title: Vice President

By /s/ Lucas Massong
--- ----- -------
Title: Assistant Treasurer

ROYAL BANK OF CANADA
Commitment
- ----------
$13,800,000

By /s/ Tom J. Oberaigner
--- --- -- ----------
Title: Manager

STANDARD CHARTERED BANK
Commitment
- ----------
$13,800,000

By /s/ Rita Raychaudhury
--- ---- ------------
Title: Vice President

SOCIETE GENERALE, SOUTHWEST AGENCY
Commitment
- ----------
$12,000,000

By /s/ Richard Gould
--- ------- -----
Title: Vice President

Dell Computer 3-Year Credit Agreement

<PAGE> 88
SCHEDULES

The following schedules have been omitted from this filing:

Schedule I -- List of Applicable Lending Offices
Schedule II -- Existing Liens

The registrant hereby undertakes to furnish supplementary a copy of
either of such schedules to the Commission upon request.

<PAGE> 89

EXHIBIT A-1

FORM OF REVOLVING CREDIT NOTE

$________________
Dated: ___________, 199_

Dell Computer 3-Year Credit Agreement
<PAGE> 90

amount first above mentioned, the indebtedness of the Borrower resulting from
each such Revolving Credit Advance being evidenced by this Revolving Credit
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

This Revolving Credit Note shall be governed by, and construed
in accordance with, the laws of the State of New York.

DELL COMPUTER CORPORATION

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

A1-2
<PAGE> 91

REVOLVING CREDIT ADVANCE AND PAYMENTS OF PRINCIPAL

</TABLE>
A1-3
<PAGE> 92

EXHIBIT A-2

FORM OF COMPETITIVE BID NOTE

$____________
Dated: __________, 199_

Interest Rate: ____% per annum (calculated on the basis of a
year of ___ days for the actual number of days elapsed).

Interest Payment Date or Dates: __________________.

Both principal and interest are payable not later than 12:00
noon (New York City time) on the day due in lawful money of the United States
of America to Citibank, N.A. ("Citibank"), as Administrative Agent, or any
successor to Citibank in such capacity, for the account of the Lender at the
Administrative Agent's Account (as defined in the Credit Agreement referred to
herein) (or at the office of such successor, if applicable), in same day funds,
free and clear and without any deduction, with respect to the payee named
above, for any and all present and future taxes, deductions, charges or
withholdings, and all liabilities with respect thereto.

A2-1
<PAGE> 93

This Competitive Bid Note shall be governed by, and construed
in accordance with, the laws of the State of New York.

DELL COMPUTER CORPORATION

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

A2-2
<PAGE> 94

EXHIBIT B-1

FORM OF NOTICE OF REVOLVING CREDIT BORROWING

Citibank, N.A., as
Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]

Attention: _____________

Ladies and Gentlemen:

(i) The Business Day of the Proposed Revolving Credit
Borrowing is ____________, 19__.

(ii) The Type of Revolving Credit Advances comprising the
Proposed Revolving Credit Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].

(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $____________.

B1-1
<PAGE> 95

*[(iv) The initial Interest Period for each Revolving Credit
Advance made as part of the Proposed Revolving Credit Borrowing is
_____ month[s].]

Very truly yours,

DELL COMPUTER CORPORATION

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

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

* To be used in the case of a Revolving Credit Borrowing comprised of
Eurodollar Rate Advances.

B1-2
<PAGE> 96

EXHIBIT B-2

FORM OF NOTICE OF COMPETITIVE BID BORROWING

Citibank, N.A., as
Administrative Agent,
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]

Attention: ______________

Ladies and Gentlemen:

The undersigned, Dell Computer Corporation, refers to the
Credit Agreement dated as of June 6, 1996 (said agreement, as amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the undersigned, Citibank, N.A. ("Citibank"), in its capacity as
Administrative Agent, Chemical Bank, in its capacity as Co-Agent, Citicorp
Securities, Inc., in its capacity as Arranger, and certain Lenders parties
thereto, and hereby gives you notice pursuant to Section 3.02 of the Credit
Agreement that the undersigned hereby requests a Competitive Bid Borrowing
under the Credit Agreement, and in that connection sets forth below the terms
on which such Competitive Bid Borrowing (the "Proposed Competitive Bid
Borrowing") is requested to be made:

(A) Business Day of
Competitive Bid
Borrowing ______________

(B) Aggregate amount of
Competitive Bid
Borrowing ______________

(D) Maturity date* ______________

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

B2-1
<PAGE> 97

(E) Interest payment
date(s) ________________________

(F) _________________* ________________________

The undersigned hereby confirms that the Proposed Competitive
Bid Borrowing is to be made pursuant to the terms of the Credit Agreement.

Very truly yours,

DELL COMPUTER CORPORATION

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

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

* Any other terms to be applicable to the Competitive Bid Borrowing.

B2-2
<PAGE> 98

EXHIBIT C

FORM OF ASSIGNMENT AND ACCEPTANCE

_________________ (the "Assignor") and _______________ (the
"Assignee") agree as follows:

C-1
<PAGE> 99

Assignor under the Credit Agreement, respectively, as specified on Schedule 1.

C-2
<PAGE> 100

relinquish its rights and be released from its obligations under the Credit
Agreement.

7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.

C-3
<PAGE> 101

SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE

Percentage of Commitment
being assigned: _____________%

Assignee's Commitment: $____________

Aggregate outstanding principal
amount of Advances assigned: $____________

Principal amount of Note
payable to Assignee: $____________

Principal amount of Note
payable to Assignor: $____________

[Amount of Taxes or Increased
Costs of Assignor:] $____________

[Amount of Taxes or Increased
Costs of Assignee:] $____________

Effective Date (if other than
date of acceptance by the
Administrative Agent): ______, 199_*

[NAME OF ASSIGNOR], as Assignor

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

Dated: , 199
-------------- -

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

* This date should be no earlier than five Business Days after delivery
of this Assignment and Acceptance to the Administrative Agent.

C-4
<PAGE> 102

[NAME OF ASSIGNEE], as Assignee

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

Domestic Lending Office:

Eurodollar Lending Office:

Accepted this ____ day
of __________, 199_

CITIBANK, N.A.,
as Administrative Agent

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

C-5
<PAGE> 103

EXHIBIT D

FORM OF OPINION OF COUNSEL FOR THE BORROWER

June __, 1996

To each of the Banks party
to the Credit Agreement
referred to below and

Citibank, N.A., as Administrative
Agent for said Banks

Re: Credit Agreement-
$150,000,000 Three-Year Revolving Credit Facility

I am the General Corporate Counsel of Dell Computer
Corporation, a Delaware corporation (the "Borrower"), I have acted as counsel
to the Borrower in connection with the Credit Agreement, dated as of June 6,
1996, among the Borrower, the Banks party thereto, Citibank, N.A. (as
Administrative Agent for such Banks), Chemical Bank, (as Co-Agent for such
Banks), and Citicorp Securities, Inc. (as Arranger), relating to a $150,000,000
Three-Year Revolving Credit Facility. Such Credit Agreement is referred to
herein as the "Credit Agreement," and terms not otherwise defined herein have
the respective meanings ascribed to them in the Credit Agreement.

D-1
<PAGE> 104

given and to be accurate. As to all matters of fact material to my opinions, I
have, when relevant facts were not independently established, relied upon
certificates furnished to me.

Based upon the foregoing and subject to further assumptions,
qualifications and limitations hereinafter set forth, I am of the opinion that:

D-2
<PAGE> 105

Adverse Effect or (4) result in or require the creation or imposition
of any Lien upon or with respect to any of the properties of the
Borrower or its Subsidiaries.

The opinion expressed in the second sentence of Paragraph C
above with respect to the enforceability of the Credit Agreement and the Notes
is subject to the following qualifications and limitations:

D-3
<PAGE> 106

of interest, fees or other charges under the Credit Agreement or the Notes.

(4) The enforceability of provisions in the Credit Agreement
to the effect that terms may not be waived or modified except in writing may be
limited under certain circumstances.

(5) I express no opinion as to the enforceability of the
second sentence of Section 2.13 of the Credit Agreement.

D-4
<PAGE> 107

person, or used for any other purpose, without my prior written consent.

Very truly yours,

Thomas H. Welch, Jr.
General Corporate Counsel

D-5
<PAGE> 108

EXHIBIT E

FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE BANKS

June ___, 1996

Each of the Banks party
to the Credit Agreement
referred to below and

Citibank, N.A.,
as Administrative Agent
for said Banks

Ladies and Gentlemen:

In rendering the opinion expressed below, we have examined the
Credit Agreement and the Notes.

In rendering the opinions expressed below, we have assumed,
with respect to the Credit Agreement and the Notes, that:

(i) such documents have been duly authorized by, have been duly
executed and delivered by, and (except to the extent set
forth in the opinions below as to the Borrower) constitute
legal, valid, binding and enforceable obligations of, all
of the parties to such documents;

E-1
<PAGE> 109

(ii) all signatories to such documents have been duly authorized;
and

(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.

Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that each of the Credit Agreement and the
Notes constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally and except as
the enforceability of the Credit Agreement and the Notes is subject to the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good faith and
fair dealing.

The foregoing opinion is subject to the following comments and
qualifications:

(B) The enforceability of provisions in the Credit Agreement
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.

E-2
<PAGE> 110

The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the law of the State of New
York, and we do not express any opinion as to the laws of any other
jurisdiction.

Very truly yours,

WFC/RMG

E-3

<PAGE> 1

EXHIBIT 11

DELL COMPUTER CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ------------------------------
JULY 28, 1996 JULY 30, 1995 JULY 28, 1996 JULY 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Primary earnings per common share:
Calculation of weighted average shares (a):
Weighted average shares of common stock
outstanding 89.9 90.8 90.9 87.4
Weighted average shares of common stock
equivalents, utilizing the treasury
stock method 7.4 7.4 6.8 7.2
------ ------ ------ ------
Weighted average shares outstanding 97.3 98.2 97.7 94.6
====== ====== ====== ======
Earnings:
Net Income available to stockholders $ 103 $ 65 $ 185 $ 115
====== ====== ====== ======
Earnings per common share (a)(b) $ 1.05 $ .66 $ 1.89 $ 1.22
====== ====== ====== ======

Fully diluted earnings per common share:

Calculation of weighted average shares (a):
Weighted average shares of common stock 89.9 90.8 90.9 87.4
outstanding
Weighted average shares of common stock 7.7 7.9 7.7 8.1
equivalents, utilizing the treasury
stock method
Assumed conversion of Convertible Preferred Stock .5 .5 .5 3.4(c)
------ ------ ------ ------
Weighted average shares outstanding 98.1 99.2 99.1 98.9
====== ====== ====== ======

Earnings: $ 103 $ 65 $ 185 $ 115
Net Income available to common stockholders -- -- -- 1(d)
Add: preferred dividends ------ ------ ------ ------
Adjusted net income available to common
stockholders $ 103 $ 65 $ 185 $ 116
====== ====== ====== ======
Earnings per common share (a)(b) $ 1.05 $ .66 $ 1.86 $ 1.18
====== ====== ====== ======

</TABLE>

(a) All share and per share information for fiscal 1996 has been
retroactively restated to reflect the two-for-one common stock split
which took place during the third quarter of fiscal 1996.

(b) Earnings per common share was calculated using the underlying data in
thousands.

(c) Assumes conversion, at the beginning of fiscal 1996, of the 60,000
shares of outstanding Convertible Preferred Stock and assumes
conversion of the remaining Convertible Preferred Stock (those shares
which were converted in March 1995) for the period from the beginning
of fiscal 1996 to the actual conversion date.

(d) Preferred dividends are exclusive of the conversion premium and
expenses of the conversion offer.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DELL
COMPUTER CORPORATION FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTH PERIOD
ENDED JULY 28, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-02-1997
<PERIOD-END> JUL-28-1996
<CASH> 46
<SECURITIES> 910
<RECEIVABLES> 828
<ALLOWANCES> 0
<INVENTORY> 204
<CURRENT-ASSETS> 2,141
<PP&E> 212
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,364
<CURRENT-LIABILITIES> 1,172
<BONDS> 13
<COMMON> 266
0
6
<OTHER-SE> 540
<TOTAL-LIABILITY-AND-EQUITY> 2,364
<SALES> 3,328
<TOTAL-REVENUES> 3,328
<CGS> 2,636
<TOTAL-COSTS> 2,636
<OTHER-EXPENSES> 53
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 273
<INCOME-TAX> 79
<INCOME-CONTINUING> 194
<DISCONTINUED> 0
<EXTRAORDINARY> (9)
<CHANGES> 0
<NET-INCOME> 185
<EPS-PRIMARY> 1.89
<EPS-DILUTED> 1.86

</TABLE>