<PAGE>







                                 LEASE AGREEMENT
                                     BETWEEN
                                        
                    PRINCIPAL MUTUAL LIFE INSURANCE COMPANY,
                                  AS LANDLORD,
                                        
                                       AND
                                        
              ZALE CORPORATION, AS DEBTOR AND DEBTOR-IN-POSSESSION,
                                    AS TENANT
                                        
                                        
                                        
                            DATED SEPTEMBER 17, 1992











7/16/92
<PAGE>

                                  TABLE OF CONTENTS

LEASE GRANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DELINQUENT PAYMENT; HANDLING CHARGES . . . . . . . . . . . . . . . . . . . . . 5
SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CONDITION; IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE . . . . . . . . . . 6
USE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
ASSIGNMENTAND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . .13
INSURANCE; WAIVERS; SUBROGATION; INDEMNITY . . . . . . . . . . . . . . . . . .15
SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.. . . . . . . . . . .16
RULES AND REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
DAMAGE TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
LANDLORD'S LIEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
DEFAULT BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
PAYMENT BY TENANT; NON-WAIVER. . . . . . . . . . . . . . . . . . . . . . . . .24
SURRENDER OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
CERTAIN RIGHTS RESERVED BY LANDLORD. . . . . . . . . . . . . . . . . . . . . .25
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
HAZARDOUS WASTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
PRIOR LEASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

<PAGE>

                                      LEASE

     THIS LEASE AGREEMENT (this "LEASE") is entered into as of September 17, 
1992, between PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation 
("LANDLORD"), ZALE CORPORATION, as debtor and debtor-in-possession, a 
Delaware corporation ("TENANT").
     
     1.   LEASE GRANT.  Subject to the terms of this Lease, Landlord leases 
to Tenant, and Tenant leases from Landlord the land described on Exhibit A 
(the "Land"), together with the building located thereon (the "Building"), 
whose street address is 901 West Walnut Hill Lane, Irving, Texas, together 
with all improvements located thereon including, without limitation, all 
parking facilities and areas, roadways and walkways appurtenant to the Land 
and/or Building (collectively, the "Premises").
     
     2.   TERM.  The term of this Lease (the "Term") shall be 60 months, 
beginning no earlier than August 1, 1992, and beginning on the date hereof as 
set forth above (the "Commencement Date"), and (subject to the last sentence 
of this Section 2) there shall be no rights to renew or extend the Term.  The 
Term and Commencement Date are subject to adjustment and earlier termination 
as herein provided.  If the Commencement date is not the first day of a 
calendar months, the Term shall be extended by the time between the 
Commencement Date and the first day of the next month.
 
     3.   RENT.
     
     a.   BASIC RENTAL.  "Basic Rental" (herein so called) shall be 
$308,333.33 for the first three months of the Term; thereafter, Basic Rental 
shall be $2,500,000 per annum and shall be payable in monthly installments of 
$208,333.33 each.
     
     b.   ADDITIONAL RENT.  In addition to the Basic Rental, Tenant shall pay 
to Landlord "Additional Rent" (herein so called) equal to the actual Basic 
Costs (defined below) incurred by Landlord and directly relating to the 
Premises. "Basic Costs" shall mean all expenses and disbursements of every 
kind which Landlord is obligated to pay or obligated or entitled under the 
terms of this Lease to pay or incur in connection with the following items:
     
          (i)  all insurance and insurance related expenses applicable to the
     Premises, including any deductible amounts not exceeding $10,000.00 per
     occurrence; and
          
          (ii) all taxes and assessments and governmental and association
     charges imposed by any and all tax authorities and/or associates, 
     including (without limitation) federal, state, county, municipal or 
     private association, whether they be by taxing or management districts or
     authorities presently taxing or by others subsequently created by
     otherwise, or by private association, and any other taxes or assessments
     (including, without limitation, all annual assessments, special 
     assessments and all other amounts payable pursuant to restrictive 
     covenants in favor of, or otherwise payable to, and all 


                                       2
<PAGE>

     other amounts payable pursuant to restrictive covenants in favor of, or 
     otherwise payable to, Las Colinas Association), attributable to the 
     Premises (or its operation) and all improvements and fixtures located 
     therein, excluding federal and state taxes on income (collectively, 
     "TAXES");  however, if the present method of taxation changes so that 
     in lieu of the whole or any part of any Taxes levied on the Land or 
     Building, there is levied on Landlord a capital tax directly on the 
     rents received therefrom or a franchise tax, assessment, or charge 
     based in whole or in part upon such rents for the Premises, then all 
     such taxes, assessments, or charges, or the part thereof so based, 
     shall be deemed to be included within the term "Taxes" for purposes 
     hereof.  Taxes shall not include any penalties incurred by virtue of 
     late payment by Landlord (due to any cause other than Tenant's default 
     in paying Taxes requires under this Lease).  Landlord shall provide to 
     Tenant within a reasonable time after receipt by Landlord, copies of 
     the bills from the taxing authorities showing the Taxes that are due; 
     provided, however, that any failure of Landlord to forward such copies 
     as described shall not reduce, release, impair or affect Tenant's 
     obligations to pay such portion of the Additional Rent as provided in 
     this Lease.  Taxes will be prorated to the Term and assessments shall 
     be charged to Tenant only for that portion falling due within the Term 
     computed as if Landlord elected the longest period over which same cold 
     be paid.  Landlord shall have the right to contest the amount of 
     validity, in whole or in part, of any Taxes. Tenant shall also have the 
     right to contest the amount or validity, in whole or in part, of the 
     Taxes by appropriate proceedings diligently conducted, at any time 
     during which there exists no Event of Default under the terms of this 
     Lease, and, if Tenant elects to defer payment in connection with such 
     contest, so long as Tenant delivers to Landlord within sixty (60) days 
     prior to the delinquency date for payment of such Taxes (A) 
     documentation reasonably satisfactory to Landlord [which may include a 
     reasonably acceptable opinion of legal counsel as to the matters set 
     forth in items (3) and (4) of this subsection (A) (1) identifying the 
     taxing authority, applicable year and amount of Taxes being contested, 
     (2) evidencing the filing of an action or the commencement of appropriate 
     proceedings initiating such contest, (3) verifying that the postponement 
     of deferment of payment of such contested Taxes is allowed by law in 
     such a contest, (4) verifying that such proceedings will suspend the 
     foreclosure of any lien on the personal property of Tenant, the 
     leasehold estate created by this Lease and/or the Premises, and (5) 
     assuring Landlord that non-payment of such Taxes will not interfere 
     with Tenant's ability to conduct its current business and that such 
     postponement or deferment will not result in any action or proceedings 
     against Landlord, and (B) cash deposits, a clean letter of credit 
     naming Landlord as beneficiary, a bond or such other security as 
     Landlord may reasonably require in an amount sufficient to pay any 
     additional interest and/or penalties incurred and to be incurred in 
     connection with such postponement or deferment of payment of the Taxes 
     being contested.  Landlord may pay such postponed or deferred Taxes 
     being contested by Tenant immediately upon the earlier to occur of a 
     non-appealable determination of the amount and validity thereof and, if 
     any event, prior to any filing of any action against Landlord and prior 
     to the foreclosure of any lien securing payment of such contested 
     Taxes.  If both Landlord and Tenant choose to contest Taxes, any such 
     contest shall be directed and controlled (a) by Tenant, with 
     consultation with Landlord, 

                                      3
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     during the first four (4) years of the Term of this Lease; and (b) by 
     Landlord, with consultation with Tenant, during the last year of the 
     Term of this Lease.  Notwithstanding anything in this subsection 3.b to 
     the contrary, (1) Landlord shall have the right to pay prior to 
     delinquency any portion of the Taxes from funds held in escrow for such 
     purpose or from other funds, unless Landlord receives, prior to such 
     payment and not less than 60 days prior to the delinquency date for 
     such Taxes, written notice from Tenant that Tenant has elected to 
     contest such Taxes and to defer payment in connection with such 
     contest, which notice is accompanied by the items described in (A) and 
     (B) as provided above in this subsection 3.b(ii), and (11) Tenant  
     shall give Landlord written notice of any contest of all or any portion 
     of the Taxes, containing the information described in subsection 
     3.b(ii)(A)(1) above, whether or not such context involves deferring 
     payment of any portion of such contested Taxes.

          
Additional Rent (other than any Escrow Deficiency as hereinafter defined) 
shall be payable in advance, based on the prior year's actual amount of Basic 
Cost items for any calendar year or part thereof during the Term, in monthly 
installments equal to the prior year's actual amount of such Basic Cost items 
for such calendar year or part thereof, divided by the number of months in 
such calendar year during the Term; provided, however, that an initial 
payment of Additional Rent Attributable to Taxes only shall be paid to 
Landlord contemporaneously with the execution of this Lease in an amount 
equal to one twelfth of the Basic Costs items attributable to Taxes only, for 
the year 1991 multiplied by the number of months which have expired in 1992 
up to the date of execution in this Lease.  Additional Rent shall be held by 
Landlord in an interest bearing account with Landlord or in an interest 
bearing account selected by Landlord in its sole discretion, with annual 
reconciliation of the account.  Any interest remaining in the account after 
payment of Taxes will be paid to Tenant after such annual reconciliation.  By 
April 1 of calendar year, or as soon thereafter as practicable, Landlord 
shall deliver to Tenant a statement of the actual Basic Costs for the 
previous year, certified by Landlord as being true and correct, together with 
back-up documentation therefor (the "ANNUAL COST STATEMENT").  If the Annual 
Cost Statement reveals the Additional Rent paid by Tenant for the calendar 
year in question exceeds the Basic Costs for such year, Landlord shall 
promptly reimburse Tenant such excess; likewise, if the Additional Rent paid 
by Tenant for such calendar year was less than the Basic Costs for such year, 
Tenant shall pay to Landlord such deficiency (the "ESCROW DEFICIENCY") within 
30 days after its receipt of the Annual Cost Statement.  Notwithstanding 
anything in this subsection 3.6 to the contrary, any Escrow Deficiency for 
the year 1992 shall include an amount equal to the total amount of all Taxes 
owed for 1992, less the amount of Additional Rent held in escrow by Landlord 
for payment of 1992 Taxes at such time.

     c.   PERFORMANCE AND PAYMENT.  Tenant shall timely perform all of its 
obligations under this Lease.  Tenant's monetary obligations under this Lease 
(including, without limitation, payment of Basic Rental and Additional Rent) 
are hereby agreed to collectively comprise and are herein called "RENT".  All 
Basic Rental and Additional Rent other than any Escrow Deficiency is 
hereinafter called "SCHEDULED RENT."  Tenant shall pay to Landlord Rent 
required under this Lease without deduction or set offs, by payment in care 
of Trammell Crow Central Office Group, Inc. by wire transfer of immediately 
available funds to John Nolan.  


                                       4
<PAGE>

Scheduled Rent shall be payable monthly in advance.  The first monthly 
installments of Scheduled Rent shall be payable on the Commencement Date; 
thereafter, Scheduled Rent shall be payable on the first day of each month 
on the Term, unless the first day of a month falls on a weekend or on a 
banking holiday, in which case such payment shall be due on the day after 
such weekend or holiday.  Scheduled Rent for any fractional month of the Term 
shall be prorated on a per diem basis for each day of any partial month this 
Lease is in effect.
     
     4.   DELINQUENT PAYMENT; HANDLING CHARGES.  All past due payments 
required of Tenant hereunder shall bear interest from the date due until paid 
at the maximum lawful rate of interest, and, with respect to all Scheduled 
Rent not paid when due, Landlord may alternatively charge Tenant a fee equal 
to 3% of the delinquent Scheduled Rent payment to reimburse Landlord for its 
cost and inconvenience incurred as a consequence of Tenant's delinquency; 
provided, however, that notwithstanding any other provision of this Section 4 
or of any other Section of this Lease to the contrary, the charges permitted 
under this Section 4 or elsewhere in this Lease, to the extent they are 
considered to be interest under law, shall not exceed the maximum lawful rate 
of interest.  Except as otherwise expressly provided in the last sentence of 
this Section 4, the delinquent payment fee or interest provided for above 
shall accrue immediately after the due date of any such late payment, without 
grace or notice of any kind being required, and independently of (i) any 
default or Event of Default under this Lease, or (ii) any notice or grace 
periods provided for in any other Sections of this Lease.  Notwithstanding 
anything in this Section 4 to the contrary, Tenant shall be allowed one (1) 
grace period of three (3) days in length during each consecutive twelve (12) 
month period (a "LATE CHARGE GRACE PERIOD") with respect to payment of 
Schedule Rent (but not with respect to any other amounts owed under the terms 
of this Lease), beginning on the due date of the subject payment and without 
notice of any kind, and, so long as all previous payments of Scheduled Rent 
have been made on or before the due date therefor in strict accordance with 
the terms of this Lease during such twelve-month period, and so long as no 
Event of Default then exists under this Lease, the three percent (3%) 
delinquency fee described in this Section 4 shall not accrue during any Late 
Charge Grace Period; provided, however, that any Late Charge Grace Period 
shall be completely independent of and unrelated to the ten-day period 
described in Section 16(a) of this Lease, and nothing in this Section 4 shall 
be interpreted as requiring any notice of any kind by Landlord in connection 
with an Late Charge Grace Period.
     
     5.   SECURITY DEPOSIT.  [Intentionally deleted.]
     
     6.   UTILITIES.

          a.   PAYMENT FOR UTILITIES.  Tenant shall contract for and pay 
directly to the appropriate utility or service providers, before delinquency 
and without notice or demand from Landlord, all costs of electricity, water, 
sewer services, natural gas, garbage collection, and all other utilities and 
services that are provided to or used on the Premises (collectively, 
"UTILITIES").  Utilities shall be prorated for any partial calendar month 
during the Term with Tenant paying the portion thereof allocable to the 
interval in such calendar month during which this Lease was in effect and 
with Landlord paying the balance.  If Tenant fails timely to pay any such 
costs, and such failure results in an emergency situation as reasonably 


                                       5
<PAGE>

determined by Landlord, Landlord may pay such costs, and all amounts so paid 
(including interest and penalties) shall be paid by Tenant to Landlord upon 
demand.
          
          b.  SEPARATION OF UTILITIES.  Tenant shall, prior to the expiration 
or termination of this Lease, take all necessary action so that all utilities 
serving Lot 1 ("LOT 1"), Lot 2 (the Premises) and Lot 3 ("LOT 3"), 
respectively, of Las Colinas Section X, First Installment Revised as 
designated on that certain plat recorded in Volume 85068, Page 2623, ET SEQ., 
of the Plat or Map records of Dallas County, Texas (the "PLAT") are (a) 
separately metered, so that each of said three Lots is billed separately by 
all utility companies only for utilities serving each such separately metered 
Lot, and (b) provided to each of said three Lots separately, with each Lot 
being independent for all purposes as to utilities, and without any of such 
Lots being dependent upon either of the other two Lots for any utility 
service, utility easements (other than those existing on the Premises as of 
the date of this Lease) or utility equipment. Tenant shall cause the matters 
described in (a) and (b) above to be accomplished at Tenant's sole cost and 
expense, no later than the date of the termination or expiration of this 
Lease, including disconnecting, capping and/or removing from the Premises 
all pipes, wires and other conduits and equipment for utilities not serving 
the Premises, creating any new utility metering, utility facilities and/or 
conduits on Lot 1 and Lot 3, granting and/or releasing any utility easements 
(other than those existing on the Premises as of the date of this Lease) or 
rights, amending the Plat and executing and delivering any documents, all as 
may be necessary to accomplish the matters described in (a) and (b) above.  
Tenant's obligation under this Section 6 shall survive the expiration or 
termination of this Lease, and any assignment or sublease hereof, and shall 
be more fully described in an agreement executed between Principal Mutual 
Life Insurance Company, as Landlord and Zale Corporation, as Debtor and 
Debtor-in-Possession, as Tenant, which agreement shall be executed 
contemporaneously with the execution and delivery of this Lease.
          
     7.   CONDITION; IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
     
          a.  CONDITION OF PREMISES.  Tenant has occupied the Premises under 
the Prior Lease and is thoroughly familiar with the condition thereof.  
Tenant accepts the Premises AS IS, WHERE IS, and without any warranties of 
any nature, expressed or implied, it being the intention of Landlord and 
Tenant to expressly disclaim and exclude all warranties of any kind 
whatsoever, including, without limitation, any warranty that the Premises 
are suitable for their intended commercial purpose.
          
          b.  IMPROVEMENTS; ALTERATIONS.  Tenant shall be entitled, without 
obtaining Landlord's consent thereto, at Tenant's sole cost, to make any 
alterations or additions to the Premises which do not (i) constitute a free 
standing structure, (ii) affect the "footprint" of the existing improvements, 
(iii) materially affect the HVAC, mechanical, electrical or plumbing systems 
of the Building, or the roof structural components or appearance of the 
Building, (iv) involve piercing the roof or structural floors of the 
Building, or erecting any permanent walls within the Building, or (v) cost in 
excess of $25,000, or cause all such alterations and additions over a 90 day 
period to exceed $50,000 in cost (any alterations or additions meeting 


                                       6
<PAGE>

the requirements of (i) through (v) inclusive being hereinafter referred to 
as a "NON-CONSENT Alteration").  The items specified on EXHIBIT B hereto 
shall constitute a "Non-Consent Alteration"; provided, however, that the cost 
limitation set forth in (v) of the preceding sentence shall not apply to 
EXHIBIT B items.  Landlord hereby specifically acknowledges and agrees that, 
without limiting in any way the definition of alterations for which its 
consent is not required, Tenant's relocation of highwall, security equipment 
and related fixtures does not require Landlord's consent, as any such 
alterations will satisfy the above conditions (i) through (v), inclusive.  
Tenant shall not make any other alterations or additions to the Premises, 
except in accordance with plans and specifications (or change orders with 
respect thereto) which have been previous submitted to and approved in 
writing by Landlord.  Landlord shall not unreasonably withhold, condition or 
delay its approval provided that (a) such plans and specifications (or change 
orders) and the improvements and methods of installation described thereon 
comply with applicable governmental laws, codes, rules, and regulations and 
are consistent with the Zale Headquarters Standard (as defined on EXHIBIT E 
attached hereto and made a part hereof), (b) such plans and specifications 
(or change orders) are sufficiently detailed to allow construction of the 
improvements in a good and workmanlike manner, -C- the improvements and 
methods of installation described therein will not adversely affect the 
Building's structure, or the Building's HVAC, plumbing, electrical, or 
mechanical systems and will not affect the exterior appearance of the 
Building, and (d) such plans and specifications are accompanied by a 
detailed, itemized construction schedule and a budget of the cost of making 
the alterations or additions described thereon.  All personal property 
described on SCHEDULE I attached to this Lease and made a part hereof by this 
reference (including all replacements and expansions thereof) is herein 
defined as "TENANT'S PROPERTY."  Tenant shall not be entitled to remove any 
of Tenant's Property at any time during which there exists an uncured default 
or an Event of Default under this Lease, except for the Excluded Property (as 
defined in Section 15 of this Lease ), which Tenant shall be entitled to 
remove at any time at Tenant's sole cost and expense.  Upon expiration or 
termination of this Lease, Tenant shall, at Landlord's request, remove 
Tenant's Property, and any of Tenant's Property not removed (1) within 10 
days after such request may be removed and stored by Landlord, and Tenant 
shall reimburse Landlord for all costs of such storage, or (2) at Landlord's 
option, shall be deemed abandoned and shall become Landlord's property if not 
removed by Tenant within 60 days after Tenant's receipt of such request to 
remove it from the Premises.  Upon any removal of Tenant's Property, Tenant 
shall repair any damage to the Premises caused by such removal.  All 
alterations, additions, or improvements other than Tenant's Property (whether 
temporary or permanent in character, and including without limitation all 
air-conditioning equipment that does not constitute Tenant's Property and all 
other equipment that is in any manner connected to the Building's plumbing 
system and which is not Tenant's Property) made in or upon the Premises, 
either by Landlord or Tenant, shall remain on the Premises during the Term 
(unless replaced with an item of similar quality, use and value), shall be 
Landlord's property at the end of the Term, and shall remain on the Premises 
without compensation to Tenant.  Approval by Landlord of any of Tenant's 
drawings or plans and specifications shall not constitute a representation of 
warranty by Landlord as to the adequacy or  sufficiency of such drawings or 
plans and specifications, or the improvements, alterations or additions to 
which they relate, for any use, purpose, or condition, but such approval 
shall merely be the approval of Landlord as required hereunder. 
Notwithstanding the foregoing, 


                                       7
<PAGE>

Landlord may withhold its consent in its absolute discretion to the 
construction or installation of any alterations described in (i) through (iv) 
inclusive described above in this subsection 7.b.  Any alterations or 
additions to the Premises performed under this subsection 7.b. which cause 
any liability or create the need for additional alterations under the 
Americans with Disabilities Act of 1990, and the rules, regulations, and 
guidelines promulgated thereunder (collectively, the "ADA") shall be done 
only with Tenant's agreement to be responsible for all of such alterations, 
costs and liabilities.
          
          c.  REPAIRS; MAINTENANCE.  Tenant shall, at its expense, (1) 
commence all work specified on EXHIBIT B hereto within thirty (30) days after 
the Commencement Date, (2) diligently pursue its completion, and (3) in any 
event, complete all of such work within one hundred twenty (120) days after 
the Commencement Date of this Lease; provided, however, that if such work 
subjects Tenant to undertake compliance work in connection with the ADA, 
Landlord shall bear the cost of such compliance work.  Additionally, Tenant, 
at its expense, shall maintain the Premises to the Zale Headquarters Standard 
and, except as hereinafter expressly provided, in good repair and condition, 
and perform routine care of landscaping and regular mowing of grass, and 
routine maintenance and repair of those portions of the Premises that are not 
Structural/Capital Items (as hereinafter defined), all in a manner consistent 
with the Zale Headquarters Standard, subject to normal wear and tear, 
casualty and condemnation.  As used in this Lease, "STRUCTURAL/CAPITAL ITEMS" 
shall mean the roof, foundation, permanent walls, structural components and 
major operating components of the Buildings and parking structure, such as 
the major heating, ventilating and air conditioning systems, the plumbing, 
mechanical and electrical systems, elevators, escalators and the paved 
parking areas, sidewalks and driveways, except that Structural/Capital Items 
shall not include any of the matters listed on EXHIBIT B (collectively, the 
"REQUIRED REPAIRS") or on EXHIBIT F attached hereto and made a part hereof 
(the "EXHIBIT F ITEMS"), or any underground or aboveground tanks in or on, or 
later placed in or on the Premises, including any such tanks installed to 
replace those described in Section 24 of this Lease, or any utility lines, 
conduits, meters or other equipment pertaining to utilities other than those 
serving only the Premises. "CASUALTY" shall include damage by fire, storm, 
blood, explosion, falling objects, riot, insurrection, acts of war and acts 
of God.  Landlord, at its expense, shall maintain, repair and replace those 
portions of the Premises that are Structural/Capital Items in a manner 
consistent with Zale Headquarters Standard, subject thereafter to normal wear 
and tear, casualty and condemnation, and subject to Tenant's obligations with 
respect thereto as expressly set forth in this Lease.  Tenant shall, 
throughout the Term, deliver the Premises and all improvements and equipment 
therein (other than Tenant's Property that Tenant elects to remove or 
Landlord requires be removed) clean and free of trash and in good repair and 
condition, except for reasonable wear and tear and casually between the last 
necessary repair, replacement, or restoration made by Tenant or Landlord 
pursuant to such party's respective obligations under this Lease.  On the 
first day of each month during the Term, Tenant shall deliver to Landlord a 
completed maintenance checklist, the form of which is attached hereto as 
EXHIBIT C, together with copies of all Service Contracts (defined below), 
including, without limitation, for janitorial, landscaping, elevator and 
escalator service that have not previously been delivered by Tenant to 
Landlord.  Landlord, at its sole cost and expense, may from time to time 
inspect the Premises to ensure Tenant is complying with its obligations under 
this Section 7.c. and the other provisions of this 


                                       8
<PAGE>

Lease; currently, Landlord anticipates making such inspections on a 
quarter-annual basis, but may make such inspections more frequently in its 
sole discretion.  Any entry by Landlord under this Section 7 shall be during 
Tenant's normal business hours, following reasonable oral notice by Landlord 
to Tenant.  Landlord's representative shall be accompanied at all times 
during such inspections by representatives designated by Tenant and shall 
strictly observe all security procedures promulgated by Tenant from time to 
time for all other business invitees.  If any inspection reveals that Tenant 
is not properly and timely performing the work required to properly maintain 
the portions of the Premises that are other than the Structural/Capital Items 
or, with respect to the Structural/Capital Items, (i) is not repairing and/or 
replacing as necessary any portions thereof costing less than $4,000.00 per 
occurrence or per related series of occurrences relating to the same 
Structural/Capital Item and occurring within six (6) months of such repair or 
replacement, or (ii) is not performing the servicing, maintenance, repair 
and/or replacement, and paying the necessary expenses therefor, with respect 
to Structural/Capital Items (including equipment that constitutes 
Structural/Capital Items), which would be either scheduled or nonscheduled 
work needed to achieve the normal useful life of the equipment or of the 
Structural/Capital Items (such work and other portions of the Premises 
described in this sentence being hereinafter collectively referred to as 
"NON-STRUCTURAL CAPITAL ITEMS") in the manner required hereunder, Landlord 
may notify Tenant as to such matters, and Tenant shall promptly perform such 
maintenance in a manner as necessary to maintain the Building to the Zale 
Headquarters Standard and all improvements and equipment therein in good 
working order and condition, subject to the provisions of the last 
subparagraph of this Section 7c.  If such failure by Tenant pertains to any 
of the matters described on EXHIBIT B or EXHIBIT C attached hereto or to any 
Non-Structural Capital Items or to any of the other matters necessary to 
maintain the Premises to the Zale Headquarters Standard (any of such maters 
constituting and being hereinafter referred too as a "MATERIAL TENANT 
REPAIR"), Landlord shall notify Tenant of such failure in wiring.  If (A) 
Tenant fails to perform a Material Tenant Repair after receipt of written 
notice from Landlord describing the work to be performed, within the period 
specified in such notice by Landlord, which specified period shall be the 
length of time sufficient, in Landlord's reasonable judgment, to complete the 
type of work described in such notice, and may vary from notice to notice 
(the "DESIGNATED CURE PERIOD"), or (B) Landlord reasonably determines that 
emergency repairs for which Tenant is responsible are necessary to avoid 
imminent personal injury or imminent substantial damage to the Premises (an 
"EMERGENCY REPAIR"), then, Landlord may take action as follows:
          
If Tenant fails to perform a Material Tenant Repair (other than an Emergency 
Repair) of a particular type and nature two (2) times in any consecutive 
twelve (12) month period, and such failures continue past the giving of 
notice and expiration of the specified Designated Cure Periods, Landlord 
shall be entitled to cause such specific Material Tenant Repair to be 
performed as required under the terms of this Lease during the twelve (12) 
consecutive months after the second such failure by Tenant (the "CORRECTION 
PERIOD"), and Tenant shall pay to Landlord within thirty (30) days after 
receipt from Landlord of Landlord's written demand therefor, the actual cost 
thereof, together with any additional inspection fees required in connection 
with Tenant's failure to perform the Material Tenant Repair during the 
Designated Cure Period contained in the first notice by Landlord pertaining 
thereto (collectively, the "MAINTENANCE CHARGES"). If Tenant fails to perform 
a Material Tenant Repair (other than an 


                                       9
<PAGE>

Emergency Repair) of the same particular type and nature for a third time 
during the Correction Period and such failure continues past the Designated 
Cure Period, Landlord shall have the further option (in addition to causing 
the Material Tenant Repair to be performed and being reimbursed by Tenant as 
provided above) of declaring an Event of Default under this Lease, without 
any further notice, grace or cure rights.

If Tenant fails to perform Material Tenant Repairs of any five (5) types or 
natures, whether or not any of said five (5) Material Tenant Repairs are of 
the same particular type or nature, within any consecutive twelve (12) month 
period, ad such failures continue past the Designated Cure Periods specified 
by Lender as applicable thereto, Landlord shall be entitled to either (i) 
cause such specific Material Tenant Repairs to be performed as required under 
the terms of this Lease during the remainder of the Term, and Tenant shall 
pay the Maintenance Charge therefor to Landlord within thirty (30) days after 
receipt of Landlord's written demand, or (ii) declare an Event of Default 
under this Lease without any further notice, grace or cure rights.

If Landlord reasonably determines that an Emergency Repair is required, and 
Landlord is unable to contact Tenant, despite Landlord's reasonable, good 
faith efforts to do so given the circumstances of the specific emergency, or 
if, after contacting Tenant, Tenant refuses or fails to act promptly and 
appropriately, Landlord shall be entitled to cause the Emergency Repair to be 
made in a manner that complies, as closely as possible given the 
circumstances, with all of Tenant's security procedures.  Landlord shall 
notify Tenant as soon as practicable of the Emergency Repair and the work 
undertaken to alleviate the immediate emergency.  Tenant shall pay Landlord 
within thirty (30) days following written demand, for the actual cost of work 
performed by or on behalf of Landlord to effect the Emergency Repair.

For purposes of this Lease the "Zale Headquarters Standard" shall be as 
described on EXHIBIT E, attached hereto and made a part hereof for all 
purposes.

Notwithstanding anything in this Lease to the contrary, (1) if any work, 
replacement or repairs required of Tenant with respect to Structural/Capital 
Items as provided above in (ii) of this Section 7.c would, in Landlord's 
reasonable judgment, have the effect of extending the remaining useful life 
of the Structural/Capital Item requiring such work, replacement or repair 
beyond its normal useful life, Landlord will reimburse Tenant proportionately 
for the cost of such work, replacement or repair, to the extent that the 
remaining useful life of such Structural/Capital item is, in Landlord's 
reasonable judgment, so extended, and (11) tenant accepts the Premises "as 
is," with all of the matters needing repair or attention as described in 
EXHIBIT B attached hereto and in EXHIBIT F attached hereto, and Landlord 
shall not be obligated, in any way or to any extent, to perform any of the 
Required Repairs or to repair or replace any of such items as described on 
EXHIBIT B or EXHIBIT F attached hereto, nor shall Landlord have any liability 
for any damage resulting from such items not being so repaired or replaced, 
except with respect to future resulting damage to Structural/Capital Items

          d.   PERFORMANCE OF WORK.  All work performed by tenant under Section
7.b of this Lease shall be performed only by contractors approved in writing by
Landlord, which 


                                      10

<PAGE>

approval shall not be unreasonably withheld, conditioned or delayed; 
provided, however, that Landlord's consent to Tenant's contractors shall not 
be required for (I) the performance of work of a type or scope for which 
Landlord's consent is not required under this Lease; or (ii) work that is 
reasonably estimated by Tenant to cost less than $10,000.00.  Landlord 
specifically approves all of the contractors set forth on any SCHEDULE 2 
attached to this Lease and made a part hereof by this reference.  Tenant 
shall cause all contractors and subcontractors retained by it to procure and 
maintain insurance coverage against such risks, in such amounts, and with 
such companies as Landlord may reasonably require.  All work performed by 
Tenant under this Lease shall be performed in accordance with all laws, 
rules, codes, ordinances, statutes, regulations and legal requirements 
(including, without limitation, the retrofit requirements of the ADA 
necessitated by any such work), and all requirements of all restrictions and 
restrictive covenant pertaining to the remises, including, without 
limitation, those in favor of Las Colinas Association, and shall be performed 
in a good and workmanlike manner so as not to damage the premises, the 
primary structure or structural qualities of the Building, Building plumbing 
or electrical lines, or any other building utility transmission facility and 
so as to be consistent with the standard of maintenance for the premises as 
specified in this Lease.  With respect to any work performed under Section 
7.b of this Lease which does not constitute a non-Consent Alteration (as 
therein defined).  Landlord shall have the right, at Landlord's option, but 
not the obligation, to supervise the work.  All work to be performed by 
Landlord under this Lease shall be performed in accordance with all legal 
requirements (including, without limitation, the requirements of the ADA 
necessitated by such work).

          e.   APPROVAL PROCESS.  With respect to any improvements or 
alterations for which Landlord's consent is required, Landlord shall within 
15 business days after its receipt of any complete set of plans and 
specifications for improvements, alterations, or additions and within ten 
business days after its receipt of any change orders with respect thereto, 
notify Tenant whether it approves or disapproves the same; any notice of 
disapproval shall be accompanied by a statement in reasonable detail of the 
reasons therefor.  Landlord may condition any such consent with the 
requirement that Tenant remove any such improvement, addition or alteration 
upon expiration or earlier termination of this Lease, and such action by 
Landlord shall not be considered unreasonable. If Landlord fails timely to 
notify Tenant of its disapproval thereof, then Landlord shall be deemed to 
have given its approval.  Upon completion of the improvements, alterations, 
or additions in question, Tenant shall deliver to Landlord an accurate, 
reproducible "as-built" plan (e.g. sepia) thereof.

          f.   ANNUAL BUDGET.  Within 45 days following the end of Tenant's
fiscal year, Tenant shall deliver to Landlord, for  its approval, but only as
contemplated below, a budget setting forth the operating expenditures expected
to be incurred by Tenant in connection with the maintenance and operation of the
premises during the following lease year.  Each such budget shall be in form and
detail reasonably satisfactory to Landlord.  In the event that the amount
budgeted for repairs and maintenance required by Tenant under this Lease shows a
decrease of more than ten percent (10%) of the average of such maintenance and
repair budget amounts (in the aggregate or for any specific line item), for the
preceding three (3) calendar years (a "MATERIAL REDUCTION"), Tenant shall
include a written justification 


                                      11

<PAGE>

of such reduced amount.  If landlord, acting reasonably and in good faith, 
rejects Tenant's justification of the Material Reduction, Landlord shall 
notify Tenant in writing within (30) days following Landlord's receipt of 
Tenant's justification that Landlord reasonably disputes same and Tenant 
shall promptly thereafter revise such budget to increase the amount budgeted 
for Tenant's maintenance and repair required under the terms of this Lease to 
the lowest actual amounts incurred by Tenant for such maintenance and repair 
over the preceding three (3) calendar years.  Within sixty (60) days after 
the expiration of each lease year, Tenant shall deliver to Landlord a 
detailed statement (I) setting forth the actual expenses incurred by Tenant 
in maintaining the Premises during such lease year and (ii) stating in 
comparative form the expenses actually incurred by Tenant in maintaining the 
Premises during the lease year in question and the amounts set forth in such 
lease year's approved budget.  Each such statement shall be certified by the 
either chief financial officer to Tenant or Tenant's vice president over 
facilities as being true and correct in all material respects.  
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SUBSECTION 7F, IT IS UNDERSTOOD 
AND AGREED THAT NO APPROVAL BY LANDLORD OF ANY BUDGET OR ANY ITEM THEREIN, 
NOR ANY FAILURE OF LANDLORD TO OBJECTION TO ANY BUDGET OR ANY ITEM THEREIN, 
NOR ANY REASONS EXPRESSED FOR ANY OBJECTION BY LANDLORD, NOR THE AMOUNT OF ANY 
BUDGET ITEM, WHETHER LESS THAN OR MORE THAN PRIOR YEARS', SHALL IN ANY WAY 
INDICATE ANY CONSENT OF OR WAIVER BY LANDLORD, OR IN ANY WAY PERTAIN TO OR 
AFFECT, (I) ANY OF TENANT'S OBLIGATIONS UNDER THIS LEASE WITH RESPECT TO 
MAINTAINING THE PREMISES AT THE ZALE HEADQUARTERS STANDARD, OR (2) 
ANY OTHER PROVISIONS OF THIS LEASE PERTAINING TO TENANT'S MAINTENANCE AND REPAIR
OBLIGATIONS.

          g.   SERVICE CONTRACTS/  Each contract entered into by Tenant relating
to the maintenance and operation of the premises, and all improvements and
equipment located therein (a "SERVICE CONTRACT"), shall provide that it shall
not extend beyond the expiration date or earlier termination of this Lease. 
None of the Service Contracts shall grant or purport to grant a lien or security
interest against any portion of the Premises, or any improvements or equipment
therein, for any amount or obligations due thereunder or be, or purport to be,
binding on Landlord.

          h.   NET LEASE.  Landlord shall not be required to make any
expenditure, incur any obligation, or incur any liability of any kind whatsoever
in connection with this Lease or the  ownership, construction, maintenance,
operation, or repair of the Premises during any portion of the Term, except as
otherwise specified by the terms of this Lease.  This lease is a completely
"net" lease, intended to ensure Landlord the Rent herein reserved on a absolute
net basis, except as otherwise specified by the terms of this Lease.

          i.   MECHANIC'S LIENS.  Tenant shall not permit any mechanic's to be
filed against the Premises for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant.  If such a lien is filed,
then Tenant shall, within 30 days after Landlord has delivered notice of the
filing to Tenant, either pay the amount of the lien or diligently contest such
lien and deliver to Landlord a bond or other security reasonably 


                                      12

<PAGE>

satisfactory to Landlord.  If Tenant fails to timely take either such action, 
then Landlord may pay the line claim without inquiry as to the validity 
thereof, and any amounts so paid, including expenses and interest, shall be 
paid by Tenant to Landlord within fifteen (15) days after Landlord has 
delivered to Tenant an invoice therefor.

     8.   USE  Tenant shall (a) continuously occupy at least fifty-one
percent (51%) of the Building and use the premises only for lawful purposes
consistent with the uses permitted which are consistent with other office
building in the vicinity of the Building (the "PERMITTED USE"), (b) comply with
all laws, orders, rules, private restrictions and restrictive covenants, and
regulations relating to the use, condition, and occupancy of the premises, -C-
within sixty (60) days after the Commencement Date, deliver to Landlord a
narrative description of a life safety plan for the Building and make such
modifications thereto as Landlord may reasonably request (the "Safety PLAN"),
and (d) continuously implement the Safety Plan (with such modifications thereto
as Landlord may from time to time reasonably request) and deliver to Landlord
narrative descriptions of any amendments thereto (provided, however, that except
(i) as specifically required in Sections 7.c and 7.d of this Lease, or (ii) for
repairs to Structural/Capital Items required due to Tenant's negligence or
wrongful acts in managing the Premises, Landlord and not Tenant shall be
required to undertake repairs or improvements to the Structural/Capital Items in
order to comply with all laws, orders, rules and regulations).  The Premises
shall not be used for any use which is disreputable or creates extraordinary
fire hazards or for the storage of any hazardous materials or substances except
for "Permitted Materials" (as defined in Section 23 of this Lease).  Permitted
Use may include, without limitation, use of portions of the Building for
operation of incidental service facilities for the primary use by and for the
benefit of Tenant's employees (an "EMPLOYEE SERVICE FACILITY"), so long as such
uses comply with the other provisions of this Section 8.  By way of example, an
Employee Service Facility may include, without limitation, a cafeteria, credit
union, company store, barber/beauty shop or fitness center, which otherwise
comply with the provisions of this Section 8.

     9.   ASSIGNMENT AND SUBLETTING.

          a.   TRANSFERS; CONSENT.  Tenant may assign or sublet the Building to
a "Permitted Transferee" (hereinafter defined) without Landlord's prior written
consent, provided that Tenant promptly notifies Landlord thereof after such
assignment or subletting.  As used in this Lease, "PERMITTED TRANSFEREE" shall
mean (i) the entity or entities that emerge as the reorganized company(ies)
under the "Plan of Reorganization" (hereafter defined) on the Confirmation Date,
(ii) one or more persons or entities that control, are controlled by or are
under common control with the entity or entities described in (i) above
["control", as used herein, shall be determined as of each of the Commencement
Date and/or the Confirmation Date and shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such controlled person or entity; the ownership, directly or
indirectly, of at least fifty-one percent (51%) of the voting securities of, or
possession of the right to vote, in the ordinary direction of its affairs, at
least fifty-one percent (51%) of the voting interest in any entity shall be
presumed to constitute such control], and (iii) independent operators and/or
owners of one or more Employee Service Facilities.  As used in this Lease, 


                                      13

<PAGE>

"PLAN OF REORGANIZATION" means the plan of reorganization for Zale 
Corporation that is confirmed by the United States Bankruptcy Court for the 
Northern District of Texas, Dallas Division (the "COURT"), in the cases 
pending under Chapter 11 of the United States Bankruptcy Code in which Zale 
Corporation and certain of its direct and indirect subsidiaries are debtors 
and debtors in possession; which cases are consolidated for administrative 
purposes only under Case No. 392-30001-SAF-11.  As used in this Lease, 
"CONFIRMATION DATE" shall mean the date on which an order of the Court 
confirming the Plan of Reorganization is entered on the docket of the Court.  
Except to Permitted Transferees, Tenant shall not, without the prior written 
consent of Landlord, (I) assign, transfer, or encumber this Lease or any 
estate or interest herein, whether directly or by operation of law, (ii) 
permit any other entity to become Tenant hereunder by merger, consolidation, 
or other reorganization, (iii) if Tenant is an entity other than a 
corporation whose stock is publicly traded, permit the transfer of an 
ownership interest in Tenant so as to result in a change in the current 
control of Tenant, (iv) sublet any portion of the Premises, (v) grant any 
license, concession, or other right of occupancy of any portion of the 
Premises, or (vi) permit the use of the Premises by any parties other than 
Tenant (any of the events listed in clauses (i) through (vi) shall be herein 
called a "TRANSFER").  Landlord's consent to any assignment or subletting of 
the Building shall not be unreasonably withheld, conditioned or delayed to 
any assignment or subletting of the Building to a party which (a) intends to 
use the Building for a Permitted Use in accordance with this Lease, (b) is 
rated by Moody's Investor Service, Inc. or Standard & Poor's Corporation, and 
(c) has a rating of at least Baa3 by Moody's Investor Service, Inc. or BBB- 
by Standard & Poor's Corporation. If Tenant requests  Landlord's consent to a 
Transfer, then Tenant shall provide Landlord with a written description of 
all terms and conditions of the proposed Transfer, copies of the proposed 
documentation, and the following information about the proposed transferee:  
name and address; reasonably satisfactory information about its business and 
business history; its proposed use of the portion of the Building to be 
Transferred; banking, financial, and other credit information; and general 
references sufficient to enable Landlord to determine the proposed 
transferee's creditworthiness and character.  Tenant shall reimburse Landlord 
for its reasonable attorneys' fees and other expenses incurred in connection 
with a Transfer.  If Landlord consents to a proposed Transfer, then the 
proposed transferee shall deliver to Landlord a written agreement whereby it 
expressly assumes the Tenant's obligations hereunder; however, any transferee 
of less than all of the space in the Building shall be liable only for 
obligations under this Lease that are properly allocable to the space subject 
to the Transfer, and only to the extent of the rent it has agreed to pay 
Tenant therefor.  No Transfer shall release Tenant from performing its 
obligations under this Lease, but rather Tenant and (subject to the previous 
sentence) its transferee shall be jointly and severally liable therefor. 
Landlord's consent to any Transfer shall not waive Landlord's rights as to 
any subsequent Transfers.  If an Event of Default occurs while the Building 
or any part thereof is subject to a Transfer, then Landlord, in addition to 
its other remedies, may collect directly from such transferee all rents 
becoming due to Tenant and apply such rents against Rent.  Tenant authorizes 
its transferees to make payments of rent directly to Landlord upon receipt of 
notice from Landlord to do so; each such transferee may rely on this 
authorization to do so, and any such payment to Landlord shall constitute a 
payment required under its Transfer documents.  Tenant may not Transfer, and 
Landlord may withhold its consent to any Transfer of, any portion of the 
Premises, other than the Building.  Whether or not Landlord's consent is 
required 


                                      14

<PAGE>

therefor, Tenant shall deliver to Landlord written notice of any Transfer, 
and no Transfer shall be effective until Landlord has received such notice.  
Notwithstanding anything in this Section 9 to the contrary, no assignment or 
subletting of all or any portion of the Building or Premises to a Permitted 
Transferee or to any other entity shall release, reduce, extinguish, 
terminate, impair or affect Tenant's liability for payment of Rent or 
performance of Tenant's obligations under this Lease.

          b.   ADDITIONAL COMPENSATION.  Tenant shall pay to Landlord,
immediately upon receipt thereof, the excess of (i) all compensation received by
Tenant for a transfer over (ii)  the sum of (1) the Basic Rental and Additional
Rent allocable to the portion of the Building covered thereby, and (2) the
applicable portion after division as described below, of all reasonable costs
incurred by Tenant in consummating such Transfer (including, without limitation,
reasonable leasing commissions, reasonable leasehold improvement costs, value of
reasonable rent concessions and reasonable attorneys' fees).  For purposes of
(2) above, the reasonableness of the costs described shall be determined by
Landlord acting in good faith, and such costs shall be (A) equal to zero with
respect to any Transfer to a Permitted Transferee, and (B) divided by the term
of the subject sublease or assigned portion of this Lease, and such resulting
portions shall be each deducted from such additional compensation as paid to
Landlord (but without any negative amortization).

     10.  INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.

          a.   INSURANCE.  Landlord shall insure, at Tenant's cost, the Premises
with a policy or policies covering the following:  (i) "All Risk" property
insurance excluding any coinsurance provision, in an amount adequate to cover
the full replacement cost of the Building and other improvements, (ii) Boiler
and Machinery coverage to the extent not covered under the "All Risk" above, and
(iii) such other insurance as Landlord may reasonably require to the extent
customarily carried on properly similar to the Premises.  Further, Tenant shall
keep in force during the Term, at Tenant's cost, the following insurance
coverage:  (1) commercial general liability insurance covering the Premises in
an amount of not less than a combined single limit of $5,000,000 or such other
amount as Landlord or Landlord's Mortgagee may from time to time reasonably
require consistent with requirements of lending institutions for similar
properties in the area, insuring Tenant (and naming Landlord and Landlord's
Mortgagee as additional insureds) against all liability for injury to or death
of a person or persons or damage to property arising from the use and occupancy
of the Premises; (2) contractual liability insurance coverage sufficient to
cover Tenant's indemnity obligations hereunder and (3) insurance covering the
full value of Tenant's property other than the Excluded Property, improvements,
and other property )(including property of others) in the Premises.  Tenant's
insurance shall provide primary coverage to Landlord wen any policies issued to
Landlord provide duplicate or similar coverage, and in such circumstances,
Landlord's policy will be excess over Tenant's policy.  Landlord and Tenant
shall each furnish certificates to the other party of the insurance carried by
such party hereunder and such other evidence satisfactory to the other party of
the maintenance of all insurance coverages required hereunder.  Landlord and
Tenant shall obtain a written obligation on the part of each insurance company
to notify the other party at least 30 days before cancellation or a material
change of any such insurance.  All insurance policies shall be in form 


                                      15

<PAGE>

and issued by companies licensed to do business in the State of Texas and 
having a Best's rating of at least A, with a financial class of VIII, and 
shall name the other party as a loss payee.  Landlord's obligations under 
this Section to provide certificates and other documentation shall arise only 
after receipt of a written annual request from Tenant.  Landlord's failure to 
provide such certificates and other documentation shall not create a default 
by Landlord under this Lease so long as Principal Mutual Life Insurance 
Company or any subsidiary or affiliate of Principal Mutual Life Insurance 
Company owns the Premises; provided, however, that if neither Principal 
Mutual Life Insurance Company  nor any subsidiary or affiliate of Principal 
Mutual Life Insurance Company is the owner of the Premises, Landlord's 
failure to provide certificates and other documentation within thirty (30) 
days after receipt of a written request therefor from Tenant shall create a 
default by Landlord under this Lease.

          b.   WAIVER; NO SUBROGATION.  Landlord and Tenant each waives any
claim it might have against the other for any injury to or death of any person
or persons or the damage to or theft, destruction, loss, or loss of use of any
property (a "LOSS"), to the extent the same is insured against under any
insurance policy that covers the Premises, Landlord's or Tenant's fixtures,
personal property, leasehold improvements, or business, or is required to be
insured against under the terms hereof, regardless of whether the negligence of
the other party caused such loss.  Each party shall cause its insurance carrier
to endorse all applicable policies waiving the carrier's rights of recovery
under subrogation or otherwise against the other party.

          c.   INDEMNITY.  Subject to Section 10.b, Tenant shall defend,
indemnify, and old harmless Landlord, Landlord's Mortgagee, and their agents
from and against all claims, demands, liabilities, causes of action, suits,
judgments, and expenses (including reasonable attorneys' fees and expenses) for
any Loss arising from any occurrence on the Premises or from Tenant's failure to
perform its obligations under this Lease (including, without limitation, the
obligations under Section 6 and Section 24 of this Lease, but excluding a Loss
arising from the willful act or sole or gross negligence of Landlord, Landlord's
Mortgagee, or their agents, against which Loss Landlord hereby indemnifies
Tenant) even though caused or alleged to be caused by the negligence or fault of
Landlord or its agents, and even though any such claim, cause of action, or suit
is based upon or alleged to be based upon the strict liability of Landlord,
Landlord's Mortgagee, or their agents.  This indemnity provision shall survive
termination or expiration of this Lease.

     11.  SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.

          a.   SUBORDINATION.  Subject to Landlord obtaining a non-disturbance
and attornment agreement that is reasonably acceptable to Tenant, Tenant shall
subordinate this Lease to any deed of trust, mortgage, or other security
instrument, or any ground lease, master lease, or primary lease, that hereafter
covers all or any part of the Premises and runs in favor of the party granting
such nondisturbance (the mortgagee under any such mortgagee or the lessor under
any such lease is referred to herein as a "LANDLORD'S MORTGAGEE".


                                      16

<PAGE>

          b.   ATTORNMENT.  Provided such party assumes Landlord's future
obligations in writing, Tenant shall attorn to any party succeeding to
Landlord's interest in the Premises, whether by purchase, foreclosure, deed in
lieu of foreclosure, power of sale, termination of lease, or otherwise, upon
such  party's request, and shall execute such agreements confirming such
attornment as such party may reasonably request.

          c.   NOTICE TO LANDLORD'S MORTGAGEE.  Tenant shall not seek to enforce
any remedy it may have for any default on the part of the Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
          
     12.  RULES AND REGULATIONS.  [Intentionally deleted]

     13.  CONDEMNATION.  If any material (in scope or nature) part of the 
Building, parking or access areas of the Premises is taken under the power of 
eminent domain (a "TAKING") such that Tenant's ability to carry on its 
business at the Premises would be substantially impaired, then Tenant may 
elect, by delivering notice to Landlord not more than 30 days after the 
conclusion of the eminent domain proceeding, to terminate this Lease.  If 
this Lease is not so terminated, then all of the terms and provisions hereof 
shall continue in full force; however, if such Taking condemns a portion of 
the Building, parking or access areas of the Premises or materially impairs 
the parking or access areas of the Premises, then Basic Rental shall be 
reduced on a reasonable basis based on the portion and area of the Building, 
parking or access areas of the Premises taken.  There shall be no abatement 
of Rent for a Taking of the Land or any part thereof except for a Taking of 
parking or access areas or a material impairment of parking or access areas 
as referenced in this Section 13.  If any Taking occurs (whether or not it 
materially impairs Tenant's ability to carry on its business), then Landlord 
shall receive the entire award or other compensation for the Premises and 
improvements taken, and Tenant may separately pursue a claim against the 
condemnor for the value of Tenant's Property and other personal property 
which Tenant is entitled to remove under this Lease, moving costs, loss of 
business, and other claims it may have.

     14.  DAMAGE TO PREMISES.  Tenant shall give the Landlord notice of any 
casualty damage to any portion of the Premises immediately after becoming 
aware of same.  If the Premises are damaged or destroyed by fire or any other 
casualty during the Term to such an extent that the damage cannot, in 
Landlord's reasonable judgment, be (1) repaired within 270 days thereafter, 
or (2) if such damage or destruction occurs during the last 18 months of the 
Term, repaired by the end of the penultimate year of the Term, then each of 
Landlord and Tenant shall have the option, exercisable by written notice to 
the other within 45 days after such damage or destruction, to terminate this 
Lease effective as of the date of such damage or destruction.  If neither 
Landlord nor Tenant has a right to terminate this Lease, or if neither Tenant 
nor Landlord elects to terminate this Lease during the 45 day period, then the 
Premises shall be repaired,  rebuilt and/or restored as provided in this 
Section 14.  So long as Principal Mutual Life Insurance Company or any 
subsidiary or affiliate of Principal Mutual Life Insurance Company owns the 
Premises, the provisions of subsection 14(a) below shall apply with respect 
to 

                                      17

<PAGE>

the procedure for repair and restoration of the Premises and the provisions 
of subsection 14(b) shall not apply.  At any time during which Principal 
Mutual Life Insurance Company or any subsidiary or affiliate of Principal 
Mutual Life Insurance Company does not own the Premises, the provisions of 
subsection 14(a) shall not apply to the procedure for repair and restoration 
of the Premises, and the provisions of subsection 14(b) shall apply to same.

(a)  Landlord shall promptly repair and rebuild the damaged or destroyed
Premises to substantially the same condition as existed immediately prior to
such damage or destruction, subject to changes reasonably deemed by Landlord to
be necessary or advisable, but in all respects limited to the amount of net
insurance proceeds received by Landlord, so long as Landlord carries the
insurance and coverages as required of Landlord by the terms of this Lease, and
attempts in good faith to obtain the proceeds of such insurance; provided,
however that Landlord agrees that Landlord shall not grant any third party any
rights n or to such insurance proceeds.  From the occurrence of the damage or
destruction, through the completion of the restoration work, Tenant shall be
entitled to a partial abatement of Basic Rental in proportion to the unusable
portion of the Premises.

(b)  Landlord shall promptly repair and rebuild the damaged and destroyed
portions of the Premises to substantially the same condition as existed
immediately prior to such damage or destruction, and all net insurance proceeds
shall be made available to Landlord for the restoration work (the
"RESTORATION").  In the event that Landlord reasonably estimates that the total
cost to repair any damage or destruction of the Premises arising from a single
accident or loss will be $100,000.00 or less, Landlord shall promptly commence
and diligently pursue the completion of the Restoration of the Premises.

In the event that the total cost to repair any damage or destruction of the
Premises arising from a single accident or loss is reasonably estimated by
Landlord to exceed the sum of $100,000.00 (a "MAJOR CASUALTY"), then Landlord
shall settle any and all claims against insurance companies arising out of any
policies of casualty insurance carried by either party hereunder, including,
without limitation, the execution of proofs of loss, and adjustments of losses. 
Landlord and Tenant shall jointly direct that all insurance proceeds payable on
account of such Major Casualty shall be held and invested in a manner to be
directed jointly by Landlord and Tenant, by the party holding any first mortgage
or deed of trust on the Premises or, if there is then no first mortgage or first
deed of trust on the Premises, by an unrelated institutional trustee designated
by Landlord (hereinafter referred to in either case as "TRUSTEE").  Landlord 
and Tenant shall each pay one-half (1/2) of all reasonable fees and expenses
charged or incurred by the Trustee in connection with the performance of the
Trustee's duties and obligations.  The Trustee shall be protected in acting upon
any certificate reasonably believed by the Trustee to be genuine and to have
been executed by the proper party, and shall receive such certificate as
conclusive evidence of any fact or as to any matter therein set forth.  Such
certificate shall be full warrant, authority and protection to the Trustee in
acting thereon, and the Trustee shall be under no duty to take any action other
than as set forth in this Section.

All amounts deposited with the Trustee on account of any Major Casualty as
aforementioned, together with interest earned on such amounts or any part
thereof (less the costs, fees and 


                                      18

<PAGE>

expenses incurred by Landlord and Tenant in the collection thereof, 
including, without limitation, adjusters' and attorneys' fees and expenses) 
[the "RESTORATION ACCOUNT")] shall be applied as follows:

(A)  Not more than once each thirty (30) days following Landlord's
     commencement of the Restoration of the Premises, Landlord may request of
     Trustee advances from the Restoration Account for the payment of costs of
     labor, materials and services supplied for the Restoration of the Premises,
     as set forth in the budget prepared by Landlord, for work actually
     performed during the preceding thirty (30) days.  Landlord's request shall
     be in writing to the Trustee and accompanied by (i) a certificate of a
     supervising architect or engineer describing in reasonable detail the work
     and material in question and the cost thereof, stating that the same were
     necessary or appropriate to the Restoration and constitute a completed part
     thereof, and that no part of the cost thereof has theretofore been
     reimbursed, and specifying the estimated additional amount, if any,
     necessary to complete the Restoration; (ii) evidence reasonably
     satisfactory to the Trustee that ninety percent (90%) of the balance in the
     Restoration Account following such requested advance will not be less than
     the estimated cost to complete the Restoration of the Premises, as set
     forth in the budget prepared by Landlord (it being understood and agreed
     that ten percent (10%) of each draw amount shall be retained in compliance
     with statutory retainage requirements) and evidence that all mechanics and
     materialmen and other parties providing labor and material have been paid
     to date; and

(B)  Upon receipt by the Trustee of evidence of the character required by
     the foregoing clauses (A)(i) and (A)(ii) that Restoration has been
     completed in accordance with the plans and specifications, and all
     applicable laws, ordinances, regulations, codes and private restrictions
     and restrictive covenants, as evidenced by any obtainable certificates, and
     the cost thereof paid in full, and that there are no mechanics',
     materialmen's or similar liens for labor or  materials supplied in
     connection therewith, then the balance, if any, in the Restoration Account
     shall be paid to Landlord or as Landlord may direct after all retainage
     periods have expired.

Landlord shall, as soon as practicable after preparation of a budget and plans
and specifications, commence and diligently proceed with the Restoration of the
Premises.  In the event that Landlord does not so commence Restoration (provided
that if the casualty loss is insured, Landlord shall not be required to commence
Restoration until the insurance proceeds have been delivered to the Trustee), or
after commencement, Landlord does not diligently proceed to the completion of
same, Tenant shall have the right to commence or complete Restoration after
Tenant has given Landlord thirty (30) days prior written notice requesting the
commencement, Landlord does not diligently proceed to the completion of same,
Tenant shall have the right to commence or complete Restoration after Tenant has
given Landlord thirty (30) days prior written notice requesting the commencement
of Restoration or that Landlord diligently proceed to the completion of same, if
Landlord during such thirty (30) day period does not so commence or proceed to
diligently complete Restoration.  In such event, the Trustee shall disburse the
Restoration Account to Tenant in accordance with the foregoing procedures.  If
Tenant undertakes to commence and/or complete Restoration, Tenant agrees to use
due reasonable diligence to pursue Restoration to completion.


                                      19

<PAGE>

Rent shall abate under this Lease for the portion of the Premises and for the
period of time as the Premises are affected by such damage or destruction.

(c)  Nothing in this Section 14 shall be construed as granting Tenant any right
of approval or consent with respect to any settlement concerning the amount of
insurance proceeds resulting from any claim by Landlord, or to be involved in
any negotiations regarding same.

     15.  LANDLORD'S LIEN.  Landlord shall not be entitled to and hereby 
disclaims any lien to which Landlord may otherwise be entitled on any 
inventory now or hereafter located at the Premises or on any property of 
Tenant's on which Tenant has granted or, as part of the Plan of 
Reorganization, is required to grant a lien to another party and the terms of 
the agreements with such other party prohibit the granting of a subordinate 
lien to Landlord (the "EXCLUDED PROPERTY").  Landlord shall have a landlord's 
lien on all property of Tenant on the Premises other than the Excluded 
Property.  In addition to the statutory landlord's lien, Tenant grants to 
Landlord, to secure performance of Tenant's obligations hereunder, a security 
interest in all equipment, fixtures, furniture, improvements, and other 
personal property of Tenant on the Premises, other than the Excluded 
Property.  Landlord acknowledges and agrees that any lien to which Landlord 
is entitled on Tenant's property at the Premises that does not constitute 
Excluded Property shall be subordinate to (I) any lien now or hereafter 
granted by Tenant to a third party as purchase money financing; or (ii) any 
lien now existing or hereafter granted by Tenant as part of the Plan of 
Reorganization in all equipment and trade fixtures, of Tenant now or 
hereafter situated on the Premises (collectively, the "Third Party Liens"), 
and all proceeds therefrom (the "COLLATERAL"), and, subject to the rights of 
the beneficiaries of the "Third Party Liens, the Collateral shall not be 
removed from the Premises without the consent of Landlord until all 
obligations of Tenant have been fully performed.  Upon the occurrence of an 
Event of Default, Landlord may, in addition to all other remedies, without 
notice or demand except as provided below, exercise the rights afforded a 
secured party under the Texas Uniform Commercial Code (the "UCC").  In 
connection with any public or private sale under the UCC, Landlord shall give 
Tenant ten (10) days' prior written notice of the time and place of any 
public sale of the Collateral or of the time after which any private sale or 
other intended disposition thereof is to be made, which is agreed to be a 
reasonable notice of such sale or other disposition.  Tenant grants to 
Landlord a power of attorney to execute and file any financing statement or 
other instrument necessary to perfect Landlord's security interest under this 
Section, which power is coupled with an interest and shall be irrevocable 
during the Term. Landlord may also file a copy of this Lease as a financing 
statement to perfect its security interest in the Collateral.

     16.  EVENTS OF DEFAULT.  Each of the following occurrences shall be an 
"EVENT OF DEFAULT":

          a.   Tenant's failure to pay any Scheduled Rent within ten (10) days
after Landlord has delivered notice to Tenant that the same is due; provided,
however, that (I) any Event of Default shall occur hereunder without any
obligation of Landlord to give any notice to Tenant if landlord has previously
given Tenant written notice under this Section 16.a on two 



                                     20

<PAGE>

(2) occasions in any consecutive twelve (12) month period, or four (4) 
occasions during the Term, and (ii) no grace or notice periods in this 
subsection 16a. shall apply to the accrual of any charge for payment received 
after its due date;

          b.   Other than with respect to matters described in other subsections
of this Section 16, Tenant's failure to perform, comply with, or observe any
other agreement or obligation of Tenant under this Lease for a period of more
than 30 days after Landlord has delivered to Tenant written notice of such
failure; however, if such failure is of a nature that it cannot be cured within
such 30-day period and Tenant commences to cure such failure within such 30-day
period and thereafter diligently pursues such cure without interruption, then
such failure shall not be an Event of Default;

          c.   Except with respect to cases currently pending in the Court,
after the date hereof, the filing of a petition by or against Tenant (the term
"Tenant") shall include, for the purpose of this Section 16.c, any guarantor of
the Tenant's obligations hereunder (i) in any bankruptcy or other insolvency
proceeding; (ii) seeking any relief under any state or federal debtor relief
law; (iii) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this Lease;
or (iv) for the reorganization or modification of Tenant's capital structure;
however, if such a petition is filed against Tenant, then such filing shall not
be an Event of Default unless Tenant fails to have the proceedings initiated by
such petition dismissed within 90 days after the filing thereof;

          d.   Any abandonment of more than fifty percent (50%) of the Building;
provided, however, that if and so long as such abandonment is the sole Event of
Default under this Lease, Landlord's sole remedy for such Event of Default shall
be termination of this Lease, and Tenant shall not be held liable for the
payment of any rent accruing after any such termination based solely on the
Event of Default of abandonment;

          e.   the conversion of Tenant's bankruptcy proceeding currently
pending in the United States Bankruptcy Court for the Northern District of Texas
to a Chapter 7 proceeding; provided, however, that if and so long as such
conversion to a Chapter 7 proceeding is the sole Event of Default under this
Lease, and Tenant continues to perform all of its obligations under this Lease
in strict accordance with the terms hereof, including, without limitation,
payment of all Rent in full, Tenant shall be entitled to remain in possession
and have the rights of Tenant under this Lease so long as all of such
obligations continue to be met in accordance with the provisions of this Lease,
and are not modified by Tenant or any trustee, or otherwise, in any such Chapter
7 bankruptcy proceeding.

          f.   A Transfer (other than to a Permitted Transferee) without
Landlord's prior written consent, or Tenant in conjunction with this Lease makes
any material misrepresentation in a document submitted to Landlord or its agents
by or on behalf of Tenant (either of which shall be an immediate Event of
Default without any prior written notice thereof from Landlord); and



                                     21

<PAGE>

          g.   Landlord is entitled to and elects to declare an Event of Default
under the terms of Section 7(c) of this Lease.

     17.  REMEDIES.  Upon any Event of Default, except as otherwise expressly 
provided in subsections 16d. and 16e. of this Lease, and in the last 
paragraph of this Section 17, Landlord may, in addition to all other rights 
and remedies afforded Landlord hereunder or by law or equity, take any of the 
following actions:

          a.   Terminate this Lease by giving Tenant written notice thereof, in
which event, Tenant shall pay to Landlord the sum of (I) all Rent accrued
hereunder through the date of termination, (ii) all amounts due under Section
19.a, and (iii) an amount equal to (A) the total Rent that Tenant would have
been required to pay for the remainder of the Term discounted to present value
at a per annum rate equal to the difference between the "Prime Rate" as
published on the date this Lease is terminated by The Wall Street Journal,
Southwest Edition, in its listing of "Money Rates" and one percent per annum,
minus (B) the then present faire rental value of the Premises for such period as
reasonably determined by Landlord, similarly discounted.

          b.   Terminate Tenant's right to possess the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (I) all Rent and other amounts accrued
hereunder to the date of termination of possession, (ii) all amounts due from
time to time under Section 18.a, and (iii) all Rent and other sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any sums thereafter received by Landlord through reletting the Premises during
such period.  Landlord shall use reasonable and good faith efforts to relet the
Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, a rental amount
different than that required under this Lease, and alterations to, and
improvement of, the Premises).  Landlord shall not be liable for, nor shall
Tenant's obligations hereunder be diminished because of, Landlord's failure,
despite its reasonable and good faith efforts to relet the Premises or to
collect rent due for such reletting or for reletting the Premises on terms
different than those contained in this Lease.  Tenant shall not be entitled to
the excess of any consideration obtained by reletting over the Rent due
hereunder.  Reentry by Landlord in the Premises shall not affect Tenant's
obligations hereunder for the unexpired Term; rather, Landlord may, from time
to time, bring an action against Tenant to collect amounts due by Tenant,
without the necessity of landlord's waiting until the expiration of the Term. 
Unless Landlord delivers written notice to Tenant expressly stating that it has
elected to terminate this Lease, all actions taken by Landlord to dispossess or
exclude Tenant from the Premises shall be deemed to be taken under this Section
17.b.  If Landlord elects to proceed under this Section 17.b, it may at any time
elect to terminate this lease under Section 17.a;

          c.   foreclosure of any liens or security interests that Landlord may 
have against Tenant's property (whether by statute or pursuant to the terms
hereof);



                                     22

<PAGE>

          d.   institute a suit for specific performance of Tenant's obligations
hereunder; or

          e.   setoff and apply any indebtedness or obligation of Tenant to
Landlord (including, without limitation, Rent) against any indebtedness or
obligation of Landlord to Tenant, without notice to or demand upon Tenant.

     Additionally, in the case of an Event of Default specified in Section 16.a,
without notice except as provided below, Landlord may after locks or other
security devices at the Premises to deprive Tenant of access thereto, and
Landlord shall  not be required to provide anew key or right of access to
Tenant, provided that Landlord notifies Tenant in writing of such Event of
Default and such Event of Default remains uncured for more than thirty (30)
days.

     In the case of an Event of Default other than an Event of Default specified
in Section 16.a, if such Event of Default is not of a nature such that the
condition creating same will materially worsen if not cured within one hundred
twenty (120) days, and if within ten (10) days of Tenant's receipt of such
notice of such Event of Default, Tenant pays to Landlord by wire transfer as set
forth below, immediately available funds in an amount equal to twice the amount
of Scheduled Rent for the immediately following four (4) months, plus an amount
equal to twice the amount of Scheduled Rent for the immediately following four
(4) months, plus an amount equal to all accrued, but unpaid amounts then due and
owing under the terms of this Lease, Tenant shall have the right thereunder to
remain in possession of the Premises for one hundred twenty (120) days after
Landlord's receipt of the wire transferred amounts described above, to
facilitate Tenant's relocation, and Tenant shall promptly vacate the Premises on
the expiration of such one hundred twenty (120) day period.  For purposes of
this paragraph, so long as Landlord is Principal Mutual Life Insurance Company,
the funds to be paid as described above shall be wire transferred in accordance
with the following wiring instructions until such time as such wiring
instructions are changed by written notice to Tenant:

               Norwest Bank Des Moines, N.A.
               7th and Walnut Streets
               Des Moines IA  50304

               Principal Mutual Life Insurance Company
               General Account No.:  014752
               ABA No.:  073000228

     All remedies provided to Landlord under this Lease shall be cumulative, and
may be exercised jointly, consecutively and/or concurrently, and the exercise of
any of remedy by Landlord shall not exclude Landlord's right to exercise any
other remedy to which Landlord may be entitled.



                                     23

<PAGE>

     Notwithstanding anything in this Section 17 to the contrary, with respect
to any Event of Default under this Lease comprised solely of a Monitoring
Default (hereinafter defined), Landlord's sole remedy with respect to any such
Monitoring Default shall be to take over, or have its agent take over, the
duties involved with respect to such Monitoring Default, and Tenant shall
reimburse Landlord for all costs and expenses incurred in connection with
exercising such remedy, including, without limitation, reimbursement for
compensation of agents or employees performing such tasks.  It is understood and
agreed that after exercising such remedy, Landlord may continue to perform or
have performed such monitoring and recordation activities for so long as
Landlord may desire, or may discontinue such activities at such time as
Landlord may, in its sole discretion decide, and any such discontinuance of such
activities by Landlord shall have no effect on the future exercise of such
remedy by Landlord.  A "MONITORING DEFAULT" shall mean an Event of Default
(i.e., following expiration of any notice or grace periods provided therefor in
Section 7c.) consisting solely of the failure of Tenant to perform its
obligations in connection with any monitoring of equipment and/or recordation of
information obtained from such monitoring, which is required to be done daily or
on a more frequent basis as described on EXHIBIT C to this Lease.

     18.  DEFAULT BY LANDLORD.

     If Landlord fails to perform any of its obligations under this lease,
Tenant shall notify Landlord of such default, in writing, setting forth in
reasonable detail the nature and extent of such failure.  Landlord shall be
deemed to be in "Default" under this Lease if such failure by Landlord is of a
material nature and is not cured within the thirty (30) day period following
delivery of such notice.  If such failure cannot reasonably be cured within such
thirty (30) days period, the length of such period shall be extended for the
period reasonably required therefor provided that Landlord commences curing such
failure within such thirty (30) day period and continues the curing thereof with
diligence and continuity.  If Landlord becomes in Default hereunder, Tenant
shall have the option to seek whatever legal or equitable remedies are available
at law or in equity.  All remedies provided to Tenant under this Lease shall be
cumulative and may be exercised jointly, consecutively or concurrently and the
exercise of any one remedy by Tenant shall not exclude Tenant's right to
exercise any other remedy to which Tenant may be entitled.

     19.  PAYMENT BY TENANT; NON-WAIVER.

          a.   PAYMENT BY TENANT.  Upon any Event of Default, Tenant shall pay
to Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (I) obtaining possession of the Premises
(including, without limitation, changing locks and obtaining keys), (ii)
removing and storing Tenant's or any other occupant's property, (iii) necessary
repairing, restoring, altering, remodeling, painting, cleaning, otherwise
putting the Premises into condition to relet the Premises to another single
tenant in the Las Colinas, Texas market, but excluding any work on
Capital/Structural Items necessitated by such reletting, (iv) if Tenant is
dispossessed of the Premises and this Lease is not terminated, reletting all of
any part of the Premises (including brokerage commissions attributable to the
unexpired portion of this Lease; cost of such necessary tenant finish work, 



                                     24

<PAGE>

and other costs incidental to such reletting, but excluding any work on 
Capital/Structural Items necessitated by such reletting), (v) performing 
Tenant's obligations which Tenant failed to perform (including, without 
limitation, payment of all utility charges and costs of paying all Taxes or 
amounts secured by liens against the Premises), and (vi) enforcing, or 
advising Landlord or, its rights, remedies, an recourses arising out of the 
Event of Default including foreclosing Landlord's liens and security 
interests against Tenant's property.

          b.   NO WAIVER.  Landlord's acceptance of Rent or partial payment
thereof following an Event of Default shall not waive Landlord's rights
regarding such Event of Default.  No waiver by Landlord or Tenant of any
violation or breach of any of the terms contained herein shall waive such
party's rights regarding any future violation of such term by the other party.

     20.  SURRENDER OF PREMISES.  No act by Landlord shall be deemed an 
acceptance of a surrender of the Premises, and no agreement to accept a 
surrender of the Premises shall be valid unless it is in writing and signed 
by Landlord.  Subject to the following sentence, at the expiration or 
termination of this Lease, Tenant shall deliver to Landlord the Premises with 
all improvements and equipment located herein or thereon in such repair and 
condition as is required of Tenant under this Lease, except for reasonable 
wear and tear between the last necessary repair, replacement, or restoration 
made by Tenant pursuant to its obligations under this Lease and damage by 
casualty and condemnation excepted, and shall deliver to Landlord all keys to 
the Premises. Tenant may remove all trade fixtures, furniture, and personal 
property placed in the Premises by Tenant provided that Tenant has performed 
all of its obligations hereunder, and shall remove such alterations, 
additions and improvements as Landlord notified Tenant in writing in 
connection with any consent thereto by Landlord, or prior to the data on 
which such alteration, addition or improvement was made, of the need for such 
removal upon the expiration of this Lease in writing.  Tenant shall repair 
all damage caused by such removal.  Without limiting or otherwise affecting 
Tenant's obligations to remove such items, all items not so removed shall be 
deemed to have been abandoned by Tenant and may be appropriated, sold, 
stored, destroyed, or otherwise disposed of by Landlord without notice to 
Tenant and without any obligation to account for such items. The provisions 
of this Section 20 shall survive the end of the Term.

     21.  HOLDING OVER.  Subject to the provisions of Section 17, if Tenant 
fails to vacate the Premises at the end of the Term, then Tenant shall be a 
tenant at will and, in addition to all other damages and remedies to which 
Landlord may be entitled for such holding over, Tenant shall pay, in addition 
to the Additional Rent, a daily Basic Rental equal to 150% of the daily Basic 
Rental payable during the last month of the Term.

     22.  CERTAIN RIGHTS RESERVED BY LANDLORD.  Provided that the exercise of 
such rights does not unreasonably interfere with Tenant's occupancy of the 
Premises, Landlord may enter the Premises at reasonable hours and upon 
reasonable notice of two (2) days or more to show the Premises to prospective 
purchasers, lenders, or tenants.  Landlord's representative shall be 
accompanied at all times during such entry into the Premises by 

                                     25

<PAGE>

representatives designated by Tenant and shall strictly observe all security 
procedures promulgated by Tenant from time to time for all business invitees.

     23.  MISCELLANEOUS.

          a.   LANDLORD TRANSFER; TERMINATION OF LEASE.  Landlord may transfer
the Premises and any of its rights under this Lease.  If Landlord assigns its
rights under this Lease, then Landlord shall thereby be released from any
obligations thereunder arising from and after the day of the transfer, provided
that the assignee assumes Landlord's obligations hereunder in writing.

          b.   LANDLORD'S LIABILITY.  The liability of Landlord to Tenant for
any default by Landlord under the terms of this Lease shall be recoverable only
from the interest of Landlord in the Premises, including proceeds arising
therefrom, and Landlord shall not be personally liable for any deficiency.  This
Section shall not limit any remedies which Tenant may have for Landlord's
defaults hereunder which do not involve the personal liability of Landlord.

          c.   FORCE MAJEURE.  Other than for Tenant's monetary obligations
under this Lease (including the payment of Rent) and obligations which can be
performed by the payment of money (including, without limitation, maintaining
insurance and payment of Taxes), whenever a period of time is herein prescribed
for action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of time, any delays due to approval periods in favor of Las Colinas
Association (or its successors), strikes, riots, acts of God, shortages of labor
or materials, war, governmental laws, regulations, or restrictions, or any other
similar causes which are beyond the control of such party.  Notwithstanding
anything in this subsection 23c to the contrary, it is understood and agreed
that this subsection 23c shall apply only to non-monetary defaults by Tenant
under this Lease.

          d.   BROKERAGE.  Pursuant to the terms of a separate agreement which
must be acceptable in all respects to Landlord, Landlord shall pay a fee to the
Swearingen Company out of Basic Rental received, in connection with the
consummation of this Lease.  Neither Landlord nor Tenant has dealt with any
other broker or agent in connection with the negotiation or execution of this
Lease.  Tenant and Landlord shall each indemnify the other against all other
costs, expenses, attorneys' fees, and other liability for commissions or other
compensation claimed by any other broker or agent claiming the same by, through,
or under the indemnifying party.

          e.   ESTOPPEL CERTIFICATES.  From time to time, Landlord and Tenant
shall each furnish to any party designated by the other party within thirty (30)
days after the requesting party has made a request therefor, a certificate
signed by the other party confirming and containing such factual certifications
and representations as to this Lease, if true, as the requesting party may
reasonably request.



                                     26

<PAGE>

          f.   NOTICES.  All notices and other communications given pursuant to
this Lease shall be in writing and shall be (I) mailed by first class, United
States Mail, postage prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified next to their signature
block, or (ii) forwarded by overnight delivery service, with receipt evidencing
delivery.  All notices shall be effective upon the earlier to occur of actual
delivery to the address of the addressee or refusal of delivery by the
addressee.  The parties hereto may change their addresses by giving notice
thereof to the other in conformity with this provision.

          g.   SEPARABILITY.  If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such clause
or provision, there shall be added as a part of this Lease a clause or provision
as similar in terms to such illegal, invalid, or unenforceable clause or
provisions as may be possible and be legal, valid, and enforceable.

          h.   AMENDMENTS; AND BINDING EFFECT.  This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant.  No provision of
this Lease shall be deemed to have been waived by Landlord or Tenant unless such
waiver is in writing signed by the waiving party, and no custom or practice
which may evolve between the parties in the administration of the terms hereof
shall waive or diminish the right of either party to insist upon the performance
by the other party in strict accordance with the terms hereof.  The terms and
conditions contained in this Lease shall inure to the benefit of and be binding
upon the parties hereto, and (subject to Section 9 hereof) upon their respective
successors as assigns.  This Lease is for the sole benefit of Landlord and
Tenant, and, other than Landlord's Mortgagee, no third party shall be deemed a
third party beneficiary hereof.

          i.   QUIET ENJOYMENT.  Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming by,
through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease.

          j.   NO MERGER.  There shall be no merger of the leasehold estate
hereby created with the fee estate in the premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.

          k.   EXHIBITS.  All exhibits and attachments attached hereto are
incorporated herein by this reference.

          Exhibit A -         Property Description
          Exhibit B -         Description of Work to be Performed
          Exhibit C -         Form of Maintenance Checklist
          Exhibit D-          DTPA Waiver
          Exhibit E -         Zale Headquarters Standard
          Exhibit F-          Recommended Repair Items



                                     27

<PAGE>

          l.   ENTIRE AGREEMENT.  This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto.  Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord and Tenant in connection therewith.

          m.   COUNTERPARTS.  This Lease may be executed in one or more
counterpart, each of which shall be deemed an original, but all of which shall
together constitute one and the same agreement.

     24.  HAZARDOUS WASTE.  The term "Hazardous Substances" as used in this 
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any 
other substances, the use and/or the removal of which is required or the use 
of which is restricted, prohibited or penalized by any "Environmental Law", 
which term shall mean any federal, state or local law, ordinance or other 
statute or any applicable governmental or quasi-governmental authority 
relating to pollution or protection of the environment.  Tenant hereby agrees 
that (I) no activity will be conducted on the Premises that will produce any 
Hazardous Substance, except for such activities that are part of the ordinary 
course of Tenant's business activities and/or the ordinary course of 
operations and maintaining the Premises (the "PERMITTED ACTIVITIES"), 
provided the Permitted Activities are conducted in accordance with all 
Environmental Laws and have been approved in advance in writing by Landlord, 
and Tenant shall be responsible for obtaining any required permits and paying 
any fees and providing any testing required by any governmental agency; (ii) 
the Premises will not be used in any manner for the storage of any Hazardous 
Substances except for Permitted Materials (defined below), provided such 
Permitted Materials are properly stored in a manner and location meeting all 
Environmental Laws and approved in advance in writing by Landlord, and Tenant 
shall be responsible for obtaining any required permits and paying any fees 
and providing any testing required by any governmental agency; (iii) no 
portion of the Premises will be used as a landfill or a dump; (iv) Tenant 
will not install any underground tanks of any type; (v) Tenant will not take 
actions or conduct its operations in a manner that constitute, or with the 
passage of time may constitute a public or private nuisance; and (vi) Tenant 
will not permit any  Hazardous Substances to be brought onto the Premises, 
except for the Permitted Materials and if so brought or found located 
thereon, Tenant shall notify Landlord and Landlord and Tenant shall come to a 
reasonable plan as to how to store, hand and/or dispose of such Hazardous 
Substances and Tenant shall diligently implement such plan, in accordance 
with all Environmental Laws; provided, however, that in the event of a 
disagreement regarding same, Landlord shall have the right, at its option, to 
make all final decisions.  Landlord or Landlord's representative shall have 
the right but not the obligation to enter the Premises in accordance with 
Section 7.c of this lease, for the purpose of inspecting the storage, use and 
disposal of Permitted Materials to ensure compliance with all Environmental 
Laws.  Should it be determined, in Landlord's sole opinion, that the 
Permitted Materials are being improperly stored, used, or disposed of, then 
Tenant shall immediately take such reasonable corrective action as requested 
by Landlord.  Should Tenant fails to take such corrective action within a 
reasonable period of time given the nature of such hazard, Landlord shall 
have the right to perform such necessary work and 

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<PAGE>

Tenant shall promptly reimburse Landlord within thirty (30) days following 
written demand by Landlord for any and all actual costs associated therewith. 
If at any time during or after the Term, the Premises are found to be so 
contaminated or subject to the conditions, Tenant shall diligently institute 
proper and thorough cleanup procedures at Tenant's sole cost, provided, 
however, that in the event of a disagreement regarding same, Landlord shall 
have the right, at its option, to make all final decisions, and Tenant shall 
indemnify and hold Landlord harmless from all claims, demands, actions, 
liabilities, costs, expenses, damages and obligations of any nature arising 
from or as a result of the use of the Premises by Tenant (including, without 
limitation, those arising from Landlord's joint, comparative, or concurrent 
negligence with any party, but excluding Landlord's intentional acts or sole 
or gross negligence).  The negligence with any party, but excluding 
Landlord's intentional acts or sole or gross negligence).  The foregoing 
indemnification and the responsibilities of Tenant shall survive the 
termination or expiration of this Lease.  The Permitted Materials are:  
construction materials that now comprise a portion of the Building, routine 
office supplies (including, without limitation, liquid paper and copier 
toner), cleaning solvents and supplies, jewelry repair materials, fertilizer 
and landscaping chemicals.  Tenant acknowledges the presence of underground 
tanks on the Premises, hereby agrees to register same as required by law, 
indemnifies and holds harmless Landlord with respect to such tanks, and shall 
promptly remove same from the Premises under Landlord's supervision and 
direction, so long as Landlord pays the costs of such removal (which costs 
are to be approved in writing by Landlord in advance).

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANTS INTENDED COMMERCIAL PURPOSE, AND TENANTS OBLIGATION TO
PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE  BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF, DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

     25.  PRIOR LEASE.   Landlord and Tenant acknowledge and agree that, upon 
the execution of this Lease, Tenant is occupying the Premises under the terms 
of that certain Lease dated March 31, 1985 by and between The Connecticut 
Bank and Trust Company, National Association, not individually, but as 
Trustee under Zale Trust No. 85-1, as the lessor thereunder ("PRIOR TRUSTEE"),
and Tenant, as the Lessee thereunder ("PRIOR LEASE").  This Lease shall take 
effect in place of and simultaneously with the rejection of the Prior Lease.  
Contemporaneously with the execution and delivery of this Lease, to the extent
that such execution and delivery occurs after August 1, 1992, Landlord shall 
credit Tenant as hereinafter provided, with any amount (the "Reduction 
Amount"), to be applied against Basic Rental (but not against any Additional 
Rent or any other amounts becoming due under the terms of this Lease) thereafter
accruing under the is Lease, equal to the remainder of (I) the basic rental 
rate actually paid by Tenant under the Prior Lease from August 1, 1992, through
the date on which this Lease is executed and delivered; less (ii) the Basic 
Rental that Tenant 



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<PAGE>

would have paid for such period under this Lease if this Lease had been 
executed and delivered prior to August 1, 1992;  provided, however, that (1) 
nothing in this Section 25 shall constitute, evidence or effect any waiver, 
release, termination, extinguishment, reduction or impairment under or with 
respect to the Prior Lease, including, without limitation, any claims 
regarding (a) the Prior lease, or (b) any rejection or the Prior lease in the 
bankruptcy case hereinbefore described, it being understood and agreed that 
this Section 25 shall be automatically deleted from this Lease without 
further action or documentation by any party in the event that it would 
otherwise be given such interpretation or effect, and (2) the Reduction 
Amount shall in no event reduce the first three (3) monthly payments of Basic 
Rental under this Lease to less than $100,000 each, and Tenant shall be 
obligated to pay all amounts of accrued Additional Rent in full, plus Basic 
Rental for each of said three (3) months in amounts of no less than $100,000 
each, regardless of the application of any portion of any Reduction Amount.

     26.  FINANCIAL STATEMENTS.  Tenant shall deliver to Landlord, upon 
written request by Landlord, whatever financial information Tenant makes 
available to the public.

DATED as of the date first above written.

TENANT:

ZALE CORPORATION                       Address:
AS DEBTOR AND DEBTOR-IN-POSSESSION
                                       901 West Walnut Hill Lane
                                       MS 5A-13, Real Estate Department
                                       Irving, Texas  75083-1003

By: /s/ Andreas Ludwig
   --------------------------------
Name:   Andreas Ludwig                 with a copy to:
Its:    Executive Vice President -
        Finance, and Chief Financial   Chief Financial Officer
        Officer                        901 West Walnut Hill Lane
                                       MS 7A-5
                                       Irving, Texas  75083-1003





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<PAGE>

LANDLORD:

PRINCIPAL MUTUAL LIFE INSURANCE        Address:
COMPANY
                                       Trammell Crow Central Office Group, Inc.
                                       2200 Ross Ave., Suite 3700
By:  /s/ Thomas J. Bell                Dallas, Texas  75201
   ------------------------------      Attn:  John E. Nolen, III
   Name: Thomas J. Bell                
   Its:  Associate Director Commercial
         Real Estate


By:  /s/ S. P. Franzenburg
   ------------------------------
   Name: S. P. Franzenburg
   Its:   Director & Secretary Asset
          Preservation

                                       With a copy to:

                                       Principal Mutual Life Insurance Company
                                       711 High Street
                                       Des Moines, Iowa  50392
                                       Attn:  Doug Achtemeir









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