Document:

exv10w15

 

Exhibit 10.15

BASE SALARY AND TARGET BONUS

FOR THE NAMED EXECUTIVE OFFICERS

     The following table sets forth the annual base salaries and of the Chief Executive
Officer and the four other most highly compensated executive officers of Zale Corporation (the
“Company”) for the fiscal year ending July 31, 2006, and the target bonus for each such executive
officer under the Company’s executive bonus program as a percentage of annual base salary.

	 	 	 	 	 	 	 	 	 
	Name	 	Base Salary	 	Target Bonus %
	Mary L. Forté

President and Chief Executive Officer
	 	$	800,000	 	 	 	125	%
	Sue E. Gove

Executive Vice President, Chief Operating Officer
	 	$	650,000	 	 	 	100	%
	Mark R. Lenz

Group Senior Vice President, Chief Financial Officer
	 	$	275,000	 	 	 	50	%
	Paul G. Leonard

Group Senior Vice President and President, Zales
Jewelers
	 	$	375,000	 	 	 	40	%
	Peter B. Feigenbaum

Senior Vice President, Upstream Supply Chain
	 	$	250,000	 	 	 	32.5	%

     For additional information regarding the compensation of the Company’s executive officers,
please refer to the information under the heading “Executive and Director Compensation” in the
Company’s Definitive Proxy Statement on Schedule 14A, which has been filed with the Securities and
Exchange Commissionexv10w16

 

Exhibit 10.16

SUMMARY OF NON-EMPLOYEE DIRECTOR COMPENSATION

     During the fiscal year ended July 31, 2005, each non-employee director of Zale
Corporation (the “Company”) received an annual retainer fee of $50,000, a $3,000 fee for each Board
of Directors meeting attended in person and a $1,000 fee for each Board of Directors meeting
attended by telephone. The Chairman of the Board of Directors received an additional retainer fee
of $150,000. The Chair of the Audit Committee of the Board of Directors received an additional
annual retainer fee of $20,000. All other Committee Chairs of the Board of Directors received an
additional annual retainer fee of $15,000. Each Committee member received $2,000 for each
Committee meeting attended, whether in person or by telephone. Non-employee directors also
received annual grants of options to purchase 5,000 shares of Common Stock under the Company’s
Outside Directors’ 1995 Stock Option Plan.

     For the fiscal year ending July 31, 2006, each non-employee director of the Company will
receive an annual retainer fee of $40,000, a $3,000 fee for each Board of Directors meeting
attended in person and a $1,000 fee for each Board of Directors meeting attended by telephone. The
Chairman of the Board of Directors will receive an additional retainer fee of $150,000. The Chair
of the Audit Committee of the Board of Directors will receive an additional retainer fee of
$15,000. All other Committee Chairs of the Board of Directors will receive an additional retainer
fee of $10,000. Each Committee member will receive $2,000 for each Committee meeting attended in
person, and a $1,000 fee for each Committee meeting attended by telephone. Non-employee directors
will also receive an annual grant of options to purchase 3,800 shares of Common Stock and an annual
award of 1,500 shares of restricted stock under the Outside Directors’ Plan.<PAGE>
                                                                   EXHIBIT 10.18

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                                             <C>
SECTION 1 -- DEFINITIONS..........................................................................................4
   Section 1.1       Certain Definitions..........................................................................4
   Section 1.2       Other Definitions............................................................................7
SECTION 2 -- MASTER AGREEMENT.....................................................................................7
   Section 2.1       Master Agreement.............................................................................7
   Section 2.2       Interpretation and Precedence................................................................8
SECTION 3 -- TERM.................................................................................................8
   Section 3.1       Term.........................................................................................8
SECTION 4 -- SERVICES.............................................................................................8
   Section 4.1       ACS Services.................................................................................8
   Section 4.2       Third Party Services.........................................................................9
   Section 4.3       Affiliates...................................................................................9
   Section 4.4       Additional Services..........................................................................9
   Section 4.5       Modification of Services.....................................................................9
   Section 4.6       Employee Screening..........................................................................10
   Section 4.7       Professional Practices......................................................................10
   Section 4.8       Approved Subcontractors.....................................................................10
   Section 4.9       Access to Zale Facilities...................................................................10
SECTION 5 -- SERVICE LEVELS/BENCHMARKING.........................................................................10
   Section 5.1       Service Levels..............................................................................10
   Section 5.2       Failure to Meet Service Levels..............................................................11
   Section 5.3       Service Level Credits Resulting from a Single Incident......................................11
   Section 5.4       Benchmarking................................................................................11
SECTION 6 -- TRANSFERS OF EQUIPMENT AND THIRD PARTY CONTRACTS....................................................12
   Section 6.1       Transfers of Equipment......................................................................12
   Section 6.2       Third Party Contracts.......................................................................12
SECTION 7 -- INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS........................................................13
   Section 7.1       Zale Software...............................................................................13
   Section 7.2       ACS Proprietary Software....................................................................13
   Section 7.3       Third Party Software........................................................................13
   Section 7.4       Non-Infringement............................................................................14
SECTION 8 -- CONFIDENTIALITY.....................................................................................14
   Section 8.1       Definitions.................................................................................14
   Section 8.2       Rights, Restrictions and Obligations of the Receiving Party.................................15
   Section 8.3        Return of Disclosing Party Information; Right to Review....................................16
   Section 8.4       Ownership of Zale Data......................................................................17
   Section 8.5       Return of Zale Data.........................................................................17
SECTION 9 -- ACCOUNT MANAGEMENT/PERSONNEL/CHANGE CONTROL.........................................................17
   Section 9.1       Account Managers............................................................................17
   Section 9.2       Key Personnel...............................................................................18
   Section 9.3       Technical Change Control....................................................................18
   Section 9.4       Contract Change Control.....................................................................18
   Section 9.5       Employee Compensation.......................................................................19
SECTION 10 -- AUDITS.............................................................................................19
SECTION 11 -- INSURANCE; RISK OF LOSS............................................................................20
   Section 11.1      Required Insurance Coverage.................................................................20
   Section 11.2      Risk of Loss and General Insurance Requirement..............................................20
SECTION 12 -- CHARGES............................................................................................20
   Section 12.1      Charges.....................................................................................20
   Section 12.2      Taxes.......................................................................................21
SECTION 13 -- INVOICING AND PAYMENT..............................................................................21
   Section 13.1      Invoices and Payment........................................................................21
   Section 13.2      Out of Pocket Expenses......................................................................21
   Section 13.3      Proration...................................................................................21

</TABLE>

                                       2

<PAGE>

<TABLE>
<S>                                                                                                             <C>
   Section 13.4      Late Payment and Disputed Amounts...........................................................22
SECTION 14 -- REPRESENTATIONS, WARRANTIES AND COVENANTS..........................................................22
   Section 14.1      Mutual Representation and Warranty..........................................................22
   Section 14.2      Additional Covenants and Warranties.........................................................23
   Section 14.3      Disclaimer..................................................................................24
SECTION 15 -- INDEMNIFICATION....................................................................................24
   Section 15.1      Indemnities.................................................................................24
   Section 15.2      Intellectual Property Indemnification.......................................................25
   Section 15.3      Indemnification Procedures..................................................................25
SECTION 16 -- LIMITATIONS ON LIABILITY...........................................................................26
   Section 16.1      Limit on Types of Damages Recoverable.......................................................26
   Section 16.2      Limit on Amount of Direct Damages Recoverable...............................................26
   Section 16.3      Force Majeure...............................................................................27
   Section 16.4      Actions of Other Party......................................................................27
SECTION 17 -- TERMINATION........................................................................................27
   Section 17.1      Termination for Cause.......................................................................27
   Section 17.2      Termination for Convenience.................................................................28
   Section 17.3      Termination upon ACS Change of Control......................................................28
   Section 17.4      Effect of Termination.......................................................................28
   Section 17.5      Termination/Expiration Assistance...........................................................28
   Section 17.6      Third Party Contracts.......................................................................29
   Section 17.7      Sunset Management...........................................................................29
SECTION 18 -- DISPUTE RESOLUTION.................................................................................30
   Section 18.1      General.....................................................................................30
   Section 18.2      Informal Dispute Resolution.................................................................30
   Section 18.3      Arbitration.................................................................................30
   Section 18.4      Continued Performance.......................................................................31
   Section 18.5      Applicable Law..............................................................................31
   Section 18.6      Jurisdiction and Venue......................................................................31
   Section 18.7      Charges and Costs...........................................................................31
   Section 18.8      Equitable Remedies..........................................................................31
   Section 18.9      Remedies Cumulative.........................................................................32
SECTION 19 -- MISCELLANEOUS......................................................................................32
   Section 19.1      Binding Nature and Assignment...............................................................32
   Section 19.2      Expenses....................................................................................32
   Section 19.3      Amendment and Waiver........................................................................32
   Section 19.4      Further Assurances; Consents and Approvals..................................................32
   Section 19.5      Severability................................................................................32
   Section 19.6      Entire Agreement............................................................................33
   Section 19.7      Notices.....................................................................................33
   Section 19.8      Survival....................................................................................33
   Section 19.9      Independent Contractor......................................................................33
   Section 19.10     Non-Solicitation............................................................................34
   Section 19.11     Third Party Beneficiaries...................................................................34
   Section 19.12     Counterparts................................................................................34
   Section 19.13     Change of Circumstance......................................................................34
   Section 19.14     Acknowledgement.............................................................................34

</TABLE>

                                       3
<PAGE>

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

         This Master Agreement for Information Technology Services (this "Master
Agreement" or "Agreement"), dated August 1, 2005 (the "Effective Date"), is
entered into by and between ACS Commercial Solutions, Inc., a Nevada corporation
("ACS"), and Zale Delaware, Inc., a Delaware corporation ("Zale").

                            BACKGROUND AND OBJECTIVES

         This Master Agreement is entered into in connection with Zale's
decision to engage ACS to provide certain information technology services
related to Zale's business operations. This Master Agreement sets forth the
general terms and conditions governing the relationship between ACS and Zale,
and the attached Schedules set forth the specific terms and conditions
applicable to specific Service elements to be provided by ACS to Zale.

         The parties further agree as follows:

                            SECTION 1 -- DEFINITIONS

SECTION 1.1       CERTAIN DEFINITIONS

         In this Master Agreement, the following terms will have the indicated
meanings:

         "ACCOUNT MANAGERS" means the individuals appointed by ACS and Zale, who
have overall program management responsibility for managing the relationship
with Zale, monitoring the performance of the Services and addressing performance
deficiencies under this Agreement, as more fully defined in Section 9.1.

         "ACS COMPETITOR" means any party that competes with ACS by providing
operational information technology services in a comparable manner.

         "ACS FACILITIES" means the facilities owned or leased by ACS and from
which ACS will provide the agreed Services. These facilities will be located in
Dallas or such other location as may be designated by ACS and approved by Zale,
which approval shall not be unreasonably withheld.

         "ACS PERSONNEL" means employees of ACS and its subcontractors assigned
to performing Services.

         "ACS PROPRIETARY SOFTWARE" means any Software owned by ACS and used in
conjunction with any of the Services.

         "ACS THIRD PARTY SOFTWARE" means any Software owned by a Third Party
Software Vendor and licensed to ACS for use on behalf of Zale or any Zale
Affiliate in connection with any of the Services, or for which ACS holds an
enterprise-wide license allowing is use for multiple customers.

         "AFFILIATE" means, with respect to any specified person or entity, any
other person or entity that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common Control with,
the specified person or entity.

         "BUSINESS DAY" means Monday through Friday, excluding ACS or Zale
recognized holidays.

                                       4

<PAGE>

         "CHARGES" means the amounts set forth in Schedule B that Zale will pay
to ACS for the Services performed by ACS during the Term, as more fully defined
in Section 12.1.

         "CONFIDENTIAL INFORMATION" means information designated or otherwise
defined as confidential, as more fully defined in Section 8.1.

         "CONTROL" means (a) the legal, beneficial, or equitable ownership,
directly or indirectly, of (i) at least fifty percent (50%) of the aggregate of
all voting equity interests in an Entity, or (ii) equity interests having the
right to at least fifty percent (50%) of the profits of an Entity or, in the
event of dissolution, to at least fifty percent (50%) of the assets of an
Entity; (b) the right to appoint, directly or indirectly, a majority of the
board of directors; (c) the right to control, directly or indirectly, the
management or direction of the Entity by contract or corporate governance
document; or (d) in the case of a partnership, the holding by an Entity (or one
of its Affiliates) of the position of sole general partner.

         "CRITICAL ACS THIRD PARTY SOFTWARE" means any ACS Third Party Software
other than that identified as generally available commercial software in
Schedule F-5, as more fully defined in Section 7.3 (a).

         "DISCLOSING PARTY" means the party disclosing Confidential Information,
as more fully defined in Section 8.1.

         "EFFECTIVE DATE" means the date set forth in the introductory paragraph
of this Master Agreement.

         "EMBARGOED COUNTRIES" means countries subject to U.S. government
embargo.

         "EQUIPMENT" means the computer equipment owned or leased by ACS or Zale
and used by ACS to provide the Services and all associated accessories and
peripheral devices used in the provision of Services.

         "EXCUSED PERFORMANCE PROBLEM" means any event which causes ACS to fail
to achieve an obligation, including a Service Level, but which, because the
parties agree upon their mutual consideration of such event that it was not
caused by or subject to the control of ACS or a third party service provider of
ACS, will not be included in any calculation of Service Level Credits that may
be owed to Zale or in determining whether a breach or termination event has
occurred hereunder. Examples of Excused Performance Problems include, but are
not limited to: (i) errors or defects in Zale Software or Zale Equipment; (ii)
any action or inaction taken by Zale or a third party service provider of Zale
which causes an adverse affect on ACS' ability to provide the Services, or (iii)
a manifestation of a latent unknown defect in Third Party Software or Equipment.

         "FREEZE PERIOD(s)" means those certain times during the year, as
designated by Zale, when Zale puts in place higher service levels, increased
resource availability (mandating vacation and leave restrictions), and more
restrictive controls over changes to the environment and/or systems during the
Holiday Seasons or Special Sales Periods.

         "FORCE MAJEURE EVENTS" means events such as natural disasters, fires,
acts of God, governmental or third party actions, or other similar events that
are beyond the reasonable control of the parties, as more fully defined in
Section 16.3.

                                       5

<PAGE>

         "HOLIDAY SEASONS" AND/OR "SPECIAL SALES PERIODS" means those days that
Zale identifies each year as comprising the Holiday Seasons, but, in any event,
shall always include November 1 through December 31, and the fourteen (14) day
periods up to and including Mother's Day and Valentine's Day.

         "LOSSES" means all losses, liabilities, damages and claims, and all
related costs and expenses (including any and all reasonable legal fees and
reasonable costs of investigation, litigation, settlement, judgment, appeal,
interest and penalties) incurred by an indemnified party in connection with a
third party claim.

         "MASTER AGREEMENT" means this Master Agreement for Information
Technology Services and, when the meaning so requires, all associated Schedules
and Exhibits to the Master Agreement.

         "NOTICE OF ASSUMPTION OF DEFENSE" means written notification from an
indemnitor to an indemnitee that the indemnitor elects to assume control of the
defense and settlement of a particular claim or action, as more fully defined in
Section 15.3.

         "RECEIVING PARTY" means the party receiving Confidential Information
disclosed by the Disclosing Party, as more fully defined in Section 8.1.

         "RULES" means the Commercial Arbitration Rules of the American
Arbitration Association, as fully defined in Section 18.3.

         "SCHEDULES" means any schedule, exhibit, agreement or other document
(i) attached to this Master Agreement, or (ii) executed by the parties at any
time, if such document states that it is a schedule to this Master Agreement.

         "SERVICE LEVELS" means the quantitative measurements established to
calculate ACS' level of performance of certain Service elements, as more fully
defined in Section 5.1.

         "SERVICE LEVEL CREDITS" means monetary amounts that ACS may be required
to deduct from its invoices to Zale due to ACS' failure to meet certain Service
Levels, as more fully defined in Section 5.2.

         "SERVICES" means those services provided by ACS and described in
Section 4.1 and Schedule A.

         "SOFTWARE" means any computer software that relates to the Services
provided, and includes all Zale Software, ACS Software and Third Party Software.

         "TERM" means the term of this Agreement, as more fully defined in
Section 3.1.

         "TERMINATION/EXPIRATION ASSISTANCE" means the assistance provided by
ACS upon termination or expiration of this Agreement to enable an orderly
transition of the Services to Zale or Zale's designee, as more fully defined in
Section 17.4.

         "THIRD PARTY CONSENTS" means the consent required from a third party to
use, access or assign a Third Party Contract, or otherwise execute the
transactions contemplated by this Agreement, as more fully defined in Section
6.2.

         "THIRD PARTY CONTRACTS" means any contract that is a Third Party
Software License or Third Party Service Contract.

                                       6

<PAGE>

         "THIRD PARTY SERVICE CONTRACTS" means, collectively, (i) the agreements
between Zale and a third party pursuant to which the third party is providing to
Zale, immediately before the Effective Date or at any time during the Term, any
services included within the Services, and (ii) the agreements between ACS and a
third party pursuant to which the third party is providing to Zale or ACS at any
time during the Term any services included within the Services.

         "THIRD PARTY SOFTWARE" means any Software that is owned and licensed by
a person other than ACS or Zale and used to provide the Services in accord with
this Agreement.

         "THIRD PARTY SOFTWARE LICENSE" means a license agreement that
authorizes Zale or ACS to use Third Party Software for the provision of Services
in accord with this Agreement.

         "TRANSFERRED EQUIPMENT" means Zale equipment that Zale sells or assigns
to ACS, as more fully defined in Section 6.1.

         "ZALE DATA" means all Confidential Information of Zale as well as all
data and information submitted to ACS by Zale or developed or produced by ACS in
connection with the Services, including, but not limited to, information
relating to Zale's employees, third party vendors, technology, operations,
facilities, financials, consumer markets, strategies, customers, procedures,
pricing policies, merchandise mix, products, capacities, systems, procedures,
security systems and practices, research development, business affairs, finances
and any other similar information.

         "ZALE EQUIPMENT" means any Equipment owned and/or licensed by Zale and
used in conjunction with any of the Services.

         "ZALE PROPRIETARY SOFTWARE" means any Software owned by Zale and
pursuant to which ACS is granted a right to use or right of access to utilize
the Software in conjunction with any of the Services.

         "ZALE THIRD PARTY SOFTWARE", as further defined in Section 7.3(c),
means any Software that is owned by a Third Party Software Vendor and licensed
to Zale, under which ACS has a right to use, right of access, or other consent
from the Third Party Software Vendor allowing ACS to use the Zale Third Party
Software to provide the Services in accord with this Agreement.

SECTION 1.2       OTHER DEFINITIONS

         Other terms used in this Master Agreement and the Schedules are defined
where they first appear and have the respective meanings so indicated.

                          SECTION 2 -- MASTER AGREEMENT

SECTION 2.1       MASTER AGREEMENT

         This Master Agreement is an agreement that contains general contractual
terms for Services to be provided to Zale by ACS. The Services, Service Levels
and Pricing are defined in separate Schedules and attachments, each of which is
incorporated into this Master Agreement by reference.

         The Parties acknowledge and agree that, upon execution of this Master
Agreement, the Master Agreement for Data Processing and Related Services dated
as of June 7, 2002, (the "Prior Agreement), including all amendments, schedules,
addendums, letters, etc., will terminate and cease to be effective.

                                       7
<PAGE>

SECTION 2.2       INTERPRETATION AND PRECEDENCE

         This Master Agreement, the Schedules and attachments that may be added
are to be interpreted so that all of the provisions are given as full effect as
possible. In the event of a conflict between this Master Agreement and a
Schedule, the order of precedence will be: (i) the Schedules and attachments;
(ii) the Master Agreement; and (iii) any other addenda, letters, etcetera,
provided that the Agreement and the Schedules shall be interpreted to give
effect to all provisions in both to the extent reasonably practicable.

                                SECTION 3 -- TERM

SECTION 3.1       TERM

         The term of this Master Agreement (the "Term") will begin as of August
1, 2005, the Effective Date, and will continue through July 31, 2012, unless
earlier terminated in accordance with the provisions of this Master Agreement.

                              SECTION 4 -- SERVICES

SECTION 4.1       ACS SERVICES

         Throughout the Term, ACS will provide the services described in
Schedule A -- Services, as such services may be amended and supplemented from
time to time (collectively, the "Services"). ACS will provide the Services in
accordance with the terms of this Master Agreement and the applicable Schedules.

         As of the Effective Date of this Master Agreement, ACS is obligated to
provide the following Services to Zale, which are detailed in Schedule A:

         (a)      Mainframe Services

         (b)      Midrange Services

         (c)      Operations Support Services

         (d)      Network Management Services

         (e)      Disaster Recovery Services

         (f)      Transition Services

         (g)      Termination/Expiration Assistance

         (h)      Any other services provided by ACS under this Agreement which
are described in any Schedule or which are ancillary to or implicitly required
in the performance of the services described in any Schedule.

                                       8

<PAGE>

SECTION 4.2       THIRD PARTY SERVICES

         Zale shall have the right to contract with a third party to perform any
services which are in addition to, or outside the scope of, the Services or
which require resources not covered by the Charges. If Zale contracts with a
third party to perform any such service, ACS will cooperate with Zale and such
third party to the extent reasonably required by Zale. Zale will require such
third parties to comply with ACS' reasonable requirements regarding operations,
standards, security and the care and use of ACS' Confidential Information and
ACS Software as well as any restrictions relating to access to any Third Party
Software products. Zale shall be responsible for any fees or other charges or
expenses charged by any Third Party Software providers to enable such third
party service providers to access or otherwise use such Software.

SECTION 4.3       AFFILIATES

         Throughout the Term, ACS may provide the Services to Zale and to those
present and future Affiliates of Zale as Zale may designate from time to time,
all in accordance with the terms and conditions of this Master Agreement;
provided that Zale and its Affiliates will be responsible for any fees or other
charges or expenses incurred by ACS or charged by any Third Party Software
providers to enable such Affiliates to obtain the Services. (e.g., equipment,
software transfer or upgrade fees, license or lease obligations).

         If at any time during the Term, Zale sells or otherwise transfers
ownership of an Affiliate to a third party, ACS will continue to provide the
Services to such Affiliate if requested by Zale and for the time period
requested by Zale, up to the expiration or termination of the Term on the terms
and conditions set forth in this Master Agreement, provided that the scope of
the Services provided by ACS to the third party does not materially differ from
those provided to Zale as a part of this Agreement, and that Zale and the third
party will be responsible for any charge or expenses incurred by ACS or imposed
by third parties (e.g., Third Party Software providers and telecommunication
carriers). ACS may require the Affiliate or its new parent company to sign an
agreement for services substantially similar to this Agreement, as appropriate
for the new parent or divested former Affiliate, if necessary, to comply with
requirements of ACS' Third Party Software providers.

SECTION 4.4       ADDITIONAL SERVICES

         ACS shall perform all services requested by Zale that are not Services
under Section 4.1 above (the "Additional Services") on a time and materials
basis at the rates specified in Schedule B or as otherwise agreed. Zale shall
not pay ACS for Additional Services except in accordance with the following
procedure: (i) Zale shall request Additional Services in writing; (ii) ACS shall
promptly provide Zale a written estimate of the total cost of performing the
Additional Services (the "Task Estimate"); (iii) if Zale chooses to purchase the
Additional Services, Zale shall give ACS written authorization to perform the
Additional Services. Zale shall not be obligated to pay any fees for the
Additional Services that exceed the Task Estimate. ACS shall maintain time
records for all applicable time and work expended on the Additional Services and
shall document such records with the applicable invoice, as appropriate.

SECTION 4.5       MODIFICATION OF SERVICES

         Zale may choose from time to time to modify or alter any of the
Services provided under this Agreement. ACS will provide such Modified Services
as requested subject to corresponding adjustments in Fees as mutually agreed and
subject to Section 12.1. To facilitate such modifications, ACS will maintain a
formal, documented modification process.

                                       9

<PAGE>

SECTION 4.6       EMPLOYEE SCREENING

         ACS agrees that with regard to its personnel assigned, or to be
assigned, at the Zale facilities or providing any Service or Additional Service
hereunder, and other personnel of ACS subcontractors who perform significant and
extended work at a Zale facility or with Zale Data, Zale may request that ACS
conduct lawful background checks and tests for unlawful drug use on those
individuals, or any of them, to include checks for any prior criminal
convictions whether felony or misdemeanor. ACS will promptly perform such checks
and will report the results to Zale. As a result of such checks, Zale may
reasonably request that certain individuals are not assigned to Zale Services,
and ACS will designate replacements, subject to the screening requirements set
forth herein.

SECTION 4.7       PROFESSIONAL PRACTICES

         ACS will, at a minimum, employ generally accepted industry professional
"best practices" in providing the Services but never less than the operational
practices required by this Agreement and applicable Schedules.

SECTION 4.8       APPROVED SUBCONTRACTORS

         (a) In providing the Services, ACS may not subcontract any material
portions of the Services, except as approved by Zale, whose approval shall not
be unreasonably withheld. To the extent any subcontractor is permitted under
this Section 4.8, ACS will cooperate to establish reasonable protections and
controls with respect to such data and information, including having such
subcontractor sign appropriate confidentiality and data protection agreements
reasonably acceptable to Zale after its review.

         (b) ACS will be responsible for the compliance by any of its
subcontractors with all of the provisions of this Agreement applicable to ACS.
ACS will remain responsible for all performance under this Agreement by any of
its subcontractors to the same extent as if such performance was made by ACS.
ACS will remain Zale's sole point of contact regarding the Services.

         (c) If Zale expresses any concerns to ACS regarding material or
potentially material performance issues with any ACS subcontractors, ACS will
investigate the matter and implement corrective action approved by Zale.

SECTION 4.9       ACCESS TO ZALE FACILITIES

         In its performance of the Services, ACS and its employees, contractors
and agents shall have reasonable access to Zale's facilities or portions
thereof, subject to Zale's security policies and procedures and Zale's Code of
Conduct (as both may be amended from time to time).

                    SECTION 5 -- SERVICE LEVELS/BENCHMARKING

SECTION 5.1       SERVICE LEVELS

         Concurrently with entering into this Agreement, Zale and ACS agree to
the quantitative measurements defined in Schedule C intended to calculate ACS'
level of performance of certain Service elements ("Service Levels"). With
respect to a Service element which has an associated Service Level, ACS will
provide such Service element throughout the Term in a manner which meets or
exceeds the associated Service Level.

                                       10

<PAGE>

SECTION 5.2       FAILURE TO MEET SERVICE LEVELS

         (a) For each particular Service, there may be certain Service Levels
which have a financial consequence associated with ACS' failure to achieve them.
Should ACS fail to meet any such Service Level for reasons other than those
specified in Section 5.2(c) below, Zale will have the option, but not the
obligation, to recover the applicable amount specified ("Service Level Credits")
as liquidated damages. ACS will deduct the Service Level Credits from the next
succeeding invoice or other amounts due to ACS. The election to receive any such
Service Level Credits is in lieu of any and all other remedies Zale may
otherwise pursue at law or in equity for breach or failure of performance,
except that accepting Service Level Credits shall not affect Zale's rights under
Section 17.1. If ACS' failure to meet Service Levels triggers Zale's right to
terminate the Agreement, Zale must exercise its right of termination within six
(6) months after Zale becomes aware of or should reasonably have become aware of
the event(s) giving rise to such right of termination or Zale will be deemed to
have waived such termination right with respect to that event.

         (b) Each time ACS incurs a Service Level Credit, ACS will: (i)
investigate the root cause(s) of the failure and deliver to Zale a report
identifying such root cause(s) within 10 days of the failure and (ii) correct
the problem and begin meeting such Service Level as soon as practicable;
provided that, if such problem is not reasonably capable of correction, the
parties shall determine how ACS should provide the related service in such a way
as to avoid a repetition of the problem. In any event, Zale shall be responsible
for costs of such efforts where the cause of the failure is not due to acts or
omissions of ACS or a third party under ACS' control.

         (c) To the extent any failure to meet a Service Level is caused by (i)
a Force Majeure Event, or (ii) a breach by Zale of this Master Agreement, or
(iii) any Excused Performance Problem, Zale will not be entitled to a Service
Level Credit.

SECTION 5.3       SERVICE LEVEL CREDITS RESULTING FROM A SINGLE INCIDENT

         If a single incident results in the failure of ACS to meet two Service
Levels, Zale shall be entitled to receive two Service Level Credits. If a single
incident results in the failure of ACS to meet three or more Service Levels,
Zale shall be entitled to receive up to three Service Level Credits, within the
provisions of Schedule C -- Service Level Agreements.

SECTION 5.4       BENCHMARKING

         Within 18 months after the Effective Date, and in each eighteen month
period thereafter, ACS will notify Zale of its option to conduct a benchmark of
the performance of the Services, Charges and Service Levels. Within 15 days of
Zale's decision to proceed with a benchmark, the Parties will agree on an
acceptable third party, that is not an ACS Competitor, and the Parties will
jointly engage such third party to benchmark ("the Benchmarker") the Services
and, if such party is not available, choose a replacement Benchmarker reasonably
acceptable to Zale and ACS. ACS will reasonably cooperate with the Benchmarker
and provide all data relating to the provision of the Services requested by the
Benchmarker, provided that ACS will not be required to provide any information
relating to its margins, costs, cost elements or business processes, or to
disclose any proprietary or trade secret information of ACS or its other
customers. The fees and expenses charged by the Benchmarker will be shared
equally by the Parties. In conducting the benchmarking, the Benchmarker will
normalize the data used to perform the benchmarking to accommodate, as
appropriate, differences in duration of the contract, volume of services, scope
of services, service levels, financing and payment schemes (including up-front
incentive payments), geographic configurations of the solution and other
pertinent factors. Based upon the results

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of such benchmarking, ACS will cooperate with Zale to investigate any
unfavorable variances, determine if such unfavorable variances are due to unique
Zale requirements or ACS' resource allocation and related pricing. Following a
benchmarking, Zale and ACS will meet to discuss in good faith the benchmarking,
and ACS will, if appropriate, put forth a recommended plan for adjusting the
Services, Charges, and Service Levels. Upon Zale's approval, ACS will implement
the plan so that Services or Service Levels, as the case may be, conform to the
benchmark, or, if such Services or Service Levels are not reasonably capable of
such adjustment, Charges are adjusted by a percentage reflecting the variance
between the Services and/or Service Levels, as the case may be, and their
applicable Benchmark(s).

          SECTION 6 -- TRANSFERS OF EQUIPMENT AND THIRD PARTY CONTRACTS

SECTION 6.1       TRANSFERS OF EQUIPMENT

         If specified in Schedule F, Zale will assign, and ACS will assume,
Zale's obligations under the applicable leases for certain Equipment that is
used to provide the Services, and/or Zale may sell Equipment owned by it to ACS
(the "Transferred Equipment"). Zale will obtain consents to such assignments
under such leases as promptly as practicable. Schedule F will state the other
terms and conditions applicable to the Transferred Equipment. Zale represents
and warrants that it owns title to, free and clear of all liens and
encumbrances, or is current with regard to any lease obligations with respect
to, any Transferred Equipment and has maintained such Transferred Equipment in
all material respects in accordance with manufacturer's specifications.

SECTION 6.2       THIRD PARTY CONTRACTS

         (a) Schedule F will provide for the treatment of all Third Party
Contracts, as follows: (i) all or certain of the Third Party Contracts may be
assigned by Zale to ACS, (ii) all or certain of the Third Party Contracts may be
retained by Zale, (iii) any required Third Party Consents (as defined below)
will be obtained by Zale, ACS or both, as specified in the Schedule, and (iv)
the respective financial, operational and other obligations of the Parties with
respect to the Third Party Contracts will be set forth in the Schedule.

         (b) If any required Third Party Consent cannot be reasonably obtained,
ACS will identify and adopt, at Zale's expense and subject to Zale's prior
approval, such alternative approaches as are necessary to provide the Services
without such Third Party Consent.

         (c) Subject to obtaining any required Third Party Consents, Zale will
grant to ACS the same rights of access to, and use of, the Third Party Contracts
used by Zale. If the scope of Zale's right of access to, and use of, any Third
Party Software is not as extensive as required by ACS to provide the Services to
any Affiliate or other entity that would be the recipient of the Services under
this Agreement, Zale will obtain such rights of access and use necessary to
allow ACS to utilize such Zale Third Party Software to provide such Services to
the Affiliate or other entity under this Agreement.

         (d) The term "Third Party Consent" shall mean any consent required from
a third party in order for a party to use, access, or assign a Third Party
Contract or as otherwise required to effectuate the transactions contemplated by
this Master Agreement. Payment by ACS or Zale of such transfer, upgrade and
other fees necessary to obtain any Third Party Consents with respect to Third
Party Contracts is specified in the applicable sections of this Agreement.

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            SECTION 7 -- INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS

SECTION 7.1       ZALE SOFTWARE

         Schedule F-5 will identify the Zale Software, if any, that ACS is
authorized to access to perform the Services and specify the rights of ACS to
use the Zale Software.

SECTION 7.2       ACS PROPRIETARY SOFTWARE

         Schedule F-5 will identify any ACS Proprietary Software that will be
used to provide the Services. ACS will install, operate and maintain any ACS
Proprietary Software needed to provide the Services. As of the Effective Date,
ACS grants to Zale, to the extent necessary for Zale to receive the Services
from ACS, a revocable, worldwide, royalty free, nonexclusive license during the
Term to use ACS Proprietary Software for the sole benefit of Zale. Except for
the foregoing license, ACS retains all right, title and interest in and to the
ACS Proprietary Software.

         In the event that Zale assumes the Services at termination, ACS will
grant to Zale, solely for the benefit of Zale, a license to use the ACS
Proprietary Software for the sole purpose of continuing the Services, at the
then-current rates for similarly situated former customers, and as governed by
the Confidential Information provisions of Section 8 of this Agreement. With
regard to any ACS Third-Party Software licensed to ACS and used by ACS to
provide the Services, ACS will use commercially reasonable efforts to assist
Zale to obtain its own license for such software as required to provide the
Services.

SECTION 7.3       THIRD PARTY SOFTWARE

         Schedule F-5 will identify any Third Party Software required to perform
the Services and specify the party which has operational and financial
responsibility related to such Third Party Software, including the obligation to
maintain licenses for Third Party Software Licenses and upgrade, enhance, and
implement new versions of Third Party Software.

        (a) ACS THIRD PARTY SOFTWARE. Schedule F-5 sets forth a complete list of
all ACS Third Party Software that will be used by ACS to perform the Services as
of the Effective Date. ACS will update Schedule F-5, and provide such updates to
Zale, as it modifies, supplements, or changes such ACS Third Party Software from
time to time. All such ACS Third Party Software other than the ACS Third Party
Software identified on Schedule F-5 as generally available commercial software
will be deemed "CRITICAL ACS THIRD PARTY SOFTWARE" unless otherwise agreed by
the Parties. ACS will inform Zale of the existence and ownership of, and the
extent of ACS' rights to, all such Critical ACS Third Party Software prior to
using such software in connection with the Services. ACS will use commercially
reasonable efforts to assist Zale to obtain a license to use (and permit third
parties to use solely on its behalf) such Critical ACS Third Party Software and
all available, relevant documentation (in source and object code form) effective
upon the expiration or termination of this Agreement and upon the third-party
vendor's standard terms and conditions.

         (b) If, after exhausting the measures described in Section 7.3(a)
above, ACS is unable to obtain the license (or the agreement to grant a license)
described in paragraph (a) above, ACS will not use any such Critical
ACS-Licensed Software to provide the Services except as follows:

                  (i) Prior to introducing such proposed Critical ACS Third
Party Software, ACS will notify Zale of its inability to obtain for Zale such a
license or agreement and the cost and viability of any other software that can
perform the requisite functions and with respect to which ACS has the ability to

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grant or transfer such a license or agreement. Such notice will contain the
proposed Critical ACS Third Party Software vendor's then-current terms and
conditions, if any, for making the software available to Zale upon expiration or
termination of this Agreement.

                  (ii) With Zale's prior approval, ACS may then introduce such
Critical ACS Third Party Software for use in providing the Services.

                  (iii) If Zale rejects the proposed Critical ACS Third Party
Software and instead decides to investigate an alternative to the proposed
Critical ACS Third Party Software, then ACS and Zale will begin this same
process with respect to such alternative and pursue obtaining the license rights
for Zale as described in Section 7.3(a).

         (c) ZALE THIRD PARTY SOFTWARE. Schedule F-5 sets forth certain Zale
Third Party Software, which may include tools, data, databases and methodologies
licensed by Zale, (i) with respect to which Zale will retain responsibility and
(ii) to which ACS will require access in order to perform under this Agreement.
Such items are collectively referred to as "ZALE THIRD PARTY SOFTWARE". Zale
Third Party Software will include any other subsequently identified third-party
software, tools, data, databases and methodologies licensed by Zale, access to
which will be provided to ACS to perform under this Agreement. As between the
Parties, Zale will be the sole and exclusive owner of the rights to the Zale
Third Party Software. ACS will access, use, copy, modify and enhance the Zale
Third Party Software (i) solely as needed to perform under this Agreement, (ii)
solely during the Agreement Term and (iii) in compliance with any applicable use
restrictions and applicable license terms and conditions that are identified in
writing to ACS. For any Required Consent or other permission required to allow
ACS to access or use the Zale Third Party Software, Zale shall have
administrative responsibility to obtain such permission or consent, with the
reasonable assistance of ACS if necessary, and Zale shall pay all fees, costs,
and other expenses required to obtain such consent or permission

SECTION 7.4       NON-INFRINGEMENT

         ACS will perform its obligations under this Master Agreement in a
manner that does not infringe or constitute an infringement or misappropriation
of any patent, copyright, trademark, trade secret or other proprietary rights of
any third party.

                          SECTION 8 -- CONFIDENTIALITY

SECTION 8.1       DEFINITIONS

         (a) "Disclosing Party" means the party furnishing Confidential
Information and "Receiving Party" means the party receiving the Confidential
Information disclosed by the Disclosing Party.

         (b) "Confidential Information" means (i) the following information,
with or without being designated as confidential: ACS Software, Zale Data, Zale
Software, all notes, schedules, summaries, charts, architectural drawings,
network diagrams and other information which is derived or otherwise sourced
from the Confidential Information, any information identifying the Disclosing
Party's clients or suppliers, and the terms of this Master Agreement, and (ii)
the following information if designated as confidential:

                           (A) information relating to the Disclosing Party's
software or hardware products or services, or to its research and development
projects or plans;

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<PAGE>

                           (B) information relating to the Disclosing Party's
methodologies, processes, techniques and business practices; and

                           (C) information relating to the Disclosing Party's
business, policies, strategies, operations, finances, plans or opportunities.

                  Information disclosed orally shall be deemed "designated" as
confidential unless it falls into one of the categories listed below.
Notwithstanding the foregoing, Confidential Information does not include
information which the Receiving Party can establish:

                           (A) has become generally available to the public or
commonly known in either party's business other than as a result of a breach by
the Receiving Party of any obligation to the Disclosing Party;

                           (B) was known to the Receiving Party prior to
disclosure to the Receiving Party by the Disclosing Party by reason other than
having been previously disclosed in confidence to the Receiving Party;

                           (C) was disclosed to the Receiving Party on a
non-confidential basis by a third party who did not owe an obligation of
confidence to the Disclosing party with respect to the disclosed information; or

                           (D) was independently developed by the Receiving
Party without any reference to any part of the Confidential Information.

SECTION 8.2       RIGHTS, RESTRICTIONS AND OBLIGATIONS OF THE RECEIVING PARTY

         (a)      During the Term, the Receiving Party may:

                  (i) disclose Confidential Information received from the
Disclosing Party only to its subcontractors, agents, representatives, advisors,
employees, officers and directors and Affiliates who have a need to know such
information exclusively for the purpose of executing its obligations or
exercising its rights under this Master Agreement and who are required to abide
by the terms of this Agreement applicable to the Confidential Information;

                  (ii) reproduce the Confidential Information received from the
Disclosing Party only as required to execute its obligations or exercise its
rights under this Master Agreement; and

                  (iii) disclose Confidential Information as required by law,
provided the Receiving Party gives the Disclosing Party prompt notice prior to
such disclosure to allow the Disclosing Party to make a reasonable effort to
obtain a protective order or otherwise protect the confidentiality of such
information.

         (b) Except as otherwise specifically provided in this Master Agreement,
the Receiving Party will not during the Term and after expiration or earlier
termination hereof:

                  (i) disclose, in whole or in part, any Confidential
Information; or

                  (ii) sell, rent, lease, transfer, encumber, pledge, reproduce,
publish, transmit, translate, modify, reverse engineer, compile, disassemble or
otherwise use the Confidential Information in whole or in part.

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<PAGE>

         (c) The Receiving Party will keep the Confidential Information strictly
confidential, exercising no less than the same care in preventing unauthorized
disclosure or use of the Confidential Information that it takes to protect its
own information of a similar nature, but in no event less than reasonable care.
Reasonable care includes, without limiting the generality of the foregoing:

                  (i) informing its subcontractors, agents, representatives,
advisors, directors, officers, employees and Affiliates and, where applicable,
their directors, officers and employees, of the confidential nature of the
Confidential Information and the terms of this Master Agreement, directing them
to comply with these terms, and obtaining their written acknowledgment that they
have been so informed and directed, and their written undertaking to abide by
these terms; and

                  (ii) notifying the Disclosing Party immediately upon discovery
of any loss, unauthorized disclosure or use of Confidential Information, or any
other breach of this Section by the Receiving Party, or any breach of or
intrusion into the Receiving Party's security systems and assisting the
Disclosing Party in every commercially reasonable way to help the Disclosing
Party regain possession of any and all Confidential Information disclosed in
breach hereof and to prevent further unauthorized disclosure or use.

         (d)      The Receiving Party acknowledges that:

                  (i) the Disclosing Party possesses and will continue to
possess Confidential Information that has been created, discovered or developed
by or on behalf of the Disclosing Party, or otherwise provided to the Disclosing
Party by third parties, which information has commercial value and is not in the
public domain;

                  (ii) unauthorized use or disclosure of such Confidential
Information is likely to cause injury not readily measurable in monetary
damages, and therefore irreparable;

                  (iii) in the event of an unauthorized use or disclosure of
Confidential Information, the Disclosing Party will be entitled, without waiving
any other rights or remedies, to such injunctive or equitable relief as may be
deemed proper by a court of competent jurisdiction;

                  (iv) subject to the rights expressly granted to the Receiving
Party in this Master Agreement, the Disclosing Party and its licensors retain
all right, title and interest in and to its Confidential Information, regardless
of whether provided by or on behalf of the Disclosing Party or created by the
Receiving Party; and

                  (v) any disclosure by the subcontractors, agents,
representatives, advisors, directors, officers and employees and Affiliates of
the Receiving Party and, where applicable, their directors, officers and
employees will be deemed to be disclosure by the Receiving Party and the
Receiving Party will be liable for any such disclosure as if the Receiving Party
had disclosed the Confidential Information.

SECTION 8.3        RETURN OF DISCLOSING PARTY INFORMATION; RIGHT TO REVIEW

         (a) As soon as practicable upon the Disclosing Party's request, and at
the expiration or earlier termination of this Master Agreement, the Receiving
Party will:

                  (i) return all Confidential Information, including, without
limitation, all originals, hard copies, reproductions and summaries of
Confidential Information; and

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                  (ii) if Confidential Information is in a form that is
impractical to return, destroy all copies of Confidential Information in its
possession, power or control, which are present on magnetic media, optical disk,
volatile memory or other storage device, in a manner that assures the
Confidential Information is rendered unrecoverable.

                  Upon completion of those tasks, an officer of the Receiving
Party will provide written confirmation to the Disclosing Party that the
requirements of this Section have been satisfied.

         (b) The Disclosing party may visit the Receiving Party's premises, upon
reasonable prior notice and during normal business hours, to review the
Receiving Party's compliance with the terms of this Section.

SECTION 8.4       OWNERSHIP OF ZALE DATA

         All Zale Data will remain the property of Zale. In addition to being
protected as Confidential Information pursuant to the foregoing paragraphs of
this Section 8, the Zale Data will not be (i) used by ACS other than in
connection with providing the Services, (ii) disclosed, sold, assigned, leased
or otherwise provided to third parties by ACS, or (iii) commercially exploited
by or on behalf of ACS, its employees or agents.

SECTION 8.5       RETURN OF ZALE DATA

         ACS will upon (i) request by Zale at any time, and (ii) the cessation
of all Termination/Expiration Assistance, promptly return to Zale, in the format
and on the media in use as of the date of request, all or any requested portion
of the Zale Data. Any archival tapes containing any Zale Data will be destroyed
in accordance with the terms of Section 8.3 (a) (ii).

         Further, ACS agrees that upon Zale's written request, ACS shall, within
twenty-four hours, or if twenty-four hours is not reasonably practicable, as
soon as is reasonably practicable, provide Zale with a copy of its business
critical data (as reasonably defined by Zale) and shall provide any other Zale
Data promptly using ACS' best professional efforts and in the sequence requested
by Zale. Data provided pursuant to this paragraph shall be provided in media as
Zale directs. Subject to the foregoing, unless furnished or paid for by Zale,
the actual media on which Zale Data is stored, after the complete deletion of
Zale Data or Confidential Information, is and shall remain the property of ACS.

            SECTION 9 -- ACCOUNT MANAGEMENT/PERSONNEL/CHANGE CONTROL

SECTION 9.1       ACCOUNT MANAGERS

         (a) ACS and Zale each will appoint an individual with overall program
management responsibility for monitoring the performance of Services and
addressing performance deficiencies under this Agreement (the "Account
Manager(s)"). Subject to and in accordance with the terms and requirements of
this Agreement, the Account Managers will meet upon the request of either party
to:

                  (i) ensure that the Service Levels are met, and in the event
of deficiencies not resolved by the personnel directly involved in the
preparation and execution of the subject task, develop and implement problem
recovery plans and solutions;

                  (ii) review ACS' performance, coordinate the provision of
Services to Zale and discuss future Zale requirements;

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                  (iii) serve as the principal interface between Zale and ACS
with respect to all issues relating to the Services;

                  (iv) review the parties' responsibilities and any failure by
either party to perform any such responsibilities; and

                  (v) discuss and attempt to resolve, if applicable, any other
matters relating to the Services that may arise from time to time.

         (b) To the extent that the Account Managers are unable to resolve any
issue, each of them will refer that issue to a person at the appropriate level
of ACS or Zale management necessary to resolve the issue, who will use
reasonable efforts to promptly resolve the issue.

SECTION 9.2       KEY PERSONNEL

         Upon entering into this Agreement, the Parties may agree that certain
personnel will be defined as either "Key ACS Personnel", "Key Transferred
Employees" or "Key Zale Personnel". Such individuals will be identified by job
description and the parties may establish certain criteria relative to the
transfer or redeployment of such individuals within each Party's respective
organization. All special designations of any "Key Personnel" (both of ACS and
Zale) and any agreed upon parameters surrounding their activities in support of
the transactions contemplated by this Master Agreement will be specified
Schedule E.

SECTION 9.3       TECHNICAL CHANGE CONTROL

         ACS will implement any changes in the technical environment and systems
used to provide the Services in accordance with Schedule A and any applicable
procedures manual (the "Technical Change Control Procedures"). Furthermore, ACS
will not make any change that materially affects the functions, controls, or
performance of, or decreases the operational efficiency of, the Services,
without first obtaining Zale's approval; provided that, if such proposed action
or decision is one that, if not permitted, would cause ACS not to be able to
meet an applicable Service Level, Zale's refusal to grant such request will be
considered an Excused Performance Problem. Notwithstanding the foregoing, ACS
may make temporary changes required by an emergency but shall, if reasonably
practicable, contact appropriate Zale personnel to obtain prior approval. ACS
will promptly notify Zale of any emergency changes implemented without prior
Zale approval, and will provide the documentation required to meet Zale's
Technical Change Control Procedures, to facilitate approvals and any further
actions required. In all cases, ACS shall provide Zale with documentation to
describe the Technical Change Control Procedure.

SECTION 9.4     CONTRACT CHANGE CONTROL

         (a) From time to time during the Term, Zale or ACS may propose changes
in or additions to the Services or other aspects of this Agreement. Subject to
clause (c) below, all such changes shall be implemented pursuant to the
procedures set forth in this Section (the "Change Control Procedures").

         (b) Any change to this Master Agreement must be approved by the Account
Manager of each Party and memorialized in a written amendment executed by both
parties that specifically identifies this Master Agreement, the section of this
Agreement that is the subject of the amendment, and the new provision.

         (c) If Zale desires to propose a change in or addition to the Services,
it shall deliver a written notice to the ACS Account Manager describing the
proposal. ACS shall respond to such proposal by preparing a written document
("Change Control Document"), indicating: (i) the effect of the proposal, if

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any, on the amounts payable by Zale; (ii) the possible effect of the proposal,
if any, on Service Levels; and (iii) the anticipated time schedule for
implementing the proposal. If ACS desires to propose a change in or addition to
the Services or other aspects of this Agreement, it may do so by preparing and
delivering a Change Control Document to the Zale Account Manager.

         (d) Routine changes made in the ordinary course of ACS' provision of
the Services that are performed within the then-existing resources used to
provide the Services and that do not affect Service Levels (such as changes to
operating procedures, schedules and Equipment configurations) may be made by ACS
without the necessity of the above, subject to Zale's prior approval, which
shall not be unreasonably withheld, when such changes are to Zale equipment,
procedures or resources.

SECTION 9.5       EMPLOYEE COMPENSATION

         All ACS personnel assigned to the Zale account by ACS (or its permitted
subcontractors) will be and remain employees of ACS (or such permitted
subcontractors), and ACS (or such permitted subcontractors) will provide for and
pay the compensation and other benefits of such personnel, including salary,
health, accident and workers' compensation benefits and all taxes and
contributions that an employer is required to pay with respect to the employment
of employees.

                              SECTION 10 -- AUDITS

         ACS will maintain records and supporting documentation of all financial
and non-financial transactions under this Master Agreement sufficient to permit
an audit thereof in accordance with this Section 10. At its expense, ACS will
provide to Zale, Zale's internal and external auditors, inspectors, regulators
and such other representatives as Zale may designate from time to time
reasonable access at reasonable times and after reasonable notice (which, unless
circumstances reasonably preclude such notice, would be no less than five (5)
Business Days) to (i) the parts of any ACS facility at which ACS is providing
the Services, (ii) ACS personnel providing the Services, and (iii) all relevant
data and records relating to the Services, for the purpose of performing
financial, technical and other audits and inspections of ACS' provision of the
services and of Zale and its business, to verify the integrity of Zale Data and
the adequate protection of Zale's Confidential Information and to examine ACS'
Charges under this Master Agreement. Auditors shall be subject to ACS
confidentiality and security requirements and shall not be ACS Competitors. Such
audits shall be conducted in a manner that does not unreasonably interfere with
ACS' operations. In no event shall auditors have access to ACS cost information.
Other than audits conducted or required by regulators, Zale will limit its
audits to one (1) in any annual period. No later than December 31 of each
calendar year throughout the Term of this Agreement, ACS will deliver to Zale
reports from ACS' independent auditors of examinations in accordance with SAS
No. 70, Type II, of the controls, procedures, and systems of ACS and its
subcontractors related to the Services. At Zale's request and expense, ACS will
expand the SAS 70 report to address Zale's particular requirements, to the
extent that the independent auditors are able to address such requirements. ACS
shall use commercially reasonable efforts to remediate any deficiencies that are
individually or in the aggregate material, identified by and consistent with the
SAS 70 audits. As requested by Zale, but no more than once during each year of
the Agreement, ACS shall provide written confirmation that there have been no
significant changes in its controls, procedures and systems related to the
Services during the three month period following the preceding SAS 70 report.
This Section will survive the expiration or earlier termination of the Term and
will continue to the third (3rd) anniversary of the expiration or termination of
the Term.

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                      SECTION 11 -- INSURANCE; RISK OF LOSS

SECTION 11.1      REQUIRED INSURANCE COVERAGE

         Throughout the Term, ACS will maintain in force, at minimum, the
insurance coverage described below.

         (a) Commercial General Liability Insurance with a minimum combined
single limit of $1,000,000 per occurrence, $2,000,000 in the aggregate;

         (b) Umbrella Liability Insurance with a minimum combined single limit
of $15,000,000 per occurrence and in the aggregate;

         (c) Worker's Compensation Insurance or any alternative plan of benefits
as permitted or as required by law, in such amount as required by law;

         (d) Employee Dishonesty and Computer Fraud Insurance for loss arising
out of or in connection with fraudulent or dishonest acts committed by the
employees of ACS in a minimum amount of $5,000,000 per occurrence;

         (e) Errors and Omissions Insurance with a combined single limit of
$20,000,000 per occurrence and in the aggregate; and

         (f) Property insurance in the amount of the replacement value of all
Zale Equipment or other material in ACS' possession or under its control, and
ACS Equipment or other material that is used primarily in providing the Services
under this Agreement. Zale shall provide ACS with the replacement cost value of
all Zale equipment or other material placed under the control of ACS, however,
if Zale does not provide such replacement cost value, ACS shall estimate the
replacement cost value and shall not be responsible for any losses that exceed
the estimated amount.

SECTION 11.2      RISK OF LOSS AND GENERAL INSURANCE REQUIREMENT

         As of the Effective Date, each party will be responsible for risk of
loss of, and damage to, any Equipment, Software or other materials in its
possession or under its control. On or before the Effective Date and each year
thereafter on the anniversary thereof, ACS shall provide Zale with certificates
of insurance. Each insurance certificate shall require that the insurance
company shall provide Zale with at least 30 days prior written notice of any
material change, cancellation or non-renewal of any coverage. ACS shall require
its insurance carriers to waive the right of subrogation against Zale.

                              SECTION 12 -- CHARGES

SECTION 12.1      CHARGES

         Subject to the other provisions of this Master Agreement, Zale will pay
to ACS the amounts set forth in Schedule B as payment in full for the Services
performed by ACS during the Term (the "Charges").

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SECTION 12.2      TAXES

         (a) Each party will pay any real property taxes or personal property
taxes on property it either owns or leases from a third party. Taxes payable on
any Transferred Equipment will be prorated as of the date of transfer based on
the number of days in the applicable tax period, with Zale paying the taxes
allocable to the period before such transfer date and ACS paying the taxes
allocable to the period on and after such date. An estimated proration of such
taxes shall be made as of the transfer date with an appropriate adjustment made
at the time the actual taxes are determined.

         (b) ACS will pay when due any sales, use, excise, value-added,
services, consumption, and other taxes and duties imposed on any goods and
services acquired, used or consumed by ACS in connection with the Services
(including any taxes applicable to the acquisition of the Transferred Equipment,
but excluding any taxes applicable to pass-through expenses).

         (c) Zale will pay when due any sales, use, excise, value-added,
services, consumption, or other tax imposed by any taxing jurisdiction on the
provision of the Services or any component thereof.

         (d) The parties will cooperate in attempting to reduce the amount of
any tax to the maximum extent feasible.

                       SECTION 13 -- INVOICING AND PAYMENT

SECTION 13.1      INVOICES AND PAYMENT

         ACS will issue to Zale, on a monthly basis, invoices for all Charges
and other amounts due with respect to Services and Additional Services, if any,
provided during the prior month. Base Charges shall be billed in advance on the
last day of the prior month, and deviations from the base Charges (i.e.,
ARCs/RRCs) shall be billed or credited in arrears. Each invoice will separately
state Charges for each category of Service, reimbursable expenses and taxes
payable. Each invoice delivered pursuant to this Section 13.1 will be due and
payable no later than thirty (30) days after the invoice date, unless subject to
Zale's good faith dispute. If the invoice is received more than two business
days following the invoice date, the invoice will be due and payable no later
than thirty (30) days after it is received.

SECTION 13.2      OUT OF POCKET EXPENSES

         Zale will reimburse ACS, within 30 days of receipt of invoice, for
reasonable, documented and actual out-of-pocket expenses incurred by ACS with
Zale's prior written approval for equipment, materials, supplies, or other
Services provided under this Agreement but not otherwise charged or covered
hereunder. Out-of-pocket expenses also include related taxes, duties, shipping,
and insurance.

SECTION 13.3      PRORATION

         All periodic charges under this Master Agreement (excluding charges
based upon actual usage or consumption of Services) will be computed on a
calendar month basis and will be prorated for any partial month.

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SECTION 13.4      LATE PAYMENT AND DISPUTED AMOUNTS

         Any amount due ACS under this Master Agreement that is not paid prior
to or on the date due will thereafter bear interest until paid at a rate that is
the lesser of (i) six percent (6 %) per annum, or (ii) the maximum rate of
interest allowed by applicable law. Zale shall pay all undisputed amounts in the
time specified in Section 13.1. Zale shall provide the reasons for withholding
any disputed amount within 30 days of the invoice date.

             SECTION 14 -- REPRESENTATIONS, WARRANTIES AND COVENANTS

SECTION 14.1      MUTUAL REPRESENTATION AND WARRANTY

         Each party represents, warrants and covenants that:

         (a) It is a corporation, duly incorporated, validly existing and in
good standing under the laws of the state in which it is incorporated, and is in
good standing in each other jurisdiction where the failure to be in good
standing would have a material adverse effect on its business or its ability to
perform its obligations under this Master Agreement.

         (b) It has all necessary corporate power and authority to own, lease
and operate its assets and to carry on its business as presently conducted and
as it will be conducted pursuant to this Master Agreement.

         (c) It has all necessary corporate power and authority to enter into
this Master Agreement and to perform its obligations hereunder, and the
execution and delivery of this Master Agreement and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
corporate actions on its part.

         (d) This Master Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against it in connection with its terms.

         (e) This Agreement does not contravene any provision set forth in any
contract, agreement, or order to which either party is subject.

         (f) It is either the owner of, or authorized to use, any and all
Software provided by such party, and, in the case of Zale, including the ability
to use such Software on behalf of Affiliates and third party service providers.
As to any Software that a party does not own but is authorized to use, such
party shall advise the other party as to the ownership and extent of its rights
with regard to such Software, including the ability to use such Software on
behalf of Affiliates, divested entities and other third party service providers,
and to the extent any limitation in such rights would impair ACS' performance of
its obligations or Zale's receipt of the services under this Agreement.

         (g) It shall perform its responsibilities under this Agreement in a
manner that does not infringe, or constitute an infringement or misappropriation
of, any patent, copyright, trademark, trade secret or other intellectual
property rights of any third party.

         (h) It shall perform its responsibilities under this Agreement in
compliance with all applicable laws related to the performance of the Services,
in the case of ACS, or the receipt of the Services, in the case of Zale, or to
the performance of its other obligations hereunder.

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                  (i) Zale and ACS shall not export or re-export any personal
computer system, part, technical data or sub-elements purchased in the United
States for use under this Agreement, directly or indirectly, to any destinations
or persons prohibited by the United States Government, and, notwithstanding any
other term, nothing in this Agreement shall be construed to call for such
export. The term 'technical data' in this context, means such data as is defined
as technical data by applicable United States export regulations. Zale
represents that all Software, Equipment or technical information provided by
Zale to ACS under this Agreement shall be free from restriction, regulation or
special procedure regarding export from the country in which such Software is
developed and from the United States to any other countries, except Embargoed
Countries.

                           (A) Where appropriate, Zale shall facilitate any
clearances required for using Zale Proprietary Software, Zale Third Party
Software, Equipment or technical information outside of the countries in which
such Software, Equipment and technical information is developed and/or the
United States, as appropriate. Zale shall provide ACS with all ECCN numbers for
such Software, Equipment, and technical information, upon ACS' request, if ACS
is required to obtain clearance before such Software, Equipment, and/or
technical information can be used to provide the Services.

                           (B) In the event any Software for which a party is
operationally responsible hereunder shall become subject to any export, import,
re-export or similar restriction, regulation or special procedure, whether due
to changes in the applicable law or due to changes in or upgrades to such
Software such party shall (i) notify the other party of any such restrictions,
regulations or special procedures of which it becomes aware, and (ii) procure,
where legally possible, any such licenses, permits, registrations or other
permission necessary to export, import or re-export such Software as may be
reasonably necessary in connection with the Services, except that neither party
shall be required to obtain licenses for export of such Software to any of the
Embargoed Countries.

                           (C) Each party shall provide all reasonable
assistance to the other party, and shall supply all necessary information to the
other party in order for such other party to procure necessary licenses and
comply with all export control laws and the provisions of this paragraph.

SECTION 14.2      ADDITIONAL COVENANTS AND WARRANTIES

         (a) Performance. ACS warrants that all Services will be performed in a
good and workmanlike manner.

         (b) Viruses. Each Party will use commercially reasonable efforts,
including using industry standard virus protection software and other customary
procedures to screen any software provided or made available by it to the other
Party under this Agreement or other software (including email) or Equipment
under its control and used to perform the Services, to avoid introducing any
"virus", "Trojan horse", "worm", or other disabling or destructive code that is
intended to materially disrupt the proper operation of the systems. If such code
is found to have been introduced by ACS into such systems, then, without
limiting Zale's other remedies under this Agreement, ACS will use commercially
reasonable efforts to promptly mitigate, and to assist Zale in mitigating, the
effects of the virus, if any, on that portion of Zale's information technology
environment.

         (c) Training of Employees. ACS personnel will be provided with
appropriate training with respect to content of and compliance with legal or
regulatory requirements and, to the extent revealed in each Benchmarking under
Section 5.4, industry best practices, applicable to the Services and Service
Levels required by this Agreement to the extent applicable to their tasks.

                                       23

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         (d) Disabling Codes. ACS covenants that it will not, without Zale's
consent, knowingly insert, or knowingly allow to be inserted, into the software
used to provide the Services any code or other device that is designed to
disable, damage, erase, delay, bypass Zale security or otherwise shut down all
or any portion of the Services or the Equipment, software or data used in
providing the Services.

SECTION 14.3      DISCLAIMER

EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES AND EXPLICITLY DISCLAIMS ALL WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.

                          SECTION 15 -- INDEMNIFICATION

SECTION 15.1      INDEMNITIES

Each party will indemnify, defend and hold harmless the other party, its
Affiliates and their respective officers, directors, employees, agents,
successors and assigns, from and against all Losses arising from, in connection
with or relating to, third party allegations for any of the following: (i) death
of or injury to any agent, employee, invitee, visitor or other person to the
extent caused by the act or omission of the indemnitor, its Affiliates, or their
respective agents, employees or contractors; (ii) damage to, or loss or
destruction of any real or tangible personal property or Zale Data, to the
extent caused by the act or omission of the indemnitor, its Affiliates, or their
respective agents, employees or contractors; (iii) indemnitor's breach of any
representation, warranty or covenant it has made in Section 14 (Representations,
Warranties and Covenants); (iv) indemnitor's willful or fraudulent misconduct or
that of its employees, contractors or agents; (v) breach of indemnitor's
obligations with respect to Confidential Information; (vi) indemnitor's failure
to perform any obligations required to be performed by it under any of the Third
Party Contracts, Equipment leases prior to the Effective Date (in the case of
Zale) or thereafter (in the case of ACS) to the extent such party has
operational or financial responsibility therefore; (vii) liability accruing in
connection with taxes, together with interest and penalties, that are the
responsibility of such party hereunder; and (viii) claims initiated by
Affiliates, employees, agents and contractors of a party or its Affiliates, or
other persons or entities asserting rights under this Agreement to the extent
such claims are based on the indemnitor's act or omission. Zale will indemnify,
defend and hold harmless ACS, its Affiliates and its officers, directors,
employees, agents, successors and assigns, from and against all Losses arising
from, in connection with or relating to, third party allegations for any of the
following: (i) any claims by any Zale employees who may be transferred to ACS
under this Agreement for any action or inaction of Zale prior to such transfer
and other claims related to the employment of individuals; and (ii) any claim
relating to the Transferred Equipment accruing prior to Zale's transfer of such
assets to ACS, including but not limited to liens or encumbrances or adverse
claims to title, and (iii) any breach by Zale of Section 14.1 (f) or 14.1 (i).
ACS will indemnify, defend and hold harmless Zale, its Affiliates and its
officers, directors, employees, agents, successors and assigns, from and against
all Losses arising from, in connection with or relating to third party
allegations for any of the following (i) any claims by any Zale employees who
may be transferred to ACS under this Agreement for any action or inaction of ACS
after to such transfer and other claims related to the employment of
individuals; and (ii) any claim relating to the Transferred Equipment accruing
after the transfer of such assets to ACS, including but not limited to liens or
encumbrances or adverse claims to title not subject to Zale's previous
ownership; and (iii) any breach by ACS of Section 14.1 (f) or 14.1 (i)

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SECTION 15.2      INTELLECTUAL PROPERTY INDEMNIFICATION

         Each party will indemnify, defend and hold harmless the other party,
the other party's Affiliates and their respective officers, directors,
employees, agents, successors and assigns, from and against all Losses arising
from and to the extent that the Zale Proprietary Software, in the case of Zale,
and the ACS Proprietary Software in the case of ACS, or the Confidential
Information provided by the indemnitor, its affiliates or any party thereof or
related thereto, (a) infringes a copyright protected under applicable law, (b)
infringes a patent existing under applicable law, (c) constitutes an unlawful
disclosure, use or misappropriation of another party's trade secret, or (d)
otherwise infringes upon a third party's intellectual property rights. If any
Party's Proprietary Software or Confidential Information becomes the subject of
a claim under this Section, or in the indemnitor's opinion is likely to become
the subject of such a claim, then the indemnitor may, at its option, (a) modify
the Proprietary Software or Confidential Information to make it non-infringing
or otherwise cure any claimed misuse, provided such modification does not
adversely affect the functionality of the Proprietary Software or Confidential
Information, or (b) procure for the indemnitee the right to continue using the
Proprietary Software or Confidential Information, or (c) replace the Proprietary
Software with substantially equivalent Software that is non-infringing or that
is free of claimed misuse. Any costs associated with implementing any of the
above alternatives will be borne by the indemnitor. With respect to any Software
provided or developed by a party pursuant to this Agreement, such party will
have no liability to the other party under this Agreement (a) to the extent that
any claim of infringement is based upon the use of the Software in connection or
in combination with equipment, devices or Software not supplied by that party or
used in a manner for which the Software was not designed, (b) for infringements
that arise as a result of specifications presented by the other party, (c) to
the extent that any claim of infringement is based upon the maintenance,
modifications, updates, enhancements and improvements to the Software made by
any party other than the indemnitor; and (d) for infringements that arise as a
result of the failure of the indemnitee to use corrections or modifications
provided by the indemnitor offering equivalent features and functionality.

SECTION 15.3      INDEMNIFICATION PROCEDURES

         (a) Promptly after receipt by an indemnitee of any written claim or
notice of any action giving rise to a claim for indemnification by the
indemnitee, the indemnitee will so notify the indemnitor and will provide copies
of such claim or any documents relating to the action. No failure to so notify
an indemnitor will relieve the indemnitor of its obligations under this Master
Agreement except to the extent that the failure or delay is prejudicial. Within
thirty (30) days following receipt of such written notice, but in any event no
later than ten (10) days before the deadline for any responsive pleading, the
indemnitor will notify the indemnitee in writing (a "Notice of Assumption of
Defense") if the indemnitor elects to assume control of the defense and
settlement of such claim or action.

         (b) If the indemnitor delivers a Notice of Assumption of Defense with
respect to a claim within the required period, the indemnitor will have sole
control over the defense and settlement of such claim; provided, however, that
(i) the indemnitee will be entitled to participate in the defense of such claim
and to employ counsel at its own expense to assist in the handling of such claim
and (ii) the indemnitor will obtain the prior written approval of the indemnitee
before entering into any settlement of such claim incurring liability or an
admission of liability on the part of the indemnitee, or ceasing to defend
against such claim. After the indemnitor has delivered a timely Notice of
Assumption of Defense relating to any claim, the indemnitor will not be liable
to the indemnitee for any legal expenses incurred by such indemnitee in
connection with the defense of such claim; provided, that the indemnitor will
pay for separate counsel for the indemnitee to the extent that conflicts or
potential conflicts of interest between the Parties so require. In addition, the
indemnitor will not be required to indemnify the indemnitee for any amount paid
by such indemnitee in the settlement of any claim for which the indemnitor has
delivered a timely Notice of Assumption of Defense if such amount was agreed to
without

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prior written consent of the indemnitor, which will not be unreasonably withheld
or delayed in the case of monetary claims. An indemnitor may withhold consent to
settlement of claims of infringement affecting its proprietary rights in its
reasonable discretion. The parties shall cooperate with each other with respect
to any claim subject to indemnification at the expense of the indemnitor.

         (c) If the indemnitor does not deliver a Notice of Assumption of
Defense relating to a claim within the required notice period or ceases to
defend against such claim, the indemnitee will have the right to defend the
claim in such a manner as it may deem appropriate, at the sole cost and expense
of the indemnitor. The indemnitor will promptly reimburse the indemnitee for all
such costs and expenses upon written request therefor.

         (d) In the event that an indemnitor shall be obligated to indemnify an
indemnitee pursuant to any provision of this Agreement, the indemnitor shall,
upon payment of such indemnity in full, be subrogated to all rights of the
indemnitee with respect to the claims to which such indemnification relates.

                     SECTION 16 -- LIMITATIONS ON LIABILITY

SECTION 16.1      LIMIT ON TYPES OF DAMAGES RECOVERABLE

         (a) EXCEPT AS SET FORTH IN CLAUSE (b) BELOW, NEITHER PARTY SHALL BE
LIABLE FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, REGARDLESS OF
THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, AND EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

         (b) The above stated limitation will not apply with respect to any
claims arising out of or relating to (i) the willful or fraudulent misconduct of
a party, its employees, contractors or agents, (ii) a breach of a party's
obligations related to Confidential Information or any allegation of violation
of the United States Government export laws and regulations, as well as those of
any country in which Services are being provided under this Agreement, whether
prior to the Effective Date or at any time during the Term, Term Extension
Period, and Termination Assistance Period, caused by either Party or its
Affiliates, or any officer, director, employee, agent, successor, or assigns of
either Party or its Affiliates, (iii) an indemnitor's obligation to pay such
damages to the extent they are awarded by a court, and (iv) any Charges owed to
ACS or Service Level Credits or other amounts owed to Zale under this Agreement.

SECTION 16.2      LIMIT ON AMOUNT OF DIRECT DAMAGES RECOVERABLE

         Each party's cumulative liability to the other for any and all actions,
whether in contract or in tort, will not exceed an amount equal to the total
Charges payable to ACS for the Services provided for the twelve (12) months
immediately preceding the month in which the event giving rise to the liability
occurred (or, if the event giving rise to the liability occurs during the first
twelve (12) months after the Effective Date, the total Charges estimated to be
payable to ACS for such first twelve (12) months). This limitation will not
apply to Losses attributable to claims by or related to (i) an indemnitee
pursuant to Section 15 (Indemnification), (ii) the willful or fraudulent
misconduct of a party, its employees, contractors or agents, or (iii) a breach
of a party's obligations related to Confidential Information. Charges and other
fees and expenses due to ACS pursuant to this Master Agreement shall not be
considered damages for purposes of this Section 16.2.

SECTION 16.3      FORCE MAJEURE

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         (a) Neither party will be liable for any failure or delay in the
performance of its obligations under this Master Agreement to the extent such
failure is caused, directly or indirectly, without fault by such party, by:
fire, flood, earthquake, elements of nature or acts of God; third party labor
disruptions or strikes; acts of war, terrorism, riots, civil disorders,
rebellions or revolutions, quarantines, embargoes and other similar governmental
or third party action; or any other cause beyond the reasonable control of such
party. Events meeting the criteria set forth above are referred to collectively
as "Force Majeure Events."

         (b) Upon the occurrence of a Force Majeure Event, the non-performing
party will be excused from any further performance or observance of the affected
obligations for as long as such circumstances prevail and such party continues
to attempt to recommence performance or observance whenever and to whatever
extent reasonably possible without delay. Any party so delayed in its
performance will immediately notify the other by telephone or by the most timely
means otherwise available (to be confirmed in writing within three (3) Business
Days of the inception of such delay) and describe in reasonable detail the
circumstances causing such delay.

         (c) If a Force Majeure Event causes a material failure or delay in the
performance of any Services for more than 24 hours, Zale may, at its option,
procure such Services from an alternate source until ACS is again able to
reasonably demonstrate to Zale that it is able to provide such Services. All
payments to be made by Zale to ACS for the affected Services for such period
will be abated and ACS will not be entitled to any additional payments as a
result of the Force Majeure Event.

SECTION 16.4      ACTIONS OF OTHER PARTY

         Neither party will be liable for any failure or delay in the
performance of its obligations under this Master Agreement if and to the extent
such failure or delay is caused by the actions or omissions of the other party
or its employees, agents or contractors or breaches of this Master Agreement by
the other party provided that the party which is unable to perform has provided
the other party with reasonable notice of such non-performance and has used
commercially reasonable efforts to perform notwithstanding the actions,
omissions or breaches of the other party.

                            SECTION 17 -- TERMINATION

SECTION 17.1      TERMINATION FOR CAUSE

         (a) Zale may terminate this Agreement, or one or more categories of
Services, for cause:

                  (i) for a material breach of the agreed Services by ACS that
is not cured by ACS within thirty (30) days of the date on which Zale provides
written notice of such breach, in accordance with Section 19.7; or

                  (ii) for a material breach of the agreed Services by ACS or
for failure by ACS to meet the Service Levels or fulfill any other obligation
under this Agreement that results in Zale being unable to conduct its normal and
customary business functions and such condition persists for 48 hours (24 hours
during a Zale Freeze Period) and, further, ACS does not achieve recovery within
10 days of notice by Zale (4 days during a Zale Freeze Period). Notwithstanding
the termination for cause provision, ACS agrees that within three days following
such notice by Zale (24 hours during a Zale Freeze Period), ACS will cooperate
with, and reimburse Zale for all expenses reasonably related to third party
assistance in repairing or reinstating the affected Services or to provide
alternate mechanisms to support Zale in conducting its business until recovery
is achieved and transition back to the Services can be reasonably achieved. Such
efforts by ACS in no way relieve ACS of its recovery obligations nor do they
impact in

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any way Zale's right to terminate the Agreement for cause as defined herein.
Following recovery, ACS will cure the cause of its failure to provide the
Services as soon as reasonably possible using industry best practices.

         (b) Zale will exercise its termination option by delivering to ACS
written notice of such termination, identifying the scope of the termination and
the termination date.

         (c) ACS may terminate this Agreement, or one or more categories of
services, if Zale fails to pay undisputed amounts (including, without
limitation, amounts determined pursuant to Section 18 (Dispute Resolution) to be
owing to ACS) within 45 days of when they become due, and Zale fails to cure
such failure within fifteen (15) business days after receipt from ACS of written
notice from ACS.

SECTION 17.2      TERMINATION FOR CONVENIENCE

         (a) Zale may terminate for convenience this Master Agreement upon no
less than one hundred eighty (180) days notice. In connection with any such
termination, Zale will be liable to ACS for the Charges and other amounts
incurred through the date of termination plus the termination fees described in
Schedule B.

         (b) If a purported termination for cause by Zale under Section 17.1
(Termination for Cause) is determined pursuant to Section 18 (Dispute
Resolution) not to be a proper termination for cause, such termination will be
deemed a Termination for Convenience subject to this Section.

SECTION 17.3      TERMINATION UPON ACS CHANGE OF CONTROL

         In the event of a change in Control of ACS (or that portion of ACS
providing all or any material portion of the Services under this Agreement) or
the Entity that Controls ACS (if any), where such control is acquired, directly
or indirectly, in a single transaction or series of related transactions, or all
or substantially all of the assets of ACS (or that portion of ACS providing all
or any material portion of the Services under this Agreement) are acquired by
any entity, or ACS (or that portion of ACS providing all or any material portion
of the Services under this Agreement) is merged with or into another entity to
form a new entity, then at any time within twelve (12) months after the last to
occur of such events, Zale may at its option terminate the Term by giving ACS at
least one hundred eighty (180) days prior notice and designating a date upon
which such termination shall be effective. If Zale elects to terminate on this
basis, Zale shall pay the Charges and other amounts incurred through the date of
termination plus eighty percent (80%) of the applicable Termination for
Convenience fee as set forth in Schedule B.

SECTION 17.4      EFFECT OF TERMINATION

         Termination of this Master Agreement for any reason under this Section
will not affect (i) any liabilities or obligations of either party arising
before such termination or out of the events causing such termination, or (ii)
any damages or other remedies to which a party may be entitled under this Master
Agreement, at law or in equity, arising from any breaches of such liabilities or
obligations.

SECTION 17.5      TERMINATION/EXPIRATION ASSISTANCE

         Commencing six (6) months before the expiration of the Term or, if
applicable, upon delivery of a termination notice by Zale or ACS pursuant to
Section 17 (Termination), and continuing until the expiration of the Term or, if
applicable, the termination date and for twelve (12) months thereafter, ACS will
provide to Zale or Zale's designee the assistance reasonably requested by Zale
to enable the Services to continue without interruption and to facilitate the
orderly transfer of the Services to Zale or its

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designee. The termination assistance will be defined and mutually agreed by the
parties in writing, and Zale will pay for the termination assistance services in
accordance with the rate structure defined in Schedule B, in addition to any
one-time charges that may be imposed by any vendor or provider of software,
services, or other under a Third Party Contract. If termination is pursuant to
Section 17.1(c) (non-payment), Zale shall pay the estimated monthly Charges
associated with the termination assistance services in advance, subject to
monthly adjustments in order to reconcile estimated and actual Charges. As a
part of the termination assistance service, ACS shall provide Zale with complete
copies of all standards, manuals and procedures developed in accordance with
Section 3.3 of Schedule A, and ACS hereby grants Zale a non-exclusive, fully
paid-up, perpetual, and worldwide license to use such standards, manuals and
procedures for Zale's internal business use, including the right to modify any
of such standards, manuals and procedures, and hereby assigns to Zale all its
right, title and interest in any customized portion of any such standards,
manuals or procedures.

SECTION 17.6      THIRD PARTY CONTRACTS

         Upon expiration or earlier termination of this Agreement, ACS will, at
Zale's request and to the extent permitted by the applicable Third Party Service
Contract or Equipment lease and any applicable Third Party Consent, obtained at
the expense of Zale, (i) assign to Zale or its designee any Third Party Service
Contracts and Equipment leases and (ii) sell, at fair market value, the ACS
owned Equipment, used to provide Services to Zale on a dedicated basis. ACS will
use commercially reasonable efforts to assist Zale or its designee to obtain
required licenses to Third Party Software. In the case of Zale's Termination for
Convenience, or ACS' Termination for Cause, Zale shall reimburse ACS for any
prepayment made by ACS on Third Party Service Contracts or Equipment leases and
attributable to the period after any assignment, provided that such prepayments
do not exceed ten percent of the Termination for Convenience Fee that would be
payable in the month the Agreement is terminated.

SECTION 17.7      SUNSET MANAGEMENT

         During the last 90 days of ACS' operation of the Services under this
Agreement whether the Agreement is ending by termination or expiration, and
subject to Section 17.4, ACS shall perform according to the terms of this
Agreement and, in addition, shall comply with the terms of this Section.

              (a) ACS will not transfer any ACS Employees or subcontractors, at
the time assigned to work on Zale Services, to other assignments without
agreement from Zale which shall not be unreasonably withheld if ACS demonstrates
such transfer would not be to the detriment of Zale.

              (b) ACS will continue to issue Service Level Credits for failure
to meet the Service Levels defined in Schedule C.

              (c) ACS will cooperate with Zale for the orderly transition of
Software and the untangling of proprietary technology.

              (d) ACS will return Zale's materials in an orderly fashion.

              (e) ACS will cooperate with Zale and/or any third party designated
for conversion of all Services or any of them.

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              (f) With regard to the Software identified in Schedule F-5 as
owned/licensed by Zale, ACS will undertake commercially reasonable efforts to
ensure that software licenses assigned to ACS by Zale are eligible for transfer
back to Zale or reassigned as Zale designates.

              (g) ACS will use commercially reasonable efforts to support Zale's
transition and will, in any event, comply with the Termination/Expiration
Assistance services defined in Schedule A.

                        SECTION 18 -- DISPUTE RESOLUTION

SECTION 18.1      GENERAL

         Any dispute or controversy between the parties with respect to the
interpretation or application of any provision of this Master Agreement or the
performance by ACS or Zale of their respective obligations hereunder will be
resolved as provided in this Section.

SECTION 18.2      INFORMAL DISPUTE RESOLUTION

         The Parties may, by mutual agreement, attempt to resolve their dispute
informally in the following manner:

         (a) Either party will submit the dispute to one (1) of their respective
executives who has been chosen by that party to attempt to resolve such dispute,
who will meet as often as the parties reasonably deem necessary to gather and
analyze any information relevant to the resolution of the dispute. The
applicable executives will negotiate in good faith in an effort to resolve the
dispute.

         (b) During the course of negotiations, all reasonable requests made by
one party to the other for non-privileged information, reasonably related to the
dispute, will be honored in order that each of the parties may be fully advised
of the other's position.

         (c) Proposals and information exchanged during the informal proceedings
described in this Section between the parties will be privileged, confidential
and without prejudice to a party's legal position in any formal proceedings. All
such proposals and information, as well as any conduct during such proceedings,
will be considered settlement discussions and proposals, and will be
inadmissible in any subsequent proceedings.

SECTION 18.3      ARBITRATION

         (a) Except as set forth in clause (b) below, any controversy or claim
arising out of or relating to this Master Agreement, or any alleged breach
hereof, including any controversy regarding the arbitrability of any dispute,
will be settled at the request of either party by binding arbitration in Dallas,
Texas, before and in accordance with the then existing Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). In any dispute in
which the amount in controversy is less than Two Hundred Fifty Thousand Dollars
($250,000), there will be one (1) arbitrator agreed to by the parties or, if the
parties are unable to agree within fifteen (15) days after demand for
arbitration is made, selected in accordance with the Rules. In all other cases
there will be three (3) arbitrators, one (1) of whom will be selected by Zale
within fifteen (15) days after demand for arbitration is made, one (1) of whom
will be selected by ACS within fifteen (15) days after demand for arbitration is
made, and one (1) of whom will be selected by the two party-appointed
arbitrators within fifteen (15) days after their selection. If one or

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more arbitrator(s) is not selected within the time period stated in the
preceding sentence, such arbitrator(s) will be selected pursuant to the Rules.
Any arbitrator(s) proposed by the American Arbitration Association will have at
least five (5) years of experience in complex, commercial technology engagements
in the area that is generally the same as the technology issue that is the
subject of the dispute. Each party will pay its own attorneys' fees and one-half
( 1/2) of the other arbitration costs, subject to final apportionment by the
arbitrators. The arbitrators will apply the law set forth in this Agreement to
govern this Master Agreement and will have the power to award any remedy
available at law or in equity; provided, however, that the arbitrators will have
no power to amend this Master Agreement or any Schedule. Any award rendered
pursuant to such arbitration will be final and binding on the parties, and
judgment on such award may be entered in any court having jurisdiction thereof.

         (b) Notwithstanding clause (a) above, either party may request a court
of competent jurisdiction to grant provisional injunctive relief to such party
until an arbitrator can render an award on the matter in question and such award
can be confirmed by a court having jurisdiction thereof.

SECTION 18.4      CONTINUED PERFORMANCE

         Both parties will continue performing their respective obligations and
responsibilities under this Master Agreement while any dispute is being resolved
in accordance with this Section, unless and until such obligations are
terminated or expire in accordance with the provisions of this Master Agreement.

SECTION 18.5      APPLICABLE LAW

         All questions concerning the validity, interpretation and performance
of this Master Agreement and will be governed by and decided in accordance with
the laws of the State of Texas, without reference to any choice of law
provisions.

SECTION 18.6      JURISDICTION AND VENUE

         The parties hereby submit and consent to the exclusive jurisdiction of
any state or federal court located in Dallas, Texas, and irrevocably agree that
all actions or proceedings relating to this Master Agreement, other than any
action or proceeding required by this Section to be submitted to arbitration,
will be litigated in such courts, and each of the parties waives any objection
which it may have based on improper venue or forum non conveniens to the conduct
of any such action or proceeding in such court.

SECTION 18.7      CHARGES AND COSTS

         In any legal action, the prevailing party will be entitled to recover,
in addition to its damages (subject to limitations stated elsewhere in this
Master Agreement), its reasonable attorneys' fees, expert witness fees, and
other ordinary and necessary costs of litigation, as determined by the
arbitrators or court. Such costs include, without limitation, costs of any legal
proceedings brought to enforce a judgment or decree.

SECTION 18.8      EQUITABLE REMEDIES

         The Parties agree that in the event of any breach or threatened breach
of any provision of this Master Agreement concerning (i) Confidential
Information, (ii) intellectual property rights or (iii) other matters for which
equitable rights may be granted, money damages would be an inadequate remedy.
Accordingly, such provisions may be enforced by the preliminary or permanent,
mandatory or prohibitory injunction or other order of a court of competent
jurisdiction.

                                       31

<PAGE>

SECTION 18.9      REMEDIES CUMULATIVE

         All remedies provided for in this Agreement shall be cumulative and in
addition to and not in lieu of any other remedies available to either party at
law, in equity or otherwise. The election by a party of any remedy provided for
in this Agreement or otherwise available to such party shall not preclude such
party from pursuing any other remedies available to such party at law, in
equity, by contract or otherwise.

                           SECTION 19 -- MISCELLANEOUS

SECTION 19.1      BINDING NATURE AND ASSIGNMENT

         Neither party may assign any of its rights or obligations under this
Master Agreement without the prior written consent of the other party, provided
that such consent is not unreasonably withheld. No assignment by a party will
relieve such party of its rights and obligations under this Master Agreement.
Subject to the foregoing, this Master Agreement will be binding on the Parties
and their respective successors and assigns.

SECTION 19.2      EXPENSES

         In this Master Agreement and each applicable Schedule, unless otherwise
specifically provided, all costs and expenses (including the fees and
disbursements of legal counsel) incurred in connection with this Master
Agreement, and the completion of the transactions contemplated by this Master
Agreement or the applicable Schedules will be paid by the party incurring such
expenses.

SECTION 19.3      AMENDMENT AND WAIVER

         No supplement, modification, amendment or waiver of this Master
Agreement or any Schedule will be binding unless executed in writing by the
party against whom enforcement of such supplement, modification, amendment or
waiver is sought. No waiver of any of the provisions of this Master Agreement or
any Schedule will constitute a waiver of any other provision (whether or not
similar) nor will such waiver constitute a continuing waiver unless otherwise
expressly provided.

SECTION 19.4      FURTHER ASSURANCES; CONSENTS AND APPROVALS

         Each party will provide such further documents or instruments or
perform such further acts as required by the other party as may be reasonably
necessary or desirable to give effect to this Agreement and to carry out its
provisions. Whenever this Master Agreement or any Schedule requires or
contemplates any action, consent or approval, such party will act reasonably and
in good faith and, unless the Agreement expressly allows exercise of a party's
sole discretion, will not unreasonably withhold or delay such action, consent or
approval.

SECTION 19.5      SEVERABILITY

         Any provision in this Master Agreement which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions or affecting the validity or enforceability of such
provision in any other jurisdiction, and such provision shall be deemed to be
restated to reflect as nearly as possible the original intentions of the parties
in accordance with applicable law.

                                       32

<PAGE>

SECTION 19.6      ENTIRE AGREEMENT

         This Master Agreement and each Schedule constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersede all
prior and contemporaneous agreements, including the Prior Agreement,
understandings, negotiations and discussions, whether oral or written, of the
parties pertaining to the subject matter hereof.

SECTION 19.7      NOTICES

         Any notice, demand or other communication required or permitted to be
given under this Master Agreement will be in writing and will be deemed
delivered to a party (i) when delivered by hand or courier, (ii) when sent by
confirmed facsimile with a copy sent by another means specified in this Section,
or (iii) three (3) days after the date of mailing if mailed by United States
certified mail, return receipt requested, postage prepaid, in each case to the
address of such party set forth below (or at such other address as the party may
from time to time specify by notice delivered in the foregoing manner):

         If to ACS, to:             President
                                    ACS Commercial Solutions, Inc.
                                    2828 North Haskell
                                    Dallas, TX 75204

         With a Copy to:            Legal Department
                                    ACS Commercial Solutions, Inc.
                                    2828 North Haskell
                                    Dallas, TX 75204

         If to Zale, to:            Chief Information Officer
                                    Zale Delaware, Inc.
                                    901 West Walnut Hill Lane
                                    Irving, TX 75038

         With a Copy to:            General Counsel
                                    Zale Delaware, Inc.
                                    901 West Walnut Hill Lane
                                    Irving, TX 75038

SECTION 19.8      SURVIVAL

         Any provision of this Master Agreement or of any Schedule which
contemplates performance or observance subsequent to any termination or
expiration of this Master Agreement, will survive expiration or termination of
this Master Agreement. The obligations related to Confidential Information shall
survive the expiration or termination of this Master Agreement for a period of
twenty years.

SECTION 19.9      INDEPENDENT CONTRACTOR

         ACS will perform its obligations under this Master Agreement as an
independent contractor of Zale. Nothing in this Agreement will be deemed to
constitute ACS and Zale as partners, joint venturers, or principal and agent.
ACS has no authority to represent Zale as to any matters, except as expressly
authorized in this Master Agreement.

                                       33
<PAGE>

SECTION 19.10     NON-SOLICITATION

         During the Term and for one year thereafter, without the employing
party's prior written consent, neither party nor any of its Affiliates shall
actively solicit for employment any individual who is employed, or any
individual who was employed by the other party or any of its Affiliates and who
was in any way related to the provision of Services. Notwithstanding the above,
ACS agrees that Zale may solicit and hire or otherwise engage upon the
termination or expiration of the Agreement any employee that is primarily
dedicated to the provision of the Services and agrees to cooperate with such
efforts and agrees not to enforce any employment or non-competition agreement
with such employee. Notwithstanding the above, neither the publication of
classified advertisements in newspapers, periodicals, internet bulletin boards,
nor other publications of general availability or circulation nor the
consideration and hiring of persons responding to such advertisements shall be
deemed a breach of this provision.

SECTION 19.11     THIRD PARTY BENEFICIARIES

         Nothing in this Master Agreement or in any Schedule, express or
implied, is intended to confer rights, benefits, remedies, obligations or
liabilities on any third party other than the parties or their respective
successors or permitted assigns.

SECTION 19.12     COUNTERPARTS

         This Master Agreement and each Schedule may be executed in one or more
counterparts, each of which will be deemed an original but all of which taken
together will constitute one and the same instrument.

SECTION 19.13     CHANGE OF CIRCUMSTANCE

         Zale or ACS may request the other party to negotiate a change in the
pricing structure based on changes to the party's business or external economic
conditions. The other party shall reasonably consider such a request but shall
be under no obligation to agree to such a change.

SECTION 19.14     ACKNOWLEDGEMENT

         The parties each acknowledge that the terms and conditions of this
Agreement have been the subject of active and complete negotiations, and that
such terms and conditions should not be construed in favor of or against any
party by reason of the extent to which any party or its professional advisors
participated in the preparation of this Agreement.

         IN WITNESS WHEREOF, the parties have executed this Master Agreement
effective as of the Effective Date.

ACS COMMERCIAL SOLUTIONS, INC.              ZALE DELAWARE, INC.

By:      /s/ M.R. O'Hara                    By:    /s/ Sue E. Gove
         -----------------------------             -----------------------------
Name:    M.R. O'Hara                        Name:  Sue E. Gove
         -----------------------------             -----------------------------
Title:   SR V.P. & Sr. Managing Director    Title: EVP & COD
         -----------------------------             -----------------------------

                                       34
<PAGE>

                             SCHEDULE A -- SERVICES

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
SECTION 1 -- MAINFRAME SERVICES................................................3
   Section 1.1       Mainframe Service Overview................................3
   Section 1.2       Supported Configurations..................................3
   Section 1.3       Tape Media System Upgrade.................................3
SECTION 2 -- MIDRANGE SERVICES.................................................3
   Section 2.1       Midrange Service Overview.................................3
   Section 2.2       Planned Upgrades..........................................4
   Section 2.3       Web Hosting Services......................................5
SECTION 3 -- OPERATIONS SUPPORT SERVICES.......................................6
   Section 3.1       Processing Facility.......................................6
   Section 3.2       Technology Refreshment....................................6
   Section 3.3       Standards and Procedures..................................7
   Section 3.4       Systems Management Disciplines............................8
   Section 3.5       Production Control........................................8
   Section 3.6       Release Management........................................9
   Section 3.7       Technical Support.........................................9
   Section 3.8       Data Management..........................................10
   Section 3.9       File Backup and Recovery Management......................10
   Section 3.10      Storage Management.......................................10
   Section 3.11      Systems Management.......................................11
   Section 3.12      Security Management......................................11
   Section 3.13      Performance Management...................................11
   Section 3.14      Change Control...........................................12
   Section 3.15      Incident Management/Problem Management...................13
   Section 3.16      Disaster Recovery Support................................14
   Section 3.17      Development Tools........................................15
   Section 3.18      Remote System Access.....................................15
   Section 3.19      Management Reporting.....................................15
   Section 3.20      Help Desk Support........................................15
SECTION 4 -- NETWORK MANAGEMENT SERVICES......................................15
   Section 4.1       LAN Services.............................................15
   Section 4.2       WAN Services.............................................16
   Section 4.3       Third Party Network Connectivity.........................16
   Section 4.4       Existing Zale Network....................................16
   Section 4.5       Transition Plan..........................................16
   Section 4.6       Network Management Services..............................17
   Section 4.7       Internet Access..........................................19
SECTION 5 -- TRANSITION SERVICES..............................................20
   Section 5.1       Transition Plan..........................................20
   Section 5.2       Roles and Responsibilities...............................20
   Section 5.3       Project Management.......................................21
   Section 5.4       Extension................................................21
SECTION 6 -- TERMINATION/EXPIRATION ASSISTANCE................................21
   Section 6.1       Termination Planning and Knowledge Transfer..............21
</TABLE>

                                       2
<PAGE>
                         SECTION 1 -- MAINFRAME SERVICES

SECTION 1.1       MAINFRAME SERVICE OVERVIEW

         ACS will manage the mainframe systems at the ACS Facility to deliver
the operational efficiency and business continuity required to meet Zale's
business requirements. ACS will architect, engineer, implement and operate the
agreed-to mainframe systems platforms that include, at a minimum, OS/390, z/OS
(or its successors) and UNIX. Mainframe Services will be provided consistent
with the Operations Support Services detailed in this Schedule A. Key aspects of
mainframe operations support include production control, scheduling, console
operations, change management, monitoring, problem management, notification and
escalation procedures for all types of events. Services include delivery of
tape, print or other output media support. Contingency resources will be
available in response to all situations that might occur related to disruption
of mainframe systems platforms, up to and including full-scale system
recoveries. Appropriate procedures, policies and practices, consistent with this
Schedule A, will be in place as of the Effective Date and are subject to annual
review and enhancement by joint agreement.

SECTION 1.2       SUPPORTED CONFIGURATIONS

         For the first two years of the Agreement, ACS will, at Zale's request,
continue to manage and support the current IBM 9672 mainframe configuration used
for Zale processing, utilizing the OS/390 Release 2.10 operating system. Zale
acknowledges that manufacturer support for this operating system will no longer
be available after December 2005. Thereafter, ACS will manage and operate the
current configuration on a best effort basis, but without obligation for those
certain Service Levels and other performance requirements that are beyond its
control due to discontinued support. ACS will resume full accountability for
Service Levels upon upgrading the mainframe to a supported z/OS operating system
platform, which is scheduled for the third year of the Agreement.

SECTION 1.3       TAPE MEDIA SYSTEM UPGRADE

         ACS will acquire, install, operate and maintain a Virtual Tape System
(VTS) to support Zale's tape storage requirements for the mainframe platforms.
ACS will complete the acquisition, installation and migration from the existing
tape silo technology to the VTS in accordance with the Transition Plan, or as
otherwise agreed by the parties.

                         SECTION 2 -- MIDRANGE SERVICES

SECTION 2.1       MIDRANGE SERVICE OVERVIEW

         The term "midrange" as used in this Agreement refers to all
non-mainframe server systems including but not limited to the IBM iSeries
(AS/400), Intel-based Windows and NT processors, and UNIX processors. Midrange
servers supported by ACS as of the Effective Date are defined in Schedule F.
Midrange does not include platforms or systems primarily providing end-user
desktop or remote services, printers, scanners, network equipment, multi-media
support, or voice telephony systems.

         ACS will manage the midrange systems at the ACS Facility to deliver the
operational efficiency and business continuity required to meet Zale's business
requirements. ACS will architect, engineer, implement and operate the agreed-to
midrange systems consistent with the Operations Support Services detailed in
this Schedule A. Key aspects of midrange operations support include, where
applicable,

                                       3
<PAGE>

system administration, production control, scheduling, console operations,
change management, monitoring, problem management, notification and escalation
procedures for all types of events, tape and backup operations, and integration
with distributed print services. Contingency resources will be available in
response to all situations that might occur related to disruption of midrange
systems, up to and including full-scale system recoveries. Appropriate
procedures, policies and practices, consistent with this Schedule A, will be in
place as of the Effective Date and are subject to annual review and enhancement
by joint agreement.

SECTION 2.2       PLANNED UPGRADES

         As a part of the Transition Services defined in Schedule D, ACS will
relocate Zale's current midrange processors and operations from Zale's
headquarters data center in Irving, Texas to the ACS data center in Dallas,
Texas, currently located at 2828 North Haskell Avenue, Dallas, Texas 75204.

          2.2.1   iSeries Processors -- ACS will relocate the four Zale iSeries
                  processors to the ACS Dallas data center according to the
                  Transition Plan. ACS will procure and install additional disk
                  capacity on the iSeries with four terabytes of usable storage
                  capacity to facilitate migration of the iSeries data from the
                  Zale-owned EMC Storage System to local storage. Zale will
                  continue to own the iSeries processors.

         2.2.2    Intel-Based Processors -- ACS will relocate Zale's Intel-based
                  processors to the ACS Dallas data center according to the
                  Transition Plan. As a part of the Transition Plan, ACS will
                  provide 21 new Intel-based processors to facilitate partial
                  consolidation of Zale's Intel-based environment into a lesser
                  number of physical assets, and will retire Zale's Intel-based
                  processors after consolidation in Schedule F-1. The relocation
                  and consolidation effort are detailed in the Schedule D,
                  Transition Services. Zale will continue to own the current
                  Intel-based processors documented in Schedule F-3.

         2.2.3    UNIX Processors -- ACS will relocate Zale's Hewlett Packard
                  UNIX (HP-UX) processors to the ACS Dallas data center
                  according to the Transition Plan. As a part of the Transition
                  Plan, ACS will provide 2 new HP-UX processors to facilitate
                  consolidation of Zale's HP-UX environment into a lesser number
                  of physical assets, and will retire up to 15 of Zale's HP-UX
                  processors after consolidation. The relocation and
                  consolidation effort are detailed in the Schedule D,
                  Transition Services. Zale will continue to own the current
                  HP-UX processors documented in Schedule F-3.

         2.2.4    Midrange Tape Storage -- ACS will provide tape library
                  resources in its Dallas data center to provide the required
                  media backup and restoration services to facilitate the new
                  ACS assets and relocated Zale assets according to the
                  Transition Plan. ACS will continue to support Zale's legacy
                  tape storage technologies and media located at Zale's Irving
                  data center until they are retired as a part of the Transition
                  Plan.

         2.2.5    Midrange Disk Storage -- As a part of the Transition Plan, ACS
                  will supplement Zale's current EMC storage capacity with an
                  EMC Clariion that has a usable 4-terabyte storage array. The
                  new storage capacity will be used to support transition
                  storage requirements, can provide additional capacity for
                  growth, and offers the potential for future consolidation
                  and/or retirement of Zale's legacy storage devices.

                                       4
<PAGE>

SECTION 2.3       WEB HOSTING SERVICES

         Until migrated to a third party outsourcer, ACS will provide
operational support services for Zale's web hosted applications and sites.
Specific equipment used to support the web environment is identified in Schedule
F3. In addition to those Operations Support Services defined in Section 3 of
this Schedule A, ACS will perform the following specific web hosting services:

         (a)      Backbone Access -- ACS will provide network access to the
                  public Internet using its managed infrastructure, including
                  access to redundant network links rated as DS3 or greater. To
                  provide support for its web hosting and internet access
                  services, Zale will have, at a minimum, access bandwidth on
                  the ACS Backbone of 46.5 Mbps. This bandwidth will also
                  provide Internet Access to other Zale systems and applications
                  outside of the Web Hosting environment.

         (b)      Help Desk Interface -- ACS will work with Zale Help Desk
                  staff, Zale web development staff (as appropriate), and Zale
                  management to resolve trouble tickets related to the web
                  hosting environment. ACS will provide 2nd and 3rd level
                  problem resolution (engineers on call 7x24), working with the
                  Zale web development staff as required, to resolve
                  operational, systems administration and network problems for
                  the Zale web hosting environment.

         (c)      Hardware Recovery -- ACS will work jointly with Zale to
                  determine appropriate alarm thresholds and severity levels for
                  all SNMP events and server events. ACS will resolve hardware
                  problems, working with hardware vendors for resolution as
                  necessary. During hardware outages or instability, ACS will
                  closely monitor the web hosting systems and will confirm or
                  initiate the appropriate failover and backup mechanisms to
                  maintain system availability.

         (d)      Reporting -- ACS will run and provide to Zale the system
                  reports as generally described in Schedule C. Additionally,
                  ACS will provide specific web performance reporting detailing
                  network/server performance using WebTrends, availability, site
                  visits/activity levels and capacity projections within the Web
                  Services environment. Zale is responsible for producing any
                  and all reports from the web server log.

         (e)      Database Administration -- ACS will monitor the stability,
                  integrity and performance of web hosting infrastructure and
                  network databases (including log file utilization, data
                  integrity, service availability, application databases,
                  processor/memory utilization, monitoring of database size and
                  available space, and replication) on a 7x24 basis. In support
                  of the web applications, and as requested, ACS will provide up
                  to 10 hours of physical database services per month.

         (f)      System Engineering -- ACS will, on an ongoing basis, evaluate
                  the design of the web hosting systems and will make
                  recommendations to Zale as the systems evolve to ensure that
                  the web hosting environment achieves and retains the
                  characteristics of redundancy between shared servers, full
                  mirroring or Raid Technology, caching hardware platform and a
                  staging environment consistent with production servers. In
                  support of the web applications, ACS will provide up to 20
                  hours of engineering services per month.

         (g)      Software Responsibilities -- Zale shall be solely responsible
                  for the operation of, and all changes to, Zale's web
                  applications, as well as all creative content. Zale shall be
                  solely

                                       5

<PAGE>

                  responsible for staging and for loading all application and
                  data content onto servers. ACS shall be responsible for
                  installation and support of all environmental software.

         (h)      Domain Management -- With regard to the provision of DNS
                  services, ACS shall provide administrative services and Zale
                  will be responsible for securing the domain name(s).

                    SECTION 3 -- OPERATIONS SUPPORT SERVICES

         ACS will provide the following services in support of Zale's mainframe
and midrange operations.

SECTION 3.1       PROCESSING FACILITY

         Throughout the Term of the Agreement, ACS will maintain a "Class A"
processing and support facility or facilities in the general Dallas/Ft. Worth
area, currently located at 2828 North Haskell Avenue, Dallas, Texas 75204, from
which Zale's operations support is to be provided. The facility or facilities
shall include all appropriate physical and logical security, environmental
controls and emergency facilities and resources.

         ACS may with Zale's approval, such approval not unreasonably withheld,
relocate all or portions of Zale's processing Services to other ACS-managed data
centers during the Term.

         Operations support facilities located at Zale's corporate offices used
for network interfaces, backup functionality, ACS office space, and limited
server hosting shall be utilized in a manner consistent with ACS and Zale
facilities and shall be maintained in a clean and orderly fashion, with the
normal facilities and cleaning services provided by Zale. This space, including
secured facilities and uninterruptible power supplies where appropriate, will be
available to ACS, for specific use to support Zale, without cost. ACS is
responsible for oversight and support of such devoted resources as described
below.

         The term "Class A" means a facility that was purposely built or
purposely renovated for major computer processing. The facility must be
acceptable under generally accepted commercial processing standards and
corresponding audit standards. ACS agrees that the portion of its facility which
is used to provide the Services will, at a minimum, meet the EDP Audit
requirements of Zale internal and external auditors.

SECTION 3.2       TECHNOLOGY REFRESHMENT

         ACS will, both as an agent of Zale subject to funding by Zale for those
technology elements owned by Zale, and on its own behalf as part of providing
the Services, maintain all equipment, systems, facilities or other technology
resources at reasonably-current technology levels. Under no circumstances shall
ACS use equipment or software that poses clear risks to the stability of Zale's
systems and formal notice under the provisions of the base Agreement must be
provided should actions by Zale cause such a situation.

         In the initial year of the Agreement, ACS will provide the upgrades to
Zale's information technology infrastructure that are described in Section 2.2
of this Schedule A. Subsequently, ACS' technology refreshment services will
include: (i) upgrade to mainframe processor and z/OS operating system in Year 3
of the Agreement, provided that Zale continues to use its mainframe
applications; (ii) upgrades to two HP UX processors four years after initial
installation; (iii) upgrade to Zale's EMC 8730

                                       6
<PAGE>

storage device in Year 3 of the Agreement; and (iv) the ability for Zale to add,
remove and upgrade various components of its technology infrastructure using the
Additional Resource Charges (ARCs), Reduced Resource Charges (RRCs), and
Hardware Provisioning Charges described in Schedule B.

         ACS will advise Zale of all hardware and software migration plans and
related maintenance and upgrade activities. Zale may decline or defer the
suggested maintenance or upgrade. Such decision must be provided in writing, and
ACS will schedule notifications and reviews to allow adequate time for Zale
consideration and response. Should Zale decline or defer the suggested
maintenance or upgrade, ACS and Zale may temporarily redefine Service Levels to
adjust ACS' responsibility for any performance failure that is directly and
clearly caused by the declination or deferral, until such time as the
maintenance or upgrade is completed.

         ACS will provide to Zale, and update from time to time, the minimum
standards for hardware, software and peripherals required for ACS to manage
Zale-owned assets in the ACS leveraged environment. Standards will include the
requirements for minimal functionality required by ACS personnel operating in a
remote Services environment, and by way of example will include, but not be
limited to, redundant network interfaces, redundant power supplies, backup and
remote management software, monitoring agents, security agents, scheduling
software, and minimum storage requirements. Required standards may differ by
manufacturer due to differences in their standards for delivery.

SECTION 3.3       STANDARDS AND PROCEDURES

         No later than 180 days after the Effective Date, ACS will develop and
publish formal operations standards and procedures documents covering all
aspects of operations, documentation, process and contingency procedures related
to Zale's operations. The effort will include periodic training for appropriate
Zale staff and ongoing update provisions. Zale reserves the right to access and
inspect these procedures as part of its audit process.

         3.3.1.   Participation In The Maintenance, Documentation, and Use Of
                  Published Standards. Zale requires that all activities within
                  the IT area, including all activities and services provided by
                  ACS, are subject to formally documented and approved technical
                  standards. ACS agrees that it will participate in the update
                  and maintenance of the Zale/ACS technical standards document
                  to be used, as amended and published no more often than
                  annually, unless required by law or regulations throughout the
                  life of this Agreement.

         3.3.2.   Zale Approval Of Standards. Zale retains the right to approve
                  all technical standards that impact its business and/or
                  services being provided. Proposed additions or changes to the
                  published standards will be subject to Zale review and the
                  joint change control process to ensure awareness and
                  acceptance of the standards. Zale approval will not be
                  unreasonably withheld.

         3.3.3.   Consistency With Zale Policies & Guidelines. The joint
                  Zale/ACS technical standards will, in all respects, be
                  consistent with Zale architectural standards and Zale policies
                  & guidelines as issued in writing from time to time. ACS will
                  ensure that all additions/changes are consistent with the
                  other standards sources and will periodically review the
                  documents to ensure they are mutually compatible.
                  Discrepancies or instances that ACS believes require costs not
                  contemplated by this Agreement are to be reported to Zale
                  management and entered into the problem management process for
                  resolution.

         3.3.4    The parties will review (and if necessary, ACS will revise)
                  such documents and standards annually.

                                       7
<PAGE>

SECTION 3.4       SYSTEMS MANAGEMENT DISCIPLINES

         ACS will, for the duration of the Agreement, maintain a set of formal
system management disciplines to ensure the effective and correct application of
technology to providing the Zale operations and support services. ACS will
maintain formal management disciplines minimally in each of the following areas
as applied both in the mainframe and midrange environments:

   i.    Configuration Management
  ii.    Capacity Management
 iii.    Change and Release Management
  iv.    Problem and Incident Management
   v.    Continuity Management
  vi.    Service Level Management
 vii.    Availability Management
viii.    Service Delivery Management
         a.  Systems Administration
         b.  Network & telecommunications
         c.  Data & database administration
         d.  Technology planning & evaluation
         e.  Methods and procedures
         f.  Project management & control

         ACS, if requested by Zale with not less than 15 days advance notice,
will provide access on an annual basis for Zale or its designated non-ACS
Competitor representative to independently review and assess the status and
application of each of the formal disciplines. ACS agrees that it will take
corrective actions as mutually agreed in any management discipline area found to
be below general industry standards after the review and assessment described
herein.

SECTION 3.5       PRODUCTION CONTROL

         With respect to mainframe and midrange systems, ACS will provide and
operate the agreed-upon tools, procedures and systems to facilitate the
effective production processing design, planning and routine scheduling for Zale
processing. Zale processing is to include a mix of standing schedules,
event-driven or special processing, user requests, demand production processing,
systems management related processing (backups, maintenance, etc.) and
test/development processing - all subject to priorities as defined by Zale. To
achieve this production control, ACS is to maintain a combination of dedicated
and shared resources devoted to the proper scheduling of Zale processing for the
mainframe and/or midrange systems under ACS control. Support is to be available
on a 24x7x365 basis. ACS shall provide the following scheduling and production
control services:

    i.  Maintain accurate descriptions, dependencies, and problem histories for
        production workloads
   ii.  Prepare daily processing schedule and queues
  iii.  Schedule and coordinate inter-system/platform data transfers
   iv.  Review batch processing results
    v.  Perform problem management, problem analysis, reschedules and
        work-arounds
   vi.  Attend daily post and pre processing meetings, as required
  vii.  Review future batch schedules
 viii.  Implement permanent/temporary schedule changes
   ix.  Handle on-request/demand jobs
    x.  Restart jobs in accordance with operational procedures and within
        specified/established windows and timeframes

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   xi.  Maintain an emergency contact list and escalation procedures to resolve
        abnormal terminations in a timely manner to ensure Service Levels and
        deadlines are met
  xii.  Monitor prime time batch; identify schedule improvement opportunities
 xiii.  Provide 24x7 coverage
  xiv.  Provide backup training to contingency production control resources
   xv.  Create components of, and participate in, disaster recovery
        planning/testing
  xvi.  Support system software upgrade efforts
 xvii.  Support internal/external audits
xviii.  Create/maintain recovery/restart documentation
  xix.  Create/modify/maintain production procedures
   xx.  Assure standards
   xxi. Participate, as appropriate, in Zale's Change Control procedures
        including acceptance testing
  xxii. Support application teams to install new/changed/upgraded applications
 xxiii. Schedule backups with application teams
  xxiv. Perform library management, change promotion, change back-out xxv.
        Report applications system performance, problems and improvement
        opportunities
  xxvi. ACS, as part of routine operations activity, will identify system and/or
        process/procedure changes and improvement opportunities identified
        through ongoing analysis of existing production operations processes.
        ACS will identify these opportunities to Zale management on a regular
        basis and will escalate situations where it believes valuable
        opportunities are being delayed or ignored.

SECTION 3.6       RELEASE MANAGEMENT

         ACS is responsible for the receipt, validation per agreed-to standards,
planning/scheduling, execution, and back-out/reversal for the promotion of all
Zale and/or ACS initiated changes into the production systems environment (but
not between stages of the development process). ACS will provide appropriate
approval, staging, monitoring, reporting, notification and migration processes,
consistent with Zale's approved system tools and procedures to accomplish such
promotions.

SECTION 3.7       TECHNICAL SUPPORT

         ACS will to provide both primary and backup resources to perform the
technical support roles for the mainframe and midrange environments. Technical
support is to include facility, hardware and environmental software
installation, routine maintenance, support, monitoring, problem management,
problem determination, analysis and resolution, planning and coordination with
other areas as required. ACS resources will demonstrate proficiency in the areas
of operating systems, subsystems, databases, telecommunications and all related
environmental software, with access to other disciplines pre-established in case
of need.

         ACS shall provide the technical support required to support the
mainframe and midrange systems, including:

   i.   System programming, system administration, architecture, engineering,
        support and maintenance
  ii.   Performance reporting, enhancement and tuning
 iii.   Capacity planning
  iv.   Problem and incident management
   v.   Storage management
  vi.   Configuration management;

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<PAGE>

 vii.   System consulting
viii.   Conducting technology changes, exchanges, ACS presentations, and client
        training
  ix.   Assistance with Applications Software testing and problem resolution
   x.   Technical support resources are to schedule and meet with Zale at least
        quarterly for planning and coordination purposes.
  xi.   Testing and installation of operating system patches, security updates,
        service packs, and general upgrades as required
 xii.   Monitor the mainframe and midrange systems for systems and subsystems
        tuning, workload balancing, resource allocation, and capacity
        distribution
xiii.   Coordination with third party Software and Equipment maintenance
        providers

         ACS will participate in the Zale planning process conducted each year
to update the 3 year master plan. ACS will provide planning input through active
participation in the process and will provide operations related data as
appropriate to support/aid the planning process.

SECTION 3.8       DATA MANAGEMENT

         ACS is to provide skilled staff to provide data and database management
and all related skills. Coverage is to include operating systems, database
subsystems and third-party data management tools. Routine and day-to-day
database and server operational and contingency/integrity support is to be
included as well as planning, maintenance and resource management initiatives.
ACS database resources will provide physical database consulting, analysis, and
design review services to Zale application development teams to coordinate and
improve the use of data resources. Provision of these services is not intended
to include provision of dedicated database resources, nor to provide support for
logical database design or procedures.

SECTION 3.9       FILE BACKUP AND RECOVERY MANAGEMENT

         ACS will provide all technical and operational tools, resources and
procedures to properly perform data and system backup and recovery processes,
whether initiated by ACS or by Zale application systems. Frequency of backups
will be determined by Zale's backup and retention policies and procedures. ACS
and Zale application responsibilities for scheduling/performing backups will be
mutually agreed by the parties. Recovery capabilities must support selective
recovery of Zale data. Backup data (including both application and system data)
is to be maintained both onsite and offsite in conjunction with both
incident/error recovery and the disaster recovery program as described in
Schedule G. Backup procedures are to include support for backup of all system,
library and related data as well as Zale business data files and databases.
Development and test data and libraries are to be included as agreed with Zale
management at implementation and periodically thereafter. Except as
intentionally scheduled by Zale or as dictated by volume, backups should not
affect or impact resource availability for production processing. Processing
costs for application data backup are to be borne by Zale. Costs for system and
environmental backups are to be borne by ACS.

SECTION 3.10      STORAGE MANAGEMENT

         ACS shall implement storage management processes, which include
processes for monitoring and efficient use of DASD space, tape libraries, media
temporary failures, restoration of damaged or inaccessible data (unless such
restoration is impossible), maintenance of backup facilities and periodic
updates to storage management parameters. ACS will assist in the formulation and
implementation of policies, procedures, tools and reporting programs to improve
the effectiveness of the storage resources. ACS will work actively to assist
Zale in the identification of storage consolidation opportunities as well as the
reduction of storage media costs.

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<PAGE>

         ACS shall review standard error recording data for the occurrence of
temporary errors to enable ACS to correct recoverable mainframe and midrange
System problems before such errors become permanent. Performance data for
monitoring these systems shall be inspected by ACS for performance bottlenecks
related to data storage. Corrective action, such as moving databases or adding
caching, shall be taken by ACS in order to meet the applicable Service Levels.
ACS shall maintain and enhance the storage environment as necessary to meet
agreed upon Service Levels. ACS shall leverage new technology where possible to
increase storage capacity and management efficiency.

SECTION 3.11      SYSTEMS MANAGEMENT

         ACS will provide agreed-to levels of systems management resources to
support the mainframe and midrange environments. Responsibilities of the system
management resources shall include general, systems software and hardware
planning, all aspects of system measurement and reporting and performance
reporting. As required, responsibilities will include library/directory
definition, procedures and management to properly support all operational, test,
development and production migrations.

SECTION 3.12      SECURITY MANAGEMENT

         ACS will provide and maintain secure physical and data environments.
Zale is responsible for developing and maintaining IT security policies for its
corporation and providing copies to ACS from time to time, but no less than
annually, as they are updated for integration into the Services. ACS shall
review and execute each security policy upon its receipt thereof, and shall
adhere to such policy until such time as it is superseded by a revised policy.
Zale, after approval, will compensate ACS for additional reasonable resources,
expenses or Services required to expand, enhance and implement the policies over
time. ACS will administer the policies and develop procedures, with Zale's
assistance, to manage, report, track, and audit the security measures adopted by
ACS to implement Zale's information security policy.

         ACS shall be responsible for physical security at all of its locations
providing Services to Zale. ACS shall comply with the security requirements and
procedures within the Zale managed facilities, and Zale shall manage IT security
policies and procedures to enable ACS personnel reasonable access to perform the
Services.

         Mainframe data shall be protected by a series of complementary software
security features including, but not necessarily limited to, ACF2 or its
equivalent, password protection for all systems and significant audit trails for
all systems access. Midrange data is protected by complementary software
features and procedures, including software provided by Zale as defined in
Section F-4. ACS is responsible for the staffing and provision of all such
security mechanisms, including security administration except as assumed in
writing by Zale. At a minimum Zale security administration duties include
internal application security logic.

         Zale and ACS shall implement a common Syslog Server to record, archive
and allow analysis of server log files. The Syslog Server shall use industry
standard software and procedures. Zale will designate the server hardware from
its excess inventory as it is made available during the Transition Plan.

SECTION 3.13      PERFORMANCE MANAGEMENT

         To manage the mainframe and midrange server performance, ACS shall
maintain and enhance a continuous process improvement model that includes:

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<PAGE>

    i.  Monitoring usage of CPUs, disks and networks, and forecasting the
        various workloads and identifying the optimum configuration to support
        future demand

   ii.  Performance reporting and analysis of system components

  iii.  Factoring new workload projections and equipment needs into long-term
        acquisition plans

   iv.  Determining floor space and environmental requirements, following Change
        Management processes, acquiring new equipment and achieving the assigned
        objectives for implemented improvements

    v.  Working with Zale to set performance expectations in accordance with the
        Service Levels

   vi.  Working with Zale to implement mainframe and midrange systems and
        Application improvements

  vii.  As mutually agreed by the parties, maintain historical database of
        statistics that will provide the ability to produce reports based on
        past usage and trends

SECTION 3.14      CHANGE CONTROL

         Zale and ACS will implement a common change control process from policy
development through routine procedure as described herein (the "System Change
Management Process"). ACS and Zale agree that they will utilize the common
System Change Management Process for all Services.

         3.14.1   ACS shall be responsible for managing and implementing changes
                  to the systems according to its documented ACS Change
                  Management Process, as updated from time to time and
                  communicated to Zale. ACS and Zale shall mutually agree to
                  reasonably modify said process to effectively interface with
                  the Zale Change Management procedures used by Zale's
                  application development personnel. ACS shall coordinate
                  changes to all systems affected by changes to ACS-managed
                  systems. All changes shall be made in accordance with the
                  System Change Management Process. The System Change Management
                  Process shall be implemented in a manner that minimizes
                  business disruption, and shall include changes to individual
                  systems and the co-ordination of changes across systems
                  comprising an end-to-end solution.

         3.14.2   ACS will provide, for common use, its on-line change
                  management system and procedures. This system will be
                  available to both Zale and ACS staff through their normal
                  system access procedures, i.e. no special equipment. Once the
                  system and procedures are accepted by Zale, ACS will operate
                  and maintain them as production systems.

         3.14.3   ACS will routinely work with development projects to ensure
                  each aspect of its Services is represented in the formative
                  stages of new systems. ACS will report any concerns it may
                  identify relating to actual or potential negative impact on
                  production stability or performance to Zale management. ACS
                  will work with Zale to track and forecast the implications of
                  expected changes in business activity levels so as to protect
                  the operational stability of the systems and Services it
                  provides.

         3.14.4   ACS shall be responsible for migrating Software components
                  from the development environments to the production
                  environments in a controlled manner and in accordance with
                  System Change Management Process. Applications and/or system
                  Software shall be built in a secured development environment
                  and, as applicable, duplicate copies of the original
                  programmed code (the "Source Code") and the code that has been
                  compiled into machine-executable form (the "Object Code")
                  shall be stored outside of the production environment in a
                  designated secure environment. Zale and ACS shall ensure the
                  process is developed in such a way as to reasonably ensure
                  adequate and auditable source control,

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<PAGE>

                  including integration of Zale's third party source management
                  application. Once the Software promotion package is properly
                  built, ACS shall ensure approvals are received prior to
                  installing the Software in the secure production environment.
                  Subsequently, ACS shall perform minor trouble-shooting and
                  identify problems with internal procedures as required.

         3.14.5   ACS shall work with Zale application developers to bring
                  Applications under the System Change Management Process. ACS
                  will work with developers on a regular basis to ensure that
                  Software is handed over pursuant to the System Change
                  Management Process and in adherence to standardized policies
                  and procedures; work with audit to ensure that Applications
                  and the System Change Management Process is compliant;
                  maintain documentation, policies and procedures current as it
                  relates directly to the System Change Management Process and
                  Data Centers in general; assist Zale in affecting an efficient
                  workflow through the systems, ensuring that priorities are
                  observed and deadlines are met within the Data Centers; and
                  ensure that all relevant System Change Management Process
                  documentation is completed/updated on an ongoing basis.

         3.14.6   For changes initiated by ACS for Zale, ACS shall provide a
                  change notification to Zale as soon as possible, according to
                  the System Change Management Process, in advance of any
                  planned changes or scheduled outages; provide a plan to
                  reverse changes where necessary; and use commercially
                  reasonable efforts to ensure that all such changes are
                  problem-free and that the continuity of operations of affected
                  systems is maintained.

         3.14.7   In the event that either ACS or Zale determines the need to
                  implement a change into the production environment after the
                  regularly scheduled weekly Change Management meeting and
                  before the next regularly scheduled Change Management meeting,
                  the change will be deemed an emergency change. Emergency
                  changes will adhere to all the requirements of a regular
                  change, and in addition will require approval by ACS and Zale
                  executives who have been delegated responsibility for
                  approving emergency changes.

SECTION 3.15      INCIDENT MANAGEMENT/PROBLEM MANAGEMENT

         3.15.1   ACS shall provide incident and problem management services in
                  relation to the Services as set forth herein. Problems
                  received by the ACS Help Desk shall be logged and tracked
                  using ACS' problem management application. Each problem will
                  be routed to the break/fix agency most likely to resolve the
                  problem in the shortest length of time. The tasks specific to
                  ACS are identified below:

                  (a)      Identify and define the incident/problem and the
                           business impact to Zale;

                  (b)      isolate the problem source or failing systems
                           components;

                  (c)      develop bypass or recovery steps to restore the
                           Services as soon as possible and to prevent a
                           recurrence;

                  (d)      ensure the proper problem escalation process is in
                           place to achieve the Service Levels;

                  (e)      escalate serious problems and problems not resolved
                           in accordance with applicable Escalation Procedures;

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<PAGE>

                  (f)      implement work-around, resolution, and obtain
                           End-User verification before problem closure;

                  (g)      continually improve the problem management
                           procedures, as measured by its contribution to
                           improved information technology Service delivery;

                  (h)      provide timely, accurate and effective status updates
                           to End-Users as required by Zale;

                  (i)      work jointly with Zale and any applicable third-party
                           vendors to conduct root cause analyses and review
                           high-impact problems to identify preventative
                           measures, assess risk and bring closure;

                  (j)      develop problem management reports to ensure
                           preventative measures are implemented and maintained;

                  (k)      produce Service Level performance reports;

                  (l)      identify significant service delivery gaps and future
                           problem prevention measures;

                  (m)      For incidents designed highest severity ("SEV1"),
                           provide root cause analysis on identified problems
                           within five (5) business days; and

                  (n)      analyze problem data and produce trend, exception and
                           forecast reports.

         3.15.2   Zale and ACS will use the common incident management, tracking
                  and reporting process in place as of the Effective Date. ACS
                  shall base its Services on the ACS incident management
                  process, as updated from time to time and communicated to
                  Zale, which shall be reasonably and mutually modified to
                  effectively interface with Zale's incident management
                  procedures. ACS will make available a comprehensive incident
                  and problem management system that can be operated from all
                  points of access within the Zale network. The system must be
                  capable of supporting all problem reporting within the entire
                  information system functions at Zale and ACS location(s) that
                  support Zale. ACS and Zale agree that they will utilize the
                  common problem management system and associated procedures for
                  all service areas. If Zale requests, ACS will work with Zale
                  to develop and implement automated interfaces between the ACS
                  problem management application and with the Zale problem
                  management application(s); such effort to be at Zale expense.

         3.15.3   ACS will with Zale jointly maintain a set of published
                  procedures for the identification, logging, tracking and
                  reporting of problems and their resolution. The design of the
                  processes will be as mutually agreed.

SECTION 3.16      DISASTER RECOVERY SUPPORT

         ACS will provide Disaster Recovery Services as described in Schedule G.
ACS will work with Zale as required to develop, maintain and physically test, on
a predetermined annual schedule, a disaster recovery plan to restore the
operating environment in the event of a prolonged outage at any Zale or ACS
Facility where ACS provides processing Services to Zale. The scope of each test
will be mutually agreed.

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<PAGE>

In support of this disaster recovery support, ACS will provide media backup and
off-site storage of Zale's backup files per mutually agreed-upon procedures and
schedules.

SECTION 3.17      DEVELOPMENT TOOLS

         ACS will install, maintain and operate the development tools,
languages, testing aids or similar software as requested by Zale and as defined
in Schedule F-5. ACS will maintain the development tools at latest release
levels, unless otherwise agreed by Zale. Additional or enhanced tools will be at
Zale's expense to buy and operate.

SECTION 3.18      REMOTE SYSTEM ACCESS

         ACS will supply its standard support tools and software, which shall
provide generally accepted industry standard functionality, as required to
provide authorized Zale users with secure, remote access to Zale systems and
data, while reasonably adhering to Zale's published security policies.

SECTION 3.19      MANAGEMENT REPORTING

         ACS shall provide regular, planned communication with Zale management,
including a monthly executive performance review meeting, status reports and
Service Level reports. At a minimum ACS will host a Daily Operational Review
meeting to review and report on all aspects of the daily delivery of services,
and a Monthly Performance Review meeting to review ACS' performance of the
preceding month.ACS will provide performance data in an electronic form. Reports
and reporting schedules are identified in Schedule C.

SECTION 3.20      HELP DESK SUPPORT

         ACS will provide second tier support to Zale's common help desk
function. ACS will respond to escalated problems reported to the common help
desk and will maintain problem reporting/tracking updates using the ACS problem
management system. ACS will provide access for designated Zale employees to its
tracking system for research and reporting.

                    SECTION 4 -- NETWORK MANAGEMENT SERVICES

         The business objective of this service category is to provide Zale with
consistently efficient network and voice support through the use of proven
Network Management methodologies and procedures. While financial responsibility
for various components of the existing network are distributed between Zale and
ACS, ACS will support, manage and maintain the network. ACS will provide,
support and manage the connectivity between the Zale General Office in Irving
Texas and the ACS data center in Dallas, Texas.

SECTION 4.1       LAN SERVICES

         The scope of the Local Area Network (LAN), for service purposes,
includes all data communications services within a specific location, including
all equipment and services whether dedicated or switched. ACS currently manages
individual LANs for Zale in four (4) locations including Zale's General Offices
and Pagoda Distribution Center, both in Irving Texas, the Peoples Distribution
Center in Toronto, Ontario, and a private network for the Zale Web environment
that is managed by ACS.

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<PAGE>

SECTION 4.2       WAN SERVICES

         The scope of the Wide Area Network (WAN), for service purposes,
includes all data communications services between any two premises, including
all intermediate equipment, services and intermediate premises (e.g. ACS
Facility to the Zale General Office), whether dedicated or switched. Except as
noted, ACS' service responsibility in this area extends from CSU/DSU to CSU/DSU
(modem to modem) except that multiplexers, routers and terminal/communications
controllers located immediately behind the CSU/DSU units at any Zale Facility
are included. As of the Effective Date, ACS manages WAN connectivity between:

    o    ACS' facilities and the Zale General Offices in Irving
    o    Zale's General Office and its Distribution Center, two remote
         Distribution Centers, and those stores with frame relay connectivity

         In addition, ACS has the ability to expand WAN services domestically
and internationally, should Zale request those services during the Term.

SECTION 4.3       THIRD PARTY NETWORK CONNECTIVITY

         Zale frequently requires access to networks that are typically owned
and controlled by a third party. Zale has connectivity to a number of other such
networks to support third party payments, store connectivity, site-to-site
connectivity, application interfaces, and other services and business
requirements as defined by Zale. For service purposes, ACS supports the data
communication interfaces only as direct connectivity from the Zale-defined
network (whether LAN or WAN) to the third party's equipment provided for such
purpose. ACS will also, as required, implement necessary network security
processes with Zale approval to prevent such third party networks from gaining
inappropriate access to the Zale network.

SECTION 4.4       EXISTING ZALE NETWORK

         For service purposes, ACS supports the data operations, engineering and
WAN services that are in place as of the Effective Date at the Zale General
Offices, the ACS data center, and certain remote locations. ACS maintains
detailed documentation and diagrams of the Zale Networks that are supported by
ACS. This documentation is updated as a part of change control and is made
available to Zale management as requested. Schedule F-4 lists network resources
managed by ACS for Zale as of the Effective Date, including equipment, circuits,
and other significant hardware. The Schedule includes information on financial
responsibility, asset location, and management responsibility. The Schedule will
be updated periodically during the Term to document changes in the Zale network,
financial responsibility, and management responsibilities. Zale also retains
records of equipment, circuits, and other network resources for which it retains
management or financial responsibility, and will share with ACS such information
as needed to effectively deliver the Services within the Service Levels.

SECTION 4.5      TRANSITION PLAN

         As a part of the Transition Services defined in Schedule D, ACS will
provide a number of enhancements to the Zale LAN and WAN networks to facilitate
the migration of the midrange environment to its Dallas data center. These
enhancements include:

         1)   Provisioning two additional full DS3 (45 Mbps bandwidth) circuits
              between the ACS facilities and the Zale General Office to
              facilitate the relocation of Zale midrange servers

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<PAGE>
              to the ACS Dallas data center and to provide increased throughput
              for ongoing operations. These circuits may be configured as Metro
              point-to-point circuits or as part of a SONET fiber ring with
              provides much greater growth capacity.

         2)   ACS, at its expense, will provide and implement a number of
              hardware enhancements in its Dallas data center to facilitate
              expansion of the LAN required to support the transitioned server
              assets. There enhancements include high volume, redundant content
              switches for load balancing, firewall enhancements, and the
              routers, switches and other infrastructure build-out required to
              support the additional bandwidth between the sites.

         3)   As a part of the Transition Plan, certain network assets owned and
              maintained Zale are designated to be relocated to the Dallas data
              center, redeployed to alternate use within the Zale network, or
              decommissioned and returned to Zale for final disposition. ACS
              will furnish detailed schedules and diagrams of planned changes
              for Zale review and approval, such approval not unreasonably
              withheld.

SECTION 4.6       NETWORK MANAGEMENT SERVICES

         ACS will provide the data network and services as described herein as
part of the base network services charge defined in Schedule B. As changes are
implemented at Zale's discretion, Zale will pay as defined in Schedule B or as
mutually agreed for incremental agreed to, network services and charges and,
correspondingly, ACS will credit Zale for any reduction in network services and
charges. The Network Management Services to be provided throughout the term
include:

         4.6.1    Data Network Design and Implementation -- ACS, subject to Zale
                  approval, is to provide the ongoing assessment, design and
                  enhancement of Zale's data network. Zale may require changes
                  to the data network as it serves ongoing business
                  requirements. ACS will incorporate the necessary changes
                  consistent both with short-term requirements and, wherever
                  possible, with a longer-term data communications strategy. ACS
                  will conduct network design reviews at least annually and will
                  provide Zale with review results and recommended changes to
                  the network and or communications strategy in writing.

         4.6.2    Network Operations -- ACS, in conjunction with Zale's
                  telecommunications vendor(s), will provide, through 7x24x365
                  monitoring, network problem recognition, tracking, resolution
                  and reporting.

         4.6.3    Tools and Facilities -- ACS will provide the appropriate
                  resources, documentation, reports, tools, procedures and
                  management methodologies to administer, comprehensively
                  manage, monitor and reliably support the Zale network, or
                  other third party providers supporting the Zale network. ACS
                  will provide, as reasonably requested by Zale, current network
                  diagrams of all network facilities under management by ACS.

         4.6.4    Network Performance Management and Reporting -- ACS will
                  monitor, forecast, tune and report to Zale management network
                  operational and cost performance. ACS will identify, notify
                  Zale and take corrective action as agreed in response to any
                  performance situation that may degrade business operation.
                  Additionally, ACS will provide, at least quarterly, electronic
                  and paper copies of an updated WAN diagram. Zale and ACS will
                  review and initial the diagram that will thereafter take
                  precedence over the previous network description.

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<PAGE>

         4.6.5    Network Asset Ownership -- From time to time, Zale may request
                  ACS to purchase or otherwise assume, at mutually agreed prices
                  and fee adjustments, some or all of the wide area network
                  equipment then owned or leased by Zale. All other acquisitions
                  required to support the network will be made by ACS with the
                  costs incorporated in charges made to Zale for new or expanded
                  services that require the equipment. Zale will continue to own
                  voice communications equipment from the digital switch inward.

         4.6.6    Network Capacity Management. -- ACS will monitor and project
                  network utilization, as well as work with Zale to identify
                  changes in business activity that may impact the data network
                  so as to ensure adequate capacity to meet business needs while
                  controlling costs.

         4.6.7    Network Backup Provisions -- ACS will provide backup
                  provisions consisting of either standby dedicated capacity via
                  alternate routing or high performance switched circuit backup
                  such that there are no single points of failure in the Zale
                  Wide Area Network, except as specifically agreed by Zale. In
                  conjunction with Zale and consistent with Schedule G --
                  Disaster Recovery Services, ACS will test designated backup
                  provisions for network components as reasonably requested.

         4.6.8    Selection of Providers -- Zale retains the right to direct
                  that ACS acquire data telecommunications network services from
                  Zale's vendor of choice to satisfy minimum procurement
                  agreements that Zale may have or will enter into, however Zale
                  will be responsible for incremental costs associated with such
                  directive, providing that ACS demonstrates it would incur
                  lower charges from an alternative major carrier (top five by
                  network services-related revenue). ACS will not commit or
                  utilize Zale data network expenditures to meet its own third
                  party purchase or procurement level agreements without written
                  permission of Zale.

         4.6.9    Network Administration/Accounting -- ACS will provide the
                  necessary skills and resources to support asset/contract/lease
                  administration, utilizing procedures and mechanisms acceptable
                  to Zale. ACS is to provide the necessary administrative and
                  clerical support to provide proper processing of billing and
                  related paperwork for the entire Zale wide area network.
                  Activities include all processing, review and approval
                  processes leading to payment of actual charges. ACS will
                  conduct periodic (at least twice per year) assessments/audits
                  of bills to ensure proper charges are being paid and will
                  provide written results to Zale. Zale expects to also audit
                  the bill payment process on a random basis, and ACS will
                  cooperate with any such audits. After second year, ACS may
                  reasonably charge for its direct cost of participation in such
                  audits beyond two audits per year, except as may be warranted
                  by documented deficiencies in immediately prior audits.

         4.6.10   Problem and change management systems -- In performing all of
                  the activities in the data and voice network area, ACS will
                  utilize the common problem tracking/management and change
                  control systems provided by ACS for common use in all areas.

         4.6.11   Network Vulnerability Assessment and Intrusion Detection --
                  ACS shall provide a quarterly vulnerability assessment and
                  analysis report of the Zale network according to the
                  parameters mutually established as of the Effective Date
                  through its third party partner Critical Watch (or other
                  comparable third party if the parties agree). ACS shall
                  provide and operate a Cisco Intrusion Detection System ("IDS")
                  device in the Zale local and wide area network, and provide
                  standard weekly summary reports to Zale.

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SECTION 4.7       INTERNET ACCESS

         ACS will provide the internet access services to Zale based on the
following requirements:

         4.7.1    SMTP Mail Service -- ACS will provide SMTP mail service
                  between Zale and the public Internet. This service will
                  leverage hardware managed by ACS to accept and deliver mail
                  from the Internet destined for Zale users and to accept and
                  deliver mail from Zale users destined for the Internet. ACS
                  will forward mail to the Internet for delivery. ACS will as
                  requested implement SPAM control software and hardware, as
                  provided by Zale.

         4.7.2    Internet Maintenance Window -- Zale will accept a maintenance
                  window for the server and Internet infrastructure each Sunday
                  morning between the hours of 1:00 AM and 5:00 AM EST or as
                  agreed by both parties. Use of the window requires prior
                  notice and agreement by Zale, which will not be unreasonably
                  withheld. No optional maintenance will be scheduled during a
                  Zale Freeze Period.

         4.7.3    Internet Connectivity Provision -- ACS will provide high speed
                  access between the Zale General Office and the ACS data center
                  to utilize the ACS firewall for access to the Internet. The
                  additional bandwidth proposed in Section 4.5.1 is sized to
                  provide sufficient capacity with redundant connectivity based
                  on the utilization levels as of the Effective Date. ACS will
                  provide network access to the Internet using its managed
                  infrastructure, including access to redundant shared network
                  links rated as DS3 or greater. To provide support for its web
                  hosting and Internet access services, Zale will have, at a
                  minimum, Internet access bandwidth of 46.5 Mbps for Web
                  Hosting Services. The cost of this bandwidth is included as
                  part of Network Management Services in Schedule B.

         4.7.4    Internet Content Responsibility -- ACS will manage and
                  maintain devices, including proxy servers, to filter Internet
                  content. Zale will retain the right to establish, and change
                  from time to time, settings and parameters to enforce its
                  content filtering policies. ACS is not responsible for
                  filtering what may be deemed "inappropriate" or
                  "objectionable" content from the Internet. ACS will, as
                  requested, implement Web Content management software and
                  hardware, as provided by Zale.

         4.7.5    Inter-company Mail Gateway -- Zale will maintain a standard
                  SMTP gateway for the purpose of exchanging mail between the
                  Zale and the ACS mail handling systems.

         4.7.6    Internet Compliance -- Zale will comply with established
                  etiquette with regard to activities that may jeopardize ACS'
                  ability to maintain its Internet connectivity to its service
                  provider. Spamming or indiscriminate unsolicited bulk mail is
                  specifically forbidden, however, targeted email advertising
                  campaigns are not forbidden.

         4.7.7    DNS Administration -- ACS will not be responsible for, and
                  will not initiate administrative or ownership registration
                  updates for any Zale owned web domains. ACS is named and is
                  responsible as the technical contact with Network Solutions
                  and UUNET, with associated rights and privileges for the Zale
                  owned domains. Additionally, ACS is responsible for DNS server
                  maintenance or other deployment activities required for access
                  to Zale domains. Zale retains ownership, administrative and
                  financial responsibility for the domains and will work with
                  registration authorities as required to maintain and update
                  the domains.

                                       19
<PAGE>

         4.7.8    Security -- ACS will provide network security to and from the
                  Internet. This service includes firewall and intrusion
                  detection services, not less than those defined in the ACS IT
                  Security Policies, for existing Internet access maintained by
                  ACS. ACS will notify Zale in writing within five business days
                  of any changes to the ACS IT Security Policy that have a
                  material effect on Zale operations. Joint ACS and Zale
                  approval is required to modify the established security
                  provisions, except in cases of immediate threat to the
                  environment. ACS may temporarily modify, but not lessen,
                  security rules and provisions to address such a threat.

         4.7.9    System Monitoring -- ACS will provide and utilize monitoring
                  tools, such as Candle Command Center, that routinely test the
                  system for availability and will generate a notification to
                  ACS and Zale of any failures or exceptions.

                        SECTION 5 -- TRANSITION SERVICES

SECTION 5.1       TRANSITION PLAN

         ACS and Zale will execute a first year plan ("Transition Plan") that
transitions hardware, software, network resources, enterprise equipment,
personnel, financial responsibilities and processes to a new operating model.
Schedule D to the Agreement details the Transition Services and provides the
Transition Plan, to be managed by ACS. In this plan, the following will be
accomplished:

         1)       ACS will acquire, build out and upgrade Zale's data
                  communications network to support relocation of most of Zale's
                  midrange processing environment to the ACS data center in
                  Dallas.

         2)       ACS will, in a phased approach, and with Zale's cooperation
                  and support, relocate Zale's midrange processing environment
                  from Zale's Systems & Network Command Center ("SNCC") located
                  on the premises of Zale's General Office to the ACS data
                  center in Dallas using proven methodologies and tools, while
                  maintaining a highly available operating environment. As a
                  part of the Transition Plan, ACS will acquire selected Zale
                  assets as a part of technology refreshment for key assets
                  (defined in Schedule F-1). ACS will also acquire, install, and
                  maintain significant new assets including UNIX processors,
                  Intel-based processors and storage systems, for technology
                  upgrade and capacity expansion. Finally, ACS will migrate
                  certain processing functions, such as backups and tape media,
                  to existing leveraged ACS assets.

         3)       Transition ACS staff responsibilities during the Transition
                  Period to the ACS leveraged personnel model, which includes
                  7x24 hour support and global resource utilization.

SECTION 5.2       ROLES AND RESPONSIBILITIES

          Each Party will have specific responsibilities required for timely
completion of the Transition Plan. These responsibilities will be defined as an
initial planning responsibility for both parties, and will be mutually agreed.
Such responsibilities will include, but not be limited to, coordination of Zale
application development resources and schedules with Plan milestones, transfer
of assets and information required for completion of the phased migration,
coordination with ACS for transfer of software licenses and third party
agreements, testing and acceptance of each new environment as transition
milestones are reached, review and approval of the environment design for
performance, security, integration with applications and third party interfaces,
and final approval and oversight of the Transition Plan.

                                       20
<PAGE>

SECTION 5.3       PROJECT MANAGEMENT

         ACS will use proven project management resources and methodologies to
define, manage, control, track and report on Transition Services
responsibilities and accomplishments. ACS, with Zale's review and approval, will
define and document activities, milestones and quality metrics to be performed
as a part of the Transition Plan. To the extent that there is a conflict between
the Transition Plan and other schedules, the provisions of the Transition Plan
will control. ACS will use best efforts to comply with the transition schedule,
as dictated by changing business requirements of both Zale and ACS.

SECTION 5.4       EXTENSION

         If Zale requires a significant extension of the Transition Plan
schedule due to the failure of Zale to fulfill its responsibilities under the
Transition Plan or for other business reasons not related to the Transition
itself, any reasonable, documented, incremental out-of-pocket costs incurred by
ACS (including allocable salaries and travel expenses) will be reimbursed by
Zale. If the extension is due to the activities of both ACS and Zale's failure
to fulfill its responsibilities under the Transition Plan, the parties will
share the collective reasonable, documented, incremental out-of-pocket costs
(including allocable salaries and travel expenses) in proportion to their
responsibility for the delay.

                 SECTION 6 -- TERMINATION/EXPIRATION ASSISTANCE

SECTION 6.1       TERMINATION PLANNING AND KNOWLEDGE TRANSFER

         Upon termination or expiration of this Agreement, ACS agrees that
certain activities will be required to return control of the Zale owned portions
of its technology resource to Zale or its designee. Subject to the terms of
Section 17 of the Agreement, ACS will participate in good faith to successfully
complete the necessary activities for the transition back to Zale or its
designee, including, but not limited to, the following:

1.       Planning
              a.  Provide requested information regarding processes/systems
                  (information for new providers)
              b.  Participate in transition planning (including development of a
                  plan)

2.       Data Transfer
              a.  Establish agreed data transfer approach and mechanisms
              b.  Define specific handover events and schedule
              c.  Coordinate handover activities

3.       Knowledge Transfer

              a.  Inventory special knowledge areas (areas include DBA, DASD
                  administration, report distribution, software administration,
                  tape management, etc.)
              b.  Review and comment on proposed procedures as requested
              c.  Identify any special methods and procedures used to support
                  Zale
              d.  Survey for undocumented / unpublished Zale operations /
                  support information (survey of all ACS staff on the account
                  and written results of the survey)
              e.  Provide monitoring mechanism for new provider (console/remote
                  access, etc.)
              f.  Participate in knowledge transfer sessions

                                       21
<PAGE>

4.       Validation & Testing
              a.  Review and comment on all materials provided
              b.  Identify any possible problems or oversights
              c.  Participate in test planning and design
              d.  Participate in scheduled testing and follow-up activities

5.       Hardware Asset Rationalization
              a.  Complete hardware inventory ACS/Zale (listing of hardware
                  owned by Zale/ACS/Third Party)
              b.  Conduct lease review
              c.  Identify any transfer / acquisition of hardware as appropriate
              d.  Review maintenance agreements and identify any issues

6.       Hardware De-Installation
              a.  Develop and obtain agreement on schedule
              b.  Identify contingency plan and costs for delays

7.       Intellectual Property
              a.  Identify software modules, plans, schedules, proprietary
                  documentation, etc. to be returned to each Party
              b.  Develop transfer logistics, including any requirements for
                  licensing, sub-licensing or assignment, and any conclusions to
                  such transfer requirements

8.       Premises
              a.  Identify and complete the physical clean-up of designated
                  items
              b.  Conduct advance completion of non-time sensitive tasks
              c.  Schedule and conduct final clean-up

9.       Billing & Administration
              a.  Identify any special contractual obligations
              b.  Prepare ACS billing projections up to actual turnover
              c.  Agree to late billing process for delayed items
              d.  Prepare and submit final bill

10.      Conclusion of Relationship
              a.  Define process for ACS/Zale turnover of responsibilities and
                  resources

                                       22
<PAGE>

                              SCHEDULE B -- PRICING

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
SECTION 1 -- MAINFRAME CHARGES.................................................3
   Section 1.1       CPU Charges...............................................3
   Section 1.2       DASD Charges..............................................3
   Section 1.3       Tape Mount and Storage Charges............................3
   Section 1.4       Virtual Tape System (VTS) Charges.........................3
SECTION 2 -- MIDRANGE CHARGES..................................................4
   Section 2.1       Total Midrange Charges....................................4
   Section 2.2       Web Hosting Charges.......................................4
SECTION 3 -- NETWORK MANAGEMENT CHARGES........................................4
SECTION 4 -- DISASTER RECOVERY CHARGES.........................................5
SECTION 5 -- TRANSITION SERVICES CHARGES.......................................5
SECTION 6 -- ADDITIONAL RESOURCE CHARGES (ARCS) AND REDUCED RESOURCE CHARGES
             (RRCS)............................................................5
SECTION 7 -- HARDWARE PROVISIONING CHARGES.....................................5
   Section 7.1       Intel-Based Processors....................................6
   Section 7.2       HP-UX Processors..........................................6
   Section 7.3       Sun Utility Model.........................................6
SECTION 8 -- PRINT CHARGES.....................................................7
SECTION 9 -- SERVICE LEVEL CREDITS.............................................7
SECTION 10 -- ADDITIONAL SERVICES..............................................7
SECTION 11 -- ACQUISITION OF ZALE ASSETS.......................................8
SECTION 12 -- TERMINATION FOR CONVENIENCE FEES.................................8
</TABLE>

                                       2
<PAGE>

                         SECTION 1 -- MAINFRAME CHARGES

SECTION 1.1       CPU CHARGES

         The unit of billing for CPU resources will be an IBM 3090-200
equivalent CPU hour. Beginning on the Effective Date, Zale will be billed
monthly for CPU resources actually consumed at a rate of $66 per IBM 3090-200
CPU hour for the first two years of the Agreement, increasing to $125 per hour
upon ACS' completion of the mainframe upgrade planned after year two of the
Agreement. Zale will be billed for all TCB and SRB CPU time consumed by Zale
test or production processing tasks, including all Zale batch jobs, data file
backups, TSO sessions, on-line subsystems including CICS, IMS and DB2, and all
other Zale-specific processing. Zale will not be billed for CPU resources
consumed by the MVS operating system, including the JES2 and VTAM subsystems,
nor for the CPU resource consumed by operating system maintenance tasks, service
level reporting, system performance monitoring external to Zale's application
subsystems, or for CPU resources consumed by ACS' Zale billing system. The
mainframe charges for CPU, DASD, Tape and VTS will be itemized in conjunction
with each monthly invoice, with detailed job information provided on a monthly
CD-ROM for Zale's further review.

<Table>
<Caption>
                                             MONTHLY CPU CHARGES
                    ------------------------------------------------------------------
                    Months     Months   Months    Months   Months    Months    Months
                    1 - 12    12 - 24   24 - 36   36 - 48  48 - 60   60 - 72   72 - 84
                    ------     ------   ------    ------   ------    ------    ------
<S>                   <C>        <C>      <C>       <C>      <C>       <C>       <C>
  CPU Rate/Hour       $66        $66      $125      $125     $125      $125      $125
</Table>

SECTION 1.2       DASD CHARGES

         The unit of billing for DASD is an allocated gigabyte (GB) of storage
capacity. The monthly unit cost per GB is $38 and the unit of allocation is the
DASD spindle. Zale will be charged for all test or production (non-system
related) DASD space which is allocated to Zale or which is dedicated to Zale's
use (by Zale request or application/application processing requirement) and
unavailable for re-allocation to ACS for other purposes.

<Table>
<Caption>
                                              MONTHLY DASD CHARGES
                    ------------------------------------------------------------------
                    Months    Months   Months    Months    Months    Months   Months
                    1 - 12   12 - 24   24 - 36   36 - 48   48 - 60   60 - 72  72 - 84
                    ------    ------   ------    ------    ------    ------   ------
<S>                <C>       <C>       <C>       <C>       <C>       <C>      <C>
  DASD Rate/GB        $38       $38       $38       $38       $38       $38      $38
</Table>

SECTION 1.3       TAPE MOUNT AND STORAGE CHARGES

         Tape Charges are determined by the number of monthly mounts and slots.
The monthly unit charge for both mounts and slots will be $0.60. This charge
will apply to both cartridge and reel tapes. System maintenance and support
mounts initiated by ACS are not chargeable.

SECTION 1.4       VIRTUAL TAPE SYSTEM (VTS) CHARGES

         ACS will install a new Virtual Tape System during the first year of the
Agreement, as described in Schedule D -- Transition Services. The objective is
to convert existing tape storage media to the VTS, effectively replacing the
above Tape Mount and Storage Charges. Although used primarily for storage of
mainframe data, the VTS supports some midrange requirements. The monthly unit
charge for the VTS will be $1.00 per logical volume, which is defined as the
equivalent of a 36-track tape. The total VTS volumes documented at the time of
the Effective Date are approximately 20,000.

                                       3
<PAGE>

                          SECTION 2 -- MIDRANGE CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will pay ACS a monthly fee for the Midrange Services defined
in Schedule A, including the following processing platforms:

o        iSeries
o        Intel-Based Processors
o        Unix Processors
o        Midrange Tape and Disk Storage
o        Web Hosting Services
o        Midrange equipment upgrades detailed in Schedules A and D.

SECTION 2.1       TOTAL MIDRANGE CHARGES

         The complete monthly charges for all of the midrange services itemized
above are as follows:

<Table>
<Caption>
                                                         MONTHLY MIDRANGE CHARGES
                           ----------------------------------------------------------------------------------------
                            Months         Months       Months       Months       Months       Months       Months
                            1 - 12        12 - 24       24 - 36      36 - 48      48 - 60      60 - 72      72 - 84
                           --------       --------     --------     --------     --------     --------     --------
<S>                        <C>            <C>          <C>          <C>          <C>          <C>          <C>
  Price per month          $256,513       $254,428     $254,022     $246,901     $241,048     $245,708     $229,458
</Table>

SECTION 2.2       WEB HOSTING CHARGES

         Included in the above Total Midrange Charges is the monthly charge for
the Web Hosting services detailed in Schedule A, which will be $32,375.

                     SECTION 3 -- NETWORK MANAGEMENT CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will pay a monthly fee for the design, acquisition,
implementation and management of the Network Management Services detailed in
Schedule A, including the following:

o        WAN Services
o        LAN Services
o        Third-Party Network Connectivity
o        Internet Access
o        Network upgrade functions detailed in Schedules A and D

         The monthly charges for Network Management are as follows:

<Table>
<Caption>
                                                       MONTHLY NETWORK MANAGEMENT CHARGES
                           -----------------------------------------------------------------------------------------
                            Months         Months       Months       Months       Months       Months       Months
                            1 - 12        12 - 24       24 - 36      36 - 48      48 - 60      60 - 72      72 - 84
                           --------        --------     --------     --------     --------     --------     --------
<S>                        <C>             <C>          <C>          <C>          <C>          <C>          <C>
  Price per month          $127,212*       $125,051     $116,959     $115,461     $115,228     $111,873     $111,095
</Table>

     *Additional one-time charge of $4,780 planned for August 2005.

                                       4
<PAGE>
                     SECTION 4 -- DISASTER RECOVERY CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will pay a monthly fee of $21,177 for the Disaster Recovery
Support detailed in Schedules A and G.

                    SECTION 5 -- TRANSITION SERVICES CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will pay the following monthly fees for the Transition
Services detailed in Schedule D.

<Table>
<Caption>
                                                      MONTHLY TRANSITION SERVICES CHARGES
                            ---------------------------------------------------------------------------------------
                            Months         Months       Months       Months       Months       Months       Months
                            1 - 12        12 - 24       24 - 36      36 - 48      48 - 60      60 - 72      72 - 84
                            ------         ------       ------       ------       ------       ------       -------
<S>                         <C>            <C>          <C>          <C>          <C>          <C>          <C>
  Price per month           $2,503         $2,503       $2,503       $2,503       $2,503       $2,301       $2,301
</Table>

      SECTION 6 -- ADDITIONAL RESOURCE CHARGES (ARCS) AND REDUCED RESOURCE
                                 CHARGES (RRCS)

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale has the ability, as approved by Zale in writing, to scale
its use of the Services 25 percent above or 25 percent below the Baseline
Resource Units shown in the following chart. For Resource Units of service above
the Baseline (an ARC), the ARC/RRC Rate in the following chart will be added to
Zale's monthly charges. For services below the Baseline (a RRC), the ARC/RRC
Rate will be deducted from Zale's monthly charges. Upon reaching a resource
utilization level that is 25 percent above or 25 percent below the Baseline in
any given month, a new Baseline will be established and the Charges for those
Resource Units will be adjusted accordingly.

<Table>
<Caption>
                                              MONTHLY ARC/RRC CHARGES
-------------------------------------------------------------------------------------------------------------------
        RESOURCE UNITS                 BASELINE UNITS               ACS SERVICES             ARC/RRC RATE PER UNIT
        --------------                 --------------               ------------             ---------------------

<S>                                    <C>                    <C>                            <C>
Wintel Logical Server Image            155 - 190              Services and utilities only        $462 per month
UNIX Logical Server Image                 24                  Services and utilities only       $1,177 per month
iSeries Logical Server Image               4                  Services and utilities only       $2,149 per month
Midrange SAN Storage GBs                20,000                Services and utilities only      $1.50 GB per month
</Table>

                   SECTION 7 -- HARDWARE PROVISIONING CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will be able to purchase and use the following types of
hardware through ACS at the monthly rates indicated below. These rates will be
evaluated for potential adjustment, as described in Section 5.4 of the
Agreement.

         The charges for the Intel-based processors are based on three years of
usage, and the charges for the HP-UX processors are based on four years of
usage. The charges for any processor used beyond the projected usage periods
will be recalculated based on the current value of the asset and the extended
maintenance requirements of the manufacturer.

                                       5
<PAGE>
         At any time during the Term that a hardware asset procured exclusively
for Zale is scheduled for refreshment or replacement, Zale will have the first
right of refusal to acquire the asset from ACS at ACS' net book value, provided
that Zale (i) declines the refreshment or replacement of the asset acquired and
continues to receive the Services associated with that asset, or (ii) declines
the refreshment or replacement of the asset acquired and eliminates the Services
associated with that asset (invoking a RRC).

SECTION 7.1       INTEL-BASED PROCESSORS

<Table>
<Caption>
                                                                                                 MONTHLY CHARGE
      SIZE        CONFIGURATION                                                                     36 MONTHS
      ----        -------------                                                                  --------------
<S>               <C>                                                                            <C>
      Low         HP DL380 | 1WAY | 1GB | 3-10/100 | 1 GigE | 2 HBA | 2x72GB | 3YR 24x7x4             $136
      Med         HP DL380 | 2WAY | 2GB | 3-10/100 | 1 GigE | 2 HBA | 2x72GB | 3YR 24x7x4             $300
      High        HP DL580 | 4WAY | 4GB | 3-10/100 | 1 GigE | 2 HBA | 4x72GB | 3YR 24x7x4            $1,003
</Table>

SECTION 7.2       HP-UX PROCESSORS

<Table>
<Caption>
                                                                                                  MONTHLY CHARGE
SIZE            CONFIGURATION                                                                        48 MONTHS
----            -------------                                                                     --------------
<S>             <C>                                                                               <C>
     Low        HP rp3410 | 2WAY (800MHz) | 4GB | 1GigE | 2x10/100 | 2x36GB | 3YR 24x7x4               $439
     Med        HP rp4440 | 4WAY (PA8800) | 8GB | 2FC | 1GigE | 2x10/100 | 2x36GB | 3YR 24x7x4        $2,446
     High       HP rp7420 | 8WAY (PA8800) | 16GB | 2FC | 1GigE | 3x10/100 | 2x36GB | 3YR 24x7x4       $3,985
</Table>

SECTION 7.3       SUN UTILITY MODEL

<Table>
<Caption>
ITEM                QTY   MODEL TYPE / CONFIGURATION                                UNIT RATE    MONTHLY CHARGE
----                ---   --------------------------                                ---------    --------------

<S>                  <C>                                                           <C>           <C>
HDS TIER 1           1    Per GB of storage in 1 TB increments* (mirrored)            1.80           1,507.98
HDS TIER 2           1    Per GB of storage in 1 TB increments (mirrored)             1.15              841.72
SHADOW IMAGE         1    Per GB of Storage in 1 TB Increments                        0.15              150.77
TRUECOPY             1    Per GB of Storage in 1 TB Increments                        0.15              150.77
BROCADE 12000        2    Switch Port                                                 53.01             106.01
BROCADE 3900         2    Switch Port                                                 43.07               86.13
MCDATA 6140          2    Switch Port                                                 55.21             110.43
V120                 1    V120 | 1CPU 650 MHz | 1 GB                                 152.15             152.15
V210 LOW             1    1 CPU | GHz | 1GB                                          171.78             171.78
V210 HIGH            1    V200 | 2CPU 1000MHz                                        265.03             265.03
V240 LOW             1    2 CPU 1GHz | 4GB | 2 additional HD                         342.33             342.33
V240 HIGH            1    2 CPU 1GHz | 4GB | 2 FC HBA                                425.77             425.77
V440 LOW             1    4 CPU 1.062GHz | 8GB | 1 x1034, | 2 additional HD          596.32             596.32
V440 HIGH            1    4 CPU 1.062GHz | 8GB | 2 FC HBA and | 1 x1034              706.75             706.75
V490 LOW             1    2 CPU 1.05GHz | 8GB | 2x73GB HD | 2xFC HBA | 2 x4444A     1,288.34         1,288.34
V490 HIGH            1    4 CPU 1.05GHz | 16GB | 2x73GB HD | 2 FC HBA | 2 x4444A    2,269.94         2,269.94
V890 LOW             1    6 CPU 1.2GHz | 24GB | 6x73GB HD | 2xFC HBA | 1 x4444A     4,601.23         4,601.23
V890 HIGH            1    8 CPU 1.2GHz | 32GB | 6x73GB HD | 2xFC HBA | 1 x4444A     5,153.37         5,153.37
V2900 LOW            1    8 CPU 1.2GHz | 32GB | 2x73GB | 2xFC HBA | 2 x4444A        7,484.66         7,484.66
V2900 HIGH           1    12 CPU 1.2GHz | 48GB | 2x73GB HD | 2xFC HBA | 2 x4444A    8,282.21         8,282.21
V4900 AND ABOVE      1    4 CPUs 1.2GHz per board 16GB                              1,656.44         1,656.44
F15K                 1    4x8 CPU 15K 1.2GHz | 1xFC HBA | x1034 | x2222A            1,159.51         1,159.51
</Table>

                                       6
<PAGE>

                           SECTION 8 -- PRINT CHARGES

         Beginning on the Effective Date and continuing throughout the term of
the Agreement, Zale will pay the following fees for print services performed
each month. ACS will provide print services from its print facility in Dallas,
which will be staffed for operations on a 24x7 basis for demand printing by
Zale.

         ACS will manage delivery of completed print by third party courier
service back to the Zale General Office for subsequent internal distribution by
Zale employees. Zale will agree to a fixed delivery schedule and will reimburse
ACS for all courier charges at cost plus a 5 percent administration fee. Zale
may modify the delivery schedule, or request additional ad hoc or scheduled
deliveries, by requesting such deliveries through the established change control
process.

<Table>
<Caption>
                                               MONTHLY PRINT CHARGES
                         ----------------------------------------------------------------

<S>                                                                       <C>
                         SIMPLEX
                         Rate per image                                   $0.0460

                         DUPLEX
                         Rate per image                                   $0.0340

                         MICROFICHE
                         Originals                                        $0.970
                         Duplicates                                       $0.100
</Table>

                       SECTION 9 -- SERVICE LEVEL CREDITS

         As described in Schedule C, failure by ACS to meet the Critical Service
Levels will result in payment of Service Level Credits to Zale. The agreed
Critical Service Levels, measurement processes and calculations for amounts
payable to Zale are documented in Schedule C.

                        SECTION 10 -- ADDITIONAL SERVICES

         ACS will provide services beyond those identified in the Agreement by
using its own staff or mutually agreed subcontractors for the hourly rates
listed below. The rates are subject to Cost of Living Adjustments (COLA)
beginning in the second year of the Agreement. The rates for additional services
will be included in the Benchmarking process described in Section 5.4 of the
Agreement.

<Table>
<Caption>
                                                               HOURLY NEAR-SHORE     HOURLY OFF-SHORE
VENDOR JOB TITLE / LABOR CATEGORY      HOURLY ON-SITE RATES          RATES                 RATES
---------------------------------      --------------------    -----------------     ----------------

<S>                                    <C>                     <C>                   <C>
Applications Programmer                $              78.54    $          74.61         $     39.27

Business Analyst                       $              64.68    $          61.45                   NA

Communications Hardware Specialist     $              60.06    $          57.06                   NA

Communications Network Specialist      $              60.06    $          57.06         $      30.03

Communications Software Specialist     $              60.06    $          57.06         $      30.03
</TABLE>

                                       7
<PAGE>

<TABLE>
<S>                                    <C>                     <C>                      <C>
Computer Systems Analyst               $              55.44    $          52.67         $      27.72

Database Administrator (DBA)           $              87.78    $          83.39         $      43.89

Database Analyst                       $              73.92    $          70.22         $      36.96

Documentation Specialist               $              60.06    $          57.06         $      30.03

Information Systems Engineer           $              55.44    $          52.67         $      27.72

Network Design Engineer                $              69.30    $          65.84         $      34.65

Project Manager                        $              78.54    $          74.61                   NA

Quality Assurance Engineer             $              60.06    $          57.06         $      30.03

Security Systems Engineer              $              60.06    $          57.06         $      30.03

Software Engineer                      $              69.30    $          65.84         $      34.65

Software Systems Specialist            $              69.30    $          65.84         $      34.65

Storage Operations Specialist          $              60.06    $          57.06         $      30.03

Storage Management Engineer            $              60.06    $          57.06         $      30.03

System Administrator/Operator          $              46.20    $          43.89         $      23.10

System Programmer                      $              69.30    $          65.84         $      34.65

Systems Engineer                       $              73.92    $          70.22         $      36.96

Tape Librarian                         $              41.58    $          39.50                   NA

Technical Architect                    $              78.54    $          74.61         $      39.27

Training Specialist                    $              55.44    $          52.67         $      27.72
</Table>

                    SECTION 11 -- ACQUISITION OF ZALE ASSETS

         Upon the Effective Date, ACS will make a one-time payment to Zale of
$600,000 to acquire the Zale assets identified in Schedule F-1.

                 SECTION 12 -- TERMINATION FOR CONVENIENCE FEES

         Upon termination of this Agreement for convenience in accordance with
the provisions of Section 17 of this Agreement, Zale shall pay to ACS the
following amounts:

         o   All charges for Services accrued through the termination date less
             any Service Level Credits due Zale;
         o   All termination related charges and services described in Section
             17 of this Agreement, including equipment, leases, licenses or
             other discontinuation or redeployment costs;
         o   A Termination for Convenience Fee indicated below, which will be
             prorated over the Term to determine the actual amount payable by
             Zale in the month of termination:

             o  End of Contract Month 12 -- $4,000,000
             o  End of Contract Month 24 -- $3,500,000
             o  End of Contract Month 36 -- $3,000,000
             o  End of Contract Month 48 -- $2,500,000

                                       8
<PAGE>

             o  End of Contract Month 60 -- $2,000,000
             o  End of Contract Month 72 -- $1,500,000
             o  End of Contract Month 84 -- 0

         Upon Termination for Convenience, Zale may exercise any or all of the
options below that are applicable to paying or offsetting the Termination for
Convenience Fee:

         o   Upon Termination for Convenience in Month 37 or later, payment of
             the Termination for Convenience Fee entitles Zale to assume
             ownership of or lease obligations for all named assets procured
             exclusively for Zale in the first year of the Agreement, as defined
             in Schedule D, provided that Zale pays any taxes and any fees
             imposed by the manufacturer for the ongoing licensing, use and
             maintenance of the assets.

         o   Upon Termination for Convenience at any time during the Term, Zale
             may purchase from ACS at net book value any named assets that ACS
             has acquired exclusively for Zale, as defined in Schedule D and in
             Schedule A, Section 3.2, and the dollar amount Zale pays to
             purchase the assets will reduce (dollar for dollar) the amount
             payable by Zale as a Termination for Convenience Fee. The
             applicable Wintel assets are projected to be depreciated over 48
             months and the HP-UX assets are projected to be leased on a 48
             month term. All purchases are subject to payment by Zale of any
             taxes and any fees imposed by the manufacturer for the ongoing
             licensing, use and maintenance of the assets.

         o   Upon Termination for Convenience at any time during the Term, ACS
             will, as requested by Zale, use commercially reasonable efforts to
             broker the sale of any named assets acquired exclusively for Zale,
             as defined in Schedule D and in Schedule A, Section 3.2, and the
             dollar amount of the proceeds minus a five percent brokerage fee
             will reduce (dollar for dollar) the amount payable by Zale as a
             Termination for Convenience Fee.

         o   Upon Termination for Convenience at any time during the Term, ACS
             will, as requested by Zale, use commercially reasonable efforts to
             redeploy within ACS any named assets acquired exclusively for Zale,
             as defined in Schedule D and in Schedule A, Section 3.2, and the
             net book value of the redeployed assets will reduce (dollar for
             dollar) the amount payable by Zale as a Termination for Convenience
             Fee.

                                       9
<PAGE>

                     SCHEDULE C -- SERVICE LEVEL AGREEMENTS

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                              <C>
SECTION 1 -- SERVICE LEVEL DEFINITIONS AND GOVERNANCE POLICIES....................................................3
   Section 1.1       Definitions..................................................................................3
   Section 1.2       General Policies.............................................................................4
   Section 1.3       Critical Service Levels......................................................................4
   Section 1.4       Service Level Credits........................................................................6
SECTION 2 -- CRITICAL SERVICE LEVELS AND MEASUREMENTS.............................................................7
   Section 2.1       System Availability Per Scheduled Hours......................................................7
   Section 2.2       Critical Report Availability................................................................10
   Section 2.3       Batch Processing Completion.................................................................11
   Section 2.4       Emergency File & Database Restorations......................................................11
   Section 2.5       Availability of Wide Area Network And Internet Access.......................................11
   Section 2.6       Web Hosting Availability....................................................................12
   Section 2.7       Planning, Management and Administration Deliverables........................................12
   Section 2.8       Notifications and Alerts....................................................................12
   Section 2.9       Security and Regulatory Compliance..........................................................12
SECTION 3 -- SUMMARY OF SERVICE LEVELS, ALLOCATIONS AND MEASUREMENTS.............................................13
</TABLE>

                                       2

<PAGE>

         SECTION 1 -- SERVICE LEVEL DEFINITIONS AND GOVERNANCE POLICIES

         Services will be provided against established measures of expected
performance in accordance with the following definitions and policies.

SECTION 1.1       DEFINITIONS

         (a)      "At-Risk Amounts" -- shall mean, for any given month during
                  the Term, five percent (5%) of the Charges payable by Zale to
                  ACS during such given month (other than any Pass-Through
                  Expenses).

         (b)      "Availability" -- shall mean the Actual Uptime expressed as a
                  percentage of the Scheduled Uptime for the particular Services
                  (i.e., Availability % = ((Actual Uptime)/(Scheduled Uptime)) x
                  100).

         (c)      "Critical Services" -- Critical Services are those specific
                  Services identified by Zale as being subject to Service Level
                  measurement including, but not limited to, mainframe, server
                  and network availability, batch job completion, report
                  delivery, database restorations, and other delivery functions
                  as mutually agreed by the parties.

         (d)      "Critical Service Levels" -- shall mean those performance
                  standards described in Section 1.3.

         (e)      "Expected Service Levels" -- shall mean those Service Levels
                  designated as "Expected Service Levels" in Section 2 with
                  respect to each Critical Service Level.

         (f)      "Elapsed Times" -- shall mean the hours for response/repair
                  Service Levels within Zale's business hours except where
                  specifically stated to be continuous hours.

         (g)      "Region" -- For Service Level purposes, the term Region also
                  includes started tasks.

         (h)      "Required Service Levels" -- shall mean those Service Levels
                  designated as "Required Service Levels" in Section 2 with
                  respect to each Critical Service Level.

         (i)      "Required Service Level Default" -- shall have the meaning set
                  forth in Section 1.4.

         (j)      "Rolling Six Month Period" -- shall have the meaning set forth
                  in Section 1.4.

         (k)      "Service Level" -- shall mean the performance standards set
                  forth in this Schedule, including Critical Service Levels,
                  Expected Service Levels, Required Service Levels and Key
                  Measurements.

         (l)      "Service Level Credit" -- shall have the meaning set forth in
                  Section 1.4.

         (m)      "Service Level Credit Allocation" -- shall have the meaning
                  set forth in Section 1.4.

                                       3

<PAGE>

SECTION 1.2       GENERAL POLICIES

         (a)      Portability -- Service Levels, unless modified in this
                  Schedule, follow a Zale application system when and if it
                  changes technology platforms, subject to Section 1.3.3
                  "Initial Period" below.

         (b)      Calculations -- Monthly calculations are based on calendar
                  month.

         (c)      Application Standards -- Zale will maintain its application
                  systems consistent with Zale standards for system maintenance,
                  change, and change management. Zale believes that its
                  standards are consistent with the ACS production
                  classification and will not unreasonably modify its standards
                  in a manner that would be less compatible with ACS standards.

         (d)      Recalls -- For all types of user service calls, a recall
                  required to complete/repair an incomplete or incorrect/partial
                  fix is to be considered a re-opening of the ticket with
                  previously Elapsed Times being included in time measurements
                  for service level purposes.

SECTION 1.3       CRITICAL SERVICE LEVELS

         1.3.1    A Required Service Level and an Expected Service Level are
                  associated with each Critical Service. ACS shall perform the
                  Services in accordance with each Expected Service Level. In
                  the event that ACS fails to achieve a Required Service Level
                  in any given month, ACS shall pay Zale a Service Level Credit
                  calculated in accordance with Section 1.4. The Required
                  Service Levels and Expected Service Levels associated with
                  each Critical Service Level are set forth in Section 2.

         1.3.2    Additions, Modifications and Deletions of Critical Service
                  Levels -- Zale may add, modify or delete Critical Service
                  Levels as follows

                  a.  Additions -- Zale may add Critical Service Levels by
                      sending notice to ACS at least sixty (60) days prior to
                      the date that such additions to Critical Service Levels
                      are to be effective, provided that Zale may send such a
                      notice (which notice may contain multiple changes) not
                      more than once each calendar quarter. The sum total of the
                      Service Level Credit Allocations percentages for new and
                      existing Critical Service Levels identified in Section 2
                      will be adjusted as necessary to equal 100%. The Parties
                      shall agree upon the Expected Service Level and the
                      Required Service Level for each Critical Service Level. In
                      the event that the Parties are unable to reach agreement
                      upon such Service Levels, such Service Levels shall be
                      established in one of the following ways:

                      Where at least four (4) months of service measurements
                      exist for the Service that is being provided by ACS, the
                      Parties agree that the Service Levels shall be established
                      as follows:

                      o    The Expected Service Level will be set at the average
                           of the two highest monthly measures.

                      o    The Required Service Level will be set to the average
                           of the three lowest monthly measures.

                                       4

<PAGE>

                      Where no measurements exist for a particular Service, the
                      Parties shall attempt to agree on an Expected Service
                      Level using industry standard measures or third party
                      advisory services (e.g., Gartner Group, META Group). If
                      the parties are unable to agree on an Expected Service
                      Level the approach used to develop an Expected Service
                      Level and a Required Service Level for a new Critical
                      Service Level will be as follows:

                      o    ACS will implement and report on the actual
                           performance of ACS as to the new Critical Service
                           Level for four (4) months on a monthly basis.
                      o    The Expected Service Level will be set at the average
                           of the two highest monthly measures.
                      o    The Required Service Level will be set to the average
                           of the three lowest monthly measures.

                  b.  Deletions -- Zale may delete Critical Service Levels by
                      sending notice to ACS at least sixty (60) days prior to
                      the date that such deletions to Critical Service Levels
                      are to be effective, provided that Zale may send such a
                      notice (which notice may contain multiple changes) not
                      more than once each calendar quarter.

                  c.  Modifications -- Zale may modify the Service Level Credit
                      Allocations for any Critical Service Levels by sending
                      notice to ACS at least sixty (60) days prior to the date
                      that such modifications to the Service Level Credit
                      Allocations are to be effective, provided that Zale may
                      send such a notice (which notice may contain multiple
                      changes) not more than once each calendar quarter. The
                      Parties shall agree upon the Expected Service Level and
                      the Required Service Level for each modification proposed.
                      The sum total of the Service Level Credit Allocations
                      percentages for all Critical Service Levels identified in
                      Section 2 will be adjusted as necessary to equal 100%.

         1.3.3    Initial Period -- During the first 60 days of ACS
                  responsibility for a Service Level (or for the same period
                  following the installation of a new or replacement application
                  system), any Service Level defaults that repeatedly occur and
                  can not be cured by joint ACS/Zale actions will be subject to
                  joint good faith efforts to correct problem(s) or to reset the
                  expected Service Level(s). The first quarterly and annual
                  report production deadlines are subject to this provision.

         1.3.4    Environment Changes -- When new systems or Region structures
                  occur, the default service levels apply until and unless this
                  Schedule is modified. For convenience, only exceptions to
                  default values are shown in tables within Section 2.

         1.3.5    Specific Corrective Actions -- Each Default of a Required
                  Service Level, as defined in Section 1.4 of this Schedule,
                  requires that ACS provide, at Zale's request, a written
                  assessment of how the service level was missed and what
                  corrective or preventative action has been/will be (with
                  completion date) taken to prevent additional defaults.

         1.3.6    Equipment Ownership -- For any computing or communications
                  equipment which Zale owns, the service level exemptions
                  described below will apply. Equipment failures will
                  effectively "stop the clock" for related service levels until
                  the equipment has been repaired/replaced and any related
                  restoration activities are complete. This exemption is subject
                  to the following restrictions:

                                       5

<PAGE>

                  a. No maintenance or support violations on ACS' part in the
                     prior 120 days
                  b. Technical support and environmental software problems are
                     not included
                  c. Proper maintenance schedules using authorized technicians
                     have been followed by ACS
                  d. Instances involving operator negligence are excluded
                  e. No environmental problems in any related ACS equipment area
                     have occurred in the prior 180 days
                  f. ACS has provided at least semi-annual written equipment
                     risk assessments to Zale for the equipment involved. Such
                     assessment shall address performance risk with respect to
                     supported software, equipment sizing, and functionality.
                  g. Zale has reasonably communicated expected and material
                     changes to the processing volumes operated on the
                     equipment, and ACS has had sufficient time to analyze,
                     recommend, and implement upgrade requirements.

SECTION 1.4       SERVICE LEVEL CREDITS

         1.4.1    Calculation--The charts set forth in Section 2 provide the
                  information required to calculate the credits (each a "Service
                  Level Credit") that ACS shall apply against monthly Charges in
                  the event that ACS fails to achieve a Required Service Level
                  and such failure is not excused as provided in this Schedule
                  (each such failure, a "Required Service Level Default"). For
                  each Required Service Level Default, ACS shall pay to Zale a
                  Service Level Credit that will be computed in accordance with
                  the following formula:

                     SERVICE LEVEL CREDIT = A X B X C

                     Where:

                     A = The applicable percentage allocated to the applicable
                     Critical Service Level in which the Required Service Level
                     Default occurred (the "Service Level Credit Allocation").
                     Zale may from time to time during the Term change the
                     Service Level Credit Allocations in accordance with this
                     Schedule C. As of the Effective Date, the Service Level
                     Credit Allocations are set forth in Section 2.

                     B = The monthly At Risk Amount, in dollars

                     C = A number determined as follows:

                     o     C = one (1) if during the six (6) consecutive months
                           immediately preceding the applicable Critical Service
                           Level Default (the "Rolling Six Month Period") the
                           number of Required Service Level Defaults that have
                           occurred with respect to the applicable Critical
                           Service Level are less than or equal to four (4).
                     o     C = two (2) if during the Rolling Six Month Period
                           the number of Required Service Level Defaults that
                           have occurred with respect to the applicable Critical
                           Service Level are equal to or greater than five (5).

         1.4.2    Credits to Zale for Service Level Defaults Occurring in a
                  Single Month--If more than one Required Service Level Default
                  has occurred in a single month, the sum of the corresponding
                  Service Level Credits shall be credited to Zale. If the more
                  than one Required Service Level Defaults occur during a month
                  in Zale's Freeze Period, a fifteen

                                       6

<PAGE>

                  (15) percent premium will be added to the Service Level
                  Credit. In no event shall the amount of Service Level Credits
                  credited to Zale with respect to all Required Service Level
                  Defaults occurring in a single month exceed, in total, the At
                  Risk Amount. ACS shall notify Zale in writing if Zale becomes
                  entitled to a Service Level Credit, which notice shall be
                  provided in the monthly performance report. The total dollar
                  amount, based on Service Level Credits, that ACS will be
                  obligated to pay to Zale, with respect to Required Service
                  Level Defaults occurring each month, shall be reflected in a
                  credit memo issued by ACS to Zale at the end of each such
                  month.

         1.4.3    Sample Calculation--Assume that ACS fails to meet the Required
                  Service Level with respect to System Availability Per
                  Scheduled Hours (as defined in Section 2). Assume that ACS'
                  total charges to Zale for the month in which the Required
                  Service Level Default occurred were $775,000. The Service
                  Level Credit due to Zale for such Required Service Level
                  Default would be computed as follows:

                      A = 20% (the Service Level Credit Allocation for System
                      Availability Per Scheduled Hours)

                           Multiplied by

                      B = $38,750 (five percent (5%) of $775,000)

                               Multiplied by

                      C = 1 (see Service Level Credit calculation above)

                               = $7,750 (the amount of the Service Level Credit)

                SECTION 2 -- CRITICAL SERVICE LEVELS AND MEASUREMENTS

         Critical Service Levels and measurements have been set for the services
documented in this Section. Detailed data and reports will be made available to
Zale's designated users through the ACS Performance Information Center (PIC), a
web portal providing instant access to service-level measurements and
statistics. Additional data will be made available to the Zale management team
in electronic and hardcopy form on request.

SECTION 2.1       SYSTEM AVAILABILITY PER SCHEDULED HOURS

         System Availability means the availability of a defined group of
applications or processing environments during scheduled hours each month. The
mainframe and midrange systems documented in the following charts will be
measured as a group to determine a collective System Availability percentage
each month.

         System Availability shall be measured using standard system utilities
and problem ticket information. A system will be considered as available if it
is operating normally and available for its intended use.

         CALCULATION OF SYSTEM AVAILABILITY PER SCHEDULED HOURS = 100 X ((A/B +
A/B) + .....A/B))/N

         WHERE:

                                       7

<PAGE>

         A = The number of minutes when an individual application or system was
         available during the month. This calculation will include every
         application or system being measured.

         B = The number of minutes when such application or system was scheduled
         to be available during the month.

         N = The number of applications or systems being measured.

              SYSTEM AVAILABILITY PER SCHEDULED HOURS -- MAINFRAME
<Table>
<Caption>
                                   Monday-Friday                     Saturday                           Sunday
                           ---------------------------------------------------------------------------------------------------
                             Scheduled        During        Scheduled         During          Scheduled          During
                              Service         Freeze         Service          Freeze           Service           Freeze
                               Level          Period          Level           Period            Level            Period
                           ---------------------------------------------------------------------------------------------------
                             Up     Up      Up      Up      Up      Up      Up       Up      Up       Up      Up       Up
Region / System              By    Until    By    Until     By    Until     By     Until     By     Until     By      Until
------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>    <C>      <C>   <C>      <C>     <C>      <C>    <C>      <C>     <C>       <C>     <C>
Mainframe Default           0700   2100     -       -      0700    2100      -       -      1000     1800      -        -
CICSQZLQ
  EDI                        -       -      -       -       -       -        -       -        -      2000      -        -
CICSQZLL
  ESR                        -       -      -       -       -      1800      -       -        -       -        -        -
  Stock Status               -       -      -       -       -      1800      -       -        -       -        -        -
  IAS                        -       -      -       -       -      1800      -       -        -       -        -        -
  IP                         -       -      -       -       -      1800      -       -        -       -        -        -
  POM                        -       -      -       -       -      1800      -       -        -       -        -        -
  Sales                      -       -      -       -       -      1800      -       -        -       -        -        -
  Stores                     -       -      -       -       -      1800      -       -        -       -        -        -
  SKU/Price Mgt              -       -      -       -       -      1800      -       -        -       -        -        -
CICSQZLA                    0300   2300     -       -      0300    2300      -       -      0300     2000      -        -
</Table>

        NOTES:   SYSTEM AVAILABILITY PER SCHEDULED HOURS

        o  A - (dash) means the default service level applies
        o  Unless specified in the schedule any system is subject to the default
           schedules for mainframe or midrange, as appropriate
        o  NF means the Non-Freeze Period service level applies
        o  N/A means the system is not scheduled up
        o  Service Levels are applied on a per application system basis

                                       8

<PAGE>

               SYSTEM AVAILABILITY PER SCHEDULED HOURS -- MIDRANGE

<Table>
<Caption>
                                   Monday-Friday                     Saturday                           Sunday
                           ---------------------------------------------------------------------------------------------------
                             Scheduled        During        Scheduled         During          Scheduled          During
                              Service         Freeze         Service          Freeze           Service           Freeze
                               Level          Period          Level           Period            Level            Period
                           ---------------------------------------------------------------------------------------------------
                             Up     Up      Up      Up      Up      Up      Up       Up      Up       Up      Up       Up
System                       By    Until    By    Until     By    Until     By     Until     By     Until     By      Until
------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>    <C>     <C>    <C>      <C>    <C>      <C>     <C>      <C>     <C>      <C>      <C>
Midrange Default            0700   2300    0600     NF     0700    2300     NF       NF     1000     2000     NF       NF
Groupwise Servers           0000   2400     NF      NF     0000    2400     NF       NF     0600     2400     NF       NF
Novell Login Servers        0000   2400     NF      NF     0000    2400    0000      NF     0800     2330    0800      NF
Domain Controllers          0000   2400     NF      NF     0000    2400     NF       NF     0000     2400     NF       NF
    ZaleDC1-4
Metaframe /Citrix           0000   2400     NF      NF     0000   24:00     NF       NF     00:00    2400     NF       NF
Intranet Web Servers        0000   2400     NF      NF     0000    2400     NF       NF     0000     2400     NF       NF
    Intranet1-4
Proxy Servers               0000   2400     NF      NF     0000    2400     NF       NF     0000     2400     NF       NF
    Proxy 1-2
    ZNTPRXY3-4
Misc Appls (ProdNT1)        0000   2400     NF      NF     0000    2400     NF       NF     0000     2400     NF       NF
Pagoda Polling               -       -      -       -       -       -        -       -        -       -        -        -
    POLLING1-2
Business Objects            6:30     -      NF      NF     6:30     -       NF       NF     10:30     -       NF       NF
    ZaleHP12
    ZNTZABO1-2
    ZNTFSDOC
Arthur                       -       -      -       -       -       -        -       -        -       -        -        -
    ZaleHP22
    ZNTART1-4
SQL Servers                  -       -      -       -       -       -        -       -        -       -        -        -
    ZNTSQL1
    ZaleSQL2
VisiFax (ZaleHP9)            -       -      -       -       -       -        -       -        -       -        -        -
Biscom (ZNTFAX1)             -       -      -       -       -       -        -       -        -       -        -        -
FedEx (ZNTSHIP1)             -       -      -       -       -       -        -       -        -       -        -        -
Diamond Sourcing             -       -      -       -       -       -        -       -        -       -        -        -
    ZaleHP22
    ZNTDISO1,2,4,6-8
Retek (ZaleHP14)
Epiphany                    0600   2400     NF      NF     0600    2400     NF       NF     0600     2400     NF       NF
    ZaleHP20
    VMSRVR02, 03
Symposium                   0600   2400     NF      NF     0600    2400     NF       NF     0600     2400     NF       NF
    ZNTSYMP1-4
Voice Response              0600   2400     NF      NF     0600    2400     NF       NF     0600     2400     NF       NF
    ZNTIVR1,2
WorkFlow                     -       -      -       -       -       -        -       -        -       -        -        -
    ZNTFLOW1,2
    ZNTWSRV1,2
RTS                          -       -      -       -       -       -        -       -        -       -        -        -
    ZNTRTS1,2,4
Autosys/Veritas             0000   2400     NF      NF     0000    2400     NF       NF     0000     2400     NF       NF
    ZaleADM1-2
</TABLE>

                                       9

<PAGE>

<TABLE>

<S>                         <C>    <C>     <C>     <C>     <C>     <C>     <C>      <C>     <C>      <C>     <C>      <C>
STS/OFA (ZaleHP12)          0630   2100     NF      NF     0630    2100     NF       NF
P/R H/R (ZaleHP12)           -       -      NF      NF      -       -       NF       NF     0700     2300     NF       NF
Optum (ZaleHP14)             -     2100     NF      NF      -      2100     NF       NF     0700     2100     NF       NF
Oracle Finance / HR          -       -      -       -       -       -        -       -        -       -        -        -
    ZaleHP24, 26
    Tacoma, Tundra
CATS Polling                 -       -      -       -       -       -        -       -        -       -        -        -
    Blazer1,2
    ZaleADM1
Insurance (ZaleAS1)          -       -      -       -       -       -        -       -        -       -        -        -
E3 (ZaleAS2)*               0900   1900     -      2100    1000    1900     NF       NF       -       -        -
All Test Servers            0800   1700    0800    1700    0800    1700    0800     1700    0800     1700    0800     1700
</Table>

         Notes:   System Availability Per Scheduled Hours
         o  A - (dash) means the default service level applies
         o  Unless specified in the schedule any system is subject to the
            default schedules for mainframe or midrange, as appropriate
         o  NF means the Non-Freeze Period service level applies
         o  N/A means the system is not scheduled up
         o  Service Levels are applied on a per application system basis

* Zale to waive SLA commitment for the first 30 days of the Agreement and/or
pending stabilization of prerequisite factors that are not under ACS' control.

SECTION 2.2       CRITICAL REPORT AVAILABILITY

         Availability is defined as delivered (available for viewing or printing
on midrange systems) or available for pick-up if produced at an ACS print
facility and couriers to Zale's General Office, as appropriate. Morning Report
is to be available via email prior to the daily production meeting M-F.

<Table>
<Caption>
JOBNAME                REPORT ID                    REPORT NAME                  DUE       EXPECTED        REQUIRED
                                                                                            WITHIN          WITHIN
<S>              <C>                    <C>                                   <C>        <C>            <C>
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
BP***            BP Replacement         Financial institution reports         0800          30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
DC25010          DC25010701             Letdown report                        05:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
DC25030          DC25030A               Sales order audit sheets              05:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
DC25030          DC25030700             Master picklist by item               05:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
RI55982          D001.OTBEXT            Daily OTB extract (files)             09:00         1 hour      <2 hours
                 D001.PCOTB                                                   (M-F)
                 DD01.STRCNTTY
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
RI85090          D001.CNTRLDN           Snapshot control download (file)      06:00         1 hour      <2 hours
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
RI85090          D001.COUNTDN           Snapshot download (file)              06:00         1 hour      <2 hours
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST30010          ST30010B               Polling status report                 06:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20080          ST20080C               Price Changes (PRCN)                  13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20100          ST20100G               Purchase Orders (PORD)                13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20170          ST20170B               Spec. Purchase Orders (POSQ)          13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20250          ST20250D               Transfers (XREC)                      13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20255          ST20250D2              DC Shipments (XREC)                   13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
ST20250          ST20250F               Transfer Requests (XREQ)              13:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
Multiple                                Morning Report                        08:00         30 mins     <1 hour
---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
</Table>

                                       10

<PAGE>

SECTION 2.3       BATCH PROCESSING COMPLETION

<Table>
<Caption>
                                                                    JOBNAME/                   EXPECTED       REQUIRED
      CRITICAL APPLICATION             TARGET BATCH EVENT           REPORT ID        DUE        WITHIN         WITHIN
 -------------------------------- ----------------------------- ----------------- --------- -------------- -------------
<S>                               <C>                            <C>              <C>       <C>            <C>
 Electronic Data Interchange      EDI Vendor P.O.               ED29003             0400       30 mins       <1 hour
 -------------------------------- ----------------------------- ----------------- --------- -------------- -------------
                                  Vendor P.O. Fax File          ED20014             0600       30 mins       <1 hour
 -------------------------------- ----------------------------- ----------------- --------- -------------- -------------
 </Table>

SECTION 2.4       EMERGENCY FILE & DATABASE RESTORATIONS

         Dataset/database availability is defined as available for transfer,
ready for access/update by other scheduled jobs or ready for on-line access as
appropriate

 <Table>
 <Caption>

 SERVICE LEVEL - MEASURED MONTHLY UNLESS SPECIFIED                          EXPECTED WITHIN       REQUIRED WITHIN

 ---------------------------------------------------------------------- ------------------------- -----------------------
<S>                                                                     <C>                       <C>
 File & Database Restoration Requests - On-site storage
 Emergency Requests  (Time for Full Restore to Be Underway)                       1 Hr                    <2 Hrs

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

 File & Database Restoration Requests - Off-site storage
 Emergency Requests (Time for Full Restore to Be Underway)                       2 Hrs                    <6 Hrs

 ---------------------------------------------------------------------- ------------------------- -----------------------
 </Table>

SECTION 2.5       AVAILABILITY OF WIDE AREA NETWORK AND INTERNET ACCESS

<Table>
<Caption>

SERVICE LEVEL - MEASURED MONTHLY UNLESS SPECIFIED                            EXPECTED                    REQUIRED

------------------------------------------------------------------ ------------------------------ -----------------------
<S>                                                                <C>                            <C>
Network Availability - Non Carrier Causes                             Outage not to Exceed 30        Single Incident
                                                                              Minutes                    <4 hours

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

Network Time to Heal - Time to Alternate Service where it is
available.  Includes Management of Appropriate Carrier(s)                   15 Minutes                   <1 hour

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

Network Time to Repair - Time To Repair where alternate service               2 hours                    <8 hours
is not available.  Includes Management of Appropriate Carrier(s)

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

Network Time to Repair - Time To Repair where alternate service               8 hours                   <24 hours
is available.  Includes Management of Appropriate Carrier(s)

------------------------------------------------------------------ ------------------------------ -----------------------
</Table>

                                       11

<PAGE>

         The Expected Service Level for availability of the wide area network
and internet access is 99.8%, calculated monthly, with the exception of the
Maintenance Window defined in Schedule A, and as excluded below. The Required
Service Level is 99.5% for the month.

         A Required Service Level Default occurs if ACS requires the use of the
Maintenance Window during a Zale Freeze Period.

SECTION 2.6       WEB HOSTING AVAILABILITY

         The Expected Service Level for internet access to the Web Hosting site
is 99.8% availability, calculated monthly, with the exception of the Maintenance
Window defined in Schedule A and as excluded below. The Required Service Level
for internet access to the Web Hosting site is 99.5%.

         A Required Service Level Default occurs if ACS requires the use of the
Maintenance Window during a Zale Freeze Period.

SECTION 2.7       PLANNING, MANAGEMENT AND ADMINISTRATION DELIVERABLES

         The Service Levels for providing documents identified as specific
deliverables under the Agreement and its Schedules are:

    o    The Expected Service Level is delivery within 5 business days of the
         event for requested Service Level Failure Analysis and Corrective
         Action Reports. The Required Service Level is delivery of the reports
         in less than 10 days.
    o    The Expected Service Level is delivery within 10 business days of the
         due date for planning, evaluation, strategy and similar documents. The
         Required Service Level is delivery of the documents in less than 20
         business days.
    o    The Expected Service Level is delivery within 20 business days of
         semi-annual updates to the Operations, Disaster Recovery and Procedures
         manuals used to provide the Services. The Required Service Level is
         delivery of the updated manuals in less than 45 days.
    o    The Expected Service Level is delivery within 20 business days of
         annual updates to the Equipment and Software inventories set out in
         Schedule F. The required Service Level is delivery of the annual
         inventory updates in less than 45 business days.

SECTION 2.8       NOTIFICATIONS AND ALERTS

         The Expected Service Level for performing the required notifications in
Section 3.15 of Schedule A is to be underway in 15 minutes. The Required Service
Level for performing notifications is less than 45 minutes.

SECTION 2.9       SECURITY AND REGULATORY COMPLIANCE

         Within 90 days of the Effective Date, Critical Service Levels will be
established for the following:

    o    Designation of an ACS Project Manager who will participate in Zale's
         compliance and regulatory planning process and in providing scheduled
         deliverables to assist Zale in meeting its regulatory requirements.
         Zale, after approval, will compensate ACS for additional reasonable
         resources, expenses or Services required to expand, enhance and support
         Zale's regulatory compliance efforts over time.

                                       12

<PAGE>

    o    Evaluation and establishment of Service Levels for turnaround times
         associated with the following functions:
            o    Priority security change requests
            o    Operational/research security requests
            o    Provisioning of user accounts
            o    Remediation plans for non-compliant security practices
            o    Monthly, quarterly, and annual compliance reporting

SECTION 3 -- SUMMARY OF SERVICE LEVELS, ALLOCATIONS AND MEASUREMENTS

<Table>
<Caption>

            CRITICAL SERVICE LEVELS                 EXPECTED          REQUIRED        ALLOCATION      EFF + MONTHS
------------------------------------------------ ---------------- ----------------- --------------- ------------------
<S>                                              <C>              <C>               <C>             <C>
System Availability Per Scheduled Hours               99.8%            99.5%             20%               2/4
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Critical Report Availability (Multiple)              30 mins         1-2 hours           10%               2/2
                                                    to 1 hour
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Batch Processing Completion (Multiple)               30 mins          <1 hour            10%               2/2
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Emergency File and Database Restorations            1-2 hours        2-6 hours           10%               2/4
(Multiple)
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Wide Area Network Availability                        99.8%            99.5%             20%               2/4
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Web Hosting Availability                              99.8%            99.5%             20%               2/4
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Planning, Management and Administration             5-20 days        20-45 days          10%               2/2
Deliverables (Multiple)
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Notifications And Alerts                             15 min           <45 min            10%               2/4
------------------------------------------------ ---------------- ----------------- --------------- ------------------
Security and Regulatory Compliance                     TBD              TBD              TBD               TBD
------------------------------------------------ ---------------- ----------------- --------------- ------------------
</Table>

*Eff=Number of months after the Effective Date when ACS will become responsible
for providing measurement data in support of the Critical Service Levels.
Months=The number of months after the Effective Date when ACS will begin to be
responsible for the applicable Service Level Credits associated with the
Critical Service Levels.

                                       13
<PAGE>

                        SCHEDULE D -- TRANSITION SERVICES

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                             <C>
SECTION 1 -- TRANSITION SERVICES OVERVIEW.........................................................................3
   Section 1.1       Plan Development.............................................................................3
   Section 1.2       Zale Responsibilities........................................................................3
   Section 1.3       Service Levels...............................................................................4
SECTION 2 -- PROPOSED TRANSITION SCHEDULE.........................................................................4
   Section 2.1       Phase 1 (August 15, 2005 to September 30, 2005)..............................................4
   Section 2.2       Phase 2 (October 1, 2005 to January 9, 2006).................................................4
   Section 2.3       Phase 3 (January 10, 2006 to June 28, 2006)..................................................5
   Section 2.4       Disaster Recovery Plan.......................................................................5
SECTION 3 -- SNCC TRANSITION......................................................................................6
   Section 3.1       ACS Enterprise Command Center................................................................6
   Section 3.2       Operations...................................................................................6
</TABLE>

                                       2

<PAGE>

                    SECTION 1 -- TRANSITION SERVICES OVERVIEW

SECTION 1.1       PLAN DEVELOPMENT

         1.1.1    Transition Plan-- ACS has developed and will execute a
                  Transition Plan to selectively upgrade and relocate Zale's
                  designated midrange processors to the ACS Dallas data center
                  and upgrade Zale's data communications network to support that
                  relocation. Following the Effective Date, ACS and Zale will
                  collaboratively refine, finalize and agree on the Transition
                  Plan, which will be approved by the Zale CIO. ACS will use
                  best efforts to comply with the Proposed Transition Schedule
                  in Section 2, as dictated by changing business requirements of
                  both Zale and ACS. The objective of the transition is to
                  complete all relocation and upgrade activities by no later
                  than July 31, 2006.

         1.1.2    Phased Approach -- The Transition Plan is defined in three
                  phases to enable a controlled migration of the designated
                  technical environments while reducing the opportunity for
                  problems affecting production Services. The phases are
                  described in general terms in Section 2 below. Generally, each
                  group of relocated midrange servers and equipment as defined
                  in each phase will be implemented first as a "test
                  environment" to verify the migration has appropriate
                  functionality, connectivity, data and performance
                  characteristics, then a second "live conversion" with current
                  data being transmitted.

         1.1.3    Change Control -- ACS and Zale together, as a part of the
                  overall Change Control process defined in Schedule A, will
                  manage the Transition Plan to best meet Zale's requirements.
                  The Transition Plan has been developed with the best knowledge
                  of both parties as of the Effective Date, however additional
                  planning efforts or changes to business requirements may
                  require changes during the execution of the plan. All changes
                  to the Transition Plan must be approved through the Change
                  Control process, with the understanding that significant
                  changes may affect the cost of the overall Transition Plan,
                  including but not limited to, personnel resources, hardware,
                  software, equipment, and network resources and circuits, such
                  cost changes to be borne by the party requiring the change.

SECTION 1.2       ZALE RESPONSIBILITIES

         1.2.1    Plan Approval and Communication -- Zale shall review, approve,
                  and communicate the Transition Plan to all affected Zale
                  managers, employees, and business units, and Zale management
                  will reasonably ensure that all Zale parties are able to
                  execute the Transition Plan on a timely basis.

         1.2.2    Asset Transfer, 3rd Party Approvals -- Zale and ACS will work
                  together to complete the proposed Asset Transfer for selected
                  Zale assets to ACS, and further to transfer any required Third
                  Party Agreements and/or Services, such as software licenses
                  and maintenance agreements, hardware maintenance agreements,
                  and telecommunications circuits, between the parties as
                  agreed.

         1.2.3    Testing -- Zale shall define, provide, organize, communicate,
                  and approve any Zale personnel required to test the Zale
                  Systems and Applications once migrated to both the "test
                  environment" and "live conversion" environment as defined in
                  Section 1.1.2 above.

                                       3

<PAGE>

         1.2.4    Personnel -- Zale shall coordinate activities and priorities
                  for both its technical and user personnel as required to
                  ensure that both Transition Plan tasks and applications
                  development/support tasks are completed according to schedule.

         1.2.5    Acceptance -- Zale will work with ACS during the phases to
                  develop Acceptance Criteria to verify a particular phase has
                  been completed as specified, and is operating as required to
                  meet Zale's business needs. Zale shall provide written
                  approval and acceptance for each completed phase.

SECTION 1.3       SERVICE LEVELS

                  Although unexpected, Service Level Failures may result from a
         Transition Plan activity. If the failure is caused by Zale, Service
         Levels impacted by the failure shall not be subject to Service Level
         Credits. If the failure is caused by ACS, its agents or subcontractors,
         or any other ACS personnel, in addition to any other remedies Zale may
         have under the Agreement, any resulting Service Level impacts shall be
         subject to Service Level Credits.

                    SECTION 2 -- PROPOSED TRANSITION SCHEDULE

SECTION 2.1       PHASE 1 (AUGUST 15, 2005 TO SEPTEMBER 30, 2005)

         o        This timeframe spans Zale's year-end close, during which no
                  changes will be made to the production IT environment. Working
                  with Zale applications development personnel, ACS will use the
                  time for documentation of existing environments, definition of
                  new environments, development of detailed migration tasks and
                  checklists, development of testing and acceptance criteria,
                  and preparation of applicable documentation for new and
                  revised procedures.

         o        Zale and ACS to collaboratively refine and finalize the
                  Transition Plan.

         o        Hardware, Software, Network and other equipment changes,
                  acquisitions and upgrades are defined in Schedule A, and will
                  be reconfirmed as of the Effective Date.

         o        ACS will initiate provisioning of network circuits and
                  acquisition of network switches, routers, hubs, software,
                  racks and cabling that are detailed in Section 4.5 of Schedule
                  A.

         o        ACS will initiate procurement of two HP-UX processors, 21
                  Intel-based processors (including 6 with VMware capabilities),
                  a Clariion 4 terabyte usable storage array, a new Virtual Tape
                  System, additional drives for the Tape Library, and added disk
                  storage for the AS/400 as detailed in Section 2.2 of Schedule
                  A.

         o        ACS, with the assistance of Zale, will initiate transition of
                  application 3rd party services (software licenses, services,
                  maintenance, etc.) between the parties.

SECTION 2.2       PHASE 2 (OCTOBER 1, 2005 TO JANUARY 9, 2006)

         o        This timeframe spans Zale's year-end Holiday Season, during
                  which no changes will be made to the production IT
                  environment.

                                        4

<PAGE>

         o        ACS will complete provisioning of new network circuits and
                  installation of equipment initiated in Phase 1. Completion of
                  this task will be determined by the availability dates
                  provided by the carriers for expanded connectivity between the
                  Zale General Offices and ACS data center in Dallas.

         o        ACS will complete acquisition and installation of new midrange
                  processors and the storage devices initiated in Phase 1.

         o        ACS will order and install leased EMC storage equipment to
                  facilitate transition activities.

SECTION 2.3       PHASE 3 (JANUARY 10, 2006 TO JUNE 28, 2006)

         o        AS/400 -- ACS will install additional disk storage and move
                  the AS/400 to the ACS Dallas data center. ACS also will assist
                  in planning for downsizing the AS/400 due to the reduced
                  processing requirements anticipated by Zale.

         o        Intel-based Processors -- ACS will move Zale server images to
                  the ACS Dallas data center and install them on both new and
                  leased processors at the ACS Dallas data center. As part of
                  Phase 3, ACS will work with Zale to identify an Intel-based
                  processor that can be used as a "Syslog" server for security
                  administration.

         o        UNIX Processors -- ACS will transfer Zale server images
                  over-the-wire and consolidate them into new processors at the
                  ACS Dallas data center.

         o        Tape Storage -- ACS will leverage an existing Tape Library at
                  its Dallas data center to facilitate transfers. The Zale Tape
                  Library will remain at Zale as a backup and will be moved to
                  the ACS facility only after the migration of all associated
                  servers is complete. Also during Phase 3, ACS will migrate
                  Zale's existing mainframe tape system to a new Virtual Tape
                  System.

         o        Disk Storage -- ACS will transfer data from Zale's EMC 8730
                  and 8830 storage units to leased equipment at the ACS Dallas
                  data center, then reverse the process after moving the EMC
                  units to the ACS facility.

SECTION 2.4       DISASTER RECOVERY PLAN

         2.4.1    2005 Disaster Exercise -- ACS will schedule and assist Zale
                  with the FY2006 Disaster Recovery exercise so that the
                  exercise, post-exercise review, and appropriate remediation,
                  if any, is completed by June 30, 2006. Zale and ACS recognize
                  that this exercise will be completed during the Transition
                  Period and may not be fully reflective of the final
                  environment.

         2.4.2    Disaster Recovery Plan -- ACS, with Zale's assistance and
                  approval, will complete planning, documentation, scheduling
                  and implementation of the Zale Disaster Recovery Plan as
                  defined in Schedule G within 90 days of completion of Phase 3
                  referenced in Section 2.3 to this Schedule D.

                                       5

<PAGE>

                          SECTION 3 -- SNCC TRANSITION

SECTION 3.1       ACS ENTERPRISE COMMAND CENTER

         3.1.1    ECC Overview -- The ACS Enterprise Command Center (ECC),
                  located at the Dallas data center, and with alternate support
                  sites at other ACS locations globally, will assume overall
                  management of daily operations from the Zale Systems and
                  Network Command Center (SNCC), located at the Zale
                  headquarters and staffed by ACS personnel. The ECC has
                  responsibility for system and server monitoring, console
                  operations, communications with technical and, as appropriate,
                  customer personnel, performance tracking and reporting, and
                  initiation of the incident management process.

                  As of the Effective Date, specific teams within the ECC are
                  already performing services for Zale to monitor and manage
                  Zale's mainframe processing, the Zale network (Network
                  Operations Center or "NOC"), the Zale web operations ("IS
                  Team"), and Zale network security and intrusion detection
                  (Security Operations Center or "SOC").

         3.1.2    Staff Transition -- ACS will begin transition of staff and
                  responsibilities into ECC managed locations after ACS has
                  established sufficient connectivity and implemented management
                  tools to permit effective remote management of the SNCC
                  operations. ACS will communicate the transition plans to Zale
                  management in advance of migration.

         3.1.3    Hands-On Support -- ACS will retain sufficient staff on site
                  at Zale during the Transition Period to ensure that any
                  hands-on support as may be required to manage servers, telecom
                  equipment, tape media and media servers will be available so
                  as to remain within designated response times.

         3.1.4    Communications -- After the Effective Date ACS will, working
                  with Zale, begin to transition inter-personal communications
                  such as page-outs, problem tickets, and calls to application
                  development personnel, to the standard operating procedures
                  and tools employed in the ECC.

SECTION 3.2       OPERATIONS

         3.1.5    SNCC Facility -- During the Transition Period, the SNCC
                  facility and secure environment will be maintained by Zale to
                  allow continued operations of Zale's midrange environment.
                  Zale and ACS employees will be permitted comparable access
                  rights and workspace to effectively perform the Services.

                  3.1.5.1  Zale may, as space become available, elect to
                           transition the equipment and personnel for their Zale
                           Monitoring Center (ZMC) into the SNCC. ACS and Zale
                           will work together to facilitate a successful
                           migration.

                  3.1.5.2  After the Transition Period, ACS will retain
                           management responsibility for specific midrange
                           servers, network equipment, circuits, and other
                           equipment that shall be located in the SNCC or other
                           closets and secure facilities controlled by Zale.
                           Zale and ACS employees will be permitted comparable
                           access rights and workspace to effectively perform
                           the Services.

         3.1.6    Production Control and Scheduling -- After ACS has established
                  sufficient connectivity and implemented management tools to
                  permit effective remote management of the midrange systems
                  located in the SNCC, ACS will consolidate Production Control
                  and Scheduling operational responsibilities conducted in the
                  SNCC into the similar teams performing these Services from the
                  ACS data center.

                                       6

<PAGE>

         3.1.7    LAN and UNIX Support-- After ACS has established sufficient
                  connectivity and implemented management tools to permit
                  effective remote management of the midrange systems located in
                  the SNCC, ACS may relocate certain UNIX and NT Administrator
                  positions into the similar teams performing these Services
                  remotely, either from the ACS data center in Dallas or other
                  ACS locations which can support these functions. During the
                  Transition Period, and afterward as agreed by the parties,
                  Zale will continue to provide comparable workspace and
                  physical access for these individuals as required to deliver
                  the Services.

                                       7
<PAGE>

                             SCHEDULE E -- PERSONNEL

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

                                       1

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                                               <C>
SECTION 1 --  PERSONNEL...........................................................................................3
   Section 1.1       Approved Positions...........................................................................3
   Section 1.2       ACS Technical Support........................................................................3
   Section 1.3       Administrative Support.......................................................................4
   Section 1.4       Organization Charts..........................................................................4
   Section 1.5       Transferred Staff............................................................................4
</TABLE>

                                       2

<PAGE>

                             SECTION 1 -- PERSONNEL

SECTION 1.1       APPROVED POSITIONS

         In providing the Services contemplated in this Agreement ACS will
provide resources in a number of positions that are key to the success of the
processing services. As such, Zale requires certain approvals and restrictions
on these positions. Zale requires prior approval of proposed assignments to the
positions of Executive Account Manager and Service Delivery Manager or to the
equivalent positions developed through the life of the Agreement. ACS agrees
that these positions (or their approved replacements) will be provided
throughout the duration of the Agreement. In addition, the ACS Regional Vice
President or comparable executive associated with Zale will participate in
quarterly strategy meetings with Zale to address personnel matters and other key
issues relating to the Services.

         1.1.1   Executive Account Manager --The Executive Account Manager will
                 be responsible for the management of the delivery of the
                 Services to Zale. This person will be designated as the primary
                 point of contact with Zale management for purposes of
                 administration of this Agreement. The Executive Account Manager
                 will submit a formal written report by the 15th of each month
                 on the status of the Agreement and delivery of the Services,
                 performance against the service levels in Schedule C, and any
                 other issues that have arisen in the normal execution of the
                 Agreement during the previous month. ACS will, as necessary,
                 name both an alternative to (temporary replacement for) and an
                 escalation point from the Executive Account Manager that will
                 provide Zale with points of contact at all times during this
                 Agreement. The Executive Account Manager will participate in
                 the Zale IT strategic planning process.

         1.1.2   Service Delivery Manager - The Service Delivery Manager will be
                 the primary operational interface with Zale. This person will
                 coordinate the technical issues related to day-to-day
                 operations, will attend and participate in Zale's regularly
                 scheduled operational meetings, including change control and
                 daily and weekly status meetings, and will be responsible for
                 monitoring the status and escalation of reported problems. The
                 Service Delivery Manager will be on site at the Zale Facility.

         1.1.3   Transition Manager -- ACS shall assign a Transition Project
                 Manager for the Transition Period to coordinate and communicate
                 all activities and responsibilities of ACS and Zale required to
                 complete the Transition according to the Transition Plan,
                 including the integration of the Transition Plan with other
                 support activities and daily operational responsibilities.

SECTION 1.2       ACS TECHNICAL SUPPORT

         ACS is to provide trained and managed resources at levels required to
properly perform its obligations under all aspects of the Agreement and the
Schedules incorporated therein. ACS is to provide these resources from its
full-time employee base or from resources obtained from the approved
subcontractors.

         Key positions exist in the areas of operations (including production
control), midrange administration, and network responsible for management,
coordination and communication of ACS' delivery responsibilities under the
Agreement. These other key positions do not require prior approval by Zale, but
are subject to Zale acceptance of performance of duties (whether on Zale
premises or not). For these positions, Zale may require reassignment/replacement
of the human resources assigned by

                                       3

<PAGE>

providing a written statement of why Zale believes, in good faith, that service
level performance is jeopardized or risk is created by the assignment. In such
instances, ACS will make the replacements as requested by Zale within reasonable
time with the exception that no such action will be taken if it would violate
the employment obligations of ACS to the individual involved. In such
situations, ACS and Zale will work in good faith to resolve the situation.

SECTION 1.3       ADMINISTRATIVE SUPPORT

         ACS will provide trained and managed resources at levels required to
properly perform its obligations under all aspects of the Agreement and the
Schedules. In addition, ACS will provide:

         1.3.1   Planning Support - ACS will, in performing the duties
                 identified in Schedule A, commit a minimum of 300 hours per
                 year, as directed by the Zale CIO, to specific, customer
                 interactive planning activities and, further, at least one
                 third of these hours are provided by specialist resources not
                 routinely dedicated to the Zale account. This minimum does not
                 relieve any ACS responsibility for the proper and timely
                 preparation of planning and related documents identified in
                 this Agreement.

         1.3.2   Account Administration - ACS will provide a single resource
                 that can work, as required, with Zale administrative resources
                 to resolve all matters and questions arising from the
                 administration of this Agreement, including, but not limited
                 to, billing and certification issues.

         1.3.3   Standards and Procedures - ACS will identify one or more
                 specific resources that are responsible for producing,
                 maintaining and distributing the standards, procedures and
                 practices materials, including operational and support
                 documentation, required to meet the obligations set forth in
                 this Agreement.

SECTION 1.4       ORGANIZATION CHARTS

         ACS and Zale shall each provide the other with such management and
other information as shall be reasonably required.

SECTION 1.5       TRANSFERRED STAFF

         The Parties agree that, should one or more functions or services be
transferred from one Party to the other Party, the Parties will determine, in
good faith, whether it is advantageous to and in keeping with the purposes and
spirit of this Agreement to also attempt to transfer all or part of the staff
associated with the transferred function/service. The Party from which the
function/service is being transferred will have sole discretion whether
associated staff may be approached or solicited for transfer.

         Notwithstanding these provisions, both Parties agree that (1) the
prohibition on solicitation for hire of employees of the other Party without
permission set forth in Section 19.10 of this Agreement is not in contradiction
with this Schedule and (2) that either Party, or both Parties in cooperation,
will take no actions that interfere with the individual rights of employees to
seek other employment except as deemed consistent with appropriate laws and
consistent with the provisions of this Agreement.

                                       4

<PAGE>

                          SCHEDULE F -- MANAGED ASSETS

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                             <C>
F-1: ZALE ASSETS PURCHASED AND MANAGED BY ACS.....................................................................3
   Section F-1.1     Intel-based Servers..........................................................................3
   Section F-1.2     HP-UX Servers................................................................................3
F-2: MAINFRAME ASSETS OWNED AND OPERATED BY ACS...................................................................5
F-3: MIDRANGE ASSETS OWNED BY ZALE AND OPERATED BY ACS............................................................6
   Section F-3.1     Intel-based Servers..........................................................................6
   Section F-3.2     HP-UX Servers...............................................................................11
   Section F-3.3     iSeries Servers.............................................................................11
   Section F-3.4     Support Equipment...........................................................................11
F-4: NETWORK ASSETS OWNED BY ZALE AND OPERATED BY ACS............................................................12
F-5: SOFTWARE ASSETS OPERATED BY ACS.............................................................................17
</TABLE>

                                       2
<PAGE>

                                  SCHEDULE F-1

                  F-1: ZALE ASSETS PURCHASED AND MANAGED BY ACS

         As a part of the Agreement, and as defined in Schedule B, Section 11,
ACS will make a one-time payment to Zale for the following assets, which ACS
will manage for Zale during the Transition Period and assume ownership of
thereafter:

SECTION F-1.1     INTEL-BASED SERVERS

<Table>
<Caption>

       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         ZaleDC1              D049FK41K846        2000 Adv Server              Domain Controller
-------------------------- -------------------- --------------------- ------------------------------------
         ZaleDC2              D049FK41K774        2000 Adv Server              Domain Controller
-------------------------- -------------------- --------------------- ------------------------------------
         ZaleDC3              D049FK41K773        2000 Adv Server              Domain Controller
-------------------------- -------------------- --------------------- ------------------------------------
         ZaleDC4              D922CMG10044        2000 Adv Server              Domain Controller
-------------------------- -------------------- --------------------- ------------------------------------
         ProdNT1              D015BX72K008           NT4 Server               Application Server
-------------------------- -------------------- --------------------- ------------------------------------
         TestNT1              D015BX72K000           NT4 Server                   Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        Zalints23             D016CYM1K022          2003 Server                 CME Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO7               EA4YLDN72R           2000 Server                   ZAP Web Dev
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm0              D049FK41L881          2000 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm1              D011DKN1K239           NT4 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm2              D011DKN1K802           NT4 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm3              D907BX520063           NT4 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm5              D911CCT60103          2000 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        Winterm6              D933CP41A093          2000 Server              Metaframe 1.8 Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDATA1              D038DYV1L164          2000 Server              MetaXP Data Collector
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF01              6J33LGP1S00B          2000 Server                  MetaXP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTMXP02              6J33LGP1S00N          2000 Server              MetaXP DISO E1 Client
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF03              6J33LGP1R00Y          2000 Server                  MetaXP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF04              6J33LGP1S011          2000 Server                  MetaXP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF05               EBASLDN72G           2000 Server              MetaXP DISO Prod Schd
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF13              6J34LGP1R01X          2000 Server                  MetaXP Server
-------------------------- -------------------- --------------------- ------------------------------------
         Proxy1               D038DYV1L111        2000 Adv Server                Proxy Server
-------------------------- -------------------- --------------------- ------------------------------------
         Proxy2               D038DYV1L163        2000 Adv Server                Proxy Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTFSDOC              D326FSY1H139        2000 Adv Server           Business Objects Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTSOX2               M03PLGP121           2000 Server             Development RCTS Server
-------------------------- -------------------- --------------------- ------------------------------------
</Table>

SECTION F-1.2     HP-UX SERVERS

<Table>
<Caption>
NAME                                 SERIAL NUMBER           OS                  APPLICATIONS
----------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                  <C>
ZaleADM1                             USR41304BC          HPUX 11i             Production Server
ZaleADM2                             USR41304B8          HPUX 11i             Production Server
Zale_HP3                             3541A04727          HPUX                 Test Server
Zale_HP9                             3730A68077          HPUX 11i             Production Fax Server
ZaleHP12                             USM41018V5          HPUX 11.0            Production Server
ZaleHP13                             US10076253          HPUX 11i             Development Server
ZaleHP14                             USR40141SL          HPUX 11.0            Production Server
ZaleHP17                             USM404173D          HPUX 11.0            Development Server
ZaleHP18/ZaleHP28                    USM40528SE          HPUX 11i             Production Server
ZaleHP19/ZaleHP21                    USM4028491          HPUX 11i             Development Server
</TABLE>

                                       3
<PAGE>

                                  SCHEDULE F-1

<Table>
<Caption>
NAME                                 SERIAL NUMBER           OS                  APPLICATIONS
----------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                  <C>
Blazer1                              USE440957E          HPUX 11i             Production Server
Blazer2                              USE440957D          HPUX 11i             Production Server
Sapphire                             USR424788F          HPUX 11i             Production Server
Sonoma                               USE440957C          HPUX 11i             Development Server
HP 660 Galactica Tape Library        US9JN00128          Tape Lib             Tape library
</Table>

                                       4

<PAGE>

                                  SCHEDULE F-2

                 F-2: MAINFRAME ASSETS OWNED AND OPERATED BY ACS

         During the Term of the Agreement, ACS will operate and maintain the
mainframe-related hardware necessary to provide the Services, such hardware
being of a technology at least as current as follows:

         Main processor (CPU):     IBM 9672-RC4 CMOS Processor or equivalent

         DASD:                     IBM RVA (RAMAC Virtual Array) 3390-3 or
                                   equivalent with Raid 5 protection

         TAPE:                     3480 Cartridge (with automatic tape loader
                                   capabilities, i.e. tape silos or virtual tape
                                   system) and limited 3420 capabilities.

                                   As a part of the Transition Plan, and
                                   as defined in Schedule A, Section
                                   1.3, ACS will convert Zale's
                                   mainframe-based tape operations to an
                                   IBM Virtual Tape System.

                                       5

<PAGE>

                                  SCHEDULE F-3

             F-3: MIDRANGE ASSETS OWNED BY ZALE AND OPERATED BY ACS

         The customer owned midrange hardware to be operated by ACS at the
Effective Date is listed in the following table. The hardware will change from
time to time and the Parties agree to maintain, separate from this Agreement, an
updated copy of said hardware. During the Term of the Agreement, ACS is
responsible for operating and overseeing the associated peripheral and
support/environment equipment required to operate the listed equipment. ACS
stewardship duties for this hardware include, but are not limited to, those
activities and management functions defined in Schedule A.

SECTION F-3.1     INTEL-BASED SERVERS

<Table>
<Caption>
                                       Novell Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        01ACSZale             D714HWB20097            Netware5                  ACS File Server
-------------------------- -------------------- --------------------- ------------------------------------
         Corplan              D038CXG1K125            Netware6                Novell Login Server
-------------------------- -------------------- --------------------- ------------------------------------
         Email1               D018FFL1K305            Netware6                Novell Email Server
-------------------------- -------------------- --------------------- ------------------------------------
         Zale_1               D114CXG1K056            Netware6                Novell Login Server
-------------------------- -------------------- --------------------- ------------------------------------
         Zale_2               D038CXG1K096            Netware6                Novell Login Server
-------------------------- -------------------- --------------------- ------------------------------------
        Zale_AP1              D040DYT1K765            Netware6                Novell File Server
-------------------------- -------------------- --------------------- ------------------------------------
        Zale_Dev               US92500559             Netware6                Novell File Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                 General Purpose NT Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
-------------------------- -------------------- --------------------- ------------------------------------
           NEO                6J16FSJ1X03P           NT4 Server            New Employee Orientation
-------------------------- -------------------- --------------------- ------------------------------------
         Zaleftz               35995902445          2000 Server                    SmartZone
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTSHIP1              6J34LGP1R02G          2000 Server              FedEX Shipping Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTFSRV1              D333LDN1J641        2003 Ent Server      Property Development File Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTFAX1              D221FPX1D025          2000 Server               BisComm Fax Server
-------------------------- -------------------- --------------------- ------------------------------------
      DC RF Project           6033DYSZS338          2000 Server               RF Gun Mgmt Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                    Microsoft SQL Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZaleSQL2              D933CP41A006          2000 Server                 Database Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTSQL1              D335LQK2H025        2000 Adv Server                 SQL Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                    Management & Utility
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        Zautosys              6011DT63B686          Win 2000 Pro                    Autosys
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTBlade              D902BX520106          2000 Server              Blade Server Console
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTEMC1              D204JZG1L095        2000 Adv Server            EMC Management Server
-------------------------- -------------------- --------------------- ------------------------------------
        STSDialup             D929CSF1A110           NT4 Server                   RAS Server
-------------------------- -------------------- --------------------- ------------------------------------
        ACSMGMT1              D242KJN2D128          2000 Server              ACS Management Server
-------------------------- -------------------- --------------------- ------------------------------------
         ACSNT1               D738BLC10263          2000 Server                  NetIQ Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

                                       6

<PAGE>

                                  SCHEDULE F-3
<TABLE>
<S>                        <C>                  <C>                   <C>
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTTECHS              D929CSF1A110          2003 Server               Desktop File Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTAVSRV              6J33LGP1L01B          2000 Server             Antivirus Update Server
-------------------------- -------------------- --------------------- ------------------------------------
       Lab Server             D338LDN1H296                                        Test Server
-------------------------- -------------------- --------------------- ------------------------------------
       Lab Server             D338LDN1H167                                        Test Server
-------------------------- -------------------- --------------------- ------------------------------------
       Lab Server             D338LDN1H157                                        Test Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                  Pagoda Polling Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
-------------------------- -------------------- --------------------- ------------------------------------
        Polling1              D926CWJ1A691           NT4 Server              Pagoda Polling Server
-------------------------- -------------------- --------------------- ------------------------------------
        Polling2              D820BX611093           NT4 Server              Pagoda Polling Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>

                                        DOT.COM Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZALINT05               EAWOLDN42G           2000 Server                     DOTCom
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINT06              D334LDN1H610          2000 Server                     DOTCom
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINT07              D334LDN1H366          2000 Server                     DOTCom
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINT08              D334LDN1H583          2000 Server                     DOTCom
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINT09              D333LDN1J867          2000 Server                     DOTCom
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINT10              D334LDN1H434          2000 Server              Exchange server 2000
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS11             D029CQX3K074        2000 Adv Server                 Web Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS12             D029CQX3K061        2000 Adv Server                 Web Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS13             D029CQX3K034        2000 Adv Server                 CME Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS14              EASY LDN42G        2003 Adv Server                 Web Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS15             EAOD MF41 34        2000 Adv Server                 SQL Cluster
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS16             EAOC MF41 34        2000 Adv Server                 SQL Cluster
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS17             D024DKN1N592           NT4 Server                   Unity Mail
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS18             D024DKN1P758           NT4 Server                  Domain server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS19             D030CQX3K051           NT4 Server                    Webtrends
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS20             D024DKN1P823           NT4 Server                   FTP server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS21             D024DKN1Q177           NT4 Server                   D.C./Backup
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS22             D023DKN1Q404           NT4 Server            D.C./Global Cat/KickMail
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS27             D029CQX3K055          2000 Server                Monitoring server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS28             D029CQX3K073          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS30             D024DKN1N425          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS31             D011CYM1K163          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS33             D030CQX3K055          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS34             D030CQX3K011          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS35             D112FSB1K895          2000 Server            Credit Card verification
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS36             D029CQX3K085        2003 Ent Server             DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS37             D029CQX3K069        2003 Ent Server             DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS24             D951DDN1K370          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZALINTS25             D951DDN1K410          2000 Server               DotCom Test Server
-------------------------- -------------------- --------------------- ------------------------------------
         RA 4100              D024DBX10587                                         Test SAN
-------------------------- -------------------- --------------------- ------------------------------------
         MSA1000               USZ0328750                                          Test SAN
-------------------------- -------------------- --------------------- ------------------------------------
         MSA1000              9J37JN7179MZ                                    cluster drive array
-------------------------- -------------------- --------------------- ------------------------------------

</TABLE>

                                       7

<PAGE>

                                  SCHEDULE F-3
<TABLE>
<S>                        <C>                  <C>                   <C>
-------------------------- -------------------- --------------------- ------------------------------------
         MSA30SB               Z5JHLMPX36                                     cluster drive array
-------------------------- -------------------- --------------------- ------------------------------------
   Fiber Ch 7-port Hub          4DH015148                                         Production
-------------------------- -------------------- --------------------- ------------------------------------
   Fiber Ch 7-port Hub          4DK015808                                         Production
-------------------------- -------------------- --------------------- ------------------------------------
    Fiber Channel Hub           4DH015148                                         Production
-------------------------- -------------------- --------------------- ------------------------------------
        ACSTL891               2K80923022                                         Tape System
-------------------------- -------------------- --------------------- ------------------------------------
        ACSTL891              3G05CR84P014                                        Tape System
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                       Arthur Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                   <C>                  <C>
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTART1              D305LDN1J451          2000 Server                  Arthur Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTART2              D305LDN1J510          2000 Server                  Arthur Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTART3              D305LDN1J542          2000 Server                  Arthur Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTART4              D305LDN1J491          2000 Server                  Arthur Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTART5              D305LDN1J539          2000 Server                  Arthur Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>

                                   Diamond Sourcing Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZNTDISO1               EBAPLDN72G           2000 Server                Deployment Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO2               EBCXLPN72G           2000 Server                Demand Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO4              6J33LGP1L01D          2000 Server                 DSI Enterprise
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO5              6J33LGP1R02Z          2000 Server              Business Intelligence
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO6               EA2WOLN72R           2002 Server                     ZAP Web
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO8               EA80LDN72R           2000 Server               Loftware Enterprise
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTDISO9               EA3MLDN72R           2000 Server              PSD & Demand Mgmt Dev
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                  Call Center / Epiphany Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZNTCASRV              6J36LGP1J0AE          2000 Server                 CA ServiceDesk
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTIVR1              D304LDN1D643          2000 Server                Edify IVR Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTIVR2              D304LDN1D636          2000 Server                Edify IVR Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTIVR3               M01ZKVJ61W           2000 Server              Edify Test IVR Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTSYMP1               EA6NLDN83M           2000 Server                Symposium Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTSYMP2               EA6KLDN83M           2000 Server                Symposium Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTSYMP3               EA6RLDN83M           2000 Server                Symposium Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTSYMP4               M04CLGP13L           2000 Server                Symposium Server
-------------------------- -------------------- --------------------- ------------------------------------
                                                                           Vcalldev - Epiph SSCCdev
                                                                           Vmktgdev - Epiph mktg dev
                                                                         Vcustdev - Epiph custcare dev
        VMSRVR01               M01XMLN12T          VMWare ESX2.5          Vcalltst - Epiph SSCC test
-------------------------- -------------------- --------------------- ------------------------------------
                                                                          Vcust - Epiph custcare prod
        VMSRVR02               EAC1MND23P          VMWare ESX2.5            Vsscc - Epiph SSCC prod
-------------------------- -------------------- --------------------- ------------------------------------
        VMSRVR03               EAADMND23P          VMWare ESX2.5            Vmktg - Epiph mktg prod
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

                                       8

<PAGE>

                                  SCHEDULE F-3

<TABLE>
<CAPTION>
                                     NT GroupWise Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTGOPO1               EADPLDN72R           2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTGOPO2               EAL2LDN72R           2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTGOPO3               EB6ALDN72R           2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTGOPOT              D933CP41A064          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTGOGWW               M01ELGPD2P           2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTGWIA              D306LDN1H729          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTGWW               D305LDN1J612          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTMTA               D306LDN1H814          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTSP01              D305LDN1J459          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTSP02              D306LDN1J010          2000 Server              GroupWise 6.5 Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                         Citrix Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZNTCMF06               M01SMLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF07               M01NMLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF08               M01FMLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF09               M035MLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF10               M037MLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF11               M02EMLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTCMF12               M02FMLN12T           2000 Server               Metaframe XP Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                     Intranet Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        Intranet1             D038DYV1L065        2000 Adv Server               Intranet Server
-------------------------- -------------------- --------------------- ------------------------------------
        Intranet2             D038DYV1K798        2000 Adv Server               Intranet Server
-------------------------- -------------------- --------------------- ------------------------------------
        Intranet3             D316LDN1K717        2000 Adv Server               Intranet Server
-------------------------- -------------------- --------------------- ------------------------------------
        Intranet4             D316LDN1K716        2000 Adv Server               Intranet Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTPROXY3              M03ZLGPD2H         2000 Adv Server                Proxy Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTPROXY4              M03YLGPD2H         2000 Adv Server                Proxy Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                          Business Objects Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
          FSDOC               D849CFS10118          2000 Server               Application Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTZABO1              D326FSY1H154        2000 Adv Server           Business Objects Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTZABO2              D326FSY1H150        2000 Adv Server           Business Objects Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTZABO3              D040DYT1L944        2000 Adv Server             Application Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                       WorkFlow Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZNTFLOW1              6J36LGP1J0C0          2000 Server                 Workflow Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTFLOW2               M0LXLGP11J           2000 Server                 Workflow Server
-------------------------- -------------------- --------------------- ------------------------------------

</TABLE>

                                       9
<PAGE>
                                  SCHEDULE F-3

<TABLE>
<S>                        <C>                  <C>                   <C>
        ZNTWFTST              6J36LGP1J0C7          2000 Server              Workflow Test Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTWSRV1              D327LDN1J112        2000 Adv Server               Workflow Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTWSRV2              D327LDN1H705        2000 Adv Server               Workflow Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                          RTS Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         ZNTRTS1              D303LDN1D227        2000 Adv Server                 RTS Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTRTS2              D303LDN1D228        2000 Adv Server                 RTS Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTRTS3              D303LDN1D203          2000 Server                 RTS Test Server
-------------------------- -------------------- --------------------- ------------------------------------
         ZNTRTS4              D303LDN1D229          2000 Server                   RTS Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                        SOX Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         ZNTSOX1               M054LGP121           2000 Server             Production RCTS Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                        MagnaWare Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         ZLXMGW1              D024DKN1N423            RH Linux             MagnaWare Capture Server
-------------------------- -------------------- --------------------- ====================================
         ZLXMGW2              D016CYM1K032            RH Linux               MagnaWare Web Server
-------------------------- -------------------- --------------------- ====================================
         ZNTMGW3              D035FFL1K266          2000 Server            MagnaWare Parsing Server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                     Security Camera Systems
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
        ZXPSEC01              CNS0000058951            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC02              CNS0000058975            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC03              CNS0000058954            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC04              CNS0000058953            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC05              CNS0000058956            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC06              CNS0000058950            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC07              CNS0000058952            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
        ZXPSEC08              CNS0000058955            XP Pro              Under DvDallas Management
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                         NGS Environment
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         TESTAPP                 C9RNL71            2003 Server               NGS Test App Server
-------------------------- -------------------- --------------------- ------------------------------------
         TESTSQL              D016CYM1K013        2003 Ent Server             NGS Test SQL Server
-------------------------- -------------------- --------------------- ------------------------------------
        ZNTNGS07              D035FFL1K286          2003 Server                  Sygate server
-------------------------- -------------------- --------------------- ------------------------------------
</TABLE>

                                       10

<PAGE>

                                  SCHEDULE F-3

<Table>
<Caption>
                                 Decommissioned
----------------------------------------------------------------------------------------------------------
       SERVER NAME            SERIAL NUMBER              OS                       APPLICATION
========================== ==================== ===================== ====================================
<S>                        <C>                  <C>                   <C>
         8500-1               D022BX71K083               NA                     Decommissioned
-------------------------- -------------------- --------------------- ------------------------------------
         8500-2               D021CL61K033               NA                     Decommissioned
-------------------------- -------------------- --------------------- ------------------------------------
         RA 4100              D024DBX10231           Dotcom SAN                 Decommissioned
-------------------------- -------------------- --------------------- ------------------------------------
</Table>

SECTION F-3.2     HP-UX SERVERS

<Table>
<Caption>
NAME                         SERIAL NUMBER                OS          APPLICATIONS
-----------------------------------------------------------------------------------------------------------
<S>                          <C>                 <C>                  <C>
ZaleHP20                     USM4133926          HPUX 11i             Production Server
ZaleHP22                     USM40192            HPUX 11i             Production Server
ZaleHP23/ZaleHP24            USE4414CD5          HPUX 11i             Production/Development
ZaleHP25/ZaleHP26            USE4414CD4          HPUX 11i             Production/Development
Tundra                       USL44049VE          HPUX 11i             HRIS WEB Server
Tacoma                       USL44049VF          HPUX 11i             HRIS WEB Server
</Table>

SECTION F-3.3     ISERIES SERVERS

<Table>
<Caption>
NAME                         SERIAL NUMBER                OS          APPLICATIONS
------------------------------------------------------------------------------------------------------------
<S>                          <C>                      <C>             <C>
ZaleAS1/2/3                  S1079F8B (23-YX776       OS/400          iSeries Application Server
                             terminal)
</Table>

SECTION F-3.4     SUPPORT EQUIPMENT

<Table>
<Caption>
NAME                         SERIAL NUMBER                OS          APPLICATIONS
------------------------------------------------------------------------------------------------------------
<S>                          <C>                     <C>              <C>
ADIC Scaler 1000             201101359               Tape Library     Tape Library
                             201200817
                             201201138
------------------------------------------------------------------------------------------------------------
CYBEX AVOCENT                Various                 Console Hub      Console Hub
------------------------------------------------------------------------------------------------------------
</Table>

                                       11

<PAGE>

                                  SCHEDULE F-4

              F-4: NETWORK ASSETS OWNED BY ZALE AND OPERATED BY ACS

         The customer owned network hardware to be operated by ACS at the
Effective Date is listed in the following table. The hardware will change from
time to time and the Parties agree to maintain, separate from this Agreement, an
updated copy of said hardware. During the Term of the Agreement, ACS is
responsible for operating and overseeing the associated peripheral and
support/environment equipment required to operate the listed equipment. ACS
stewardship duties for this hardware include, but are not limited to, those
activities and management functions defined in Schedule A.

<Table>
<Caption>
      HOST            MSERIAL             SERIAL               MANUF                       DESCRIPTION
---------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                  <C>                  <C>
Zale Irving Closet Switches
---------------------------------------------------------------------------------------------------------------------
ZALIRVX7C                          FOX080309J7          CISCO SYSTEMS        CATALYST 4506 7C CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX7D                          FOX082701LS          CISCO SYSTEMS        CATALYST 4506 7D CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX6D                          FOX082501KW          CISCO SYSTEMS        CATALYST 4506 6D CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX4E                          FOX080602NV          CISCO SYSTEMS        CATALYST 4506 4E CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX7AW                         FOX072802AC          CISCO SYSTEMS        CATALYST 4506 7A West CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX6AW                         FOX0637SOEV          CISCO SYSTEMS        CATALYST 4506 6A West CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX6AE                         FOX090400ZL          CISCO SYSTEMS        CATALYST 4506 6A East CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5AW                         FOX0645109B          CISCO SYSTEMS        CATALYST 4506 5A West CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5AE                         FOX06381LG5          CISCO SYSTEMS        CATALYST 4506 5A East CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX7BE                         FOX065016FL          CISCO SYSTEMS        CATALYST 4506 7B East CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX6BW                         FOX073302K1          CISCO SYSTEMS        CATALYST 4506 6B West CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX6BE                         FOX0722027P          CISCO SYSTEMS        CATALYST 4506 6B East CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5BW                         FOX071701Y6          CISCO SYSTEMS        CATALYST 4506 5B West CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5BE                         FOX071800Q9          CISCO SYSTEMS        CATALYST 4506 5B East CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX4D                          FOX082703M8          CISCO SYSTEMS        CATALYST 4506 4D CLOSET IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX07                          FOX081800BK          CISCO SYSTEMS        CATALYST 4507 SNCC IRVING
---------------------------------------------------------------------------------------------------------------------
ZALIRVX05                          FHK0703Y0F8          CISCO SYSTEMS        CATALYST 2950 Switch for DMZ
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5D                          FOX06320PA4          CISCO SYSTEMS        CATALYST 4000 Switch for Call Center
---------------------------------------------------------------------------------------------------------------------
ZALIRVX06                          FHK0703Z0CX          CISCO SYSTEMS        CATALYST 2950 Switch for DMZ
---------------------------------------------------------------------------------------------------------------------
ZALIRVX61                          FHK0704X186          CISCO SYSTEMS        CATALYST 2950 Switch for DC
---------------------------------------------------------------------------------------------------------------------
ZALIRVX62                          FHK0704X18Q          CISCO SYSTEMS        CATALYST 2950 Switch for DC
---------------------------------------------------------------------------------------------------------------------
ZALIRVX63                          FHK0704W18X          CISCO SYSTEMS        CATALYST 2950 Switch for DC
---------------------------------------------------------------------------------------------------------------------
ZALIRVX5C                          FOX074406SY          CISCO SYSTEMS        Catalyst 4506 Switch in 5C
---------------------------------------------------------------------------------------------------------------------
ZALIRVX3C                          FOC0746W0UY          CISCO SYSTEMS        Catalyst 2950 Switch in 3C
---------------------------------------------------------------------------------------------------------------------
ZALIRVX4E2                         FOC0748X0V5          CISCO SYSTEMS        Catalyst 2950 Switch in SNCC for Store
                                                                             Security Network WS- C2950G-48-EI
---------------------------------------------------------------------------------------------------------------------
ZALIRVX4E3                         FOC0748X0UT          CISCO SYSTEMS        Catalyst 2950 Switch in 4E for Store
                                                                             Security Network WS-C2950G-48-EI,
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       12
<PAGE>

                                  SCHEDULE F-4

<Table>
<Caption>
      HOST            MSERIAL             SERIAL               MANUF                       DESCRIPTION
---------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                  <C>                  <C>
Zale Irving Switch Backbone
---------------------------------------------------------------------------------------------------------------------
ZALIRVX03                          SMG0625A05Z          CISCO SYSTEMS        CATALYST 6509 "A" Wing 7AE
---------------------------------------------------------------------------------------------------------------------
ZALIRVX04                          SMG0625A05S          CISCO SYSTEMS        CATALYST 6509 "B" Wing 7BW
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      TBA05260922          CISCO SYSTEMS        WS-C6509 CATALYST CHASSIS
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SAD0522009D          CISCO SYSTEMS        WS-X6K-S2-MSFC2 CATALYST 6500
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SAD05200815          CISCO SYSTEMS        WS-X6K-S2-MSFC2/2 CAT 6500 RED
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SAL05258PWQ          CISCO SYSTEMS        WS-X6348-RJ-45 CATALYST
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SAD0524056W          CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SSAD05070ZJV         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SSAD05070LEH         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX01         TBA05260922      SSAD05070YX8         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      TBA05260839          CISCO SYSTEMS        WS-C6509 CATALYST CHASSIS
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SAD052200BE          CISCO SYSTEMS        WS-X6K-S2-MSFC2 CATALYST 6500
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SAD0522027T          CISCO SYSTEMS        WS-X6K-S2-MSFC2/2 CAT 6500 RED
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SAL05248MNY          CISCO SYSTEMS        WS-X6348-RJ-45 CATALYST
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SAD0524057B          CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SSAD052600S0         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SSAD05070YWW         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
ZALIRVX02         TBA05260839      SSAD05070ZG8         CISCO SYSTEMS        WS-X6516-GBIC CAT 6500 16-PORT
---------------------------------------------------------------------------------------------------------------------
Zale Irving Routers, Switches, Firewalls, Load balancers
---------------------------------------------------------------------------------------------------------------------
ZALIRVH01                          Z182552              BAY NETWORKS         24 PORT 10 BASET HUB NA
---------------------------------------------------------------------------------------------------------------------
ZALIRVH02                          5863094              BAY NETWORKS         TR WG ANALYZER W/STP
---------------------------------------------------------------------------------------------------------------------
ZALIRVF01                          88807044603          CISCO                Cisco PIX 525 at Zale
---------------------------------------------------------------------------------------------------------------------
ZALIRVF02                          88807050951          CISCO                Cisco PIX 525 at Zale
---------------------------------------------------------------------------------------------------------------------
ZALINTR03         JAB043386UH      JAB043386UH          CISCO SYSTEMS        CISCO2610 ETHERNET ROUTER at G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTR03         JAB043386UH      19817660             CISCO SYSTEMS        WIC-1T 1-PORT SERIAL WAN CARD
---------------------------------------------------------------------------------------------------------------------
ZALINTR03         JAB043386UH      19009276             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALINTR04         JAB043386UJ      JAB043386UJ          CISCO SYSTEMS        CISCO2610 ETHERNET ROUTER at G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTR04         JAB043386UJ      19853889             CISCO SYSTEMS        WIC-1T 1-PORT SERIAL WAN CARD
---------------------------------------------------------------------------------------------------------------------
ZALINTR04         JAB043386UJ      19898305             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALNS02-1                          11151                F5 NETWORKS          F5-3DNS at Irving
---------------------------------------------------------------------------------------------------------------------
ZALNS02-2                          11186                F5 NETWORKS          F5-3DNS at Irving
---------------------------------------------------------------------------------------------------------------------
ZALINTX03         FOX04193155      FOX04193155          CISCO SYSTEMS        WS-C4006-S2 CATALYST 4000 at G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTX03         FOX04193155      JAB043701XX          CISCO SYSTEMS        WS-X4232-L3
---------------------------------------------------------------------------------------------------------------------
ZALINTX03         FOX04193155      JAB042509U9          CISCO SYSTEMS        WS-X4148-RJ CATALYST 4000
---------------------------------------------------------------------------------------------------------------------
ZALINTX03         FOX04193155      JAB041907TC          CISCO SYSTEMS        WS-X4019 CATALYST 4006 BACKBON
---------------------------------------------------------------------------------------------------------------------
ZALINTX04         FOX04193179      FOX04193179          CISCO SYSTEMS        WS-C4006-S2 CATALYST 4000 at G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTX04         FOX04193179      JAB043300DM          CISCO SYSTEMS        WS-X4232-L3
---------------------------------------------------------------------------------------------------------------------
ZALINTX04         FOX04193179      JAF042100E5          CISCO SYSTEMS        WS-X4148-RJ CATALYST 4000
---------------------------------------------------------------------------------------------------------------------
ZALINTX04         FOX04193179      JAB041907T6          CISCO SYSTEMS        WS-X4019 CATALYST 4006 BACKBON
---------------------------------------------------------------------------------------------------------------------
ZALIRVR08         JMX0709L42B      JMX0709L42B          CISCO SYSTEMS        Cisco 3725 DS3 at Zale
---------------------------------------------------------------------------------------------------------------------
ZALIRVR08         JMX0709L42B      29711970             CISCO SYSTEMS        WIC 1 DSU T1 Card
---------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       13

<PAGE>

                                  SCHEDULE F-4

<Table>
<Caption>
      HOST            MSERIAL             SERIAL               MANUF                       DESCRIPTION
---------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                  <C>                  <C>
ZALAMXR01                          250667788            CISCO SYSTEMS        2524 AMEX Router at G.O.
---------------------------------------------------------------------------------------------------------------------
ZALIDS01                           CNM7U11BRB           CISCO SYSTEMS        IDS-4215-4FE-K9 IDS system managing
                                                                             the AT&T Managed Internet DS3
---------------------------------------------------------------------------------------------------------------------
ZALIRVCS01                                              CISCO SYSTEMS        Cisco CSS11501 Content Switch w/ GE
                                   JAB083405RF                               SFP, LC Connector SX transceiver
---------------------------------------------------------------------------------------------------------------------
ZALIRVCS02                                              CISCO SYSTEMS        Cisco CSS11501 Content Switch w/ GE
                                   JAB083405RP                               SFP, LC Connector SX transceiver
---------------------------------------------------------------------------------------------------------------------
ZALINTR01         JAB043386V0      JAB043386V0          CISCO SYSTEMS        2610 ETHERNET ROUTER to G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTR01         JAB043386V0      19853968             CISCO SYSTEMS        WIC-1T 1-PORT SERIAL WAN CARD
---------------------------------------------------------------------------------------------------------------------
ZALINTR01         JAB043386V0      19901367             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALINTR02         JAB043386V1      JAB043386V1          CISCO SYSTEMS        2610 ETHERNET ROUTER to G.O.
---------------------------------------------------------------------------------------------------------------------
ZALINTR02         JAB043386V1      19854285             CISCO SYSTEMS        WIC-1T 1-PORT SERIAL WAN CARD
---------------------------------------------------------------------------------------------------------------------
ZALINTR02         JAB043386V1      19951458             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALIRVR09         JAB04358AZQ      JAB04358AZQ          CISCO SYSTEMS        CISCO2610 ETHERNET ROUTER
---------------------------------------------------------------------------------------------------------------------
ZALIRVR09         JAB04358AZQ      20173394             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALIRVR01         50015877         50015877             CISCO SYSTEMS        CISCO 7505 5-SLOT
---------------------------------------------------------------------------------------------------------------------
ZALIRVR01         50015877         25251045             CISCO SYSTEMS        FEIP2-DSW-2TX
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        364109065            CISCO SYSTEMS        CISCO3640 4-SLOT MODULAR RTER
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        15154067             CISCO SYSTEMS        NM-1E1R2W 1 ETHR TOKEN RG CARD
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        11422094             CISCO SYSTEMS        NM-1E1R2W 1 ETHR TOKEN RG CARD
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        11928792             CISCO SYSTEMS        NM-1E1R2W 1 ETHR TOKEN RG CARD
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        13868049             CISCO SYSTEMS        WIC-1T 1-PORT SERIAL WAN CARD
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        13857813             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        25164306             CISCO SYSTEMS        NM-1FE-TX 1-PORT ETH NETWK MOD
---------------------------------------------------------------------------------------------------------------------
ZALIRVR02         364109065        19252179             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALIRVR10         JMX0808L8JE      JMX0808L8JE          CISCO SYSTEMS        2611 DUAL ETHERNET MOD ROUTER
---------------------------------------------------------------------------------------------------------------------
ZALIRVR10         JMX0808L8JE      29693449             CISCO SYSTEMS        WIC 1 DSU T1 CARD
---------------------------------------------------------------------------------------------------------------------
ZALINTLD1                          12395                F5 NETWORKS          BIG IP Load Balancer
---------------------------------------------------------------------------------------------------------------------
ZALINTLD2                          12346                F5 NETWORKS          BIG IP Load Balancer
---------------------------------------------------------------------------------------------------------------------
No Name                            Multiple             MultiTech            Polling Modem farm
---------------------------------------------------------------------------------------------------------------------
Haskell Routers, Switches, Firewalls, Load balancers
---------------------------------------------------------------------------------------------------------------------
ZALIRVFW1                          44405512295          CISCO                Cisco PIX 515 at ACS Haskell
---------------------------------------------------------------------------------------------------------------------
ZALINTX01         FOX04183789      FOX04183789          CISCO SYSTEMS        CATALYST 4000 at Haskell
---------------------------------------------------------------------------------------------------------------------
ZALINTX01         FOX04183789      JAE042218U1          CISCO SYSTEMS        WS-X4148-RJ Catalyst 4000
---------------------------------------------------------------------------------------------------------------------
ZALINTX01         FOX04183789      JAB041907SL          CISCO SYSTEMS        WS-X4019 Catalyst 4006 Backbone
---------------------------------------------------------------------------------------------------------------------
ZALINTX01         FOX04183789      JAB0450048K          CISCO SYSTEMS        WS-X4232-L3
---------------------------------------------------------------------------------------------------------------------
ZALINTX02         FOX04193068      FOX04193068          CISCO SYSTEMS        CATALYST 4000 at Haskell
---------------------------------------------------------------------------------------------------------------------
ZALINTX02         FOX04193068      JAB042509X4          CISCO SYSTEMS        WS-X4148-RJ Catalyst 4000
---------------------------------------------------------------------------------------------------------------------
ZALINTX02         FOX04193068      JAB041907SB          CISCO SYSTEMS        WS-X4019 Catalyst 4006 Backbone
---------------------------------------------------------------------------------------------------------------------
ZALINTX02         FOX04193068      JAB042409F3          CISCO SYSTEMS        WS-X4232-L3
---------------------------------------------------------------------------------------------------------------------
ZALINTF01                          88807042477          CISCO SYSTEMS        Cisco PIX 525
---------------------------------------------------------------------------------------------------------------------
ZALINTF02                          88807044598          CISCO SYSTEMS        Cisco PIX 525
---------------------------------------------------------------------------------------------------------------------
ZALNS01-1                          10927                F5 NETWORKS          F5-3DNS at Haskell
---------------------------------------------------------------------------------------------------------------------
ZALNS01-2                          10943                F5 NETWORKS          F5-3DNS at Haskell
---------------------------------------------------------------------------------------------------------------------
ZALDALR01                          50015999             CISCO SYSTEMS        7505 5 SLOT ROUTER
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       14
<PAGE>

                                  SCHEDULE F-4
<Table>
<Caption>
      HOST            MSERIAL             SERIAL               MANUF                       DESCRIPTION
---------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                  <C>                  <C>
ZALDALR02                          JAB043586KV          CISCO SYSTEMS        2620 ETHERNET ROUTER
---------------------------------------------------------------------------------------------------------------------
ZALDALR03                          72641123             CISCO SYSTEMS        7206 6 SLOT ROUTER CHASSIS 1A
---------------------------------------------------------------------------------------------------------------------
ZALDALR04                          364109083            CISCO SYSTEMS        3640 at Haskell support
---------------------------------------------------------------------------------------------------------------------
ZALDALR05         JMX0707L8JE      JMX0707L8JE          CISCO SYSTEMS        2610 for New DMZ
---------------------------------------------------------------------------------------------------------------------
ZALDALR05         JMX0707L8JE      29693011             CISCO SYSTEMS        WIC 1 DSU T1 CARD
---------------------------------------------------------------------------------------------------------------------
Remote Routers, Switches, Firewalls, Load balancers
---------------------------------------------------------------------------------------------------------------------
ZALTORX01                          FOC0733Y11U          CISCO SYSTEMS        Catalyst 2950 Switch in Toronto DC
                                                                             WS-C2950G-48-EI
---------------------------------------------------------------------------------------------------------------------
ZALIR2X01                          FOX07071TL9                               Catalyst 4506 Switch at Pagoda Irving
---------------------------------------------------------------------------------------------------------------------
ZALTORR02         JAB04358AZN      JAB04358AZN          CISCO SYSTEMS        CISCO2610 ETHERNET ROUTER ISDN Canada
---------------------------------------------------------------------------------------------------------------------
ZALTORR02         JAB04358AZN      20166217             CISCO SYSTEMS        WIC-1DSU-T1 T1 DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALIR2R01                          JAB050280LE          CISCO SYSTEMS        2610 at Pagoda
---------------------------------------------------------------------------------------------------------------------
ZALIR2R02                          JMX0514K2ZZ          CISCO SYSTEMS        2611 at Pagoda
---------------------------------------------------------------------------------------------------------------------
ZALTORR01                          SHN032902Q5          CISCO SYSTEMS        2610 at Peoples
---------------------------------------------------------------------------------------------------------------------
VoIP Equipment
---------------------------------------------------------------------------------------------------------------------
ZNTPUB1                            USE515A60Y           CISCO SYSTEMS        Cisco Call Manager at GO (Win2k OS)
---------------------------------------------------------------------------------------------------------------------
ZNTPUB2                            USE515A61V           CISCO SYSTEMS        Cisco Call Manager at GO (Win2k OS)
---------------------------------------------------------------------------------------------------------------------
ZALIRVR11                          FTX0918A27J          CISCO SYSTEMS        Cisco 2821 router at GO
---------------------------------------------------------------------------------------------------------------------
ZALIRVR12                          FTX0918A27C          CISCO SYSTEMS        Cisco 2821 router at GO
---------------------------------------------------------------------------------------------------------------------
ZALTORR03                          FTX0918A2KQ          CISCO SYSTEMS        Cisco 2851 router at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORR04                          FTX0918A2KF          CISCO SYSTEMS        Cisco 2851 router at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORX03                          CAT0916Y1AQ          CISCO SYSTEMS        Cisco 3560 switch at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORX04                          CAT0916X0EA          CISCO SYSTEMS        Cisco 3560 switch at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORW01                          FOC09130LPF          CISCO SYSTEMS        Cisco AP1200 WAP at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORW02                          FOC09114B8X          CISCO SYSTEMS        Cisco AP1200 WAP at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORW03                          FOC09121XWW          CISCO SYSTEMS        Cisco AP1200 WAP at Toronto
---------------------------------------------------------------------------------------------------------------------
ZALTORW04                          FOC09130LY9          CISCO SYSTEMS        Cisco AP1200 WAP at Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C42969EB      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A71F6      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3D7716F      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A72B0      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C4286397      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A71F4      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A724D      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BCEC      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BC98      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3C45B59      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3E23E90      CISCO SYSTEMS        Cisco VoIP Phone - M7940 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BC83      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7365      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       15

<PAGE>
<Table>
<Caption>
      HOST            MSERIAL             SERIAL               MANUF                       DESCRIPTION
---------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                  <C>                  <C>
VoIP Phone                         SEP0013C44A7245      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7453      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A6E3E      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A73BE      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A6A5B      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7134      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C4296A15      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BDF8      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7387      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP00138054D64D      CISCO SYSTEMS        Cisco VoIP Phone - M7905 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP00138054D5A2      CISCO SYSTEMS        Cisco VoIP Phone - M7905 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C4286582      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3C45F33      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BECD      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A71E3      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A720D      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A749D      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3BABC69      CISCO SYSTEMS        Cisco VoIP Phone - M7940 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP00138054D4BB      CISCO SYSTEMS        Cisco VoIP Phone - M7905 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP00138054D6BB      CISCO SYSTEMS        Cisco VoIP Phone - M7905 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A71F9      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7221      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461C226      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7399      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7461      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3E23DA7      CISCO SYSTEMS        Cisco VoIP Phone - M7940 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A71AB      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7376      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7317      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C461BDE0      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A73AD      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7449      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A7459      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C42863A4      CISCO SYSTEMS        Cisco VoIP Phone - M7960 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C44A6CA9      CISCO SYSTEMS        Cisco VoIP Phone - M7912 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         SEP0013C3D77D8B      CISCO SYSTEMS        Cisco VoIP Phone - M7940 Toronto
---------------------------------------------------------------------------------------------------------------------
VoIP Phone                         INM091115LB          CISCO SYSTEMS        Cisco VoIP Phone - M7910G Irving
---------------------------------------------------------------------------------------------------------------------
Decommissioned Equipment
---------------------------------------------------------------------------------------------------------------------
ZALINTR07                          JAB04358B06          CISCO SYSTEMS        2610 ETHERNET ROUTER; WIC-1 DSU-T1 T1
                                                                             DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
ZALINTR08                          JAB04358AZP          CISCO SYSTEMS        2610 ETHERNET ROUTER; WIC-1 DSU-T1 T1
                                                                             DSU/CSU WAN
---------------------------------------------------------------------------------------------------------------------
</Table>

                                       16

<PAGE>

                                  SCHEDULE F-5

                      F-5: SOFTWARE ASSETS OPERATED BY ACS

         Owner/Licensee - The Party who holds the license for the software.

         Maintenance - The Party that has financial responsibility for
maintaining the software and financial responsibility for updates/upgrades per
the requirements in Schedules A and D. Except as stated in this Schedule or as
provided under the technology refreshment provisions of Schedule A, ACS as
operator of the software is responsible for acquiring, testing and installing,
in conjunction with Zale, all environmental software maintenance, fixes and
upgrades and Zale is responsible for acquiring, developing, testing and
installing, in conjunction with ACS, all applications software maintenance,
fixes and upgrades.

         Desktop Software - For purposes of this Schedule, all desktop software
utilized on Zale-owned PC equipment is assumed to be Zale owned, licensed and
maintained, except as explicitly noted in this Schedule.

         Table Omissions - In the event that a software package is erroneously
omitted from the following table, the Parties will work in good faith to
determine whether the software is/was part of the software in use by the Parties
in connection with this Agreement at the Effective Date and will determine the
ownership and maintenance responsibilities by mutual agreement.

<Table>
<Caption>
                                                                    PLATFORM       OWNER/        MAINTENANCE
          VENDOR                  SOFTWARE PACKAGE                                LICENSEE     RESPONSIBILITY
 ----------------------------------------------------------------------------------------------------------------
<S>                      <C>                                        <C>           <C>          <C>
 Network Associates      PGP                                          Unix          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Adobe                   Acrobat                                      Unix          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 ADP                     CSS Horizon                                WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 ADP                     PC Payroll for Windows                       Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 ADS/SRS                 Reportsmith                                WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 AJB                     Retail Transaction Switch                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 BISCOM                  Faxcom for NT                                 W2K          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 BMC                     3270 Super Optimizer/CICS                     M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 BMC                     Load Plus IMS                                 M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 BMC                     Secondary Index Utility                       M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        Broadcast Agent                              Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        Designer License                             Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        Explorer Server                              Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        Info Server                                  Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        IS Bundle (Supv & Designer)                  Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Business Objects        Report Server                                Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Candle Corporation      Omegamon II CICS                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Candle Corporation      Omegamon II MVS                               M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Checkfree               Checkfree                                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Citrix                  MetaFrame                                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Citrix                  WinFrame (not in use)                        Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Citrix                  MetaFrame XP                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 CLR                     Insource                                      W2K          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Compaq                  Insight ManagerCIM                           Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Service Desk                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       17

<PAGE>

                                  SCHEDULE F-5

<Table>
<S>                      <C>                                        <C>           <C>          <C>
 Computer Associates     Asset Management Manager                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Remote Control Manager                       Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Software Delivery Manager                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Service Desk                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     TNG Base Manager (not in use)                Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     ETrust Access Control                        UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     ACF2/CICS                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     ACF2/MVS                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Autosys                                      UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     DADS/Plus                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Disk                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Earl                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     CA-11                                         M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Endevor/MVS                                   M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Endevor/PDM                                   M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Erwin (not in use)                           Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Faver/MVS                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Harvest                                      UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Intertest                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Jars                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Librarian (Base)                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Netspy                                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     CA-90 (Services)                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     CA-1                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Optimizer                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Optimizer II                                  M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     PDSMAN                                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Prevail/Deliver                               M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Prevail/XP-view                               M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     CA-7                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     SYSVIEW/E                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Vantage                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Verify                                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     View                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Vision Results                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Computer Associates     Xcom                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               Abend-Aid IMS                                 M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               Abend-Aid MVS                                 M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               CICS Abend-Aid FX                             M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               File-Aid/IMS                                  M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               File-Aid/MVS                                  M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Compuware               Shared Services                               M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Deloitte and Touche     Remediation and Compliance Tracking          Intel         Zale            Zale
                         System
 ----------------------------------------------------------------------------------------------------------------
 Diversified Software    Docutext                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Diversified Software    Jobscan                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 DSI                     Transcollector, Loftware                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 ECORA                   Audit Works for Windows & Novell             Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       18

<PAGE>

                                  SCHEDULE F-5
<Table>
<S>                      <C>                                        <C>           <C>          <C>
 Edify                   Edify IVR                                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC                     EMC Control Center                           UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC                     EMC Storage Scope                            UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC                     Timefinder                                   UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC                     ESN Manager                                  UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC                     PowerPath                                    UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 EMC (fka Softworks)     Catalog Solutions                             M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Epiphany                Various bundled components                   UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Foresight               Marcam                                       UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 FTZ                     FTZ Smartzone                                 NT4          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Harte Hanks             Directory of Major Malls                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      DCE Programming & Archive Libraries          UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      DCE/9000 Executive (Client) Only             UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      DCE/9000 Quickstart Bundle                   UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      FDDI/9000 Series 800                         UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      HP C/ANSI C Developer Bundle                 UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      HP Glance Plus/UX Pak for s800               UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      HP-UX 11.0, 11i Support Tools                UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      HP-UX Media Kit                              UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HP                      Mirror Disk/UX                               UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 HYDE                    SPATCH - CGI PAGE                            UNIX           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Backup Recovery & Media Svcs                AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Performance Tools - Iseries                 AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Query for Iseries                           AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Operating System/400                        AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     DB2 Query Mgr & SQL Dev Kit                 AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Valupak for Iseries                         AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Iseries Client Accsss Win Fam               AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Websphere Development Studio                AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 IBM                     3270 File Transfer Prog                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     ACF/SSP                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     ACF/VTAM for ESA                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     AD/CYCLE C/370                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     AD/CYCLE C/370 DEBUGGER                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     AOC/MVS                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     Assembler H                                   M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     BDT/FTF/NJE                                   M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     BTAM                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     CICS/ESA                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     COBOL COMP LIB                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     COBOL FOR MVS (ALT)                           M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     COBOL II COMP LIB                             M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     DCF                                           M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     DFSMS/MVS                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     DLF                                           M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     DW/370                                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     EREP                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       19

<PAGE>

                                  SCHEDULE F-5

<Table>
<S>                      <C>                                        <C>           <C>          <C>
 IBM                     GAM/SP                                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     GDDM                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     GDDM IMAGE VIEW UTIL                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     GDDM INTERACTIVE MAP DEF                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     GDDM OS/2 link                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     GDDM PCLKF                                    M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     IMS/ESA DB                                    M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     IMS/ESA TM                                    M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     ISPF                                          M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     JES/328x Print Facility                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     MVS DITTO                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     NCP                                           M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     NETVIEW FILE TRAN PROG                        M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     NETVIEW V3                                    M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OGL/370                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 BASE                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 C/C++ W/O DEBUG                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 DFSORT                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 DSS HSM (ALT 3)                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 RMF                                 M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     OS/390 V2 SDSF                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     PL/I COMP LIB V2                              M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     PPFA/370                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     PSF V2 BASE                                   M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     REXX COMPILER                                 M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     REXX LIBRARY                                  M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 IBM                     RMF/SAM                                       M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 JDA                     Arthur Forecasting (not in use)           WINNT/Unix       Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     Arthur Planning                            WIN/Unix        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     E3/Slim                                     AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     Profile Intellect                           AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     AIM                                         AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     Performance Analysis                        AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 JDA                     Synsort                                     AS/400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 MacKinney Systems       ISPF VSAM Utility                             M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 Macromedia              Cold Fusion Studio (not in use)              Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Macromedia              Coldfusion (not in use)                      Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Message M               Unity Mail                                   Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Commerce Server 2000                         Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               MSDN                                         Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               NT4                                          Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Proxy Server 2000                            Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Site Server                                  Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               SQL Server                                   Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Windows 2000                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Windows Terminal Server                      Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Microsoft               Windows 2003                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       20

<PAGE>

                                  SCHEDULE F-5
<Table>
<S>                      <C>                                        <C>           <C>          <C>
 Microsoft               Internet Server Accelerator                  Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 NetIQ                   App Manager                               Intel/UNIX       Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 NetIQ                   NetIQ                                        Intel         Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 NetIQ                   Webtrends                                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 NetIQ                   Mail Marshall                                Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 NetIQ                   Web Marshall                                 Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Network Associates      Groupshield Security Suite                   Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Network Associates      Netshield Security Suite                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Network Associates      PGP                                          Unix          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Groupwise                                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Intranetware (not in use)                    Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Managewise (not in use)                      Intel          ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Netware                                      Intel          ACS            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Netware Cluster Services (not in use)        Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Netware SAA (not in use)                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  Support Connection (not in use)              Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Novell                  ZenWorks                                     Intel          ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 NSB Group (STS)         Auditworks                                   UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Octel                   New Employee Orientation                      NT4          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 OpenHand                Guinevere                                   NT 2000        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Optum                   Move                                         UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Database                                     UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Developer                                    UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Enterprise Server                            UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Express Server                               UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Forms                                        UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Oracle Financial Analyzer                    UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Oracle Financials                            UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  SQR Reportwriter                             UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  HRIS                                         UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Oracle                  Portal                                       UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 PCDesigns               Cratchit a'la Carte                           WIN          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Peoplesoft              Enterprise One                               Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 PKZIP                   PKZIP for UNIX                               UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 PKZIP                   PKZIP for Mainframe                         OS/390         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Respond                 Respond III                                   W2K          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Retek                   Retek                                        UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 SAS                     SAS/Base                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Seagate                 Backup Exec (not in use)                     Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Serena                  Comparex                                      M/F          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Simware                 Rexxware (not in use)                        Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Software Diversified    Stash (SDS)                                   M/F          Zale            Zale
 Svcs
 ----------------------------------------------------------------------------------------------------------------
 Spatch                  Wireless Text Messaging                      Intel          ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 StarBase                StarTeam SCM Tool                            Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Sterling Software       Connect: Direct                              UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Sterling Software       Connect: Mailbox                             UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Sterling Software       Connect:Direct                                M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       21

<PAGE>
<TABLE>
<S>                      <C>                                        <C>           <C>          <C>
 Sterling Software       Gentran                                       M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 Sterling Software       TRACS/EP                                      M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Sterling Software       TRACS/SNA                                     M/F           ACS             ACS
 ----------------------------------------------------------------------------------------------------------------
 Stone Eagle             S-Credit-AS400                               AS400         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Systemware              JHS                                           M/F          Zale             ACS
 ----------------------------------------------------------------------------------------------------------------
 Tequila SW SWSoftware   RetailLease                                   WIN          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Tobit                   Faxware                                      Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Tripwire                Tripwire for servers                         UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Unitech                 ACR Summary                                   M/F          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 VeriSign                Pay Flow Pro                                  W2K          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Veritas*                Backup Exec                                  Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Veritas                 Backup Exec for Windows NT 2000              Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Veritas                 NetBackup Datacenter                         UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Esker Software          VSIFAX                                       UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Weiland Fin.            Bank Relationship Manager                     WIN          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 WRQ Reflections         Terminal Emulator (not in use)               Intel         Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Xcellnet                Connect Remote                                NT4          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Bonus                                      WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Commissions                                WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Elvis                                        UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    EPIP                                       WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Incentives                                 WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    InfoPak                                       WIN          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Pagoda Time Cards                          WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    PIC                                        WIN/UNIX        Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Sample Room                                   WIN          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    Website                                       W2K          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 Zale                    CATS Polling                                 UNIX          Zale            Zale
 ----------------------------------------------------------------------------------------------------------------
 </Table>

*ACS to provide ACS-licensed Veritas software for all Intel-based processors
within the scope of the Services, all HP UX processors owned by ACS or acquired
from Zale (after assumption of ownership), and any processors ACS puts into
service for Zale as part of an Additional Resource Charge (ARC).

                                       22
<PAGE>

                    SCHEDULE G -- DISASTER RECOVERY SERVICES

                                       TO

              MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES

                                     BETWEEN

                               ZALE DELAWARE, INC.

                                       AND

                         ACS COMMERCIAL SOLUTIONS, INC.

                                 AUGUST 1, 2005

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                                              <C>
SECTION 1 -- DISASTER RECOVERY PLANNING...........................................................................3
   Section 1.1       Scope of Services............................................................................3
   Section 1.2       Disaster Recovery Plan.......................................................................4
SECTION 2 -- DISASTER RECOVERY EXERCISE...........................................................................6
   Section 2.1       Disaster Recovery Testing....................................................................6
SECTION 3 -- DISASTER PROCEDURES..................................................................................6
   Section 3.1       Disaster Invocation..........................................................................6
   Section 3.2       Disaster Management Procedures...............................................................7
   Section 3.3       Service Levels...............................................................................7
SECTION 4 --  OPTIONAL SERVICES...................................................................................8
   Section 4.1       Alternate Site Access/Business Recovery......................................................8
   Section 4.2       Alternate Strategies.........................................................................8
TABLES AND EXHIBITS...............................................................................................9
   Table G-1: Systems Subject to Disaster Recovery................................................................9
   Table G-2: Disaster Recovery Plan - Key Components............................................................10
   Table G-3: Sungard Exercise Request...........................................................................12
</TABLE>

                                       2

<PAGE>

                     SECTION 1 -- DISASTER RECOVERY PLANNING

SECTION 1.1       SCOPE OF SERVICES

         1.1.1    ACS & Zale Facilities -- The recovery capabilities developed
                  to satisfy the requirements of this Schedule must support
                  components at multiple locations, including, as impacted, Zale
                  user locations, Zale processing facilities, ACS equipment
                  deployments at Zale facilities, the ACS primary processing
                  facility and any other facilities that may be incorporated
                  into the system architecture supported under this Agreement.
                  Support for the facilities includes equipment, software,
                  operation and oversight and interfaces or linkages to other
                  components as required to establish a recovered environment.

          1.1.2   Recoverability Targets -- The Disaster Recovery Plan
                  ("Disaster Recovery Plan") developed by ACS shall meet Zale's
                  requirement to have recovered essential functionality of
                  critical mainframe and midrange applications (and associated
                  system and third party communications access), as defined by
                  Zale, within 72 hours of a declared disaster, with other
                  applications following on an urgent basis with full recovery
                  of key business applications as described and prioritized in
                  the Disaster Recovery Plan.

                  Recoverability Targets are based on the ready and
                  uninterrupted availability of commercial ground and air
                  transportation to transport data and recovery personnel to the
                  designated offsite recovery location, especially during a
                  force majeure event where such availability is limited. To
                  limit risk related to this threat, Zale may consider
                  additional Advanced Data Management capabilities such as those
                  described in Section 4.2 of this Schedule.

         1.1.3    Systems -- ACS will provide a disaster recovery capability for
                  Zale's mainframe and midrange processing environments.
                  Recovery is to include recovery of the necessary technology
                  components, including communications, from a site other than
                  ACS' primary processing facility, or the systems' normal
                  processing facility if different, to allow use of applicable
                  Mission Critical Applications as defined in Section 1.2.2 and
                  Table G-1 within agreed time periods, but not to exceed the
                  time specified in Section 1.1.2, following a declared
                  disaster. The cost of mainframe and midrange disaster recovery
                  services is included in Schedule B.

                  ACS recognizes that critical components of Zale's midrange
                  processing environment may be resident at Zale facilities, at
                  ACS facilities, or at both, and that the plan must provide
                  recoverability for these components. Recovery must allow
                  recovered systems to work in conjunction with other mainframe
                  or midrange components that may or may not have been relocated
                  by the recovery effort.

         1.1.4    Operations Services -- Recovery is to include the support
                  functions defined in Schedule A associated with the recovered
                  environment, including but not limited to, printing services,
                  production control and scheduling, technical support,
                  production migration and application management, computer
                  operations, escalation and supervisory support and help desk
                  escalation. Recovery is to include adequate voice and related
                  communications capability to support the

                                       3

<PAGE>

                  large amount of coordination that would be required in a
                  disaster recovery situation.

         1.1.5    Interfaces -- The scope of disaster recovery is to include
                  recovery of the logical data interfaces between Zale systems
                  and platforms and between Zale systems and external systems.
                  The cost of interface support is included in the disaster
                  recovery fees in Schedule B.

         1.1.6    Communications Networks -- In addition to the communications
                  links between system components (whether used in normal
                  operating conditions or as part of recovery operations) the
                  disaster recovery capability provided by ACS is to include
                  support for the Zale data communications network. This support
                  includes links to other Zale facilities, store polling, EDI
                  linkages and other communications that may be implemented
                  within the scope of the included systems. Dial and internet
                  communications for both support and end user access to Zale
                  applications must be available as part of the recovery. Zale,
                  as holder of certain communication assets, will need to
                  provide proper authorization and complete information to ACS
                  to act on Zale's behalf for recovery and relocation of
                  Services. The cost of communications disaster recovery is
                  included in the disaster recovery fees in Schedule B.

         1.1.7    Desktop Recovery -- ACS will support the existing data backup
                  mechanism that provides end user retention of data on servers
                  that are subject to routine off-site backup for recovery
                  purposes. Recovery plans for each plan scenario (i.e. partial
                  or total loss of any of the facilities involved in the
                  technology architecture) will include consideration of
                  providing recovered server access, either from the original
                  desktop workstations or from an alternate site equipped with
                  emergency desktop workstations as described in Section
                  4.1below.

SECTION 1.2       DISASTER RECOVERY PLAN

         1.2.1    Disaster Recovery Plan Management -- As of the Effective Date,
                  ACS shall continue to manage disaster recovery using the
                  existing Disaster Recovery Plan currently maintained by ACS
                  for Zale. Once a year, ACS and Zale will jointly review,
                  update, publish and then maintain a comprehensive Disaster
                  Recovery Plan that will encompass the entire scope of disaster
                  recovery support described in this Schedule. Zale shall
                  communicate its priorities and preferences to ACS on how to
                  meet the Disaster Recovery Plan objectives. ACS is to take the
                  lead role for development and maintenance of the plan.

                  In conjunction with the operations Disaster Recovery Plan
                  required by this Schedule, Zale will develop and publish a
                  corresponding application system disaster recovery plan (or
                  provide a section of the Disaster Recovery Plan). The plan is
                  to include the provision of reviews to ensure ongoing
                  recoverability of applications, emergency deployment of
                  resources once production processing is recovered, adaptation
                  and optimization efforts once a recovery situation is known,
                  and provision for returning to normal processing (and recovery
                  of missed processing) once recovery mode can be terminated.

         1.2.2    Mission Critical Applications -- During each Benchmark, Zale
                  shall review, update and approve the list of mission critical
                  Applications, which shall include

                                       4

<PAGE>

                  (unless otherwise agreed by Zale) those Applications deemed
                  mission critical by Zale as of the Effective Date ("Mission
                  Critical Applications"). Subsequent to the recovery of Mission
                  Critical Applications, all other Services shall be recovered
                  in accordance with the Disaster Recovery Plan. The list of
                  Mission Critical Applications is provided as Table G-1 in this
                  Schedule.

         1.2.3    Recovery Priorities/Sequence -- Zale will define the business
                  recovery requirements for each area within the scope of the
                  disaster recovery program. Information provided by Zale is to
                  include identification of critical applications and
                  subsystems, recovery sequences, and priorities for user access
                  recovery. For business recoveries, Zale will also define the
                  number of critical employees needing access and their terminal
                  and logical access requirements.

         1.2.4    Data -- ACS and Zale will jointly develop and ACS will
                  implement and maintain the mainframe and midrange tape and
                  DASD backup and off-site storage mechanisms that are needed to
                  meet requirements to assure timely recovery of the computing
                  environments per the Disaster Recovery Plan. Zale and ACS are
                  responsible for maintaining application system backup
                  processes and procedures in a manner that support the Disaster
                  Recovery Plan. Failure by Zale to develop the backup
                  requirements/provisions as part of developing or modifying the
                  application systems will relieve ACS of the requirement to
                  recover any directly related functions. To avoid this
                  situation wherever possible, ACS will review disaster recovery
                  data backups as part of the change control/change migration
                  process.

         1.2.5    The Plan -- The Disaster Recovery Plan is maintained by ACS,
                  stored in one or more secure offsite locations, and is
                  distributed electronically as required on CD or comparable
                  electronic media. A sample of the typical plan components is
                  provided for reference as Table G-2 to this Schedule.

         1.2.6    Updating the Plan -- ACS shall ensure that the Disaster
                  Recovery Plan is kept up to date and is capable of
                  implementation. The process for approving changes to the
                  Disaster Recovery Plan shall be managed by Zale which will
                  review risks presented by any modifications to the Disaster
                  Recovery Plan and accept and implement substantial
                  modifications which materially impact the Services, in
                  accordance with the Change Management Procedure. Changes to
                  the Disaster Recovery Plan requiring additional resources at
                  the offsite recovery location may generate additional charges
                  which will be passed on to Zale.

         1.2.7    System Changes -- ACS shall advise Zale at least thirty (30)
                  days in advance of any changes to the systems or Services
                  being implemented, including any planned workload or capacity
                  changes, that could negatively impact the Disaster Recovery
                  Plan. Such changes to the systems or Services will be
                  coordinated through the System Change Management Process, and
                  shall not be implemented without Zale's prior approval.

         1.2.8    Training -- ACS shall train ACS Personnel and any Zale
                  personnel (as required by Zale) in disaster recovery
                  procedures and ensure immediate access to procedures and
                  relevant documents in a Disaster.

                                       5

<PAGE>

                     SECTION 2 -- DISASTER RECOVERY EXERCISE

SECTION 2.1       DISASTER RECOVERY TESTING

         2.1.1    Test Schedule -- ACS and Zale will jointly test the Disaster
                  Recovery Plan on an annual basis, as scheduled by mutual
                  agreement but never during a Zale Freeze Period. ACS and Zale
                  will agree on goals and objectives for the annual disaster
                  recovery test prior to the scheduled testing date. Zale shall
                  be involved in establishing test dates, developing test plans,
                  and be involved in the actual test to validate the results.
                  ACS shall document results as Zale determines, and shall
                  identify and implement process improvements required as a
                  result of the tests.

         2.1.2    Test Scope -- The portion of the Disaster Recovery Plan
                  established for testing will be as agreed but must include
                  core applications, polling, new applications and any systems
                  that did not pass on a previous test. The Plan (or segment
                  thereof) may be tested in its entirety at one time or in more
                  than one focused test area and must generally executed within
                  the environments specified for exercise in Table G-3, although
                  no more than one test per year will be conducted with the
                  external provider except as provided in Section
                  2.1.4--Re-tests below. Test scenarios are to include, over
                  time, each of the loss scenarios defined in the disaster
                  recovery plan.

         2.1.3    Walk-Thru -- In addition to full testing, Zale and ACS, at
                  Zale's direction, will conduct one annual walk-through of each
                  element of the Zale's Disaster Recovery Plan.

         2.1.4    Re-tests -- After each disaster recovery test, ACS and Zale
                  shall jointly determine if the agreed upon goals and
                  objectives for the disaster recovery test were reasonably
                  achieved. If an agreed upon goal or objective was not
                  achieved, ACS and Zale will assign responsibility for not
                  achieving the goal or objective and determine if re-testing is
                  required prior to the next scheduled disaster recovery test.
                  If ACS and Zale determine that re-testing is required prior to
                  the next scheduled disaster recovery test, the cost of the
                  re-test shall be borne by the party for which responsibility
                  for not achieving the goal or objective was assigned.

         2.1.5    Testing Affect on Service Levels--Disaster recovery testing
                  shall be designed and executed to have no impact on the
                  Service Levels.

         2.1.6    Audits -- The ACS plan will meet Zale's audit requirements and
                  will be subject to the annual general audit provisions of the
                  Agreement. Zale agrees to bear any cost for ACS to comply with
                  Zale's audit requirements which fall outside normal industry
                  standards.

                        SECTION 3 -- DISASTER PROCEDURES

SECTION 3.1       DISASTER INVOCATION

         3.1.1    Invocation -- A Disaster can only be declared by Zale. Zale
                  and ACS shall each immediately inform the other, and Zale
                  management, of any circumstances of

                                       6

<PAGE>

                  which it becomes aware which could amount to, or might lead
                  to, a Disaster. This shall include any instance of an actual
                  or threatened force majeure event. ACS shall consult with Zale
                  and obtain Zale's consent prior to declaring a disaster, which
                  consent will not be unreasonably withheld. With regard to
                  those circumstances in which only the business of Zale is
                  impacted, Zale may request that ACS declare a disaster; such
                  request shall not be unreasonably denied.

         3.1.2    Irrevocable -- Charges related to declaration of a disaster at
                  the designated recovery facility are generally irrevocable,
                  even if recovery is no longer needed and Zale never actually
                  utilizes the recovery facility.

         3.1.3    Notifications -- Notification by either party of a disaster
                  situation is to be made immediately.

SECTION 3.2       DISASTER MANAGEMENT PROCEDURES

         3.2.1    Execution Procedure -- In the event of a Disaster, ACS shall:
                  (i) immediately implement the relevant Zale Disaster Recovery
                  Plan and or segments of the Plan; (ii) provide operational and
                  technical support for disaster recovery planning, development,
                  documentation, testing and execution; and (iii) provide
                  continuous, non-stop effort and escalation to senior
                  management of ACS and Zale to minimize disruptions caused by
                  any Disaster.

         3.2.2    Reporting -- ACS shall make available to Zale various reports
                  reflecting the status of its Disaster recovery activities.
                  Zale's existing Disaster Recovery Plan provides for continuity
                  of IT services. It does not include the broader scope of
                  overall business continuity in the event of a "disaster"
                  event.

         3.2.3    Executive Communications -- In addition to normal provisions
                  for communications, ACS agrees that it will assign an
                  executive/senior management resource to provide communications
                  and recovery oversight services to Zale in the event of the
                  invocation of disaster recovery. The senior ACS resource is to
                  be identified and accepted by the Zale CIO in advance, with
                  both parties conducting such working sessions and procedures
                  development/agreement as may be deemed necessary by the Zale
                  CIO to be able to meet the reasonable expectation of senior
                  and executive Zale management. This communications and
                  oversight function is to be independent from, but coordinated
                  with the interaction at the account management,
                  administration, operations and support levels.

SECTION 3.3       SERVICE LEVELS

         3.3.1    Affected Services -- If the Disaster is caused by a force
                  majeure event, Service Levels impacted by the Disaster shall
                  not be subject to Service Level Credits. If the Disaster is
                  caused by ACS, its agents or subcontractors, or any other ACS
                  personnel, in addition to any other remedies Zale may have
                  under the Agreement, any resulting Service Level impacts shall
                  be subject to Service Level Credits.

         3.3.2    Non-Affected Services -- In the event of a Disaster, ACS shall
                  provide additional technical resources to Zale to ensure
                  Service Levels for non affected areas are maintained.

                                       7

<PAGE>

                         SECTION 4 -- OPTIONAL SERVICES

SECTION 4.1       ALTERNATE SITE ACCESS/BUSINESS RECOVERY

          ACS will, as reasonably requested, assist Zale in the development of a
business recovery plan designed to allow Zale to resume critical data processing
and voice communications functions in support of business activity in the event
of a disaster at a General Office facility. The plan will provide for an
alternative workspace in the Dallas metropolitan area for critical Zale
employees, with appropriate terminal and/or desktop equipment,
telecommunications, and voice communication capability to allow the resumption
of critical processing functions as defined in the plan. Any hardware, software,
network, facilities or third party consulting resources required to provide such
plan and capability shall be at Zale's sole expense.

SECTION 4.2       ALTERNATE STRATEGIES

         4.2.1    Advanced Recovery Data Management --To reduce the risk of
                  extending recovery timelines beyond those specified in Section
                  1.1.2--Recoverability Targets, at Zale's request, ACS will
                  work with third-party offsite recovery facility providers to
                  provide Advanced Recovery Data Management services, such as
                  data transportation and remote storage and/or remote data
                  mirroring to reduce or eliminate delays resulting from the
                  data relocation to a designated recovery facility. These
                  Services are currently not within the scope of the Agreement
                  and would carry additional charges.

         4.2.2    Standby Equipment -- ACS and Zale will work to develop a
                  disaster recovery approach that utilizes Zale acquisition of
                  application and network servers in an effective manner. The
                  use of backup and/or development/test servers, based at
                  alternate sites where practical, to defer the cost of further
                  equipment is a planning objective. Zale and ACS will agree as
                  to which servers/platforms are to be backed up by owned/leased
                  standby equipment, by third party reserved resources, or by
                  emergency acquisition of replacement equipment. Acquisition of
                  backup server equipment is to be at Zale's discretion.

         4.2.3    Emergency Acquisitions -- Both parties agree that emergency
                  implementation of all or part the Disaster Recovery Plan may
                  involve emergency acquisition of certain equipment, typically
                  small servers and workstations, that are readily available.
                  Disaster recovery process cannot be dependent on the
                  availability of this (or any other singular) communication
                  mechanism.

         4.2.4    Reciprocal Agreements -- Wherever practical, and with Zale's
                  sole approval, Zale and ACS may enter into reciprocal
                  agreements with other third parties to provide each other
                  alternate processing facilities or environments at reduced
                  expense.

                                       8
<PAGE>

                               TABLES AND EXHIBITS

 TABLE G-1: SYSTEMS SUBJECT TO DISASTER RECOVERY

                 HARDWARE & SYSTEMS SUBJECT TO DISASTER RECOVERY

The following Recovery Components are subject to Disaster Recovery as defined in
Schedule A and this Schedule G, as it may be revised from time to time, but no
less than annually. Zale, upon approval, will compensate ACS for additional
reasonable resources, expenses or Services required as a result of such
revisions. Recovery includes communications access and all related interfaces to
recovered or external systems.

<Table>
<Caption>
      PLATFORM                     SYSTEM/FUNCTION                          RECOVERY COMPONENT

--------------------- ------------------------------------------- ---------------------------------------
<S>                   <C>                                         <C>
Mainframe                                DCS                              DCS Batch and On-line
--------------------- ------------------------------------------- ---------------------------------------
                                         RIS                              RIS Batch and On-line
--------------------- ------------------------------------------- ---------------------------------------

--------------------- ------------------------------------------- ---------------------------------------
Midrange                           Polling - Pagoda                             Polling1/2
--------------------- ------------------------------------------- ---------------------------------------
                                 Polling - non-Pagoda                           PROD POLL
--------------------- ------------------------------------------- ---------------------------------------
                                   Polling Support                               PRODNT1
--------------------- ------------------------------------------- ---------------------------------------
                                     Sales Audit                                   HP12
--------------------- ------------------------------------------- ---------------------------------------
                                        RETEK                                      HP14
--------------------- ------------------------------------------- ---------------------------------------
                                  SKU Forecasting/E3                              ZALAS2
--------------------- ------------------------------------------- ---------------------------------------
                                      Optum/Move                                   HP14
--------------------- ------------------------------------------- ---------------------------------------
                                      Payroll/HR                                   HP12
--------------------- ------------------------------------------- ---------------------------------------
                           Novell Component - Login Server                        ZALE1
--------------------- ------------------------------------------- ---------------------------------------
                                   17 Desktop PC's                           17 Desktop PC's
--------------------- ------------------------------------------- ---------------------------------------
                                    Zale Insurance                                ZALAS1
--------------------- ------------------------------------------- ---------------------------------------
                                      E.Piphany                                    HP20
--------------------- ------------------------------------------- ---------------------------------------
                                  Oracle Financials                             HP24, HP26
--------------------- ------------------------------------------- ---------------------------------------
</Table>

                                       9

<PAGE>

TABLE G-2: DISASTER RECOVERY PLAN - KEY COMPONENTS

                            MASTER TABLE OF CONTENTS

1.       CLIENT RECOVERY
         1.1.     CR - ZALE GROUP
                  1.1.1.   Disaster Recovery Plan Overview
                  1.1.2.   ZALE Main Plan

2.       DATA CENTER RECOVERY
         2.1.     DCR - TECHNICAL SERVICES GROUP
                  2.1.1.   Data Storage Work Group
                  2.1.2.   Database OS/390 Work Group
                  2.1.3.   Mainframe System Software Work Group
                  2.1.4.   Automation Work Group
                  2.1.5.   Communications Work Group
                  2.1.6.   Open Systems Work Group
         2.2.     DCR - OPERATIONS GROUP
                  2.2.1.   Computer Operations Work Group
                  2.2.2.   Production Control Work Group
                  2.2.3.   Media Services Work Group
         2.3.     DCR - OPERATIONS SUPPORT GROUP
                  2.3.1.   Recovery Services Work Group

3.       SUPPORT RECOVERY
         3.1.     SR - SUPPORT SERVICES GROUP
                  3.1.1.   Client/Server Work Group
         3.2.     SR  - SOFTWARE ASSET MANAGEMENT GROUP
                  3.2.1.   Passcode Administration Work Group
         3.3.     SR - ENTERPRISE NETWORK PARTNERS GROUP
                  3.3.1.   Network Engineering Work Group
         3.4.     SR - ACCOUNT MANAGEMENT GROUP
                  3.4.1.   Account Management Work Group

                           BRIEF SECTION DESCRIPTIONS

DISASTER RECOVERY PLAN OVERVIEW - Serves as an overview and a guide on how to
read the Disaster Recovery Plan

ZALE MAIN PLAN - Covers alert notifications and recovery strategies.

DATA STORAGE PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Data Storage work
group.

DATABASE OS/390 PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Database OS/390
work group.

MAINFRAME SYSTEM SOFTWARE PLAN - Contains disaster notification, contact
information, responsibilities, assumptions and recovery procedures for the
Mainframe System Software work group.

AUTOMATION PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and

                                       10

<PAGE>

recovery procedures for the Automation work group.

COMMUNICATIONS PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Communications
work group.

OPEN SYSTEMS PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Open Systems work
group. Typically addresses recovery procedures for AIX, SUN, UNIX and RISC
environments.

COMPUTER OPERATIONS PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Computer
Operations work group.

PRODUCTION CONTROL PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Production Control
work group.

MEDIA SERVICES PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Media Services
work group.

RECOVERY SERVICES PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Recovery Services
work group.

CLIENT/SERVER PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Client/Server work
group. Typically addresses recovery procedures for NT and Intel environments.

PASSCODE ADMINISTRATION PLAN - Contains disaster notification, contact
information, responsibilities, assumptions and recovery procedures for the
Passcode Administration work group.

NETWORK ENGINEERING PLAN - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Network
Engineering work group.

ACCOUNT MANAGEMENT - Contains disaster notification, contact information,
responsibilities, assumptions and recovery procedures for the Account Management
work group. Plan includes process of establishing communication between ACS
Account Management and Client.

                                       11

<PAGE>

TABLE G-3: SUNGARD EXERCISE REQUEST

                    EXAMPLE OF ACS RECOVERY EXERCISE REQUEST

GENERAL INFORMATION

             CLIENT:          Zale

MAINFRAME

             MIPS                             40

             DASD (GBS)                      587

MIDRANGE

         ZALEHP18
                HP N Class
                4 CPUs
                8 gig RAM
                36 gig mirrored internal boot drive
                2gig fiber connection to SAN

         ZALEHP22
                HP N Class
                8 CPUs
                16 gig RAM
                36 gig mirrored internal boot drive
                2gig fiber connection to SAN

         ZALEHP24
                HP RP8420
                4 CPUs
                8 gig RAM
                36 gig mirrored internal boot drive
                2gig fiber connection to SAN

         ZALEHP26
                HP RP8420
                6 CPUs
                12 gig RAM
                36 gig mirrored internal boot drive
                2gig fiber connection to SAN

         ZALEADM1
                HP L3000
                4 CPUs
                16 gig RAM
                36 gig mirrored internal boot drive
                2gig fiber connection to SAN

         ZALEDC1
                HP/Compaq Proliant 6500

                                       12

<PAGE>

                2 CPUs, 700mhz
                1 gig RAM
                36 gig internal disks

         ZALEDC3
                HP/Compaq Proliant 6500
                2 CPUs, 700mhz
                1 gig RAM
                100 gig internal disks

         ZNTRTS1
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTIVR1
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZALEAP1 - Netware 6.x
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                72 gig internal disks

         ZNTDISO1
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO2
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO3
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO4
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO5
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM

                                       13

<PAGE>

                100 gig internal disks

         ZNTDISO6
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO7
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO8
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         ZNTDISO9
                HP/Compaq DL380G2
                2 CPUs, 2.4 Ghz
                1 gig RAM
                100 gig internal disks

         LTO1 Tape Library
                20 LTO1 drives, 2 gig fiber connection to SAN

         SAN - EMC Disk Space Needed

         -----ZALEHP24-----
         vgERPDBP        621468
         vgERPPBIN       8631
         TOTAL   630099MB

         -----ZALEHP26-----
         vgERPAPP        60417
         vgERPAPPSW      17262
         TOTAL   77679MB

         -----ZALEHP18-----
         vg9ias 17858
         vgLOGS 8929
         vgMIXP 20913
         vgZESCP 43155
         vgapps 8929
         vgmisr 17858
         vgtest 8929
         vguora 8929
         TOTAL 135500MB

         -----ZALEADM2-----
         DBASHAREdg      88632
         IGNITEdg        66768
         ORABINdg        8929
         RECPdg  14386
         harvest 8929
         veritas 63296

                                       14

<PAGE>

         TOTAL   250940MB

         -----ZALEHP22-----
         dgARCH 57543
         dgDATA1 115088
         dgDATA2 115088
         dgDATA3 115088
         dgDATA4 115088
         dgDATA5 159137
         dgDATA6 138104
         dgIDB 17858
         dgIDX1 115088
         dgIDX2 115088
         dgOID 28772
         dgORAHOME 8631
         dgPR1P 8929
         dgRBS 28772
         dgREDO 57544
         dgTEMP 57543
         dgZAPP 120834
         rootdg 8929
         TOTAL 1383124MB

         -----ZALEHP19-----
         AIMDdg 647370
         BORDdg 14386
         DRWDdg 187018
         OFAdg 100702
         OFINdg 23315
         STSDdg 28772
         ZAPDdg 111118
         rootdg 28772
         TOTAL 1141453MB

         -----ZALEADM1-----
         ORABINdg        8929
         POLPdg  28772
         autosys 17560
         TOTAL   55261

                                       15

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