EXECUTION COPY

                            INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into
as of the 22nd day of June, 2004, by and between Friedman's Inc, a Delaware
corporation (the "Company"), and the undersigned (the "Indemnitee").

                                    RECITALS

     WHEREAS, it is essential to the Company that it attract and retain as
directors and officers the most capable persons available; and

     WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in the current environment; and

     WHEREAS, the Indemnitee is willing to serve as a director or officer of the
Company if the Indemnitee is adequately and reasonably protected against the
risks associated with such service; and

     WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), under which law the Company is organized, empowers a
corporation to indemnify a person serving as a director or officer of the
Company and a person who serves at the request of the company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, and Section 145 of the DGCL and the certificate of
incorporation of the Company specify that the indemnification set forth in
Section 145 and in the certificate of incorporation, respectively, shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any law (common or statutory), agreement, vote of stockholders
or disinterested directors or otherwise; and

     WHEREAS, the Company and the Indemnitee have concluded that the indemnities
available under the Company's certificate of incorporation, bylaws and any
insurance now or hereafter in effect need to be supplemented to more fully
protect the Indemnitee against the risks associated with the Indemnitee's
service to the Company; and

     WHEREAS, in recognition of Indemnitee's need for additional protection
against personal liability in order to enhance and enable Indemnitee's service
to the Company in an effective manner, and in order to induce Indemnitee to
provide services to the Company as a director and/or officer thereof, the
Company wishes to provide in this Agreement for the indemnification of
Indemnitee to the fullest extent permitted by the DGCL and as set forth in this
Agreement.

     NOW THEREFORE, in consideration of the foregoing, the covenants contained
herein and Indemnitee's continued service to the Company, the Company and
Indemnitee, intending to be legally bound, hereby agree as follows:

     Section 1. Definitions. The following terms, as used herein, shall have the
following respective meanings:

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings relative to the
foregoing.

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     "Change in Control" shall be deemed to have taken place if: (i) any person
or group of persons (as such term is defined in Rule 13d-5(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended to date the "Exchange
Act") acquires shares carrying more than fifty percent (50%) of the voting
rights at general meetings of the Company, (ii) the stockholders of the Company
approve a merger or consolidation of the Company with any other company, other
than (x) a merger or consolidation which actually results in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (y) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person or group of persons acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities, or (iii) the stockholders of the Company approve a plan
of complete liquidation of the Company or an arrangement for the sale or
disposition of the Company or all or substantially all of the Company's overall
assets or any transaction having a similar effect; provided, that no Change of
Control shall be deemed to result from any corporate changes to the Company's
certificate of incorporation or by-laws at the Company not resulting from one of
the events specified above or from any change in the relative rights and powers
of one or more classes of the Company's capital stock whether effected by
contract or otherwise, in each case to the extent that they result from or are
related to the settlement of any criminal or civil litigation or do not result
in the occurrence of any of the events specified in clauses (i) through (iii) of
this definition.

     "Claim" means (a) any threatened, pending or completed action, suit,
proceeding or arbitration or other alternative dispute resolution mechanism, or
(b) any inquiry, hearing or investigation, conducted by any third party, that
Indemnitee in good faith believes might lead to the institution of any such
action, suit, proceeding or arbitration or other alternative dispute resolution
mechanism, in each case whether civil, criminal, administrative or other
(whether or not the claims or allegations therein are groundless, false or
fraudulent) and includes, without limitation, those brought by or in the name of
the Company or any director or officer of the Company.

     "Company Agent" means any director, officer, partner, employee, agent,
trustee or fiduciary of the Company, any Subsidiary or any Other Enterprise.

     "Covered Event" means any event or occurrence on or after the date of this
Agreement related to the fact that Indemnitee is or was a Company Agent or
related to anything done or not done by Indemnitee in any such capacity, and
includes, without limitation, any such event or occurrence (a) arising from
performance of the responsibilities, obligations or duties imposed by ERISA or
any similar applicable provisions of state or common law; or (b) arising from
any merger, consolidation or other business combination involving the Company,
any Subsidiary or any Other Enterprise, including without limitation any sale or
other transfer of all or substantially all of the business or assets of the
Company, any Subsidiary or any Other Enterprise; provided, however, that in any
such case, Indemnitee acted in good faith and in a manner which such Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and in the case of a criminal proceeding, in addition the Indemnitee
(x) had no reasonable cause to believe that such Indemnitee's conduct was
unlawful and (y) has not admitted that Indemnitee's conduct was unlawful.

     "D&O Insurance" means the directors' and officers' liability insurance
described on Exhibit l to this Agreement and any replacement or substitute
policies issued by one or more insurers rated "A" or better by A.M. Best
Company, Inc. providing, unless otherwise approved by the Board of Directors of
the Company, in all respects coverage at least comparable to and in the same
amount as that provided under the insurance described on Exhibit 1.

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     "Determination" means a determination made by (a) a majority vote of
Disinterested Directors even if less than a quorum; (b) Independent Legal
Counsel, in a written opinion addressed to the Company and Indemnitee; (c) the
stockholders of the Company; or (d) a decision by a court of competent
jurisdiction not subject to further appeal.

     "Disinterested Director" shall be a director of the Company who is not or
was not a party to the Claim giving rise to the subject matter of a
Determination.

     "Expenses" includes the reasonable fees and expenses of one firm of
attorneys (and one local counsel in each relevant jurisdiction) and all other
costs, travel expenses, fees of experts, transcript costs, filing fees, witness
fees, telephone charges, postage, copying costs, delivery service fees and other
expenses and obligations of any nature whatsoever paid or incurred in connection
with investigating, prosecuting or defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in any Claim, for which Indemnitee is or becomes legally
obligated to pay.

     "Independent Legal Counsel" shall mean a law firm or a member of a law firm
that (a) neither is nor in the past five years has been retained to represent in
any material matter the Company, any Subsidiary, Indemnitee or any other party
to the Claim, (b) under applicable standards of professional conduct then
prevailing would not have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's rights to
indemnification under this Agreement and (c) is reasonably acceptable to the
Company and Indemnitee.

     "Loss" means any amount which Indemnitee is legally obligated to pay as a
result of any Claim, including, without limitation (a) all judgments, penalties
and fines, and amounts paid or to be paid in settlement, (b) all interest,
assessments and other charges paid or payable in connection therewith and (c)
any federal, state, local or foreign taxes imposed (net of the value to
Indemnitee of any tax benefits resulting from tax deductions or otherwise as a
result of the actual or deemed receipt of any payments under this Agreement).

     "Other Enterprise" means any corporation (other than the Company or any
Subsidiary), partnership, joint venture, association, employee benefit plan,
trust or other enterprise or organization to which Indemnitee renders service at
the request of the Company or any Subsidiary.

     "Parent" shall have the meaning set forth in the regulations of the
Securities and Exchange Commission under the Securities Act of 1933, as amended;
provided the term "Parent" shall not include the board of directors of a
corporation in its capacity as a board of directors, and provided further that
if the other party to any transaction referred to in Section 11.2 has no Parent
as so defined above, "Parent" shall mean such other party.

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (or any subdivision, department, commission or agency thereof), and
includes without limitation any "person", as such term is used in Sections 13(d)
and 14(d) of the Exchange Act.

     "Potential Change in Control" shall be deemed to have occurred if (a) the
Company enters into an agreement or arrangement the consummation of which would
result in the occurrence of a Change in Control, (b) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control or (c) the Board of
Directors of the Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.

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     "Subsidiary" means any corporation of which more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors of such corporation is now or hereafter owned, directly or
indirectly, by the Company.

     "Voting Securities" means any securities of the Company which vote
generally in the election of directors.

     Section 2. Indemnification

     2.1. General Indemnity Obligation.

     2.1.1. Subject to the remaining provisions of this Agreement, the Company
hereby indemnifies and holds Indemnitee harmless for any Losses or Expenses
arising from any Claims relating to (or arising in whole or in part out of) any
Covered Event, including without limitation, any Claim the basis of which is any
actual or alleged breach of duty, neglect, error, misstatement, misleading
statement, omission or other act done or attempted by Indemnitee in the capacity
as a Company Agent, whether or not Indemnitee is acting or serving in such
capacity at the date of this Agreement, at the time liability is incurred or at
the time the Claim is initiated.

     2.1.2. The obligations of the Company under this Agreement shall apply to
the fullest extent authorized or permitted by the provisions of applicable law,
as presently in effect or as changed after the date of this Agreement, whether
by statute or judicial decision (but, in the case of any subsequent change, only
to the extent that such change permits the Company to provide broader
indemnification than permitted prior to giving effect thereto).

     2.1.3. Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company, unless the Company has joined
in or consented to the initiation of such Claim; provided, the provisions of
this Section 2.1.3 shall not apply (i) following a Change in Control to Claims
seeking enforcement of this Agreement, the certificate of incorporation or
bylaws of the Company or any other agreement now or hereafter in effect relating
to indemnification for Covered Events or (ii) absent a Change in Control, to
Claims seeking enforcement of this Agreement, the certificate of incorporation
or bylaws of the Company or any other agreement now or hereafter in effect
relating to indemnification for Covered Events, but only if the Indemnitee is
ultimately determined to be entitled to indemnification.

     2.1.4. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Losses or Expenses
paid with respect to a Claim but not, however, for the total amount thereof, the
Company shall nevertheless indemnify and hold Indemnitee harmless against the
portion thereof to which Indemnitee is entitled.

     2.1.5. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in defense of any
or all Claims relating to (or arising in whole or in part out of) a Covered
Event or in defense of any issue or matter therein, including dismissal without
prejudice, the Company shall indemnify and hold Indemnitee harmless against all
Expenses incurred in connection therewith.

     2.2. Indemnification for Serving as Witness and Certain Other Claims.
Notwithstanding any other provision of this Agreement, the Company hereby
indemnifies and holds Indemnitee harmless for all Expenses in connection with
(a) the preparation to serve or service as a witness in any Claim in which
Indemnitee is not a party, if such actual or proposed service as a witness arose
by reason of Indemnitee

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having served as a Company Agent on or after the date of this Agreement and (b)
any Claim initiated by Indemnitee on or after the date of this Agreement (i) for
recovery under any directors' and officers' liability insurance maintained by
the Company; (ii) following a Change in Control, for enforcement of the
indemnification obligations of the Company under this Agreement, the Certificate
of Incorporation or Bylaws of the Company or any other agreement now or
hereafter in effect relating to indemnification for Covered Events, regardless
of whether Indemnitee ultimately is determined to be entitled to such insurance
recovery or indemnification, as the case may be; or (iii) absent a Change in
Control, for enforcement of this Agreement, the Certificate of Incorporation or
Bylaws of the Company or any other agreement now or hereafter in effect relating
to indemnification for Covered Events, but only if the Indemnitee is ultimately
determined to be entitled to indemnification.

     Section 3. Limitation on Indemnification.

     3.1. Coverage Limitations. No indemnification is available pursuant to the
provisions of this Agreement:

     3.1.1. If such indemnification is not lawful;

     3.1.2. If Indemnitee's conduct giving rise to the Claim with respect to
which indemnification is requested was knowingly fraudulent, a knowing violation
of law, deliberately dishonest or in bad faith or constituted willful
misconduct;

     3.1.3. In respect of any Claim based upon or attributable to Indemnitee
gaining in fact any personal profit or advantage to which Indemnitee was not
legally entitled;

     3.1.4. In respect of any Claim based upon or in connection with a
proceeding by or in the right of the Company in which Indemnitee was adjudged
liable to the Company unless and only to the extent that the Court of Chancery
of Delaware shall determine upon application that, despite the adjudication of
such liability but in view of all circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such expenses (including
attorney's fee) which the Court of Chancery of Delaware shall deem proper; or

     3.1.5. In respect of any Claim for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act; or

     3.1.6. With respect to any related Claim or Expense, if Indemnitee does not
cooperate fully with any investigation or inquiry, whether, governmental,
regulatory or otherwise, which cooperation includes, but is not limited to,
providing complete and prompt access to all information requested, and to comply
with all interview requests. This provision applies to all investigations,
regardless of whether they are conducted by the Company, any of its agents or
its counsel, or any outside regulator or prosecutor, including but not limited
to, the Department of Justice, the Securities and Exchange Commission, the
Federal Bureau of Investigation, or any state or local law enforcement or
regulatory authority.

     3.2. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment otherwise due and payable to the extent Indemnitee
has otherwise actually received payment (whether under the certificate of
incorporation or the bylaws of the Company, the D&O Insurance or otherwise) of
any amounts otherwise due and payable under this Agreement.

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     Section 4. Payments and Determinations.

     4.1. Advancement and Reimbursement of Expenses. If requested by Indemnitee,
the Company shall advance to Indemnitee, no later than two business days
following any such request, any and all Expenses for which indemnification is
available under Section 2 (after giving effect to Section 3). In order to obtain
such advancement or reimbursement, the Indemnitee must also furnish to the
Company a written affirmation of his good faith belief that he has conducted
himself in good faith and that he reasonably believed that: (1) In the case of
conduct in his official capacity with the corporation, that his conduct was in
its best interest; and (2) in all other cases, that his conduct was at least not
opposed to its best interests; and (3) in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful and has not
admitted that his conduct was unlawful. In addition, Indemnitee must furnish to
the Company a written undertaking, executed personally or on his behalf, to
repay the advance if it is ultimately determined that he is not entitled to
indemnification. Upon any Determination that Indemnitee is not permitted to be
indemnified for any Expenses so advanced, Indemnitee hereby agrees to reimburse
the Company for all such amounts previously paid. Such obligation of
reimbursement shall be unsecured and no interest shall be charged thereon.

     4.2. Payment and Determination Procedures.

     4.2.1. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, together with such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing
that Indemnitee has requested indemnification.

     4.2.2. Upon written request by Indemnitee for indemnification pursuant to
Section 4.2.1, a Determination with respect to Indemnitee's entitlement thereto
shall be made in the specific case (a) if a Change in Control shall have
occurred, as provided in Section 4.2.3; and (b) if a Change in Control shall not
have occurred, by (i) the Board of Directors by a majority vote of Disinterested
Directors, (ii) Independent Legal Counsel, if either (A) there are no
Disinterested Directors or (B) a majority vote of Disinterested Directors
otherwise so directs or (iii) the stockholders of the Company (if submitted by
the Board of Directors) but shares of stock owned by or voted under the control
of any Indemnitee who is at the time party to the proceeding may not be voted.
If a Determination is made that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within 10 days after such Determination.

     4.2.3. If there is a Change in Control, any Determination to be made under
Section 4 shall be made by Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).

     4.2.4. If no Determination is made within 60 days after receipt by the
Company of a request for indemnification by Indemnitee pursuant to Section
4.2.1, a Determination shall be deemed to have been made that Indemnitee is
entitled to the requested indemnification (and the Company shall pay the related
Losses and Expenses no later than 10 days after the expiration of such 60-day
period), except where such indemnification is not lawful; provided, however,
that (a) such 60-day period may be extended for a reasonable time, not to exceed
an additional 30 days, if the Person or Persons making the Determination in good
faith require such additional time for obtaining or evaluating the documentation
and information relating thereto; and (b) the foregoing provisions of this
Section 4.2.4 shall not apply (i) if the Determination is to be made by the
stockholders of the Company and if (A) within 15 days after receipt by the
Company of the request by Indemnitee pursuant to Section 4.2.1 the Board of
Directors has resolved to submit such Determination to the stockholders at an
annual meeting of the stockholders to be held within 75 days after such receipt,
and such Determination is made at such annual meeting, or (B) a

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special meeting of stockholders is called within 15 days after such receipt for
the purpose of making such Determination, such meeting is held for such purpose
within 60 days after having been so called and such Determination is made at
such special meeting, or (ii) if the Determination is to be made by Independent
Legal Counsel.

     Section 5. D & O Insurance.

     5.1. Current Policies. The Company hereby represents and warrants to
Indemnitee that Exhibit 1 contains a complete and accurate description of the
D&O Insurance.

     5.2. Continued Coverage. The Company shall maintain, to the extent
practicable, the D&O Insurance for so long as this Agreement remains in effect.
The Company shall cause the D&O Insurance to cover Indemnitee, in accordance
with its terms and at all times such insurance is in effect, to the maximum
extent of the coverage provided thereby for any director or officer of the
Company.

     5.3. Indemnification. In the event of any reduction in, or cancellation of,
the D&O Insurance (whether voluntary or involuntary on behalf of the Company),
the Company shall, and hereby agrees to, indemnify and hold Indemnitee harmless
against any Losses or Expenses which Indemnitee is or becomes obligated to pay
as a result of the Company's failure to maintain the D&O Insurance in effect in
accordance with the provisions of Section 5.2, to the fullest extent permitted
by applicable law, notwithstanding any provision of the certificate of
incorporation or the bylaws of the Company, or any other agreement now or
hereafter in effect relating to indemnification for Covered Events. The
indemnification available under this Section 5.3 is in addition to all other
obligations of indemnification of the Company under this Agreement and shall be
the only remedy of Indemnitee for a breach by the Company of its obligations set
forth in Section 5.2.

     Section 6. Subrogation. In the event of any payment under this Agreement to
or on behalf of Indemnitee, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee against any Person
other than the Company or Indemnitee in respect of the Claim giving rise to such
payment. Indemnitee shall execute all papers reasonably required and shall do
everything reasonably necessary to secure such rights, including the execution
of such documents reasonably necessary to enable the Company effectively to
bring suit to enforce such rights.

     Section 7. Notification and Defense of Claims.

     7.1. Notice by Indemnitee. Indemnitee shall give notice in writing to the
Company as soon as practicable after Indemnitee becomes aware of any Claim with
respect to which indemnification will or could be sought under this Agreement;
provided the failure of Indemnitee to give such notice, or any delay in giving
such notice, shall not relieve the Company of its obligations under this
Agreement except to the extent the Company is actually prejudiced to any such
failure or delay.

     7.2. Insurance. The Company shall give prompt notice of the commencement of
any Claim relating to Covered Events to the insurers on the D&O Insurance, if
any, in accordance with the procedures set forth in the respective policies in
favor of Indemnitee. The Company shall thereafter take all necessary action to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such Claims in accordance with the terms of such policies.

     7.3. Defense.

     7.3.1. In the event any Claim relating to Covered Events is by or in the
right of the Company, Indemnitee may, at the option of Indemnitee, either
control the defense thereof or accept the

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defense provided under the D&O Insurance; provided, however, that Indemnitee may
not control the defense if such decision would jeopardize the coverage provided
by the D&O Insurance, if any, to the Company or the other directors and officers
covered thereby, and also provided that the amounts expended by the Company
shall be reimbursed to the Company by the Indemnitee if the standards and
requirements of Section 145 of the DGCL so require.

     7.3.2. In the event any Claim relating to Covered Events is other than by
or in the right of the Company, Indemnitee may, at the option of Indemnitee,
either control the defense thereof, require the Company to defend or accept the
defense provided under the D&O Insurance; provided, however, that Indemnitee may
not control the defense or require the Company to defend if such decision would
jeopardize the coverage provided by the D&O Insurance to the Company or the
other directors and officers covered thereby. In the event that Indemnitee
requires the Company to so defend, or in the event that Indemnitee proceeds
under the D&O Insurance but Indemnitee determines that such insurers under the
D&O Insurance are unable or unwilling to adequately defend Indemnitee against
any such Claim, the Company shall promptly undertake to defend any such Claim,
at the Company's sole cost and expense, utilizing counsel of Indemnitee's choice
who has been approved by the Company. If appropriate, the Company shall have the
right to participate in the defense of any such Claim.

     7.3.3. In the event the Company shall fail, as required by any election by
Indemnitee pursuant to Section 7.3.2, timely to defend Indemnitee against any
such Claim, Indemnitee shall have the right to do so, including without
limitation, the right (notwithstanding Section 7.3.4) to make any settlement
thereof, and to recover from the Company, to the extent otherwise permitted by
this Agreement, all Expenses and Losses paid as a result thereof.

     7.3.4. The Company shall have no obligation under this Agreement with
respect to any amounts paid or to be paid in settlement of any Claim without the
express prior written consent of the Company to any related settlement. In no
event shall the Company authorize any settlement imposing any liability or other
obligations on Indemnitee without the express prior written consent of
Indemnitee. Neither the Company nor Indemnitee shall unreasonably withhold
consent to any proposed settlement.

     Section 8. Determinations and Related Matters.

     8.1. Presumptions.

     8.1.1. The termination of any claim by judgment, order or settlement
(whether with or without court approval) or any conviction, guilty plea or plea
of nolo contendere or its equivalent, which such conviction or plea does not
establish (through the Executive's admission or otherwise) that the Executive's
conduct was not subject to indemnification hereunder, shall not adversely affect
either the right of Indemnitee to indemnification under this Agreement or the
presumptions to which Indemnitee is otherwise entitled pursuant to the
provisions of this Agreement nor create a presumption that Indemnitee did not
meet any particular standard of conduct or have a particular belief or that a
court has determined that indemnification is not permitted by applicable law.

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     8.2. Appeals; Enforcement.

     8.2.1. In the event that (a) a Determination is made that Indemnitee shall
not be entitled to indemnification under this Agreement, (b) any Determination
to be made by Independent Legal Counsel is not made within 90 days of receipt by
the Company of a request for indemnification pursuant to Section 4.2.1 or (c)
the Company fails to otherwise perform any of its obligations under this
Agreement (including, without limitation, its obligation to make payments to
Indemnitee following any Determination made or deemed to have been made that
such payments are appropriate), Indemnitee shall have the right to commence a
Claim in any court of competent jurisdiction, as appropriate, to seek a
Determination by the court, to challenge or appeal any Determination which has
been made, or to otherwise enforce this Agreement. Any such judicial proceeding
challenging or appealing any Determination shall be deemed to be conducted de
novo and without prejudice by reason of any prior Determination to the effect
that Indemnitee is not entitled to indemnification under this Agreement. Any
such Claim shall be at the sole expense of Indemnitee except as provided in
Section 9.3.

     8.2.2. If a Determination shall have been made or deemed to have been made
pursuant to this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such Determination in any judicial proceeding
commenced pursuant to this Section 8.2, except if such indemnification is
unlawful.

     8.2.3. The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 8.2 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court arbitrator that the Company is bound by all the
provisions of this Agreement. The Company hereby consents to service of process
and to appear in any judicial proceedings and shall not oppose Indemnitee's
right to commence any such proceedings.

     8.3. Procedures. Indemnitee shall cooperate with the Company and with any
Person making any Determination with respect to any Claim for which a claim for
indemnification under this Agreement has been made, as the Company may
reasonably require. Indemnitee shall provide to the Company or the Person making
any Determination, upon reasonable advance request, any documentation or
information reasonably available to Indemnitee and necessary to (a) the Company
with respect to any such Claim or (b) the Person making any Determination with
respect thereto.

     Section 9. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company, any
Subsidiary, any Other Enterprise or any Affiliate of the Company against
Indemnitee or Indemnitee's spouse, heirs, executors, administrators or personal
or legal representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of the
Company, any Subsidiary, any Other Enterprise or any Affiliate of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, that if any
shorter period of limitations, whether established by statute or judicial
decision, is otherwise applicable to any such cause of action such shorter
period shall govern.

     Section 10. Contribution. If the indemnification provisions of this
Agreement should be unenforceable under applicable law in whole or in part or
insufficient to hold Indemnitee harmless in respect of any Losses and Expenses
incurred by Indemnitee, then for purposes of this Section 10, the Company shall
be treated as if it were, or was threatened to be made, a party defendant to the
subject Claim and the Company shall contribute to the amounts paid or payable by
Indemnitee as a result of such Losses and Expenses incurred by Indemnitee in
such proportion as is appropriate to reflect the relative benefits accruing to
the Company on the one hand and Indemnitee on the other and the relative fault
of

                                       9
<PAGE>

the Company on the one hand and Indemnitee on the other in connection with such
Claim, as well as any other relevant equitable considerations. For purposes of
this Section 10 the relative benefit of the Company shall be deemed to be the
benefits accruing to it and to all of its directors, officers, employees and
agents (other than Indemnitee) on the one hand, as a group and treated as one
entity, and the relative benefit of Indemnitee shall be deemed to be an amount
not greater than the Indemnitee's yearly base salary or Indemnitee's
compensation from the Company during the first year in which the Covered Event
forming the basis for the subject Claim was alleged to have occurred. The
relative fault shall be determined by reference to, among other things, the
fault of the Company and all of its directors, officers, employees and agents
(other than Indemnitee) on the one hand, as a group and treated as one entity,
and Indemnitee's and such group's relative intent, knowledge, access to
information and opportunity to have altered or prevented the Covered Event
forming the basis for the subject Claim.

     Section 11. Miscellaneous Provisions.

     11.1. Successors and Assigns, Etc. This Agreement shall be binding upon and
inure to the benefit of (a) the Company, its successors and assigns (including
any direct or indirect successor by merger, consolidation or operation of law or
by transfer of all or substantially all of its assets) and (b) Indemnitee and
the heirs, personal and legal representatives, executors, administrators or
assigns of Indemnitee.

     11.2. The Company shall not consummate any consolidation, merger or other
business combination, nor will it transfer 50% or more of its assets (in one or
a series of related transactions), unless the ultimate Parent of the successor
to the business or assets of the Company shall have first executed an agreement,
in form and substance satisfactory to Indemnitee, to expressly assume all
obligations of the Company under this Agreement and agree to perform this
Agreement in accordance with its terms, in the same manner and to the same
extent that the Company would be required to perform this Agreement if no such
transaction had taken place; provided that, if the Parent is not the Company,
the legality of payment of indemnity by the Parent shall be determined by
reference to the fact that such indemnity is to be paid by the Parent rather
than the Company.

     11.3. Severability. The provisions of this Agreement are severable. If any
provision of this Agreement shall be held by any court of competent jurisdiction
to be invalid, void or unenforceable, such provision shall be deemed to be
modified to the minimum extent necessary to avoid a violation of law and, as so
modified, such provision and the remaining provisions shall remain valid and
enforceable in accordance with their terms to the fullest extent permitted by
law.

     11.4. Rights Not Exclusive; Continuation of Right of Indemnification.
Nothing in this Agreement shall be deemed to diminish or otherwise restrict
Indemnitee's right to indemnification pursuant to any provision of the
certificate of incorporation or bylaws of the Company, any agreement, vote of
stockholders or Disinterested Directors, applicable law or otherwise. This
Agreement shall be effective as of the date first above written and continue in
effect until no Claims relating to any Covered Event may be asserted against
Indemnitee and until any Claims commenced prior thereto are finally terminated
and resolved, regardless of whether Indemnitee continues to serve as a director
of the Company, any Subsidiary or any Other Enterprise.

     11.5. No Employment Agreement. Nothing contained in this Agreement shall be
construed as giving Indemnitee any right to be retained in the employ of the
Company, any Subsidiary or any Other Enterprise.

     11.6. Subsequent Amendment. No amendment, termination or repeal of any
provision of the certificate of incorporation or bylaws of the Company, or any
respective successors thereto, or of any

                                       10
<PAGE>

relevant provision of any applicable law, shall affect or diminish in any way
the rights of Indemnitee to indemnification, or the obligations of the Company,
arising under this Agreement, whether the alleged actions or conduct of
Indemnitee giving rise to the necessity of such indemnification arose before or
after any such amendment, termination or repeal.

     11.7. Notices. Notices required under this Agreement shall be given in
writing and shall be deemed given when delivered in person or sent by certified
or registered mail, return receipt requested, postage prepaid. Notices shall be
directed to the Company at Friedman's, Inc., 171 Crossroads Parkway, Savannah,
GA 31422, Attention: Henry Thompson, and to Indemnitee at the address set forth
on the signature page hereto (or such other address as either party may
designate in writing to the other).

     11.8. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and performed in such state without giving effect to the
principles of conflict of laws.

     11.9. Headings. The headings of the Sections of this Agreement are inserted
for convenience only and shall not be deemed to discriminate part of this
Agreement or to affect the construction thereof.

     11.10. Counterparts. This Agreement may be executed in any number of
counterparts all of which taken together shall constitute one instrument.

     11.11. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall
constitute, or be deemed to constitute, a waiver of any other provisions hereof
(whether or not similar) nor shall any such waiver constitute a continuing
waiver.

                                    * * * * *

                                       11
<PAGE>

     The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.

                                         FRIEDMAN'S INC.

                                         By:  /s/Sheldon Whitehouse
                                            ------------------------------------
                                         Name:   Sheldon Whitehouse
                                              ----------------------------------
                                         Title:  Director
                                               ---------------------------------

                                         INDEMNITEE
                                                 /s/Samuel Cusano
                                         ---------------------------------------
                                         Name:      Samuel Cusano
                                              ----------------------------------
                                         Address:
                                                 -------------------------------

                                       12
<PAGE>

                                    Exhibit 1



Primary D&O Coverage:
--------------------

Policy Issuer: Chubb Group of Insurance Companies

Policy Number: 8158-2293

Limits of Liability:
         Each Claim:  $10 million
         Each Policy Period:  $10 million
         Sublimit for all Security Derivative Demands:  $250,000

Term:    July 22, 2003 to July 22, 2004.

Coverage Form:  Chubb EPP Ed. 11/02 Form

Premium:  $280,000

The Chubb policy specifies self-insured retentions of between $0 and $500,000
depending on the nature of the underlying claim.


Excess Coverage (1st Layer):
--------------------------

Policy Issuer:  St. Paul

Policy Number:  568CM1984

Coverage:  $5 million

Term:  July 22, 2003 to July 22, 2004

Coverage Forms:     St. Paul Mercury Insurance Company Form XP001 Prior and
                    Pending Litigation Exclusion-I Form XP041

Retention Amount:
         SEC:  $500,000
         All Other:  $200,000


Excess Coverage (2nd Layer) ("Stub-Year Policy"):
------------------------------------------------

Policy Issuer:  AIG

Policy Number:  549-76-03

Coverage:  $10 million

Term:  November 21, 2003 to July 22, 2004


<PAGE>
Coverage Forms:     General Terms and Conditions Form 14-02-7302 Executive
                    Liability and Entity Securities Liability: 14-02-7303

Premium:  $340,000