Document:

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                                                                   Exhibit 10.18

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
       day of                 , 2002, by and between the SAVANNAH ECONOMIC
 DEVELOPMENT AUTHORITY, a public body corporate and politic and an
instrumentality of the State of Georgia organized and existing under the
constitution and laws of the State of Georgia ("Authority"), as Lessor, and
FRIEDMAN'S, INC., a Delaware corporation having its main office at 4 West
State Street, Savannah, Georgia 31401 ("Lessee").

         WHEREAS, the Authority was created for the purpose of promoting and
initiating industrial growth and development;

         WHEREAS, the Authority is authorized to construct, acquire, own,
repair, remodel, maintain, extend, improve and equip projects on land owned or
leased by the Authority and to sell, lease, exchange, transfer, assign, pledge,
mortgage or dispose of, or grant options for any projects so acquired or
constructed; and

         WHEREAS, pursuant to a Development Agreement, dated the date hereof,
between the Authority and the Lessee, the Authority has appointed the Lessee as
its agent to construct a corporate office building / distribution facility of
approximately 40,000 square feet ("Improvements") on land in Savannah, Chatham
County, Georgia owned by the Authority and known as Lot 1 of Subdivision of
Parcel lC-3, Crossroads Business Center, Savannah, Chatham County, Georgia, as
shown on a plat (the "Plat") prepared by Thomas & Hutton Engineering Co. and
recorded in Subdivision Map Book 26-S, Page 26, Chatham County records
("Property" and together with the Improvements, the "Project") and has agreed to
lease the Project to the Lessee;

         NOW, THEREFORE, for and in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE 1
                                REPRESENTATIONS

         Section 1.1 Representations by the Authority. The Authority warrants to
the Lessee as follows:

         a.       The Authority is a body corporate and politic organized and
         existing under the Constitution and Laws of the State of Georgia. In
         entering into this Lease and performing its obligations thereunder, the
         Authority will be acting in accordance with law.

         b.       The Authority is not a party to any contract, lease, mortgage,
         indenture or other obligation under the terms of which, or upon the
         happening of a default under which, there would be created any lien,
         charge or encumbrance on the Project defined in Section 2.4 which would
         disturb the Lessee's exclusive possession, use and enjoyment of the
         Project as contemplated by this Lease.

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<PAGE>
         c.       The rights of the Lessee under this Lease to acquire fee
         simple title to the property covered by this Lease free and clear of
         all liens, charges and encumbrances, except for liens, charges and
         encumbrances described on Exhibit A hereto (the "Restrictions") and
         liens, charges and encumbrances made or suffered to be made by the
         Lessee, cannot be impaired by reason of the terms of or any default
         under any existing contract, lease, mortgage, indenture or other
         obligation to which the Authority is a party.

Section 1.2 Representations by the Lessee. The Lessee warrants to the Authority
as follows:

         a.       The Lessee is a Delaware corporation, is in good standing in
         the state of its organization, and is qualified to do business in the
         State of Georgia.

         b.       The Lessee has power to enter into this Lease and perform all
         of its obligations contained herein.

                                    ARTICLE 2

                   ACQUISITION AND CONSTRUCTION OF THE PROJECT

         Section 2.1 Lease of Property. Subject to the terms and conditions of
this Lease, the Authority does hereby lease and demise to the Lessee the
Property together with those portions of the Improvements to be constructed and
installed thereon which constitute improvements and fixtures to land.

         Section 2.2 Construction and Installation of Improvements. The Lessee
shall have the right to construct and install Improvements upon the Property
during the Term of this Lease (as hereafter defined). The Improvements shall
include, without limitation, (i) all buildings located, or to be located on the
Property, (ii) all site infrastructure improvements, such as fill dirt, piping,
electrical and plumbing lines, paving improvements and outdoor lighting, (iii)
all building fixtures, such as dividing walls, lighting and plumbing fixtures,
built-in shelving and storage areas, and (iii) all warehouse and distribution
fixtures which are installed on the Property.

         Section 2.3 Lessee's Obligations Concerning Construction. The Lessee
shall comply with the following restrictions and shall fulfill the following
obligations during construction and installation of the Improvements:

         a.       All Improvements and additions to the Project shall be
         constructed or installed in accordance with the Declaration of
         Covenants and Restrictions for Crossroads Business Center which are
         dated June 30, 1995, and recorded in the office of the Clerk of
         Superior Court of Chatham County, Georgia at Deed Record Book 173-J,
         folio 211.

         b. The Lessee shall comply with all applicable federal, state
         and local governmental regulations concerning the construction, and
         shall, at its sole expense, obtain any necessary governmental permits
         with respect to the Improvements.

         c.       The Lessee shall pay and discharge all bills and other
         obligations with respect to the construction, and shall not allow the
         Property to be subjected to any

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         materialman's lien. In the event such lien is filed against the
         Property, the Lessee shall either (i) cause the lien to be discharged,
         or (ii) legally contest the validity of the lien or the amount of the
         underlying obligation, in which event the Lessee shall furnish
         assurance, reasonably acceptable to the Authority, that the lien will
         ultimately be discharged without any expense to the Authority.

         Section 2.4 Ownership of the Project. The Property and those portions
of the Improvements which constitute fixtures shall be and remain the property
of the Authority during the Term. The parties agree that during the Term of this
Lease, although the Property and those portions of the Improvements which
constitute fixtures shall be titled in the name of and owned by the Authority
for Georgia real property law purposes, the Company shall be treated as the
owner of all of the Project for federal tax purposes. All Improvements which
constitute fixtures shall become property of the Authority upon their
construction, installation or delivery to the Property.

         Section 2.5 Removal or Demolition of Improvements. The Lessee shall
have the right to demolish or remove certain of the Improvements during the
Term, in accordance with the provisions of Article 4.

                                    ARTICLE 3

                         TERM OF LEASE AND CONSIDERATION

         Section 3.1 Duration of Lease. The "Term" of this Lease shall commence
as of the date hereof, and shall terminate on December 31, 2012, unless the
Lessee exercises its option to terminate this Lease prior to such time, in
accordance with Section 3.3, or unless the Term is extended by the mutual
agreement of the parties.

         Section 3.2 Consideration. In consideration of this Lease and the
Authority's agreement to convey the Project to the Lessee upon the termination
of this Lease, the Lessee shall pay the following Consideration:

         a.       Base Rent in the total amount of $264,715 shall be payable
         upon the execution of this Lease; and

         b.       The Authority represents and agrees that under current
         Georgia law, those portions of the Project which consist, and will
         consist, of land and improvements and fixtures to land, title to which
         is held by the Authority, will be exempt from all state, county and
         city ad valorem taxes. During the Term of this Lease and subject to the
         more particular terms hereof, Lessee or its designee will make rental
         payments ("Additional Rent") to the Authority on January 1 in the years
         and amounts as follows:

                                       3
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<Table>
<Caption>
    January 1               Additional
   of the year                Rent(1)
<S>                          <C>
2003-2005                    $     0
2006                           9,908
2007                          16,513
2008                          23,119
2009                          29,724
2010                          36,329
2011                          42,935
2012                          49,540
2013 and thereafter               (2)
</Table>

(1) Fixed amounts payable for investment in the Project through the Term of the
    Lease.

(2) Amount to be determined by a Certified Public Accountant agreeable to the
    Authority and shall be an amount equal to what ad valorem taxes would be if
    the Project were owned by Lessee.

         No other lease payments will be required (other than payment for Lot lA
described below, any applicable indemnity payments and any increase in
Additional Rent pursuant to Section 4.2 hereof.)

         Section 3.3 Requirements Relating to Lot lA That portion of the
Property shown on Exhibit B as Lot 1A consists of 1.08 acres and shall be
maintained as attractive green space by Lessee and its assigns until such time
as Lessee or its assigns shall elect to construct improvements of any type
thereon, including surface parking. Prior to construction of any such
improvements Lessee or its assigns shall notify SEDA in writing of its election
to construct such improvements and shall pay SEDA the sum of $59,400 prior to
the beginning of any such construction. Said payment shall be in addition to the
hereinabove described Base Rent and Additional Rent.

         Section 3.4 Option to Terminate. The Authority hereby grants the Lessee
an option to terminate this Lease at any time during the Term for no additional
consideration. This option to terminate may be exercised by giving written
notice of termination to the Authority, and the Term shall end on the date
specified in the notice. If no date of termination is stated in the notice, then
the Term shall end on the last day of the calendar month in which the notice is
given to the Authority. No Additional Rent shall be payable in any calendar year
subsequent to the year of termination of this Lease.

         Section 3.5 Conveyance to the Lessee Upon Termination. Upon termination
of this Lease at any time, Authority agrees to convey to Lessee or its assigns,
legal title to the Project and Property. Within ten days after the end of the
Term, the Authority shall deliver to the Lessee or its assigns a Limited
Warranty Deed transferring legal title to the Project and Property, free and
clear of all liens and encumbrances, except the Restrictions and liens and
encumbrances made or consented to in writing by the Lessee. In the event Lessee
or its assigns have not elected to construct improvements on Lot 1A at the time
of such transfer of legal title, the Limited Warranty Deed shall set forth the
requirement that Lot 1A be maintained as green space until such election is
made, and such

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requirement shall constitute an obligation running with the Property. The deed
shall be effective as of the date of termination of this Lease notwithstanding
that actual delivery thereof shall take place on a different date.

                                    ARTICLE 4

                            ALTERATIONS AND REMOVALS

         Section 4.1 Maintenance, Alterations and Improvements. The Lessee shall
keep the Project in good operating order and condition, and the grounds neat and
orderly. The Lessee shall have full authority over and control of the Project,
and all of the benefits and burdens of the Project during the term of this
Lease.

            The Lessee shall have the privilege of making such alterations of or
additions to the Project or any part thereof, including constructing any new
buildings or structures, or installing any fixtures, machinery, equipment, other
personal property, facilities or improvements from time to time as in its sole
discretion it may determine to be desirable for its uses and purposes. The cost
thereof shall be borne by the Lessee. The provisions of Section 2.3, relating to
the obligations of the Lessee during construction shall apply to all alterations
and additions pursuant to this section.

            Section 4.2 Additional Investment. Any additional capital investment
which consists of land, improvements or fixtures made by Lessee with respect to
the Property and the Project during the term of this Lease, other than
identified herein, will, at the request of Lessee, be titled in the name of the
Authority and leased to Lessee pursuant to an amendment to this Lease. Said
additional capital investment will, to the extent then authorized by Georgia
law, be exempt from ad valorem taxes while titled in the name of the Authority.
During the Term of this Lease, as so amended, Lessee will make payments of
Additional Rent with respect to said additional capital investment to the
Authority in addition to the amounts set forth in Section 3.2b hereof, such
Additional Rent to be negotiated between the parties hereto. Said payments shall
begin on January 1 of the year following the making of such additional capital
investments by Lessee.

            Section 4.3 Removal of Property. The Lessee shall have the privilege
 from time to time of removing from the Project any structures, fixtures,
 machinery, facilities and improvements, constituting a part of the Project
 title to which is held by the Authority and thereby acquiring the property
 therein and title thereto, upon the filing of a certificate with the Authority
 signed by an officer or authorized agent of the Lessee describing any property
 removed pursuant to this Section 4.3. Immediately upon receipt of any such
 certificate, the Authority shall execute any deed, bill of sale or similar
 document necessary or advisable to transfer title to any such property to the
 Lessee or such grantee as the Lessee may designate, free and clear of any
 liens, charges or encumbrances, except for the Restrictions or those liens,
 changes or encumbrances made or consented to by the Lessee. The parties hereto
 acknowledge that it is not intended that the Authority hold title to any
 portion of the Project which constitutes personalty.

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                                   ARTICLE 5
                         PROVISIONS RESPECTING DAMAGE,
                          DESTRUCTION AND CONDEMNATION

         Section 5.1 Damage or Destruction. The proceeds of any insurance which
may become payable by reason of damage to or destruction of the whole or any
part of the Project shall be paid to the Lessee, and the Authority shall not be
entitled to any part of such insurance proceeds.

         Should such damage or destruction give rise to a claim against any
person other than the Authority, the Lessee shall have the right to maintain an
action for damages against such person in the name of the Authority, in the name
of the Lessee, or both; provided, however, that the Lessee bear all expenses of
any such action including any cost or expense to the Authority. Any recovery
made in such action, whether by judgment, compromise or otherwise, shall be the
exclusive benefit of the Lessee.

         Section 5.2 Condemnation. If the whole or any part of the Project shall
be taken or condemned by a competent authority for any public use or purpose,
the proceeds of any award of compensation for damages recovered on account of
such taking or condemnation shall be paid to the Lessee, and the Authority shall
be entitled to no part of any such award, compensation or damages.

         Section 5.3 Procedure. The Authority will, upon receipt of any checks
or other evidences or remuneration issued as recovery or award pursuant to
Sections 5.1 or 5.2 and made payable to the Authority individually or to the
Authority and the Lessee jointly, endorse and deliver the same forthwith to the
Lessee.

         Should the Authority or the Lessee receive notice of any proceedings
having been commenced to condemn all or any part of the Project under statutes
providing for eminent domain, the party receiving notice shall promptly notify
the other in writing of such notice. The Authority shall follow the instructions
of the Lessee with regard to such proceeding and the Lessee shall be in complete
and total control of the handling of such proceeding, including any litigation.
The Lessee shall bear all expenses of defending against any such proceeding.

         Section 5.4 Property Insurance. The Lessee shall have the exclusive
right to insure the Project or any portion thereof to the extent deemed
advisable by the Lessee, in its sole discretion. Any such insurance obtained by
the Lessee shall name such additional insureds, loss payees or beneficiaries as
the Lessee shall, in its sole discretion, deem advisable, and the Authority need
not be named as an additional insured, loss payee or beneficiary of such
insurance, The Authority shall have no right or obligation to obtain or provide
insurance for the Project or any portion thereof.

                                    ARTICLE 6

                           COVENANTS OF THE AUTHORITY

         Section 6.1 Retention of Title to the Project. Except as otherwise
specifically provided in this Lease, the Authority shall not sell, assign,
encumber, convey or otherwise dispose of legal title to the Project or any part
thereof during the term of this Lease without the prior written consent of the
Lessee. The Authority shall, but only at the written request of the Lessee,
grant such rights of

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way or easements, over, across, or under, the land included in the Project, or
grant such permits or licenses in respect to the use thereof, as shall be
necessary or convenient for the operation or use of the Project, including but
not limited to, leases, easements or rights of way for utilities, roadways,
railroads, or similar purposes in connection with the Project, and for the
utilization of the real property adjacent to or near the Project and owned by or
leased to the Lessee or any subsidiary thereof.

         Section 6.2 Quiet Enjoyment. The Authority covenants and agrees that it
has full right and lawful authority to enter into this Lease for the full term
hereof and the Authority shall duly observe all the covenants, stipulations and
agreements herein contained obligatory upon it, the Lessee shall have, hold and
enjoy, during the term hereof, peaceful, quiet and undisputed possession of the
Project.

         Section 6.3 Liens. Except as requested by Lessee, the Authority will
not create or suffer to be created any lien on the Project. The Authority will
not become a party to any contract, lease, mortgage, indenture or other
obligation under the terms of which, or upon the happening of a default under
which, there would be created any lien, charge or encumbrance on the Project.
The Authority will not become a party to any contract, lease, mortgage,
indenture or other obligation under the terms of which, or upon the happening of
a default under which, there would be impairment of the right of the Lessee to
acquire fee simple title to the Project or any portion thereof, free and clear
of all liens, charges and encumbrances, except for liens, charges and
encumbrances made or consented to by the Lessee.

         Section 6.4 Taxes. The Authority covenants that during the Term of this
Lease it will take no action which may tend or cause or induce any attempt to
impose any ad valorem taxes on the Project or any part thereof which consists of
land, improvements or fixtures to land or the Lessee's interest therein. The
Lessee shall have the right in its own name, in the name of the Authority, or
both, but at its own cost and expense, to contest any such taxes; provided that
the Lessee shall not take such action in the name of the Authority unless such
contest must legally be filed in the name of the lessor or holder of legal title
to the Project.

         Section 6.5 Special Assessments. The Lessee shall be responsible for
all assessments to which the Project is subject pursuant to the Crossroads
Owners' Association or any governmental authority. The Authority will promptly
notify the Lessee in writing of any notice received or request made in
connection with such proposed improvements. Any special assessments validly
levied shall be paid by the Lessee and shall not be an expense of the Authority.

         Section 6.6 Waiver of Landlord's Lien Rights. The Authority hereby
waives and surrenders any statutory or common law right to any landlord's lien
upon any of the property included in the Project, and covenants and agrees not
to distrain or exercise any similar remedy against such property. The Authority
covenants and agrees that it will not create, or cause to be created, any lien,
charge or encumbrance of any kind whatsoever against any of the property subject
to this Lease at any time during the term of this Lease, without the prior
written consent of the Lessee.

                                       7
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                                    ARTICLE 7

                             COVENANTS OF THE LESSEE

         Section 7.1 Zoning, Sanitary and Safety Laws. In its use and occupancy
of the Project, the Lessee will at all times comply with such zoning, building,
sanitary and safety laws, and with such rules and regulations thereunder, as
under applicable law shall be binding upon it; provided, however, the Lessee may
contest in good faith the validity, existence or applicability thereof. Lessee
shall not (either with or without negligence) cause or permit the escape,
disposal or release of any biologically or chemically active or other hazardous
substances or materials on the Property or the Project, nor allow to be brought
onto the Property or the Project any such substances or materials. Without
limitation, hazardous substances and materials shall include those described in
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 et seq., any applicable state
or local laws and the regulations adopted under these acts. In all events,
Lessee covenants to indemnify the Authority against and from any and all
damages, liabilities, obligations, penalties, assessments, claims, litigation,
costs, disbursements or expenses of any kind or of any nature whatsoever
(including, without limitation, reasonable attorneys' fees, consultants' fees
and experts' fees, and disbursements actually incurred in investigating,
defending against, settling or prosecuting any claim, litigation or proceeding)
which may at any time be imposed upon, incurred by or asserted or awarded
against the Authority resulting form any release of hazardous materials on the
Property or the Project, or resulting from a violation of any environmental laws
relating to or affecting the Property or the Project. Lessee shall immediately
notify the Authority and all federal, state and local authorities who are
required to be given notice, of any release of hazardous materials or substances
on the Property or the Project, and, in the event of any such release, shall
immediately provide for the removal of the same. The within covenants shall
survive the expiration or earlier termination of this Lease.

         Section 7.2 Indemnity. The Lessee shall indemnify the Authority, its
members, directors, officers, agents and employees, against any cost, damage,
liability or expense, including reasonable attorneys' fees, incurred by any of
them which arises out of (i) any damage or injury to any person or property
which occurs on the Property, except for damage or injury caused by the act or
neglect of the Authority, its members, officers, agents or employees, or (ii)
any legal action undertaken by the Lessee in the name of the Authority.

         The Authority shall promptly, within ten days of receipt of notice
thereof, notify the Lessee in writing of any claim or action brought against the
Authority, its members, directors, officers, agents or employees in which
indemnity may be sought against the Lessee. The Lessee shall promptly assume the
defense of such claim or action including the settlement thereof.

         Section 7.3 Lessee's Liability Insurance. The Lessee, at its own
expense, shall obtain and maintain during the continuation of this Lease a
policy or policies of general liability insurance written by an insurance Lessee
or companies licensed to do business in the State of Georgia, which policy or
policies shall name the Authority as an additional insured and shall protect
the Authority, its members, officers, employees and agents, and their successors
and assigns, against any and all liability for properly damage and personal
injuries suffered by anyone by reason of the use or occupancy of the Property,
such insurance to carry limits of not less than $1,000,000 to apply in the

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case of each occurrence, and $2,000,000 to apply as general aggregate, and
$1,000,000 for property damage. Evidence of said coverage shall be furnished to
the Authority.

         Section 7.4 Authority to Execute Lease. Lessee covenants and agrees
that it has full right and lawful authority to enter into this Lease for the
full term hereof and Lessee shall duly observe all the covenants, stipulations
and agreements herein contained.

                                   ARTICLE 8
                                   REMEDIES

         Section 8.1 Defaults by the Lessee. In the event the Lessee fails to
fully and timely perform any of its obligations hereunder, the Authority may
maintain an action for damages arising out of such default. The Authority shall
not, in any event, have the right to terminate this Lease, or its obligation to
convey the Project to the Lessee upon the termination of this Lease.

         Section 8.2 Defaults by the Authority. In the event the Authority fails
to fully and timely perform any of its obligations hereunder, the Lessee shall
be entitled to all rights, at law or in equity, that it may have as a result of
such a breach, including, but not limited to, the right to sue for specific
performance of this Lease. The Authority's obligation to pay monetary damages,
interest, attorney's fees and expenses pursuant to this Article 8 shall be
limited to the amount of payments made to the Authority pursuant to the terms of
this Lease.

         Section 8.3 Attorneys' Fees and Interest. In the event either party
files a legal action against the other party hereunder, and judgment is entered
against one of the parties, the prevailing party shall, in addition to its
damages, be entitled to interest at the rate then payable on judgments for
contract actions from the date of default until the date the judgment is fully
paid, and it shall be entitled to receive the reimbursements of all of its
reasonable expenses incurred in maintaining such action, including, without
limitation, its reasonable attorneys' fees.

                                   ARTICLE 9
                                 MISCELLANEOUS

         Section 9.1 Notices. Except as otherwise specifically provided herein,
all notices, approvals, consents, requests and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
mailed by certified mail, postage prepaid, return receipt requested, addressed
as follows:

If to the Authority:        Savannah Economic Development Authority
                            Attention: President
                            Post Office Box 128
                            Savannah, Georgia 31402-0128

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If to the Lessee:           Friedman's, Inc.
                            4 West State Street
                            Savannah, GA 31401
                            Attention: Victor M. Suglia

With a copy to:             Denis F. Shanagher, Esq.
                            c/o Friedman's Inc.
                            315 11th Street
                            Oakland, CA 94607

The Authority and the Lessee may, by like notice, designate in writing any
further or different addresses to which subsequent notices shall be sent.

         Section 9.2 Prior Agreements Superseded. Except for the Development
Agreement, which supplements this Lease, this Lease shall completely and fully
supersede all other prior understandings or agreements between the parties.

         Section 9.3 Severability. If any clause, provision or Section of this
Lease be ruled invalid by any court of competent jurisdiction, the invalidity of
such clause, provision or Section shall not affect any of the remaining
provisions hereof.

         Section 9.4 Counterparts. This Lease may be simultaneously executed in
several counterparts, each of which shall be an original and all of which
constitute but one and the same agreement.

         Section 9.5 Captions. The captions or headings in this Lease are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions of this Lease.

         Section 9.6 Laws Governing Construction of Agreement. This Lease shall
be governed by, and construed in accordance with, the law of the State of
Georgia.

         Section 9.7 Memorandum of Lease. The parties agree that this Lease
shall not be recorded, but rather shall be evidenced by a Memorandum of Lease
Agreement in a form approved by the parties hereto, which Lessee shall record at
Lessee's expense.

                                       10
<PAGE>
         IN WITNESS WHEREOF, the Authority and the Lessee have caused these
presents to be executed by their duly authorized officers, and their corporate
seals to be affixed as of the day and year above written.

                                    SAVANNAH ECONOMIC DEVELOPMENT
                                    AUTHORITY

                                    By:
                                       -----------------------------------------

                                    Attest:
                                           -------------------------------------

Signed, sealed and delivered
in the presence of:

----------------------------
Witness

                                    FRIEDMAN'S, INC.

                                    By: [ILLEGIBLE SIGNATURE]
                                       -----------------------------------------

                                    Attest:  [ILLEGIBLE SIGNATURE]
                                           -------------------------------------

Signed, sealed and delivered
in the presence of:
[ILLEGIBLE SIGNATURE]
----------------------------
Witness

                                       11<PAGE>
                                                                 Exhibit 10.21.1

                               INDEMNITY AGREEMENT

      THIS INDEMNITY AGREEMENT (this "Agreement") is entered into as of the 27th
day of August 2002, between Friedman's Inc., a Delaware corporation (the
"Corporation"), and Bradley J. Stinn ("Indemnitee").

      WHEREAS, Indemnitee serves as the Senior Vice President and Chief
Financial Officer of the Corporation and also as the Chief Financial Officer of
Crescent Jewelers, a California corporation ("Crescent") and a wholly-owned
subsidiary of Crescent Jewelers Inc. (the "Parent"), each an affiliate of the
Corporation (Crescent and the Parent, collectively, the "Crescent Entities");

      WHEREAS, the Corporation is aware that certain members of its Board of
Directors and the holder of 100% of its Class B Common Stock have relationships
with and interests in the Crescent Entities;

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

      WHEREAS, both the Corporation and Indemnitee recognize the risk of
litigation and other claims being asserted against officers of the Corporation
in light of business conditions in today's environment; and

      WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability arising out of or related to the business, operations
and financial and other reporting obligations of the Corporation, including
transactions involving both the Corporation and the Crescent Entities, and in
order to enhance Indemnitee's continued service to the Corporation in an
effective manner, the Corporation desires to extend to Indemnitee the
contractual rights to indemnification and advancement of expenses as provided
herein;

      NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:

      1. Certain Definitions for Purposes of this Agreement. The following terms
as used in this Agreement shall have the meanings set forth below.

      (a)   "Corporation" includes any domestic or foreign predecessor entity of
            the Corporation in a merger or other transaction in which the
            predecessor's existence ceased upon consummation of the transaction.

      (b)   "DGCL" means the Delaware General Corporation Law, as amended.
<PAGE>
      (c)   "Director" means an individual who is or was a director of the
            Corporation or an individual who, while a director of the
            Corporation, is or was serving at the Corporation's request as a
            director, officer, partner, trustee, employee, or agent of another
            foreign or domestic corporation, partnership, limited liability
            company, joint venture, trust, employee benefit plan, or other
            entity. A Director is considered to be serving an employee benefit
            plan at the Corporation's request if his duties to the Corporation
            also impose duties on, or otherwise involve services by, him to the
            plan or to participants in or beneficiaries of the plan. "Director"
            includes, unless the context requires otherwise, the estate or
            personal representative of a Director.

      (d)   "Disinterested Director" or "Disinterested Officer" means a Director
            or Officer, respectively, who at the time of a vote referred to in
            Section 4(a) is not a Party to the Proceeding.

      (e)   "Expenses" includes all reasonable counsel fees, retainers, court
            costs, transcript costs, fees of experts, witness fees, travel
            expenses, duplicating costs, printing and binding costs, telephone
            charges, postage, delivery service fees, and all other disbursements
            or expenses of the types customarily incurred in connection with
            prosecuting, defending, preparing to prosecute or defend,
            investigating, being or preparing to be a witness in, or otherwise
            participating in, a Proceeding, including any appeals.

      (f)   "Liability" includes the obligation to pay a judgment, settlement,
            penalty, fine (including an excise tax assessed with respect to an
            employee benefit plan), or reasonable Expenses actually incurred
            with respect to a Proceeding.

      (g)   "Officer" means an individual who is or was an officer of the
            Corporation or an individual who, while an officer of the
            Corporation, is or was serving at the Corporation's request as a
            director, officer, partner, trustee, employee, or agent of another
            foreign or domestic corporation, partnership, limited liability
            company, joint venture, trust, employee benefit plan, or other
            entity. An Officer is considered to be serving an employee benefit
            plan at the Corporation's request if his duties to the Corporation
            also impose duties on, or otherwise involve services by, him to the
            plan or to participants in or beneficiaries of the plan. "Officer"
            includes, unless the context requires otherwise, the estate or
            personal representative of an Officer.

      (h)   "Party" includes an individual who was, is, or is threatened to be
            made a named defendant or respondent in a Proceeding.

      (i)   "Proceeding" includes any threatened, pending, or completed action,
            suit, or other type of proceeding, whether civil, criminal,
            administrative,

                                      -2-
<PAGE>
            arbitrative or investigative and whether formal or informal, to
            which Indemnitee is a Party by reason of the fact that he is or was
            an Officer or Director.

      (j)   "Reviewing Party" shall mean the persons making the evaluation as to
            reasonableness of Expenses pursuant to Section 4 of this Agreement,
            and shall not include a court making any determination under this
            Agreement or otherwise.

      (k)   "Supporting Documentation" for Expenses means documents or other
            evidence of specific Expenses to be reimbursed or advanced,
            including any relevant invoice, bill, agreement or other
            documentation.

      2. Basic Indemnification Arrangement.

      (a)   Obligation to Indemnify; Limits. The Corporation shall indemnify
            Indemnitee against any and all Liability incurred in a Proceeding;
            provided, however that the Corporation shall not indemnify
            Indemnitee under this Agreement for any Liability incurred in a
            Proceeding in which Indemnitee is adjudged liable to the Corporation
            or is subjected to injunctive relief in favor of the Corporation:

                  (1) For any breach of Indemnitee's duty of loyalty to the
            Corporation or its stockholders;

                  (2) For acts or omissions not in good faith or which involve
            intentional misconduct or a knowing violation of law;

                  (3) For the types of liability set forth in Section 174 of the
            DGCL; or

                  (4) For any transaction from which Indemnitee's derived an
            improper personal benefit.

      (b)   Partial Indemnification. If Indemnitee is entitled under any
            provision of this Agreement or otherwise to indemnification by the
            Corporation for some portion of Liability incurred by him, but not
            the total amount thereof, the Corporation shall indemnify Indemnitee
            for the portion of such Liability to which he is entitled.

      (c)   Mandatory Indemnification. The Corporation shall indemnify
            Indemnitee to the extent that he has been successful, on the merits
            or otherwise, in the defense of any Proceeding to which he was a
            Party, or in defense of any claim, issue or matter therein, because
            he is or was a Director or Officer, against reasonable Expenses
            incurred by him in connection with the Proceeding.

                                      -3-
<PAGE>
      3. Advances for Expenses.

      (a)   Obligations and Requirements. The Corporation shall, before final
            disposition of a Proceeding, advance funds to pay for or reimburse
            the reasonable Expenses incurred by Indemnitee as a Party to such
            Proceeding if Indemnitee delivers to the Corporation Indemnitee's
            written undertaking (meeting the qualifications set forth below in
            Section 3(b)) to repay any funds advanced if it is ultimately
            determined that Indemnitee is not entitled to indemnification under
            this Agreement, the DGCL or otherwise.

      (b)   Undertaking. The undertaking required by Section 3(a) above must be
            an unlimited general obligation of Indemnitee but need not be
            secured and shall be accepted without reference to Indemnitee's
            financial ability to make repayment. If Indemnitee seeks to enforce
            his rights to indemnification in a court pursuant to Section 5, such
            undertaking to repay shall not be applicable or enforceable unless
            and until there is a final court determination that he is not
            entitled to indemnification, as to which all rights of appeal have
            been exhausted or have expired.

      (c)   Timing of Payments. Subject to a determination of reasonableness of
            Expenses pursuant to Section 4 below, reimbursement or advances for
            Expenses under this Section 3 shall be made not later than thirty
            (30) days after the later of (i) the Corporation's receipt of the
            affirmation and undertaking required by Section 3(a), or (ii) the
            Corporation's receipt of Supporting Documentation for specific
            Expenses to be reimbursed or advanced.

      4. Determination of Reasonableness of Expenses.

      (a)   Procedure for Determination. The Corporation and Indemnitee hereby
            acknowledge that indemnification of Indemnitee under Section 2 of
            this Agreement has been pre-authorized by the Corporation, and that
            no determination need be made for a specific Proceeding that such
            indemnification or advance of expenses to Indemnitee is permissible
            in the circumstances because he has met a particular standard of
            conduct. Nevertheless, except as set forth in Section 4(b) below,
            evaluation as to reasonableness of Expenses of Indemnitee for a
            specific Proceeding shall be made as follows:

            (1)   If there are two or more Disinterested Directors, by the Board
                  of Directors of the Corporation by a majority vote of all
                  Disinterested Directors (a majority of whom shall for such
                  purpose constitute a quorum) or by a majority of the members
                  of a committee of Disinterested Directors numbering two or
                  more appointed by such a vote; or

                                      -4-
<PAGE>
            (2)   If there are fewer than two Disinterested Directors, by a
                  majority vote of the Board of Directors, or by a majority vote
                  of the members of a committee of Directors (in which selection
                  Directors who do not qualify as Disinterested Directors may
                  participate); or

            (3)   If so designated by the Board of Directors, by one or more
                  Disinterested Officers.

      (b)   Presumption if Determination Not Timely. Notwithstanding the
            requirement under Section 4(a) that the Reviewing Party evaluate the
            reasonableness of Expenses claimed by Indemnitee, any Expenses
            claimed by Indemnitee shall be deemed reasonable if the Reviewing
            Party fails to make the evaluation required by Section 4(a) within
            thirty (30) days following the later of (i) the Corporation's
            receipt of the affirmation and undertaking required by Section 3(a),
            or (ii) the Corporation's receipt of Supporting Documentation for
            specific expenses to be reimbursed or advanced.

      5. Court-Ordered Indemnification and Advances for Expenses.

      (a)   Procedure. If Indemnitee is a Party to a Proceeding, he may apply
            for indemnification or for advances for Expenses to the court
            conducting the Proceeding or to another court of competent
            jurisdiction. For purposes of this Agreement, the Corporation hereby
            consents to personal jurisdiction and venue in any court in which is
            pending a Proceeding to which Indemnitee is a Party. Regardless of
            any determination by the Reviewing Party that Indemnitee is not
            entitled to indemnification or to advancement of Expenses or as to
            the reasonableness of Expenses, and regardless of any failure by the
            Reviewing Party to make a determination as to such entitlement or
            the reasonableness of Expenses, such court's review shall be a de
            novo review. After receipt of an application and after giving any
            notice it considers necessary, the court may:

            (1)   Order indemnification or the advance for Expenses if it
                  determines that Indemnitee is entitled to indemnification or
                  to advance for Expenses under this Agreement, the DGCL or
                  otherwise; or

            (2)   Order indemnification or the advance for Expenses if it
                  determines that, in view of all the relevant circumstances, it
                  is fair and reasonable to indemnify Indemnitee, or to advance
                  Expenses to Indemnitee, regardless of whether Indemnitee
                  complied with the requirements for advancement of Expenses.

      (b)   Payment of Expenses to Seek Court-Ordered Indemnification. If the
            court determines that Indemnitee is entitled to indemnification or
            to advance for

                                      -5-
<PAGE>
            Expenses, the Corporation shall pay Indemnitee's reasonable Expenses
            to obtain such court-ordered indemnification or advance for
            Expenses.

      6. Vested Rights; Specific Performance. No amendment to the Certificate of
Incorporation or Bylaws of the Corporation or any other corporate action shall
in any way limit Indemnitee's rights under this Agreement. In any proceeding
brought by or on behalf of Indemnitee to specifically enforce the provisions of
this Agreement, the Corporation hereby waives the claim or defense therein that
the plaintiff or claimant has an adequate remedy at law, and the Corporation
shall not urge in any such proceeding the claim or defense that such remedy at
law exists. The provisions of this Section 6, however, shall not prevent
Indemnitee from seeking a remedy at law in connection with any breach of this
Agreement.

      7. Liability Insurance. To the extent the Corporation maintains an
insurance policy or policies providing directors' or officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage provided under
such policy or policies in effect for any other Director or Officer of the
Corporation, as the case may be.

      8. Witness Fees. Nothing in this Agreement shall limit the Corporation's
power to pay or reimburse Expenses incurred by Indemnitee in connection with his
appearance as a witness in a Proceeding at a time when he has not been made a
named defendant or respondent in the Proceeding.

      9. Security for Indemnification Obligations. The Corporation may at any
time and in any manner, at the discretion of the Board of Directors, secure the
Corporation's obligations to indemnify or advance Expenses to Indemnitee
pursuant to this Agreement.

      10. Non-exclusivity, No Duplication of Payments. The rights of Indemnitee
hereunder shall be in addition to any other rights with respect to
indemnification, advancement of Expenses or otherwise that Indemnitee may have
under the Corporation's Certificate of Incorporation or Bylaws, the DGCL or
otherwise; provided, however, that the Corporation shall not be liable under
this Agreement to make any payment to Indemnitee hereunder to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
provision of the Certificate of Incorporation or Bylaws, or otherwise) of the
amounts otherwise payable hereunder. The Corporation's obligation to indemnify
or advance expenses hereunder to Indemnitee who is or was serving at the request
of the Corporation as a director, officer, partner, trustee, employee or agent
of any other entity shall be reduced by any amount Indemnitee has actually
received as indemnification or advancement of expenses from such other entity.

      11. Amendments. To the extent that the provisions of this Agreement are
held to be inconsistent with the provisions of the DGCL (including Section
145(f) thereof), such provisions of such statute shall govern. To the extent
that the DGCL is hereafter amended to permit a Delaware business corporation,
without the need for stockholder

                                      -6-
<PAGE>
approval, to provide to its directors or officers greater rights to
indemnification or advancement of Expenses than those specifically set forth
hereinabove, this Agreement shall be deemed amended to require such greater
indemnification or more liberal advancement of Expenses to Indemnitee, in each
case consistent with the DGCL as so amended from time to time. Otherwise, no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by the Corporation and Indemnitee.

      12. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.

      13. Waiver. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

      14. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors or assigns (including any direct or indirect successor or assign by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Corporation), spouses, heirs, and personal and
legal representatives.

      15. Applicability of Agreement. This Agreement shall apply retroactively
with respect to acts or omissions of Indemnitee occurring since the date that
Indemnitee first became a Director or Officer, and this Agreement shall continue
in effect regardless of whether Indemnitee continues to serve as a Director or
Officer, but only in respect of acts or omissions occurring prior to the
termination of Indemnitee's service as a Director or Officer.

      16. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal, or unenforceable for any reason whatsoever: (a)
the validity, legality, and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable, that is not itself invalid, illegal, or unenforceable) shall not
in any way be affected or impaired thereby; (b) such provision or provisions
shall be deemed reformed to the extent necessary to conform to applicable law
and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section of this Agreement containing any
such provision held to be invalid, illegal, or unenforceable, that is not itself
invalid, illegal, or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

      17. 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

                                      -7-
<PAGE>
made and to be performed in such state without giving effect to the principles
of conflicts of laws.

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

      19. Inducement. The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee to serve or continue to serve as a Director and/or
Officer, and the Corporation acknowledges that Indemnitee is relying upon this
Agreement in serving as a director, officer, employee or agent of the
Corporation or, at the request of the Corporation, as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan, or other entity.

      20. Notice by the Indemnitee. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee so to notify the Corporation shall
not relieve the Corporation of any obligation which it may have to Indemnitee
under this Agreement or otherwise.

      21. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or (ii) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is so mailed if to the Corporation, to the principal office address of the
Corporation, or if to Indemnitee, to the address of Indemnitee last on file with
the Corporation, or to such other address as may have been furnished to
Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case
may be.

      Executed as of the date first above written.

                                       FRIEDMAN'S INC.

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

                                       -----------------------------------------
                                       Bradley J. Stinn

                                      -8-

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