Document:

EXECUTION COPY

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (this "Agreement"), dated as of June 22, 2004, by and
between FRIEDMAN'S INC., a Delaware corporation (the "Company"), and SAMUEL
CUSANO, an individual residing in the State of Florida (the "Executive").

                              W I T N E S S E T H :
                              - - - - - - - - - -

     WHEREAS, the Company desires to secure the services and employment of the
Executive on behalf of the Company and its subsidiaries and affiliates, and the
Executive desires to enter into such employment with the Company, upon the terms
and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, each intending to be legally bound
hereby, agree as follows:

     1. Employment. On the terms and subject to the conditions set forth herein,
the Company hereby agrees to employ the Executive as the Chief Executive Officer
of the Company, and the Executive hereby agrees to accept such employment, for
the Employment Term (as defined in Section 3). During the Employment Term, the
Executive shall serve as the Chief Executive Officer of the Company and shall
report to the Board of Directors of the Company (the "Board"), and shall have
such responsibilities, duties and authority as are generally consistent and
customary with the position of Chief Executive Officer including, but not
limited to, selection of other senior executive officers, as appropriate,
subject to the oversight of the Board, and shall have such other powers and
perform such other duties as may from time to time be assigned to him by the
Board. The Executive shall also be elected to serve as a director of the Company
(or any parent company subsequently formed) and, if requested, as an executive,
officer and/or director of the Company's subsidiaries without additional
compensation, and shall be nominated to stand for election at each Annual or
Special Meeting of Shareholders (as applicable) as long as he serves as Chief
Executive Officer and such nomination shall be affirmatively recommended to the
shareholders for election.

     2. Performance; Place of Employment. The Executive will serve the Company
faithfully and to the best of his ability and will devote his full business
time, energy, experience and talents to the business of the Company and its
subsidiaries and affiliates; provided, however, that it shall not be a violation
of this Agreement for the Executive to (a) manage his personal investments, (b)
with the prior consent of the Board (not to be unreasonably withheld or
conditioned) serve on for-profit corporate boards, other than those of the
Company and its subsidiaries, or, (c) with prior notice to the Board, to serve
on industry, civic, community, charitable, educational, or religious boards so
long, in the case of clause (b) and (c), as such service does not interfere with
the Executive's performance of his duties hereunder. The Executive will maintain
his principal office, and his principal place of work shall be, at the Company's
primary executive offices in Savannah, Georgia.
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     3. Employment Term. Subject to earlier termination pursuant to Section 6,
the term of employment of the Executive hereunder shall begin on June [_], 2004
(the "Commencement Date"), and shall continue through the date which is two (2)
years following the Commencement Date (the "Initial Term"); provided, however,
that upon the failure of the Company to give timely notice of non-renewal, such
term of employment shall be automatically extended by an additional one (1) year
beyond the end of the then-current term, unless, at least one hundred twenty
(120) days before the expiration of the Initial Term, or one hundred twenty
(120) days before any such subsequent anniversary thereof, as the case may be,
the Company gives notice to the Executive that the Company does not desire to
extend the term of this Agreement, in which case the term of employment
hereunder shall terminate as of the end of the Initial Term or the end of the
then-current one-year extension term, as applicable (the term of employment
hereunder, including any extensions, in accordance with this Section 3, shall be
referred to herein as the "Employment Term").

     4. Compensation and Benefits.

     (a) Base Salary. As compensation for his services hereunder and in
consideration of the Executive's other agreements hereunder, during the
Employment Term, the Company shall pay the Executive a base salary, payable in
equal installments in accordance with the Company's payroll procedures, at an
annual rate of Seven Hundred Fifty Thousand Dollars ($750,000), subject to
annual review by the Board (which amount shall not be decreased except upon
mutual consent of the Executive and the Company).

     (b) Signing Bonus. In consideration of the Executive's agreements
hereunder, the Company shall pay the Executive a signing bonus of Five Hundred
Thousand Dollars ($500,000), payable as follows: One Hundred Thousand Dollars
($100,000) on the date of execution of this Agreement, and One Hundred Thousand
Dollars ($100,000) on each of July 30, 2004, August 31, 2004, September 30,
2004, and October 29, 2004.

     (c) Annual Incentive Bonus; Stock Options. (1) During the Employment Term,
the Executive shall be entitled to participate in the Company's incentive bonus
plan (comprised of a cash and stock component), the terms and conditions of
which shall be determined by the Board or a committee thereof. Such incentive
bonus will have a target amount of 1.00 times the Executive's annual base salary
and may be up to 1.25 times the Executive's annual base salary, at the rate of
base salary in effect in accordance with Section 4(a) during the period with
respect to which such bonus is payable, if all performance targets are fully
satisfied at the highest level; provided, however, that the incentive cash bonus
to which the Executive may otherwise become entitled for calendar year 2004
shall be a minimum of Two Hundred Fifty Thousand Dollars ($250,000), separate
and apart from the signing bonus in Section 4(b).

     (2) The Executive shall also be entitled to participate in the stock option
plan established by the Company, pursuant to which the Executive shall receive
options, granted on the date of execution of this Agreement at the market price
of the Company's stock at the close of business on the date immediately
preceding execution of the this Agreement, to purchase an aggregate of five
hundred thousand (500,000) shares of Class A Common Stock of the Company, with
one hundred thousand (100,000) shares vesting immediately and one hundred
thousand (100,000) vesting annually, on the anniversary date of this Agreement,
over the next four years. All such options shall be accelerated and vest
immediately upon a Change of Control (as defined

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below), upon the Executive's death or disability, upon termination of employment
by the Company for other than Cause, as hereinafter defined, or upon termination
by the Executive for Good Reason, as hereinafter defined. Upon such cessation of
the Executive's employment, the Executive shall have not less than one hundred
twenty (120) days to exercise or forfeit such fully vested option shares;
provided, however, that the Executive shall have not less than one (1) year in
the event such cessation is as a result of the Executive's death or disability.

     (d) Retirement, Medical, Dental and Other Benefits. During the Employment
Term, the Executive shall, in accordance with the terms and conditions of the
applicable plan documents and all applicable laws, be eligible to participate in
the various retirement, medical, dental and other employee benefit plans made
available by the Company, from time to time, for its senior executive officers.

     (e) Vacation; Sick Leave. During the Employment Term, the Executive shall
be entitled to four (4) weeks of vacation per year, and to sick leave in
accordance with the Company's policies and practices with respect to its senior
executive officers.

     (f) Expenses. The Executive shall be reimbursed by the Company for all
reasonable business expenses, including travel costs, actually incurred by him
in connection with the performance of his duties hereunder in accordance with
policies established by the Company from time to time and upon receipt by the
Company of appropriate documentation. In addition, the Company shall reimburse
the Executive for housing expenses and travel to and from Savannah, Georgia and
the Executive's primary residence in Sarasota, Florida. The Company further
agrees that reasonable moving and relocation expenses as incurred by the
Executive will be paid by the Company. For purposes of the moving and relocation
benefits, the Executive's Nashville, Tennessee residence shall be applicable.

     (g) Indemnification; D&O Insurance. The Company shall indemnify the
Executive for any liability he incurs arising from his actions within the scope
and course of his employment hereunder in accordance with the form of Indemnity
Agreement to be executed herewith and to be applicable during the term hereof
and the Company's Certificate of Incorporation and By-laws, provided that (i)
the Executive conducted himself in good faith, and (ii) the Executive reasonably
believed that his actions were in the best interests of the Company. During the
Employment Term, the Company shall maintain a directors' and officers' liability
insurance policy covering the Executive in an amount and on terms customary for
similarly situated companies and with coverage and on other terms reasonably
determined by the Board.

     (h) Legal Fees. The Company shall reimburse the Executive for reasonable
attorney's fees the Executive incurs in connection with the negotiation,
preparation and/or execution of this Agreement up to Twenty-Five Thousand
Dollars ($25,000), subject to the receipt by the Company of a statement from
such attorney including rates and hours. If it becomes necessary for either
party to file a lawsuit to enforce this Agreement, and if a final judgment is
rendered by the court in such a lawsuit, the non-prevailing party shall pay the
reasonable attorney's fees and costs incurred by the prevailing party.

     (i) Automobile. The Company shall pay to the Executive a car allowance of
Seven Hundred Fifty Dollars ($750) per month and shall promptly reimburse the
Executive for any expenses incurred by the Executive to maintain the car.

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     (j) Services Furnished. The Company shall furnish the Executive with office
space, secretarial and/or administrative assistance, office supplies, support
services and such other facilities and services as shall be suitable to the
Executive's position and adequate for the performance of his duties hereunder,
including but not limited to providing personnel, support services and
technology and third party consultants and advisors (including legal counsel, if
needed) sufficient to enable the Executive to perform all of his obligations
under applicable laws such as the Executive's certification obligations under
The Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

     5. Covenants of the Executive. The Executive acknowledges that in the
course of his employment with the Company he has and will become familiar with
the Company's and its subsidiaries' and affiliates' trade secrets and with other
confidential information concerning the Company and its subsidiaries and
affiliates, and that his services are of special, unique and extraordinary value
to the Company and its subsidiaries and affiliates. Therefore, the Company and
the Executive mutually agree that it is in the interest of both parties for the
Executive to enter into the restrictive covenants set forth in this Section 5
and that such restrictions and covenants are reasonable given the nature of the
Executive's duties and the nature of the Company's business.

     (a) Noncompetition. During the Employment Term and for eighteen (18) months
thereafter following termination of the Employment Term, the Executive shall
not, within any jurisdiction or marketing area in which the Company or any of
its subsidiaries or affiliates is doing business during the Executive's
employment or as of the date of termination (as applicable), directly or
indirectly, own, manage, operate, control, be employed by or participate in the
ownership, management, operation or control of, or be connected in any manner
with, any business substantially of the type and character engaged in or
competitive with that conducted by the Company or any of its subsidiaries or
affiliates; provided, that the Executive's ownership of securities of up to two
percent (2%) or less of any class of securities of a public company shall not,
by itself, be considered to be competition with the Company or any of its
subsidiaries or affiliates.

     (b) Nonsolicitation. During the Employment Term and for twelve (12) months
following termination of the Employment Term, the Executive shall not, directly
or indirectly, (i) employ, solicit for employment or otherwise contract for the
services of any individual who is or was (within one hundred eighty (180) days
of the termination date) an employee of the Company or any of its subsidiaries
or affiliates; (ii) otherwise induce or attempt to induce any employee of the
Company or its subsidiaries or affiliates to leave the employ of the Company or
such subsidiary or affiliate, or in any way knowingly interfere with the
relationship between the Company or any such subsidiary or affiliate and any
employee respectively thereof; or (iii) solicit or attempt to solicit any
client, customer, supplier, licensee or other business relation of the Company
or any subsidiary or affiliate of the Company or induce any such client,
customer, supplier, licensee or business relation to cease doing business with
the Company or such subsidiary or affiliate, or interfere in any way with the
relationship between any such client, customer, supplier, licensee or business
relation and the Company or any subsidiary or affiliate thereof.

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     (c) Nondisclosure; Inventions. For the Employment Term and thereafter, (i)
the Executive shall not divulge, transmit or otherwise disclose (except as
legally compelled by court order, and then only to the extent required, after
prompt notice to the Board of any such order), directly or indirectly, other
than in the regular and proper course of business of the Company and its
subsidiaries, any customer lists, trade secrets or other confidential knowledge
or information with respect to the operations or finances of the Company or any
of its subsidiaries or affiliates or with respect to confidential or secret
processes, services, techniques, customers or plans with respect to the Company
or its subsidiaries or affiliates (all of the foregoing collectively hereinafter
referred to as, "Confidential Information"), and (ii) the Executive will not
use, directly or indirectly, any Confidential Information for the benefit of
anyone other than the Company and its subsidiaries or affiliates; provided,
however, that the Executive has no obligation, express or implied, to refrain
from using or disclosing to others any such knowledge or information which is or
hereafter shall become available to the general public other than through
disclosure by the Executive. All Confidential Information, new processes,
techniques, know-how, methods, inventions, plans, products, patents and devices
developed, made or invented by the Executive, alone or with others, while an
employee of the Company which are related to the business of the Company and its
subsidiaries and affiliates shall be and become the sole property of the
Company, unless released in writing by the Board, and the Executive hereby
assigns any and all rights therein or thereto to the Company.

     (d) Nondisparagement. During the Employment Term and thereafter, neither
the Company nor the Executive shall take any action to disparage or publicly
criticize one another (including their respective affiliates, employees,
officers, directors or owners). Nothing contained in this Section 5(d) shall
preclude the Executive from enforcing his rights under this Agreement.

     (e) Return of Company Property. All Confidential Information, files,
records, correspondence, memoranda, notes or other documents (including, without
limitation, those in computer-readable form) or property relating or belonging
to the Company or its subsidiaries or affiliates, whether prepared by the
Executive or otherwise coming into his possession in the course of the
performance of his services under this Agreement, shall be the exclusive
property of the Company and shall be delivered to the Company, and not retained
by the Executive (including, without limitation, any copies thereof), promptly
upon request by the Company and, in any event, promptly upon termination of the
Employment Term.

     (f) Enforcement. The Executive acknowledges that a breach of his covenants
contained in this Section 5 may cause irreparable damage to the Company and its
subsidiaries and affiliates, the exact amount of which would be difficult to
ascertain, and that the remedies at law for any such breach or threatened breach
would be inadequate. Accordingly, the Executive agrees that if he breaches or
threatens to breach any of the covenants contained in this Section 5, in
addition to any other remedy which may be available at law, the Company and its
subsidiaries and affiliates shall be entitled to specific performance and
injunctive relief to prevent the breach or any threatened breach thereof without
bond or other security or a showing that monetary damages will not provide an
adequate remedy.

     (g) Scope of Covenants. The Company and the Executive further acknowledge
that the time, scope, geographic area and other provisions of this Section 5
have been specifically

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negotiated by sophisticated commercial parties and agree that they consider the
restrictions and covenants contained in this Section 5 to be reasonable and
necessary for the protection of the interests of the Company and its
subsidiaries and affiliates, but if any such restriction or covenant shall be
held by any court of competent jurisdiction to be void but would be valid if
deleted in part or reduced in application, such restriction or covenant shall
apply with such deletion or modification as may be necessary to make it valid
and enforceable. The restrictions and covenants contained in each paragraph of
this Section 5 shall be construed as separate and individual restrictions and
covenants and shall each be capable of being severed without prejudice to the
other restrictions and covenants or to the remaining provisions of this
Agreement.

     6. Termination. The employment of the Executive hereunder shall
automatically terminate at the end of the Employment Term. The employment of the
Executive hereunder and the Employment Term may also be terminated at any time
by the Company with or without Cause. For purposes of this Agreement, "Cause"
shall mean: (i) embezzlement, theft or misappropriation by the Executive of any
property of the Company or its subsidiaries or affiliates; (ii) any breach by
the Executive of the Executive's covenants under Section 5; (iii) any breach by
the Executive of any other material provision of this Agreement which breach is
not cured, to the extent susceptible to cure, within fourteen (14) days after
the Company has given notice to the Executive describing such breach; (iv)
misconduct in the discharge of the Executive's duties (after receiving written
notice from the Board specifying the manner in which he is alleged to have
failed properly to discharge his duties and having had the opportunity to cure
such failure within thirty (30) days from receipt of such notice); (v) any act
by the Executive constituting a felony or otherwise involving theft, fraud,
dishonesty or misrepresentation; (vi) the Executive's breach of his fiduciary
obligations to the Company or its parent or subsidiaries; or (vii) any chemical
or alcohol dependence by the Executive which adversely affects the performance
of his duties and responsibilities to the Company or its parent or subsidiaries.
If, after the expiration of any applicable cure period, the Company asserts that
grounds exist for termination with Cause, it shall so notify the Executive and
within fifteen (15) days shall afford the Executive a hearing before the Board
regarding any disputed facts. The Board shall make a determination regarding the
existence of "Cause" upon completion of such hearing; provided, however, that
any determination that Cause exists shall require the affirmative vote of
two-thirds of the Directors other than the Executive. If any such determination
remains pending after such fifteen (15) day period, the Company shall be
entitled to suspend (with pay and benefits) the Executive's duties pending
determination of the existence of Cause. Any determination or decision as to
"Cause" must be made in good faith and must be reasonable given the relevant
facts and circumstances. The employment of the Executive may also be terminated
at any time by the Executive by notice of resignation delivered to the Company
not less than ninety (90) days prior to the effective date of such resignation.

     7. Severance. (a) If the Executive's employment hereunder is terminated
during the Employment Term (1) by the Company other than for Cause and not due
to disability (as determined in good faith and consistent with the Company's
long term disability policy) or death, (2) by the Executive for Good Reason (as
defined in paragraph (b) of this Section 7), or (3) upon non-renewal by the
Company, the Executive shall be entitled to receive as severance, and the
Company shall pay, an amount equal to two (2) times the sum of (x) the
Executive's then current annual salary and (y) the greater of (i) the
Executive's most recent annual incentive

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bonuses and (ii) the arithmetic mean of the Executive's annual incentive bonuses
for the two (2) most recent years, payable in a lump sum on the eighth day after
the date the Executive signs the release referenced below in favor of the
Company and its subsidiaries. In addition, in the event that the Executive's
employment is terminated other than for Cause or death, or in the event that the
Executive terminates his employment for Good Reason, as defined herein, the
Executive shall be entitled to continued healthcare coverage equivalent to the
coverage received while employed by the Company, for a period of one (1) year
from the date of termination or until the Executive receives coverage from a
subsequent employer, whichever event occurs sooner; provided, however, that,
thereafter, he shall be entitled to elect to continue his health benefits
pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended
("COBRA"). If the Executive's employment is terminated otherwise than as
described in this Section 7, the Executive shall not be entitled to any
severance, termination pay or similar compensation or benefits. As a condition
of receiving any severance for which he otherwise qualifies under this Section
7, the Executive agrees to execute, deliver and not revoke (within the time
period permitted by applicable law) a general release of the Company and its
subsidiaries and affiliates and their respective officers, directors, employees
and owners from any and all claims, obligations and liabilities of any kind
whatsoever arising from or in connection with the Executive's employment or
termination of employment with the Company or this Agreement (including, without
limitation, civil rights claims), in such form as is attached hereto as Exhibit
A. The Executive acknowledges and agrees that, except as specifically described
in this Section 7, all of the Executive's rights to any compensation (other than
base salary earned through the date of termination of employment), benefits,
bonuses or severance from the Company or its subsidiaries or affiliates after
termination of the Employment Term shall cease upon such termination.

     (b) For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without the Executive's consent, of any of the following events
(without the Executive's express written consent): (i) a reduction by the
Company in the Executive's base salary stated in Section 4(a) or a reduction in
the target bonus stated in Section 4(c), (ii) a diminution in the Executive's
duties with respect to the Company, or (iii) any material breach of this
Agreement by the Company. For the avoidance of doubt, termination by the
Executive for Good Reason is conditioned on the Executive's delivery of a
written notice of resignation delivered to the Company not less than thirty (30)
days prior to the effective date of such resignation, as set forth in Section 6.

     8. Change In Control. (a) Within twelve (12) months after a Change in
Control (as defined in paragraph (b) of this Section 8), the Company may, on
ninety (90) business days' prior notice to the Executive, terminate the
Employment Term. In such circumstances, except where the Company has previously
issued a notice of termination for Cause pursuant to Section 7 or the Employment
Term is terminated by reason of the Executive's death or disability, the Company
shall: (i) pay to the Executive an amount equal to two hundred ninety-nine
percent (299%) of the Executive's last year's base salary and annual incentive
bonus as in effect on the date of the Executive's termination of employment
(payable, at the Company's option, in a lump-sum or ratably over the longer of
the Employment Term otherwise remaining or one year following the date of the
Executive's termination, as applicable). The payments set forth in this Section
8 are hereinafter referred to as the "Change in Control Severance". Payment of
the Change in Control Severance shall be subject to the following conditions:
(i) as a condition

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precedent to any such Change in Control Severance, the Executive agrees to
execute, deliver and not revoke (within the time period permitted by applicable
law) a general release of the Company and its subsidiaries and affiliates and
their respective officers, directors, employees and owners in the form of
Exhibit A hereto.

     (b) For purposes of this Agreement, "Change in Control" shall mean: (i) the
acquisition by 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) of shares carrying more than fifty percent (50%) of the voting rights at
general meetings of the Company, (ii) the shareholders 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 shareholders 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.

     (c) The amounts payable pursuant to this Section 8 shall be in lieu of any
other severance payments (including, but not limited to that provided for in
Section 7 above) to which the Executive may be entitled on termination of the
Employment Term, and the Executive acknowledges that he shall not, thereupon, be
entitled to payment of severance pursuant to the Company's severance plans,
policies or practices in effect on the date of this Agreement or in effect from
time to time. Notwithstanding the foregoing, all unvested options shall vest and
any restrictions on restricted stock, if applicable, shall lapse upon a Change
of Control.

     (d) To the extent that the amount of any payments under this Section 8, or
any other payment in the nature of compensation (within the meaning of Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), to or
for the benefit of the Executive, whether paid or payable pursuant to this
Agreement or otherwise by the Company (the "Payments"), are subject to the
excise tax provisions of Section 4999 of the Code, the Company shall pay the
Executive a tax equalization payment ("Tax Equalization Payment") in accordance
with this Section 8(d), in addition to the payments otherwise payable under this
Section 8. The Tax Equalization Payment shall be in an amount that when added to
the Payments will place the Executive in the same after-tax (including, without
limitation, income taxes, excise taxes, and any interest and penalties imposed
with respect thereto) position as if the excise tax penalty of Section 4999 of
the Code, did not apply to any of the Payments. The amount of this Tax

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Equalization Payment shall be determined by the Company's independent
accountants and shall be remitted to the applicable United States federal, state
and local tax jurisdictions. All fees of the accounting firm for such
determination shall be borne by the Company. The Executive shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a Tax Equalization
Payment (as an additional Tax Equalization Payment). The Executive shall
cooperate with the Company to determine whether, and how, to contest such claim.
The Company shall bear and pay directly all costs and expenses (including
additional taxes, interest and penalties) incurred in connection with such claim
and/or contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for excise tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such claim and/or contest and
payment of costs and expenses.

     9. Notice. Any notices required or permitted hereunder shall be in writing
and shall be deemed to have been given when personally delivered or when mailed,
certified or registered mail, or sent by reputable overnight courier, postage
prepaid, to the addresses set forth as follows:

     If to the Company:                 Friedman's Inc.
                                        171 Crossroads Parkway
                                        Savannah, Georgia 31422
                                        Attention:  Chairman of the Board

     With copies (which shall not
     constitute notice) to:             White & Case LLP
                                        1155 Avenue of the Americas
                                        New York, New York 10036
                                        Attention:  S. Ward Atterbury, Esq.

     If to the Executive:               Samuel Cusano
                                        ______________________
                                        Sarasota, Florida 34236

     With copies (which shall not
     constitute notice) to:             Bass, Berry & Sims PLC
                                        315 Deaderick Street
                                        Suite 2700
                                        Nashville, TN 37238
                                        Attention:  James H. Cheek III
                                                    Howard H. Lamar III

or to such other address as shall be furnished in writing by either party to the
other party; provided that such notice or change in address shall be effective
only when actually received by the other party.

     10. General.

     (a) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York applicable to contracts executed and to be performed entirely within said
State.

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     (b) Jurisdiction. Any judicial proceeding brought against the Executive
regarding any dispute arising out of this Agreement or any matter related hereto
may be brought in the courts of the State of Georgia, or in any United States
District Court sitting in Georgia, and, by execution and delivery of this
Agreement, the Executive accepts the exclusive jurisdiction of such courts. The
Executive hereby agrees that service of any process, summons, notice or document
by U.S. registered mail addressed to the Executive shall be effective service of
process for any action, suit or proceeding brought against the Executive in any
such court. The Executive hereby irrevocably and unconditionally waives any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. The Executive
agrees that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon the Executive and may be
enforced in any other courts to whose jurisdiction the Executive is or may be
subject, by suit upon such judgment.

     (c) Construction and Severability. If any provision of this Agreement shall
be held invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired, and the parties undertake to implement
all efforts which are necessary, desirable and sufficient to amend, supplement
or substitute all and any such invalid, illegal or unenforceable provisions with
enforceable and valid provisions which would produce as nearly as may be
possible the result previously intended by the parties without renegotiation of
any material terms and conditions stipulated herein.

     (d) Assignability. The Executive may not assign his interest in or delegate
his duties under this Agreement. This Agreement is for the employment of the
Executive, personally, and the services to be rendered by him under this
Agreement must be rendered by him and no other person. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the Company and
its successors and assigns. Without limiting the foregoing and notwithstanding
anything else in this Agreement to the contrary, the Company may assign this
Agreement to, and all rights hereunder shall inure to the benefit of, any
subsidiary of the Company or any person, firm or corporation resulting from the
reorganization of the Company or succeeding to the business or assets of the
Company by purchase, merger, consolidation or otherwise.

     (e) Warranty by the Executive. The Executive represents and warrants to the
Company that the Executive is not subject to any contract, agreement, judgment,
order or decree of any kind, or any restrictive agreement of any character, that
restricts the Executive's ability to perform his obligations under this
Agreement or that would be breached by the Executive upon his performance of his
duties pursuant to this Agreement.

     (f) Compliance with Rules and Policies. The Executive shall perform all
services in accordance with the policies, procedures and rules established by
the Company and the Board. In addition, the Executive shall comply with all
laws, rules and regulations that are generally applicable to the Company or its
subsidiaries and their respective employees, directors and officers.

     (g) Withholding Taxes. All amounts payable hereunder shall be subject to
the withholding of all applicable taxes and deductions required by any
applicable law.

                                      -10-
<PAGE>

     (h) Entire Agreement; Modification. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof,
supersedes all prior agreements and undertakings, both written and oral, and may
not be modified or amended in any way except in writing by the parties hereto.

     (i) Duration. Notwithstanding the Employment Term hereunder, this Agreement
shall continue for so long as any obligations remain under this Agreement.

     (j) Survival. The covenants set forth in Section 5 of this Agreement shall
survive and shall continue to be binding upon the Executive notwithstanding the
termination of this Agreement for any reason whatsoever.

     (k) Waiver. No waiver by either party hereto of any of the requirements
imposed by this Agreement on, or any breach of any condition or provision of
this Agreement to be performed by, the other party shall be deemed a waiver of a
similar or dissimilar requirement, provision or condition of this Agreement at
the same or any prior or subsequent time. Any such waiver shall be express and
in writing, and there shall be no waiver by conduct. Pursuit by either party of
any available remedy, either in law or equity, or any action of any kind, does
not constitute waiver of any other remedy or action. Such remedies are
cumulative and not exclusive.

     (l) Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.

     (m) Section References. The words Section and paragraph herein shall refer
to provisions of this Agreement unless expressly indicated otherwise.

                                      * * *

                                      -11-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement as of the day and year first written above.

                                         FRIEDMAN'S INC.

Date:  June 22, 2004                     By:  /s/ Sheldon Whitehouse
     -----------------------------          ------------------------------------
                                            Name:  Sheldon Whitehouse
                                            Title: Director

Date:  June 22, 2004                         /s/ Samuel Cusano
     -----------------------------       ---------------------------------------
                                           Samuel Cusano
<PAGE>

                                                                       Exhibit A

                                 GENERAL RELEASE

     I, SAMUEL CUSANO, for myself, my successors, administrators, heirs and
assigns, hereby fully release, waive and forever discharge FRIEDMAN'S INC. and
each of its predecessors, successors, subsidiaries and affiliated and parent
companies (collectively, the "Company"), and, in such capacities, all of the
shareholders, directors, officers, attorneys, employees, assigns and owners,
whether past, present or future, respectively, of, and any other person or
entity connected with, any of the foregoing (the "Released Parties") from any
and all administrative claims, actions, suits, debts, demands, damages, claims,
judgments, and/or liabilities of any nature, including costs, attorneys' fees
and expenses, whether known or unknown, arising out of my employment with or
separation from the Company, such as (by way of example only) any claims for
compensation, bonus, severance, or other benefits, claims for breach of
contract, wrongful discharge, workers' compensation benefits, tort claims (e.g.,
infliction of emotional distress, defamation, negligence, privacy, fraud,
misrepresentation), claims under federal, state, and local wage and hour laws
and wage payment laws, claims for reimbursements; and/or claims under the
following, in each case as amended: (1) Title VII of the Civil Rights Act of
1964 (race, color, religion, sex and national origin discrimination); (2) 42
U.S.C. ss. 1981 (discrimination); (3) 29 U.S.C. ss. 206(d)(1) (equal pay); (4)
Executive Order 11246 (race, color, religion, sex and national origin
discrimination); (5) Age Discrimination in Employment Act ("ADEA") and Executive
Order 11141 (age discrimination); (6) the Americans with Disabilities Act of
1990, 42 U.S.C. ss. 12101, et seq.; (7) the Family and Medical Leave Act; (8)
the Immigration Reform and Control Act; (9) the Employee Retirement Income
Security Act of 1974, 29 U.S.C. ss. 1001 et seq.; (10) the Vietnam Era Veterans
Readjustment Assistance Act; (11) ss.ss. 503-504 of the Rehabilitation Act of
1973 (handicap discrimination); and/or (12) any other claims under any other
state, federal, local, non-U.S. law, statute, regulation, or common law or
claims at equity relating to conduct or events occurring prior to the date on
which this General Release is fully executed, with regard to my employment with
the Company and the termination thereof.

     This General Release shall not extend to or include any matter, occurrence
or event occurring after the execution of this General Release or the following:
(a) any rights or obligations under applicable law which cannot be waived or
released pursuant to an agreement, (b) any rights to payments or benefits under
Sections 7 and 8 of the Employment Agreement, dated as of June [_], 2004, by and
between the Company and myself (as amended or supplemented through the date
hereof, the "Agreement") to which I am entitled, (c) my rights of
indemnification and directors and officers liability insurance coverage to which
I may be entitled with regard to my service as an officer or director of the
Company, including, without limitation, as set forth in Section 4(g) of the
Agreement and in my Indemnification Agreement with the Company; (d) my rights
with regard to accrued benefits under any employee benefit plan, policy or
arrangement maintained by the Company or under COBRA; (e) my rights under the
provisions of the Agreement that are intended to survive my termination of
employment; and (f) my rights as a stockholder. I represent and warrant that, as
of the date of my execution of this General Release, I have not assigned or
transferred any claims of any nature I would otherwise have against the Company,
its successors or assigns.

     By signing this General Release, I acknowledge that:
<PAGE>

          (i) I have read and fully understand the terms of this General Release
     and have had the opportunity to negotiate its terms;

          (ii) I have been advised and urged to consult with my attorneys
     concerning the terms of this General Release, and that I have done so to
     the extent I deem necessary;

          (iii) I have agreed to this General Release knowingly and voluntarily;

          (iv) I have been given twenty-one (21) days to consider this General
     Release, and acknowledge that in the event that I execute this General
     Release prior to the expiration of the twenty-one (21) day period, I hereby
     waive the balance of said period;

          (v) I will have seven (7) days following the execution of this General
     Release to revoke this General Release and this General Release shall not
     become effective or enforceable until the revocation period has expired.
     Any revocation within this seven (7) day period must be submitted in
     writing and personally delivered, or mailed to [Name, Address] and
     postmarked, within seven (7) days of my execution of this General Release.
     No payments or benefits provided for in Sections 7 and 8 of the Agreement
     shall be paid or provided until after the seven (7) day period has expired
     and the General Release has become effective. If this General Release is
     revoked by me then I shall forfeit the payments and benefits set forth in
     Sections 7 and 8 of the Agreement, and the Company shall not be required to
     provide any such payment or other consideration; and

          (vi) I have agreed that no provision of this General Release may be
     modified, changed, waived or discharged unless such waiver, modification,
     change or discharge is agreed to in writing and signed by the Company and
     me.

                                         ---------------------------------------
                                         SAMUEL CUSANO

                                         Dated:
                                               ---------------------------------

Sworn to before me this
     day of          , 20  .

-----------------------------
Notary Public

                                      -14-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.

                                       1
<PAGE>

     "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.

                                       2
<PAGE>

     "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.

                                       3
<PAGE>

     "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

                                       4
<PAGE>

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.

                                       5
<PAGE>

     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

                                       6
<PAGE>

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

                                       7
<PAGE>

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.

                                       8
<PAGE>

     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

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