Document:

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               WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED
                      CREDIT AGREEMENT AND CREDIT DOCUMENTS

         THIS WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND CREDIT DOCUMENTS ("Amendment"), dated as of October 24, 2002 (the
"Amendment Date"), is among Friedman's Inc., a Delaware corporation, each of its
Subsidiaries party hereto, Bank of America, N.A. (in its capacity as
administrative agent for the Lenders), and each of the lending institutions
party hereto.

                                    RECITALS:

         A. The Credit Parties, the Lenders, and the Agent have entered into
that certain Amended and Restated Credit Agreement dated as of August 28, 2002
(as amended, the "Credit Agreement") pursuant to which the Lenders have provided
certain credit facilities to the Borrowers.

         B. The Credit Parties have requested that the Lenders amend certain
provisions of the Credit Agreement and waive Events of Default under the Credit
Agreement as provided hereinbelow.

         C. Subject to satisfaction of the conditions set forth herein, the
Lenders are willing to amend the Credit Agreement and provide the requested
waivers of Events of Default as specifically provided herein.

         NOW, THEREFORE, BE IT RESOLVED, THAT, in consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE 1

                                   Definitions

         Section 1.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Credit Agreement, as amended hereby.

                                    ARTICLE 2

                           Waiver of Event of Default

         Section 2.1 Waiver of Event of Default. The Credit Parties have failed
to deliver on or before October 12, 2002, (a) the terminations, releases, and
UCC amendments prescribed by clause (c) of paragraph 1 of the certain
Postclosing Agreement dated as of the Closing Date among the original parties to
the Credit Agreement (as amended or otherwise modified from time to time, the
"Postclosing Agreement") which is an Event of Default under the Postclosing
Agreement and (b) the terminations,
<PAGE>
releases, and UCC amendments prescribed by clause (o) of the definition of
"Permitted Liens" set forth in the Credit Agreement which has resulted in a
breach of the covenant contained in Section 7.2 of the Credit Agreement and an
Event of Default pursuant to Section 8.1(c)(i) of the Credit Agreement
(collectively, the "Specified Defaults"). The Credit Parties have requested that
the Lenders waive the Events of Default resulting from the Specified Defaults.
Effective as of the Amendment Date, and subject to the conditions precedent and
other terms of this Amendment, the requisite Lenders hereby waive the Events of
Default resulting from the Specified Defaults.

                                    ARTICLE 3

                                   Amendments

         Section 3.1 Amendment to Cover Page of the Credit Agreement. Effective
as of the Amendment Date, the cover page of the Credit Agreement is amended and
restated in its entirety to read as set forth in Annex A of this Amendment.

         Section 3.2 Amendment to Section 1.1 of the Credit Agreement. Effective
as of the Amendment Date, Section 1.1 of the Credit Agreement is amended as
follows:

                  (a) the definition of "Borrowing Base" in Section 1.1 of the
         Credit Agreement is hereby amended and restated to read in its entirety
         as follows:

                           "Borrowing Base" means, as of any day, an amount
                  equal to the sum of (a) the Receivables Advance Rate
                  multiplied by the Net Balance of the Borrowers' Eligible
                  Installment Contracts, plus (b) the lesser of (i) fifty
                  percent (50.0%) of the Borrowers' Eligible Inventory, (ii)
                  eighty-five percent (85.0%) of the Net Recovery Value of the
                  Borrowers' inventory, or (iii) $75,000,000, minus (c)
                  Reserves, minus (d) on any day other than the Closing Date,
                  $5,000,000.

                  (b) the definition of "Permitted Investments" in Section 1.1
         of the Credit Agreement is hereby amended and restated to read in its
         entirety as follows:

                           "Permitted Investments" means Investments which are
                  (a) cash and Cash Equivalents, (b) accounts receivable
                  created, acquired, or made in the ordinary course of business
                  and payable or dischargeable in accordance with customary
                  trade terms, (c) Investments consisting of Capital Stock,
                  obligations, securities, or other Property received in
                  settlement of accounts receivable (created in the ordinary
                  course of business) from bankrupt obligors, (d) Investments
                  existing as of the Closing Date and set forth in Schedule
                  1.1B, (e) advances or loans to directors, officers, and
                  employees in the ordinary course of business for reasonable
                  business expenses that do not exceed $1,000,000 in the
                  aggregate at any one time outstanding, (f) Investments by
                  members of the

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                  Consolidated Group in their Subsidiaries and Affiliates
                  existing on the Closing Date; provided that such Investments,
                  direct and indirect, in Crescent Jewelers, Inc., its
                  Subsidiaries, and parent companies (collectively herein
                  "Crescent Parties") shall not at anytime exceed $95,000,000 in
                  the aggregate as follows: (i) an initial investment of
                  $85,000,000 on the Closing Date; (ii) an additional Investment
                  not in excess of $5,000,000 in the aggregate at anytime after
                  the Closing Date if the Excess Availability immediately after
                  giving effect to the making of such Investment is equal to or
                  greater than $10,000,000; provided that if such additional
                  Investment is made in December the Excess Availability
                  immediately after giving effect to the making of such
                  Investment shall be equal to or greater than $35,000,000; and
                  (iii) an additional Investment not in excess of $5,000,000 in
                  the aggregate if the Excess Availability immediately after
                  giving effect to the making of such Investment is equal to or
                  greater than the Minimum Excess Availability Requirement, (g)
                  Investments by members of the Consolidated Group in and to
                  Domestic Credit Parties, (h) Investments which constitute
                  Permitted Acquisitions, (i) Investments in Persons that do rot
                  become Subsidiaries (but specifically excluding any of the
                  Crescent Parties) after giving effect to such Investments,
                  representing the formation of strategic alliances or other
                  similar arrangements in an amount not to exceed $6,000,000 in
                  the aggregate at any time outstanding; provided that at the
                  time of making any such Investment, Excess Availability is
                  equal to or in excess of the Minimum Excess Availability
                  Requirement immediately after giving effect to such
                  Investment, and no Default or Event of Default exists, and (j)
                  other Investments of a nature not contemplated in clauses (a)
                  through (j) preceding (but specifically excluding any
                  Investment in any of the Crescent Parties) in an amount not to
                  exceed $3,000,000 in the aggregate at any time outstanding.

                  (c) clause (o) in the definition of "Permitted Liens" in
         Section 1.1 of the Credit Agreement is hereby amended and restated to
         read in its entirety as follows:

                           (o) Liens existing as of the Closing Date and set
                  forth in Schedule 1.1C; provided that no such Lien shall at
                  anytime be extended to or cover any Property other than the
                  Property subject thereto on the Closing Date, and provided
                  further, notwithstanding the foregoing, any such Lien which
                  purports to cover Collateral, including, without limitation,
                  proceeds of consigned goods described in clause (p) following
                  shall not be a Permitted Lien after the expiration of one
                  hundred twenty (120) days after the Closing Date.

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         Section 3.3 Amendment to Section 10.6(a)(ix) of the Credit Agreement.
Effective as of the Amendment Date, Section 10.6(a)(ix) of the Credit Agreement
is hereby amended and restated to read in its entirety as follows:

                           (ix) amend the definition of (A) Eligible Installment
                  Contracts, Eligible Inventory, or Reserves if the effect of
                  any or all of such amendments would increase the determination
                  of the Borrowing Base by more than five percent (5.0%) or (B)
                  Borrowing Base, Receivables Advance Rate, or the proviso
                  contained in clause (f) of the definition of Permitted
                  Investments (including clause (i), clause (ii), or clause iii
                  thereof).

         Section 3.4 Amendment to Section 10.17 of the Credit Agreement.
Effective as of the Agreement Date, Section 10.17 of the Credit Agreement is
hereby amended and restated to read in its entirety as follows:

                           Section 10.17 Agency of Friedman's for Each Other
                  Credit Party. Each of the other Credit Parties irrevocably
                  appoints Friedman's as its agent for all purposes relevant to
                  this Agreement, including the giving and receipt of notices
                  and execution and delivery of all documents, instruments, and
                  certificates contemplated herein and all modifications hereto.
                  Any acknowledgment, consent, direction, certification, or
                  other action which might otherwise be valid or effective only
                  if given or taken by all or any of the Credit Parties or
                  acting singly, shall be valid and effective if given or taken
                  only by Friedman's, whether or not any of the other Credit
                  Parties joins therein, and the Agent and the Lenders shall
                  have no duty or obligation to make further inquiry with
                  respect to the authority of Friedman's under this Section
                  10.17, provided that nothing in this Section 10.17 shall limit
                  the effectiveness of, or the right of the Agent and the
                  Lenders to rely upon, any notice (including without limitation
                  a Notice of Borrowing or a Notice of Continuation/Conversion),
                  document, instrument, certificate, acknowledgment, consent,
                  direction, certification, or other action delivered by any
                  Credit Party pursuant to this Agreement.

                                    ARTICLE 4

                          Amendment to Credit Documents

         Section 4.1 Amendments to Postclosing Agreement. Effective as of the
Amendment Date, the Postclosing Agreement is hereby amended as follows:

                  (a) the words "within forty five (45) days of the Agreement
         Date," where they appear in clause (c) of paragraph 1 of the
         Postclosing Agreement, are

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         hereby amended to read "within one hundred twenty (120) days of the
         Agreement Date"; and

                  (b) the words "within sixty (60) days of the Agreement Date,"
         where they appear in clause (d) of paragraph 1 of the Postclosing
         Agreement, are hereby amended to read "within ninety (90) days of the
         Agreement Date".

                                    ARTICLE 5

                                   Conditions

         Section 5.1 Conditions Precedent. The effectiveness of this Amendment
is subject to the satisfaction of each of the following conditions precedent:

                  (a) The Agent shall have received all of the following, each
         dated the date of this Amendment (unless otherwise indicated), in form
         and substance satisfactory to the Agent:

                           (i) Amendment Documents. This Amendment and any other
                  instrument, document, or certificate reasonably required by
                  the Agent to be executed or delivered by the Credit Parties in
                  connection with this Amendment, in each case duly executed
                  (the "Amendment Documents");

                           (ii) Additional Information. The Agent shall have
                  received such additional documents, instruments, and
                  information as the Agent may reasonably request to effect the
                  transactions contemplated hereby; and

                           (iii) Expenses. The Borrowers shall have paid to the
                  Agent all fees, costs, and expenses owed to and/or incurred by
                  the Agent in connection with the Credit Agreement or this
                  Amendment.

                  (b) The representations and warranties contained herein, in
         the Credit Agreement, and in all other Credit Documents, as amended
         hereby, shall be true and correct in all material respects as of the
         date hereof as if made on the date hereof except for such
         representations and warranties limited by their terms to a specific
         date.

                  (c) All corporate proceedings taken in connection with the
         transactions contemplated by this Amendment and all other agreements,
         documents, and instruments executed and/or delivered pursuant hereto,
         and all legal matters incident thereto, shall be satisfactory to the
         Agent; and

                  (d) No Default or Event of Default shall be in existence after
         giving effect to this Amendment.

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<PAGE>
                                    ARTICLE 6

                                  Miscellaneous

         Section 6.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Credit Agreement and the
other Credit Documents are ratified and confirmed and shall continue in full
force and effect. Each of the Credit Parties, the Agent, and the Lenders agree
that the Credit Agreement as amended hereby and the other Credit Documents shall
continue to be legal, valid, binding, and enforceable in accordance with their
respective terms.

         Section 6.2 Representations and Warranties. Each Credit Party hereby
represents and warrants to the Agent and the Lenders that, as of the date of and
after giving effect to this Amendment, (a) the execution, delivery, and
performance of this Amendment and any and all other Amendment Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of such Credit Party and will not violate such Credit Party's
organizational or governing document, (b) the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct on and as of the date hereof, in all material respects, as if made again
on and as of the date hereof except for such representations and warranties
limited by their terms to a specific date, and (c) after giving effect to this
Amendment, no Default or Event of Default exists.

         Section 6.3 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Document, including any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Credit Documents, and no investigation by the Agent or any Lender, or any
closing, shall affect the representations and warranties or the right of the
Agent and the Lenders to rely upon them.

         Section 6.4 Reference to Credit Agreement. Each of the Credit
Documents, including the Credit Agreement, the Amendment Documents, and any and
all other agreements, documents, or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Credit
Agreement as amended hereby, are hereby amended so that any reference in such
Credit Documents to the Credit Agreement, whether direct or indirect, shall mean
a reference to the Credit Agreement as amended hereby.

         Section 6.5 Effect of Amendment. The effect of the waivers contained in
Section 2.1 of this Amendment are expressly limited as provided herein, and in
order to induce the Agent and the Lenders to agree to such waivers, each of the
Credit Parties agrees that such waivers shall not constitute or be deemed a
waiver of any other Event of Default, now existing or hereafter arising, or a
waiver of any rights or remedies arising as a result of any such other Event of
Default. No consent or waiver, express or implied, by the Agent or any Lender to
or for any breach of or deviation from any covenant,

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<PAGE>
condition, or duty by any Credit Party shall be deemed a consent or waiver to or
of any other breach of the same or any other covenant, condition, or duty. Each
of the Credit Parties (individually, a "subject Credit Party") hereby (a)
consents to the execution and delivery of this Amendment by the other Credit
Parties, (b) agrees that this Amendment shall not limit or diminish the
obligations of the subject Credit Party under its certain Credit Documents
delivered in connection with the Credit Agreement, executed or joined in by the
subject Credit Party and delivered to the Agent, (c) reaffirms the subject
Credit Party's obligations under each of such Credit Documents, and (d) agrees
that each of such Credit Documents remains in full force and effect and is
hereby ratified and confirmed.

         Section 6.6 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         Section 6.7 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
APPLICABLE LAWS OF THE UNITED STATES.

         Section 6.8 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Credit Parties, the Agent, and the Lenders and
their respective successors and assigns, except no Credit Party may assign or
transfer any of its respective rights or obligations hereunder except in
accordance with the provisions of the Credit Agreement.

         Section 6.9 Counterparts. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

         Section 6.10 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

         Section 6.11 Entire Agreement. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

                  [Remainder of page intentionally left blank]

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<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts effective as
of the Effective Date specified in the introductory paragraph hereof.

                                 CREDIT PARTIES:

                                 FRIEDMAN'S INC.

                                 By: /s/
                                     -------------------------------------------
                                     Victor M. Suglia
                                     Senior Vice President,
                                     Chief Financial Officer

                                 FRIEDMAN'S FLORIDA PARTNERSHIP

                                 By:      Friedman's Management Corp., its
                                          Managing Partner

                                          By: /s/
                                              ----------------------------------
                                              Victor M. Suglia
                                              President

                                 FI STORES LIMITED PARTNERSHIP

                                 By:      Friedman's Inc., its general partner

                                          By: /s/
                                              ----------------------------------
                                              Victor M. Suglia
                                              Senior Vice President,
                                              Chief Financial Officer

                                 FRIEDMAN'S HOLDING CORP.

                                 By: /s/
                                     -------------------------------------------
                                     Victor M. Suglia
                                     Secretary and Treasurer

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<PAGE>
                                 FRIEDMAN'S MANAGEMENT CORP.

                                 By: /s/
                                     -------------------------------------------
                                     Victor M. Suglia
                                     President

                                 FCJV HOLDING CORP.

                                 By: /s/
                                     -------------------------------------------
                                     Victor M. Suglia
                                     President

                                 FCJV, L.P.

                                 By:      FCJV Holding Corp.,
                                          its general partner

                                          By: /s/
                                              ----------------------------------
                                              Victor M. Suglia
                                              President

                                 FRIEDMAN'S INVESTMENTS LLC

                                 By:      Friedman's Inc.,
                                          its managing member

                                          By: /s/
                                              ----------------------------------
                                          Name:
                                                --------------------------------
                                          Title:
                                                 -------------------------------

                                 FRIEDMAN'S BENEFICIARY INC.

                                 By: /s/
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

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                                 AGENT:

                                 BANK OF AMERICA, N.A.

                                 By: /s/
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 LENDERS:

                                 BANK OF AMERICA, N.A.

                                 By: /s/
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 THE CIT GROUP/BUSINESS CREDIT, INC.

                                 By: /s/
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                       10
<PAGE>
                                     ANNEX A
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT

                      AMENDED AND RESTATED CREDIT AGREEMENT

                           Dated as of August 28, 2002

                                      among

                                FRIEDMAN' S INC.,
                                       and
                    CERTAIN OF ITS SUBSIDIARIES PARTY HERETO,
                             as the Credit Parties,
                     THE LENDING INSTITUTIONS NAMED HEREIN,
                                 as the Lenders,

                             BANK OF AMERICA, N.A.,
                           as the Administrative Agent

                         BANC OF AMERICA SECURITIES LLC
                    Sole Lead Arranger and Sole Book Manager

                      THE CIT GROUP/BUSINESS CREDIT, INC.,
                              as Syndication Agent

                               JPMORGAN CHASE BANK
                               Documentation Agent<PAGE>
               WAIVER AND THIRD AMENDMENT TO AMENDED AND RESTATED
                                CREDIT AGREEMENT

      THIS WAIVER AND THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment"), dated as of May 15, 2003 (the "Amendment Date"), is among
Friedman's, Inc., a Delaware corporation, each of its Subsidiaries party hereto,
Bank of America, N.A. (in its capacity as administrative agent for the Lenders),
and each of the lending institutions party hereto.

                                    RECITALS:

      A. The Credit Parties, the Lenders, and the Agent have entered into that
certain Amended and Restated Credit Agreement dated as of August 28, 2002 (as
amended, the "Credit Agreement") pursuant to which the Lenders have provided
certain credit facilities to the Borrowers.

      B. The Credit Parties have requested that the Lenders amend certain
provisions of the Credit Agreement and waive certain Events of Default under the
Credit Agreement as provided hereinbelow.

      C. Subject to satisfaction of the conditions set forth herein, the Lenders
are willing to amend the Credit Agreement and provide the requested waiver of
Events of Default as specifically provided herein.

      NOW, THEREFORE, BE IT RESOLVED, THAT, in consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE 1

                                   Definitions

      Section 1.1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Credit Agreement, as amended hereby.

                                    ARTICLE 2

                           Waiver of Events of Default

      Section 2.1 Waiver of Events of Default. The Credit Parties have failed to
deliver (a) on or before December 26, 2002, the terminations, releases, and UCC
amendments prescribed by clause (o) of the definition of "Permitted Liens" set
forth in the Credit Agreement which has resulted in a breach of the covenant
contained in Section 7.2 of the Credit Agreement and an Event of Default
pursuant to Section 8.1(c)(i) of the Credit Agreement, (b) on or before December
26, 2002, the terminations, releases, and UCC amendments prescribed by clause
(c) of paragraph 1 of the certain Postclosing Agreement dated as of the Closing
Date among the original parties to the Credit Agreement (as amended or otherwise
modified from time to time, the "Postclosing Agreement") which is an Event of
Default pursuant to the Postclosing Agreement, and (c) on or before November 26,
2002, the agreements prescribed by clause (d) of paragraph 1 of the Postclosing
<PAGE>
Agreement which is an Event of Default pursuant to the Postclosing Agreement
(the Events of Default described in clause (a), clause (b), and clause (c)
preceding being referred to herein collectively as the "Specified Defaults").
The Credit Parties have requested that the Lenders waive the Specified Defaults.
Effective as of the Amendment Date, and subject to the conditions precedent and
other terms of this Amendment, the requisite Lenders hereby waive the Specified
Defaults.

                                    ARTICLE 3

                                   Amendments

      Section 3.1 Amendment to Section 1.1 of the Credit Agreement. Effective as
of the Amendment Date, the definition of "Reserves" in Section 1.1 of the Credit
Agreement is hereby amended by: (a) deleting the word "and" at the end of clause
(g); (b) replacing the period at the end of clause (h) with a semi-colon and the
word "and"; and (c) inserting a new clause (i) which shall read in its entirety
as follows:

            (i) reserves for accounts payable owing to any Person pursuant to a
      transaction whereby a Borrower has transferred, converted, or otherwise
      reclassified consigned inventory, unless the Borrowers have delivered to
      the Agent an executed release letter from such Person, in substantially
      the form of Exhibit F or otherwise in form and substance satisfactory to
      the Agent in its sole discretion.

      Section 3.2 Addition of Section 5.23 to the Credit Agreement. Effective as
of the Amendment Date, the Credit Agreement is hereby amended to add Section
5.23 to the Credit Agreement, which shall read in its entirety as follows:

            Section 5.23 Tax Shelter Regulations. No Credit Party intends to
      treat the Loans and/or Letters of Credit and related transactions as being
      a "reportable transaction" (within the meaning of Treasury Regulation
      Section 1.6011-4). In the event any Credit Party determines to take any
      action inconsistent with such intention, such Credit Party will promptly
      notify the Agent and the Lenders thereof. If any Credit Party so notifies
      the Agent, each Credit Party acknowledges that one or more of the Lenders
      may treat its Loans and/or its interest in Non-Ratable Loans and/or
      Discretionary Over-Advances and/or Letters of Credit as part of a
      transaction that is subject to Treasury Regulation Section 301.6112-1, and
      such Lender or Lenders, as applicable, will maintain the lists and other
      records required by such Treasury Regulation.

      Section 3.3 Amendment to Section 6.1 of the Credit Agreement. Effective as
of the Amendment Date, Section 6.1 of the Credit Agreement is hereby amended by:
(a)

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renumbering clause (q) to be clause (r) and (b) inserting a new clause (q) which
shall read in its entirety as follows:

            (q) Reportable Transactions. The Credit Parties will notify the
      Agent and the Lenders promptly of any intention by any Credit Party to
      treat the Loans and/or Letters of Credit and related transactions as being
      a "reportable transaction" (within the meaning of Treasury Regulation
      Section 1.6011-4), and the Credit Parties will, promptly after providing
      such notification to the Agent and the Lenders, deliver to the Agent and
      the Lenders a duly completed copy of IRS Form 8886 or any successor form.

      Section 3.4 Amendment to Section 7.15 of the Credit Agreement. Effective
as of the Amendment Date, Section 7.15 of the Credit Agreement is hereby amended
and restated to read in its entirety as follows:

            Section 7.15 Inventory Classification. During any calendar month,
      the Borrowers and the Guarantors shall not transfer, convert, or otherwise
      reclassify (a) Eligible Inventory into consigned goods unless (i) no
      Default or Event of Default exists, (ii) the aggregate fair market value
      thereof does not exceed $2,000,000, and (iii) the Borrowers and the
      Guarantors provide at least ten (10) Business Days prior written notice
      thereof to the Agent, which notification contains satisfactory
      calculations that, after giving effect to such transaction, the aggregate
      principal amount of the Obligations will not exceed the Borrowing Base and
      (b) consigned goods into inventory owned by a Borrower or a Guarantor
      unless (i) no Default or Event of Default exists and (ii) the Borrowers
      and the Guarantors provide at least ten (10) Business Days prior written
      notice thereof to the Agent.

      Section 3.5 Amendment to Section 10.15 of the Credit Agreement. Effective
as of the Amendment Date, Section 10.15 of the Credit Agreement is hereby
amended to add the following sentence to the end thereof:

      Notwithstanding anything herein to the contrary, except as otherwise
      reasonably necessary to comply with applicable securities laws, the
      information subject to this Section 10.15 shall not include, and the Agent
      and each Lender may disclose without limitation of any kind, any
      information with respect to the "tax treatment" and "tax structure" (in
      each case, within the meaning of Treasury Regulation Section 1.6011-4) of
      the transactions contemplated hereby and all materials of any kind
      (including opinions or other tax analyses) that are provided to the Agent
      or such Lender relating to such tax treatment and tax structure; provided
      that with respect to any document or similar item that in either case
      contains information concerning the tax treatment or tax structure of the
      transactions as well as other information, this sentence shall only apply
      to such portions of this Agreement or the Loan Documents that relate to
      the

                                       3
<PAGE>
      tax treatment or tax structure of the Loans, Letters of Credit and
      transactions contemplated hereby.

      Section 3.6 Addition of Exhibit F to the Credit Agreement. Effective as of
the Amendment Date, the Credit Agreement is hereby amended to add Exhibit F to
the Credit Agreement, which shall read in its entirety as set forth on Exhibit A
hereof.

                                    ARTICLE 4

                                   Conditions

      Section 4.1 Conditions Precedent. The effectiveness of Article 2 and
Article 3 of this Amendment is subject to the satisfaction of each of the
following conditions precedent:

            (a) The Agent shall have received all of the following, each dated
      the date of this Amendment (unless otherwise indicated), in form and
      substance satisfactory to the Agent:

                  (i) Amendment Documents. This Amendment and any other
            instrument, document, or certificate reasonably required by the
            Agent to be executed or delivered by the Credit Parties in
            connection with this Amendment, in each case duly executed (the
            "Amendment Documents");

                  (ii) Additional Information. The Agent shall have received
            such additional documents, instruments, and information as the Agent
            may reasonably request to effect the transactions contemplated
            hereby; and

                  (iii) Expenses. The Borrowers shall have paid to the Agent all
            fees, costs, and expenses owed to and/or incurred by the Agent in
            connection with the Credit Agreement or this Amendment.

            (b) The representations and warranties contained herein, in the
      Credit Agreement, and in all other Credit Documents, as amended hereby,
      shall be true and correct in all material respects as of the date hereof
      as if made on the date hereof except for such representations and
      warranties limited by their terms to a specific date.

            (c) All corporate proceedings taken in connection with the
      transactions contemplated by this Amendment and all other agreements,
      documents, and instruments executed and/or delivered pursuant hereto, and
      all legal matters incident thereto, shall be satisfactory to the Agent;
      and

            (d) No Default or Event of Default shall be in existence after
      giving effect to this Amendment.

                                       4
<PAGE>
                                    ARTICLE 5

                                  Miscellaneous

      Section 5.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Credit Agreement and the
other Credit Documents are ratified and confirmed and shall continue in full
force and effect. Each of the Credit Parties, the Agent, and the Lenders agree
that the Credit Agreement as amended hereby and the other Credit Documents shall
continue to be legal, valid, binding, and enforceable in accordance with their
respective terms.

      Section 5.2 Representations and Warranties. Each Credit Party hereby
represents and warrants to the Agent and the Lenders that, as of the date of and
after giving effect to this Amendment, (a) the execution, delivery, and
performance of this Amendment and any and all other Amendment Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of such Credit Party and will not violate such Credit Party's
organizational or governing document, (b) the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct on and as of the date hereof, in all material respects, as if made again
on and as of the date hereof except for such representations and warranties
limited by their terms to a specific date, and (c) after giving effect to this
Amendment, no Default or Event of Default exists.

      Section 5.3 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Credit
Document, including any Credit Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Credit Documents, and no investigation by the Agent or any Lender, or any
closing, shall affect the representations and warranties or the right of the
Agent and the Lenders to rely upon them.

      Section 5.4 Reference to Credit Agreement. Each of the Credit Documents,
including the Credit Agreement, the Amendment Documents, and any and all other
agreements, documents, or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Credit Agreement as
amended hereby, are hereby amended so that any reference in such Credit
Documents to the Credit Agreement, whether direct or indirect, shall mean a
reference to the Credit Agreement as amended hereby.

      Section 5.5 Effect of Amendment. The effect of the waiver contained in
Section 2.1 of this Amendment is expressly limited as provided herein, and in
order to induce the Agent and the Lenders to agree to such waiver, each of the
Credit Parties agrees that such waiver shall not constitute or be deemed a
waiver of any other Event of Default, now existing or hereafter arising, or a
waiver of any rights or remedies arising as a result of any such other Event of
Default. No consent or waiver, express or implied, by the Agent or any Lender to
or for any breach of or deviation from any covenant, condition, or duty by any
Credit Party shall be deemed a consent or waiver to or of any other breach of
the same or any other covenant,

                                       5
<PAGE>
condition, or duty. Each of the Credit Parties (individually, a "subject Credit
Party") hereby (a) consents to the execution and delivery of this Amendment by
the other Credit Parties, (b) agrees that this Amendment shall not limit or
diminish the obligations of the subject Credit Party under its certain Credit
Documents delivered in connection with the Credit Agreement, executed or joined
in by the subject Credit Party and delivered to the Agent, (c) reaffirms the
subject Credit Party's obligations under each of such Credit Documents, and (d)
agrees that each of such Credit Documents remains in full force and effect and
is hereby ratified and confirmed.

      Section 5.6 Releases. As a material inducement to the Agent and the
Lenders to enter into this Amendment, each of the Credit Parties (collectively,
the "Releasing Parties"), by their execution below, hereby represent and warrant
that there are no claims or offsets against, or defenses or counterclaims to,
the terms and provisions of and the other obligations created or evidenced by
the Credit Agreement or the other Credit Documents. The Releasing Parties hereby
release, acquit, and forever discharge the Agent and the Lenders, and their
respective officers, employees, attorneys and agents (all of whom are herein
jointly and severally referred to as the "Released Parties") from any and all
liability, damages, losses, obligations, costs, expenses, suits, claims,
demands, causes of action for damages or any other relief, whether or not now
known or suspected, of any kind, nature or character, at law or in equity, that
any Releasing Party now has or may have ever had as a result of actions
occurring on or prior to the date hereof against any of the Released Parties
(hereinafter being collectively referred to as the "Claims"), all of which
Claims are hereby waived.

      Section 5.7 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

      Section 5.8 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
APPLICABLE LAWS OF THE UNITED STATES.

      Section 5.9 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Credit Parties, the Agent, and the Lenders and
their respective successors and assigns, except no Credit Party may assign or
transfer any of its respective rights or obligations hereunder except in
accordance with the provisions of the Credit Agreement.

      Section 5.10 Counterparts. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

                                       6
<PAGE>
      Section 5.11 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

      Section 5.12 Entire Agreement. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts effective as
of the Amendment Date specified in the introductory paragraph hereof.

                                    CREDIT PARTIES:

                                    FRIEDMAN'S INC.

                                    By:  /s/ Victor M. Suglia
                                       ---------------------------------
                                          Victor M. Suglia
                                          Senior Vice President,
                                          Chief Financial Officer

                                    FRIEDMAN'S FLORIDA PARTNERSHIP

                                    By:   Friedman's Management Corp., its
                                          Managing Partner

                                          By:  /s/ Victor M. Suglia
                                             ---------------------------
                                                Victor M. Suglia
                                                President

                                    FI STORES LIMITED PARTNERSHIP

                                    By: Friedman's Inc., its general partner

                                          By:  /s/ Victor M. Suglia
                                             ---------------------------
                                                Victor M. Suglia
                                                Senior Vice President,
                                                Chief Financial Officer

                                       7

<PAGE>

                                    FRIEDMAN'S HOLDING CORP.

                                    By: /s/ Victor M. Suglia
                                       ---------------------------------
                                          Victor M. Suglia
                                          Secretary and Treasurer

                                    FRIEDMAN'S MANAGEMENT CORP.

                                    By: /s/ Victor M. Suglia
                                       ---------------------------------
                                          Victor M. Suglia
                                          President

                                    FCJV HOLDING CORP.

                                    By: /s/ Victor M. Suglia
                                       ---------------------------------
                                          Victor M. Suglia
                                          President

                                    FCJV, L.P.

                                    By:   FCJV Holding Corp.,
                                          its general partner

                                          By: /s/ Victor M. Suglia
                                             ---------------------------
                                                Victor M. Suglia
                                                President

                                    FRIEDMAN'S INVESTMENTS LLC

                                    By:   Friedman's Inc.,
                                          its managing member

                                          By: /s/ Victor M. Suglia
                                             ---------------------------
                                          Name: Victor M. Suglia
                                               -------------------------
                                          Title: Chief Financial Officer,
                                                 Secretary and Treasurer
                                                ------------------------

                                       8
<PAGE>
                                    FRIEDMAN'S BENEFICIARY INC.

                                    By:  /s/ Victor M. Suglia
                                       ---------------------------------
                                    Name:    Victor M. Suglia
                                         -------------------------------
                                    Title:   Secretary and Treasurer
                                          ------------------------------

                                    AGENT:

                                    BANK OF AMERICA, N.A.

                                    By:   /s/ David Knoblauch
                                       ---------------------------------
                                    Name:     David Knoblauch
                                         -------------------------------
                                    Title:    Senior Vice-President
                                          ------------------------------

                                    LENDERS:

                                    BANK OF AMERICA, N.A.

                                    By:   /s/ David Knoblauch
                                       ---------------------------------
                                    Name:     David Knoblauch
                                         -------------------------------
                                    Title:    Senior Vice-President
                                          ------------------------------

                                    THE CIT GROUP/BUSINESS CREDIT, INC.

                                    By:   /s/ Adrian Avalos
                                       ---------------------------------
                                    Name:     Adrian Avalos
                                         -------------------------------
                                    Title:    Vice-President
                                          ------------------------------

                                    PNC BANK, NATIONAL ASSOCIATION

                                    By:   /s/ Sunnie M. Kim
                                       ---------------------------------
                                    Name:     Sunnie M. Kim
                                         -------------------------------
                                    Title:    Assistant Vice-President
                                          ------------------------------

                                    JPMORGAN CHASE BANK

                                    By:   /s/ Michael Stevenson
                                       ---------------------------------
                                    Name:     Michael Stevenson
                                         -------------------------------
                                    Title:    Vice-President
                                          ------------------------------

                                       9
<PAGE>
                                    THE PROVIDENT BANK

                                    By:   /s/ Mary Sue Wolfer
                                       ---------------------------------
                                    Name:     Mary Sue Wolfer
                                         -------------------------------
                                    Title:    Credit Officer
                                          ------------------------------

                                    ABN AMRO BANK N.V.

                                    By:   /s/
                                       ---------------------------------
                                    Name:
                                         -------------------------------
                                    Title:
                                          ------------------------------

                                    By:   /s/ Frederick Jennings
                                       ---------------------------------
                                    Name:     Frederick Jennings
                                         -------------------------------
                                    Title:    Vice-President
                                          ------------------------------

                                       10
<PAGE>
                                    EXHIBIT A
                                       TO
                          WAIVER AND FIRST AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>
                           [Consignor's Letterhead]

                         As of _______________, _____

Friedman's Inc.
4 West State Street
Savannah, Georgia 31401
Attn: Victor Suglia

Bank of America, N.A.
55 South Lake Avenue, Suite 900
Pasadena, California 91101
Attn: David T. Knoblauch

      Re:   [CONSIGNMENT AGREEMENT] dated as of [___________, ______]
            (the "Consignment Agreement") between [INSERT NAME OF
            FRIEDMAN'S ENTITY PARTY TO THE CONSIGNMENT AGREEMENT] (the
            "Consignee"), [INSERT CONSIGNOR'S NAME HERE] (the "Consignor")

Ladies and Gentlemen:

      Reference is made to the Consignment Agreement, pursuant to which the
Consignor from time to time delivers goods to the Consignee pursuant to the
terms thereof. In addition, from time to time the Consignee may purchase goods
from Consignor, including goods which were previously delivered by the Consignor
to the Consignee pursuant to the Consignment Agreement (each such purchase by
the Consignee from the Consignor, whether evidenced by letter agreement, bill of
sale, memo, book entry, or otherwise, a "Purchase"). In connection with each
Purchase, the Consignee has requested that the Consignor provide this agreement
with respect to Consignor's interest in the goods which are the subject of such
Purchase.

      For value received, the receipt and sufficiency of which are hereby
acknowledged by the Consignor, the Consignor hereby agrees that the Consignor
has no right, title, or interest in any goods which are the subject of a
Purchase ("Purchased Inventor"), or any proceeds thereof. Without limiting the
foregoing, the Consignor hereby (a) releases, terminates, and discharges all
title, rights of ownership, liens, security interests, pledges, mortgages, and
other interests and rights in all Purchased Inventory, and all proceeds thereof,
and (b) authorizes the Consignee and the agent of Consignee's secured lenders,
Bank of America, N.A. ("Bank of America") to file one or more financing
statements (including an initial financing statement in lieu of continuation
statements) and amendments without the Consignor's signature in order to release
all Purchased Inventory from any effective financing statements now or hereafter
filed by the Consignor against the Consignee. Any such financing statement will
describe the Consignor as the "Secured Party" and the Consignee as the "Debtor"
and contain a description of the property which is the subject of such financing
statement or "collateral" as set forth on Exhibit A hereto.
<PAGE>
      To induce the Consignor to agree to the terms of this agreement ("Release
Letter"), the Consignee (by its execution below) agrees that, except as provided
herein with respect to Purchased Inventory, and proceeds thereof:

      1.    the Consignor retains its rights, title, and interests in all
            goods which are at any time the subject of a consignment by the
            Consignor to the Consignee pursuant to the terms of the
            Consignment Agreement;

      2.    all terms and provisions of the Consignment Agreement and all
            rights and obligations of the Consignee and the Consignor
            thereunder shall remain in full force and effect and are ratified
            and confirmed in all respects; and

      3.    the Consignment Agreement shall continue to be legal, valid,
            binding, and enforceable in accordance with its respective terms.

      THIS RELEASE LETTER EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS WHETHER WRITTEN OR ORAL RELATING TO THE
SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. This Release Letter shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
conflicts of law principles.

      This Release Letter may be executed in one or more counterparts and on
telecopy counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.

                                    Very truly yours,

                                    [CONSIGNOR]

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

Accepted and Agreed to as of __________________, _______:

                                    [CONSIGNEE]

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

                                       2
<PAGE>
                                    EXHIBIT A

                 Collateral Description for Financing Statements

This financing statement is filed to reflect the secured party's interest in
certain goods held by the debtor which are the subject of a consignment by the
secured party ("Consignor") with the debtor ("Consignee") pursuant to that
certain [DESCRIBE THE CONSIGNMENT AGREEMENT HERE]. The "collateral" includes all
goods which are consigned from Consignor to Consignee, including, goods
containing gold, silver, diamonds, platinum, precious stones or other precious
metals, or similar items heretofore or hereafter consigned to Consignee whether
at the address given or at any other address (collectively, the "Consigned
Merchandise"). The "collateral" excludes any goods which are owned by Consignee,
including any goods which, from time to time, were previously Consigned
Merchandise but which thereafter have been sold by Consignor to Consignee,
whether evidenced by letter agreement, bill of sale, memo, book entry, or
otherwise (any such sold goods, "Sold Merchandise"). The "collateral" excludes,
in any event, all proceeds and products of Consigned Merchandise and of Sold
Merchandise.

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