FRIEDMANS INC
INDEMNIFICATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.21.1
<SEQUENCE>6
<FILENAME>y67049exv10w21w1.txt
<DESCRIPTION>INDEMNIFICATION AGREEMENT
<TEXT>
<PAGE>
                                                                 Exhibit 10.21.1

                               INDEMNITY AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      2. Basic Indemnification Arrangement.

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

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

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

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

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

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

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


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      3. Advances for Expenses.

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

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

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

      4. Determination of Reasonableness of Expenses.

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

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



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

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

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

      5. Court-Ordered Indemnification and Advances for Expenses.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts

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made and to be performed in such state without giving effect to the principles
of conflicts of laws.

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

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

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

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

      Executed as of the date first above written.

                                       FRIEDMAN'S INC.

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




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



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