ASSET PURCHASE AGREEMENT

Exhibit 10.54

ASSET PURCHASE AGREEMENT

dated as of April 11, 2008

by and among

FRIEDMAN’S INC., and

CRESCENT JEWELERS, as SELLERS

and

WHITEHALL JEWELERS, INC., as BUYER

ASSET PURCHASE AGREEMENT

          This Asset Purchase Agreement (this “ Agreement ”) is dated as of April 11, 2008, by and among Whitehall Jewelers, Inc., a Delaware Corporation (the “ Buyer ”), and Friedman’s Inc., a Delaware corporation (“ Friedman’s ”), and Crescent Jewelers, a California corporation and wholly-owned subsidiary of Friedman’s (“ Crescent ” and together with Friedman’s, each a “ Seller ” and collectively the “ Sellers ”). The Buyer and the Sellers are referred to collectively herein as the “ Parties .”

          WHEREAS, each of the Sellers is engaged in the business of selling jewelry and incidental services from leased specialty stores (the “ Business ”);

          WHEREAS, on January 22, 2008 (the “ Petition Date ”), an involuntary petition for relief (Case No. 08-10161 (CSS)) (the “ Friedman’s Case ”) under chapter 7 of Title 11, U.S.C. (as amended as of the Petition Date) (the “ Bankruptcy Code ”), was filed against Friedman’s in the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”);

          WHEREAS, on January 28, 2008 (the “ Relief Date ”), by Order of the Bankruptcy Court, the Friedman’s Case was converted to a voluntary proceeding under chapter 11 of the Bankruptcy Code;

          WHEREAS, on January 28, 2008 (the “ Crescent Petition Date ”), a voluntary petition for relief (the “ Crescent Case ”, and collectively with the Friedman’s Case, the “ Bankruptcy Case ”) under chapter 11 of the Bankruptcy Code was filed by Crescent in the Bankruptcy Court;

          WHEREAS, on January 28, 2008, an Order was entered by the Bankruptcy Court jointly consolidating the Friedman’s Case and the Crescent Case for procedural purposes;

          WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, and as authorized under Sections 105, 363, 365 and 1146 of the Bankruptcy Code, each of the Sellers desires to sell, transfer and assign to Buyer, and Buyer desires to purchase from Sellers, all of Sellers’ right, title and interest in certain properties and assets associated with the Business or ancillary thereto, on the terms and subject to the conditions hereinafter set forth; and

          WHEREAS, Sellers and Buyer are entering into this Agreement to evidence their respective duties, obligations and responsibilities in respect of the purchase and sale and related transactions contemplated by this Agreement and the Ancillary Agreements as defined in Article 1 (the “ Transactions ”).

          NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

1. Definitions .

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          “ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

          “ Agreement ” has the meaning set forth in the preface above.

          “ Ancillary Agreements ” means the Bill of Sale, and the Assignment and Assumption Agreement.

          “ Assets ” means, with respect to any Person, all assets of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including without limitation, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and intellectual property.

          “ Assumed Liabilities ” has the meaning set forth in Section 2(d).

          “ Assumption Agreement ” has the meaning set forth in Section 7(a)(vi).

          “ Assumption Order ” means the order to be entered by the Bankruptcy Court, in form and substance acceptable to the Buyer, approving the assumption and assignment of the Purchased Leases by the Sellers to the Buyer.

          “ Bankruptcy Case ” has the meaning set forth in the preface above.

          “ Bankruptcy Code ” has the meaning set forth in the preface above.

          “ Bankruptcy Court ” has the meaning set forth in the preface above.

          “ Bill of Sale ” has the meaning set forth in Section 7(a)(v).

          “ Books and Records ” has the meaning set forth in Section 2(a)(vi).

          “ Business ” has the meaning set forth in the preface above.

          “ Business Employees ” mean all store-level employees of the Sellers for the Acquired Stores employed by the Sellers immediately prior to the Closing.

          “ Buyer ” has the meaning set forth in the preface above.

          “ Cash ” means cash and cash equivalents.

          “ Cash on Hand ” means Cash in the cash registers at the Acquired Stores or otherwise held at the Acquired Stores.

          “ Closing ” has the meaning set forth in Section 2(j)(i).

          “ Closing Date ” has the meaning set forth in Section 2(j)(i).

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          “ Consignment Goods ” means and refers to goods being held by Sellers for sale on consignment from Sellers’ vendors pursuant to consignment agreements, consignment memoranda, and/or terms of consignment.

          “ Consignment Order ” means and refers to Final Order Pursuant to 11 U.S.C. Sections 105 and 363 Authorizing Payment of Prepetition Claims of Consignment Vendors, Providing Adequate Protection and Approving Procedures Regarding Consigned Goods.

          “ Contract ” means any binding contract, agreement, arrangement, license, lease, commitment, sale and purchase order, and other instrument or understanding of any kind, whether written or oral, express or implied.

          “ Cost File ” means Sellers’ master cost file as represented in the Sellers’ financial stock ledger as of the Closing Date.

          “ Cost Value ” means, with respect to each item of Inventory (other than Defective Inventory) on the Closing Date, the average standard cost (determined by applicable merchant accounting unit for such item of Inventory as reflected in Sellers’ Cost File), which average standard cost is inclusive of freight and shipping charges. With respect to Defective Inventory, “Cost Value” shall mean the value the Sellers and Buyer agree upon for such item during the Inventory Taking.

          “ Cure Amounts ” means all pre-petition and post-petition cure amounts under Purchased Leases including amounts which accrued prior to the Closing Date which are not payable until after the Closing Date.

          “ Defective Inventory ” means any item of inventory agreed upon and identified by Buyer and Sellers as damaged or defective or otherwise not salable in the ordinary course because it is dented, worn, scratched, broken, broken sets, faded, torn, mismatched, non-redeemed or layaway altered merchandise or merchandise affected by other similar defects rendering it not first quality (such as, for example, watches that are not running, watches without boxes, watches without applicable instructions, and pierced earrings without backs).

          “ Delayed Assumption Date ” is defined in Section 2(l).

          “ Distribution Center ” means the Sellers’ distribution center located at 4550 Excel Parkway, Addison, Texas.

          “ Employee Plan ” means all plans, practices and arrangements, written or unwritten, formal or informal, whether applicable to a group of individuals or a single individual, and whether active, frozen or terminated, providing compensation (other than salary or wages) or other benefits of any type or nature with respect to the Business Employees, including but not limited to all plans providing benefits for such employees that are employee benefit plans as defined in Section 3(3) of ERISA.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

          “ Excluded Assets ” has the meaning set forth in Section 2(b).

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          “ Excluded Consignment Goods ” has the meaning set forth in Section 2(c).

          “ Expedited Procedures Motion ” means Motion of the Debtors and Debtors-in-Possession for an Order, Pursuant to Sections 105, 363 and 365(a) of the Bankruptcy Code and Bankruptcy Rules 2002, 6004 and 6006, (A) Approving Expedited Procedures for Rejection of Executory Contracts and Unexpired Leases; (B) Approving Expedited Procedures for Assumption and Assignment of Executory Contracts and Unexpired Leases; and (C) Authorizing the Debtors to Conduct Store Closing Sales or “Going Out of Business Sales”.

          “ Expedited Procedures Order ” means that order entered by the Bankruptcy Court, in form and substance acceptable to the Buyer, approving the relief requested by the Expedited Procedures Motion.

          “ Final Inventory Reconciliation ” has the meaning set forth in Section 2(g)(i)(B).

          “ Final Order ” shall mean an order or judgment, the operation or effect of which is not stayed, and as to which order or judgment (or any revision, modification or amendment thereof), the time to appeal or seek review or rehearing has expired, and as to which no appeal or petition for review or motion for reargument has been taken or been made and is pending for argument.

          “ Government Agreements ” means collectively (i) that certain Superseding Agreement between Friedman’s Inc. and the United States Attorney’s Office for the Eastern District of New York, dated as of December __, 2005, (ii) that certain Agreement Between Crescent Jewelers and the United States Attorney’s Office for the Eastern District of New York, dated as of July 13, 2006, and (iii) any other agreement between Friedman’s Inc. or Crescent Jewelers and any Governmental Entity.

          “ Governmental Entity ” means any federal, state, local or foreign court, administrative or regulatory agency or commission or other governmental authority or instrumentality, or any arbitral tribunal.

          “ Gross Rings ” has the meaning set forth in Section 2(i)(iii).

          “ Interim Sale Period ” has the meaning set forth in Section 2(i)(iii).

          “ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended.

          “ Inventory ” means all supplies and items of inventory owned by Sellers (including, Layaway Inventory and Defective Inventory for which Buyer and Sellers can agree upon a Cost Value), located in the Acquired Stores as of the Closing Date and Purchased Consignment Goods.

          “ Inventory Date ” has the meaning set forth in Section 2(i)(i).

          “ Inventory Completion Date ” has the meaning set forth in Section 2(i)(i).

          “ Inventory Dispute Period ” has the meaning set forth in Section 2(i)(iv).

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          “ Inventory Taking ” has the meaning set forth in Section 2(i)(i).

          “ Inventory Taking Instructions ” has the meaning set forth in Section 2(i)(i).

          “ Inventory Taking Service ” has the meaning set forth in Section 2(i)(i).

          “ Interim Sale Period ” has the meaning set forth in Section 2(i)(iii).

          “ Layaway Deposits ” means the aggregate amount of all customer deposits (based upon the Sellers’ books and records) in respect of Layaway Inventory.

          “ Layaway Inventory ” means all items of inventory held at the Acquired Stores on layaway, in each case, where the goods subject to layaway are properly identified, segregated, and in a condition as described in the documentation.

          “ Leases ” means all real property leases, including all written amendments, modifications and renewals thereto, to which either Seller is a party as a lessee.

          “ Lease Assumption Documents ” has the meaning set forth in Section 2(l).

          “ Lenders ” means each of the lenders of the Sellers for borrowed money.

          “ Letter of Credit ” has the meaning set forth in Section 2(g)(i)(C).

          “ Liability ” means any debt, liability, duty, responsibility, obligation, assessment, cost, expense, loss, expenditure, charge, fee, penalty, fine, contribution, premium or obligation of any kind, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and regardless of when sustained, incurred or asserted or when the relevant events occurred or circumstances existed, including all costs and expenses relating thereto.

          “ Lien ” means any and all claims, liens, encumbrances, interests, obligations, security interests, judgments, and charges of every nature whatsoever.

          “ Lowest Store Price ” has the meaning set forth in Section 2(i)(ii).

          “ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

          “ Parties ” has the meaning set forth in the preface above.

          “ Permitted Liens ” means (i) liens for Property Taxes and other governmental charges and assessments which are not yet due and payable, (ii) Liens described in Schedule B which will be and are discharged or released either prior to, or simultaneously with, the Closing, (iii) retention of title agreements with suppliers entered into in the Ordinary Course of Business, (iv) encroachments, overlaps, Liens and other title defects, easements and encroachments that do not, individually or in the aggregate, materially impair the marketability of title to Purchased Leases or the continued use as currently conducted of the assets to which such Liens or other title

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defects, easements or encroachments relate and (v) Liens with respect to any of the Purchased Assets and created by or resulting from the acts or omissions of Buyer or this Agreement.

          “ Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity or a Governmental Entity (or any department, agency, or political subdivision thereof).

          “ PLU ” means price look up.

          “ Property Tax ” means any Tax resulting from and relating to the assessment of real or personal property by any Governmental Entity (to include specifically ad valorem property or real estate taxes and any payments made to a Government Entity in lieu of such ad valorem property or real estate taxes).

          “ Purchased Assets ” has the meaning set forth in Section 2(a).

          “ Purchased Consignment Goods ” means (i) first quality, finished, saleable Consignment Goods located in the Acquired Stores as of Closing Date the purchase of which is designated by the Sellers, at the Sellers’ sole option, prior to commencement of the Inventory Taking and consented to by the subject vendor, at its sole option, as of the Closing Date, and (ii) first quality, finished, saleable Consignment Goods located in any of the Sellers’ Stores consigned by Bulova (excluding Wittnaur), Rosy Blue and Summit; provided, that Sellers’ request and such vendors consent to the Buyer’s purchase of such goods prior to Closing Date.

          “ Purchased Leases ” means all Leases of Sellers for the Acquired Stores that are assumed and assigned to Buyer on or after the Closing Date, together with all security deposits related thereto and all permanent fixtures, improvements and appurtenances thereto and associated with such Purchased Leases, subject to the rejection of up to fifteen (15) Leases by the Buyer on or prior to the Delayed Assumption Date pursuant to Section 2(l) hereof.

          “ Purchased Permits ” has the meaning set forth in Section 2(a)(v).

          “ Remaining Cash Payment ” means the Cash Payment less the Initial Cash Payment.

          “ Retail Value ” shall mean, with respect to each item of Inventory, the lower of (x) the lowest ticketed or marked price of such item in the Store Closing Location on the Closing Date, and (y) the price for such item as reflected in Sellers PLU file.

          “ Retained Liabilities ” shall mean all of the claims, liabilities, obligations or indebtedness of any nature whatsoever of the Sellers other than the Assumed Liabilities, including without limitation, all liabilities indicated as Retained Liabilities in Section 2(d).

          “ Sale Motion ” has the meaning set forth in Section 5(e)(i).

          “ Sale Order ” has the meaning set forth in Section 5(e)(ii).

          “ Securities Act ” means the Securities Act of 1933, as amended.

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          “ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.

          “ Sellers ” has the meaning set forth in the preface above.

          “ SKU ” means the unique stock keeping unit identifier assigned to identical pieces of Inventory.

          “ Stores ” means the Sellers’ retail locations where the Seller conducts its business.

          “ Tangible Personal Property ” has the meaning set forth in Section 2(a)(i).

          “ Tax ” or “ Taxes ” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Internal Revenue Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

          “ Tax Return ” means any all federal, state, county and local tax returns and other returns and reports which were required to be filed in respect of all Taxes, levies, license, registration and permit fees, charges or withholding of any nature whatsoever.

          “ Ten-Day Notice ” means that 10-day notice to landlords of the Buyers’ intention to assume the subject Purchased Lease required pursuant to the Expedited Procedures Motion.

          “ Transactions ” has the meaning set forth in the preface above.

          “ Transaction Consideration ” has the meaning set forth in Section 2(g).

          “ Transferred Employees ” has the meaning set forth in Section 5(g)(i).

          “ Transition Period ” means the period of 90 days following the Closing Date.

          “ Warranties ” has the meaning set forth in Section 2(a)(vii).

          (a) Purchased Assets . On the terms and subject to the conditions set forth herein, on the Closing Date, the Sellers shall sell, transfer, assign, convey and deliver to the Buyer, and the Buyer shall purchase and accept from the Sellers, free and clear of all Liens (other than the Permitted Liens), all of the Sellers’ right, title and interest in and to the Assets of the Sellers described below (hereinafter, collectively referred to as the “ Purchased Assets ”):

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          (b) Excluded Assets . Notwithstanding anything to the contrary in this Agreement, all Assets which are not Purchased Assets (herein referred to as the “ Excluded Assets ”), shall be retained by the Sellers and are not being sold or transferred to the Buyer hereunder (including, without limitation, all Cash).

          (c) Special Provision for Consignment Goods . Prior to the Closing, the Sellers shall be solely responsible for segregating and securing all Consignment Goods. After the Closing, the Sellers and Buyer shall cooperate in the segregating, inventorying, securing, removal, reconciling and any other handling of the Excluded Consignment Goods. Sellers shall be responsible for the allocation and distribution of that portion of the Cash Payment allocable to Purchased Consignment Goods. Buyer shall permit Consignment Goods to be stored at the

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Acquired Stores, and Buyer shall establish reasonable policies and procedures to safeguard the Consignment Goods. Any Consignment Goods which are not Purchased Consignment Goods shall be excluded from Purchased Assets hereunder (“ Excluded Consignment Goods ”) ; IT BEING EXPRESSLY UNDERSTOOD THAT CONSIGNMENT GOODS SHALL ONLY BE DEEMED TO BE PURCHASED CONSIGNMENT GOODS IN THE SOLE DISCRETION OF THE SELLERS AND WITH THE CONSENT OF THE VENDOR THAT SUPPLIED SUCH CONSIGNMENT GOODS. Within thirty (30) days of the Closing Date, Sellers shall cause all Excluded Consignment Goods to be removed from all Acquired Stores. Buyer shall have no liability for segregating, securing, removing or any other handling of the Excluded Consignment Goods, but shall take commercially reasonable means to secure and safeguard such goods while in Buyer’s possession. Buyer shall have no authority to sell any Excluded Consignment Goods, but shall timely remit to the Sellers the payments required to be made by the Consignment Order to the extent any Excluded Consignment Goods are inadvertently sold or otherwise knowingly disposed of. Vendors of Consignment Goods shall have recourse solely against the Sellers with respect to Excluded Consignment Goods pursuant to the terms of the Consignment Order.

          (d) Assumed Liabilities . Except for Assumed Liabilities, Buyer shall not assume any obligations or liabilities of Sellers, including but not limited to environmental and employment-related liabilities and obligations, whether known or unknown, disputed or undisputed, contingent or non-contingent, liquidated or unliquidated or otherwise. Effective as of the Closing Date, the Buyer shall assume and thereafter in due course pay, fully satisfy, discharge and perform the Liabilities of Sellers specifically referred to in this Section 2(d) hereinafter, collectively, the “ Assumed Liabilities ”), as follows:

          (e) Retained Liabilities . Buyer shall not assume or agree to pay, satisfy, discharge or perform, or take or agree to take any of the Purchased Assets subject to, and shall not be deemed by virtue of the execution and delivery of this Agreement or any document delivered to the Buyer at the Closing pursuant hereto, or as a result of the consummation of the transactions contemplated hereby, to have assumed, or to have agreed to assume, pay, satisfy, discharge or perform, or take, or to have agreed to take, any of the Retained Liabilities and such Retained Liabilities shall remain the responsibility of the Sellers. Buyers shall be, and the Sale Order shall expressly provide that Buyers shall not be considered a successor employer and shall not have successor employer liability with respect to any employee benefits, collective bargaining agreement, the WARN Act, COBRA, and/or any severance or key employee retention bonus program.

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          (f) Reserved .

          (g) Transaction Consideration . In consideration of the Transactions contemplated hereunder (the “ Transaction Consideration ”), Buyer shall:

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          (h) Petty Cash. Buyer shall reimburse Sellers for the actual Cash on Hand located in each of the registers located in the Acquired Stores, it being understood that at the close of business on the date immediately preceding the Closing Date, Sellers shall count the Cash on Hand in each of the registers in the Acquired Stores.

          (i) Taking of Inventory.

                    (i) Inventory Taking . Commencing as of the Closi