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     FIRST SUPPLEMENTAL INDENTURE, dated as of August 8, 2002, among FINLAY FINE
JEWELRY CORPORATION, a Delaware corporation (the "Company"), and HSBC Bank USA
(formerly known as Marine Midland Bank), as trustee (the "Trustee").

                         W I T N E S S E T H:

     WHEREAS, the Company and the Trustee have entered into that certain
Indenture dated as of April 24, 1998 (the "Indenture"), for the equal and
ratable benefit of the Holders of the Company's 8-3/8% Senior Notes due 2008
(the "Securities"); and

     WHEREAS, in accordance with Section 9.02 of the Indenture, the Company has
obtained the written consent of the Holders of a majority in aggregate principal
amount of the Securities outstanding to an amendment to the Indenture and Finlay
Enterprises has obtained a written consent of the holders of a majority in
aggregate principal amount of its Senior Debentures outstanding to an amendment
to the Senior Debenture Indenture; and

     NOW THEREFORE, for the purpose of memorializing the amendment to the
Indenture so consented to by the Holders of the Securities, the parties hereto
do hereby agree as follows:

     SECTION 1. Definitions and Terms.

     Unless otherwise defined herein, all initially capitalized terms used
herein shall have the meanings assigned to such terms in the Indenture.

     SECTION 2. Amendment to Indenture.

     Section 4.09(b)(iv) of the Indenture is amended to read in its entirety as
follows (CHANGED TEXT IS SHOWN IN BOLD AND DOUBLE UNDERLINED):

          "(iv) the incurrence by Finlay Jewelry of Indebtedness or other
     obligations in an aggregate principal amount of up to the greater of (x)
     $50.0 million and (y) 90% of the fair market value of the fine gold content
     of specified Consignment Inventory eligible to be consigned under (a) the
     Gold Consignment Agreement or (b) a substantially similar gold consignment
     agreement that Finlay Jewelry may enter into subsequent to the date of this
     Indenture which provides for the transfer of title to the gold content of
     Consignment Inventory from the relevant vendor to a gold consignor;
     provided that such $50.0 million specified in clause (x) above shall be
     permanently reduced by the aggregate amount of all Net Proceeds of Asset
     Sales applied to repay such Indebtedness pursuant to Section 4.10(b)(i)
     hereof;"

     SECTION 3. Ratification of Indenture, as Amended.

     The Indenture, as amended hereby, is hereby ratified and confirmed and
continues in full force and effect.

     SECTION 4. Effectiveness.

     This First Supplemental Indenture shall become effective upon the execution
hereof by the Company and the Trustee, the Company having delivered to the
Trustee evidence of consent from the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding. Notwithstanding the
foregoing, this First Supplemental Indenture shall not become effective unless
Finlay Enterprises obtains the consent of holders

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of not less than a majority in aggregate principal amount of the Senior
Debentures then outstanding to an amendment to the Senior Debenture Indenture
which is substantially the same as this First Supplemental Indenture.

     SECTION 5. References to the Indenture.

     On and after the date of this First Supplemental Indenture, each reference
in the Indenture to "this Indenture," "hereunder," "hereof" or "herein" shall
mean and be a reference to the Indenture as amended hereby unless the context
otherwise requires.

     SECTION 6. Governing Law.

     This First Supplemental Indenture shall be construed and enforced in
accordance with the laws of the State of New York.

     SECTION 7. Counterparts and Method of Execution.

     This First Supplemental Indenture may be executed in several counterparts,
all of which together shall constitute one agreement binding on all parties
hereto, notwithstanding that all the parties have not signed the same
counterpart.

     SECTION 8. Titles.

     Section titles are for descriptive purposes only and shall not control or
alter the meaning of this First Supplemental Indenture as set forth in the text.



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     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first above written.

                                   FINLAY FINE JEWELRY CORPORATION


                                   By: /s/ Bruce Zurlnick
                                       ---------------------------------------
                                       Name:  Bruce Zurlnick
                                       Title: Senior Vice President, Treasurer
                                                and Chief Financial Officer



                                   HSBC BANK USA,
                                      as Trustee


                                   By: /s/ Frank J. Godino
                                       ---------------------------------------
                                       Name:  Frank J. Godino
                                       Title: Vice President


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