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                     AMENDMENT NO. 3 AND LIMITED CONSENT


      THIS AMENDMENT NO. 3 AND LIMITED CONSENT (this  "Amendment") is made as of
September 11, 1997, by and between FINLAY FINE JEWELRY  CORPORATION,  a Delaware
corporation  with its principal  office at 521 Fifth Avenue,  New York, New York
10175 (the  "Consignee")  and RHODE  ISLAND  HOSPITAL  TRUST  NATIONAL  BANK,  a
national  banking  association  with its principal  office at One Hospital Trust
Plaza,  Providence,  Rhode  Island  02903  (the  "Consignor")  amending  certain
provisions  of the Gold  Consignment  Agreement  dated  as of June 15,  1995 (as
amended,  modified or supplemented and in effect, the "Consignment  Agreement"),
by and between the Consignee and the  Consignor.  Capitalized  terms used herein
which are defined in the Consignment Agreement and not defined herein shall have
the same meaning herein as therein.

      WHEREAS, the Consignee has requested that the Consignor agree to amend the
terms of the  Consignment  Agreement in certain  respects and consent to certain
actions to be taken by the Consignee, all as hereinafter more fully set forth;

      WHEREAS,  the  Consignor is willing to amend the terms of the  Consignment
Agreement in such respects and to grant such consent, upon the terms and subject
to the conditions contained herein; and

      NOW, THEREFORE, in consideration of the mutual agreements contained in the
Consignment  Agreement,  herein and other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
hereby agree as follows:

            ss.1.  Amendments  to  the  Consignment  Agreement.  Subject  to the
      satisfaction  of the  conditions  precedent set forth in ss.4 hereof,  the
      Consignment Agreement is hereby amended as follows:

                  (a) by deleting the definition of "Dollar Facility"  contained
      in Section 1 of the Consignment Agreement in its entirety and substituting
      in lieu thereof the following new definition:

                "Dollar Facility:  Collectively, the Loan Documents, as such
        term is defined in the Amended and Restated Credit Agreement dated as
       of September __, 1997, among the Consignee, the Parent, the Dollar Agent
       and the Lenders (as defined therein), as such facility has been or may be

                                                              


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            amended,  restated or otherwise  modified or as such facility may be
replaced,  increased, renewed,  supplemented,  refunded or refinanced by another
facility,  provided that such Dollar  Facility  shall be subject at all times to
the terms and provisions of the Intercreditor Agreement."

     (b) by deleting Section 8.3(b) of the Consignment Agreement in its entirety
and substituting in lieu thereof the following new text:

               "(b) permit the ratio of (i) the  aggregate  principal  amount of
          all Indebtedness for Borrowed Money of the Parent and its Subsidiaries
          on a consolidated basis as of any fiscal quarter ending date set forth
          in the table below to (ii)  Consolidated  EBITDA of the Parent and its
          Subsidiaries for the period of four consecutive fiscal quarters ending
          on such fiscal quarter ending date in such table,  to exceed the ratio
          set forth opposite such date in such table:


                    Fiscal Quarter
                    Ending Date:           Ratio:
                    10/31/97               6.30:1
                    01/31/98               4.30:1"

     ss.2.  Limited  Consent.  Subject  to the  satisfaction  of the  conditions
precedent  set  forth  inss.4  hereof,  the  Consignor  hereby  consents  to the
execution  and  delivery  by the  Consignee  of an Amended and  Restated  Credit
Agreement  dated as of September  __, 1997 (the  "Restated  Credit  Agreement"),
among the  Consignee,  the  Parent,  the Dollar  Agent and the  lenders  parties
thereto, such Restated Credit Agreement being in substantially the form attached
hereto as Exhibit A.
            
     ss.3.  Representations and Warranties.  The Consignee hereby represents and
warrants to the Consignor as follows:

            (a)  Representations  and Warranties in Consignment  Agreement.  The
            representations  and  warranties of the  Consignee  contained in the
            Consignment Agreement were true and correct in all material respects
            when  made and  continue  to be true  and  correct  in all  material
            respects  on the  date  hereof,  except  to the  extent  of  changes
            resulting  from  transactions   contemplated  or  permitted  by  the
            Consignment  Documents and this  Amendment and changes  occurring in
            the ordinary  course of business  that do not result in a Materially
            Adverse  Effect,  and to the extent  that such  representations  and
            warranties relate expressly to an earlier date.

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            (b)  Authority,  No  Conflicts,  Etc.  The  execution,  delivery and
            performance by the Consignee of this Amendment and the  consummation
            of the transactions contemplated hereby (i) are within the corporate
            power  of  the  Consignee  and  have  been  duly  authorized  by all
            necessary corporate action on the part of the Consignee, (ii) do not
            require any approval or consent of, or filing with, any governmental
            agency or  authority,  or any other person,  association  or entity,
            which bears on the  validity of this  Amendment  or the  Consignment
            Documents and which is required by law or the  regulation or rule of
            any agency or  authority,  or other  person,  association  or entity
            (except for the consent of the Dollar  Agent and each of the lenders
            under  the  Dollar   Facility,   which  consent  is  being  obtained
            concurrently  herewith  as required  by ss.4  hereof),  (iii) do not
            violate  any  provisions  of any  law,  rule  or  regulation  or any
            provision  of  any  order,  writ,  judgment,   injunction,   decree,
            determination  or awar presently in effect in which the Consignee is
            named in a manner which has or could  reasonably be expected to have
            a Materially  Adverse  Effect,  (iv) do not violate any provision of
            the Charter  Documents  of the  Consignee,  (v) do not result in any
            breach of or  constitute a default under any agreement or instrument
            to  which  the  Consignee  is a party  or by  which it or any of its
            properties is bound,  including  without  limitation  any indenture,
            loan or credit agreement,  lease, debt instrument or mortgage,  in a
            manner  which  has  or  could  reasonably  be  expected  to  have  a
            Materially  Adverse Effect, and (vi) do not result in or require the
            creation or imposition of any mortgage, deed of trust, pledge, lien,
            security  interest or other charge or encumbrance of any nature upon
            any of the assets or properties of the Consignee  except in favor of
            the Consignor pursuant to the Security Documents.

               (c)  Enforceability of Obligations.  This Amendment has been duly
          executed and  delivered by the Consignee  and  constitutes  the legal,
          valid and binding obligation of the Consignee, enforceable against the
          Consignee in accordance with its terms,  provided that (a) enforcement
          may be limited by applicable bankruptcy,  insolvency,  reorganization,
          moratorium or similar laws of general application affecting the rights
          and  remedies  of  creditors,  and (b)  enforcement  may be subject to
          general  principles of equity, and the availability of the remedies of
          specific  performance  and  injunctive  relief  may be  subject to the
          discretion of the court before which any proceedings for such remedies
          may be brought.

     ss.4. Condition to Effectiveness. The effectiveness of this Amendment shall
be  subject  to the  delivery  of the  following,  each  in form  and  substance
satisfactory to the Consignor:
            
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               (a) this  Amendment  executed  by each of the  Consignee  and the
          Consignor; and

               (b)  evidence of the consent of the Dollar  Agent and each of the
          lenders  under the Dollar  Facility to the  execution  and delivery of
          this Amendment by the Consignor and the Consignee.

     ss.5.  Ratifications,  etc. Except as expressly provided in this Amendment,
all of the terms  and  conditions  of the  Consignment  Agreement  and the other
Consignment  Documents shall remain in full force and effect.  All references in
the  Consignment  Agreement  or  any  related  agreement  or  instrument  to the
Consignment  Agreement shall  hereafter  refer to the  Consignment  Agreement as
amended  hereby.  The Consignee  confirms and agrees that the Obligations of the
Consignee  to the  Consignor  under the  Consignment  Documents,  as amended and
supplemented  hereby,  are secured by and are  entitled  to the  benefits of the
Security Documents.

     ss.6.  No Implied  Waiver.  Except as expressly  provided  herein,  nothing
contained  herein shall  constitute a waiver of, impair or otherwise  affect any
Obligations,  any  other  obligations  of  the  Consignee  or any  right  of the
Consignor consequent thereon.
           

     ss.7.  Governing  Law.  This  Amendment  is  intended  to take effect as an
instrument  under seal and shall be  construed  according to and governed by the
internal laws of the State of Rhode Island.
             

     ss.8.  Execution in  Counterparts.  This  Amendment  may be executed in any
number of  counterparts  and by each  party on a separate  counterpart,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
together shall  constitute one instrument.  In proving this Amendment,  it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
            


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      IN WITNESS  WHEREOF,  the parties have executed  this  Amendment as of the
date first above written.


                                    FINLAY FINE JEWELRY
                                      CORPORATION


                                    By: /s/ Barry D. Scheckner
                                        -------------------------------
                                        Name:  Barry D. Scheckner
                                        Title: Senior Vice President and 
                                        Chief Financial Officer   


                                    RHODE ISLAND HOSPITAL TRUST
                                      NATIONAL BANK


                                    By: /s/ Jerry Zimmerman  
                                        -------------------------------
                                        Name:  Jerry Zimmerman   
                                        Title: Vice President