We write to set forth our agreement

                                                            As of June 16, 2005

Ms. Joyce Manning Magrini

122 Clarewill Avenue

Upper Montclair, NJ 07043

Dear Ms. Magrini:

         We write to set forth our agreement with respect to your continued

employment by Finlay Fine Jewelry Corporation (the "Company").

         1.       The Company hereby agrees to continue to employ you, and you

agree to continue to be employed by the Company, on the terms and conditions

hereinafter set forth. You will serve as Executive Vice President -

Administration of the Company and you will hold such other offices in the

Company and its parent company, subsidiaries and divisions to which you may from

time to time be appointed or elected. You agree to serve the Company faithfully

and to the best of your ability, to promote the Company's best interests and to

devote your full working time, energy and skills to the Company's business.

         2.       (a) As full compensation for your services hereunder

(including services, if any, as an officer of the Company and an officer and

director of its subsidiaries and divisions), you shall receive base salary

("Base Salary") at the rate of $325,000 per annum, payable in equal monthly

installments and an annual bonus payable on or about April 25th during each year

of the term hereof based on the attainment of financial goals as set by the

Company's Compensation Committee ("Annual Bonus"), less all applicable

withholding taxes and lawful deductions. The Company shall include you in any

employee benefit plans and other fringe benefit programs that it maintains for

senior executives. The Company shall reimburse you for your ordinary and

necessary business expenses incurred in the course of your performance of

services hereunder, subject to submission of adequate substantiation thereof and

to conformance with the Company's regular policies from time to time in effect

with respect to reimbursement of expenses.

                  (b) Nothing in this Agreement shall prevent the Company from

increasing the compensation to be paid to you if the Company shall determine it

advisable to do so in order to compensate you fairly for services rendered.

Ms. Joyce Manning Magrini

Page 2

As of June 16, 2005

                  (c) Notwithstanding anything herein to the contrary, in the

event that you are employed by the Company on June 30, 2008, you shall receive,

with the Company's regular July 2008 payroll cycle, in addition to your Base

Salary and Annual Bonus, a special bonus equal to 50% of your then current Base

Salary.

         3.       (a) The term of your employment hereunder shall continue until

the earliest of the following dates: (a) June 30, 2008 (b) the day on which you

die; (c) such date as the Company terminates your employment for "good cause";

(d) if you become "Totally Disabled" or (e) the day on which you voluntarily

resign. For purposes of this Agreement, you shall be To