<PAGE>


                                                                   EXHIBIT 10.11


                                                                  EXECUTION COPY

                          AMENDED AND RESTATED GUARANTY
                          -----------------------------

         This Amended and Restated GUARANTY (this "Guaranty"), dated as of
January 22, 2003, by and among the Guarantors identified as such on the
signature page hereof (each, a "Guarantor" and collectively, "Guarantors"), and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("GE Capital"),
individually and as agent (in such capacity, "Agent") for itself and the lenders
from time to time signatory to the Credit Agreement hereinafter defined
("Lenders").

                              W I T N E S S E T H:
                              --------------------

         WHEREAS, Finlay Fine Jewelry Corporation ("Borrower") is party to the
Amended and Restated Credit Agreement dated as of September 11, 1997, among the
Borrower, the Parent, the Lenders thereunder and Agent (as amended, the
"Existing Credit Agreement");

         WHEREAS, Finlay Jewelry, Inc., a Delaware corporation ("Finlay"), is
party to a Guarantee, dated as of May 26, 1993 (the "Finlay Guarantee"), in
favor of Agent;

         WHEREAS, Finlay Merchandising & Buying, Inc., a Delaware corporation
("Finlay Merchandising"), is party to a Guarantee, dated as of October 28, 1998
(the " Finlay Merchandising Guarantee"), in favor of Agent;

         WHEREAS, eFinlay, Inc., a Delaware corporation, ("eFinlay", together
with Finlay and Finlay Merchandising, the "Existing Guarantors") is party to a
Guarantee, dated as of September 29, 2000 (the "eFinlay Guarantee", together
with the Finlay Guarantee and the Finlay Merchandising Guaranty, the "Existing
Guarantees"), in favor of Agent;

         WHEREAS, the Borrower, the Parent, the Lenders and Agent have agreed to
amend and restate the Existing Credit Agreement on terms set forth in the Second
Amended and Restated Credit Agreement, dated as of the date hereof (including
all annexes, exhibits and schedules thereto, as from time to time amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), among the
Borrower, the Parent, the Lenders, Agent and Fleet Precious Metals, Inc., as
Documentation Agent, pursuant to which the Lenders have agreed to continue to
make secured revolving credit advances to the Borrower from time to time;

         WHEREAS, the Existing Guarantors, the Agent and the Lenders have agreed
to amend and restate the Existing Guarantees on the terms set forth in this
Guaranty;

         WHEREAS, it is the intent of the parties hereto that this Guaranty not
constitute a novation of the obligations and liabilities under the Existing
Guarantees or evidence payment of all or any of such obligations and
liabilities, that this Guaranty


<PAGE>


amend and restate in its entirety the Existing Guarantees, and that from and
after the effectiveness of this agreement the Existing Guarantees be of no
further force or effect except as to evidence the incurrence of the obligations
of the Guarantors thereunder and the representations and warranties made
thereunder; and

         WHEREAS, it is a condition precedent to the obligation of the Lenders
to continue to make their respective secured revolving credit advances to the
Borrower under the Credit Agreement that the Guarantors shall have executed and
delivered this Guaranty to the Agent;

         NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce Lenders to provide the Loans and other
financial accommodations under the Credit Agreement, it is agreed as follows:

1.   DEFINITIONS.
     -----------

         Capitalized terms used herein shall have the meanings assigned to them
in the Credit Agreement, unless otherwise defined herein.

         References to this "Guaranty" shall mean this Amended and Restated
Guaranty, including all amendments, modifications and supplements and any
annexes, exhibits and schedules to any of the foregoing, and shall refer to this
Amended and Restated Guaranty as the same may be in effect at the time such
reference becomes operative.

2.   THE GUARANTY.
     ------------

         2.1. Guaranty of Guaranteed Obligations of Borrower. Each Guarantor
hereby jointly and severally unconditionally guarantees to Agent and Lenders,
and their respective successors, endorsees, transferees and assigns, the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance of the Obligations of Borrower (hereinafter the "Guaranteed
Obligations"). Guarantors agree that this Guaranty is a guaranty of payment and
performance and not of collection, and that their obligations under this
Guaranty shall be primary, absolute and unconditional, irrespective of, and
unaffected by:

                  (a) the genuineness, validity, regularity, enforceability or
         any future amendment of, or change in this Guaranty, any other Loan
         Document or any other agreement, document or instrument to which any
         Credit Party and/or Guarantors are or may become a party;

                  (b) the absence of any action to enforce this Guaranty or any
         other Loan Document or the waiver or consent by Agent and/or Lenders
         with respect to any of the provisions thereof;


                                       2
<PAGE>

                  (c) the existence, value or condition of, or failure to
         perfect its Lien against, any Collateral for the Guaranteed Obligations
         or any action, or the absence of any action, by Agent in respect
         thereof (including, without limitation, the release of any such
         security); or

                  (d) the insolvency of any Credit Party; or

                  (e) any other action or circumstances which might otherwise
         constitute a legal or equitable discharge or defense of a surety or
         guarantor,

it being agreed by each Guarantor that its obligations under this Guaranty shall
not be discharged until all of the Guaranteed Obligations have been paid (or in
the case of Letter of Credit Obligations, cash collateralized in accordance with
the Credit Agreement) in full. Each Guarantor shall be regarded, and shall be in
the same position, as principal debtor with respect to the Guaranteed
Obligations. Each Guarantor agrees that any notice or directive given at any
time to Agent which is inconsistent with the waiver in the immediately preceding
sentence shall be null and void and may be ignored by Agent and Lenders, and, in
addition, may not be pleaded or introduced as evidence in any litigation
relating to this Guaranty for the reason that such pleading or introduction
would be at variance with the written terms of this Guaranty, unless Agent and
Lenders have specifically agreed otherwise in writing. It is agreed among each
Guarantor, Agent and Lenders that the foregoing waivers are of the essence of
the transaction contemplated by the Loan Documents and that, but for this
Guaranty and such waivers, Agent and Lenders would decline to enter into the
Credit Agreement.

         2.2. Demand by Agent or Lenders. In addition to the terms of the
Guaranty set forth in Section 2.1 hereof, and in no manner imposing any
limitation on such terms, it is expressly understood and agreed that, if, at any
time, the outstanding principal amount of the Guaranteed Obligations under the
Credit Agreement (including all accrued interest thereon) is declared to be
immediately due and payable, then Guarantors shall, without demand, pay to the
holders of the Guaranteed Obligations the entire outstanding Guaranteed
Obligations due and owing to such holders. Payment by Guarantors shall be made
to Agent in immediately available Federal funds to an account designated by
Agent or at the address set forth herein for the giving of notice to Agent or at
any other address that may be specified in writing from time to time by Agent,
and shall be credited and applied to the Guaranteed Obligations.

         2.3. Enforcement of Guaranty. In no event shall Agent have any
obligation (although it is entitled, at its option) to proceed against the
Borrower or any other Credit Party or any Collateral pledged to secure
Guaranteed Obligations before seeking satisfaction from any or all of the
Guarantors, and Agent may proceed, prior or subsequent to, or simultaneously
with, the enforcement of Agent's rights hereunder, to exercise any right or
remedy which it may have against any Collateral, as a result of any Lien it may
have as security for all or any portion of the Guaranteed Obligations.


                                       3
<PAGE>

         2.4. Waiver. In addition to the waivers contained in Section 2.1
hereof, to the maximum extent permitted under applicable law, Guarantors waive,
and agree that they shall not at any time insist upon, plead or in any manner
whatever claim or take the benefit or advantage of, any appraisal, valuation,
stay, extension, marshaling of assets or redemption laws, or exemption, whether
now or at any time hereafter in force, which may delay, prevent or otherwise
affect the performance by Guarantors of their Guaranteed Obligations under, or
the enforcement by Agent or Lenders of, this Guaranty. Guarantors hereby waive
diligence, presentment and demand (whether for non-payment or protest or of
acceptance, maturity, extension of time, change in nature or form of the
Guaranteed Obligations, acceptance of further security, release of further
security, composition or agreement arrived at as to the amount of, or the terms
of, the Guaranteed Obligations, notice of adverse change in the Borrower's
financial condition or any other fact which might increase the risk to
Guarantors) with respect to any of the Guaranteed Obligations or all other
demands whatsoever and to the maximum extent permitted under applicable law,
waive the benefit of all provisions of law which are or might be in conflict
with the terms of this Guaranty. Guarantors represent, warrant and jointly and
severally agree that, as of the date of this Guaranty, their obligations under
this Guaranty are not subject to any offsets or defenses against Agent or
Lenders or any Credit Party of any kind. Guarantors further jointly and
severally agree that their obligations under this Guaranty shall not be subject
to any counterclaims, offsets or defenses (other than a defense of payment or
performance) against Agent or any Lender or against any Credit Party of any kind
which may arise in the future.

         2.5. Benefit of Guaranty. The provisions of this Guaranty are for the
benefit of Agent and Lenders and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
Credit Party and Agent or Lenders, the obligations of any Credit Party under the
Loan Documents. In the event all or any part of the Guaranteed Obligations are
transferred, indorsed or assigned by Agent or any Lender to any Person or
Persons, any reference to "Agent" or "Lender" herein shall be deemed to refer
equally to such Person or Persons.

         2.6. Modification of Guaranteed Obligations, Etc. Each Guarantor hereby
acknowledges and agrees that Agent and Lenders may at any time or from time to
time, with or without the consent of, or (with respect to subclause (b) and (e)
herein, unless otherwise provided under the UCC) notice to, Guarantors or any of
them:

                  (a) change or extend the manner, place or terms of payment of,
         or renew or alter all or any portion of, the Guaranteed Obligations;

                  (b) take any action under or in respect of the Loan Documents
         in the exercise of any remedy, power or privilege contained therein or
         available to it at law, equity or otherwise, or waive or refrain from
         exercising any such remedies, powers or privileges;

                  (c) amend or modify, in any manner whatsoever, the Loan
         Documents;


                                       4
<PAGE>

                  (d) extend or waive the time for any Credit Party's
         performance of, or compliance with, any term, covenant or agreement on
         its part to be performed or observed under the Loan Documents, or waive
         such performance or compliance or consent to a failure of, or departure
         from, such performance or compliance;

                  (e) take and hold Collateral for the payment of the Guaranteed
         Obligations guaranteed hereby or sell, exchange, release, dispose of,
         or otherwise deal with, any property pledged, mortgaged or conveyed, or
         in which Agent or Lenders have been granted a Lien, to secure any
         Obligations;

                  (f) release anyone who may be liable in any manner for the
         payment of any amounts owed by Guarantors or any Credit Party to Agent
         or any Lender;

                  (g) modify or terminate the terms of any intercreditor or
         subordination agreement pursuant to which claims of other creditors of
         any Guarantor or any Credit Party are subordinated to the claims of
         Agent and Lenders; and/or

                  (h) apply any sums by whomever paid or however realized to any
         amounts owing by any Guarantor or any Credit Party to Agent or any
         Lender in such manner as Agent or any Lender shall determine in its
         discretion;

and Agent and Lenders shall not incur any liability to Guarantors as a result
thereof, and no such action shall impair or release the Guaranteed Obligations
of Guarantors or any of them under this Guaranty.

         2.7. Reinstatement. This Guaranty shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Credit Party or any Guarantor for liquidation or reorganization, should any
Credit Party or any Guarantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of such Credit Party's or such Guarantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Guaranteed Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by Agent or any Lender, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Guaranteed Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

         2.8. Deferral of Subrogation, Etc. Notwithstanding anything to the
contrary in this Guaranty, or in any other Loan Document, each Guarantor hereby:


                                       5
<PAGE>

                  (a) expressly and irrevocably subordinates, on behalf of
         itself and its successors and assigns (including any surety) to and
         until all of the Guaranteed Obligations have been paid (or in the case
         of Letters of Credit Obligations, cash collateralized in accordance
         with the Credit Agreement) in full, any and all rights at law or in
         equity to subrogation, to reimbursement, to exoneration, to
         contribution, to indemnification, to set off or to any other rights
         that could accrue to a surety against a principal, to a guarantor
         against a principal, to a guarantor against a maker or obligor, to an
         accommodation party against the party accommodated, to a holder or
         transferee against a maker, or to the holder of any claim against any
         Person, and which such Guarantor may have or hereafter acquire against
         any Credit Party in connection with or as a result of such Guarantor's
         execution, delivery and/or performance of this Guaranty, or any other
         documents to which such Guarantor is a party or otherwise; and

                  (b) acknowledges and agrees (i) that this subordination is
         intended to benefit Agent and Lenders and shall not limit or otherwise
         affect any Guarantor's liability hereunder or the enforceability of
         this Guaranty, and (ii) that Agent, Lenders and their respective
         successors and assigns are intended as the sole third party
         beneficiaries of the waivers and agreements set forth in this Section
         2.8 and their rights under this Section 2.8 shall survive payment in
         full of the Guaranteed Obligations.

         2.9. Election of Remedies. If Agent may, under applicable law, proceed
to realize benefits under any of the Loan Documents giving Agent and Lenders a
Lien upon any Collateral owned by any Credit Party, either by judicial
foreclosure or by non-judicial sale or enforcement, Agent may, at its sole
option, determine which of such remedies or rights it may pursue without
affecting any of such rights and remedies under this Guaranty. If, in the
exercise of any of its rights and remedies, Agent shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against
any Credit Party, whether because of any applicable laws pertaining to "election
of remedies" or the like, Guarantors hereby consent to such action by Agent and
waive any claim based upon such action, even if such action by Agent shall
result in a full or partial loss of any rights of subrogation which Guarantors
might otherwise have had but for such action by Agent. Any election of remedies
which results in the denial or impairment of the right of Agent to seek a
deficiency judgment against any Credit Party shall not impair each Guarantor's
obligation to pay the full amount of the Guaranteed Obligations. In the event
Agent shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent may bid all or less than the
amount of the Guaranteed Obligations and the amount of such bid need not be paid
by Agent but shall be credited against the Guaranteed Obligations. To the
maximum extent permitted under the UCC or other applicable law, each Guarantor
agrees that, the amount of the successful bid at any such sale shall be
conclusively deemed to be the fair market value of the collateral and the
difference between such bid amount and the remaining balance of the Guaranteed
Obligations shall be conclusively deemed to be the amount of the Guaranteed
Obligations guaranteed under this Guaranty, notwithstanding that any present


                                       6
<PAGE>

or future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Agent and Lenders might otherwise be
entitled but for such bidding at any such sale.

         2.10. Funds Transfers. If any Guarantor shall engage in any transaction
as a result of which the Borrower is required to make a mandatory prepayment
with respect to the Guaranteed Obligations under the terms of the Credit
Agreement (including any issuance or sale of such Guarantor's Stock or any sale
of its assets), such Guarantor shall distribute to, or make a contribution to
the capital of, one or more of the Borrowers an amount equal to the mandatory
prepayment required under the terms of the Credit Agreement.

3.   DELIVERIES.
     ----------

         In a form reasonably satisfactory to Agent, Guarantors shall deliver to
Agent (with sufficient copies for each Lender), concurrently with the execution
of this Guaranty and the Credit Agreement, the Loan Documents and other
instruments, certificates and documents as are required to be delivered by
Guarantors to Agent under the Credit Agreement.

4.   REPRESENTATIONS AND WARRANTIES.
     ------------------------------

         To induce Lenders to continue to make the Loans and incur Letter of
Credit Obligations under the Credit Agreement, Guarantors jointly and severally
make the representations and warranties as to each Guarantor contained in the
Credit Agreement, each of which is incorporated herein by reference, and the
following representations and warranties to Agent and each Lender, each and all
of which shall survive the execution and delivery of this Guaranty:

         4.1. Corporate Existence; Compliance with Law. Each Guarantor (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) is duly qualified to do business and
is in good standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification;
(iii) has the requisite corporate power and authority and the legal right to
own, pledge, mortgage and operate its properties, to lease the property it
operates under lease, and to conduct its business as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all material filings with, and has given all notices
to, all Governmental Authorities having jurisdiction, to the extent required for
such ownership, operation and conduct; (v) is in compliance with its charter and
by-laws; and (vi) is in compliance with all applicable provisions of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.


                                       7
<PAGE>

         4.2. Executive Offices. Each Guarantor's executive office and principal
place of business are as set forth in Schedule III-A, Schedule III-B, Schedule
III-C, and Schedule III-D of the Security Agreement.

         4.3. Corporate Power; Authorization; Enforceable Guaranteed
Obligations. The execution, delivery and performance of this Guaranty and all
other Loan Documents and all instruments and documents to be delivered by each
Guarantor hereunder and under the Credit Agreement are within such Guarantor's
corporate power, have been duly authorized by all necessary or proper corporate
action, including the consent of stockholders where required, are not in
contravention of any provision of such Guarantor's charter or by-laws, do not
violate any law or regulation, or any order or decree of any Governmental
Authority, do not conflict with or result in the breach of, or constitute a
default under, or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which any Guarantor is a party or by which any Guarantor or any of
its property is bound, do not result in the creation or imposition of any Lien
upon any of the property of any Guarantor, other than those in favor of Agent,
for itself and the benefit of Lenders, and the same do not require the consent
or approval of any Governmental Authority or any other Person except those
referred to in Section 6.1(iv) of the Credit Agreement, all of which have been
duly obtained, made or complied with prior to the Closing Date. On or prior to
the Closing Date, this Guaranty and each of the Loan Documents to which any
Guarantor is a party shall have been duly executed and delivered for the benefit
of or on behalf of such Guarantor, and each shall then constitute a legal, valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

5.   FURTHER ASSURANCES.
     ------------------

         Each Guarantor agrees, upon the written request of Agent or any Lender,
to execute and deliver to Agent or such Lender, from time to time, any
additional instruments or documents reasonably considered necessary by Agent or
such Lender to cause this Guaranty to be, become or remain valid and effective
in accordance with its terms.

6.   PAYMENTS FREE AND CLEAR OF TAXES.
     --------------------------------

         (a) All payments required to be made by each Guarantor hereunder shall
be made to Agent and Lenders free and clear of, and without deduction for, any
and all present and future Taxes. If any Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6) Agent


                                       8
<PAGE>

or Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (b) such Guarantor shall make such
deductions, and (c) such Guarantor shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, each applicable
Guarantor shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof. Each Guarantor shall jointly and severally indemnify
and, within ten (10) days of demand therefor, pay Agent and each Lender for the
full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 6) paid by Agent or such Lender, as appropriate, and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted.

         (b) Notwithstanding anything to the contrary contained herein, this
Section 6 is expressly made subject to Section 2.22 of the Credit Agreement. In
the event of any conflict between this Section 6 and Section 2.22 of the Credit
Agreement, Section 2.22 of the Credit Agreement shall govern and control.

7.   OTHER TERMS.
     -----------

         7.1. Entire Agreement. This Guaranty, together with the other Loan
Documents, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements relating to a
guaranty of the loans and advances under the Loan Documents and/or the
Guaranteed Obligations.

         7.2. Headings. The headings in this Guaranty are for convenience of
reference only and are not part of the substance of this Guaranty.

         7.3. Severability. Whenever possible, each provision of this Guaranty
shall be interpreted in such a manner to be effective and valid under applicable
law, but if any provision of this Guaranty shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Guaranty.

         7.4. Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by any other party, or whenever any
of the parties desires to give or serve upon another any such communication with
respect to this Guaranty, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be addressed to
the party to be notified as follows:

              (a)     If to Agent, at:

                      General Electric Capital Corporation
                      800 Connecticut Avenue, Two North



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<PAGE>


                      Norwalk, CT  06854
                      Attention: Account Manager - Finlay
                      Telecopier: (203) 852-3640

                      with copies to:

                           General Electric Capital Corporation
                           201 High Ridge Road
                           Stamford, Connecticut 06927
                           Attention: Commercial Finance Legal Counsel
                           Telecopier: (203) 316-7889

                           -and-


                           Weil, Gotshal & Manges LLP
                           767  Fifth Avenue
                           New York, New York 10153
                           Attention: Ted S. Waksman, Esq.
                           Telecopier: (212) 310-8007

              (b)     If to any Lender, at the address of such Lender specified
in the Credit Agreement.

              (c)     If to any Guarantor, at:

                           Finlay Fine Jewelry Corporation
                           529 Fifth Avenue, 5th Flr.
                           New York, New York 10017
                           Attention: Bruce Zurlnick
                           Telecopier: (212) 808-2946

                      With copies to:

                           Finlay Enterprises, Inc.
                           529 Fifth Avenue, 6th Flr.
                           New York, New York 10017
                           Attention:  Bonni G. Davis, Esq.
                           Telecopier: (212) 808-0349

                      -and-

                           Blank Rome LLP
                           405 Lexington Avenue
                           New York, New York 10174
                           Attention: Richard DiStefano, Esq.
                           Telecopier: (212) 885-5001



                                       10
<PAGE>

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been validly served, given or delivered (a) if by registered or
certified mail, return receipt requested, four (4) Business Days following the
date when sent, (b) if by telex, when sent and answerback received, (c) if by
overnight courier, when received, (d) if by telecopier, when sent, or (e) when
receipted for, if personally delivered or delivered by messenger.

         7.5. Successors and Assigns. This Guaranty and all obligations of
Guarantors hereunder shall be binding upon the successors and assigns of each
Guarantor (including a debtor-in-possession on behalf of such Guarantor) and
shall, together with the rights and remedies of Agent, for itself and for the
benefit of Lenders, hereunder, inure to the benefit of Agent and Lenders, all
future holders of any instrument evidencing any of the Obligations and their
respective successors and assigns. No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Obligations or any portion thereof or interest therein
shall in any manner affect the rights of Agent and Lenders hereunder. Guarantors
may not assign, sell, hypothecate or otherwise transfer any interest in or
obligation under this Guaranty.

         7.6. No Waiver; Cumulative Remedies; Amendments. Neither Agent nor any
Lender shall by any act, delay, omission or otherwise be deemed to have waived
any of its rights or remedies hereunder, and no waiver shall be valid unless in
writing, signed by Agent and then only to the extent therein set forth. A waiver
by Agent, for itself and the ratable benefit of Lenders, of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have had on any future occasion. No failure
to exercise nor any delay in exercising on the part of Agent or any Lender, any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. None of the terms or provisions of this
Guaranty may be waived, altered, modified, supplemented or amended except by an
instrument in writing, duly executed by Agent and Guarantors.

         7.7. Termination. This Guaranty is a continuing guaranty and shall
remain in full force and effect until all of the Guaranteed Obligations have
been paid (or in the case of Letter of Credit Obligations, cash collateralized
in accordance with the Credit Agreement) in full. Upon payment and performance
in full of the Guaranteed Obligations (and if applicable, cash collateralization
of the Letter of Credit Obligations), Agent shall deliver to Guarantors such
documents as Guarantors may reasonably request to evidence such termination.


                                       11
<PAGE>

         7.8. Counterparts. This Guaranty may be executed in any number of
counterparts, each of which shall collectively and separately constitute one and
the same agreement.

         7.9. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.

         EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN
ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. EACH GUARANTOR HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,
NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN OR AMONG GUARANTORS, AGENT OR ANY LENDER PERTAINING TO THIS
GUARANTY OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OF
THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT AND GUARANTORS ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
NEW YORK COUNTY, AND, PROVIDED, FURTHER, THAT NOTHING IN THIS GUARANTY SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE GUARANTEED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF AGENT, FOR THE BENEFIT OF AGENT AND LENDERS. EACH GUARANTOR
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH GUARANTOR HEREBY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GUARANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
GUARANTOR AT THE ADDRESS SET FORTH IN SECTION 7.4 HEREOF AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.




                                       12
<PAGE>

         7.10. WAIVER OF JURY TRIAL.

         BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), EACH GUARANTOR AND AGENT DESIRES THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OR ARBITRATION, EACH GUARANTOR AND AGENT WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN
CONNECTION WITH THIS GUARANTY AND THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO.

         7.11. Limitation on Guaranteed Obligations. Notwithstanding any
provision herein contained to the contrary, each Guarantor's liability hereunder
shall be limited to an amount not to exceed as of any date of determination the
greater of:

               (a) the net amount of all Loans and other extensions of credit
     (including Letters of Credit) advanced under the Credit Agreement and
     directly or indirectly re-loaned or otherwise transferred to, or incurred
     for the benefit of, such Guarantor, plus interest thereon at the applicable
     rate specified in the Credit Agreement; or

               (b) the amount which could be claimed by the Agent and Lenders
     from such Guarantor under this Guaranty without rendering such claim
     voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
     Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
     Fraudulent Conveyance Act or similar statute or common law after taking
     into account, among other things, such Guarantor's right of contribution
     and indemnification from each other Guarantor under Section 7.12.

         7.12. Contribution with Respect to Guaranteed Obligations.

               (a) To the extent that any Guarantor shall make a payment under
     this Guaranty of all or any of the Guaranteed Obligations (a "Guarantor
     Payment") which, taking into account all other Guarantor Payments then
     previously or concurrently made by the other Guarantors, exceeds the amount
     which such Guarantor would otherwise have paid if each Guarantor had paid
     the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in
     the same proportion that such Guarantor's "Allocable Amount" (as defined
     below) (in effect immediately prior to such Guarantor Payment) bore to the
     aggregate


                                       13
<PAGE>

     Allocable Amounts of all of Guarantors in effect immediately prior to the
     making of such Guarantor Payment, then, following indefeasible payment in
     full in cash of the Obligations and termination of the Revolving
     Commitments, such Guarantor shall be entitled to receive contribution and
     indemnification payments from, and be reimbursed by, each of the other
     Guarantors for the amount of such excess, pro rata based upon their
     respective Allocable Amounts in effect immediately prior to such Guarantor
     Payment.

               (b) As of any date of determination, the "Allocable Amount" of
     any Guarantor shall be equal to the maximum amount of the claim which could
     then be recovered from such Guarantor under this Guaranty without rendering
     such claim voidable or avoidable under Section 548 of Chapter 11 of the
     Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
     Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

               (c) This Section 7.12 is intended only to define the relative
     rights of Guarantors and nothing set forth in this Section 7.12 is intended
     to or shall impair the obligations of Guarantors, jointly and severally, to
     pay any amounts as and when the same shall become due and payable in
     accordance with the terms of this Guaranty.

               (d) The rights of the parties under this Section 7.12 shall be
     exercisable upon the full and indefeasible payment of the Guaranteed
     Obligations and the termination of the Credit Agreement and the other Loan
     Documents.

               (e) The parties hereto acknowledge that the rights of
     contribution and indemnification hereunder shall constitute assets of any
     Guarantor to which such contribution and indemnification is owing.

8.   SECURITY.
     --------

         To secure payment of each Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, each Guarantor has entered
into a Security Agreement pursuant to which each Guarantor has granted to Agent
for the benefit of Lenders a security interest in substantially all of its
personal property and the Borrower has entered into a Pledge Agreement pursuant
to which the Borrower has pledged all of the Stock of each of its Subsidiaries
to Agent for the benefit of Lenders.

9.   CREDIT AGREEMENT.
     ----------------

         Each Guarantor agrees to perform, comply with and be bound by the
covenants contained in Sections 8 and 9 of the Credit Agreement (which
provisions are incorporated herein by reference), to the extent applicable to
Subsidiaries of the Borrower, as if each Guarantor were a Credit Party signatory
to the Credit Agreement.



                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Guaranty as of the date first above written.

                                        Guarantors:

                                        FINLAY JEWELRY, INC.


                                        By: /s/ Bruce E. Zurlnick
                                            ------------------------------------
                                        Name: Bruce E. Zurlnick
                                              ----------------------------------
                                        Title: Sr. V.P., Treas. & CFO
                                               ---------------------------------


                                        FINLAY MERCHANDISING & BUYING, INC.

                                        By: /s/ Bonni G. Davis
                                            ------------------------------------
                                        Name: Bonni G. Davis
                                              ----------------------------------
                                        Title: V.P., Sec., & General Counsel
                                               ---------------------------------


                                        eFINLAY, INC.

                                        By: /s/ Bonni G. Davis
                                            ------------------------------------
                                        Name: Bonni G. Davis
                                              ----------------------------------
                                        Title: V.P., Sec., & General Counsel
                                               ---------------------------------






                [Signature Page to Amended and Restated Guaranty]

<PAGE>


GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent


By: /s/ Charles Chiodo
    ----------------------------------
Name: Charles Chiodo
Title: Duly Authorized Signatory



















                [Signature Page to Amended and Restated Guaranty]