AMENDMENT ONE TO
                  COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT


         THIS AMENDMENT ONE TO COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
("Amendment"), dated as of September 15, 1997, is entered into among Debtors,
Foothill, Fleet, the Representatives signatory hereto (on behalf of the
Claimants they represent), and Collateral Agent. For good and valuable
consideration, the receipt and adequacy of which hereby is acknowledged by each
party hereto, the parties hereto hereby agree as follows:

                                    RECITALS

A. On or about May 14, 1993, Debtors, Foothill, Fleet, various Representatives,
and other parties entered into the Collateral Agency and Intercreditor
Agreement referred to in Paragraph 1.a. below of this Amendment.

B. Since May 14, 1993, the IRB Claims have been satisfied in full.

C. Since May 14, 1993, the Gold Claims of the Gold Claimants other than Fleet
have been satisfied in full so that Fleet is the only remaining Gold Claimant.

D. Concurrently herewith, T&C has duly authorized and proposes to issue
$13,254,000 of 15% senior secured notes due February 15, 1998 (herein the "New
Senior Secured Notes"), pursuant to an Indenture dated as of September 15, 1997
(the "New Indenture"), naming State Street Bank and Trust Company as trustee
(the "New Trustee"), payment of which New Senior Secured Notes will be
guaranteed by the other Debtors.

E. The proceeds of issuance of the New Senior Secured Notes will be used to
retire in full the outstanding obligations of T&C, guaranteed by the other
Debtors, with respect to the remaining $13,254,000 of 11-1/2% senior secured
notes due September 15, 1997 (herein the "Old Senior Secured Notes"), issued
pursuant to an Indenture dated as of May 14, 1993, between Debtors and Shawmut
Bank, N.A., as trustee.

F. The New Senior Secured Notes are intended to refinance and refund the
indebtedness evidenced by the Old Senior Secured Notes. This Amendment is
intended to substitute the New Senior Secured Notes in place and in stead of the
Old Senior Secured Notes, so that the claims of the holders of the New Senior
Secured Notes will be entitled to the same liens and priorities as were the
claims of the holders of the Old Senior Secured Notes, and no less and no more.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged by each party hereto, the parties
hereto hereby agree as follows:

                                       -1-

<PAGE>
         
         1.       Definitions.

                  a. Terms used herein and not otherwise defined herein shall
have the meaning ascribed thereto in that certain Collateral Agency and
Intercreditor Agreement dated as of May 14, 1993, among Town & Country
Corporation, a Massachusetts corporation, as one of the Debtors, Town & Country
Fine Jewelry Group, Inc., a Massachusetts corporation, as one of the Debtors,
Gold Lance, Inc., a Massachusetts corporation, as one of the Debtors, L.G.
Balfour Company, Inc., a Delaware corporation, as one of the Debtors, Foothill
Capital Corporation, a California corporation, as a Claimant, Fleet Precious
Metals Inc., as a Claimant, Rhode Island Hospital Trust National Bank, as a
Claimant, Republic National Bank, as a Claimant, ABN AMRO Bank N.V., as a
Claimant, Chemical Bank, as a Claimant, Foothill Capital Corporation, a
California corporation, as the Foothill Representative, Fleet Precious Metals
Inc., as the Gold Claimants' Representative, Chemical Bank, as the IRB
Claimants' Representative, Shawmut Bank, N.A., as the Senior Note Claimants'
Representative, Bankers Trust Company, as the Senior Subordinated Note
Claimants' Representative, and Foothill Capital Corporation, a California
corporation, as Collateral Agent, as amended by this Amendment.

                  b. The following definitions contained in Section 1 of the
Agreement are hereby amended and restated in their entirety as follows:

                           "Debtors" means T&C, Town & Country Fine Jewelry
                  Group, Inc., a Massachusetts corporation, GL, Inc., a
                  Massachusetts corporation, formerly known as Gold Lance, Inc.,
                  a Massachusetts corporation, and L.G. Balfour Company, Inc., a
                  Delaware corporation.

                           "Foreign Subsidiary Stock" means sixty five percent
                  (65%) of the shares of capital stock, rights to acquire same,
                  or certificates evidencing same, of any one or more Foreign
                  Subsidiaries, now or hereafter beneficially owned by any
                  Debtor or Debtors. In addition, "Foreign Subsidiary Stock"
                  shall include any right, title, and interest of any Debtor in
                  and to any identifiable proceeds of any distribution made by
                  any Foreign Subsidiary to such Debtor, including, without
                  limitation, any distribution of the proceeds of any sale or
                  disposition by any Foreign Subsidiary of all or any part of
                  its assets.

                           "Little Switzerland Stock" means the shares of common
                  stock of Little Switzerland, Inc. transferred on or prior to
                  the date hereof by one or more of Debtors into a trust for the
                  benefit of Town & Country Corporation and the holders of its
                  exchangeable preferred stock. For the avoidance of doubt, the
                  Little Switzerland Stock shall not include the Company-Owned
                  Little Switzerland Stock.

                                      -2-

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                           "Major Disposition" means the sale or other
                  disposition by one or more of Debtors, in a single transaction
                  or a related series of transactions, of Collateral with a fair
                  value in excess of ten million dollars, not in the ordinary
                  course of business; except that: (a) Bulk returns or bulk
                  sales of Precious Metals at fair value or for ounce-for-ounce
                  credit against outstanding Gold Claims shall not constitute
                  Major Dispositions; and (b) sales or other dispositions of the
                  Zale Bankruptcy Claim and/or the Solomon Brothers Stock and/or
                  the Foreign Subsidiary Stock, and/or all or any portion or
                  part of any thereof, and/or any Proceeds derived from any
                  thereof, made in accordance with the requirements of the
                  indentures that are part of the Underlying Transactional
                  Documents relating to the Senior Secured Note Claims and/or
                  the Senior Subordinated Note Claims shall not constitute Major
                  Dispositions.

                           "Other Collateral" means any Collateral that does not
                  fall within any of the fourteen other Categories of
                  Collateral. "Other Collateral" shall include, without
                  limitation, "proceeds" (as defined in the UCC) of Collateral,
                  whether or not received by any Debtor, if any, that do not
                  fall within any of the Primary Categories of Collateral or
                  within the definition of "Proceeds." The Other Collateral
                  shall not include any of the Little Switzerland Stock or any
                  "proceeds" (as defined in the UCC) thereof, or any of the IRB
                  Collateral or any "proceeds" (as defined in the UCC) thereof.
                  The Other Collateral shall include any Company-Owned Little
                  Switzerland Stock.

                           "Senior Note Claimants' Representative" means State
                  Street Bank and Trust Company, as trustee pursuant to the
                  Indenture dated as of September 15, 1997, entered into by
                  Debtors and such trustee as one of the Senior Note
                  Transactional Documents,or any successor Representative
                  designated by the Senior Note Claimants to Collateral Agent,
                  with a copy of any such successor designation notice to be
                  sent to Debtors and to the Representatives.

                  c. The following definitions are hereby added to Section 1 of
the Agreement:

                           "Company-Owned Little Switzerland Stock" means all
                  shares of stock of Little Switzerland, Inc., a Delaware
                  corporation, owned by any Debtor that have not been
                  transferred on or prior to the date hereof, by any Debtor
                  and/or any Affiliate of any Debtor, into a trust for the
                  benefit of T&C and the holders of its exchangeable preferred
                  stock.

                           "Fleet" means Fleet Precious Metals Inc.

                           "T&C" means Town & Country Corporation, a
                  Massachusetts corporation.

                                       -3-

<PAGE>

         2. New Schedules 3, 5, and 8. Schedules 3, 5, and 8 to the Agreement
hereby are amended and restated in their entirety to read as attached hereto.

         3. New Senior Note Claimants' Representative; Senior Secured Notes. (a)
From and after the date that this Amendment becomes effective, State Street Bank
and Trust Company shall be substituted in place and in stead of Shawmut Bank,
N.A. and its successors as the Senior Note Claimants' Representative, for all
purposes of the Agreement and each and every other Underlying Transactional
Document or Security Document that refers or relates to the Senior Note
Claimants' Representative, subject to the provisions of the Agreement with
regard to future succession or replacement of such Representative.

                  (b) From and after the date that this Amendment becomes
effective, the holders of the New Senior Secured Notes shall be substituted in
place and in stead of the holders of the Old Senior Secured Notes (and their
successors) as the Senior Note Claimants, and the New Senior Secured Notes shall
be substituted in place and in stead of the Old Senior Secured Notes, for all
purposes of the Agreement and each and every other Underlying Transactional
Document or Security Document that refers to or relates to the Senior Notes, Old
Senior Secured Notes, New Senior Secured Notes, Senior Note Claims or Senior
Note Claimants. From and after the date that this Amendment becomes effective,
the definition in the Agreement of "Senior Note Obligations" shall refer to the
Obligations of the Debtors with respect to the New Senior Secured Notes instead
of the Obligations of the Debtors with respect to the Old Senior Secured Notes,
and any reference in any Security Document to the "Obligations" shall include
the "Senior Note Obligations" which include the Obligations of the Debtors with
respect to the New Senior Secured Notes.

         4. Effect of this Amendment on the Agreement. This Amendment amends the
Agreement only to the extent expressly stated herein. As so amended, the
Agreement shall continue in full force and effect.

         5. Governing Law. This Amendment is governed by and shall be construed
in accordance with the laws of the State of New York.

         6. Counterpart/Fax Execution. This Amendment may be executed in any
number of counterparts, and/or by facsimile (followed promptly by delivery of
original signatures), all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart.

         7. References to Intercreditor Agreement in Security Documents. (a) The
Claimants and each party hereto agree that all references in the Security
Documents to the Intercreditor Agreement shall be deemed to mean the Agreement
amended by this Amendment, as so amended, as as it may from time to time be
further amended, modified, supplemented, or restated in writing in accordance
with the Agreement.

                                       -4-

<PAGE>

                  (b) Each Debtor hereby acknowledges, agrees, ratifies, and
reaffirms that each and all of the security interests and/or liens granted to
Collateral Agent, on behalf of the Claimants, under each and every Security
Document, shall secure all of the Obligations, including, without limitation,
the Senior Note Obligations, as such term is modified and clarified by this
Amendment, including, without limitation, Section 3(b) of this Amendment.

         8. Certain Consents and Waivers. (a) Each Claimant, each
Representative, and Collateral Agent each consents to the replacement of the Old
Senior Secured Notes with the New Senior Secured Notes, the redesignation of the
Senior Note Claimant's Representative provided for in this Amendment, and the
redesignation of the Senior Note Transactional Documents provided for in this
Amendment (collectively, in this Amendment, referred to as the "Refinancing").

                  (b) Each Gold Claimant, each Senior Note Claimant, each of
their respective Representatives, and the Senior Subordinated Note Claimants'
Representative (acting in its capacity as the indenture trustee for the Senior
Subordinated Note Claimants, and upon the instructions of holders of not less
than a majority in amount of the Senior Subordinated Note Claims evidenced by
the notes issued pursuant to the indenture listed as Item # 1 on Schedule 9
attached to the Agreement), each waives any defaults under the Gold
Transactional Documents, the Senior Note Transactional Documents, or the Senior
Subordinated Note Transactional Documents, as the case may be, arising from or
occurring due to the Refinancing.

                  (c) In addition to the foregoing, Foothill's consents granted
to Debtors with respect to certain aspects of the Refinancing are set forth in
the document listed as Item # 4 on Schedule 3 attached hereto.

                  (d) Each Gold Claimant, each Senior Note Claimant, each of
their respective Representatives, and the Senior Subordinated Note Claimants'
Representative (acting in its capacity as the indenture trustee for the Senior
Subordinated Note Claimants, and upon the instructions of holders of not less
than a majority in amount of the Senior Subordinated Note Claims evidenced by
the notes issued pursuant to the indenture listed as Item # 1 on Schedule 9
attached to the Agreement), each consents to the redemption of the New Senior
Secured Notes pursuant to Sections 3.1 and/or 3.2 of the New Indenture, and
agrees that any actions taken by any Debtor and/or any holder of the New Senior
Secured Notes and/or the New Trustee contemplated by Sections 3.1 and/or 3.2 of
the New Indenture and in accordance therewith (including, without limitation,
the disposition by any Debtor of any asset the proceeds of which are to be
distributed to the holders of the New Senior Secured Notes in accordance with
such Sections 3.1 and/or 3.2) shall not cause an Event of Default under their
respective Underlying Transactional Documents.

                  (e) In addition to the foregoing, Foothill's consents granted
to Debtor, and Foothill's agreements with Debtor, with respect to certain
aspects of the redemption of the

                                       -5-

<PAGE>

New Senior Secured Notes pursuant to Sections 3.1 and/or 3.2 of the New
Indenture, and any covenants of Debtors in favor of Foothill with respect
thereto or pertinent thereto, are set forth, collectively, in the Underlying
Transactional Documents between Foothill and Debtors listed as Items #s 1, 2, 3,
and 4 on Schedule 3 attached hereto.

         9. Authorization and Enforceability. Each party hereto hereby
represents and warrants to the other parties hereto as follows: (a) The
execution, delivery, and performance by such party of this Amendment have been
duly authorized by all necessary corporate and other action and do not and will
not require any registration with, consent or approval of, or notice to or
action by, any Person (except for such as have been obtained) in order to be
effective and enforceable; and (b) The Agreement, as amended by this Amendment,
constitutes the legal, valid, and binding obligation of such party, enforceable
against such party in accordance with its terms.

{balance of page intentionally omitted}

                                       -6-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have entered into this amendment
as of the date first set forth above, intending to be legally bound hereby.

                          Town & Country Corporation, a Massachusetts
                          corporation, as one of the Debtors
                        
                          By_____________________________________
                        
                          Title____________________________________
                        
                        
                          Town & Country Fine Jewelry Group, Inc., a
                          Massachusetts corporation, as one of the Debtors
                        
                          By_____________________________________
                        
                          Title____________________________________
                        
                        
                          GL, Inc., a Massachusetts
                          corporation, formerly known
                          as Gold Lance, Inc., a
                          Massachusetts corporation,
                          as one of the Debtors
                        
                          By_____________________________________
                        
                          Title____________________________________
                        
                        
                          L.G. Balfour Company, Inc., a Delaware
                          corporation, as one of the Debtors
                        
                          By_____________________________________
                        
                          Title____________________________________
                                                                          
                                       S-1

<PAGE>

                           Fleet Precious Metals Inc., as a Claimant

                           By_____________________________________

                           Title____________________________________

                           By_____________________________________

                           Title____________________________________


                           Foothill Capital Corporation, a California
                           corporation, as the Foothill Representative

                           By_____________________________________

                           Title____________________________________


                           Fleet Precious Metals Inc., as the Gold Claimants'
                           Representative

                           By_____________________________________

                           Title____________________________________

                           By_____________________________________

                           Title____________________________________


                           State Street Bank and Trust Company, as
                           successor to Shawmut Bank, N.A., as the outgoing
                           Senior Note Claimants' Representative

                           By_____________________________________

                           Title____________________________________

                                       S-2

<PAGE>

                           State Street Bank and Trust Company, as the
                           incoming Senior Note Claimants' Representative

                           By_____________________________________

                           Title____________________________________

                           Address for notices:

                           State Street Bank and Trust Company
                           Financial Markets Group
                           Corporate Trust Department
                           Two International Place
                           Boston, Massachusetts  02110
                           Attn: Gerald R. Wheeler, V.P.
                           Ref:  Town & Country

                           Telephone: 617.664.5602
                           Facsimile: 617.664.5371

                           Bankers Trust Company, as the Senior
                           Subordinated Note Claimants' Representative

                           By_____________________________________

                           Title____________________________________


                           Foothill Capital Corporation, a California
                           corporation, as Collateral Agent

                           By_____________________________________

                           Title____________________________________

                                       S-3

<PAGE>

                                   Schedule 3

                (Description of Foothill Transactional Documents)

1. Loan Agreement dated as of July 3, 1996, between Foothill and Debtors.

2. Amendment Number One to Loan Agreement dated as of October 31, 1996, between
   Foothill and Debtors.

3. Amendment Number Two to Loan Agreement dated as of May 30, 1997, between
   Foothill and Debtors.

4. Amendment Number Three to Loan Agreement dated as of September 15, 1997,
   between Foothill and Debtors.

5. The Lock Box Agreements (as defined in the Loan Agreement listed in Item 1 of
   this Schedule 3, as such Loan Agreement may from time to time be amended,
   modified, supplemented, extended, or restated).

<PAGE>

                                   Schedule 5

                  (Description of Gold Transactional Documents)

1. Amended and Restated Consignment Agreement, dated as of July 3, 1996, among
   Debtors and Fleet Precious Metals Inc.

<PAGE>

                                   Schedule 8

            (Description of the Senior Note Transactional Documents)

1. Indenture dated as of September 15, 1997 among Debtors and State Street Bank
   and Trust Company, as trustee, governing certain 15% Senior Secured Notes of
   Town & Country Corporation due February 15, 1998.

2. Any of the 15% notes issued pursuant to the Indenture referenced in the
   preceding paragraph.