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                                  Exhibit 10.32
                                  -------------

                              CONSIGNMENT AGREEMENT


         CONSIGNMENT AGREEMENT ("AGREEMENT") made as of January 31, 2002, by and
between SOVEREIGN PRECIOUS METALS, LLC, a Pennsylvania limited liability
company, with its principal office at 15 Westminster Street, Providence, Rhode
Island 02903 ("Consignor"), and MICHAEL ANTHONY JEWELERS, INC., a Delaware
corporation with its principal office at 115 South MacQuesten Parkway, Mount
Vernon, New York 10550 ("Consignee").

         Consignee has requested Consignor to deliver Precious Metal (as defined
herein) on consignment for sale to Consignee. To effectuate this arrangement,
Consignor and Consignee agree that the Consignment Agreement governing this
arrangement is stated as follows:

1.       DEFINITIONS.

For the purposes of this Agreement:

         "ABN" shall mean ABN AMRO Bank, N.V., New York Branch and any legal
successor in interest thereto.

         "BASE RATE" shall mean the higher of (i) the prime commercial lending
rate announced from time to time by Sovereign Bank, or (ii) the rate quoted by
Sovereign Bank at approximately 11:00 am, New York City time, to dealers in the
New York Federal Funds Market for the overnight offering of dollars by Sovereign
Bank for deposit, plus one-half of one percent (0.50%).

         "BULLION FORWARD EXPOSURE AMOUNT" shall mean any risk up to the Bullion
Forwards Limit which the Consignor assumes with respect to outstanding gold
forwards contracts now or in the future entered into by Consignee with
Consignor, whether or not evidence by a written agreement.

         "BULLION FORWARDS LIMIT" shall mean an amount equal to $1,000,000.

         "CONSIGNEE'S COUNSEL" shall mean Rita Martin-Crowley, Esq., General
Counsel of the Consignee.

         "CONSIGNED PRECIOUS METAL" shall mean Precious Metal, which Consignor
has consigned, to Consignee pursuant to the terms of this Agreement for which
payment has not been received or which has not been Redelivered to Consignor.

         "CONSIGNMENT FEES" shall mean the outstanding total of fees agreed to
(based on specified quantities and time periods) by Duly Authorized Officers of
both parties at the time of each Delivery of Consigned Precious Metal.


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         "CONSIGNMENT LIMIT" shall mean the lesser of (a) 45,000 troy ounces of
fine gold, or (b) Consigned Precious Metal with a Fair Market Value (or unpaid
Purchase Price in the case of Consigned Precious Metal for which the Purchase
Price has been agreed but payment has not been received by Consignor) equal to
$14,000,000.00 LESS the Bullion Forward Exposure Amount.

         "CI" shall mean Commerzbank International S.A. and any legal successor
in interest thereto.

         "CS" shall mean Credit Suisse, New York Branch.

         "CURRENT LIABILITIES" shall mean, at any date as of which the amount
thereof shall be determined, all amounts that should, in accordance with
generally accepted accounting principles, be included as current liabilities on
the balance sheet of Consignee as at such date, plus, to the extent not already
included herein all Indebtedness that is payable upon demand within one (1) year
from the date of determination thereof unless such indebtedness is renewable or
extendible at the option of Consignee to a date more than one (1) year from the
date of determination.

         "DELIVER" or "DELIVERY" shall mean either actual shipment, creating the
right in Consignee to demand actual shipment through a writing, instrument or a
statement of account, or Consignor's crediting Precious Metal to the account of
Consignee with one or more third parties when no physical movement thereof is
contemplated by the parties.

         "DULY AUTHORIZED OFFICER" shall mean, with respect to the Consignee,
the President of Consignee, or other officer or employee who is authorized by
the Board of Directors or an executive committee of such Board of Directors and
with respect to the Consignor, any vice president or other officer or employee
who is authorized to act in such capacity.

         "ENVIRONMENTAL REQUIREMENT(S)" shall mean any present or future law,
statute, ordinance, rule, regulation, order, code, license, permit, decree,
judgment, directive or the equivalent of or by any Governmental Authority and
relating to or addressing the protection of human health or the environment.

         "EQUITY PRECIOUS METAL" shall mean Precious Metal (a) owned outright by
the Consignee subject only to security interests permitted hereunder, and (b)
not delivered to the Consignee pursuant to a "consignment", "lease", "loan",
"conditional sale" or other similar arrangement.

         "EVENT OF DEFAULT" shall mean an Event of Default under Section 13 of
this Agreement.

         "FAIR MARKET VALUE" on any day shall mean the Second London Gold Fixing
for that day. If no such price is available for a particular day, the Fair
Market Value for such day shall be the price for the immediately preceding day
for which such price is available.

         "FINANCIAL STATEMENTS" shall mean the balance sheet, income statement,
statement of cash flows and stockholder's equity statement of Consignee for the
year or other period then ended, together with supporting schedules, certified
(without qualification) by Deloitte & Touche or


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other independent public accountants approved by Consignor and prepared in
accordance with generally accepted accounting principles consistently applied.

         "FPM" shall mean Fleet Precious Metals, Inc. and any legal successor in
interest thereto.

         "GOVERNMENTAL AUTHORITY" shall mean the United States government, any
state or other political subdivision thereof, any agency, court or body of the
United States government, any state or other political subdivision thereof, or
any quasi-governmental agency or authority exercising executive, legislative,
judicial, regulatory or administrative functions.

         "GUARANTEES" shall mean, as applied to Consignee, all guarantees,
endorsements or other contingent or surety obligations with respect to
obligations of others whether or not reflected on the balance sheet of
Consignee, including any obligation to furnish funds, directly or indirectly
(whether by virtue of partnership arrangements, by agreement to keep-well or
otherwise), through the purchase of goods, supplies or services, or by way of
stock purchase, capital contribution, advance or loan, or to enter into a
contract for any of the foregoing, for the purpose of payment of obligations of
any other person or entity.

         "HAZARDOUS MATERIAL" shall mean any material or substance (i) which,
whether by its nature or use, is now or hereafter defined as a hazardous waste,
hazardous substance, pollutant or contaminant under any Environmental
Requirement, (ii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous to human health or
the environment, (iii) which is or contains petroleum or any fraction thereof,
including crude oil, heating oil, gasoline or diesel fuel, or (iv) the presence
of which requires investigation or remediation under any Environmental
Requirement.

         "INDEBTEDNESS" shall mean, as applied to Consignee, (i) all obligations
for borrowed money or other extensions of credit whether or not secured or
unsecured, absolute or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or guarantees issued
for the account of or on behalf of Consignee and all obligations representing
the deferred purchase price of property, other than accounts payable arising in
the ordinary course of business, (ii) all obligations evidenced by bonds, notes,
debentures or other similar instruments, (iii) all obligations secured by any
mortgage, pledge, security interest or other lien on property owned or acquired
by Consignee whether or not the obligations secured thereby shall have been
assumed, (iv) that portion of all obligations arising under capital leases that
is required to be capitalized or as stated as such on the balance sheet of
Consignee, (v) all Guarantees, (vi) all obligations with respect to Precious
Metal leased or consigned to Consignee, including, but not limited to,
obligations pursuant to this Agreement, and (vii) all obligations that are
immediately due and payable out of the proceeds of or production from property
now or hereafter owned or acquired by Consignee.

         "MITSUI" shall mean Mitsui & Co (U.S.A.), Inc.

         "NOTICE" or "NOTICES" shall mean all requests, demands and other
communications, in writing (including telegraphic and telecopy communications),
sent by registered or certified mail, return receipt requested, overnight
delivery service, telegraph, facsimile transmission or hand-delivery to the
other party at that party's Principal Office.


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         "PRECIOUS METAL" shall mean gold having a fineness of not less than
..9995 without regard to whether such gold is alloyed or unalloyed, in billion
form, or is contained in or processed into other materials, which contain
elements other than gold.

         "PRINCIPAL OFFICE" shall mean:

         For Consignor:

         Sovereign Precious Metals, LLC
         15 Westminster Street
         Providence, RI 02903
         Attention:  Irene A. Ogarek
                      Vice President

         Fax Number:  (401) 752-1438

         For Consignee:

         Michael Anthony Jewelers, Inc.
         115 South MacQuesten Parkway
         Mount Vernon, New York  10550
         Attention:  Michael A. Paolercio, Senior
            Vice President and Treasurer

         Fax Number:  914-699-2335

         "PURCHASE PRICE" shall mean a price to which both parties' Duly
Authorized Officers agree and shall be stated in dollars per troy ounce of
Precious Metal content.

         "REDELIVER" or "REDELIVERY" shall mean that Consignee deliver to
Consignor's Principal Office or as otherwise directed by Consignor, at
Consignee's sole risk and expense, Precious Metal of a fineness equal to the
fineness specified for that Precious Metal and of a type and quality and in a
form acceptable to Consignor.

         "SECURITY AGREEMENT" shall mean that certain Amended and Restated
Security Agreement of [even date herewith] among Consignee, as debtor, FPM as
agent and secured party and ABN, CI, Mitsui and the Consignor, as secured
parties.

         "TANGIBLE NET WORTH" shall mean, at any date as of which the amount
thereof shall be determined, the total assets of Consignee minus (i) the sum of
any amounts attributable to (a) goodwill, (b) intangible items such as
unamortized debt discount and expense, patents, trade and service marks and
names, customer lists, copyrights and research and development expenses except
prepaid expenses, (c) all reserves not already deducted from assets, (d) the
value of any minority interests in any subsidiaries and (e) amounts and loans
due from affiliates and/or officers of Consignee, and (ii) Total Liabilities.

         "TOTAL LIABILITIES" shall mean, at any date as of which the amount
thereof shall be determined, all obligations that should, in accordance with
generally accepted accounting


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principles consistently applied, be classified as liabilities on the balance
sheet of Consignee, including in any event all Indebtedness as shown on the
balance sheet of Consignee.

         "WORKING CAPITAL" shall mean the excess of Consignee's current assets,
computed in accordance with generally accepted accounting principles
consistently applied, over the sum of Current Liabilities.

2.       AMOUNT OF CONSIGNMENT.

         Provided (i) no Notice of election to terminate this Agreement (as
provided in Section 14 hereof) has been given by either party and (ii) no Event
of Default nor any event which with notice or lapse of time, or both, would
constitute an Event of Default has occurred hereunder, Consignor will Deliver
from time to time to Consignee upon its request Precious Metal under the terms
and conditions of this Agreement. In no event will Consignor be obligated to
deliver Precious Metal if the aggregate amount of fine troy ounces or Fair
Market Value of Precious Metal requested when added to Consigned Precious Metal
exceeds Consignee's Consignment Limit.

         Consignee acknowledges and confirms that, notwithstanding any other
provision of this Agreement, upon its receipt of thirty (30) days' prior written
Notice from the Consignor to the Consignee, which may be delivered at any time
in the Consignor's sole discretion, then (a) Consignor shall have no further
obligation to deliver Precious Metal to Consignee; (b) any request made by
Consignee thereafter for a Delivery of Precious Metal shall be reviewed by
Consignor on a case-by-case basis; (c) the decision to make any subsequent
Delivery shall be made by the Consignor thereafter in its sole and absolute
discretion and irrespective of whether Consignee is in compliance with the
requirements of this Agreement; and (d) thereafter Consignor shall have no
commitment to Consignee to make any Delivery of Precious Metal to Consignee. The
foregoing Notice requirement shall be a right of the Consignor in addition to,
and shall not be deemed to otherwise modify or limit, the rights of the
Consignor to terminate this Agreement pursuant to the terms of Section 14
hereof.
         If for any reason the number of fine troy ounces or Fair Market Value
(or unpaid Purchase Price in the case of Consigned Precious Metal for which the
Purchase Price has been agreed but payment has not been received by Consignor)
of all Consigned Precious Metal at any time exceeds Consignee's Consignment
Limit, Consignee shall immediately Redeliver to Consignor, or purchase and pay
for, Precious Metal of a quantity, or with a Fair Market Value, sufficient to
eliminate such excess.

         Consignor shall provide Consignee with a monthly statement of the
quantity of Consigned Precious Metal (in whatever form) held by Consignee. If
Consignee does not agree with the information reported in the statement,
Consignee must give Notice of such disagreement to Consignor within fifteen (15)
days of the date of receipt of such statement. If Consignee fails to give Notice
to Consignor within the fifteen (15) day period, Consignee shall be deemed to
have affirmed the accuracy of the information reported in the statement and to
have waived any claim Consignee may have by reason of a dispute as to such
statement. On or about March 30 of each year, Consignee shall provide Consignor
with a written confirmation, signed by a Duly Authorized officer of Consignee,
of the quantity of Consigned Precious Metal as of the date of such confirmation.
Upon and after the occurrence of an Event of Default, Consignee shall provide to



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Consignor on a daily basis written confirmation, in form acceptable to
Consignor, of the quantity and location of all Consigned Precious Metal.

         Consignee shall give Consignor at least two (2) full Rhode Island
business days' Notice of its requirements for Precious Metal. Consignor shall
not be liable to Consignee if Consignor fails to Deliver the Precious Metal by
reason of an Act of God or other catastrophe, force majeure, lack of supply,
delay in transportation, war or other hostilities, strike, lockout, epidemic,
acts of government or other public authority, requirements of any regulatory
board, agency or authority, unavoidable casualties or any other causes beyond
Consignor's control. CONSIGNOR MAKES NO WARRANTY OF MERCHANTABILITY IN RESPECT
TO PRECIOUS METAL CONSIGNED OR SOLD UNDER THIS AGREEMENT NOR OF FITNESS FOR ANY
PARTICULAR PURPOSE NOR ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, except that
Consignor does warrant to Consignee that all Precious Metal will be of the
fineness stated in Section 1 for that Precious Metal.

3.       DELIVERY OF PRECIOUS METAL.

         All Deliveries of Precious Metal by Consignor will be made to Consignee
by Consignor crediting an account of Consignee at a third party supplier of
Precious Metal or by delivery at Consignee's Principal Office or other such
location approved by Consignor, such Deliveries to be on terms and conditions
satisfactory to Consignor. At the time of Delivery or crediting, Consignor shall
provide Consignee with particulars of the total quantity of the Precious Metal
being Delivered or credited to Consignee. Any Duly Authorized officer of
Consignee receiving any Delivery shall give a receipt to Consignor for the same
in a form satisfactory to Consignor. All shipping expenses (including insurance)
shall be borne by Consignee, and any such expenses paid or incurred by Consignor
shall be reimbursed by Consignee immediately in the same manner as payments
under Section 5 hereof.

4.       TITLE.

         Title to Consigned Precious Metal shall remain with Consignor and shall
not vest in Consignee until Consignor has received payment for the Consigned
Precious Metal as required by Section 5 of this Agreement. Upon each Precious
Metal Delivery, Consignee shall bear the entire risk of loss, theft, damage or
destruction of the Consigned Precious Metal from any cause whatsoever, whether
or not insured, irrespective of where the Consigned Precious Metal is located,
and including any loss resulting from the bankruptcy or similar circumstances of
any entity holding Consigned Precious Metal for any purpose, including
fabrication or reconsignment, and Consignee agrees to hold the Consigned
Precious Metal in trust for Consignor and to indemnify and hold harmless
Consignor against any and all liabilities, damages, losses, costs, expenses,
suits, claims, demands or judgments of any nature (including, without
limitation, attorneys' fees and expenses) arising from or connected with any
loss, theft, damage or destruction of the Consigned Precious Metal. Consignee
shall execute such financing statements, security agreements and other documents
as Consignor shall request to protect Consignor's interest under the Uniform
Commercial Code.


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5.       CONFIRMATION AND PAYMENTS.

         During the term of this Agreement, Consignee shall have the right to
purchase any Consigned Precious Metal. To exercise the right, a Duly Authorized
Officer of Consignee shall give Notice to a Duly Authorized Officer of Consignor
that Consignee wishes to purchase specified quantities of Consigned Precious
Metal. Promptly after Consignee requests and Consignor agrees to, through their
respective Duly Authorized Officers, delivery and payment terms for a specified
quantity of Consigned Precious Metal, Consignor shall send Consignee a telecopy
(with signature) confirmation, which shall set forth (among other things) the
following items: (i) the type and fineness of Precious Metal, (ii) the quantity
of such Precious Metal and applicable Consignment Fees, (iii) the date on which
or the period within which Delivery and settlement are to be made, and (iv) the
manner of delivery. Absent manifest error, the provisions of each such
confirmation shall be binding and shall supersede any terms hereof not
consistent with such provisions. Consignee agrees to examine each such
confirmation and, in the event of error therein, to notify Consignor of such
error by telecopy (with signature) within one (1) Rhode Island business day
after Consignee's receipt thereof (Consignee being conclusively deemed to have
waived any such error in the absence of such notification). Unless otherwise
agreed not later than two (2) Rhode Island business days prior to an agreed
settlement date, Consignee shall be obligated to Redeliver or (if a Purchase
Price has been agreed upon) purchase and pay for the specified quantity of
Consigned Precious Metal plus all Consignment Fees related thereto.

         Payment of any Purchase Price and all other amounts due by Consignee to
Consignor under this Agreement (including any applicable sales or use tax) shall
be made in the following manner: (i) by bank wire to, Sovereign Bank, ABA #:
011075150, BNF: Sovereign Precious Metals, LLC, Acct. #: 98500027762, (ii) by
Consignor to charge its account with Consignor, or (iii) by other means which
Consignor approves in writing. If Consignor in its discretion grants payment
terms different from the foregoing for particular purchases, then the Purchase
Price shall not be deemed to be paid in full for the purposes of this Agreement
until all payments under such terms have been made.

         Any amount not paid when due under this Agreement shall bear interest
at four percent per annum (4% p.a.) in excess of the Base Rate until paid in
full (whether or not this Agreement has been terminated), such rate to be a
floating rate to be redetermined daily in accordance with changes in the Base
Rate. Such interest shall be paid on demand in the manner provided above.

6.       COMMINGLING; REDELIVERY OF PRECIOUS METAL.

         Consignee may use the Consigned Precious Metal only in the ordinary
course of its business as now conducted. No Consigned Precious Metal shall be
removed from Consignee's Principal office (except as provided in this Section
hereof or as may be agreed upon by the parties hereto) or sold to any third
party prior to the fixing of the Purchase Price for such Consigned Precious
Metal. Notwithstanding a contrary provision in this Section, Consignee shall
have the right, on terms and conditions approved in writing by Consignor, to
remove scrap from its Principal Office for refining in the ordinary course of
its business, it being agreed that all such scrap Consigned Precious Metal shall
be and remain the property of Consignor until purchased and paid for pursuant to
Section 5 hereof.


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         At any time prior to termination of this Agreement, any or all of the
amount of the Consigned Precious Metal (excluding any Consigned Precious Metal
as to which a Purchase Price has been agreed to under Section 5) may be
Redelivered by Consignee to Consignor and shall be Redelivered by Consignee to
Consignor upon demand of Consignor, subject to and pursuant to the provisions of
Section 14 of this Agreement, regardless of whether Consignee is in compliance
with the terms of this Agreement.

7.       INSURANCE.

         Consignee, at its sole cost and expense shall procure and maintain
property insurance to cover all locations where Consigned Precious Metal will be
located on an all risk form, including flood and earthquake, and such other
insurance (including, but not limited to, fidelity insurance for all employees,
including officers) with respect to the Consigned Precious Metal as may from
time to time be reasonably required by Consignor. All insurance provided for in
this Section shall be effected under valid and enforceable policies, in such
forms and in such amounts as may from time to time be reasonably required by
Consignor, issued by financially sound and responsible insurance companies which
are admitted in the jurisdiction in which the Consigned Precious Metal is
located, or are approved under the applicable states' surplus lines insurance
laws. At least ten (10) days prior to Consignor's first Delivery of Precious
Metal to Consignee and thereafter not less than fifteen (15) days prior to the
expiration dates of insurance policies theretofore furnished pursuant to this
Agreement, Consignee shall deliver to Consignor copies of all insurance policies
(together with Accord Form 27 (284) or other similar forms satisfactory to
Consignor) evidencing the insurance coverage required by Consignor. All policies
of insurance shall provide for thirty (30) days notification in advance of any
cancellation, nonrenewal or material change in policy conditions, including
cancellation for non-payment of premium.

         All policies of insurance provided for or contemplated by this
Agreement shall name Consignor as a loss payee or an additional insured, as its
interests may appear.

         All policies of insurance provided for in this Agreement shall, to the
extent obtainable, contain clauses or endorsements to the effect that:

         (a)      No act or negligence of consignee, or anyone acting for
                  Consignee, which might otherwise result in a forfeiture of
                  such insurance or any part thereof shall in any way affect the
                  validity or enforceability of such insurance insofar as
                  Consignor is concerned; and

         (b)      Consignor shall not be liable for any premiums or subject to
                  any assessments on the policies.

         Losses under each policy of insurance provided for or contemplated by
this section shall be adjusted with the insurers and/or underwriters and paid
directly to Consignor and Consignee as their interests may appear. Written
Notice of all losses shall promptly be given by Consignee to the Consignor.
Consignee shall pay all costs and expenses of collecting or recovering any
insurance proceeds under such policies, including, but not limited to, any and
all fees of attorneys, appraisers and adjusters.


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         In the event of any loss described above, except for a loss during
transit of Precious Metal sent by Consignor to Consignee's Principal Office by
registered United States mail, Consignor shall have the right to demand that
Consignee, and upon such demand Consignee shall, compensate Consignor, upon
terms acceptable to Consignor, for the full amount of such loss, whether or not
recovery has been made under any applicable policy. In the event Consignor
requires such compensation, Consignee shall be entitled to manage the relevant
claims and to retain any recovery under the applicable policy.

8.       TAXES, ETC.; CERTAIN RIGHTS OF CONSIGNOR.

         Consignee will promptly pay any and all taxes, assessments and
governmental charges upon the Consigned Precious Metal prior to the date of any
penalties and prior to the date any liens would attach thereto. Consignee will
not use the Consigned Precious Metal in violation of any statute or ordinance.
Consignor may examine and inspect the Consigned Precious Metal at any time,
wherever located, and Consignee agrees to keep all records relating to the
Consigned Precious Metal at its Principal office. Consignee further agrees to
promptly give Notice to Consignor of the assertion of any lien or other
encumbrance against the Consigned Precious Metal and Consignee's response to
such assertion.

         At its option, Consignor may discharge taxes, liens, security interests
or other encumbrances at any time levied or placed on the Consigned Precious
Metal (which are not being contested in good faith), may pay for insurance on
the Consigned Precious Metal and may pay for the maintenance and preservation of
the Consigned Precious Metal. Consignee agrees to reimburse Consignor on demand
for any payment made, or any expense incurred, by Consignor in connection with
the foregoing, together with interest thereon at the Base Rate plus four percent
per annum (4.0% p.a.), computed from the date of such payment or expense until
paid.

9.       REPRESENTATIONS AND WARRANTIES.

         The following representations and warranties shall survive the delivery
of this Agreement and the Delivery of Precious Metal by Consignor to Consignee.
Consignee represents and warrants to Consignor that

         (a)      Consignee has heretofore furnished to Consignor Consignee's
                  Financial Statements for the period ending January 31, 2001,
                  together with interim Financial Statements for the period
                  ending November 3, 2001, each of which fairly present the
                  financial condition of Consignee as of their date, and the
                  results of its operations for the year or other period then
                  ended in conformity with generally accepted accounting
                  principles consistently applied. To the best of Consignee's
                  knowledge and belief, Consignee does not have any contingent
                  obligations, liabilities for taxes or unusual forward or
                  long-term commitments except as specifically mentioned in the
                  Financial Statements. Since November 3, 2001 there has been no
                  material adverse change in the business, prospects,
                  operations, results of operations, assets, liabilities or
                  condition (financial or otherwise) of Consignee;

         (b)      Consignee (i) is duly organized, validly existing and in good
                  standing under the laws of the state of its incorporation as
                  of the date hereof, (ii) has full power and


                                      -52-
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                  authority to own its properties and to carry on business as
                  now being conducted and is qualified to do business in every
                  jurisdiction (including the State of New York) where such
                  qualification is necessary except where the failure to so
                  qualify would not have a material adverse effect on the
                  business or financial condition of Consignee or the security
                  granted to Consignor under the Security Agreement or any other
                  security documents, (iii) has full power to execute, deliver
                  and perform this Agreement, the Security Agreement and any
                  other documents securing the obligations of Consignee under
                  this Agreement and (iv) when this Agreement and any other
                  document contemplated hereby have been duly authorized,
                  executed and delivered by Consignee, such Agreement and
                  documents will constitute the legal, valid and binding
                  obligations of Consignee enforceable in accordance with their
                  terms, except to the extent that enforcement thereof may be
                  determined by applicable bankruptcy, insolvency,
                  reorganization, moratorium or similar laws of general
                  application relating to or affecting the enforcement of the
                  rights of creditors by equitable principles, whether
                  enforcement is sought in equity or at law;

         (c)      The execution, delivery and performance by Consignee of the
                  terms and provisions of this Agreement, the Security Agreement
                  and any other security documents (i) have been duly authorized
                  by all requisite corporate action, (ii) will not violate any
                  provision of law, any order of any court or other agency of
                  government, or the corporate charter or by-laws of Consignee,
                  (iii) will not violate any Indenture, agreement or other
                  instrument to which it is a party, or by which it is bound, or
                  be in conflict with, result in breach of, or constitute (with
                  notice or lapse of time or both) a default under such
                  indenture, agreement or instrument, and (iv) except as this
                  Agreement and any security or other document contemplated
                  hereby may provide, will not result in the creation or
                  imposition of any lien, charge or encumbrance of any nature
                  whatsoever upon any of the property or assets of Consignee
                  pursuant to any such indenture, agreement or instrument;

         (d)      There is no action, suit or proceeding at law or in equity or
                  by or before any governmental instrumentality or other agency
                  now pending or, to the best knowledge of Consignee, threatened
                  against or affecting Consignee, except as listed on SCHEDULE A
                  attached hereto;

         (e)      Consignee is not in default in the performance, observance or
                  fulfillment of any of the obligations, covenants or conditions
                  contained in any agreement or instrument to which it is a
                  party where such default, with or without the passage of time
                  or the giving of notice, would have a material adverse effect
                  on the business or financial condition of Consignee;

         (f)      No financing statement or agreement is on file in any public
                  office pertaining to or affecting any property of Consignee,
                  now owned or hereafter acquired, except as listed on SCHEDULE
                  B attached hereto;


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         (g)      Consignee has obtained all necessary approvals, permits,
                  licenses, authorizations and other consents required by, is
                  not in material violation of, and has performed all of its
                  obligations under, all Environmental Requirements;

         (h)      Except as described on SCHEDULE C attached hereto, Consignee
                  has not received any notice, citation, summons, directive,
                  order or other communication, written or oral, from, and
                  Consignee has no knowledge, after reasonable inquiry, of any
                  notice, citation, summons, directive, order or other
                  communication by, any Governmental Authority or any other
                  person concerning the presence, generation, treatment,
                  storage, transportation, transfer, disposal, release or other
                  handling of Hazardous Material within, on, from, related to,
                  or affecting any real property owned or occupied by Consignee;

         (i)      To the best of Consignee's knowledge (after reasonable inquiry
                  and except as described in SCHEDULE C attached hereto, no real
                  property owned or occupied by Consignee has ever been used,
                  either by Consignee, any tenant or any predecessor in
                  interest, to generate, treat, store, transport, transfer,
                  dispose of, release or otherwise handle any Hazardous
                  Material, except in compliance with all Environmental
                  Requirements; and

         (j)      No Hazardous Material is currently located within, on, under
                  or about any real property owned or occupied by Consignee in a
                  manner which violates any Environmental Requirement, or which
                  requires cleanup or corrective action of any kind under any
                  Environmental Requirement.

10.      CONDITIONS OF CONSIGNMENT.

         Without limiting the uncommitted nature of Consignor's obligations
under this Agreement, Delivery by Consignor of any Precious Metal under this
Agreement is further subject to the following conditions precedent:

         (a)      The representations and warranties set forth in Section 9 of
                  this Agreement shall be true and correct on and as of the date
                  of this Agreement and the date the Delivery is made.

         (b)      Consignee shall have executed and delivered to Consignor, upon
                  the execution of this Agreement, the following:

                  (i)      All required security documents, including, but not
                           limited to, any and all UCC financing statements
                           executed by a Duly Authorized Officer of Consignee as
                           may be required by Consignor;

                  (ii)     A certificate of the Secretary or Assistant Secretary
                           of Consignee certifying to the votes of Consignee's
                           Board of Directors authorizing the execution,
                           delivery and performance of this Agreement and any
                           security documents or other documents contemplated
                           hereby;


                                      -54-
<PAGE>

                  (iii)    A certificate of the Secretary or Assistant Secretary
                           of Consignee certifying the names of the officers of
                           Consignee authorized to sign this Agreement, any
                           security documents and any other documents or
                           certificates (or any amendments thereto) to be
                           delivered pursuant to this Agreement (or any
                           amendments thereto) by Consignee or any of its
                           officers, together with the true signatures of such
                           officers, on which certificates Consignor may
                           conclusively rely until it shall receive a further
                           certificate canceling or amending the prior
                           certificate and submitting the signatures of the
                           officers named in such further certificate;

                  (iv)     A certificate of the Secretary of State of the state
                           of incorporation of Consignee and all states where
                           Consignee is qualified to do business, dated
                           reasonably near the date of this Agreement, stating
                           that Consignee is duly incorporated or duly qualified
                           and in good standing in such state(s) and has filed
                           all annual reports and has paid all franchise taxes
                           required to be filed or paid to the date of such
                           certificate;

                  (v)      A favorable written opinion of Consignee's Counsel,
                           dated the date of this Agreement, satisfactory to
                           Consignor and its counsel in scope and substance,
                           with respect to the matters set forth in subsections
                           9 (b), (c), (d) and (e); and further to the effect
                           that this Agreement and all required security
                           documents have been duly authorized, executed and
                           delivered by Consignee and constitute the legal,
                           valid, binding obligations of Consignee enforceable
                           in accordance with their terms;

                  (vi)     A certificate signed by Consignee's chief executive
                           or chief financial officer to the effect stated in
                           (c) below; and

                  (vii)    Such other supporting documents and legal opinions as
                           Consignor may reasonably request.

         (c)      No Event of Default nor any event which with notice or the
                  lapse of time, or both, would constitute an Event of Default
                  shall have occurred.

11.      AFFIRMATIVE COVENANTS.

         Consignee covenants and agrees that, from the date of this Agreement
and until payment and performance in full by Consignee of its indebtedness,
obligations and liabilities to Consignor under this Agreement or any other
agreement or instrument, whether now existing or arising hereafter, Consignee
shall:

         (a)      Do or cause to be done all things necessary to preserve, renew
                  and keep in full force and effect its corporate existence,
                  rights, licenses, permits and franchises and comply with all
                  laws and regulations applicable to it; at all times maintain,
                  preserve and protect all franchises and trade names and
                  preserve all the remainder of its property used or useful in
                  the conduct of its business and keep the same in good repair,
                  working order and condition, and from time to time, make, or
                  cause to be made, all needful and proper repairs, renewals,
                  replacements, betterments


                                      -55-
<PAGE>

                  and improvements thereto, so that the business carried on in
                  connection therewith may be properly and advantageously
                  conducted at all times;

         (b)      Comply with all applicable laws and regulations, whether now
                  in effect or hereafter enacted or promulgated by any
                  Governmental Authority having jurisdiction in the premise;

         (c)      Pay and discharge or cause to be paid and discharged all
                  taxes, assessments and governmental charges or levies imposed
                  upon it or upon its respective income and profits or upon any
                  of its property, real, personal or mixed, or upon any part
                  thereof, before the same shall become in default, as well as
                  all lawful claims for labor, materials and supplies or
                  otherwise, which, if unpaid, might become a lien or charge
                  upon such properties or any part thereof; provided that
                  Consignee shall not be required to pay and discharge or cause
                  to be paid and discharged any such tax, assessment, charge,
                  levy or claim so long as the validity thereof shall be
                  contested in good faith by appropriate proceedings and it
                  shall have set aside on its books adequate reserves with
                  respect to any such tax, assessment, charge, levy or claim so
                  contested, and provided, further, that payment with respect to
                  any such tax, assessment, charge, levy or claim shall be made
                  before any of its property shall be seized and sold in
                  satisfaction thereof;

         (d)      Give prompt written notice to Consignor of any proceedings
                  instituted against it by or in any Federal or state court or
                  before any commission or other regulatory body, Federal, state
                  or local, which, if adversely determined, would have a
                  materially adverse effect upon its business, operations,
                  properties, assets, or condition, financial or otherwise or
                  could result in the forfeiture of assets of Consignee;

         (e)      Furnish to Consignor:

                  (i)      within ninety (90) days after the end of each fiscal
                           year, Financial Statements showing its financial
                           condition at the close of such fiscal such year and
                           containing a statement to have examined the
                           provisions of this Agreement and that no Event of
                           Default nor any event which with notice or lapse of
                           time, or both, would constitute an Event of Default
                           has occurred;

                  (ii)     within forty-five (45) days after the end of the
                           first, second and third quarter in each such fiscal
                           year, Financial Statements for such period and the
                           fiscal year to that date, subject to changes
                           resulting from routine year-end audit adjustments, in
                           form satisfactory to Consignor. Notwithstanding
                           provisions in the definition of "Financial
                           Statements" requiring certification by independent
                           public accountants, Financial Statements for this
                           subsection (ii) may be prepared and certified by the
                           chief financial officer of Consignee to the best of
                           his or her information and belief;


                                      -56-
<PAGE>

                  (iii)    Simultaneously with the furnishing of each of the
                           Financial Statements to be delivered pursuant to
                           subsections (i) and (ii) above, a narrative statement
                           of the President or Chief Financial Officer of
                           Consignee which shall comment upon and explain any
                           material changes; both positive and negative,
                           reflected in such statements from prior periods, and
                           which shall also contain a declaration to the effect
                           that such officer has reviewed the terms of this
                           Agreement and has no knowledge of any event or
                           condition which constitutes an Event of Default or
                           which with notice or lapse of time, or both, would
                           constitute an Event of Default or, if he or she has
                           such knowledge, specifying the nature and period of
                           existence of such event or condition;

                  (iv)     within twenty (20) days after the end of each month,
                           a consignment base certificate of Consignee as of the
                           last Rhode Island business day of the preceding month
                           (such certificate to be in the form of EXHIBIT B
                           attached hereto and certified by Consignee's Chief
                           Financial Officer or Treasurer);

                  (v)      within forty-five (45) days after the end of each
                           quarter in each fiscal yearly a certificate of
                           Consignee as to the status of Consignee's compliance
                           with its agreements with Consignor (such certificate
                           to be in the form of EXHIBIT C attached hereto and
                           certified by Consignee's Chief Financial Officer or
                           Treasurer); and

                  (vi)     Promptly, from time to time, furnish such other
                           information regarding its operations, assets,
                           business affairs and financial condition as Consignor
                           may reasonably request;

         (f)      Permit agents or representatives of Consignor, at Consignee's
                  expense (including, without limitation, the fees and expenses
                  of such agents or representatives), (i) to inspect, at any
                  time during normal business hours and without notice, the
                  Consigned Precious Metal and Consignee's books and records and
                  to make abstracts or reproductions of such books and records,
                  (ii) to conduct a field examination of the Consigned Precious
                  Metal in the possession and control of Consignee (which
                  examination shall include the observance thereof by BDO
                  Seidman as to such examination, including an annual audit
                  review of Consignee's control system), such examination to be
                  done at reasonable times and at any time in the case of an
                  emergency (provided, however, that Consignee only shall be
                  required to pay for one field examination per year unless an
                  Event of Default has occurred and is continuing, in which case
                  Consignor may conduct such field examinations as frequently as
                  it may desire and all such field examinations shall be at
                  Consignee's expense), (iii) to observe the taking of any
                  physical inventory of Consigned Precious Metal in Consignee's
                  possession (Consignee shall give Consignor not less than ten
                  (10) days, prior Notice of the taking of each such inventory),
                  and (iv) at reasonable times and at any time in case of
                  emergency or at any time after the occurrence and continuing
                  of an Event of Default, to take a physical inventory of the
                  Consigned Precious Metal in Consignee's possession;


                                      -57-
<PAGE>

         (g)      Promptly advise Consignor of any material adverse change in
                  its condition, financial or otherwise, business, prospects,
                  operations, results of operations, assets or liabilities and
                  of any condition or event, which constitutes, or with notice
                  of lapse of time or both would constitute, an Event of
                  Default;

         (h)      Promptly join with Consignor from time to time in executing
                  one or more financing statements pursuant to the Uniform
                  Commercial Code in form satisfactory to Consignor, and execute
                  such other instruments in form suitable for recording or
                  filing as Consignor may reasonably require and Consignee does
                  hereby (a) make, constitute and appoint Consignor or its agent
                  its true and lawful attorney-in-fact, for, in its name and on
                  its behalf to execute and deliver for filing any financing
                  statement, including any continuation statement, which
                  Consignor or its agent deems necessary to be executed,
                  delivered or filed by Consignor in connection with this
                  Agreement, and (b) ratify and confirm all that said
                  attorney-in-fact shall do or cause to be done by virtue of
                  this Section;

         (i)      Defend the Consigned Precious Metal against the claims and
                  demands of any persons (other than Consignor and those persons
                  listed as secured parties on SCHEDULE B attached hereto) at
                  any time claiming the same or any interest therein;

         (j)      Consent, and Consignee does hereby consent to the delivery by
                  Consignor to any lender, lessor or consignor to Consignee of
                  all information and reports prepared or received by Consignor
                  with respect to Consignee;

         (k)      Except as to past violations being cured by Consignee as
                  described on SCHEDULE C attached hereto, comply, and cause all
                  tenants or other occupants of any real property which
                  Consignee owns or occupies to comply, in all respects with all
                  Environmental Requirements, and not generate, treat, store,
                  handle, process, transfer, transport, dispose of, release or
                  otherwise use, and not permit any tenant or other occupant of
                  such property to generate, treat, store, handle, process,
                  transfer, transport, dispose of, release or otherwise use,
                  Hazardous Materials within, on, under or about such property,
                  in a manner that could lead to the imposition on Consignee,
                  Consignor or any such real property of any liability or lien
                  of any nature whatsoever under any Environmental Requirement;

         (l)      Except as to matters described on SCHEDULE C attached hereto,
                  notify Consignor promptly in the event of any spill or other
                  release of any Hazardous Material within, on, under or about
                  any real property owned or occupied by Consignee which is
                  required to be reported to a Governmental Authority under any
                  Environmental Requirement, promptly forward to Consignor
                  copies of any notices received by Consignee relating to
                  alleged violation of any Environmental Requirement and (as to
                  all matters including, without limitation, those disclosed on
                  SCHEDULE C attached hereto) promptly pay when due any fine or
                  assessment against Consignee, Consignor or any such real
                  property relating to any Environmental Requirement;


                                      -58-
<PAGE>

         (m)      Upon receipt of Notice by Consignee from a third party to whom
                  Consignee has reconsigned consigned Precious Metal that such
                  reconsigned consigned Precious Metal has been sold,
                  reconsigned or otherwise transferred or disposed of by such
                  third party, and within one (1) New York business day after
                  receipt of such notice, purchase such Consigned Precious Metal
                  from Consignor pursuant to terms of this Agreement;

         (n)      Own Equity Precious Metal in an amount at least equal to the
                  sum of (i) five percent (5%) of Consignee's entire inventory
                  of Precious Metal consigned or leased to Consignee (including,
                  without limitation, Consigned Precious Metal) PLUS (ii) twenty
                  percent (20%) of the amount of Precious Metal physically
                  located other than at Consignee's Principal Office;

         (o)      Maintain at all times Tangible Net Worth in an amount at least
                  equal to $40,000,000.

         (p)      Maintain at all times Working Capital in an amount at least
                  equal to $22,000,000.

         (q)      Maintain at all times a ratio of Total Liabilities including,
                  without limitation, all obligations under this Agreement, any
                  other precious metal facility or similar agreements and any
                  loan agreements) to Tangible Net Worth of not more than
                  3.00:1.00, determined in accordance with generally accepted
                  accounting principles consistently applied;

         (r)      Maintain at all times a ratio of Current Liabilities PLUS
                  long-term Indebtedness secured by current assets to working
                  Capital of not more than 6.30:1.00;

         (s)      Maintain at all times a ratio of earnings before interest,
                  taxes, depreciation and amortization (EBITDA) to current
                  maturities of long-term debt plus interest expense plus
                  consignment fees plus non-financed capital expenditures for
                  any four fiscal quarter period of not less than 1.00:1.00
                  determined in accordance with generally accepted accounting
                  principles consistently applied; and

         (t)      Maintain key-man life insurance with insurance companies
                  satisfactory to Consignor on the lives of Michael Paolercio
                  and Anthony Paolercio, Jr. in the amount of not less than
                  $5,000,000 each provided, however, that in the event that
                  either of such individuals shall terminate his employment with
                  Consignee during his life, the insurance on the terminated
                  individual's life may be cancelled.

12.      NEGATIVE COVENANTS.

         Consignee covenants and agrees that, until Consignee makes payment and
performs in full its indebtedness, obligations, and liabilities under this
Agreement or under any other agreement or instrument, whether now existing or
arising hereafter, unless Consignor consents in writing, Consignee will not,
directly or indirectly:

         (a)      Create, incur, assume or suffer to exist any mortgage, pledge,
                  lien, attachment, charge or other encumbrance of any nature
                  whatsoever on any of the Consigned


                                      -59-
<PAGE>

                  Precious Metal or any products or property now or hereafter
                  owned by Consignee or in which Consignee presently has or
                  hereafter acquires an interest which does or will include the
                  Consigned Precious Metal other than (i) security interests in
                  favor of Consignor or as listed on SCHEDULE B attached hereto
                  and (ii) mortgages on Consignee's Mount Vernon, New York real
                  property;

         (b)      Sell, lease, transfer or otherwise dispose of its properties,
                  assets, rights, licenses and franchises to any person, except
                  in the ordinary course of its business, or turn over the
                  management of, or enter into a management contract with
                  respect to, such properties, assets, rights, licenses and
                  franchises;

         (c)      Dissolve, liquidate, consolidate with or merge with, or
                  acquire all or substantially all of the assets or properties
                  of, any other corporation or entity, or make any substantial
                  change in its executive management;

         (d)      Sell, assign, encumber, pledge, discount or otherwise dispose
                  of in any way any accounts receivable, promissory notes or
                  trade acceptances held by Consignee, with or without recourse,
                  except for (i) security interest as Listed on SCHEDULE B
                  attached hereto, (i) collection (including endorsements) in
                  the ordinary course of business, and (ii) liens in favor of
                  Consignor;

         (e)      Grant any security interest or ownership rights to any
                  customer of Consignee with respect to any of the Consigned
                  Precious Metal while at Consignee's premises whether or not
                  such customers have prepaid orders for the Consigned Precious
                  Metal or any products or property which does or will include
                  the Consigned Precious Metal;

         (f)      Guarantee, endorse or otherwise in any way become or be
                  responsible for obligations of any other person, except
                  endorsements of negotiable instruments for collection in the
                  ordinary course of business;

         (g)      Obtain Precious Metal on consignment or loan from any source
                  other than Consignor or those persons listed as secured
                  parties on SCHEDULE B attached hereto;

         (h)      Permit the aggregate amount of Consigned Precious Metal PLUS
                  Precious Metal consigned to Consignee by other consignors to
                  exceed 275,000 fine troy ounces of gold; or

         (i)      Permit the amount of Consignee's Precious Metal Inventory
                  physically located other than at Consignee's Principal office
                  to exceed at any time (i) in the aggregate, Consignee's Equity
                  Precious Metal plus ten percent (10%) of Precious Metal
                  consigned from the Consignor, FPM, ABN, Mitsui and CI to the
                  Consignee, (ii) 7,500 fine troy ounces at, or in transit to or
                  from, any one location, or (iii) 15,000 fine troy ounces
                  located outside the United States.

13.      EVENTS OF DEFAULT; RIGHTS AND REMEDIES OF CONSIGNOR UPON DEFAULT.


                                      -60-
<PAGE>

         In each case of happening of any of the following events (each of which
is herein sometimes called an "Event of Default"):

         (a)      Any representation or warranty made herein, or in any report,
                  certificate, financial statement or other instrument furnished
                  in connection with this Agreement, or the Delivery of Precious
                  Metal by Consignor hereunder, shall prove to be false or
                  misleading in any material respect;

         (b)      Consignee fails to make punctual payment or perform any
                  obligation required by the provisions of Section 2, 5, 6 or 14
                  of this Agreement;

         (c)      Consignee fails to pay any amount due hereunder or any other
                  indebtedness, obligation or liability of Consignee to
                  Consignor when the same shall become due and payable, whether
                  at the due date thereof or at a date fixed for prepayment or
                  by acceleration or otherwise;

         (d)      Consignee fails to observe or perform any covenant, condition
                  or agreement required by the terms of Sections 7, 8, 11(f),
                  11(m), 11(n), 11(o), 11(p), 11(q), 11(r), 11(s), 12(a), 12(c),
                  12(e), 12(f), 12(g), 12(h) or 12(i) of this Agreement;

         (e)      Consignee fails to observe or perform any other covenant,
                  condition or agreement required by the terms of this Agreement
                  and such failure shall continue unremedied for ten (10) days;

         (f)      Default with respect to any evidence of indebtedness,
                  obligations or liabilities of Consignee (including, but not
                  limited to, consignment agreements and any other agreements
                  between Consignee and any parent, affiliate or subsidiary of
                  Consignor), if the effect of such default is to accelerate the
                  maturity of such indebtedness, obligation or liability or to
                  permit the holder thereof (or any material portion thereof) to
                  cause such indebtedness to become due prior to the stated
                  maturity thereof, or if any indebtedness of Consignee is not
                  paid, when due and payable, whether at the due date thereof or
                  by acceleration or otherwise;

         (g)      Consignee shall (i) apply for, consent to, or suffer the
                  appointment of a custodian, receiver, trustee or liquidator of
                  it or any of its property, (ii) admit in writing its inability
                  to pay its debts as they mature, (iii) make a general
                  assignment for the benefit of creditors, (iv) file, or have
                  filed against it, a petition for relief under Title 11 of the
                  United States Code, or (v) file, or have filed against it, a
                  petition in bankruptcy, or a petition or an answer seeking
                  reorganization or an arrangement with creditors or to take
                  advantage of any bankruptcy, reorganization, insolvency,
                  readjustment of debt, dissolution or liquidation law or
                  statute in any jurisdiction within or outside of the United
                  States, or an answer admitting the material allegations of a
                  petition filed against it in any proceeding under any such
                  law, or corporate action shall be taken for the purpose of
                  effecting any of the foregoing, and which, in the case of any
                  involuntary proceeding under (i), (iii), (iv) or (v) is not
                  dismissed or discharged within sixty (60) days of its
                  commencement;


                                      -61-
<PAGE>

         (h)      An order, judgment or decree shall be entered, without the
                  application, approval or consent of Consignee by any court of
                  competent jurisdiction, approving a petition seeking
                  reorganization of Consignee or appointing a custodian,
                  receiver, trustee or liquidator of Consignee or of all or a
                  substantial part of the assets of Consignee;

         (i)      Occurrence of any loss, theft, or destruction of or damage to
                  the Consigned Precious Metal or any products or property,
                  which includes Consigned Precious Metal;

         (j)      Discontinuance of the operation of Consignee's business for
                  any reason;

         (k)      For any reason the present chief financial officer shall cease
                  to be or function as the chief financial officer of Consignee
                  and a successor is not appointed within sixty (60) days of
                  such cessation;

         (1)      For any reason the present President shall cease to be or
                  function as President and chief executive officer of Consignee
                  and a successor is not appointed within sixty (60) days of
                  such cessation;

         (m)      Occurrence of an event of default under any credit, loan or
                  consignment agreement or any promissory note to which
                  Consignee is a party, as amended or modified from time to
                  time, including those certain Consignment Agreements or
                  Amended and Restated Consignment Agreement dated as of August
                  20, 1993 between Consignee and each of ABN, FPM, [Mitsui?]
                  respectively, as the same have been amended from time to time,
                  that certain Consignment Agreement dated as of January 22,
                  2001 between CI and Consignee, as the same has been amended
                  from time to time and any promissory note in favor of JP
                  Morgan Chase Bank.

         (n)      Occurrence of any Event of Default as defined in the Security
                  Agreement;

         (o)      Occurrence of any attachment on any Precious Metal owned by
                  consignee or on any Consigned Precious Metal; or

         (p)      Determination by Consignor in good faith that Consignee has
                  suffered a material adverse change in its business or
                  financial condition.

Upon the occurrence of any such Event of Default and at any time thereafter
during the continuance of such Event of Default, Consignor may, by Notice to
Consignee, terminate this Agreement as provided in Section 14 and declare all
liabilities, indebtedness or obligations of Consignee to be due and payable;
PROVIDED, however, that the foregoing listing of Events of Default shall not be
deemed to limit Consignor's right at any time, even if an Event of Default has
not occurred, to demand, upon thirty (30) days' prior written notice to
Consignee, (x) that Consignee Redeliver Consigned Precious Metal and (y) payment
of all liabilities, indebtedness or obligations of Consignee to Consignor,
subject to and pursuant to the provisions of Section 14 of this Agreement. Upon
Consignor's declaration and the expiration of such thirty (30) day notice
period, such liabilities, indebtedness and obligations shall become immediately
due and payable, both as to principal and/or interest, without presentment,
demand, protest or notice of


                                      -62-
<PAGE>

any kind, all of which are hereby expressly waived, anything contained herein or
in any other evidence of such indebtedness, obligations and liabilities to the
contrary notwithstanding. Notwithstanding the foregoing, in the case of an Event
of Default under Section 13(g) (and assuming that the thirty (30) day period
provided for in Section 13(g), if applicable, has expired) or under Section
13(h) of this Agreement, this Agreement shall terminate immediately and
automatically upon the occurrence of such Event of Default, and all of the
liabilities, indebtedness or obligations of Consignee shall be immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by Consignee, anything contained herein or in
any other evidence of such indebtedness, obligations and liabilities to the
contrary notwithstanding. Consignor may enforce payment of the same and exercise
any or all of the rights, powers and remedies possessed by Consignor, under this
Agreement or under any agreement securing the obligations of Consignee
hereunder, whether afforded by the Uniform Commercial Code or otherwise afforded
by law or in equity. The remedies provided for herein are cumulative and are not
exclusive of any other remedies provided by law. Consignee agrees to pay
Consignor's reasonable attorney's fees and legal expenses incurred in enforcing
Consignor's rights, powers and remedies under this Agreement, the Security
Agreement and any agreement securing the liabilities, indebtedness or
obligations of Consignee to Consignor, whether such enforcement is directly by
Consignor or through its agent.

         Without limiting the foregoing, upon the occurrence of any Event of
Default and at any time thereafter during the continuance thereof, Consignor
shall have the right to enter and/or remain upon the premises of Consignee or
any other place or places where any Consigned Precious Metal is located and kept
(without any obligation to pay rent to Consignee or others) and (i) remove
Consigned Precious Metal or inventory containing the same therefrom to the
premises of Consignor or any agent of Consignor, for such time as Consignor may
desire, in order to maintain, collect, sell and/or liquidate said Consigned
Precious Metal or (ii) use such premises, together with equipment, materials,
supplies, books and records of Consignee, to maintain possession, refine and
prepare said Consigned Precious Metal for sale, liquidation, or collection.
Consignor may require Consignee to assemble the Consigned Precious Metal and
make it available to Consignor at a place or places to be designated by
Consignor, which is reasonably convenient for the parties. Consignor may at any
time and from time to time employ and maintain in any premises of Consignee or
any place where any of the Consigned Precious Metal is located a custodian
selected by Consignor who shall have full authority to do all acts necessary to
protect Consignor's interests and to report to Consignor thereon. Consignee
agrees to cooperate with any such custodian and to do whatever Consignor may
reasonably request to preserve the Consigned Precious Metal. All reasonable
expenses incurred by reason of the employment of the custodian shall be paid by
Consignee pursuant to the last sentence in Section 8 hereof.

14.      TERMINATION.

         This Agreement shall terminate, at the election of the Consignor, upon
the occurrence of any Event of Default. Unless otherwise terminated in
accordance with the terms hereof, this Agreement shall continue until either
Consignor or Consignee elects to terminate this Agreement by not less than
thirty (30) days, prior Notice to the other party. Unless otherwise mutually
agreed in writing by Consignor and Consignee, no Delivery of Precious Metal to
Consignee will be made following the giving of Notice by either Consignor or
Consignee of its election to


                                      -63-
<PAGE>

terminate this Agreement. Termination of this Agreement shall not affect
Consignee's duty to pay and perform in full its obligations to Consignor
hereunder. On the effective date of the termination of this Agreement, Consignee
shall either Redeliver or purchase and pay for all Consigned Precious Metal
which Consignor has previously Delivered and which has not been paid for or
Redelivered, the price to be based on Consignor's spot market price or the date
of such purchase and shall reimburse Consignor for any and all outstanding fees,
costs, expenses and other obligations of Consignee to Consignor.

15.      INDEMNITY.

         Consignee will defend, indemnify and hold harmless Consignor, its
employees, agents, officers, and directors, from and against any and all claims,
demands, penalties, causes of action, fines, liabilities, settlements, damages,
costs or expenses of whatever nature, known or unknown, foreseen or otherwise
(including, without limitation, counsel and consultant fees and expenses, court
costs, and litigation expenses) arising out of, or in any way related to, (i)
any breach by Consignee of any of the provisions of this Agreement, (ii) the
presence, disposal, spillage, discharge, emission, leakage, release, or
threatened release of any Hazardous Material within, on, under, about, from or
affecting any real property owned or occupied by Consignee, including, without
limitation, any damage or injury resulting from any such Hazardous Material to
or affecting such property or the soil, water, air, vegetation, buildings,
personal property, persons or animals located on such property or on any other
property or otherwise, (iii) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to any such
Hazardous Material, (iv) any lawsuit brought or threatened, settlement reached,
or order or directive of or by any Governmental Authority relating to such
Hazardous Material or (v) any violation of any Environmental Requirement.

16.      MISCELLANEOUS.

         (a)      This Agreement and all covenants, agreements, representations
                  and warranties made herein and in the certificates delivered
                  pursuant hereto, shall survive the execution and delivery to
                  Consignor of this Agreement, and shall continue in full force
                  and effect so long as this Agreement and any other
                  indebtedness of Consignee to Consignor is outstanding and
                  unpaid. In this Agreement, reference to a party shall be
                  deemed to include the successors and permitted assigns of such
                  party, and all covenants and agreements in this Agreement by
                  or on behalf of Consignee shall inure to the benefit of the
                  successors and assigns of Consignor.

         (b)      Consignee will reimburse Consignor upon demand for all
                  out-of-pocket costs, charges and expenses of Consignor
                  (including costs of searches of public records and filing and
                  recording documents with public offices and reasonable fees
                  and disbursements of counsel to Consignor) in connection with
                  (i) the preparation, execution and delivery of this Agreement
                  and any security document or other agreement contemplated
                  hereby, (ii) any amendments, modifications, consents or
                  waivers in respect hereof and (ii) any enforcement hereof.

         (c)      This Agreement shall be construed in accordance with and
                  governed by the laws of the State of Rhode Island.


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<PAGE>

         (d)      No modification or waiver of any provision of this Agreement,
                  or of any security document or other document contemplated
                  hereby, nor consent to any departure of Consignee from a
                  provision, shall be effective unless the same shall be in
                  writing. A written consent shall be effective only in the
                  specific instance, and for the purpose, for which given. No
                  notice to, or demand on Consignee, in any one case, shall
                  entitle Consignee to any other or future notice or demand in
                  the same, similar or other circumstances.

         (e)      Neither any failure nor any delay on the part of Consignor in
                  exercising any right, power or privilege hereunder, or in any
                  other instrument given as security therefor, shall operate as
                  a waiver thereof, nor shall a single or partial exercise
                  thereof preclude any other or future exercise, or the exercise
                  of any other right, power or privilege.

         (f)      Consignee shall not have the right to assign its rights
                  hereunder or any interest herein without the prior written
                  consent of Consignor.

         (g)      Any provision of this Agreement, which is prohibited or
                  unenforceable in any jurisdiction, shall, as to such
                  jurisdiction, be ineffective to the extent of such prohibition
                  or unenforceability without invalidating the remaining
                  provisions hereof or affecting the validity or enforceability
                  of such provision in any other jurisdiction.

         (h)      Any Section headings in this Agreement are included herein for
                  convenience of reference only and shall not constitute a part
                  of this Agreement for any other purpose. As used in this
                  Agreement, the term "person" shall include any individual,
                  corporation, partnership, joint venture, trust or
                  unincorporated organization, or a government or any agency or
                  political subdivision thereof.

         (i)      Consignee hereby submits to the jurisdiction of the courts of
                  the State of Rhode Island and the United States District Court
                  for the State of Rhode Island, as well as to the jurisdiction
                  of all courts to which an appeal may be taken or other review
                  sought from the aforesaid courts, for the purpose of any suit,
                  action or other proceeding arising out of any of Consignee's
                  obligations under or with respect to this Agreement, and
                  expressly waives any and all objections it may have as to
                  value in any of such courts. CONSIGNEE AND CONSIGNOR EACH
                  WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
                  BROUGHT BY EITHER OF THEM AGAINST THE OTHER ON ANY MATTER
                  WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ANY ACTION,
                  PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY
                  CONNECTED WITH THIS AGREEMENT, ANY OTHER DOCUMENTS EXECUTED IN
                  CONNECTION HEREWITH OR ANY OF THE TRANSACTIONS CONTEMPLATED
                  HEREIN OR THEREIN). No party to this Agreement, including, but
                  not limited to, any assignee or successor or a party, shall
                  seek a jury trial in any lawsuit, proceeding, counterclaim, or
                  any other litigation procedure based upon, or arising out of,
                  this Agreement, any related instruments, any collateral or the
                  dealings or


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<PAGE>

                  the relationship between the parties. No party will seek to
                  consolidate any such action, in which a jury trial has been
                  waived, with any other action in which a jury trial cannot be
                  or has not been waived. THE PROVISIONS OF THIS PARAGRAPH HAVE
                  BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
                  PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN
                  ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
                  PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
                  INSTANCES.

         IN WITNESS WHEREOF, Consignor and Consignee have caused this Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.

                                     SOVEREIGN PRECIOUS METALS, LLC
                                     AS CONSIGNOR


                                     By: /s/: Irene A. Ogarek
                                         --------------------------------------
                                         Name:  Irene A. Ogarek
                                         Title:    Vice President


MICHAEL ANTHONY JEWELERS, INC.
AS CONSIGNEE



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