<PAGE>
                                  EXHIBIT 10.26
                                  -------------

                              CONSIGNMENT AGREEMENT

          CONSIGNMENT AGREEMENT ("AGREEMENT") made as of January 22, 2001, by
and between COMMERZBANK INTERNATIONAL S.A, with its principal office at 11 rue
Notre Dame, Luxembourg L-2013 ("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 The Chase Manhattan Bank, or (ii) the rate
quoted by The Chase Manhattan 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 The Chase Manhattan Bank for deposit, plus one-half of one percent
(0.5001).

         "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.

           "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
$15,000,000.00

         "CS" shall mean Credit Suisse, New York Branch arid ally legal
successor in interest thereto.




                                      -1-
<PAGE>



         "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 o= within one (1)
,7EAR 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 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 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.








                                      -2-
<PAGE>

         "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 others 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, including but not limited to obligations to the Second Insurance
Companies and the Third Insurance Companies, (iv) that portion of all
obligations arising under capital leases that is required to be capitalized or:
the balance sheet of Consignee, (y) 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
cut of the proceeds of or production from property now or hereafter owned or
acquired by Consignee.

"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.


                                      -3-
<PAGE>

"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:

Commerzbank International S.A.
11 rue Notre Dame
Luxembourg L-2013

Fax Number: 011 352 47 79 11 420

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 dated as of August 20, 1993, as amended by amendments thereto dated as
of May 16, 1994. September 1, 1994, January 15, 1995, October 20, 1995 and
October 23, 1998 among Consignee, as debtor, FPM as agent and secured party and
ABN, CS 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 W 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.


                                      -4-
<PAGE>

"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 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 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 LO Consignee. The
foregoing Notice requirement shall be a right o` 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 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 pavement t 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 should 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 or the information reported in the
statement and to have



                                      -5-
<PAGE>

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 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 New York 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. P_ 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,



                                      -6-
<PAGE>

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.

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) New York 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) New York 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, Commerzbank AG, New York
ABA # 026-008-044 for further credit to Commerzbank AG, Frankfurt for Account
Commerzbank International S.A. (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 (4-%)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



                                      -7-
<PAGE>

         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 or
Section 12(1) 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.

          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 (2/84) 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



                                      -8-
<PAGE>

(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.

         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
(4.0%), 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



                                      -9-
<PAGE>

         (a)      Consignee has heretofore furnished to Consignor Consignee's
                  Financial Statements for the period ending January 29,
                  2000.,together with interim Financial Statements for the
                  period ending July 29, 2000, 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 July 29, 2000 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 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 l,-mired by applicable bankruptcy,
                  insolvency, reorganization, moratorium or similar laws of
                  general application relating to or affecting the enforcement
                  of -he rights of creditors by equitable principles, whether
                  enforcement Is sought in equity or at law;

         (c)      The execution, delivery and performance by Consignee or the
                  terms and provisions of this Agreement, the Security Agreement
                  and any other security documents (-') 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



                                      -10-
<PAGE>

                  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
                  3 attached hereto;

         (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 any 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,

         (j)      treat, store, transport, transfer, dispose of, release or
                  otherwise handle any Hazardous Material, except ,in compliance
                  with all Environmental Requirements; and

         (k)      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:


                                      -11-
<PAGE>

         (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-1 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;

                  (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, dated reasonably near
                           the date of this Agreement, stating that Consignee is
                           duly incorporated and in good standing in such state
                           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 forh 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 sated in (c)
                           below; and

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


                                      -12-
<PAGE>


         (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, betterment's 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:


                                      -13-
<PAGE>

                  (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 the 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 1officer of Consignee to the best of
                           his or her information and belief;

                  (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,

                  (iv)     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;

                  (v)      within twenty (20) days after the end of each month,
                           a consignment base certificate of Consignee as of the
                           last New York 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); and

                  (vi)     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);

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

         (g)      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 field examinations of the Consigned Precious
                  Metal in the possession and control of Consignee (which
                  examinations shall include the observance


                                      -14-
<PAGE>

                  thereof by BDO SEIDMAN as to one of such examinations per year
                  including an annual audit review of Consignee's control
                  system), such examinations 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 field
                  examinations 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;

         (h)      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;

         (i)      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;

         (j)      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 3 attached
                  hereto) at any time claiming the same or any interest therein;

         (k)      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;

         (l)      Expect 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;


                                      -15-
<PAGE>
         (m)      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;

         (n)      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;

         (o)      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;

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

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

         (r)      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;

         (s)      Maintain at all times a ratio of Current Liabilities PLUS
                  long-term Indebtedness secured by current assets (including,
                  but not limited to, obligations of Consignee to the Second
                  insurance Companies and the Third Insurance Companies) to
                  working Capital of not more than 6.30:1.00;

         (t)      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


                                      -16-
<PAGE>

         (u)      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 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 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 3 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) -n
                  the ordinary course ofr business, and (i) 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;


                                      -17-
<PAGE>

         (g)      Obtain Precious Metal on consignment or loan from any source
                  other than Consignor or those persons listed as secured
                  parties on Schedule 3 attached hereto;

         (h)      Permit the aggregate amount of Consigned Precious Metal PLUS
                  Precious Metal consigned to Consignee by other consignors to
                  exceed 275,000 troy ounces of fine 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 and CS to the
                  consignee, (ii) 7,500 troy ounces at, or in transit to or
                  from, any one location, or (iii) 10,000 troy ounces outside
                  the United States.

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

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(g), I
                  l (n), 11(o), 11(p), 11(q), 11(r), 11(s), 11(t), 12(a), 12(c),
                  12(e), 12(f), 12(g), 12(h) or 12(1) 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


                                      -18-
<PAGE>

                  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.

         (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;

         (l)      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; those certain Consignment Agreements or Amended and
                  Restated Consignment Agreement dated as of August 20, 1993
                  between consignee and each of ABN, FPM, respectively, as the
                  same have been amended from time to time (,iv) that certain
                  Consignment Agreement dated as of January 31,1994 between CS
                  and Consignee, as the same has been amended from time to time
                  and (v) any promissory note (including, without limitation,
                  that certain. promissory note of Debtor in favor of The Chase
                  Manhattan Bank dated July 31, 1998) and/or agreements in favor
                  of The Chase Manhattan Bank as successor in interest by merger
                  to Chemical Bank.


                                      -19-
<PAGE>

         (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 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


                                      -20-
<PAGE>

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, price 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 No-ice by either Consignor or
Consignee of its election: to 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.



                                      -21-
<PAGE>

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 New York.

         (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.


                                      -22-
<PAGE>

                  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 New York and the United States District Court for
                  the Southern District of New York, 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 JURRY IN ANY ACTIN, 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 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.

                      Commerzbank International S.A.
                      As Consignor


                      By:   /s/: E. Winter         /s/: Ralf Kreikenbaum
                        -------------------------------------------------------
                      Name:      E. Winter              Ralf Kreikenbaum
                      Title      Legal Advisor          Senior Vice President

MICHAEL ANTHONY JEWELERS, INC.
AS CONSIGNEE

BY:  /S/: MICHAEL A. PAOLERCIO
   ---------------------------------
NAME:  MICHAEL A PAOLERCIO
TITLE:  SVP & TREASURER



                                      -23-