<PAGE>   1

                                                                   Exhibit 10.33



                           LOAN & SECURITY AGREEMENT


THIS LOAN AND SECURITY AGREEMENT entered into as of the 29th day of January,
1999, by and between General Electric Capital Business Asset Funding
Corporation, a Delaware corporation, whose address is 10900 NE 4th St.,
Suite 500, Bellevue, WA 98004 ("Lender") and MICHAEL ANTHONY JEWELERS, INC., a
DELAWARE CORPORATION, whose address is 115 SOUTH MACQUESTEN PARKWAY, MT. VERNON,
NY 10550 ("Borrower").

         WHEREAS, Lender has agreed to make a commercial loan or loans to
Borrower; and

         WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.

         NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower and Lender agree as follows:

1. CREATION OF SECURITY INTEREST. As security for the due and punctual payment
of any and all of the present and future obligations of the borrower to Lender,
whether direct or contingent or joint or several, Borrower hereby conveys,
assigns and grants to Lender a continuing security interest in all of Borrower's
rights, title and interests in and to the equipment described in the
Supplemental Security Agreement(s) entered into pursuant to this Loan and
Security Agreement from time to time ("Equipment") including all present and
future additions, attachments and accessories thereto, all substitutions
therefor and replacements thereof and all proceeds thereof, including all
proceeds of insurance (such Equipment and property hereinafter called
"Collateral").

2. THE LOANS.

(a) Subject to the terms and conditions of this Loan and Security Agreement,
lender agrees to make a loan or loans to Borrower. The maximum principal amount
of any loan or loans to be made by Lender to Borrower shall be within Lender's
discretion, subject to the exercise of Lender's reasonable business judgment,
and shall be as stated in the loan commitment letter issued by lender to
Borrower, or in the event a commitment letter is not issued by Lender, in
Lender's internal credit approval (each such loan or loans shall be referred to
as "the Loan Amount").

(b) The Loan Amounts shall be repaid by Borrower as a term loan or term loans
("Term Loan"). The Term Loan shall be evidenced by a promissory note or notes in
the form attached hereto as Exhibit "A" ("Term Note"). The payment provisions of
each Term Note shall be stated therein.

(c) If requested by Borrower, and in accordance with the terms and conditions of
Section 3 hereof, Lender shall make interim fundings to Borrower of a Term Loan
as partial advances of the Loan Amount ("Interim Loans"). The Interim Loans
shall either be for the payment of the acquisition cost of any items of
Equipment delivered and accepted by Borrower prior to the expiration date of
Lender's loan commitment to Borrower ("Commitment Expiration date") or to fund
progress payments to the vendor or manufacturer of the Equipment, if the making
of progress payments was agreed to by Lender in its commitment or approval to
make the loan or loans to Borrower. The Interim Loans shall be evidenced by
promissory notes in the form attached hereto as Exhibit "B" ("Interim Note").
Interest on all Interim Loans shall be payable as provided therein. The
principal amount due under the Interim Loans shall be due as provided in the
Interim Notes, at which time, provided no Event of Default hereunder has
occurred and is continuing or event which with the passing of time or giving of
notice or both would become an Event of Default hereunder has occurred and is
continuing. Lender shall consolidate all Interim Loans and convert them to a
Term Loan evidenced by a Term Note or Notes. Whether or not a Term Loan is
evidenced by one or more Term Notes shall be agreed between Lender and Borrower,
or in the absence of such an agreement, as decided by Lender, in the exercise of
its reasonable business judgment.

(d) In the event that the amount loan pursuant to the Interim Loans is less than
the Loan Amount, subject to Borrower's compliance with the terms and conditions
of this Loan and Security Agreement (including the satisfaction of the
conditions of borrowing set forth in Section 7 of this Loan and Security
Agreement including but not limited to providing Lender with a description of
the items of Equipment), Lender shall disburse to Borrower the balance of the
Loan Amount on the same date that the Interim Loans are converted into a term
loan.

3. METHOD FOR BORROWING ON INTERIM LOAN. Borrower shall give Lender at least
five (5) business days written notice of a request for the disbursement of an
Interim Loan ("Request"), specifying the date on which the Interim Loan is to be
disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default or event which with the passing of time or the giving of notice or both
would constitute an Event of Default hereunder has occurred and is continuing
and (ii) in the event items of Equipment have been delivered to Borrower,
Borrower has unconditionally accepted the Equipment from the vendor thereof.
Subject to the conditions of this Loan and Security Agreement, Lender shall
disburse the Interim Loan to the invoicing party, or if Borrower shall have paid
the amount of such invoice, Lender shall reimburse Borrower, upon receipt of
proof of payment from Borrower.

4. CROSS COLLATERAL/CROSS DEFAULT. All Collateral shall secure the payment and
performance of all of Borrower's liabilities and obligations to Lender hereunder
and under any of the loan documents relating hereto including, but not limited
to all Interim Notes and all Term Notes (the Loan and Security Agreement, the
Interim Notes, the Term Notes, the Supplemental Security Agreement(s) and all
other loan documents may be referred to herein collectively as the "Loan
Documents"). Lender's security interest in the Collateral shall not be
terminated until and unless all of Borrower's obligations to Lender under any of
the Loan Documents are fully paid and performed. The occurrence of an event of
default under any other of the Loan Documents shall be deemed to be an Event of
Default hereunder and an Event of Default hereunder shall be deemed to be an
event of default under any other of the Loan Documents.



                                  Page 1 of 6
<PAGE>   2

5. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants as
follows:

(a) Power and Authorization. Borrower has the full power and (corporate)
authority to execute deliver and perform Borrower's obligations under the Loan
Documents. The execution and delivery of the Loan Documents have been authorized
by all requisite corporate (or partnership) action on the part of Borrower. The
execution, delivery and performance of the Loan Documents have not constituted
and will not constitute a breach, default or violation of or under Borrower's
articles of incorporation, by-laws (partnership agreement), or any other
agreement, indenture, contract, lease, law, order, decree, judgment, or
injunction to which Borrower is a party or may be bound and have not resulted
and will not result in the creation of any lien upon the Equipment pursuant to
any agreement, indenture, lease, contact or other instrument to which Borrower
is a party, except the lien created by this Loan and Security Agreement.

(b) Existence. If Borrower is a corporation, Borrower (i) is duly incorporated,
validly existing and in good standing under the laws of its state of
incorporation, (ii) has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry out its business as now
conducted, and (iii) is duly qualified to transact business as now conducted,
and (iii) is duly qualified to transact business as a foreign corporation in
each jurisdiction where the Equipment will be located and in the jurisdiction
where its principal place of business is located. If Borrower is a partnership,
Borrower (i) has been duly formed as a (limited or general) partnership under
the laws of the state of its organization, (ii) is comprised of the general
partner(s) listed on the Schedule of Partners attached to this Loan and Security
Agreement, and (iii) is in good standing under the laws of the state of its
formation.

(c) Binding Effect. This Loan and Security Agreement constitutes the valid and
binding agreement of the Borrower; the Interim Notes and the Term Note, when
executed and delivered, will constitute the valid and binding obligations of the
Borrower; and the Loan Documents are enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by the bankruptcy laws,
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.

(d) Litigation. There is no action, suit or proceeding pending against, or to
the knowledge of the Borrower, threatened against or affecting the Borrower,
before any court or arbitrator or any governmental body, agency or official
which has not been previously disclosed to the Lender in writing and in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial condition or results of operations of
the Borrower or which would in any manner draw into question the validity of any
of the Loan Documents.

(e) Filing of Tax Returns. The Borrower has filed all tax returns required to
have been filed and has paid all taxes shown to be due and payable on such
returns, including interest and penalties, and all other taxes which are payable
by it, to the extent the same have become due and payable. The Borrower knows of
no proposed tax assessment against it and all tax liabilities of the Borrower
are adequately provided for.

(f) Title. The Borrower has or shall have at the time it executes the Term Note
good and indefeasible title to the Collateral free and clear of all liens other
than the Lender's lien.

(g) Compliance with Law. The business and operations of the Borrower have been
and are being conducted in accordance with all applicable laws, rules and
regulations, other than violations which could not (either individually or
collectively) have a material adverse effect on the financial condition or
operations of the Borrower.

(h) Full Disclosure. All documents, records, instruments, certificates,
statements (including, but not by way of limitation, financial statements of
Borrower) and information provided to Lender by Borrower in connection with this
Loan and Security Agreement are true and accurate in all material respects and
do not contain any untrue statement, or fail to contain any statement of a
material fact necessary to make the statements contained herein or therein not
misleading. There is no fact known to the Borrower that Borrower has not
disclosed in writing which could materially and adversely affect the financial
condition or operations of Borrower.

(i) Security Interest. The security interest granted to Lender hereunder is a
valid, first priority security interest in the Collateral and has been, or
promptly after the execution of the Supplemental Security Agreement describing
the Collateral will be, perfected in accordance with the requirements of all
states in which any item of the Collateral is located.

(j) Personal Property. Under the laws of the state(s) in which the Collateral is
to be located, the Collateral is deemed to consist solely of personal property.

(k) Pollution and Environmental Control. Borrower has obtained all permits,
licenses and other authorizations which are required under, and is in material
compliance with, all federal, state, and local laws and regulations relating to
pollution, reclamation, or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes into air,
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or hazardous or toxic materials or wastes. Borrower
shall maintain all such permits, licenses, and authorizations current.

6. COVENANTS. Borrower hereby agrees and covenants as follows:

(a) Payment. Borrower shall pay the indebtedness secured hereby as provided
herein and in the Interim Notes and Term Notes.

(b) Location of Collateral. Borrower will keep the Collateral located at the
location or locations stated on the Supplemental Security Agreements, provided,
however, that Borrower may change the location of the Collateral with Lender's
prior written consent.

(c) No Liens. Except for the security interest granted hereby or under any other
agreement under which Lender is the secured party, whether as mortgagee.
beneficiary or otherwise. Borrower shall keep the Collateral free and clear of
any security interest, lien or encumbrance of any kind and Borrower shall not
sell, assign (by operation of law or otherwise) exchange or otherwise dispose of
any of the Collateral.



                                  Page 2 of 6
<PAGE>   3

(d) Insurance. Borrower shall procure and continuously maintain and pay for
(a) all risk physical damage and property insurance to the equipment for not
less than the full replacement value thereof naming Lender as loss payee and
(b) bodily injury and property damage combined single limit liability insurance,
all in such amounts and against such risks and hazards as are reasonably
required by Lender, with insurance companies and pursuant to contracts or
policies and with deductibles satisfactory to Lender. All contacts and policies
shall include provisions for the protection of Lender notwithstanding any act or
neglect of or breach or default by Borrower, shall provide for payment of
insurance proceeds to Lender, shall provide that they may not be modified,
terminated or canceled unless Lender is given at least thirty (30) days' advance
written notice thereof, and shall provide that the coverage is "primary
coverage" for the protection of Borrower or Lender notwithstanding any other
coverage carried by Lender protecting against similar risks. Borrower shall
promptly notify any appropriate insurer and Lender of each and every occurrence,
which may become the basis of a claim or cause of action against the insured and
provide Lender with all data pertinent to such occurrence. Borrower shall
furnish Lender with certificates of such insurance or copies of policies upon
request and shall furnish Lender with renewal certificates not less than thirty
(30) days prior to the renewal date. Proceeds of all insurance are payable first
to Lender to the extent of its interest.

(e) Financing Statements. At the request of Lender, Borrower will join Lender in
executing one or more financing statements pursuant to the Uniform Commercial
Code and other documents deemed necessary by Lender under applicable law to
record or perfect its security interest in the Collateral, including
continuation statements, in form satisfactory to Lender and will pay the cost of
filing the same in all public offices wherever filing is deemed by Lender to be
necessary or desirable. Borrower hereby authorizes Lender, in such jurisdictions
where such action is authorized by law, to effect any such recordation or filing
of financing statements or other documents without Borrower's signature thereto.

(f) Change of Name or Address. Borrower will immediately notify Lender in
writing of any change in its place of business or the adoption or change of any
tradename or fictitious business name, and will upon request of Lender, execute
any additional financing statements or other similar documents necessary to
perfect or maintain its security interest.

(g) Use of Equipment, Maintenance. Borrower will cause the Equipment to be used
in a careful and proper manner, will comply with and conform to all governmental
laws, rules and regulations relating thereto, and will cause the Equipment to be
operated in accordance with the manufacturer's or supplier's instructions or
manuals and only by competent and duly qualified personnel. Borrower will cause
the Equipment to be kept and maintained in good repair, condition and working
order and will furnish all parts, replacements, mechanisms, devices and
servicing required therefor so that the value, condition and operating
efficiency thereof will at all times be maintained and preserved, normal wear
and tear excepted. All such repairs, parts, mechanisms, devices and replacements
shall immediately, without further act, become part of the Equipment and subject
to the security interest created by this Loan and Security Agreement. Borrower
will not make any improvement, change, addition or alteration to the Equipment
if such improvement, change, addition or alteration will impair the originally
intended function or use of the Equipment or impair the value of the Equipment
as it existed immediately prior to such improvement, change, addition or
alteration. Any part added to the Equipment in connection with any improvement,
change, addition or alteration shall immediately, without further act, become
part of the Equipment and subject to the security interest created by this Loan
and Security Agreement.

(h) Inspection. Lender may at any reasonable time or times inspect the Equipment
and may at any reasonable time or times inspect the books and records of
Borrower.

(i) Taxes. Borrower shall promptly pay, when due, all charges, fees, assessments
and taxes (excluding all taxes measured by Lender's income) which may now or
hereafter be imposed upon the ownership, leasing, possession, sale or use of the
Collateral.

(j) Performance by Lender. If Borrower fails to perform any agreement or
obligation contained herein, Lender may itself perform, or cause the performance
of such agreement or obligation. Borrower will pay, or reimburse Lender, on
demand, for any and all fees, including attorneys' fees, costs and expenses of
whatever kind or nature incurred by Lender in connection with (i) the creation,
preservation and protection of Lender's security interest in the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, (ii)
payments or discharge of any taxes or liens upon or in respect of the
Collateral, (iii) premiums for insurance with respect to the Equipment and
(iv) this Loan and Security Agreement and with protecting, maintaining or
preserving the Collateral and Lender's interests therein, whether through
judicial proceedings or otherwise, or in connection with defending or
prosecuting any actions, suits or proceedings arising out of or related to the
Loan and Security Agreement and the Loan Documents or in connection with any
debt restructuring, loan workout negotiations or bankruptcy or insolvency case
or proceedings. All such amounts shall constitute obligations of Borrower
secured by the Collateral. In the event that Borrower fails to perform any of
its agreements contained herein, Borrower will, on demand, reimburse Lender for
all such expenditures, together with interest thereon from the date of such
expenditure until fully reimbursed at the rate of two percent (2%) per month on
the outstanding balance of such expenditures or the highest rate permitted by
law, whichever is less.

(k) Power of Attorney. Borrower hereby irrevocably appoints Lender Borrower's
attorney-in-fact, with full authority in the place and stead of Borrower and in
the name of Borrower or otherwise, from time to time in the Lender's discretion,
to take any action and to execute any instrument which Lender may deem necessary
or advisable to accomplish the purposes of this Loan and Security Agreement,
including, without limitation; (i) to obtain, compromise and adjust insurance
required to be paid to Lender; (ii) to ask, demand, collect, sue for, recover,
receive, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (iii) to receive, endorse, and
collect any drafts or other instruments, documents, and chattel paper in
connection with clause (i) or (ii) above; and (iv) to file any claims or take
any action or institute any proceedings which Lender may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Lender with respect to any of the Collateral.

(l) No Duties. The powers conferred on Lender hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Lender shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.



                                  Page 3 of 6
<PAGE>   4

(m) Financial Data. Borrower will furnish to Lender and will cause any guarantor
of Borrower's obligations to furnish to Lender on request (i) annual balance
sheet and profit and loss statements prepared in accordance with generally
accepted accounting principles and practices consistently applied and, if Lender
so requires, accompanied by the annual audit report of an independent certified
public accountant reasonably acceptable to Lender, and (ii) all other financial
information and reports that Lender may from time to time reasonably request,
including, if Lender so requires, income tax returns of Borrower and any
guarantor of Borrower's obligations hereunder.

7. CONDITIONS OF BORROWING. Lender shall not be obligated to make any loan
hereunder unless:

(a) The Interim Notes or Term Notes evidencing such loan shall have been duly
executed and delivered to Lender;

(b) Borrower shall have executed and delivered to Lender the Supplemental
Security Agreement describing the Collateral and stating, except with respect to
progress payment fundings, the location thereof;

(c) Except with respect to progress payment fundings, Lender shall have received
evidence (as described in Section 6d hereof) that insurance has been obtained in
accordance with the provisions of this Loan and Security Agreement;

(d) Lender shall have received any and all third party consents, waivers or
releases deemed necessary or desirable by it in connection with the loan and the
Collateral being financed, including, without limitation, Uniform Commercial
Code lien releases and the consent and waiver, in form and substance
satisfactory to Lender, of each and every realty owner, landlord and mortgagee
holding an interest in or encumbrance on the real property where any of the
Collateral is to be located;

(e) All filings, recordings and other actions deemed necessary or desirable by
Lender in order to establish, protect, preserve and perfect its security
interest in the Collateral being financed by such loan as a valid perfected
first priority security interest shall have been duly effected, including,
without limitation, the filing of financing statements and the recordation of
landlord (owners) and/or mortgagee waivers or disclaimers, all in form and
substance satisfactory to Lender, and all fees, taxes and other charges relating
to such filings and recordings shall have been paid by Borrower;

(f) The representations and warranties contained in this Loan and Security
Agreement shall be true and correct in all respects on and as of the date of the
making of any loan hereunder with the same effect as if made on and as of such
date;

(g) In the sole judgment of Lender, there shall have been no material adverse
change in the financial condition, business or operations of Borrower from the
earliest date of any financial statement, credit report, business report or
similar document submitted to Lender for its review;

(h) All Loan Documents shall be satisfactory to Lender's attorneys; and

(i) Lender shall have received, in form and substance satisfactory to Lender,
such other documents as Lender shall require including, but not limited to, a
Request, proof of payment, vendor invoices and certificates of authority and
incumbency.

8. DEFAULT. The occurrence of any of the following events, following the giving
of any required notice and/or the expiration of any applicable period of grace,
shall constitute an event of default ("Event of Default") hereunder:

(a) Borrower's default in payment of any installment of the principal of or
interest on any Interim Note or Term Note when and after the same shall become
due and payable, whether at the due date thereof or by acceleration or
otherwise, which default shall continue unremedied for ten (10) days; or

(b) The failure by Borrower to make payment of any other amount payable
hereunder or under any Interim Note or Term Note, and the continuance of such
failure for more than ten (10) days after written notice thereof by Lender to
Borrower; or

(c) The failure by Borrower to perform or observe any covenant, condition,
obligation or agreement to be performed or observed by it hereunder, which
failure shall continue unremedied for thirty (30) days after written notice
thereof by Lender to Borrower; or

(d) The occurrence of a default described in Section 4 hereof; or

(e) Any warranty, representation or statement made or furnished with respect to
the Borrower or the Collateral to Lender by or on behalf of Borrower, in
connection with this Loan and Security Agreement, or the indebtedness secured
hereby, shall prove to have been false in any adverse, material respect when
made or furnished; or

(f) Borrower shall become insolvent or bankrupt or make an assignment for the
benefit of creditors or consent to the appointment of a trustee or receiver; or
a trustee or a receiver shall be appointed for Borrower or for a substantial
part of its property without its consent and shall not be dismissed for a period
of sixty (60) days; or bankruptcy, reorganization, liquidation, insolvency or
dissolution proceedings shall be instituted by or against Borrower and, if
instituted against Borrower, shall be consented to or be pending and not
dismissed for a period of sixty (60) days; or any execution or writ of process
shall be issued under any action or proceeding against Borrower in such capacity
whereby any of the Collateral may be taken or restrained; Borrower shall cease
doing business as a going concern; or, without the prior written consent of
Lender, Borrower shall sell, transfer or dispose of all or substantially all of
its assets or property; or

(g) The liquidation, merger, consolidation, reorganization, conversion to an "S"
status or dissolution, if Borrower is a corporation or partnership, of Borrower,
if in Lender's reasonable opinion, such act shall materially and adversely
affect Borrower's ability to perform under any of the Loan Documents. Not
withstanding the forgoing, lender acknowledges that borrower may acquire other
jewelry concerns and the same shall not be deemed a merger or consolidation
herein, provided borrower survives the acquisition; or



                                  Page 4 of 6
<PAGE>   5

(h) Any item of Collateral is seized or levied on under legal or governmental
process or for any reason Lender deems itself insecure. Lender shall be entitled
to deem itself insecure when some event occurs, fails to occur or is threatened
or some objective condition exists or is threatened which significantly impairs
the prospects that any of Borrower's obligations to Lender will be paid when
due, which significantly impairs the value of the Collateral to Lender or which
significantly affects the financial or business condition of Borrower.

         The occurrence of an Event of Default shall terminate any commitment or
obligation by Lender to make any of the loans contemplated by this Loan and
Security Agreement.

9. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default hereunder,
Lender may, at its option, do any one or more of the following:

(a) Declare all obligations of Borrower to Lender to be immediately due and
payable, whereupon all unpaid principal of and interest on said indebtedness and
other amounts declared due and payable shall be and become immediately due and
payable;

(b) Take possession of all or any of the Collateral and exclude therefrom
Borrower and all others claiming under Borrower, and thereafter hold, store,
use, operate, manage, maintain and control, make repairs, replacements,
alterations, additions and improvements to and exercise all rights and powers of
Borrower in respect to the Collateral or any part thereof. In the event Lender
demands, or attempts to take possession of the Collateral in the exercise of any
rights under this Loan and Security Agreement, Borrower promises and agrees to
promptly turn over and deliver complete possession thereof to Lender;

(c) Require Borrower to assemble the Collateral, or any portion thereof, at a
place designated by Lender and reasonably convenient to both parties, and
promptly to deliver such Collateral to Lender, or an agent or representative
designated by it;

(d) Sell, lease or otherwise dispose of the Collateral at public or private
sale, without having the Collateral at the place of sale, and upon terms and in
such manner as Lender may determine (and Lender may be a purchaser at any sale);
and

(e) Exercise any remedies of a secured party under the Uniform Commercial Code
as adopted in the state where the Collateral is located or any other applicable
law.

         Except as to portions of the Collateral which are perishable or
threaten to decline speedily in value or are of a type customarily sold on a
recognized market, Lender shall give Borrower at least ten (10) days' prior
written notice of the time and place of any public or private sale of the
Collateral or other intended disposition thereof to be made. Such notice may be
mailed to Borrower at the address set forth in the first paragraph of this Loan
and Security Agreement. Borrower hereby specifically agrees (to the extent that
applicable law and public policy allows it to effectively do so) that any public
or private sale held in accordance with the terms of this Loan and Security
Agreement shall, for the purpose of the Uniform Commercial Code as adopted in
the state where the Collateral is located and for all other purposes, be deemed
to have been conducted in a commercially reasonable manner and in good faith.

         The proceeds of any sale under Section 9(d) shall be applied as
follows:

         (i) To the repayment of the costs and expenses of retaking, holding and
preparing for the sale and the selling of the Collateral (including legal
expenses and attorneys' fees) and the discharge of all assessments,
encumbrances, charges or liens, if any, on the Collateral prior to the lien
hereof (except any taxes, assessments, encumbrances, charges or liens subject to
which such sale shall have been made);

         (ii) To the payment of the whole amount then due and unpaid of the
indebtedness of Borrower to Lender;

         (iii) To the payment of other amounts then secured hereunder; and

         (iv) The surplus, if any, shall be paid to the Borrower or to
whomsoever may be lawfully entitled to receive the same.

         Lender shall have the right to enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to stop or
prevent Lender from pursuing any further remedy which it may have, and any
repossession or retaking or sale of the Collateral pursuant to the terms hereof
shall not operate to release Borrower until full payment of any deficiency has
been made in cash.

10. LIMITATION ON INTEREST. It is the intent of the parties to this Loan and
Security Agreement to contract in strict compliance with applicable usury laws
from time to time in effect. In furtherance thereof, the parties stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.

11. PERSONAL PROPERTY/TAGS. No item of Equipment will be attached or affixed to
realty or any building without Lender's prior knowledge and written consent and
waiver of the landlord and the mortgagee, if any, of the real property. If so
requested by Lender, Borrower will affix tags supplied by Lender, reflecting
Lender's security interest in the Equipment.

12. LOSS AND DAMAGE. Borrower shall bear the risk of damage, loss, theft, or
destruction, partial or complete of the Equipment, whether or not such loss or
damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the pro rata portion of the
outstanding principal balance due under the Interim Note or Term Note, as the
case may be, and all other amounts relating to that item of Equipment then due
and owing hereunder, and upon payment of



                                  Page 5 of 6
<PAGE>   6

that amount, Lender's lien shall be terminated with respect to that item of
Equipment only, and Lender will release its interest in that item Equipment.

13. ASSIGNMENT. Borrower may not assign or transfer any rights under this Loan
and Security Agreement or to the Collateral without Lender's prior written
consent.

14. INDEMNIFICATION. Borrower shall indemnify and hold harmless Lender from and
against any and all claims, losses, liabilities. causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan
Documents or the Collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.

15. NOTICES. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, request or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective only if the same is physically delivered or is
by certified mail, postage prepaid, return receipt requested, or by overnight
courier, postage prepaid, mailed to the parties at the addresses set forth in
the first paragraph of this Loan and Security Agreement, with a copy to Lender's
Vice President of Credit. Any party hereto may change its address for such
notices by delivering or mailing to the other parties hereto, as aforesaid, a
notice of such change.

16. NO WAIVER BY LENDER. By exercising or failing to exercise any of its rights,
options or elections hereunder, Lender shall not be deemed to have waived any
breach or default on the part of Borrower or to have released Borrower from any
of the obligations secured hereby, unless such waiver or release is in writing
and is signed by Lender. In addition, the waiver by Lender of any breach hereof
for default in payment of an indebtedness secured hereby shall not be deemed to
constitute a waiver of any succeeding breach or default.

17. FURTHER AGREEMENTS. From time to time, Borrower will execute such further
instruments as Lender may reasonably require, in order to protect, preserve, and
maintain the security interest granted hereby.

18. BINDING UPON SUCCESSORS. All agreements, covenants, conditions and
provisions of this Loan and Security Agreement shall apply to and bind the
successors and assigns of all parties hereto.

19. GOVERNING LAWS. This Loan and Security Agreement shall be governed by the
laws of the State of Washington.

20. AMENDMENT. This Loan and Security Agreement can be modified or rescinded
only by a writing expressly referring to this Loan and Security Agreement,
signed by both of the parties hereto.

21. INVALIDITY OF PROVISIONS. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason whatsoever
such illegality or invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.

IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.

Lender:       General Electric          Borrower: Michael Anthony Jewelers, Inc.
              Capital Business Asset
              Funding Corporation
              ------------------------                 -------------------------
By:           /s/                       By:            /s/ Michael A. Paolercio 
              ------------------------                 -------------------------
(Print Name):                           (Print Name):      Michael A. Paolercio 
              ------------------------                 -------------------------
Title:                                  Title:             Treasurer           
              ------------------------                 -------------------------
                                        Social Security
                                        Number:
                                                       -------------------------
                                        (if Borrower is
                                         an individual)
                                        FEIN:              13-2910285          
                                                       -------------------------



                                  Page 6 of 6