LAZARE KAPLAN INTERNATIONAL INC.
EIGHTH AMENDMENT TO REVOLVING CREDIT AGREEMENT

          This Eighth Amendment to Revolving Credit Agreement (herein, the
“Amendment”) is entered into as of April __, 2007, between Lazare Kaplan
International Inc., a Delaware. corporation (the “Borrower”), and ABN AMRO Bank
N.V., as Administrative Agent (the “Agent”), ABN AMRO Bank N.V., as a lender
(“ABN AMRO”) and Bank Leumi USA, as a lender (“Leumi” and together with ABN
AMRO, the “Banks”).

PRELIMINARY STATEMENTS

          A. The Borrower, the Agent and the Banks entered into a certain
Revolving Credit Agreement, dated as of August 14, 2002, as amended by the First
Amendment to Revolving Credit Agreement between the Borrower and the Banks dated
as of May 28, 2003, a Second Amendment to Revolving Credit Agreement dated as of
November 24, 2003, a Third Amendment to Revolving Credit Agreement dated as of
September 13, 2004, a Fourth Amendment to Revolving Credit Agreement dated as of
November 24, 2004, a Fifth Amendment to Revolving Credit Agreement dated as of
May 6, 2005, a Sixth Amendment to Revolving Credit Agreement dated as of July
15, 2005 and Seventh Amendment to Revolving Credit Agreement dated as of
December 1, 2005 (the Revolving Credit Agreement, as the same has been amended
prior to the date hereof, being referred to herein as the “Credit Agreement”).
All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.

          B. The Borrower has requested that the Banks extend the existing
Termination Date of December 1, 2007 in accordance with Section 24 of the Credit
Agreement, and make certain other amendments thereto and the Banks are willing
to do so under the terms and conditions set forth in this Amendment.

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

SECTION 1. AMENDMENTS.

          Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:

 

 

 

          1.1. The definition of “Commitment” in Section 1 of the Credit
Agreement shall be amended and restated in its entirety to read as follows:

 

 

 

“Commitment: The several obligations of (a) ABN AMRO to make Loans to the
Borrower up to an aggregate outstanding principal amount not to exceed
$27,200,000, and (b) Leumi to make Loans to the Borrower up to an aggregate
outstanding principal amount not to exceed $10,000,000, as such amounts may be
reduced from time to time or terminated according to the terms of this
Agreement.”

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          1.2. The definition of “Termination Date” in Section 1 of the Credit
Agreement shall be amended and restated in its entirety to read as follows:

 

 

 

 

“Termination Date: December 1, 2008, or such later date as may be extended
pursuant to Section 24 hereof.”

 

 

 

 

          1.3. Section 8.3(a) shall be amended in its entirety to read as
follows:

 

 

 

 

“(a) as of the end of each of its fiscal quarters, Working Capital of not less
than one hundred million dollars ($100,000,000);”

 

 

 

 

          1.4. Section 9.1(f) shall be amended in its entirety to read as
follows:

 

 

 

 

“(i) any of the Borrower or its Subsidiaries shall be in default (after any
applicable period of grace or cure period) under any agreement or agreements
evidencing a Capitalized Lease or Indebtedness in excess of $100,000 owing to
any Person or any affiliate thereof, or shall fail to pay such amounts
thereunder when due, or within any applicable period of grace or (ii) any lender
of the Borrower or its Subsidiaries (other than the Banks) shall demand
repayment of any Indebtedness payable on demand under any uncommitted borrowing
facility;”

SECTION 2. CONDITIONS PRECEDENT.

          The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:

 

 

 

          2.1. The Borrower, the Agent and the Banks shall have executed and
delivered this Amendment, and the Borrower shall have executed and delivered
replacement Promissory Notes to the Banks.

 

 

 

          2.2. The Agent shall have received copies (executed or certified, as
may be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Amendment to the extent the Agent or its
counsel may reasonably request.

 

 

 

          2.3. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Agent and its counsel.

 

 

 

          2.4. Lazare Kaplan Europe Inc., Lazare Kaplan Japan Inc. and Lazare
Kaplan Africa Inc. shall have executed and delivered to the Agent their consent
to this Amendment in the form set forth below.

SECTION 3. REPRESENTATIONS.

          In order to induce the Banks to execute and deliver this Amendment,
the Borrower hereby represents to the Banks that as of the date hereof the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except

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that the representations contained in Section 6(d) shall be deemed to refer to
the most recent financial statements of the Borrower delivered to the Banks) and
the Borrower is in compliance with the terms and conditions of the Credit
Agreement and no Default or Event of Default has occurred and is continuing
under the Credit Agreement or shall result after giving effect to this
Amendment.

SECTION 4. MISCELLANEOUS.

          4.1. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.

          4.2. The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Agent.

          4.3. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of New York.

[SIGNATURE PAGE TO FOLLOW]

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          This Eighth Amendment to Revolving Credit Agreement is entered into as
of the date and year first above written.

 

 

 

 

 

LAZARE KAPLAN INTERNATIONAL INC.

 

 

 

 

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Accepted and agreed to:

 

 

 

 

 

ABN AMRO BANK N.V., individually and as Agent

 

 

 

 

 

By

 

 

 

 

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Name

 

 

 

 

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By

 

 

 

 

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BANK LEUMI USA

 

 

 

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GUARANTOR’S ACKNOWLEDGEMENT AND CONSENT

          Each of the undersigned heretofore executed and delivered to the Bank
a Guaranty dated August 14, 2002. Each of the undersigned hereby consents to the
Eighth Amendment to the Credit Agreement as set forth above and confirms that
its Guaranty and all of the undersigned’s obligations thereunder remain in full
force and effect. Each of the undersigned further agrees that the consent
thereof to any further amendments to the Credit Agreement shall not be required
as a result of this consent having been obtained, except to the extent, if any,
required by the Guaranty referred to above.

 

 

 

 

 

LAZARE KAPLAN EUROPE INC.

 

 

 

By

 

 

 

 

 

 

 

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LAZARE KAPLAN JAPAN INC.

 

 

 

By

 

 

 

 

 

 

 

Name

 

 

 

 

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LAZARE KAPLAN AFRICA INC.

 

 

 

By

 

 

 

 

 

 

 

Name

 

 

 

 

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Title

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