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                                                                  Exhibit 10(ad)


ANTWERP DIAMOND BANK NV                             [LOGO]


Confidential                            Antwerpen, 18th July 2005

                                        LAZARE KAPLAN INTERNATIONAL INC.
                                        19 West 44th Street, 16th floor

                                        NEW YORK (NY) 10036
                                        USA


This letter replaces our confirmation letter and also our addendum to that
letter dated 22nd January 2004.

Dear sirs


Referring to our recent conversations we have the pleasure to confirm that our
Bank is willing to continue the existing bank relation and credits, with
retention of the existing guarantees and collaterals, without debt novation and
subject to the modalities and conditions as stipulated here below.

1.  Amount
    An uncommitted credit of a counter value of maximum 30.000.000 US$ (thirty
    million US dollar). Drawings will only be permitted in US dollar and Euro.

2.  Utilization forms and modalities
    In principle the aforesaid credit is only to be utilized for overdrafts in
    current accounts. Utilization, other than overdrafts in current accounts
    (e.g. straight loans, discount, bank guarantees issued by us, forward
    contracts, ...), as well as utilization not directly connected to your
    diamond activities, always require a preliminary and explicit consent of our
    Bank.

3.  Interest conditions
    With regard to the overdrafts in current accounts, following interests and
    provisions will be charged : debit interest : for utilization in EUR :
    floating base rate EUR-ADB (presently 3,20% per annum) increased with 1,50%
    per annum; for utilization in US$ : Libor US$ fixing 3 months increased with
    1,60% per annum. Base rate-ADB equals the per annum rate of interest
    announced by the Bank from time to time at its head office in Antwerp.

    Changes in aforesaid base rates will be communicated as the occasion arises,
    either by letter or by computer generated message.

    With regard to possible other utilization (cf. supra) the debit interest
    and/or commission will be fixed the moment these utilization are
    authorized.

    For possible overdrawing of credit facilities (cf. article 6 of our General
    Credit Granting Conditions) the Bank has the right to increase aforesaid
    conditions with maximum 0,5% per annum.

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                 Pelikaanstraat 54 o B-2018 Antwerpen o Belgium
                tel +32 (0)3 204 72 04 o fax +32 (0)3 233 90 95
                    telex 31673 ADIABA B o Swift ADIA BE 22
            BTW BE 0404 465 551 RPR-Antwerpen o P.R. 000-0018639-15


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                                        Antwerpen, 18th July 2005

                                        LAZARE KAPLAN INTERNATIONAL INC.
                                        19 West 44th Street, 16th floor

                                        NEW YORK (NY) 10036
                                        USA


4.  General Conditions
    The granting of this credit is governed by our General Conditions for
    Banking Operations and by our General Credit Granting Conditions of which
    you already received a copy and to which you already explicitly agreed and
    enclosed addendum dated 18th July 2005. As far as necessary the acceptance
    of this credit reconfirms your agreement with said General Conditions. We
    stipulate further that the credit granted by our Bank implies that you will
    at least once a year provide us with a full insight information in your
    financial structure and that you will offer no personal guarantees and/or
    collateral to any other financial institution or to any third party without
    the preliminary and written consent of our Bank, except as for the
    stipulations in your letter dated 8th September, 1999 regarding the existing
    credit facilities and except as for possible limitations resulting from
    point 5 of the "Sixth Amendment and Agreement to Loan Agreement" of November
    2000 between Lazare Kaplan Inc., Fleet Bank N.A. and Bank Leumi U.S.A.

    Without prejudice to the foregoing, personal guarantees or collateral
    covering a credit or granted, for whatever reason, to other financial
    institutions or to third parties will, in all instances also have to be
    granted to the Bank in proportion to the credit granted by the latter.

5.  Guarantees and Commitments
    As guarantee for all amounts you are or will be due to our Bank in view of
    this credit, following guarantees are granted in favor of our Bank :

    -   a several and indivisible corporate guarantee of LAZARE KAPLAN EUROPE
        INC., for the total engagements
    -   a several and indivisible corporate guarantee of LAZARE KAPLAN BELGIUM
        NV, for the total engagements
    -   a several and indivisible corporate guarantee of LAZARE KAPLAN GHANA
        LTD., for the total engagements
    -   a several and indivisible corporate guarantee of LAZARE KAPLAN AFRICA
        INC., for the total engagements
    -   a several and indivisible corporate guarantee of LAZARE KAPLAN JAPAN
        INC., for the total engagements

    Moreover you commit yourself to hand over to us the following information
    on a regular basis :

    -   yearly audited Financial Statements (consolidated figures) due by
        September 15
    -   quarterly Financial Statements (consolidated figures) due 60 days after
        the last day of the quarter
    -   monthly a detailed list of outstanding receivables
    -   monthly overview debit positions other banks (consolidated figures)

    and durably to meet following conditions :

    -   unless prior written notice to the Bank, your business offices should be
        maintained at the present address and your certificate of incorporation
        and/or by-laws are to remain unchanged
    -   ratio of Senior Debt (only bank debt) to Tangible Net Worth at not more
        than 1.50:1

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                 Pelikaanstraat 54 o B-2018 Antwerpen o Belgium
                tel +32 (0)3 204 72 04 o fax +32 (0)3 233 90 95
                    telex 31673 ADIABA B o Swift ADIA BE 22
            BTW BE 0404 465 551 RPR-Antwerpen o P.R. 000-0018639-15

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                                        LAZARE KAPLAN INTERNATIONAL INC.
                                        19 West 44th Street, 16th floor

                                        NEW YORK (NY) 10036
                                        USA


    -   Working Capital should be minimum 80 million US$ (Working Capital =
        Current Assets - Current Liabilities)

        o   Current Assets = as determined in accordance with GAAP, consistently
            applied (1)
        o   Current Liabilities = as determined in accordance with GAAP,
            consistently applied, except that Current Liabilities shall not
            include the notes payable to ABN AMRO Bank and Bank Leumi and any
            portion of any other committed bank debt unless (and only to the
            extent) such amount is required to be repaid within nine months of
            such date of determination

    -   all information given by you to your American bankers related to the
        observance of the covenants imposed by them is to be given
        simultaneously to our Bank

    Additional or complementary collateral which we would obtain (cf. art. 15 of
    our aforesaid General Credit Granting Conditions) will also be registered in
    our books.

For the sake of good order we remind you that the credit facility described
herein is not a committed facility : no commitment fee will be charged, but we
may terminate the credit facility at any time and for any reason, even though
you may have complied with all of the terms and conditions enumerated herein.

We kindly request you to confirm your agreement with the contents of the present
letter by returning to us within 15 days the attached copy of this letter,
signed by your legal representatives, under your company's seal and hand-written
statement "seen and approved".

                                Yours faithfully,


            Willy Laeremans                           Theo Strous
         Senior Vice President                     Managing Director
            Credit Division                Member of the Executive Committee


(1) including inventory and receivables



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                 Pelikaanstraat 54 o B-2018 Antwerpen o Belgium
                tel +32 (0)3 204 72 04 o fax +32 (0)3 233 90 95
                    telex 31673 ADIABA B o Swift ADIA BE 22
            BTW BE 0404 465 551 RPR-Antwerpen o P.R. 000-0018639-15



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