<PAGE>

                                                                  Exhibit 10(ac)

                 AMENDED AND RESTATED CREDIT FACILITY AGREEMENT

THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT (the "Agreement") is made as
of [December, 1st 2004] by and between ABN AMRO Bank N.V., Tokyo branch (the
"Bank"), LAZARE KAPLAN JAPAN INC., a Delaware corporation, (the "Borrower")
operating through its branch office in Japan and LAZARE KAPLAN INTERNATIONAL
INC., a Delaware corporation (the "Guarantor") as follows:

                                    Recitals

     A.   The Borrower and the Guarantor have entered into the Credit Facility
          Agreement (as renewed, extended, or amended to date, the "Existing
          Agreement") dated as of Nov. 29, 2000 with the Bank, providing for,
          among other things, loan facilities in Japanese yen (the "Facility" or
          "Facilities") in the maximum amount equivalent to the Facility Amount
          (as defined below).

     B.   Subject to the terms and conditions set forth below, the Borrower, the
          Guarantor and the Bank desire to amend and restate the Existing
          Agreement.

     C.   The amendment and restatement of the Existing Agreement hereunder is
          not intended by the parties to constitute either a novation or a
          discharge or satisfaction of the indebtedness and obligations under
          the Existing Agreement, which indebtedness and obligations under the
          Existng Agreement shall remain outstanding hereunder on the terms and
          conditions hereinafter provided.

     D.   In consideration of the aftermentioned and the mutual covenants
          contained herein, the Borrower, the Guarantor and the Bank under the
          Existing Agreement agree that, effective upon the Extension Date, the
          Existing Agreement is amended and restated as follows:

1. Definitions:

1.1 In the Agreement, the following terms shall have the following meanings:


                                                                               1




<PAGE>

Advance - the borrowing of the Facility by the Borrower pursuant to the terms of
the Agreement.

Business Day: a day, other than Saturday or Sunday on which banks are open for
general interbank business in Tokyo, New York and London.

Closing Date: November 29th, 2000.

Drawdown Date: the date on which the Advances are made, or are proposed to be
made.

Extension Date: [Dec 1, 2004]

Event of Default: any event specified in Section 13 of the Agreement.

Interest Period: with respect to any Advance hereunder, the period determined in
accordance with Section 4.2 of the Agreement.

"month(s)": a period of the required number of calendar days, ending on the day
numerically corresponding to the day of the calendar month(s) on which it
started and "monthly" shall be construed accordingly; provided, that (i) if
there is no such numerically corresponding day, it shall end on the last
Business Day in the relevant calendar month and (ii) if such numerically
corresponding day is not a Business Day, the period shall end on the immediately
preceding Business Date.

Notice of Intent to Borrow: the Borrower's request to the Bank requesting an
Advance in a manner as provided in Section 8 hereof.

Outstanding Amount(s): all advances and monies extended hereunder, all
liabilities of the Borrower to the Bank whatsoever arising (whether accrued or
contingent) and all interest and fees from time to time payable to the Bank, in
each case under or in connection with the Facility or pursuant to the Agreement.

Repayment Date: means, with respect to an Advance, the last day of the Interest
Period with respect to such Advance; provided, that if such date falls on a day
that is not a Business Day, the Repayment Date shall be the immediately
succeeding


                                                                               2




<PAGE>

Business Day; provided, further, that if such Business Day falls on the next
calendar month, the Repayment Date shall be immediately preceding Business Day.

Termination Date - two (2) years from the Extension Date; provided, that if such
date falls on a day that is not a Business Day, the Termination Date shall be
the immediately preceding Business Day.

1.2 Clause headings in the Agreement are inserted for convenience only and shall
be ignored in construing the Agreement. Words denoting singular numbers shall
include the plural and vice versa.

2. Type of Facilities and Facility Limit

2.1 Subject to the terms of the Agreement, the Bank agrees to make available to
the Borrower the Facilities in the maximum amount equivalent to Japanese Yen One
Billion & one hundred million (JPY 1,100,000,000.00) (the "Facility Amount").

2.2 The aggregate of all Advances outstanding hereunder shall not, at any time,
exceed the Facility Amount.

3. Availability and Borrowing

3.1 From the Closing Date and prior to the Termination Date, the Borrower may
borrow, repay and re-borrow, subject to the terms of the Facility as stated
herein.

3.2 All Advances shall be in Japanese yen in the minimum principal amount
equivalent to Japanese Yen One hundred million (JPY 1,000,000.00), with integral
multiples equivalent to Yen One hundred million (JPY 1,000,000.00).

3.3 The Facility shall be available only if the debt to equity ratio of the
Guarantor does not exceed 1.5: 1, where debt would represent obligations of the
Guarantor for borrowed money.

4. Interest Rates and Fees

4.1 Interest Rate


                                                                               3




<PAGE>

The interest shall accrue on each Advance from and including the relevant
Drawdown Date up to but excluding the date that the Advance is repaid at the
rate that is the aggregate of:

          (i) The Japanese yen LIBOR for the relevant Interest Period that
          appears on the Telerate Page 3750 at or around 11:00 a.m. two (2)
          Business Days prior to the first day of each Interest Period (the
          "LIBOR"), and if the LIBOR does not appear on the Telerate Page 3750,
          the rate determined by the Bank by reference to such other publicly
          available service for displaying the LIBOR; or at the base rate
          determined by the Bank,

          (ii) a margin rate of one percent (1%) per annum.

4.2 Interest Period

With respect to any Advance, Interest Period is at the Borrower's option as
stated in the Notice of Intent to Borrow at either one (1), two (2), three (3),
six (6) or more months as requested by the Borrower; provided, that no Interest
Period may exceed the Termination Date. The Interest Period for an Advance shall
begin on the Drawdown Date of that Advance. If the Borrower fails to indicate an
Interest Period in the Notice of Intent to Borrow, the Interest Period shall be
one (1) month.

4.3 Interest Payment

With respect to each Advance, interest payable by the Borrower under the
Agreement accrue from day to day and are due on the last day of the Interest
Period of such Advance; provided, that interest shall be payable by the Borrower
at least semi-annually in arrears. The interest shall be calculated based on the
actual number of days elapsed and 360 days a year or when applicable the actual
number of days elapsed and 365 days a year at the discretion of the Bank.

4.4 Facility Fee

A facility fee equal to 17.5 basis points (0.175%) per annum of the Facility
Amount in


                                                                               4




<PAGE>

Japanese Yen, accruing from and including the Closing Date to and including the
Termination Date shall be payable by the Borrower to the Bank at least
semi-annually in arrears in Japanese Yen.

4.5 Commitment Fee

The Borrower shall pay to the Bank, at least semi-annually in arrears in
Japanese Yen, a commitment fee equal to 25 basis points (0.25%) per annum of the
unused portion of the Facility Amount in Japanese Yen, accruing from and
including the Closing Date to and including the Termination Date.

5. Purpose of Facility

The Facilities available under the Agreement shall be used by the Borrower for
the purpose of working capital of the Borrower or any other purpose in the
normal course of business, including the repayment of outstanding indebtedness.

6. Repayment

The Borrower will be required to make repayment of any Advance of the Facility
and any other Outstanding Amount under the Agreement on the Repayment Date.

7. Term of the Agreement

The Agreement shall expire on the Termination Date; provided, that the Borrower
may request that the Bank renew and extend the Agreement for additional one year
periods, by notifying of such request to the Bank at least three hundred and
sixty five (365) days prior to the Termination Date then in effect. The
determination to renew and extend the Agreement on the same or new terms and
conditions is in the sole discretion of the Bank and subject to the Bank's
approval of the Borrower and Guarantor's credit history.

8. Notice of Intent to Borrow


                                                                               5




<PAGE>

The Facility becomes available subject to the Bank's receipt of the Borrower's
Notice of Intent to Borrow. Such Notice of Intent to Borrow must be received by
the Bank at least by 11:00 a.m. two (2) Business Days prior to any proposed
Drawdown Date. The Notice of Intent to Borrow shall state the amount of the
Advance in Japanese Yen, the Interest Period and the Drawdown Date that the
Borrower is requesting.

9. Conditions Precedent

Save as the Bank may otherwise agree, the availability of the Facility and each
Advance hereunder shall be strictly conditional upon the Borrower's compliance
with all the terms and conditions stated in the Agreement, there being no
occurrence of an Event of Default and the execution and delivery of the
following documents and other evidence, and that each is, in form and substance,
satisfactory to the Bank:

(a)  An original of the Agreement duly signed by the Borrower and the Guarantor;

(b)  A certified copy of the seal certificate (inkan shomei sho) of the
     Borrower;

(c)  A copy of the: (i) certified commercial register (shogyo tokibo tohon);
     (ii) Articles of Incorporation (teikan); and (iii) Regulations of the Board
     of Directors (torishimariyakukai kitei), of the Borrower certified as of a
     date which is before the first Drawdown Date;

(d)  Evidence that all necessary filings, if any, registration and other
     formalities in relation to the Agreement or any other document referred to
     herein or in connection with the Facility have been completed; and

(e)  A certificate of the Borrower dated within seven (7) days after any
     Drawdown Date that (i) the Representations and Warranties contained in
     Section 10 below are true and correct in all material respects on and as of
     any Drawdown Date; and (ii) no Event of Default or event which, with the
     giving of notice or the passage of time or both, would be an Event of
     Default has occurred and is continuing, or would result from such
     borrowing.

10. Representations and Warranties


                                                                               6




<PAGE>

10.1 The Borrower represents and warrants as follows on and as of each Drawdown
Date and Extension Date or the discretion of the Bank:

(a)  The Borrower is a corporation duly organized and validly existing under the
     laws of the State of Delaware with power to own its own property and assets
     and carry on its business as it is now being conducted.

(b)  The execution, delivery and performance by the Borrower of the Agreement
     are within the Borrower's corporate powers, have been duly authorized by
     all necessary corporate action and do not contravene the Borrower's
     Articles of Incorporation ("teikan") or Regulations of the Board of
     Directors ("torishimariyakukai kitei") or does not violate any law or any
     existing agreement or contractual obligation binding on or affecting the
     Borrower.

(c)  No governmental, regulatory approval, registration, permit, or third party
     approval, etc. is required with regard to the Borrowers participation in
     the transactions contemplated by the Agreement.

(d)  There is no pending, threatened or continuing action, suit, investigation,
     litigation or proceeding affecting the Borrower before any court,
     governmental agency or arbitrator that could be reasonably likely to have a
     material adverse effect on the financial condition or business operations
     of the Borrower or would affect the legality, validity or enforceability of
     the Agreement or any Advance hereunder.

(e)  The claims of the Bank against the Borrower under the Agreement shall rank
     at least pari passu with the claims of all other general unsecured
     creditors and all unsubordinated creditors of the Borrower except to the
     extent that there are certain preferential rights that arise as a matter of
     law.

(f)  The consolidated and non-consolidated financial statements of the Borrower
     and the Guarantor for the fiscal year ended in May, and any other relevant
     information, copies of which have been furnished to the Bank, fairly and
     accurately present the financial condition of the Borrower as of such date
     and that there has been no material adverse change in the financial
     condition of


                                                                               7




<PAGE>

     the Borrower or in the results of the Borrower's business operations.

(g)  The Borrower is in compliance, in all material respects which bear any
     relation to the Agreement, with all applicable laws, rules, regulations and
     orders of Japan and of any foreign countries in which the Borrower carries
     on business and the Borrower has obtained and is maintaining all licenses
     and approvals as are required under applicable laws, rules, regulations and
     orders to ensure the validity and performance of the Agreement.

(h)  The Agreement has been duly executed and delivered by the Borrower. The
     Agreement shall constitute, when delivered, a legal, valid and binding
     obligation of the Borrower enforceable against the Borrower in accordance
     with its terms and furthermore each loan made to the Borrower pursuant to
     the Agreement will constitute a legal, valid and binding obligation of the
     Borrower enforceable against the Borrower in accordance with the terms of
     this Agreement.

(i)  No Event of Default has occurred which has not been cured.

10.2 The Guarantor represents and warrants as follows on and as of each Drawdown
Date and Extension Date:

(a)  The Guarantor is a corporation duly organized and validly existing under
     the laws of Delaware with power to own its own property and assets and
     carry on its business as it is now being conducted.

(b)  The execution, delivery and performance by the Guarantor of the Agreement
     are within the Guarantor's corporate powers, have been duly authorized by
     all necessary corporate action and do not contravene the Guarantor's
     Articles of Incorporation or Certificate of Incorporation that may be
     applicable to the Guarantor or By-laws or does not violate any law or any
     existing agreement or contractual obligation binding on or affecting the
     Guarantor.

(c)  Paragraphs (c), (d), (e), (g), (h) and (i) of Section 10.1 above are
     mutatis mutandis applicable to the Guarantor in respect of the guarantee
     made by the Guarantor hereunder and the Agreement.


                                                                               8




<PAGE>

11. Affirmative Covenants

So long as any Outstanding Amount shall remain unpaid with respect to any
Advance furnished by the Bank hereunder, the Borrower shall at all times:

Material Compliance with Laws

Comply, in all material respects which bear any relation to the Agreement, with
all applicable laws rules, regulations and orders and obtain and maintain all
licenses and approvals as are required under applicable law for the validity or
performance of the Agreement.

Payment of Taxes and Material Obligations

Pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law become a lien
upon its property; provided, that the Borrower shall not be required to pay or
discharge any such tax, assessment, charge, claim or obligation that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained, unless and until any action is taken to enforce
any lien resulting therefrom attached to its property.

Maintenance of Books

Keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the
Borrower in accordance with generally accepted accounting principles in effect
from time to time.

Maintenance of Properties

Maintain and preserve all of its properties that are used or useful in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.

Reporting Requirements


                                                                               9




<PAGE>

Furnish to the Bank, as soon as available and in any event within three (3)
months after the end of each fiscal year and fiscal half year, a copy of all
relevant financial statements or other statement or information relating to the
business and financial condition of the Borrower and the Guarantor as may from
time to time be requested by the Bank, with a verification as to the accuracy of
such information. Further, the Borrower shall promptly notify the Bank in
writing of any substantial change in its shareholders, management or
constitutive documents; it shall promptly notify the Bank if there is any
litigation that if adversely determined would have a material adverse effect on
the financial condition or operations of the Borrower, or which would affect the
legality, validity, and enforceability of the Agreement.

The Borrower shall not, except with the prior written consent of the Bank,
permit any change in its ownership directly or indirectly resulting in a change
of control or any change in voting powers or rights directly or indirectly
resulting in any change in control of the Borrower.

The Borrower shall notify the Bank in writing of any Event of Default or
potential Event of Default forthwith upon occurrence thereof.

12. Financial Covenant (Maintaining Debt to Equity Ratio)

So long as any amount shall remain unpaid with respect to any Advance furnished
by the Bank hereunder, the Guarantor shall at all times maintain its debt to
equity ratio not to exceed 1.5 : 1, where debt would represent obligations of
the Guarantor for borrowed money.

13. Events of Default

Each of the following describes circumstances that constitute an Event of
Default:

(a)  The Borrower or the Guarantor fails to pay when due any or all of the
     Outstanding Amounts and/or any other amount payable under the Agreement or
     any other document referred to in the Agreement or in connection with the
     Facility and upon notification of non payment by the bank the payment shall
     remain unpaid for a period of five (5) business days

(b)  The Borrower or the Guarantor fails duly to perform or comply with any of
     the obligations, covenants or agreement assumed by it in the Agreement or


                                                                              10




<PAGE>

     any other document referred to in the Agreement or in connection with the
     Facility and such non compliance shall continue uncured [for a period of
     forty five (45) days] [for a period of ninety (90) days after the Bank has
     given written notice of such failure to the Borrower]; or it shall become
     unlawful for the Borrower or the Guarantor to perform or comply with any of
     its obligations hereunder or the Borrower or the Guarantor repudiates or
     expresses an intention to repudiate any obligation under the Agreement.

(c)  Any representation or warranty made or deemed to be made by the Borrower or
     the Guarantor in the Agreement or any other document referred to in the
     Agreement or in connection with the Facility proves to have been incorrect
     or misleading in any material respect when made or deemed to be made.

(d)  Any indebtedness of the Borrower or the Guarantor for borrowed money in
     excess of US Dollars One Million (USD 1,000,000.00) in aggregate or its
     equivalent is not paid when due or within any applicable grace period, or
     any creditor or creditors of the Borrower or the Guarantor, as the case may
     be, declares that any indebtedness of the Borrower or the Guarantor for
     borrowed money in excess of US Dollars One Million (USD 1,000,000.00) in
     aggregate or its equivalent is in default and is due and payable prior to
     its specified maturity.

(e)  The Borrower or the Guarantor is unable to pay its debts as they fall due
     and commences negotiations with any one or more of its creditors with a
     view to the general readjustment or rescheduling of its indebtedness.

(f)  The Borrower or the Guarantor takes any corporate action or other steps are
     taken or legal proceedings are started for its winding-up, dissolution,
     administration or re-organization or for the appointment of a liquidator,
     receiver, trustee, administrator or similar officer or any proceeding is
     instituted by or against the Borrower or the Guarantor, whether in Japan or
     some other jurisdiction, seeking to adjudicate it a bankrupt or insolvent,
     or seeking liquidation, arrangement, adjustment, protection, relief, or
     composition of its or its debts under any law relating to bankruptcy
     ("hasan"), commencement of procedures for rehabilitation ("saisei
     tetsuzuki"), commencement of reorganization proceedings ("kaisha kosei
     tetsuzuki"),


                                                                              11




<PAGE>

     commencement of company arrangement ("kaisha seiri"), commencement of
     special liquidation ("tokubetsu seisan") or such comparable actions in any
     other jurisdiction, and in the case of such proceeding against it, either
     such proceeding shall remain undismissed or unstayed for a period of thirty
     (30) days or any of the actions sought in such proceeding shall occur; or
     the Borrower shall take any corporate action to authorize any of the
     actions set forth above in this paragraph.

(g)  The debt to equity ratio of the Guarantor exceeded 1.5: 1 where debt would
     represent obligations of the Guarantor for borrowed money.

(h)  The Borrower shall cease or threaten to cease to carry on all or a
     substantial part of its business (other than for the purposes of an
     amalgamation, merger or reconstruction on terms approved by the Bank.

(i)  Any order or notice of provisional attachment, provisional injunction or
     attachment is issued in respect of the Borrower.

(k)  Upon the occurrence of an Event of Default (and subject to the continuation
     thereof) and at any time thereafter, the Bank may by giving verbal or
     written notice to the Borrower:

     (a)  cancel any part of the Facility then undrawn or unutilized, and
          declare all Outstanding Amounts to be immediately due and payable; and

     (b)  declare that the Agreement or the Facility shall be terminated.

14. Set-Off

Upon the occurrence and during the continuance of any Event of Default, the Bank
may, at any time and from time to time, to the fullest extent permitted by law,
set off and apply any obligation (whether or not matured) owed by the Bank to
the Borrower or the Guarantor, as the case may be, including any and all
deposits (general or special, time or demand, provisional or final) regardless
of the place of payments, booking


                                                                              12




<PAGE>

branch or currency of either obligation against any and all of the obligations
of the Borrower or the Guarantor now or hereafter existing under the Agreement
and the Advances, whether or not the Bank shall have made any demand under the
Agreement or any Advance and although such obligations may be unmatured. If the
obligations are in different currencies, the Bank may convert its obligation at
the spot rate of exchange of the Bank, for the purpose of the set-off. The
rights of the Bank under this Section are in addition to other rights and
remedies (including without limitation, other rights of set-off) that the Bank
may have.

15. Taxes/Other Deductions and Expenses

15.1 All payments under the Agreement and any Advance hereunder are to be free
and clear of any present or future taxes, withholding or other deductions
whatsoever.

15.2 All relevant expenses, fees and out of pocket costs, including, but not
limited to the legal fees and costs to be incurred by the Bank for the
enforcement of its right hereunder, shall be for account of the Borrower,
whether or not the Facility is actually advanced.

16. Changes in Circumstances

If, at any time, it is unlawful for the Bank to fund or allow to remain
outstanding all or any part of the Facility, then the Bank shall, promptly after
becoming aware of the same, deliver to the Borrower a notice to that effect and
any amount owing or liability incurred pursuant to the Agreement or in relation
to or in connection with the Facility will be immediately due and payable and
availability under the Facility will be reduced to zero.

17. Indemnity

The Borrower irrevocably and unconditionally undertakes to indemnify the Bank
and each of its affiliates and its officers, directors, employees, agents,
advisors and other representatives from and against any and all damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
of them arising out of or relating to the Facility or the Agreement or the
guarantee hereunder, except to the extent such damage, loss, liability or
expense is found in a final judgment by a court of competent


                                                                              13




<PAGE>

jurisdiction to have resulted from the indemnified party's gross negligence
or willful misconduct.

18. Bank Transaction Agreement

To the extent that the Agreement does not contradict any terms of any Bank
Transaction Agreement in effect between the Bank and the Borrower, the terms of
any such Bank Transaction Agreement, except Article 4 (Security) and Article 5
(Acceleration of Payment) thereof, will apply to the Agreement. To the extent
that the Agreement does contradict any terms of any Bank Transaction Agreement
in effect between the Bank and the Borrower, the terms of the Agreement shall
apply.

19. Guarantee

The Guarantor hereby jointly and severally guarantees (rentai hosho) any debts,
liabilities and obligations of the Borrower arising under or in connection with
the Facility or pursuant to the Agreement, not merely as surety but as
independent obligor for the Bank and its successors.

20. Governing Law and Jurisdiction

20.1 The Agreement shall be governed by and construed in accordance with the
laws of Japan.

20.2 The parties hereto hereby submit to the exclusive jurisdiction of the Tokyo
District Court in connection with any disputes that may arise hereunder.


                                                                              14




<PAGE>

                           [Intentionally left blank]



                                                                              15




<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
indicated.

LAZARE KAPLAN JAPAN INC.
As Borrower


By:                                     Date:                             , 2004
    ---------------------------------        ------------------ ----------
Name:
      -------------------------------
Title:
       ------------------------------


LAZARE KAPLAN INTERNATIONAL INC.
As Guarantor


By:                                     Date:                             , 2004
    ---------------------------------        ------------------ ----------
Name:
      -------------------------------
Title:
       ------------------------------


ABN AMRO Bank N.V., Tokyo branch
As Bank


By:                                     Date:                             , 2004
    ---------------------------------        ------------------ ----------
Name:
      -------------------------------
Title:
       ------------------------------


By:                                     Date:                             , 2004
    ---------------------------------        ------------------ ----------
Name:
      -------------------------------
Title:
       ------------------------------


                                                                              16