<PAGE>


                           CREDIT FACILITY AGREEMENT

THIS CREDIT FACILITY AGREEMENT (the "Agreement") is made as of November, 29th
2000 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:

1. Definitions:

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

Advance - the borrowing of the Facility (as defined in Section 2.1 below) by the
Borrower pursuant to the terms of this 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.

Event of Default - any event specified in Section 14 of this Agreement.

Interest Period - with respect to any Advance hereunder, the period determined
in accordance with Section 4.2 of this 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



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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 (as defined in Section 2.1)
or pursuant to this 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 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 Closing 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 this Agreement are inserted for convenience only and
shall be ignored in construing this 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 this Agreement, the Bank agrees to make available to
the Borrower loan facilities in Japanese yen (the "Facility" or "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.


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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

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; and

                (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

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With respect to each Advance, interest payment due from the Borrower under this
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.

4.4 Facility Fee

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

6. Repayment

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

7. Renewal and Review of Facility



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The Borrower may request that the Bank renew and extend the terms of this
Agreement for additional one year periods, provided that the Borrower gives
notice 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 this Facility 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

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 terns and conditions stated in this 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 this 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 this Agreement or any other document referred
        to herein or in connection with the Facility have been completed; and



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(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

10.1 The Borrower represents and warrants as follows on and as of each Drawdown
Date:

(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 this
        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 this 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 this Agreement or any Advance hereunder.

(e)     The claims of the Bank against the Borrower under this Agreement shall
        rank



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        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 May 31, 2000, 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 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 this 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 this
        Agreement.

(h)     This Agreement has been duly executed and delivered by the Borrower.
        This 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 this 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:

(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 this
        Agreement



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        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) and (h) of Section 10.1 above are mutatis
        mutandis applicable to the Guarantor in respect of the guarantee made by
        the Guarantor hereunder and this Agreement.

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 this 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 this 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



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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

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 this Agreement.

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 this



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<PAGE>


        Agreement or any other document referred to in this 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 or covenants assumed by it in this Agreement or any
        other document referred to in this Agreement or in connection with the
        Facility and such non compliance shall continue uncured for a period of
        forty five (45) days

(c)     Any representation or warranty made or deemed to be made by the Borrower
        or the Guarantor in this Agreement or any other document referred to in
        this Agreement or in connection with the Facility proves to have been
        incorrect of 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"),

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        commencement of procedures for rehabilitation ("saisei tetsuzuki"),
        commencement of reorganization proceedings ("kaisha kosei tetsuzuki"),
        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 Borrower shall fail to perform or observe any term, covenant or
        agreement contained in Section 11 or the Borrower shall fail to perform
        or observe any other term, covenant or agreement contained in this
        Agreement on its part to be performed or observed and such failure is
        not remedied within ninety (90) days after the Bank has given written
        notice of such failure to the Borrower, or such other extended period of
        time as the Bank may agree upon; 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 this Agreement.

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

(i)     Upon the occurrence of an Event of Default (and subject to the
continuation thereof) or any termination of the Facility and/or this Agreement
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 this Agreement or the Facility shall be terminated.

14. Set-Off


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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 branch, or currency of either obligation
against any and all of the obligations of the Borrower or the Guarantor now or
hereafter existing under this Agreement and the Advances, whether or not the
Bank shall have made any demand under this 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 this 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 this 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



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

18. Bank Transaction Agreement

To the extent that this 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 S
(Acceleration of Payment) thereof, will apply to this Agreement. To the extent
that this Agreement does contradict any terms of any Bank Transaction Agreement
in effect between the Bank and the Borrower, the terms of this 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 this Agreement, not merely as surety but as
independent obligor for the Bank and its successors.

20. Governing Law and Jurisdiction

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

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

21. No Personal Liability

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It is expressly understood and agreed that, (1) the person who executes this
Agreement on behalf of the Borrower only acts in his capacity as the
representative of the Borrower and shall not be personally liable for the
obligations of the Borrower under or in connection with the Facility or pursuant
to this Agreement, and (2) the person who executes this Agreement on behalf of
the Guarantor only acts in his capacity as the representative of the Guarantor
and shall not be personally liable for the obligations of the Guarantor under or
in connection with the Facility or pursuant to this Agreement, except in the
event of fraud, misappropriation or grave misconduct of such person with respect
to this agreement.

                           [Intentionally left blank]



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<PAGE>


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

<TABLE>
<S>                                                   <C>
LAZARE KAPLAN JAPAN INC.
As Borrower



By: /s/ Richard Scott Meiller                        Date:    12/4                    , 2000
    -------------------------------------                   --------------------------
    Name: Richard Scott Meiller
    Title: Representative



LAZARE KAPLAN INTERNATIONAL INC.
As Guarantor


By: /s/ William H. Moryto                            Date:    November 29th           , 2000
    -------------------------------------                   --------------------------
    Name: William H. Moryto
    Title: Vice President and Chief Financial Officer

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


By:                                          Date:   12/5/               , 2000
    ------------------------------                   --------------------------
    Name:
    Title:

</TABLE>
                                                     /s/ Michael F. Kerbert
                                                     --------------------------
                                                     Michael F. Kerbert
                                                     Country Manager Japan





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