Document:

Exhibit
10.57

    

    DELTA
MUTUAL, INC.

    6% PROMISSORY
NOTE

     

    
      
        	
                $14,987

              	
                April
      2, 2009

              
	 
      	 
      
	 
      	
                Scottsdale,
      Arizona

              
	 
      	 
      

      

    

    FOR VALUE
RECEIVED, DELTA MUTUAL INC., a Delaware corporation (the "Company"), with its
principal office at 14301 North 87th Street,
# 310, Scottsdale AZ 85260, promises to pay to Security Systems International,
LLC, an Arizona limited liability company, (the "Lender"), with a mailing
address of 9034 East Caribbean Lane, Scottsdale, AZ 85260, in lawful money of
the United States of America, the principal sum of Fourteen Thousand Nine
Hundred Eighty Seven Dollars ($14,987), together with interest from the date of
this Note on the unpaid principal balance at a rate equal to six percent (6.0%)
per annum, computed on the basis of a year of 360 days. All unpaid principal,
together with any then unpaid and accrued interest, shall be due and payable at
any time after the earlier of each of (i) the Maturity Date (as defined below),
or (ii) when, upon or after the occurrence of an Event of Default (as defined
below), such amounts are declared due and payable by the Lender or made
automatically due and payable in accordance with the terms hereof.

     

    The
following is a statement of the rights of the Lender and the conditions to which
this Note is subject, and to which the Lender, by the acceptance of this Note,
agrees:

     

    1.
Definitions.  As used in this Note, the following capitalized
terms have the following meanings:

    

    1.1
“Company” includes the corporation initially executing this Note and any Person
which shall succeed to or assume the obligations of the Company under this
Note.

    
      1.2
“Event of
Default” has the meaning given in Section 5 hereof.

    

    
      1.3
“Lender”
shall mean the Person specified in the introductory paragraph of this
Note.

    

    
      1.4
“Maturity
Date” shall mean the date on which the Company receives demand for payment, in
writing, from the Lender.

    

    
      1.5
“Obligations”
shall mean all obligations owed by the Company to the Lender, now existing or
hereafter arising under or pursuant to this Note.

    

    
      1.6
“Person”
shall mean and include an individual, a partnership, a corporation (including a
business trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a governmental
authority.

    

     

    2. Interest. All
accrued and unpaid interest on this note shall be due and payable on the
Maturity Date.

     

    3. Repayment at the
Company’s Option. At any time after the date hereof and prior to the
Maturity Date, the Company my repay this Note, including all accrued interest,
without penalty or premium, in whole or in part; provided that such repayment
will be applied first to the payment of unpaid interest accrued on this Note,
and second, to payment of the principal amount of this Note.

     

    4. Representations and
Warranties of The Lender.  The Lender represents and warrants
to the Company upon the acquisition of the Note as follows:

     

    4.1.
Binding Obligation.  The Lender has full legal capacity, power and
authority to execute and deliver this Note and to perform its obligations
hereunder.  This Note is a valid and binding obligation of the Lender,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and general principles of
equity.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.2. Own
Account.  The Lender is purchasing this Note for his own account for
investment, not as a nominee or agent, and not with a view to, or for resale in
connection with, the distribution thereof.  The Lender has such
knowledge and experience in financial and business matters that the Lender is
capable of evaluating the merits and risks of such investment, is able to incur
a complete loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time.

     

    5. Events of
Default.  The occurrence of any of the following shall
constitute an "Event of Default" under this Note:

     

    5.1
Failure to Pay.  If the Company shall fail to pay any principal or
interest payment or any other payment required under the terms of this Note on
the Maturity Date and such payment shall not have been made within fifteen (15)
business days of the Company's receipt of written notice from the Lender of such
failure to pay;

    

    5.2
Voluntary Bankruptcy or Insolvency Proceedings.  The Company shall (i)
apply for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its
property,  (ii) be unable, or admit in writing its inability, to pay
its debts generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v)
become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any action for the purpose of effecting any
of the foregoing; or

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    5.3
Involuntary Bankruptcy or Insolvency Proceedings.  Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the Company or of
all or a substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.

     

    6. Rights of The Lender upon
Default. Upon the occurrence or existence of any Event of Default (other
than an Event of Default referred to in Sections 5.2 and 5.3) and at any
time thereafter during the continuance of such Event of Default, the Lender may,
by written notice to the Company, declare all outstanding Obligations payable by
the Company hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived.  Upon the occurrence or existence of any Event of
Default described in Sections 5.2 and 5.3, immediately and without notice,
all outstanding Obligations payable by the Company hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly
waived.  In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, the Lender may exercise any other right,
power or remedy otherwise permitted to it by law, either by suit in equity or by
action at law, or both.

     

    7. Successors and
Assigns.  Subject to the restrictions on transfer described in
Sections 9 and 10 below, the rights and obligations of the Company and the
Lender of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.

     

    8. Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the Lender.

     

    9. Transfer of this
Note.  This Note may not be sold, assigned or transferred by
the Lender. The Company shall treat the Lender hereof as the owner and holder of
this Note for the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this Note shall be
overdue, and the Company shall not be affected by notice to the
contrary.

     

    10. Assignment by The
Company.  Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company without the prior written consent of the
Lender.

     

    11.
Notices.  All notices, requests, demands, consents,
instructions or other communications required or permitted hereunder shall in
writing and faxed, mailed or delivered to each party at the respective addresses
or facsimile numbers of the parties.  All such notices and
communications shall be effective (a) when sent by Federal Express or other
overnight service of recognized standing, on the business day following the
deposit with such service; (b) when mailed, by registered or certified mail,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d)
when faxed, upon confirmation of receipt.

     

    12.
Waivers.  The Company hereby waives notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor
and all other notices or demands relative to this instrument.

     

    13. Governing
Law.  This Note and all actions arising out of or in connection
with this Note shall be governed by and construed in accordance with the laws of
the State of Arizona, without regard to the conflicts of law provisions of the
State of Arizona, or of any other state.

    

    IN WITNESS WHEREOF, The Company has
caused this Note to be issued as of the date first written above.

     

    
      
        	
                DELTA
      MUTUAL, INC.

              
	
                a
      Delaware corporation

              
	 
      	 
      
	
                By:

              	
                /s/ Martin G. Chilek

              
	
                Name:

              	
                Martin
      G. Chilek

              
	
                Title:

              	
                Sr.
      Vice President & CFO

              

      

    

    
      
         

      

      
        3AMENDED
AND RESTATED CREDIT FACILITY AGREEMENT

    

    THIS
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT (the "Agreement") is made as of
February 28, 2009 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 November 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 Existing Agreement
      shall remain outstanding hereunder on the terms and conditions hereinafter
      provided.

            

    

    
      	
               
      

            	
              D.

            	
              In
      consideration of the after mentioned 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
this Agreement, the following terms shall have the following
meanings:

    

    Advance:  the
borrowing of the Facility 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.

    

    
      	
              FacilityAg

            	
              1

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

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

    

    Extension
Date:  February 28, 2009.

    

    Guarantee:  the
guarantee entered into by the Guarantor in favour of the Bank in respect of the
obligations of the Borrower under this Facility Agreement.

    

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

    

    "Material
Adverse Effect":  a material adverse effect on:

    
      	
              i)

            	
              the
      ability of the Borrower or the Guarantor to perform its obligations under
      this Agreement or in connection with an
Advance;

            

    

    
      	
              ii)

            	
              the
      business, operations, property, condition (financial or otherwise) or
      prospects of the Borrower or the Guarantor;
or

            

    

    
      	
              iii)

            	
              the
      validity or enforceability of this Agreement or the rights or remedies of
      the Bank under 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
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 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.

     

    
      	
              FacilityAg

            	
              2

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Termination
Date:  December 1, 2010.

    

    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 the Facilities in the maximum amount equivalent to Japanese Yen Five
Hundred and thirty million (JPY 530,000,000) (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 million (JPY 1,000,000.00), with integral multiples equivalent
to Japanese Yen One 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 1.75: 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
Bank's cost of funds; and

     

    
      	
              FacilityAg

            	
              3

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (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 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 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 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
indebtedness.

    

    
      	
              FacilityAg

            	
              4

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.  Repayment

    

    
      	
              6.1

            	
              Unless
      demanded earlier, in accordance with Clause 13 or Clause 19 of this
      Agreement, the Borrower will repay the Advances made to it in accordance
      with this Clause 6.

            

    

    
      	
              6.2

            	
              The
      Borrower may repay, in whole or in part, any Advances to the Bank on a
      Repayment Date relating to such
Advance.

            

    

    
      	
              6.3

            	
              The
      Borrower will be required to make repayment of any Advance of the Facility
      and any other Outstanding Amount under this Agreement on the Termination
      Date, subject to the extension of such Termination Date by the Bank in
      accordance with Clause 7 of this
Agreement.

            

    

    

    7.
Term of this Agreement

    

    The
arrangements under this Agreement shall expire on the Termination Date;
provided, that the Borrower may request that the Bank renew and extend this
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 this
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

    

    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.

    

    Subject
to compliance by the Bank with all laws, regulations and policies applicable to
the Bank (including the requirements of Japan's Financial Services Agency),
compliance by the Borrower with the conditions precedent set out in Clause 9 and
no limits set out in Clause 3 being exceeded, the Bank will make the utilization
available on the proposed Drawdown Date specified in the Notice of Intent to
Borrow.

    

    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 this Agreement, there being no occurrence of
an Event of Default and the satisfaction of the following conditions
precedent:

    

    
      	
              FacilityAg

            	
              5

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              (a)

            	
              An
      original of this Agreement duly signed by the Borrower and the
      Guarantor;

            

    

    

    
      	
              (b)

            	
              An
      original of the Guarantee duly signed by the
  Guarantor;

            

    

    

    
      	
              (c)

            	
              A
      current certified copy of the seal certificate (inkan shomei sho) of
      the Borrower certified and provided at the time of loan renewal, and if
      changed in any way, within thirty (30) days of such
  change;

            

    

    

    
      	
              (d)

            	
              A
      current 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 and provided at the time of loan
      renewal, and if amended, within thirty (30) days of such
      amendment;

            

    

    

    
      	
              (e)

            	
              A
      copy of the constitutive documents of the Guarantor certified and provided
      at the time of loan renewal, and if amended, within thirty (30) days of
      such amendment;

            

    

    

    
      	
              (f)

            	
              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

            

    

    

    
      	
              (g)

            	
              There
      shall have been no change in the business, assets, financial condition of
      the Borrower and the Guarantor since the end of the most recent fiscal
      year end, except as set forth in Form 10Q of the Guarantor for the period
      ended November 30, 2008, which would have a Material Adverse
      Effect.

            

    

    

    
      10.  Representations
and Warranties

    

    

    10.1           The
Borrower represents and warrants as follows on and as of each Drawdown Date and
Extension Date or at the request 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.

            

    

     

    
      	
              FacilityAg

            	
              6

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              (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 Borrower’s
      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 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 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 of any kind in the
      financial condition of the Borrower or in the results of the Borrower's
      business operations, which would have a Material Adverse
      Effect.

            

    

    
      	
              (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 and Extension Date:

     

    
      	
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              7

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              (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 and
      the Guarantee 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 applicable mutatis mutandis to the
      Guarantor in respect of the Guarantee provided by the Guarantor and in
      respect of 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

    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.

     

    
      	
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    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.

    

    Change of
Control

    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.

    

    Event of
Default

    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 1.75 : 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 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 three  (3) business
      days.

            

    

     

    
      	
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              (b)

            	
              The
      Borrower fails duly to perform or comply with the covenants Material
      Compliance with Laws or Change of Control set out at Clause 13 of this
      Agreement.

            

    

     

    
      	
               (c)

            	
              The
      Borrower or the Guarantor fails duly to perform or comply with any of the
      obligations or covenants (other than those referred to in Clause 13(b) or
      agreements assumed by it in this Agreement or any other document referred
      to in this Agreement or in connection with the Facility  for
      twenty (20) days after written notice thereof has been given by the Bank
      to the Borrower or the Guarantor, as appropriate, or if such matter cannot
      with best efforts be remedied within  a twenty (20) day period,
      such additional period as the Bank considers reasonably necessary to cure
      the same.

            

    

    
      	
              (d)

            	
              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
      or misleading in any material respect when made or deemed to be
      made.

            

    

    
      	
              (e)

            	
              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.

            

    

    
      	
              (f)

            	
              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.

            

    

    
      	
              (g)

            	
              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 tetsuzuk""),
      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.

            

    

     

    
      	
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              (h)

            	
              The
      debt to equity ratio of the Guarantor exceeded 1.75: 1 where debt would
      represent obligations
      of the Guarantor for borrowed
money.

            

    

    
      
      

    

    
      	
              (i)

            	
              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).

            

    

    
      	
              (j)

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

            

    

    
      	
              (k)

            	
              It
      is or becomes unlawful for the Borrower or the Guarantor to perform any of
      its obligations under this Agreement or any other document referred to in
      this Agreement or in connection with the
  Facility.

            

    

    
      	
              (l)

            	
              The
      Borrower or the Guarantor repudiates this Agreement or evidences an
      intention to repudiate this Agreement or any other document referred to in
      this Agreement or in connection with the
  Facility.

            

    

    

    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 this 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 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.

     

    
      	
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    15.   Taxes/Other
Deductions and Expenses

    

    15.1           All
payments to be made by the Borrower or the Guarantor under this Agreement are to
be in immediately available funds, without set-off or counterclaim and free and
clear of any present or future taxes, withholding or other deductions
whatsoever.

    15.2           If
any withholdings or deductions are required to be made by law, the Borrower or
the Guarantor will pay such additional amount as is necessary to ensure that the
Bank receives the amount that would have been received had no such withholding
or deduction been required.

    

    
      	
              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

    

    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 wilful misconduct.

    

    
      18. 
Increased
Costs

    

    If as a
result of (i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation or (ii) compliance with
any law or regulation made after the date of this Agreement or any request from
or requirement of any central bank or other fiscal, monetary or other
authority:

     

    
      	
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    (i) the
Bank or its head office is unable to obtain the rate of return on its capital
which it would have been able to obtain but for the Bank's making, funding or
maintaining the Advances or any part of the Advances; or

     

    (ii) the
Bank or its head office incurs an additional or increased cost as a result of
the Bank's making, funding or maintaining the Advances or any part of the
Advances,

     

    then the Borrower will on
demand pay to the Bank an amount sufficient to indemnify the Bank or its head
office for such reduction in return or increased cost.

    

    
      19.  Illegality

    

    If at any
time it becomes unlawful for the Bank to fund or maintain all or any part of any
Advance, the Bank will, promptly after becoming aware of the same, deliver to
the Borrower a notice to that effect and any amount owing or liability incurred
in connection with that Advance will be immediately due and payable and the
availability of further Advances will be immediately cancelled.

    

    
      20.
Assignment

    

    20.1       
  The Bank may assign any of its rights or transfer by novation any of
its rights and obligations under this Agreement to The Royal Bank of Scotland
plc, Tokyo Branch without the consent of the Borrower or the
Guarantor.

     

    20.2     
    The Bank may enter into any sub-participation in
relation to this Agreement or any Obligor or enter into any other contractual
arrangements with any third party to fund any Advance or to reduce its credit
exposure to the Borrower without the consent of the Borrower.

     

    20.3    
     Neither the Borrower or the Guarantor may assign
any of its rights or transfer any of its rights or obligations under this
Agreement.

     

    21.  Disclosure
of Information

    Each of
the Borrower and the Guarantor authorises the Bank to disclose information about
it or any transactions or dealings between it and the Bank for any purpose to
(i) any other branches, subsidiaries or associated or affiliated companies of
the Bank; (ii) government agencies, authorities and credit bureaus in Japan and
elsewhere where the disclosure is required by law; (iii) the professional
advisers of the Bank; (iv) any person with whom the Bank may enter, or has
entered into, any kind of transfer, participation or other agreement in relation
to this Agreement; and (v) any investor or potential investor in a
securitisation (or similar transaction of broadly equivalent economic effect) of
the Bank’s rights or obligations under this Agreement.

     

    
      	
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    22.  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 5
(Acceleration of Payment) thereof, will apply to this Agreement.

    

    24.  Notices

    Any
communication to be made by one person to another under or in connection with
this Agreement shall be made in writing by letter to the address specified below
(or any substitute address as that person may previously have notified the other
in writing).

    

    Emil Lai

    ABN AMRO  Bank NV, Tokyo
Branch

    Atago Green Hills MORI
Tower

    5-1, Atago 2-Chome,
Minato-ku,

    Tokyo 105-6231 Japan

    

    Richard Scott Meiller

    Lazare Kaplan Japan Inc.

    8-7, Taito 4-Chome,
Taito-ku

    Tokyo, Japan 110-0016

    

    William H. Moryto

    Lazare Kaplan International
Inc

    19 West 44th
Street,  16th
Fl.

    New York, New York 10036

    

    Any
communication or document made or delivered by one person to another under or in
connection with this Agreement will only be effective:

    
      	
               
      

            	
              (i)

            	
              if
      by way of fax, when received in legible form;
or

            

    

     

    
      	
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                  (ii)

                

              	
                      
                  if
      by way of letter, when it has been left at the relevant address or
      three days
      after being deposited in the post, postage prepaid in an envelope
      addressed to it at that
address,

                

              

      

    

     

    and, if a
particular department or officer is specified as part of its address details, if
addressed to that department or officer.

    

    25.  Governing
Law and Jurisdiction

    

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

    

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

    

    [Intentionally
left blank]

    

    
      	
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    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.

    

    LAZARE
KAPLAN JAPAN INC.

    As
Borrower

    

    By:
______________________________   Date:
____________  ____, 2009

    Name:

    Title:

    

    LAZARE
KAPLAN INTERNATIONAL INC.

    As
Guarantor

    

    By:
______________________________   Date:
____________  ____, 2009

    Name:

    Title:

    

    ABN AMRO
Bank N.V., Tokyo branch

    As
Bank

    

    By:
______________________________  Date: _____________  ____,
2009

    Name:

    Title:

    

    By:
______________________________  Date: _____________  ____,
2009

    Name:

    Title:

     

    
      	
              FacilityAg

            	
              16

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