September 30, 2007
Lazare Kaplan International Inc.
19 West 44 th Street
New York, New York 10036
Ladies and Gentlemen::
We are pleased to advise that Bank Leumi USA (“Bank”) holds available to Lazare Kaplan International
Inc. (“Borrower”) a credit facility up to a maximum aggregate principal amount of $2,200,000.00 (the “Facility”)
valid and available at our discretion and subject to the terms and conditions set forth below.
We note the Facility described herein is not a committed facility, no commitment fee will be
charged, any advances under the Facility are made in the sole and absolute discretion of the Bank and
the Bank may terminate the Facility at any time.
A. Terms and Conditions of Credit Facility :
(1) Borrower:
Lazare Kaplan International Inc.
(2) Amount:
$2,200,000.00 revolving facility. Funds may be borrowed, repaid and reborrowed .
The Facility is provided in conjunction with a committed line of credit facility made
available to Borrower by the Bank in the maximum aggregate principal amount of
$7,800,000.00, the terms of which are set forth in a Line of Credit Agreement dated
the date hereof between Borrower and the Bank (the “Line of Credit Agreement”).
(3) Maturity:
The Facility is payable on demand, but if no demand is made then the Facility shall be
payable on December 1, 2007. Any requirements stated in this letter which must be
complied with after the “Maturity” are premised upon the Bank agreeing to extend
the Facility on the terms stated herein.
B. Other Conditions :
2
(4) Rates:
Short term revolving borrowing at either (a) the higher of (i) the Bank’s Reference
Rate (“RR”) and (ii) one-half of one percent (1/2%) above the Federal Funds
Effective Rate (“Fed Funds Rate”), or (b) at one to six month LIBOR (as elected by
Borrower) + 1.60% per annum. The RR does not necessarily represent the lowest
rate of interest charged by the Bank to customers. For any day, the Fed Funds Rate
is the rate per annum equa