NAMGEM TRADING (BERMUDA) LIMITED,
LAZARE KAPLAN INTERNATIONAL INC.,
NAMGEM TRADING (BVI) LIMITED
OVERSEAS PRIVATE INVESTMENT CORPORATION
Dated as of August 18, 2008
SUBORDINATION AGREEMENT (the “Agreement”), dated as of August 18, 2008, by and among
NAMGEM TRADING (BERMUDA) LIMITED , a company organized and existing under the laws of
Bermuda (“NamGem Bermuda”), LAZARE KAPLAN INTERNATIONAL INC. , a corporation organized
and existing under the laws of the State of Delaware, United States of America (the “Sponsor”), NAMGEM
TRADING (BVI) LIMITED, a company limited by shares organized and existing under the laws of the British
Virgin Islands (the “Borrower”), and OVERSEAS PRIVATE INVESTMENT CORPORATION , an
agency of the United States of America (“OPIC”).
(l) OPIC and the Borrower have entered into the First Amended and Restated Finance Agreement dated
as of June 10, 2008 (the “Finance Agreement”) pursuant to which OPIC has agreed to provide a credit facility of
up to $25,200,000 to the Borrower subject to the terms and conditions set forth in the Finance Agreement.
(2) The Borrower may hereafter become indebted to the Subordinated Lender(s) in the principal amount of
$10,800,000, evidenced by a promissory note or notes substantially in the form attached hereto as Exhibit A
(each a “Subordinated Loan Note”), as permitted under subsection 7.02(b) of the Finance Agreement.
(3) It is a condition precedent to the obligation of OPIC to make the Loan under the Finance Agreement
that the Subordinated Lenders and the Borrower shall have executed and delivered this Agreement.
NOW, THEREFORE , in consideration of the premises and of the agreements contained herein, the
Subordinated Lenders and the Borrower each hereby agrees with OPIC as follows:
1. Definitions; Interpretation.
(a) Capitalized terms used herein shall have the meanings given them in the Finance Agreeme