February 27, 2009 Lazare Kaplan International Inc.
February
27, 2009
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▇▇▇▇▇▇ International Inc.
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New York,
New York 10036
Attention:
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Re: Amended
and Restated Facility Letter
Ladies
and Gentlemen:
In
accordance with our recent discussions, we are please to confirm ABN AMRO Bank
N.V.’s (the “Lender”) agreement to
hold available to ▇▇▇▇▇▇ ▇▇▇▇▇▇ International Inc. (the “Borrower”) a
revolving loan facility for own-note borrowings (“Loans”) up to a
maximum aggregate principal amount of $7,800,000 (the “Facility”). The
Facility will be available at the Lender’s discretion in accordance with this
letter agreement (the “Facility Letter”)
until the earlier to occur of (i) notice from the Lender that the Lender has
terminated the Facility or (ii) the Maturity Date (as such term is defined in
the Credit Agreement) (such date, the "Facility Termination
Date").
Reference
is made to the Amended and Restated Revolving Credit Agreement dated as of
February 27, 2009 (as the same has been and may be amended, restated or
otherwise modified from time to time, the “Credit Agreement”) by
and among the Borrower and the Lender. Terms used herein but not
otherwise defined shall have the meaning assigned to such terms in the Credit
Agreement and such terms are hereby incorporated herein by
reference.
The
Lender’s agreement to make the Loans under the Facility is subject to the
following terms and conditions:
The
proceeds of the Loans shall be used solely for working capital. The
Borrower acknowledges and agrees that compliance by the Borrower with the terms
and conditions set forth herein, merely entitles the Borrower to make requests
for Loans hereunder, the granting of which, however, shall, in each case, remain
within the Lender’s sole and absolute discretion.
The
interest rate applicable to the Loans made under this Facility shall be either
(i) the Base Rate or (ii) LIBOR plus the LIBOR Margin. Each Base Rate
Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the Facility Termination Date. Each LIBOR Rate
Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto. Without limiting the uncommitted nature of this Facility
Letter and the Lender’s right to demand repayment of the Loans hereunder,
together with all interest accrued thereon and any other obligations thereunder,
the Borrower promises to pay interest on each Loan in arrears on each Interest
Payment Date with respect thereto and upon demand. The Borrower
hereby further promises to pay to the order of the Lender, on demand, at the
place of payment indicated in the attached note, interest on any unpaid amounts
under this Facility Letter following an Event of Default under the Credit
Agreement or after demand by the Lender under this Facility Letter, at a rate
per annum equal to the Base Rate plus two percent (2%) until such amount is paid
in full. You authorize us to debit all interest and fees when due to
your account on our books.
Section
4.1 and Section 11 of the Credit Agreement shall be applicable to all
Loans. Please be advised that Loans with interest based on LIBOR are
made in the Lender’s sole and absolute discretion.
If, no
later than December 31, 2009, the Borrower and its Subsidiaries shall have no
less than US$35,000,000 in committed lending facilities in addition to the
Commitment and the committed portion of the Indebtedness described in Section
8.2(viii) of the Credit Agreement, then as provided in the Credit Agreement, the
Commitment shall automatically be reduced by $9,700,000 and any Loans
outstanding under the Credit Agreement in excess of $17,500,000, shall
thereafter be governed by this Facility Letter and the Borrower shall promptly
deliver to the Lender a note reflecting the increase in Loans governed by this
Facility Letter.
As
security for the Facility, you will provide us with an unconditional guaranty in
favor of the Lender by the Guarantors.
Without
in any way limiting the uncommitted nature of the Facility, you agree that if
any of the Borrower or its Subsidiaries shall default under any agreement or
agreements evidencing any indebtedness in excess of $100,000 owing to any
person, or if such Indebtedness shall be payable on demand, and demand shall be
made, or any affiliate thereof, or shall fail to pay such amounts thereunder
when due or demanded, irrespective of any applicable period of grace or cure
period, then the Lender may, by written notice to the Borrower, demand, and the
Borrower will make, immediate payment to the Lender of all Loans and other
amounts outstanding under the Facility, including but not limited to interest,
costs and expenses, whether mature, contingent or unmatured.
Without
in any way affecting the uncommitted nature of this Facility, you agree that so
long as this Facility is in effect and until all Loans and obligations incurred
hereunder are paid in full, you shall comply with the covenants set forth in
Section 8 of the Credit Agreement.
Without
in any way affecting the uncommitted nature of this Facility, you agree to pay
to the Lender, a fee at the rate per annum equal to one-fourth of one percent
(1/4 of 1%) (computed on the basis of a year of 360 days and the actual number
of days elapsed) on the maximum aggregate principal amount of the Facility
(whether drawn or undrawn). Such fee shall be payable
quarter-annually in arrears on the last Business Day of each March, June,
September and December in each year (commencing on the first such date occurring
after the date hereof) and upon the Facility Termination Date.
The terms
of this Facility Letter shall not be amended without the prior written consent
of each of the Borrower and the Lender.
The
Borrower shall pay to the Lender, on demand, the reasonable costs, expenses and
disbursements (including, but not limited to legal fees) in connection with the
preparation, interpretation, administration, amendment, modification,
cancellation, enforcement or restructuring of the Borrower’s obligations under
this Facility Letter.
All
obligations under this Facility are payable immediately on demand. In
addition to any other rights the Lender may have, and without limiting the
uncommitted nature of this Facility, if the Borrower does not comply with any of
its undertakings in this letter agreement, or an Event of Default shall have
occurred under Section 9.1(a)-(j) of the Credit Agreement, or should any
guaranty issued in support of this Facility be canceled or in any other way
become ineffective or impaired, the Lender may, at its option, declare all Loans
and other obligations under this Facility to the Lender to be, whereupon they
shall become, immediately due and payable, without presentment, demand, protest
or further notice of any kind, all of which the Borrower hereby
waives.
For the
avoidance of doubt, this is not a committed facility and the Lender may
terminate this Facility or demand the Loans at any time. Section 16
and Section 20 of the Credit Agreement shall be applicable to this Facility
Letter and are hereby incorporated herein by reference.
This
Facility Letter amends, restates, supersedes and replaces the Facility Letter
dated as of April 13, 2007 and all other prior letter agreements between us with
respect to the subject matter contained herein.
If you
are in agreement with the foregoing, kindly indicate your acceptance by signing
the attached copy of this letter in the space provided and the attached
promissory note and returning the same to us.
Very
truly yours,
ABN AMRO
Bank N.V.
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Accepted
and agreed:
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