COOPERATION AGREEMENT

 

 

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                                                                 EXHIBIT 10(u)

 

 

                              COOPERATION AGREEMENT

                                     BETWEEN

                        LAZARE KAPLAN INTERNATIONAL INC.

                                       AND

                 NAMGEM DIAMOND MANUFACTURING COMPANY (PTY) LTD

                                       AND

                      NAMDEB DIAMOND CORPORATION (PTY) LTD

 

 

THIS AGREEMENT (the "Agreement") is made on this ninth day of January, 2004 by

and among Lazare Kaplan International Inc., a company incorporated in Delaware,

U.S.A. with its registered address at 19 West 44 Street, New York, New York

10036 (together with such subsidiaries as it may designate, "LKI," provided that

in the event of such designation LKI shall remain liable for the performance of

its obligations under this Agreement), NamGem Diamond Manufacturing Company

(Pty) Ltd, a company incorporated in Namibia with its registered address at

2359, Industry Street West Erf 20, Okahandja ("NamGem"), and Namdeb Diamond

Corporation (Pty) Ltd, a company incorporated in Namibia with its registered

address at Namdeb Centre, 10th Floor, Dr. Franz Indongo Street, Windhoek

("Namdeb"), each hereinafter referred to as a "Party" and collectively as the

"Parties".

 

WHEREAS, NamGem is Namibia's flagship venture in the international diamond

polishing industry and through its parent company Namdeb is ultimately

beneficially owned by Namdeb's shareholders, the Government of the Republic of

Namibia (for whom it is a strategic project) and De Beers Centenary AG; and

 

WHEREAS, NamGem in August 2003 issued to prospective technical partners the

"Framework" attached hereto as Annexure A, the principles of which are hereby

reaffirmed by the Parties, subject to the specific terms of this Agreement;

and

 

WHEREAS, on the basis of the objective criteria specified in Annexure A and a

written LKI Submission of Qualifications dated October 15, 2003, including the

proposal attached hereto as Annexure B, LKI was selected to fulfill the role of

technical partner by a committee comprised of representatives of Namdeb's

shareholders: and

 

WHEREAS, NamGem and LKI wish to formalize a program of cooperation as envisaged

in Annexure A and B, for which the commitments of Namdeb at 9, 10 and 11 below

are essential; and

 

WHEREAS, assurances have been provided of the sufficiency of future rough,

diamond supply to NamGem, which forms an essential condition of LKI's entry into

this Agreement and the performance of its obligations hereunder;

 

NOW THEREFORE, the Parties hereby agree as follows.

 

         1.       [

                 

                 

 

 

 

 

 

 

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         2.       [

                 

                 

                 

                 

                 

                 

                 

                 

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         3.       LKI shall at its own expense saw (or, in this case of

                  marketables prepare) and deliver into NamGem's custody at

                  [                            ] or such other location as

                  NamGem and LKI may agree all [

                                          ] rough diamonds [

                 

                 

                 

                                                                    ,] and

                  NamGem shall proceed to polish those goods to specifications

                  and timetables notified by LKI's resident representative at

                  NamGem, delivering the resulting polished diamonds into LKI's

                  custody at [                           ] for export and sale

                  by LKI [                            ] through its global

                  marketing networks: provided, that at such time, and for so

                  long as NamGem is in LKI's reasonable professional judgment

                  able efficiently to saw goods at NamGem's premises, sawing

                  shall take place at those premises to specifications

                  notified by LKI's resident representative, with LKI delivering

                  into NamGem's custody, as above, such rough diamonds received

                  pursuant to this Agreement [

                 

                 

                         ] and with NamGem subsequently redelivering for LKI

                  export, as above, both the resulting polished and those goods

                  which, after sawing, [

                 

                                                         ]

 

         4.       The safeguarding of LKI's rough, sawn and polished diamonds,

                  and all costs associated with their handling, cutting,

                  polishing and transport, while in NamGem's custody shall be

                  NamGem's exclusive responsibility, with NamGem at all times

                  maintaining insurance cover on those diamonds [

                      ] and retaining liability to LKI for any diamond loss,

                  destruction or damage not caused by LKI and for which LKI has

                  not been fully reimbursed (including, without limitation, the

                  amount of any deductible on any insurance claim).

 

         5.       Within [    ] business days following export from Namibia of

                  any polished diamonds or sawn unpolished goods delivered by

                  NamGem pursuant to 3 above,

 

 

 

 

 

                                       2

 

 

 

 

 

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                  LKI shall pay to NamGem in US dollars to such account(s) as

                  NamGem may designate

 

                  [                                                          

 

 

 

 

 

 

                                                   ]

 

                  less any amounts owing to LKI pursuant to 4 above, and any

                  taxes, duties or other levies of any kind whatsoever paid or

                  payable by LKI to any governmental authority in Namibia

                  arising from implementation of this Agreement in accordance

                  with its terms [

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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         6.       Except as NamGem and LKI may otherwise agree, LKI shall [