EXHIBIT 10(u)
COOPERATION AGREEMENT
BETWEEN
▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ International Inc., a company incorporated in Delaware,
U.S.A. with its registered address at ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (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
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ 20, Okahandja ("NamGem"), and Namdeb Diamond
Corporation (Pty) Ltd, a company incorporated in Namibia with its registered
address at Namdeb Centre, 10th Floor, ▇▇. ▇▇▇▇▇ 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. [
]
2. [
]
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
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 [
]
6. Except as NamGem and LKI may otherwise agree, LKI shall [
]
(i) Purchase in NamGem's name, deliver, and install, in
an area fully and suitably prepared by NamGem, the
equipment outlined at page 2 of Annexure B or such
other equipment as LKI and NamGem may agree (with
NamGem, as owner, assuming operational, maintenance
and all other responsibilities for such equipment
following its installation in good working order);
(ii) Second to NamGem a suitably qualified expatriate
resident representative for the duration of this
Agreement, and other suitably qualified expatriate
technicians for as long as LKI and NamGem agree is
necessary, to undertake the training of NamGem's
current staff complement and other tasks, [
] such expatriates remaining engaged by
LKI and under the direction of senior staff at its
headquarters but operating in close coordination
with, and consistent with the supervisory
responsibilities of, NamGem management,
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(iii) Design and implement a suitable training program for
a Namibian of superior qualifications and potential
selected and employed by NamGem in consultation with
LKI, such training being aimed at preparing this
individual to become NamGem's General Manager within
a period of [ ] from commencement of this
Agreement, and including appropriate exposure to
LKI's activities and operations abroad;
(iv) At NamGem's reasonable request, transfer skills and
know-how to selected NamGem employees through their
participation in such diamond trading, marketing and
other downstream LKI activities as may be relevant to
NamGem; [
] and
(v) [
]
7. The activities in 6 above shall be carried out by LKI with due
expedition, following their prioritization in order of
relative importance through consultation with NamGem, such
prioritization to be reflected in an implementation schedule
to be presented by LKI for NamGem approval no later than [
]. Written and oral reports on implementation
progress shall be presented by LKI to each ordinarily
scheduled NamGem Board meeting, and otherwise as reasonably
requested by the Board, with NamGem furnishing LKI with such
information about its results and operations during the period
preceding this Agreement as may be necessary or advisable in
benchmarking such progress or otherwise effectively fulfilling
the purposes and provisions of this Agreement.
8. NamGem shall employ its best efforts to obtain all official
approvals necessary or advisable for implementation of this
Agreement in accordance with its terms, it being understood
and agreed by the Parties that any absence of such approvals
which hinders fulfillment by LKI of its responsibilities under
this Agreement shall relieve LKI from such responsibilities in
proportion to such hindrance; provided, that LKI shall
promptly upon request by NamGem furnish such information
within LKI's possession and capable lawfully of being
disclosed by LKI as is necessary for procurement of such
approvals.
9. For the duration of this Agreement, Namdeb shall ensure that
NamGem possesses sufficient [
] and Namdeb shall employ its best efforts to ensure
that NamGem possesses sufficient skilled management in place,
to meet NamGem's obligations and maintain its operation as an
efficient going concern [
]
4
10. Except as it may otherwise specify, this Agreement shall be
terminable by either LKI or NamGem furnishing the other with
[ '] written notice at any time from [
] onwards; [
.]
11. [
.]
5
12. No Party shall assign its rights or delegate its
responsibilities under this Agreement to any other party
without the prior written consent of the other Parties.
13. Formal notices under this Agreement shall be delivered by
facsimile transmission and forwarded by mail or hand delivery
and shall be addressed as follows:
(i) to LKI:
▇▇▇▇▇▇ ▇▇▇▇▇▇ International Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(ii) To NamGem:
NamGem Diamond Manufacturing Company (Pty) Ltd.
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Okahandja
Fax (▇▇▇) ▇▇-▇▇▇▇▇▇
(iii) To Namdeb:
Namdeb Centre
▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Windhoek
Fax (▇▇▇) ▇▇-▇▇▇▇▇▇▇
provided, that any Party may change its address for notice
purposes by communicating such change to the other Parties in
writing.
14. Except as may be required by law, each Party shall hold in
confidence any business, financial, technical or other
information gained from or about any other Party in connection
with this Agreement, and shall use such information solely for
purposes of Agreement implementation.
15. Each Party agrees and stipulates that this Agreement is not a
joint venture or partnership agreement.
16. The provisions of 10, 12, 13, 14, 16, 17 and 18 shall survive
any termination of this Agreement.
17. No indulgence granted by a Party shall constitute a waiver of
any such Party's rights under this Agreement, or shall any
variation of this Agreement's terms be effective unless
reduced to writing and signed by the Parties.
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18. This Agreement shall be governed by, and construed in
accordance with, the laws of the Republic of Namibia, to the
jurisdiction of whose courts the Parties hereby consent.
19. NamGem and LKI shall divide equally the costs of their
respective legal counsel incurred in connection with the
drafting and finalization of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement in
counterparts, as of the date first hereinabove written.
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERNATIONAL INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
NAMGEM DIAMOND MANUFACTURING COMPANY (PTY) LTD.
By: /s/ ▇▇▇ Vatanavi Mazeingo
----------------------------
Name: ▇▇▇ Vatanavi Mazeingo
Title: Chairman
NAMDEB DIAMOND CORPORATION (PTY) LTD.
By: /s/ ▇▇▇▇ ▇. Zaamwani
----------------------------
Name: ▇▇▇▇ ▇. Zaamwani
Title: Managing Director
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Annexure A [ ], Annexure B [ ], Annexure C [ ],