<PAGE>

                                                                 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.       [








<PAGE>




                             ]

         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





<PAGE>

                  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,




                                       3





<PAGE>

                  (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





<PAGE>

         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





<PAGE>

         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:

                                 Lazare Kaplan International Inc.
                                 19 West 44th Street
                                 New York, N.Y. 10036
                                 USA
                                 Fax (212) 857-7660

                  (ii)     To NamGem:

                                 NamGem Diamond Manufacturing Company (Pty) Ltd.
                                 Erf 2399, Extension 11
                                 Northern Industria,
                                 Okahandja
                                 Fax (264) 62-503704

                  (iii)    To Namdeb:

                                 Namdeb Centre
                                 10th Floor, Dr. Franz Indongo Street
                                 Windhoek
                                 Fax (264) 61-2043334

                  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.




                                       6





<PAGE>

         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.

         LAZARE KAPLAN INTERNATIONAL INC.


         By:    /s/ Leon Tempelsman
                ----------------------------
         Name:  Leon Tempelsman
         Title: President


                 NAMGEM DIAMOND MANUFACTURING COMPANY (PTY) LTD.


         By:    /s/ Joe Vatanavi Mazeingo
                ----------------------------
         Name:  Joe Vatanavi Mazeingo
         Title: Chairman


         NAMDEB DIAMOND CORPORATION (PTY) LTD.


         By:    /s/ Inge K. Zaamwani
                ----------------------------
         Name:  Inge K. Zaamwani
         Title: Managing Director




                                       7





<PAGE>



Annexure A [       ], Annexure B [       ], Annexure C [       ],