REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

VIA FEDERAL EXPRESS – PRIORITY OVERNIGHT

Confidential

June 19, 2007

Mr. Linus Cortez

Chief Financial Officer

Stuller, Inc.

302 Rue Louis XIV

Lafayette, Louisiana 70508

Dear Mr. Cortez:

This letter, will amend our letter agreement dated March 16, 2000, and replace
our existing letter agreement dated, April 25, 2006, when signed by the last
party hereto.

A. For the Term, Charles & Colvard, Ltd., (C&C), hereby:

 

  1. Appoints Stuller Inc., (Stuller) the rights to sell Charles & Colvard
created moissanite (either as a loose jewel or in manufactured jewelry) in the
territory comprised of the North American Continent from the present date until
December 31, 2008 (The “Appointment Term”).

 

  2. Warrants that Stuller will be charged no more than the lowest price charged
to any jewelry industry customer worldwide. The price schedule effective May 1,
2006 (previously given to Stuller) is the current pricing. Further, if at any
time the pricing of moissanite is decreased, C&C shall provide Stuller with a
credit toward additional purchases of moissanite equal to the amount of such
price decrease on the lesser of (a) Stuller’s net purchases of moissanite during
the prior 90 days or (b) Stuller’s actual inventory at such time. Stuller will
be informed at least 90 days prior to any price increase.

 

  3. C&C will fund all pre-approved, eligible advertising/promotional activity
expenses submitted by Stuller. This funding is limited to *****% of net
purchases made by Stuller. To receive the co-op credit Stuller must submit to
C&C, on a quarterly basis, a marketing report listing all activities undertaken
by Stuller for the quarter. This report must be supported by actual receipts for
all expenditures and other appropriate backup evidencing that advertising has
occurred. C&C will issue a credit memo to Stuller for actual marketing
expenditures.

 

  4. Agrees to provide stock re-balancing semi-annually on a dollar value per
dollar value basis, *****. This stock balancing will occur within 15 days of
May15 and November 15 of each year.

 

  5. Agrees to provide the Stuller staff with any required training concerning
the product, the marketing strategy, and the product positioning being
implemented by C&C.

 

  6. Agrees *****.

B. Stuller agrees to comply with the following:

 

  a. MAP pricing

 

  b. Brand Identity Guidelines

 

  c. Submission of support documentation relevant to all co-op and any other
authorized marketing and sales expenses.

300 Perimeter Park Drive, Suite A            Morrisville, NC
27560            Telephone 919.468.0399

Facsimile 919.468.0486    www.moissanite.com

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

Page 2

June 19, 2007

Linus Cortez, CFO – Stuller, Inc.

C. Stuller and C&C agree to the following four major initiatives for 2007:

 

  1. Stuller will *****. Illustrative of Stuller’s commitment, *****.

 

  2. C&C and Stuller will ***** including *****.

 

  3. C&C and Stuller will *****.

 

  4. Stuller will *****.

 

  5. On a quarterly basis Stuller agrees *****.

Stuller hereby recognizes and agrees to cooperate with C&C in the protection of
all C&C trademarks, logos, copyrights and intellectual property. Further,
Stuller agrees to include Charles & Colvard created moissanite in its catalog
and trade show presentations for the term of the agreement; and to make
commercially reasonable efforts to market moissanite to its customers consistent
with the Brand Identity Guidelines (BIG) supplied by C&C, and, Stuller
specifically agrees to make commercially reasonable efforts to sell Charles &
Colvard created moissanite as loose stones to retailers and manufacturers only
for use in jewelry mountings.

Further, Stuller agrees *****. The parties agree *****.

If the forgoing meets with your understanding of our agreement, please sign and
return one copy of this letter for our files.

Agreed and accepted:

 

Charles & Colvard, Ltd.     Stuller, Inc.  

/s/ Dennis M. Reed

   

/s/ Linus Cortez

  Dennis M. Reed     Linus Cortez   President & CMO     Chief Financial Officer
  Date: 6/26/07     Date: 6/21/07  

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

Exhibit I

MAP Price List

Effective May 1, 2006. All prices listed in US$. All prices subject to change
without notice.

 

SRB (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2.5   0.05   *****   *****   78 3   0.09   *****   *****   78 3.25   0.11  
*****   *****   78 3.5   0.14   *****   *****   78 4   0.22   *****   *****   40
4.5   0.29   *****   *****   40 5   0.41   *****   *****   40 5.5   0.54   *****
  *****   21 6   0.68   *****   *****   21 6.5   0.88   *****   *****   21 7  
1.10   *****   *****   21 7.5   1.35   *****   *****   10 8   1.60   *****  
*****   10 8.5   1.90   *****   *****   10 9   2.26   *****   *****   10 9.5  
2.75   *****   *****   10 10   3.08   *****   *****   10 10.5   3.57   *****  
*****   10 11   4.11   *****   *****   5 11.5   4.72   *****   *****   5 12  
5.32   *****   *****   5 12.5   6.01   *****   *****   5 13   6.80   *****  
*****   5 13.5   7.60   *****   *****   5 14   8.46   *****   *****   5 14.5  
9.51   *****   *****   5 15   10.46   *****   *****   5

All SRB (standard round brilliant) moissanite jewels are sold by piece by size
(mm).

The average carat weights listed are for informational purposes only.

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

 

SCR (mm)

 

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Average

Pieces/Bag

1   3   *****   *****   869 1.1   3   *****   *****   653 1.2   3   *****  
*****   440 1.3   3   *****   *****   370 1.4   3   *****   *****   295 1.5   3
  *****   *****   255 1.6   3   *****   *****   190 1.7   3   *****   *****  
167 1.8   3   *****   *****   140 1.9   3   *****   *****   112 2   3   *****  
*****   109 2.1   3   *****   *****   94 2.2   3   *****   *****   82 2.3   3  
*****   *****   71 2.4   3   *****   *****   63

 

All SCR (single cut round) moissanite jewels are sold by weight in bulk bags
weighing 3 carats each.

The average pieces per bag listed are for informational purposes only.

 

Baguette

(mm)

 

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Average

Pieces/Bag

4x2

  3   *****   *****   29

5x2.5

  3   *****   *****   16

Tapered

Baguette

 

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Average

Pieces/Bag

5x2.5x2

  3   *****   *****   19

All Baguette moissanite jewels are sold by weight in bulk bags weighing 3 carats
each.

The average pieces per bag listed are for informational purposes only.

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

MAP Price List

Effective May 1, 2006. All prices listed in US$. All prices subject to change
without notice.

 

Castle (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2.5

  0.05   *****   *****   40

3

  0.09   *****   *****   40

3.5

  0.15   *****   *****   40

4

  0.21   *****   *****   40

4.5

  0.30   *****   *****   40

5

  0.40   *****   *****   40

5.5

  0.52   *****   *****   21

6

  0.69   *****   *****   21

6.5

  0.88   *****   *****   21

7

  1.09   *****   *****   21

7.5

  1.33   *****   *****   10

8

  1.61   *****   *****   10

Cushion (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2

  0.04   *****   *****   40

2.5

  0.07   *****   *****   40

3

  0.12   *****   *****   40

3.5

  0.19   *****   *****   40

4

  0.30   *****   *****   40

4.5

  0.42   *****   *****   40

5

  0.57   *****   *****   21

5.5

  0.75   *****   *****   21

6

  0.96   *****   *****   21

6.5

  1.21   *****   *****   21

7

  1.49   *****   *****   21

7.5

  1.80   *****   *****   10

8

  2.15   *****   *****   10

8.5

  2.54   *****   *****   10

9

  2.98   *****   *****   10

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

 

9.5

  3.74   *****   *****   10

10

  4.18   *****   *****   5

10.5

  4.99   *****   *****   5

11

  5.79   *****   *****   5

11.5

  6.82   *****   *****   5

12

  8.07   *****   *****   5

Heart (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

3

  0.08   *****   *****   78

3.5

  0.14   *****   *****   40

4

  0.21   *****   *****   40

4.5

  0.30   *****   *****   40

5

  0.42   *****   *****   40

5.5

  0.54   *****   *****   21

6

  0.70   *****   *****   21

6.5

  0.86   *****   *****   21

7

  1.10   *****   *****   21

7.5

  1.32   *****   *****   21

8

  1.61   *****   *****   10

8.5

  1.99   *****   *****   10

9

  2.43   *****   *****   10

9.5

  2.83   *****   *****   10

10

  3.30   *****   *****   10

All moissanite jewels on this page are sold by piece by size (mm), average carat
weights listed are for

informational purposes only.

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

MAP Price List

Effective May 1, 2006. All prices listed in US$. All prices subject to change
without notice.

 

Marquise

(mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

4x2

  0.06   *****   *****   40

5x2.5

  0.12   *****   *****   40

6x3

  0.21   *****   *****   21

7x3.5

  0.32   *****   *****   21

8x4

  0.47   *****   *****   21

9x4.5

  0.67   *****   *****   21

10x5

  0.90   *****   *****   21

11x5.5

  1.26   *****   *****   12

12x6

  1.58   *****   *****   12

13x6.5

  1.98   *****   *****   12

14x7

  2.48   *****   *****   12

Octagon

(mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2

  0.03   *****   *****   78

2.5

  0.07   *****   *****   78

3

  0.11   *****   *****   78

3.5

  0.17   *****   *****   78

4

  0.25   *****   *****   40

4.5

  0.36   *****   *****   40

5

  0.47   *****   *****   40

5.5

  0.62   *****   *****   21

6

  0.80   *****   *****   21

6.5

  1.02   *****   *****   21

7

  1.26   *****   *****   21

7.5

  1.56   *****   *****   10

8

  1.87   *****   *****   10

8.5

  2.19   *****   *****   10

9

  2.58   *****   *****   10

9.5

  3.02   *****   *****   10

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

 

Oval (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

4x2

  0.09   *****   *****   40

5x3

  0.23   *****   *****   40

6x4

  0.43   *****   *****   21

7x5

  0.84   *****   *****   21

8x6

  1.33   *****   *****   10

9x7

  1.91   *****   *****   10

10x8

  2.72   *****   *****   10

11x9

  3.74   *****   *****   10

12x10

  5.18   *****   *****   5

14x10

  6.58   *****   *****   5

14x10.5

  6.93   *****   *****   5

Pear (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

5x3

  0.20   *****   *****   21

6x4

  0.39   *****   *****   21

7x5

  0.69   *****   *****   21

7.5x5

  0.76   *****   *****   21

8x5

  0.85   *****   *****   21

9x6

  1.33   *****   *****   12

10x7

  1.93   *****   *****   12

10.5x7

  2.13   *****   *****   12

12x7.5

  2.87   *****   *****   12

12x8

  3.09   *****   *****   5

All moissanite jewels on this page are sold by piece by size (mm), average carat
weights listed are for

informational purposes only.

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

MAP Price List

Effective May 1, 2006. All prices listed in US$. All prices subject to change
without notice.

 

Princess

(mm)

 

Average

Carat Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2x2

  0.04   *****   *****   78

2.5x2.5

  0.08   *****   *****   78

3x3

  0.14   *****   *****   40

3.5x3.5

  0.21   *****   *****   40

4x4

  0.33   *****   *****   21

4.5x4.5

  0.44   *****   *****   21

5x5

  0.64   *****   *****   21

5.5x5.5

  0.83   *****   *****   10

6x6

  1.07   *****   *****   10

6.5x6.5

  1.35   *****   *****   10

7x7

  1.64   *****   *****   10

7.5x7.5

  2.08   *****   *****   10

8x8

  2.51   *****   *****   10

8.5x8.5

  2.87   *****   *****   10

9x9

  3.49   *****   *****   5

9.5x9.5

  3.97   *****   *****   5

10x10

  4.80   *****   *****   5

10.5x10.5

  5.38   *****   *****   5

11x11

  6.31   *****   *****   5

11.5x11.5

  7.23   *****   *****   5

12x12

  8.14   *****   *****   5

12.5x12.5

  8.86   *****   *****   5

13.0x13.0

  9.94   *****   *****   5

Radiant (mm)

 

Average

Carat Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

4x2

  0.10   *****   *****   40

5x3

  0.30   *****   *****   40

6x4

  0.61   *****   *****   21

7x5

  1.04   *****   *****   10

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

 

8x6

  1.67   *****   *****   10

9x7

  2.43   *****   *****   10

10x8

  3.51   *****   *****   10

11x9

  4.79   *****   *****   5

12x10

  6.45   *****   *****   5

14x10

  8.41   *****   *****   5

14x12

  11.72   *****   *****   5

SBC (mm)

 

Average

Carat Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2x2

  0.04   *****   *****   78

2.5x2.5

  0.11   *****   *****   78

3x3

  0.16   *****   *****   40

3.5x3.5

  0.24   *****   *****   40

4x4

  0.37   *****   *****   21

4.5x4.5

  0.51   *****   *****   21

5x5

  0.71   *****   *****   21

5.5x5.5

  0.91   *****   *****   10

6x6

  1.18   *****   *****   10

6.5x6.5

  1.50   *****   *****   10

7x7

  1.88   *****   *****   10

7.5x7.5

  2.28   *****   *****   10

8x8

  2.78   *****   *****   10

8.5x8.5

  3.28   *****   *****   10

9x9

  3.94   *****   *****   5

9.5x9.5

  4.62   *****   *****   5

10.0x10.0

  5.29   *****   *****   5

All moissanite jewels on this page are sold by piece by size (mm), average carat
weights listed are for

informational purposes only.

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

MAP Price List

Effective May 1, 2006. All prices listed in US$. All prices subject to change
without notice.

 

Triangle (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2x2x2

  0.02   *****   *****   78

2.5x2.5x2.5

  0.06   *****   *****   78

3x3x3

  0.09   *****   *****   78

3.5x3.5x3.5

  0.14   *****   *****   40

4x4x4

  0.21   *****   *****   40

4.5x4.5x4.5

  0.30   *****   *****   21

5x5x5

  0.40   *****   *****   21

5.5x5.5x5.5

  0.52   *****   *****   21

6x6x6

  0.67   *****   *****   21

6.5x6.5x6.5

  0.83   *****   *****   10

7x7x7

  1.06   *****   *****   10

7.5x7.5x7.5

  1.28   *****   *****   10

8x8x8

  1.48   *****   *****   10

8.5x8.5x8.5

  1.79   *****   *****   10

9x9x9

  2.12   *****   *****   10

9.5x9.5x9.5

  2.41   *****   *****   10

Trillion (mm)

 

Average

Carat

Weight

 

Minimum

Advertised

Price

 

Suggested

Retail

 

Tray Capacity

2x2x2

  0.02   *****   *****   78

2.5x2.5x2.5

  0.05   *****   *****   78

3x3x3

  0.08   *****   *****   78

3.5x3.5x3.5

  0.13   *****   *****   40

4x4x4

  0.18   *****   *****   40

4.5x4.5x4.5

  0.27   *****   *****   21

5x5x5

  0.36   *****   *****   21

5.5x5.5x5.5

  0.47   *****   *****   21

6x6x6

  0.61   *****   *****   21

6.5x6.5x6.5

  0.74   *****   *****   10

7x7x7

  0.94   *****   *****   10

--------------------------------------------------------------------------------

REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
IS DENOTED HEREIN BY *****

LOGO [g20389image1.jpg]

 

7.5x7.5x7.5

  1.16   *****   *****   10

8x8x8

  1.44   *****   *****   10

8.5x8.5x8.5

  1.66   *****   *****   10

9x9x9

  2.16   *****   *****   10

9.5x9.5x9.5

  2.41   *****   *****   10

10x10x10

  2.77   *****   *****   5

10.5x10.5x10.5

  3.34   *****   *****   5

11x11x11

  3.85   *****   *****   5

All moissanite jewels on this page are sold by piece by size (mm), average carat
weights listed are for informational

purposes only.