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 *****

Exhibit 10.111

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Mr. Klaus H. Jung     March 14, 2008

President

Reeves Park, Inc.

5050 Lincoln Drive

Suite 470

Edina, MN 55436

Re: Manufacturing Agreement

Dear Klaus:

This letter agreement (the “Agreement”) sets forth the terms and conditions of
the sale of Charles & Colvard created Moissanite (“Moissanite”) by Charles &
Colvard, Ltd. (“C&C”), to Reeves Park (“Buyer”). In addition to this letter and
the attached terms and conditions there are other agreements between the two
companies including but not limited to: a License Agreement, various Consignment
Agreements and a Security Agreement.

C&C hereby agrees to sell to Buyer commercially reasonable amounts of
Moissanite, using the pricing set forth in the then current price list, (Price
File *****) for use by Buyer in the manufacturing of fine jewelry featuring
Moissanite; provided, however, the prices charged to Buyer will be no more than
the lowest charged for any jewelry industry manufacturing customer of C&C
worldwide. In addition, the parties hereto agree to the following;

 

  1. Effective July 1, 2007 C&C will fund at a *****% rate all pre-approved,
eligible advertising/promotional activity expenses submitted by the Buyer
dealing with advertising/promotional materials in which Moissanite is being
promoted/advertised. This funding is limited to *****% of net purchases made by
the Buyer. C&C agrees to consider additional funding greater than the *****% of
net purchases amount on a specific pre-approved basis. Credit will be given via
credit memo to Buyer’s account within 30 days after Buyer presents sufficient
supporting documentation to C&C.

 

  2. Upon Buyer’s request, C&C also agrees to provide the staff of the Buyer
with any required training materials and guidance concerning Moissanite, C&C’s
marketing strategy and C&C’s product positioning for Moissanite.

 

  3. With respect to the sale and delivery of new Charles & Colvard created
Moissanite, Buyer shall have 45 days within which to inspect and thereupon
reject any new items that are damaged or that do not conform to Buyer’s ordering
specifications. If Buyer returns damaged or non-conforming items within the
foregoing 45-day time period, then Buyer shall be given credit for an amount
equal to 100% of the price charged to Buyer by C&C for such returned items. For
purposes of this Agreement, the foregoing 45-day time period also applies to
Moissanite shipped to a party, such as a manufacturer of jewelry, designated in
writing by Buyer to receive the Moissanite. Notwithstanding the foregoing, to
receive their credit, Buyer must report any damaged or non conforming items
within 15 days subsequest to the end of a quarter or 30 days subsequent to the
end of each calendar year.

 

  4. With respect to Moissanite accepted and used by Buyer, the following
provisions apply:

a. As of July 1, 2007 of the amount of new Moissanite thereafter purchased by
Buyer during each calendar quarter Buyer may return up to an amount equal to
*****% of such purchases for *****% of the price originally paid by Buyer for
the returned items, and Buyer will not be charged a re-stocking fee or like
charge in connection with the return of such items. No more than *****% of such
items shall be damaged. These returns must be quantified within 30 days of the
end of the applicable quarter and completed within a reasonable period
thereafter.

b. For any damaged Moissanite not covered by the provisions of paragraph 4(a)
above, Buyer may return such items and receive a credit of up to *****% of the
price paid originally paid by Buyer for the returned items; and Buyer will not
be charged a re-stocking fee or like charge in connection with the return of
such items.

c. Under no circumstances will credit be given for any damaged jewels 3.0mm in
size or smaller.

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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 *****

 

Mr. Klaus H. Jung

March 14, 2008

Page Two

 

  5. C&C agrees to provide stock re-balancing quarterly on a dollar value per
dollar value basis, up to a maximum of *****% of the purchases made by Buyer in
the most recent quarter prior to the request for re-balancing. This stock
balancing will occur within 15 days of the end of the quarter for which the
charge applies.

 

  6. As of and from the date hereof March 14, 2008, all stock ordered for use in
trunk shows will be delivered to Buyer on a consignment basis. These consignment
shipments will be governed by a separate written consignment agreement that will
set forth the terms of the consignment arrangement including, but not limited
to, the amount of consigned Moissanite jewelry and length of the consignment
period.

 

  7. Buyer agrees to provide, to the best of its ability and apply best efforts
to provide retail forecasting and reporting on a timely basis, to C&C for all
major programs that Buyer sells Moissanite jewelry.

 

  8. With respect to the sale and delivery of new Charles & Colvard created
moissanite, Buyer agrees to remit to C&C an amount equal to no less than *****%
of the amount invoiced prior to the shipment of the amount invoiced. The parties
hereto acknowledge and agree that the total amount so received by C&C shall be
applied to amounts due C&C by Buyer for Moissanite previously ordered and
shipped with the understanding that all monies will be applied to interest due
first and then from the oldest invoices(s) first. With respect to the sale and
delivery of new Charles & Colvard created Moissanite, an invoiced amount is due
and payable ***** days from the invoice date for purposes of the computation of
interest as contemplated by paragraph 10 below, and for other purposes under
this Agreement.

 

 

9.

Beginning with the 2nd calendar quarter in 2008, and for each calendar quarter
thereafter until all amounts past due C&C from Buyer are paid in full, the
amounts paid by Buyer pursuant to the provisions of paragraph 8 above shall be
aggregated and during each calendar quarter Buyer agrees to remit to C&C at
least $*****. Such amounts shall also be applied to interest due first and then
from the then oldest invoice(s) first. Buyer’s failure to remit the minimum
payment per quarter shall be considered a material breach of this Agreement for
termination purposes. Any amount paid by Buyer in a calendar quarter under the
provision of this paragraph 9 towards the $***** minimum and which was not used
to pay for new Charles & Colvard created Moissanite which was invoiced under the
provisions of paragraph 8 above shall be automatically applied by C&C against
amounts invoiced to Buyer in the following calendar quarter for shipments under
the provision of paragraph 8 .above.

 

  10. Beginning April 1, 2008, C&C shall provide Buyer a monthly summary of
accounts receivable by age and shall charge *****% per annum on amounts that are
past due until paid in full; provided, however, if Buyer is able to secure
financing from any source so that Buyer liquidates all of its past due
obligations to C&C by December 31, 2008, then C&C agrees to immediately issue a
credit to Buyer in an amount equal to all charges for interest theretofore
imposed by C&C on Buyer’s account.

Buyer hereby recognizes, and agrees to cooperate with C&C in the protection of,
all C&C trademarks, copyrights and intellectual property. Buyer acknowledges
receipt of the Brand Identity Guidelines provided by C&C and agrees to market
Charles & Colvard created Moissanite in a manner consistent with such
guidelines. Additionally, Buyer shall use commercially reasonable efforts to
ensure its customers abide by such guidelines.

Unless sooner terminated, this Agreement remains in effect from the effective
date hereof through December 31, 2009. Either party may terminate this Agreement
only for “good cause”. Good cause shall be any intentional, material, repeated
or continuous breach of this Agreement by either party. The party intending to
terminate shall give the other notice specifying the cause for termination, and
the recipient may cure the breach within 30 days of receipt of such notice.

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REDACTED – OMITTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION
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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND IS DENOTED HEREIN BY *****

 

Mr. Klaus H. Jung

March 14, 2008

Page Three

Buyer hereby reissues, ratifies, and confirms the enforceability and validity of
all consignment agreements and security agreements (whenever executed and as
amended from time to time, the “Consignment and Security Agreements”) between
Buyer and C&C with respect to Moissanite, and agrees that all Consignment and
Security Agreements constitute the legal, valid, and binding obligations of
Buyer, enforceable in accordance with their respective terms. In addition, and
except as provided in the introductory paragraph of this Agreement, Buyer and
C&C acknowledge and agree that neither the execution and delivery of any new
manufacturing agreement or this Agreement nor any of the terms, provisions,
covenants, or agreements contained in any new manufacturing agreement or this
Agreement shall in any manner release, impair, lessen, modify, waive, or
otherwise affect the liability and obligations of Buyer under the terms of the
Consignment and Security Agreements.

If the forgoing meets with your understanding of our agreement, please sign two
copies of this Agreement and return one fully executed copy for our files.

 

Charles & Colvard, Ltd.     Agreed and Accepted by “Buyer” By:  

/s/ James R. Braun

    By:  

/s/ Klaus Jung

Name:   James R. Braun     Name:   Klaus Jung Title:   VP of Finance & CFO    
Title:   President/CEO Date:   3-17-08     Date:   3-14-08

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND IS DENOTED HEREIN BY *****

 

TERMS AND CONDITIONS

1. ACCEPTANCE OF ORDERS. C&C’s acceptance of all orders for Charles & Colvard
created Moissanite (the “Product”) and all offers and sales by C&C are subject
to and expressly conditioned upon Buyer’s acceptance of the terms and conditions
of this Agreement, and Buyer’s acceptance of any offer by C&C must be made on
such terms and conditions exactly as offered by C&C. Any of Buyer’s terms and
conditions which are different from or in addition to those contained in this
Agreement are objected to by C&C and shall be of no effect unless specifically
agreed to in writing by C&C. Shipment of the Product shall not be construed as
acceptance of any of Buyer’s terms and conditions which are different from or in
addition to those contained herein. Buyer’s acceptance of the Product furnished
by C&C pursuant hereto shall constitute Buyer’s acceptance of the terms and
conditions of this Agreement.

This Agreement shall be governed by and construed under the laws of the State of
North Carolina as if made and to be performed entirely within such state.

2. PRICES. The prices stated in this Agreement are F.O.B. C&C’s manufacturing
facilities and do not include transportation, insurance or any sales, use,
excise or other taxes, duties, fees or assessments imposed by any jurisdiction.
All applicable taxes shall be paid by Buyer, unless Buyer provides C&C with
appropriate tax exemption certificates. Buyer shall promptly reimburse C&C for
any taxes paid by C&C which are the responsibility of Buyer hereunder. All
prices and other terms are subject to correction for typographical or clerical
errors. Prices are subject to change annually at the sole discretion of C&C.

3. TERMS OF SALE & PAYMENT. C&C shall provide the Product in the “very good”
grade which includes slight possible color saturations and inclusions. Buyer
shall pay for the Product in cash upon delivery, unless an earlier or later time
for payment is specified in the Agreement (in which case payment shall be due at
the time so specified). Each shipment shall be considered a separate and
independent transaction and payment for each shipment shall be due accordingly.

C&C may, at its option, elect to extend credit to Buyer. If C&C extends credit
to Buyer, invoices will be issued upon shipment and payment shall be due in full
within ***** from the invoice date. C&C reserves the right to change the amount
of or withdraw any credit extended to Buyer at any time without notice to Buyer.

Amounts not paid when due shall be subject to interest at the rate of ***** per
month or, if less, the maximum rate permitted by law.

In the event of the bankruptcy or insolvency of Buyer, or the filing of any
proceeding by or against Buyer under any bankruptcy, insolvency or receivership
law, or in the event Buyer makes an assignment for the benefit of creditors, C&C
may, at its election and without prejudice to any other right or remedy,
exercise all rights and remedies granted to C&C in Section 7 as in the case of a
default by Buyer under this Agreement.

4. DELIVERY, TITLE AND RISK OF LOSS. All sales hereunder shall be F.O.B. C&C’s
manufacturing facilities, and the Product shall be deemed delivered to Buyer
when delivered to the transportation company at the C&C’s manufacturing
facilities. Unless otherwise agreed in writing by C&C, all transportation
charges and expenses shall be paid by Buyer, including the cost of any insurance
against loss or damage in transit which C&C may obtain on Buyer’s behalf. C&C
reserves the right to ship the Product freight collect.

C&C hereby reserves, and Buyer hereby grants to C&C, a purchase money security
interest in all Product purchased under this Agreement, together with all
proceeds thereof, including insurance proceeds. Such security interest secures
all of Buyer’s obligations arising under this Agreement, and any other
agreements between Buyer and C&C, until all amounts due C&C hereunder have been
paid in full. Buyer agrees to promptly execute and deliver appropriate financing
statements evidencing C&C’s security interest upon C&C’s request. This purchase
money security interest shall be subordinate to Buyer’s senior Well Fargo Loan
facility

Title and risk of loss and/or damage to the Product shall pass to Buyer upon
delivery of the Product to the transportation company at C&C’s manufacturing
facilities. Confiscation or destruction of or damage to the Product shall not
release, reduce or in any way affect the liability of Buyer hereunder. In the
event Buyer rejects or revokes acceptance of any Product for any reason, all
risk of loss and/or damage to such Product shall nonetheless remain with Buyer
unless and until the same are returned at Buyer’s expense to such place as C&C
may designate in writing.

Buyer shall inspect all Product promptly upon receipt and file claims with the
transportation company in the event there is evidence of shipping damage.

5. PERFORMANCE. C&C shall make a reasonable effort to observe the dates
specified herein or such later dates as may be agreed to by Buyer for delivery
or other performance, but C&C shall not be liable for any delay in delivery or
failure to perform due to acceptance of prior orders, strike, lockout, riot,
war, fire, act of God, accident, delays caused by any subcontractor or supplier
or by Buyer, technical difficulties, failure or breakdown of machinery or
components necessary to order completion, inability to obtain or substantial
rises in the price of labor or materials or manufacturing facilities, or
compliance with any law, regulation, order or direction, whether valid or
invalid, of any governmental authority or

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instrumentality thereof, or due to any unforeseen circumstances or any causes
beyond its control, whether similar or dissimilar to the foregoing and whether
or not foreseen. No penalty of any kind shall be effective against C&C for delay
or failure; provided, however, that if the delay or failure extends beyond six
(6) months from the originally scheduled date either party may, with written
notice to the other, terminate this Agreement without further liability.

6. ACCEPTANCE. All Product delivered hereunder shall be deemed accepted by Buyer
as conforming to this Agreement, and Buyer shall have no right to revoke any
acceptance, unless written notice of the claimed nonconformity is received by
C&C within twenty (20) days of delivery thereof. Notwithstanding the foregoing,
any use of the Product by Buyer, its agents, employees, contractors or
licensees, for any purpose, after delivery thereof, shall constitute acceptance
of that product by Buyer.

7. DEFAULT AND TERMINATION. Buyer may terminate this Agreement if C&C materially
defaults in the performance of its obligations hereunder and fails to cure such
default within sixty (60) days after written notice thereof from Buyer. Such
termination shall be Buyer’s sole remedy in the event of a default by C&C.

Buyer shall be deemed in material default under this Agreement if Buyer fails to
pay any amounts when due hereunder, cancels or attempts to cancel this Agreement
prior to delivery or refuses delivery or otherwise fails to perform its
obligations hereunder or fails to pay C&C any sums due under any other agreement
or otherwise. In the event of a material default by Buyer, C&C may, upon written
notice to Buyer, (1) suspend its performance and withhold shipments, in whole or
in part, (2) terminate this Agreement, (3) declare all sums owing to C&C
immediately due and payable and/or (4) recall Product in transit, retake same
and repossess any Product held by C&C for Buyer’s account, without the necessity
of any other proceedings, and Buyer agrees that all Product so recalled, taken
or repossessed shall be the property of C&C, provided that Buyer is given credit
therefore. Exercise of any of the foregoing remedies shall not be construed as
limiting, in any manner, any of the rights or remedies available to C&C under
the Uniform Commercial Code or other laws.

8. PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS. The sale of the Product
hereunder does not convey any expressed or implied license under any patent,
copyright, trademark or other proprietary rights owned or controlled by C&C,
whether relating to the Product sold or any manufacturing process or other
matter. All rights under any such patent, copyright, trademark or other
proprietary rights are expressly reserved by C&C.

9. MANUFACTURING PRACTICES. When engaged in the design, production or
distribution of any jewelry containing the Product, Buyer and its agents,
sub-manufacturers, or contractors involved in the design, production, or
distribution of jewelry containing the Product shall not engage in the use of
child labor, prison or any type of forced labor, or any other labor practices
that may violate the sensibilities of the American public. Buyer shall certify
to C&C from time to time, upon C&C’s demand, that it, as well as its agents,
sub-manufacturers, or contractors involved in the design, production, or
distribution of the Product does not engage in such labor practices. Upon C&C’s
demand, Buyer shall also certify that all rules and regulations, as well as all
measures of safety, health, and labor practices, recommended or requested by the
relevant authorities of Buyer’s governing municipalities, as well as the
governing municipalities of Buyer’s agents, sub-manufacturers, or contractors
involved in the design, production or distribution of the Product have been
complied with. Buyer shall indemnify C&C for, and hold C&C harmless from, all
claims, actions or demands arising from any action or omission that occurs on
Buyer’s, its agent’s, sub-manufacturer’s or contractor’s premises. Furthermore,
C&C guarantees that no radioactive process has been utilized in the
manufacturing process of the Product.

10. LIMITED WARRANTY. Other than as set out herein, C&C makes no warranty or
other representation concerning the Product; and, other than as specifically
provided in this Agreement, C&C’s liability is limited to replacement of any
Product not conforming to the specifications set out in Section 3 of this
Agreement upon their return to C&C. Buyer reserves the right to return any
Product not conforming to the specifications set out herein to C&C. C&C shall
pay return shipping, handling and insurance on the replacements for the Product
that does not meet the specifications in Section 3. All returned Product must be
accompanied by a return authorization number that should be displayed
prominently on the outside of the package. All other shipping, handling and
insurance for returns shall be paid by Buyer. The warranty set forth in this
Section 10 is intended solely for the benefit of Buyer. All claims hereunder
shall be made by Buyer and may not be made by Buyer’s customers. THE WARRANTY
SET FORTH ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, WHICH
ARE HEREBY DISCLAIMED AND EXCLUDED BY C&C, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OF USE.

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND IS DENOTED HEREIN BY *****

 

LICENSING AGREEMENT

This Agreement is by and between Charles & Colvard, Ltd., having its principal
office at 300 Perimeter Park Drive, Suite A, Morrisville, North Carolina 27560
(“Licensor”) and Reeves Park, Inc. having its principal office at 5050 Lincoln
Drive, Suite 470, Edina, MN 55436 (“Licensee”):

A. Licensor desires to license certain of its trademarks, which are set forth on
the attached the Brand Identity Guidelines.

B. The Trademarks and Copyright Works are valuable rights of the Licensor.
Licensor desires to and Licensee agrees to protect the integrity of the
Trademarks and Copyright Works so as to avoid consumer confusion and to
distinguish Licensor’s products from those of its competitors. Licensee shall
exercise this protection by conforming to certain guidelines concerning the use
of the Trademarks and Copyright Works, as described in the Brand Identity
Guidelines.

C. Licensee wishes to use the Trademarks and Copyright Works in connection with
the advertising, promotion and sale of Licensee’s products which incorporate
Charles & Colvard created Moissanite jewels.

Now, therefore, in consideration of the mutual promises of the Agreement, the
parties agree as follows:

 

1. GRANT OF LICENSE

Licensor grants to Licensee, subject to the terms and conditions of this
Agreement, the non-exclusive right to use the Trademarks and Copyright Works
listed in the Brand Identity Guidelines, in connection with Licensee’s
advertisement, promotion and sale of Licensee’s products which incorporate
Charles & Colvard created Moissanite jewels. Licensee may use the Trademarks and
Copyright Works: (i) only in the United States of America without reasonable
prior written notice to Licensor; (ii) only in connection with Licensee’s
advertisements, promotional and sales materials (including but not limited to
online advertising and promotion) (collectively “Advertisements”); and
(iii) only as permitted by this Agreement. Licensee may make no other use of the
Trademarks and Copyright Works and Licensor reserves any rights, benefits and
opportunities not expressly granted to Licensee under this Agreement.

 

2. TERM AND TERMINATION

The term of this Agreement shall begin on the date of this Agreement and end
simultaneously with the termination of the Manufacturing Agreement of even date
hereof between Licensor and Licensee concerning manufacture of jewelry
incorporating Charles & Colvard created Moissanite Jewels, unless sooner
terminated. Licensor may terminate this Agreement at any time and for any
reason.

 

3. ROYALTIES

Licensee is not obligated to pay Licensor any royalties for the use of the
Trademarks or Copyright Works under the terms of this agreement.

 

4. QUALITY AND APPROVAL

(a) Purpose of Quality Control. In order to maintain the quality and reputation
of the Trademarks and the rights in the Copyright Works, all Advertisements must
have Licensor’s prior approval.

(b) Pre-approved Materials. All advertising, promotional and sales material
bearing or incorporating the Trademarks and/or Copyright Works which are
supplied to Licensee directly by Licensor, without change or alteration of any
kind, shall be considered approved.

(c) Materials Requiring Prior Approval. Licensor and Licensee shall cooperate in
the development by Licensee of Advertisements containing the Trademarks and/or
Copyright Works which are not pre-approved to facilitate the timely approval of
such materials. Licensee shall submit to Licensor for prior approval any and all
Advertisements containing or bearing the Trademarks and/or Copyright Works which
are not pre-approved. Licensee shall not use the Trademarks and/or Copyright
Works in connection with Advertisements before obtaining Licensor’s approval.
Licensor may withhold its approval for any reason. If Licensor fails to approve
a submittal within twenty (20) days after receipt of Licensee’s submission, such
failure shall constitute a disapproval of the submittal.

(d) Changes. If during the term of this Agreement there is to be any change to
Advertisements bearing or incorporating the Trademarks and/or Copyright Works
(even if such changes do not relate to a change in the display of Trademarks and
Copyright Works) after the initial approval, the changed Advertisements shall be
considered new proposed Advertisements and Licensee must comply with the
provisions of Section 4(b) prior to using the changed Advertisements.

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5. TRADEMARK AND COPYRIGHT OWNERSHIP AND NOTICES

(a) Licensee’s use of the Trademarks shall, depending upon the directions
provided by Licensor, in every instance be combined with one of the following
notices: (i) Reg. U.S. Pat. & TM. Off.; (ii) ®; (iii) Trademark of Charles &
Colvard; (iv) TM; or (v) such other similar language as shall have Licensor’s
prior approval.

(b) Licensor and Licensee agree and intend that all material, including without
limitation all artwork and designs, created by Licensee or any other person or
entity retained or employed by Licensee bearing, displaying or containing the
Trademarks or Copyright Works (“Copyright Materials”) are works made for hire
within the meaning of the United States Copyright Act and shall be the property
of Licensor, unencumbered by moral rights. As owner, Licensor shall be entitled
to use and license others to use the Copyright Materials. To the extent the
Copyright Materials are not works made for hire, Licensee hereby irrevocably
assigns to Licensor, its successors and assigns, the entire right, title and
interest in perpetuity throughout the world in and to any and all rights,
including all copyrights and related rights in such Copyright Materials.
Licensee warrants and represents that: (i) the Copyright Materials are
completely original and are not based on or derived from the work or works of
any third party; (ii) only Licensee created or contributed to the Copyright
Materials; (iii) the Copyright Materials are an original work of authorship, and
no royalties, honorariums or fees were, are or will be payable to other persons
by reason of Licensor’s use of the Copyright Materials; and (iv) the Copyright
Materials do not infringe the rights of others. If Licensee wishes to retain a
third party to assist Licensee in the creation of the Copyright Materials,
Licensee shall obtain Licensor’s prior approval and shall obtain and provide to
Licensor an original assignment from the third party to Licensor of the third
party’s rights in the Copyright Materials.

(c) The following notice (or such other notice as shall have Licensor’s prior
approval) shall appear in connection with the Copyright Works and/or Copyright
Materials at least once on Advertisements using Copyright Works and/or Copyright
Materials: © (year of first publication) Charles & Colvard® All Rights Reserved.

(d) Licensee shall not use any language or display the Trademarks, Copyright
Works and Copyright Materials in such a way as to create the impression that the
Trademarks, Copyright Works and Copyright Materials belong to Licensee. Licensee
shall not use any Trademark, any trademark incorporating all or any part of the
Trademarks, the Copyright Works or the Copyright Materials on any business sign,
business cards, stationery or forms (except as licensed herein), or as the name
of Licensee’s corporation or business or any division thereof, unless otherwise
agreed by Licensor in writing. Licensee waives all claims to any rights in
materials bearing the Trademarks, Copyright Works and Copyright Materials beyond
the limited permission to use the Trademarks granted in this Agreement.

(e) Upon Licensor’s request and without further consideration, Licensee agrees
to execute any additional documents proposed by Licensor, or do or have done all
things as may be requested by Licensor to vest and/or confirm the sole and
exclusive ownership of all right, title and interest, including copyrights and
related rights in and to the Copyright Materials in favor of Licensor, its
successors and assigns.

(f) Licensee hereby irrevocably assigns and transfers to Licensor, or if
applicable, Licensee agrees to obtain an appropriate assignment by an author to
the Licensor, to the extent permissible in any jurisdiction, any and all moral
rights in and to the Copyright Materials and, where non-assignable, Licensee
hereby irrevocably waives, or if applicable, Licensee agrees to obtain an
appropriate waiver by any authors of, in favor of the Licensor, its successors,
assigns, employees, agents, representatives and/or any persons acting under
Licensor’s authority, any and all moral rights in such Copyright Materials.

(g) The use of any word, name, symbol or device by Licensee to identify or
distinguish any of Licensor’s products shall inure to the benefit of Licensor.
The use of any such word, name, symbol or device in connection with
Advertisements shall be made only with Licensor’s prior approval. All trademark
rights in any such word, name, symbol or device shall belong to Licensor and
shall be exercised by Licensee only pursuant to Licensor’s prior, written
approval. At its sole discretion, Licensor may amend the Brand Identity
Guidelines to include any such word, name, symbol or device.

 

6. RIGHTS IN THE TRADEMARKS AND COPYRIGHT WORKS

(a) Licensee shall not make any unlicensed use, file any application for
registration or claim any other proprietary right to any of the Trademarks,
Copyright Works, Copyright Materials or derivations or adaptations thereof, or
any marks or works similar thereto.

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(b) Licensee acknowledges the validity of and Licensor’s title to the
Trademarks, Copyright Works and Copyright Materials and shall not do or suffer
to be done any act or thing, which will impair the rights of Licensor in and to
the Trademarks, Copyright Works or Copyright Materials. Licensee shall not
acquire and shall not claim any title or any other proprietary right to the
Trademarks, Copyright Works, Copyright Materials or in any derivation,
adaptation, variation or name thereof by virtue of this license or Licensee’s
creation or usage.

 

7. ELECTRONIC MATERIALS

 

  (a) CD ROM USE

Charles & Colvard, Ltd. (“Licensor”) hereby grants to you (“Licensee”) a
limited, non-exclusive, royalty-free license to use certain trademarks and
certain copyrights in works as are made available by Licensor on specified CD
Rom (the “Licensed Materials”) solely in connection with the advertising,
promotion, and sale of Licensee’s products which incorporate Charles & Colvard
created Moissanite. Licensee is granted the right to use the Licensed Materials
only in conformity with the terms of this agreement and the guidelines
concerning the use of Licensor’s trademarks and copyright works as described in
the Brand Identity Guidelines, as may be amended from time to time. Licensee may
make no other use of the Licensed Materials, and Licensor reserves any rights,
benefits, and opportunities not expressly granted to Licensee under this
agreement.

The Licensee may not include the Licensed Materials in any electronic files to
be distributed or used by others without first obtaining the specific written
consent of Licensor. Furthermore, the Licensee shall have no right to, nor shall
it attempt to challenge, assign, sublicense, transfer, pledge, lease, rent, or
share the rights granted under this License Agreement to or with any third
party, in whole or in part, without the prior written consent of Licensor.
Licensee acknowledges and agrees that the Licensed Materials (and trademarks and
copyrights therein) are proprietary to Licensor and protected under applicable
U. S. and foreign laws.

Licensor may terminate this agreement at any time and for any reason. Upon
termination, Licensee must destroy all copies, electronic or otherwise, of the
Licensed Materials and/or any materials incorporating parts thereof. Licensee
may terminate this agreement at any time by destroying the Licensed Materials
and/or any materials incorporating parts thereof in Licensee’s possession.

Licensee agrees to comply with Licensor’s standards for controlling the quality
of products sold under or in connection with the Licensed Materials.

Licensee may not reverse engineer, modify, or create derivative works based upon
the Licensed Materials or any part thereof, except as is specifically permitted
in the Brand Identity Guidelines.

The following notice (or such other notice as shall have Licensor’s prior
written approval) shall appear in connection with the Licensed Materials at
least once on all documentation: “Used pursuant to license from Charles &
Colvard, Ltd.” License shall also use “© (year of first publication) Charles &
Colvard, Ltd. All Rights Reserved” in connection with copyright works and ™ or
®, as appropriate, in connection with trademarks.

Furthermore, upon notice from Licensor posted electronically that it has changed
the appearance of the Licensed Materials (or any of the trademarks and/or
copyright works therein), Licensee shall use only the changed version in any and
all materials produced by Licensee within four (4) weeks following Licensor’s
initial notice.

 

  (b) WEBSITE

Charles & Colvard, Ltd. (“Licensor”) hereby grants to you (“Licensee”) a
limited, non-exclusive, royalty-free license to use certain trademarks and
certain copyrights in works as are made available by Licensor for electronic
download (the “Licensed Materials”) solely in connection with the advertising,
promotion, and sale of Licensee’s products which incorporate Charles & Colvard
created Moissanite. Licensee is granted the right to use the Licensed Materials
only in conformity with the terms of this agreement and the guidelines
concerning the use of Licensor’s trademarks and copyright works as described in
the Brand Identity Guidelines, as may be amended from time to time. Licensee may
make no other use of the Licensed Materials, and Licensor reserves any rights,
benefits, and opportunities not expressly granted to Licensee under this
agreement.

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The Licensee may not include the Licensed Materials in any electronic files to
be distributed or used by others without first obtaining the specific written
consent of Licensor. Furthermore, the Licensee shall have no right to, nor shall
it attempt to challenge, assign, sublicense, transfer, pledge, lease, rent, or
share the rights granted under this License Agreement to or with any third
party, in whole or in part, without the prior written consent of Licensor.
Licensee acknowledges and agrees that the Licensed Materials (and trademarks and
copyrights therein) are proprietary to Licensor and protected under applicable
U. S. and foreign laws.

Licensor may terminate this agreement at any time and for any reason. Upon
termination, Licensee must destroy all copies, electronic or otherwise, of the
Licensed Materials and/or any materials incorporating parts thereof. Licensee
may terminate this agreement at any time by destroying the Licensed Materials
and/or any materials incorporating parts thereof in Licensee’s possession.

Licensee agrees to comply with Licensor’s standards for controlling the quality
of products sold under or in connection with the Licensed Materials.

Licensee may not reverse engineer, modify, or create derivative works based upon
the Licensed Materials or any part thereof, except as is specifically permitted
in the Brand Identity Guidelines.

The following notice (or such other notice as shall have Licensor’s prior
written approval) shall appear in connection with the Licensed Materials at
least once on all documentation: “Used pursuant to license from Charles &
Colvard, Ltd.” License shall also use “© (year of first publication) Charles &
Colvard, Ltd All Rights Reserved” in connection with copyright works and ™ or ®,
as appropriate, in connection with trademarks.

From time to time, Licensor may add other articles, trademarks, or copyright
works for electronic download, and the parties agree that by such action this
agreement shall be amended to include such additions. Furthermore, upon notice
from Licensor posted electronically that it has changed the appearance of the
Licensed Materials (or any of the trademarks and/or copyright works therein),
Licensee shall use only the changed version in any and all materials produced by
Licensee within four (4) weeks following Licensor’s initial notice.

 

8. COOPERATION WITH LICENSOR

If Licensee learns of any infringement of the Trademarks, Copyright Works or
Copyright Materials or of the existence, use or promotion of any mark or design
similar to the Trademarks, Copyright Works or Copyright Materials, Licensee
shall promptly notify Licensor. Licensor will, in its discretion, decide whether
to object to such existence, use or promotion. Licensee agrees to cooperate
fully with Licensor in the prosecution of any trademark or copyright application
that Licensor may desire to file or in the conduct of any litigation relating to
the Trademarks, Copyright Works or Copyright Materials, as may reasonably be
required by Licensor.

 

9. EXTENT AND AMENDMENT OF THE LICENSE

From time to time, Licensor may add other articles, trademarks, or copyright
works to the Brand Identity Guidelines and the parties agree that by such action
this Agreement shall be amended to include such additions. Furthermore, upon
notice from Licensor that it has changed the appearance of any of the Trademarks
or Copyright Works, Licensee shall incorporate the new version of the changed
Trademark or Copyright Work into all Advertisements bearing the changed
Trademark or Copyright Work within four (4) weeks following Licensor’s initial
notice.

 

10. COMPLIANCE WITH GOVERNMENT STANDARDS

Licensee represents and warrants that the Advertisements shall comply with, meet
and/or exceed all Federal, State or Provincial, and local laws, ordinances,
standards, regulations and guidelines, including, but not limited to, those
pertaining to product, quality, labeling and propriety. Licensee agrees that it
will not publish material in its Advertisements or cause or permit any material
to be published, in violation of any such Federal, State or Provincial, or local
law, ordinance, standard, regulation or guideline.

 

11. POST-TERMINATION AND-EXPIRATION RIGHTS AND OBLIGATIONS

(a) At the expiration or termination of this Agreement, all rights granted to
Licensee under this Agreement shall forthwith revert to Licensor, and Licensee
shall refrain from further use of the Copyright Works, Copyright Materials
and/or the Trademarks, either directly or indirectly, or from use of any marks
or designs similar to the Copyright Works, Copyright Materials or the
Trademarks.

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Licensee will immediately cease all use of Advertisements bearing or including
the Trademarks, Copyright Works and/or Copyright Materials. Licensee also shall
turn over to Licensor all photographs, codes and other materials, which
reproduce the Copyright Works, Copyright Materials or the Trademarks or shall
provide evidence satisfactory to Licensor of their destruction. Licensee shall
be responsible to Licensor for any damages caused by the unauthorized use by
Licensee or by others of such photographs, codes and other materials, which are
not turned over to Licensor.

(b) Licensee acknowledges that any breach or threatened breach of any of
Licensee’s covenants in this Agreement relating to the Trademarks, Copyright
Works and/or Copyright Materials, including without limitation, Licensee’s
failure to remove such materials from its Advertisements at the termination or
expiration of this Agreement will result in immediate and irreparable damage to
Licensor and to the rights of any subsequent license of Licensor. Licensee
acknowledges and admits that there is no adequate remedy at law for any such
breach or threatened breach, and Licensee agrees that in the event of any such
breach or threatened breach, Licensor shall be entitled to injunctive relief and
such other relief as any court with jurisdiction may deem just and proper,
without the necessity of Licensor posting any bond.

 

12. ASSIGNMENT AND SUBLICENSE

(a) Licensee shall not assign or transfer any of its rights under this Agreement
or delegate any of its obligations under this Agreement (whether voluntarily, by
operation of law, change in control or otherwise) without Licensor’s prior
approval. Any attempted assignment, transfer, or delegation by Licensee without
such approval shall be void and a material breach of this Agreement. A change in
the majority ownership or a material change in the management of Licensee shall
constitute an assignment of rights under this Section requiring Licensor’s prior
approval.

(b) Licensee may sublicense its rights hereunder to authorized jewelry
distributors or retailers engaged in the sale of Licensee’s products which
incorporate Charles & Colvard created Moissanite jewels; provided Licensee shall
first notify, in writing, Licensor of any such authorized jewelry distributor or
retailer to be sublicensed hereunder and each of which must agree to be bound by
the terms of this Agreement. Each such sublicense shall be deemed automatically
approved by Licensor. Any other proposed sublicense shall require Licensor’s
prior written approval. Licensee shall use all commercially reasonable efforts
to insure the use of the rights granted by the sublicense are used in conformity
with the terms of this Agreement, including but not limited to notification by
Licensee to Licensor of any misuse of the rights and full cooperation with
Licensor in asserting Licensor’s rights to the full extent of the law.

 

13. INDEPENDENT CONTRACTOR

Licensee is an independent contractor and not an agent, partner, joint venture,
affiliate or employee of Licensor. No fiduciary relationship exists between the
parties. Neither party shall be liable for any debts, accounts, obligations or
other liabilities of the other party, its agents or employees, Licensee shall
have no authority to obligate or bind Licensor in any manner. Licensor has no
proprietary interest in Licensee and has no interest in the business of
Licensee, except to the extent expressly set forth in this Agreement.

 

14. SEVERABILITY

If any provision of this Agreement shall be determined to be illegal and
unenforceable by any court of law or any competent government or other
authority, the remaining provisions shall be severable and enforceable in
accordance with their terms so long as this Agreement without such terms or
provisions does not fail of its essential purpose or purposes. The parties will
negotiate in good faith to replace any such illegal or unenforceable provision
or provisions with suitable substitute provisions which will maintain the
economic purposes and intentions of this Agreement.

 

15. SURVIVAL

Licensee’s obligations and agreements under Sections 5, 6, 9 and 10 shall
survive the termination or expiration of this Agreement.

 

16. MISCELLANEOUS

(a) Captions. The captions for each Section have been inserted for the sake of
convenience and shall not be deemed to be binding upon the parties for the
purpose of interpretation of this Agreement.

(b) Scope and Amendment of Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the use of Licensor’s Trademarks,
Copyright Works and Copyright Materials and supersedes any and all prior and

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contemporaneous negotiations, understandings or agreements in regard to such
subject matter and is intended as a final expression of their Agreement. With
the exception of the addition of new Trademarks, Copyright Works, and Copyright
Materials as provided for in Section 7, this Agreement may be amended only by
written instrument expressly referring to this Agreement, setting forth such
amendment and signed by Licensor and Licensee.

(c) Governing Law and Interpretation. This Agreement will be deemed to have been
executed in the State of North Carolina, United States of America and will be
construed and interpreted according to the laws of that State without regard to
its conflicts of law principles or rules. The parties agree that each party and
its counsel has reviewed this Agreement and the normal rule of construction that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.

(d) Attorneys’ Fees. If Licensor brings any legal action or other preceding to
interpret or enforce the terms of this Agreement, or if Licensor retains a
collection agent to collect any amounts due under this Agreement, then Licensor
shall be entitled to recover reasonable attorneys’ fees and any other costs
incurred, in addition to any other relief to which it is entitled.

(e) Waiver. The failure of Licensor to insist in any one or more instances upon
the performance of any term, obligation or condition of this Agreement by
Licensee or to exercise any right or privilege herein conferred upon Licensor
shall not be construed as thereafter waiving such term, obligation, or condition
or relinquishing such right or privilege, and the acknowledged waiver or
relinquishment by Licensor of any default or right shall not constitute waiver
of any other default or right. No waiver shall be deemed to have been made
unless expressed in writing and signed by the Chief Executive Officer.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives on the dates indicated below.

 

CHARLES & COLVARD, LTD.

  LICENSEE: REEVES PARK, INC. By:  

/s/ James R. Braun

  Date: 3-17-08   By:  

/s/ Klaus H. Jung

  Date: 3-14-08   James R. Braun,       Klaus H. Jung     VP of Finance & CFO  
    President