Exhibit 10.1


    EXHIBIT
      10.1

      CONFIDENTIAL
        

      


      May
        24,
        2006

      


      


      
        	
                Mr.
                  [***]

                [***]

                [***]

                Sumitomo
                  Corporation

                [***]

                Tokyo
                  104-8610, Japan

              	
                Mr.
                  [***]

                [***]

                [***]

                Sumitomo
                  Corporation of America 

                [***]

                [***]

              


      

      


      Re: Annual
        Purchase Commitment for Cree Products

      


      


      Dear
        Messrs. [***] and [***]:

      


      This
        letter will serve to document the following agreements and understandings
        reached between Sumitomo Corporation ("Sumitomo"), Sumitomo Corporation of
        America (“SCOA”) and Cree, Inc. (“Cree”) in connection with the purchase and
        distribution by Sumitomo and SCOA of LED Products, [***] Products and Wafer
        Products pursuant to the terms of the Amended and Restated Distributorship
        Agreement dated May 25, 2005 between Sumitomo, SCOA and Cree (the
“Distributorship Agreement”):

       

      1. The
        agreements and understandings set forth in this letter agreement ("Letter
        Agreement") will be subject to the terms and conditions of the Distributorship
        Agreement, as modified by this Letter Agreement. Capitalized terms used herein
        without definition shall have the meanings provided in the Distributorship
        Agreement. The term “Agreement” as used in the Distributorship Agreement shall
        refer to the Distributorship Agreement as modified by this Letter Agreement.
        Notwithstanding any language to the contrary in the Distributorship Agreement,
        in the event of a conflict between the terms and conditions of this Letter
        Agreement and those contained in the Distributorship Agreement, the terms
        and
        conditions of this Letter Agreement shall prevail. 

      


      2. Pursuant
        to Section 3.3 of the Distributorship Agreement, the parties have reviewed
        and
        discussed in good faith [***] and agree to extend the term of Distributor’s
        appointment as a distributor of GaN Wafer Products in the Territory
        [***].

       

             
        3.  Pursuant
        to Section 7.2(e) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***]-month warranty period for LED Products
        provided in the Distributorship Agreement and agree that no change shall
        be made
        at this time to the LED Product warranty period set forth in Section 7.2(d)
        of
        the Distributorship Agreement. 

      


      4. Pursuant
        to Section 8.3(c) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***] for earning bonuses for FY07 as well
        as
        the bonus rate for FY07. The parties agree that Distributor will be entitled
        to
        a bonus at the [***] of FY07 equal to [***]. Any such bonus is subject to
        the
        provisions in Section 8.3(c) of the Distributorship Agreement. 

      


      5. Pursuant
        to Section 8.7(a) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***] Reserve percentage for [***] and agree
        that no change shall be made at this time to the [***] percentage set forth
        in
        Section 8.7(a) of the Distributorship Agreement for [***]. 

      


      6. Pursuant
        to Section 9.2 of the Distributorship Agreement, the parties have reached
        agreement on the Annual MPC for FY07. The parties agree that the Distributorship
        Agreement is hereby amended by adding the following provision immediately
        following the first sentence in Section 9.1:

      


      “Subject
        to Sections 9.3 and 9.4 below and Section 7 of the Letter Agreement dated
        May
        24, 2006 between the parties, Distributor shall purchase during FY07 LED
        Products having an aggregate purchase price of at least at $180,000,000 (US)
        (the “Annual MPC” for FY07), of which not less than (a) [***] (US) will be
        purchased in the fiscal quarter of [***] ending [***], (b) [***] (US) will
        be
        purchased in the fiscal quarter of [***] ending [***], (c) [***] (US) will
        be
        purchased in the fiscal quarter of [***] ending [***], and (d) [***] (US)
        will
        be purchased in the fiscal quarter of Manufacturer ending [***]. “ 

      


      7. Notwithstanding
        any language to the contrary in Section 9.1 of the Distributorship Agreement,
        as
        amended by this Letter Agreement, Distributor’s Quarterly MPC for the [***]
        fiscal quarter of [***] will be reduced by the aggregate purchase price of
        Wafer
        Products purchased and shipped pursuant to the Distributorship Agreement
        during
        [***] as provided more fully in this Section 7. At the end of [***] the
        [***]fiscal quarter[***] of [***], Distributor’s Quarterly MPC for the [***]
        fiscal quarter of [***] will be reduced by the aggregate purchase price of
        Wafer
        Products shipped during [***] fiscal quarter, net of any discounts or credit
        memoranda applied toward such purchases. As of the end of business on [***],
        Distributor’s Quarterly MPC for the [***] fiscal quarter of [***] shall be
        reduced by: (i) the aggregate purchase price of Wafer Products shipped between
        [***] and [***] (inclusive of such dates), net of any discounts or credit
        memoranda applied toward such purchases; and (ii) the aggregate purchase
        price
        of Wafer Products confirmed by Manufacturer in a Material Schedule issued
        on or
        before [***] for shipment after [***] but before [***] as provided in Section
        7.1(b) of the Distributorship Agreement, net of any discounts or credit
        memoranda applied toward such purchases. Distributor’s Quarterly MPC for the
        [***] fiscal quarter of [***] will not be reduced for Wafer Products that
        Manufacturer confirms for shipment during the remainder of the [***] fiscal
        quarter in a Material Schedule issued after [***]. Distributor may take all
        such
        reductions in its [***] quarter Quarterly MPC into consideration in calculating
        its Weekly MPC for the [***] quarter as provided in Section 7.3 of the
        Distributorship Agreement. 

      


      8. Notwithstanding
        any language in Section 9.3 of the Distributorship Agreement to the contrary,
        the parties agree that the Inventory Cap for [***] shall be [***]. Further,
        the
        parties agree that the second sentence in Section 9.4 of the Distributorship
        Agreement is hereby amended to read as follows with respect to performance
        of
        the Distributorship Agreement [***]:

      


      “If,
        as a
        result of the above Inventory Cap provisions, Distributor has not purchased
        during any fiscal quarter of [***] an amount of [***] Products equal to at
        least
        [***], then Manufacturer may at its option terminate this Agreement by providing
        Distributor with [***] prior written notice, in which case Distributor shall
        not
        have any further purchase obligations for Products under Section 9.1 hereof
        [***]. If [***] Products ordered by Distributor are not shipped [***], the
        delayed Products or the substitute LED Products, as applicable, will be deemed
        purchased by Distributor [***] solely for the purpose of determining whether
        the
        foregoing minimum amount has been met, provided that shipment of such Products
        is not delayed due to any cause attributable to Distributor.” 

      


      9. The
        parties agree that Addendum
        A
        and
Addendum
        B
        of the
        Distributorship Agreement are hereby amended and restated as set forth more
        fully in the versions of Addendum
        A
        and
Addendum
        B
        attached
        hereto, respectfully. 

      


      10. This
        Letter Agreement sets forth the entire agreement between the parties as to
        the
        subject matter hereof and supersedes any and all prior agreements,
        understanding, arrangements, promises, representations, warranties, and/or
        any
        contracts of any form or nature whatsoever, whether oral or in writing and
        whether explicit or implicit, that may have been entered into prior to the
        execution of this Letter Agreement between the parties, their officers,
        directors, or employees as to the subject matter hereof. None of the parties
        hereto have relied upon any oral representation of the other party(ies).
        Except
        as expressly modified by this Letter Agreement, all other terms and conditions
        of the Distributorship Agreement shall remain unchanged and in full force
        and
        effect.

      


      If
        you
        and SCOA are in agreement with the foregoing, please sign below on behalf
        of
        Sumitomo and arrange for an authorized representative of SCOA to sign on
        its
        behalf. When fully executed, please return a copy of the signed letter to
        [***]
        attention at [***]. When fully executed, this letter will serve as a binding
        agreement between Cree, Sumitomo and SCOA with respect to the matters set
        forth
        above.

      



      
        
          


          [***]
            Confidential treatment requested pursuant to a request for confidential
            treatment filed with the Securities and Exchange Commission. Omitted
            portions
            have been filed separately with the Commission.

          


          
          

        

        
          
          

          
            

          

        

        
          
          

           

          


        

      


      Very
        truly yours,

      


      CREE,
        INC.

      


      


      /s/
        Charles M.
        Swoboda                       
  

      Charles
        M. Swoboda, Chairman of the 

      Board,
        CEO & President

      


      


      ACKNOWLEDGED
        AND AGREED:   

                         

        
          	 SUMITOMO
                  CORPORATION	 	 	  SUMITOMO
                  CORPORATION OF AMERICA
                   

                
	By: [***]	 	 	 By: [***]     
	
                  

                	 	 	
                  

                
	[***]  
[***]
Electronics
                  Division	 	 	[***] 
[***] 
[***]


        

      

           

      
        	 Date: May
                24, 2006	 Date: May
                30, 2006 


      

      


      


      CGS-B505-6A

      



      
        
          
            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

            


            


          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      



      ADDENDUM
        A

      


      Licensed
        Marks

      


      
        	
                 

                Mark

              	
                Registered
                  in US (Priority Country)

              	
                Registration
                  No. 

              	
                Goods

              
	
                CREE

              	
                Yes

              	
                2,440,530
                  (US); 4,471,239 (JP); 0505534 (KR); 980988 (TW); Pending in
                  [***]

              	
                All

              
	
                CREE
                  LOGO

              	
                Yes

              	
                2,452,761
                  (US); 4,484,784 (JP); 0514036 (KR); and 978876 (TW); Pending in
                  [***]

              	
                All

              
	
                CREE
                  LED LIGHT LOGO

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                CI

              	
                No

              	 	
                Wafers

              
	
                GSIC

              	
                Yes
                  

              	
                2,012,686
                  (US)

              	
                LEDs

              
	
                EZBRIGHT

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                EZBRIGHT290

              	
                No

              	 	
                LEDs

              
	
                EZ290

              	
                No

              	 	
                LEDs

              
	
                EZ

              	
                No

              	 	
                LEDs

              
	
                EZ-7

              	
                No

              	 	
                LEDs

              
	
                EZ-8.5

              	
                No

              	 	
                LEDs

              
	
                EZ-12

              	
                No

              	 	
                LEDs

              
	
                EZ-16

              	
                No

              	 	
                LEDs

              
	
                EZ-18

              	
                No

              	 	
                LEDs

              
	
                EZ-21

              	
                No

              	 	
                LEDs

              
	
                EZ-24

              	
                No

              	 	
                LEDs

              
	
                EZR

              	
                No

              	 	
                LEDs

              
	
                EZR260

              	
                No

              	 	
                LEDs

              
	
                EZR-21

              	
                No

              	 	
                LEDs

              
	
                EZR-24

              	
                No

              	 	
                LEDs

              
	
                EZR-27

              	
                No

              	 	
                LEDs

              
	
                EZR-30

              	
                No

              	 	
                LEDs

              
	
                MEGABRIGHT

              	
                Yes

              	
                2,650,523
                  (US); 4,572,117 (JP); 0563873 (KR); 1022690 (TW)

              	
                LEDs

              
	
                MEGABRIGHT
                  MAX

              	
                No

              	 	
                LEDs

              
	
                MEGABRIGHT
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                MB

              	
                No

              	 	
                LEDs

              
	
                MB
                  MAX

              	
                No

              	 	
                LEDs

              
	
                MB
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                RAZERTHIN

              	
                Yes
                  

              	
                2,861,793
                  (US); 0600614 (KR); 1121336 (TW); Pending in [***] 

              	
                LEDs

              
	
                RT230

              	
                No

              	 	
                LEDs

              
	
                RT290

              	
                No

              	 	
                LEDs

              
	
                SUPERBRIGHT

              	
                No

              	 	
                LEDs

              
	
                ULTRABRIGHT

              	
                Yes
                  

              	
                2,860,183
                  (US); 4,797,922 (JP)

              	
                LEDs

              
	
                UB

              	
                No

              	 	
                LEDs

              
	
                ULTRATHIN

              	
                No
                  

              	 	
                LEDs

              
	
                UT

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                UT230

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                XBRIGHT

              	
                Yes

              	
                2,644,422
                  (US); 4,666,211 (JP); 0572312 (KR); 1029877 (TW)

              	
                LEDs

              
	
                XBRIGHT
                  PLUS

              	
                No

              	 	
                LEDs

              


      

      



      
        
          
             

            Distributorship
              Agreement Page
              32

            Amended
              and Restated as of May 25, 2005

            


            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      



      
        	
                XB

              	
                No

              	 	
                LEDs

              
	
                XB500

              	
                No

              	 	
                LEDs

              
	
                XB900

              	
                No

              	 	
                LEDs

              
	
                XB
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                XLAMP

              	
                Yes

              	
                3,014,910
                  (US); 4,810,789 (JP); 0615714 (KR); 04004596 (MY); T04/05899G (SG);
                  01136401 (TW); Pending in [***] 

              	
                LEDs
                  (packaged)

              
	
                XTHIN

              	
                Yes
                  

              	
                2,861,792
                  (US); 4,790,510 (JP); 0600615 (KR); 1121335 (TW)

              	
                LEDs

              
	
                XT

              	
                 

                1  No

              	 	
                LEDs

              
	
                XT-12

              	
                 

                2  No

              	 	
                LEDs

              
	
                XT-16

              	
                 

                3  No

              	 	
                LEDs

              
	
                XT-18

              	
                 

                4  No

              	 	
                LEDs

              
	
                XT-21

              	
                 

                5  No

              	 	
                LEDs

              
	
                XT-24

              	
                 

                6  No

              	 	
                LEDs

              
	
                XT-27

              	
                 

                7  No

              	 	
                LEDs

              


      

      


      


      Key

      
        	
                US
                  = United States

              	
                TW
                  = Taiwan

              
	
                JP
                  = Japan

              	
                CN
                  = China

              
	
                KR
                  = Korea

              	
                MY
                  = Malaysia 

              


      

      [***] 

      


      


      This
        Addendum
        A
        may be
        amended from time to time by Cree in its sole discretion.

      


      



      
        
          
             

            Distributorship
              Agreement Page
              33

            Amended
              and Restated as of May 25, 2005

            


            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      



      ADDENDUM
        B

      


      CREE
        TRADEMARK USAGE GUIDELINES

      


      
        	
                A.
                  

              	
                General
                  Rules for Trademark Use and
                  Presentation

              


      

      


      	1.  	
              Use
                the correct trademark symbol with trademarks. When using a registered
                trademark, the ® symbol should be used adjacent the first prominent
                appearance of the term. Unregistered trademarks should include the
                designation "TM" instead of the ® symbol. Subsequent appearances of a mark
                do not necessarily need to include a trademark
                symbol.

            


      


      	2.  	
              Include
                an attribution statement (which may appear in small but still legible
                print) in any written material (such as advertising copy, brochures,
                etc.)
                on which a Cree trademark appears. For example, the following statement
                would be appropriate:

            


      


      “Cree
        and
        the Cree Logo are registered trademarks of Cree, Inc. in the United States
        and/or other countries.“

      


      	3.  	
              Do
                not vary the spelling, add or delete hyphens (even for normal hyphenation
                at the end of a line of text), make one word two, or use a plural
                form of
                a Cree trademark. 

            


      


      	4.  	
              Trademarks
                should always be used as adjectives (e.g. "Zero Recovery® rectifiers have
                exceptional reverse recovery
                properties.")

            


      


      	5.  	
              Trademarks
                should always be capitalized.

            


      


      	6.  	
              Never
                combine a Cree trademark with your company
                name.

            


      


      	7.  	
              Do
                not use a Cree trademark in a possessive
                form.

            


      


      	8.  	
              Do
                not shorten or make acronyms out of a Cree
                trademark.

            


      


      	9.  	
              On
                materials that include both a Cree trademark and your company name,
                you
                must display your company name more prominently than any Cree trademark.
                You may not use a Cree trademark in such a manner that it appears
                that
                Cree is legally associated with your company, other than the fact
                that
                your company is authorized to sell or distribute Cree
                products.

            


      


      	10.  	
              Do
                not display a Cree trademark in a manner that is illegible or difficult
                to
                read.

            


      


      	11.  	
              Do
                not use a Cree trademark in a manner such that it appears to be associated
                with products of other manufacturers.

            


      


      
        	
                B.
                  

              	
                Presentation
                  of the Cree Logo

              


      

       

      1. The
        Cree
        Logo may refer to Cree or to Cree's products. When using the word "Cree"
        to
        refer to Cree products, the trademark should be used as an adjective, followed
        by the generic name of the product. For example, a brochure may refer to
        "Cree®
Microwave Transistors."

      


      2. Graphic
        Presentation

      


      The
        Cree
        Logo comprises the word “Cree” in stylized lettering followed by a stylized cube
        symbol as shown below:

      



      
        
          
             

            Distributorship
              Agreement Page
              34

            Amended
              and Restated as of May 25, 2005

            


          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      



      

      


      The
        lettering in the Cree Logo and the diamond-shaped surface of the stylized
        cube
        are divided into five equal-sized horizontal regions including upper, middle
        and
        lower solid regions, and two horizontally striped regions interposed between
        the
        upper and lower solid regions, respectively, and the middle solid region.
        The
        horizontally striped regions comprise nine equally sized stripes, which
        alternate in color between background and foreground colors. The sides of
        the
        stylized cube are solid in color.

      


      Some
        variation in line width and spacing in the horizontally striped regions is
        permissable where required by the medium, so long as the overall shape and
        impression of the mark is not substantially changed. For example, for
        embroidered items, it may not be possible to stitch nine stripes in the
        horizontally striped regions without making the logo excessively
        large.

       

      Computer
        graphic files and camera-ready artwork of the Cree Logo and other Cree
        trademarks may be obtained from Cree. Do not generate the Cree Logo on your
        own.
        Do not modify any computer files or artwork obtained from Cree without Cree's
        express written consent. 

      


      3.    
        Color Specifications

      


      a.
        The
        following term is used in this specification:

      


      “Cree
        Blue” means blue no. PMS 294.

      


      


      b.    
        The
        Cree
        Logo may be presented only using the following color combinations:

       

      ·  Black
        lettering on a white or light, uniform background.

      ·  White
        lettering on a dark, uniform background.

      ·  Cree
        Blue
        lettering on a white or light, uniform background.

      


      


      4.    
        Spacing
        

       

            
        a.     The
        Cree
        Logo should be surrounded by a region of background color at least as wide
        as
        the lettering height, as shown below:

      


      

      b.   
         The Cree Logo should never be presented such that it could be viewed as a
        compound mark. For example, the Cree Logo should never be shown physically
        touching or adjacent another mark such that the two marks appear to be part
        of
        the same overall trademark.

      



      
        
          
             

            Distributorship
              Agreement Page
              35

            Amended
              and Restated as of May 25, 2005

            


          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      



      c.
            With the express written consent of an authorized
        representative of Cree, the spacing recommendations may be relaxed on items
        where the available physical space or graphic resolution is limited, such
        as
        letterhead, business cards and certain promotional items.

      


      


      
        	
                C.
                  

              	
                Presentation
                  of the Cree LED Light Logo

              


      

      


      	1.  	
              The
                Cree LED Light Logo may be used in lieu of the Cree Logo when referring
                to
                products and/or services provided by Cree’s LED business units (i.e., LED
                chips, lighting LEDs, and LED
                backlighting).

            


      


      	2.  	
              Graphic
                Presentation

            


      


      The
        Cree
        LED Light Logo consists of the Cree Logo, as defined above, and the phrase
“LED
        Light” presented directly beneath said logo. The phrase “LED Light” is preceded
        by a straight, horizontal line that is aligned with the left edge of the
        Cree
        Logo and the top edge of the lettering in “LED Light.” The phrase “LED Light” is
        presented in Interstate font, with the letters “LED” and “L”
capitalized.

      


      As
        defined in Section B Part 2 above, some variation in line width and spacing
        in
        the horizontally striped regions of the Cree Logo as contained in the Cree
        LED
        Light Logo is permissable where required by the medium, so long as the overall
        shape and impression of the mark is not substantially changed. The proportions
        of the horizontal line and wording “LED Light” shall be determined by the
        presentation of the Cree Logo.

      


      As
        with
        the Cree Logo and other Cree trademarks, computer graphic files and camera-ready
        artwork of the Cree LED Light Logo may be obtained from Cree. Do not generate
        the Cree LED Light Logo on your own. Do not modify any computer files or
        artwork
        obtained from Cree without Cree's express written consent. 

      


      	3.  	
              Color
                Specifications

            


      


      The
        Cree
        LED Light Logo may be presented only using the following color
        combinations:

      


      	·  	
              Cree
                Blue lettering on a white or light, uniform
                background.

            


      	·  	
              White
                lettering on a dark, uniform background.

            


      	·  	
              Black
                lettering on a white or light, uniform
                background.

            


      


      	4.  	
              Spacing

            


      


      a. The
        Cree
        LED Light Logo should be surrounded by a region of background color at least
        as
        wide as the lettering height, as shown below:

      


      

      



      
        
          
             

            Distributorship
              Agreement Page
              36

            Amended
              and Restated as of May 25, 2005

            


          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               



          

        

      


            

      	b.  	
              The
                Cree LED Light Logo should never be presented such that it could
                be viewed
                as a compound mark. For example, the Cree LED Light Logo should never
                be
                shown physically touching or adjacent another mark such that the
                two marks
                appear to be part of the same overall
                trademark.

            


      

        
          c. With
            the
            express written consent of an authorized representative of Cree, the
            spacing
            recommendations may be relaxed on items where the available physical
            space
            or graphic resolution is limited, such as certain promotional
            items.

        

      

    

    
      


      


      D.       
PRESENTATION OF LED
        TRADEMARKS

      


      	1.  	
              Typed
                Form

            


          

            a.    
        As with any Cree trademark, the first letter of an LED trademark (also referred
        to as the first letter of the LED trademark’s prefix) should always be
        capitalized when it appears in text. Likewise, always capitalize the first
        letter of the secondary word in the mark (e.g., MegaBright, XBright, XLamp,
        etc.). There are two exceptions to this rule:

      


      	·  	
              The
                mark EZBRIGHT is presented in text as “EZBrightTM”, with both letters of
                the mark’s prefix and the first letter of the secondary word of the mark
                capitalized.

            


      	·  	
              The
                mark COLORWAVE is presented in text as “ColorwaveTM”, with only the first
                letter of the mark capitalized.

            


       

          b.  With
        the
        exception of the GSIC trademark, do not hyphenate or place a space between
        the
        LED trademark’s prefix and the secondary word of the trademark. (e.g., XBright
        should never be X Bright or X-Bright.) The GSIC trademark should always be
        presented with a raised dot separating the “G” and the “SiC” as
        follows:

      


      G
        .
        SiC®

      


      


      


       
        c. As
        stated
        in Section B, Part 2 above, computer graphic files and camera-ready artwork
        of
        any of the Cree trademarks may be obtained from Cree. You may not generate
        any
        logos on your own or modify any graphic files or artwork provided by Cree
        without Cree’s express written consent.