Document:

Exhibit 4(u)(2)

 Exhibit 4(u)(2) 
 DEED OF EASEMENT AND RIGHT-OF-WAY GRANT 
 THIS DEED OF EASEMENT AND RIGHT-OF-WAY GRANT (this
“Easement”) is made as of this 9th day of July, 2009, by Baltimore Gas and Electric Company, a corporation duly organized and existing under the laws of the State of Maryland (the “Company” or the “Grantor”), to
Deutsche Bank Trust Company Americas, a banking corporation organized and existing under the laws of the State of New York including its permitted successors and assigns (the “Grantee”). 
 W I T N E S S E T H, that for and in consideration of the sum of Ten Dollars ($10.00), cash in hand paid, receipt whereof is hereby acknowledged,
the Grantor does grant and convey unto the Grantee, with Special Warranty of Title, a non-exclusive easement and right-of-way in and over the following: 
 1. All real property, now owned or hereafter acquired by the Company, including, but not limited to the real property more particularly described on Exhibit A, attached hereto and made a part hereof, to place,
replace, maintain, access, remove, sell or otherwise dispose of any of the Distribution Equipment (as hereinafter defined) on such real property to the extent necessary in the reasonable discretion of the Grantee for either the operation of the
Distribution Equipment as part of an electric utility Distribution System (as hereinafter defined) or for the exercise or enforcement of the Grantee’s interest in such Distribution Equipment; 
 2. All real property, now leased or hereafter leased by the Company (or by any predecessor in interest to the interest of the Company in any such lease)
(each, an “Underlying Lease”), only to the extent not prohibited by any applicable law or regulation, only to the extent permitted by each Underlying Lease, only to the extent of the term of each Underlying Lease, and only to the extent of
the Company’s rights and obligations in and to each Underlying Lease, including, but not limited to the leases, if any, more particularly described on Exhibit A, attached hereto and made a part hereof, to place, replace, maintain,
access, remove, sell or otherwise dispose of any of the Distribution Equipment (as hereinafter defined) on the real property that is subject to such Underlying Leases to the extent necessary in the reasonable discretion of the Grantee for either the
operation of the Distribution Equipment as part of an electric utility Distribution System (as hereinafter defined) or for the exercise or enforcement of the Grantee’s interest in such Distribution Equipment; and 
 3. All easements and rights-of-way, now owned or hereafter granted to the Company (or to any predecessor in interest to the interest of the Company in
any such easement or right-of-way) (each, an “Underlying Easement”), only to the extent not prohibited by any applicable law or regulation, only to the extent the Company’s interests are transferable under each Underlying Easement,
and only to the extent of the Company’s rights and obligations in and to each Underlying Easement, including, but not limited to the easements and rights-of-way more particularly described on Exhibit A, attached hereto and made a part
hereof, to place, replace, maintain, access, remove, sell or otherwise dispose of any of the Distribution Equipment (as hereinafter defined) on the real property that is subject to such Underlying Easements to the extent necessary in the reasonable
discretion of the Grantee for either the operation of the Distribution Equipment as part of an electric utility Distribution System (as hereinafter defined) or for the exercise or enforcement of the Grantee’s interest in such Distribution
Equipment. 
  

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 Subject to the terms of any applicable Underlying Lease or any applicable Underlying Easement, this
Easement shall be enforceable against any successor to, or transferee or assignee of, the Company’s interest in any real property interests described in clauses (1), (2) and (3) above and shall remain in full force and effect and
shall be applicable as to all such real property interests notwithstanding any sale, assignment, transfer or other disposition of the Company’s interest in any such real property. Subject to the terms of any applicable Underlying Lease or any
applicable Underlying Easement, this Easement (and the rights granted hereby) shall be transferable, in whole or in part, by the Grantee or any permitted transferee hereof (1) to any permitted successor to the Grantee or its permitted
successors under the Indenture and Security Agreement dated as of July 9, 2009 of the Company to the Grantee (as amended from time to time, the “Indenture”), (2) to any purchaser of all or any portion of any Distribution
Equipment so long as such purchaser uses such Distribution Equipment as part of an electric utility distribution system, and (3) subject to any prior transfers in the preceding clause (2), to the Company or its successors upon satisfaction and
discharge of the Indenture. 
 As used herein, the term “Distribution Equipment” means all equipment and fixtures now or hereafter
owned or leased by the Company as part of its electric utility Distribution System and included in the following subaccounts of electric utility distribution plant account (in each case within the meaning of the Uniform System of Accounts of the
Federal Regulatory Commission (or any successor provisions thereto) and as more fully described in Exhibit B hereto), together with all such additional items of Distribution System equipment as may, by reason of technological advances, serve
the same or similar functions and purposes: 
  

	 	•	 	 station equipment; 

  

	 	•	 	 storage battery equipment; 

  

	 	•	 	 poles, towers and fixtures; 

  

	 	•	 	 overhead conductors and devices; 

  

	 	•	 	 underground conduit; 

  

	 	•	 	 underground conductors and devices; 

  

	 	•	 	 line transformers; 

  

	 	•	 	 services; 

  

	 	•	 	 meters; 

  

	 	•	 	 installations on customers’ premises; 

  

	 	•	 	 leased property on customers’ premises; and 

  

	 	•	 	 street lighting and signal systems. 

 As used herein, the term “Distribution System” means all land, structures, conversion equipment, lines, line transformers, and other facilities employed between the primary source of supply (i.e., generating station, or point of
receipt in the case of purchased power) and of delivery to customers, which are not includible in the Transmission System (as defined herein) whether or not such land, structures, and facilities are operated as part of a transmission system or as
part of a distribution system. Stations which change electricity from transmission to distribution voltage shall be classified as distribution stations. 
  

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 As used herein, the term “Transmission System” means (1) all land, conversion structures,
and equipment employed at a primary source of supply (i.e., generating station, or point of receipt in the case of purchased power) to change the voltage or frequency of electricity for the purpose of its more efficient or convenient transmission;
(2) all land, structures, lines, switching and conversion stations, high tension apparatus, and their control and protective equipment between a generating or receiving point and the entrance to a distribution center or wholesale point; and
(3) all lines and equipment whose primary purpose is to augment, integrate or tie together the sources of power supply. Where poles or towers support both transmission and distribution conductors, the poles, towers, anchors, guys, and rights of
way shall be classified as transmission system. The conductors, crossarms, braces, grounds, tiewire, insulators, etc., shall be classified as transmission or distribution facilities, according to the purpose for which used. Where underground conduit
contains both transmission and distribution conductors, the underground conduit and right of way shall be classified as distribution system. The conductors shall be classified as transmission or distribution facilities according to the purpose for
which used. 
 Notwithstanding anything herein to the contrary, the Company shall retain the right to use the real property which is subject
to this Easement in any manner which shall not interfere with the use and enjoyment of the rights granted hereunder to the Grantee. 
 The
Grantee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Easement. In no event shall
the Grantee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, without limitation, loss of profit) irrespective of whether the Grantee has been advised of the likelihood of such loss or
damage and regardless of the form of action, unless such loss or damage results from the Grantee’s gross negligence, willful misconduct, or bad faith. 
 The granting of this Easement is made and accepted subject to all applicable matters of record in the applicable land records and further subject to all matters that may exist on the ground as of the date hereof.

 If any provision of this Easement shall be held to be invalid, illegal or unenforceable, the remaining provisions shall be binding upon
the parties and shall be enforceable as though said invalid, illegal or unenforceable provisions were not contained herein. 
 This Easement
may only be amended, and any provision hereof may only be waived, in writing by an amendment or waiver hereto executed by the Company and the Grantee, who may only so act in accordance with the Indenture (including Section 1308 thereof).

 This Easement shall be governed by the laws of the State of Maryland. 
  

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 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, and its corporate seal to
be hereunto affixed and attested, all as of the day and year first above written. 
  

			
	 BALTIMORE GAS AND ELECTRIC COMPANY
 [SEAL]

		
	By:	 	 /s/    Christopher J. Budzynski

	Name:	 	Christopher J. Budzynski
	Title:	 	Vice President and Treasurer

  

					
	ATTEST:
	
	 Executed by Baltimore Gas and
 Electric
Company in the presence of:

			
	 /s/    Sean Klein
	 		 	
			
	STATE OF MARYLAND	 	)	 	
		 	)	 	SS.:
	CITY/COUNTY OF ANNE ARUNDEL	 	)	 	

 On this 8th day of July, 2009, before me, a Notary Public within and for said County, personally appeared
Christopher J. Budzynski, to me personally known to be Vice President and Treasurer of BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland corporation, the corporation which executed the within instrument, and who, being by me duly sworn, did say that
he/she is Vice President and Treasurer of BALTIMORE GAS AND ELECTRIC COMPANY, the corporation named in the foregoing instrument; that the seal affixed to said instrument is the corporate seal of said corporation; that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors; and said Christopher J. Budzynski acknowledged to me said instrument to be the free act and deed of said corporation, and that said corporation executed the same.

  

	
	 /s/    Cathy Lynn Crouse

	Notary Public, State of Maryland
	Commission Expires: 1/1/2010

  

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 ATTORNEY CERTIFICATION 
 I HEREBY CERTIFY that the within instrument was prepared under my supervision and that I am an attorney licensed to practice law in the State of
Maryland. 
  

	
	 /s/    Andrew E. Skopp

	Andrew E. Skopp, Esquire

  

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 EXHIBIT A 
 Description of Example Properties 
  

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 EXHIBIT B 
 Definitions of Electric Utility Distribution Plant Subaccounts 
 Station equipment. 
 This account shall include installed station equipment, including transformer banks, etc., which are used for the purpose of changing the characteristics of electricity
in connection with its distribution. 
 Items: 
 1. Bus compartments, concrete, brick and sectional steel, including items permanently attached thereto. 
 2. Conduit, including
concrete and iron duct runs not part of building. 
 3. Control equipment, including batteries, battery charging equipment, transformers,
remote relay boards, and connections. 
 4. Conversion equipment, indoor and outdoor, frequency changers, motor generator sets, rectifiers,
synchronous converters, motors, cooling equipment, and associated connections. 
 5. Fences. 
 6. Fixed and synchronous condensers, including transformers, switching equipment, blowers, motors, and connections. 
 7. Foundations and settings, specially constructed for and not expected to outlast the apparatus for which provided. 
 8. General station equipment, including air compressors, motors, hoists, cranes, test equipment, ventilating equipment, etc. 
 9. Platforms, railings, steps, gratings, etc., appurtenant to apparatus listed herein. 
 10. Primary and secondary voltage connections, including bus runs and supports, insulators, potheads, lightning arresters, cable and wire runs from and to
outdoor connections or to manholes and the associated regulators, reactors, resistors, surge arresters, and accessory equipment. 
 11.
Switchboards, including meters, relays, control wiring, etc. 
 12. Switching equipment, indoor and outdoor, including oil circuit breakers
and operating mechanisms, truck switches, disconnect switches. 
  

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 Note: Rectifiers, series transformers, and other special station equipment devoted exclusively to street lighting service
shall not be included in this account, but in account Street Lighting and Signal Systems. 
 Storage battery equipment. 
 This account shall include installed storage battery equipment used for the purpose of supplying electricity to meet emergency or peak demands. 
 Items: 
 1. Batteries, including elements, tanks, tank
insulators, etc. 
 2. Battery room connections, including cable or bus runs and connections. 
 3. Battery room flooring, when specially laid for supporting batteries. 
 4. Charging equipment, including motor generator sets and other charging equipment and connections, and cable runs from generator or station bus to battery room connections. 
 5. Miscellaneous equipment, including instruments, water stills, etc. 
 6. Switching equipment, including end cell switches and connections, boards and panels, used exclusively for battery control, not part of general station switchboard. 
 7. Ventilating equipment, including fans and motors, louvers, and ducts not part of building. 
 Note: Storage batteries used for control and general station purposes shall not be included in this account but in the account appropriate for their use. 
 Poles, towers and fixtures. 
 This account shall include installed
poles, towers, and appurtenant fixtures used for supporting overhead distribution conductors and service wires. 
 Items: 
 1. Anchors, head arm, and other guys, including guy guards, guy clamps, strain insulators, pole plates, etc. 
 2. Brackets. 
 3. Crossarms and braces.

 4. Excavation and backfill, including disposal of excess excavated material. 
  

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 5. Extension arms. 
 6. Foundations. 
 7. Guards. 
 8. Insulator pins and suspension bolts. 
 9. Paving. 
 10. [Omitted] 
 11. Pole steps and ladders.

 12. Poles, wood, steel, concrete, or other material. 
 13. Racks complete with insulators. 
 14. Railings. 
 15. Reinforcing and stubbing. 
 16. Settings.

 17. Shaving, painting, gaining, roofing, stenciling, and tagging. 
 18. Towers. 
 19. Transformer racks and
platforms. 
 Overhead conductors and devices. 
 This
account shall include installed overhead conductors and devices used for distribution purposes. 
 Items: 
 1. Circuit breakers. 
 2. Conductors,
including insulated and bare wires and cables. 
 3. Ground wires, clamps, etc. 
 4. Insulators, including pin, suspension, and other types, and tie wire or clamps. 
 5. Lightning arresters. 
  

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 6. Railroad and highway crossing guards. 
 7. Splices. 
 8. Switches. 
 9. [Omitted] 
 10. Other line devices.

 Note: Conductors used solely for street lighting or signal systems shall not be included in this account, but in account Street Lighting and Signal
Systems. 
 Underground conduit. 
 This account shall
include installed underground conduit and tunnels used for housing distribution cables or wires. 
 Items: 
 1. Conduit, concrete, brick and tile, including iron pipe, fiber pipe, Murray duct, and standpipe on pole or tower. 
 2. Excavation, including shoring, bracing, bridging, backfill, and disposal of excess excavated material. 
 3. Foundations and settings specially constructed for and not expected to outlast the apparatus for which constructed. 
 4. Lighting systems. 
 5. Manholes, concrete
or brick, including iron or steel frames and covers, hatchways, gratings, ladders, cable racks and hangers, etc., permanently attached to manholes. 
 6. [Omitted]. 
 7. Pavement disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 
 8. [Omitted]. 
 9. Protection of street
openings. 
 10. Removal and relocation of subsurface obstructions. 
  

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 11. Sewer connections, including drains, traps, tide valves, check valves, etc. 
 12. Sumps, including pumps. 
 13. Ventilating
equipment. 
 Note: Underground conduit used solely for street lighting or signal systems shall be included in account Street Lighting and Signal Systems.

 Underground conductors and devices. 
 This account
shall include installed underground conductors and devices used for distribution purposes. 
 Items: 
 1. Armored conductors, buried, including insulators, insulating materials, splices, potheads, trenching, etc. 
 2. Armored conductors, submarine, including insulators, insulating materials, splices in terminal chamber, potheads, etc. 
 3. Cables in standpipe, including pothead and connection from terminal chamber or manhole to insulators on pole. 
 4. Circuit breakers. 
 5. Fireproofing, in
connection with any items listed herein. 
 6. Hollow-core oil-filled cable, including straight or stop joints, pressure tanks, auxiliary air
tanks, feeding tanks, terminals, potheads and connections, etc. 
 7. Lead and fabric covered conductors, including insulators,
compound-filled, oil-filled or vacuum splices, potheads, etc. 
 8. Lightning arresters. 
 9. [Omitted]. 
 10. [Omitted]. 
 11. Protection of street openings. 
 12.
Racking of cables. 
 13. Switches. 
  

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 14. Other line devices. 
 Note: Underground conductors and devices used solely for street lighting or signal systems shall be included in account Street Lighting and Signal Systems. 
 Line transformers. 
 A. This account shall include installed overhead
and underground distribution line transformers and pole type and underground voltage regulators owned by the utility, for use in transforming electricity to the voltage at which it is to be used by the customer, whether actually in service or held
in reserve. 
 B. [Omitted]. 
 C. The records covering line
transformers shall be so kept that the utility can furnish the number of transformers of various capacities in service and those in reserve, and the location and the use of each transformer. 
 Items: 
 1. [Omitted]. 
 2. Transformer cut-out boxes. 
 3. Transformer
lightning arresters. 
 4. Transformers, line and network. 
 5. Capacitors. 
 6. Network protectors. 
 Note: Line transformers used solely for street lighting or signal systems shall be included in account Street Lighting and Signal Systems. 
 Services. 
 This account shall include installed overhead and underground conductors leading from a point where wires
leave the last pole of the overhead system or the distribution box or manhole, or the top of the pole of the distribution line, to the point of connection with the customer’s outlet or wiring. Conduit used for underground service conductors
shall be included herein. 
  

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 Items: 
 1.
Brackets. 
 2. Cables and wires. 
 3. Conduit. 
 4. Insulators. 
 5. [Omitted]. 
 6. Overhead to underground, including conduit or standpipe and conductor from last splice on pole to connection with
customer’s wiring. 
 7. Pavement disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 
 8. [Omitted]. 
 9. Protection of street
openings. 
 10. Service switch. 
 11. Suspension wire. 
 Meters. 
 A. This account shall
include the cost installed of meters or devices and appurtenances thereto, for use in measuring the electricity delivered to its users, whether actually in service or held in reserve. 
 B. When a meter is permanently retired from service, the installed cost included herein shall be credited to this account. 
 C. The records covering meters shall be so kept that the utility can furnish information as to the number of meters of various capacities in service and in reserve as well as the location of each meter owned. 
 Items: 
 1. Alternating current, watt-hour meters.

 2. Current limiting devices. 
 3. Demand indicators. 
 4. Demand meters. 
  

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 5. Direct current watt-hour meters. 
 6. Graphic demand meters. 
 7. Installation,
labor of (first installation only). 
 8. Instrument transformers. 
 9. Maximum demand meters. 
 10. Meter badges
and their attachments. 
 11. Meter boards and boxes. 
 12. Meter fittings, connections, and shelves (first set). 
 13. Meter switches and cut-outs. 
 14. Prepayment meters. 
 15. Protective
devices. 
 16. Testing new meters. 
 Note: This
account shall not include meters for recording output of a generating station, substation meters, etc. It includes only those meters used to record energy delivered to customers. 
 Installations on customers’ premises. 
 This account shall include installed equipment on the customer’s
side of a meter when the utility retains title to and assumes full responsibility for maintenance and replacement of such property. This account shall not include leased equipment, for which see account, Leased Property on Customers’ Premises.

 Items: 
 1. Cable vaults. 
 2. Commercial lamp equipment. 
 3. Foundations
and settings specially provided for equipment included herein. 
 4. Frequency changer sets. 
 5. Motor generator sets. 
  

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 6. Motors. 
 7. Switchboard panels, high or low tension. 
 8. Wire and cable connections to incoming cables. 

Leased property on customers’ premises. 
 This account shall
include electric motors, transformers, and other equipment on customers’ premises (including municipal corporations), leased or loaned to customers, but not including property held for sale. 
 Street lighting and signal systems. 
 This account shall include
installed equipment used wholly for public street and highway lighting or traffic, fire alarm, police, and other signal systems. 
 Items: 
 1. Armored conductors, buried or submarine, including insulators, insulating materials, splices, trenching, etc. 
 2. Automatic control equipment. 
 3.
Conductors, overhead or underground, including lead or fabric covered, parkway cables, etc., including splices, insulators, etc. 
 4. Lamps,
are, incandescent, or other types, including glassware, suspension fixtures, brackets, etc. 
 5. [Omitted]. 
 6. Ornamental lamp posts. 
 7. Pavement
disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 
 8. [Omitted]. 
 9. Posts and standards. 
 10. Protection of
street openings. 
 11. Relays or time clocks. 
 12. Series contactors. 
 13. Switches. 
 14. Transformers, pole or underground. 
  

 15Mutual Termination and Release Agreement

 Exhibit 10.131 
 MUTUAL TERMINATION AND RELEASE AGREEMENT 
 MUTUAL TERMINATION AND RELEASE
AGREEMENT (this “Agreement) is made and entered into this 2nd day of
July, 2009, by and among Charles & Colvard, Ltd., a North Carolina corporation (“C&C”), Bird Capital Group, Inc., a Nevada corporation (“BCG”), and Richard A. Bird, an individual resident of the State
of Texas (“Bird”). 
 RECITALS: 
 A. C&C, BCG and Bird are parties to that certain Management Services Agreement dated February 3, 2009 (the “Prior Agreement”). 
 B. C&C, BCG and Bird by mutual agreement now desire to terminate the Prior Agreement. 
 C. Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Prior Agreement.

 NOW, THEREFORE, in consideration of the terms and conditions herein provided, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged by the parties, the parties hereto agree as follows: 
 1. Termination. C&C, BCG and
Bird mutually agree that the Prior Agreement shall terminate and be of no further force or effect as of the close of business on July 2, 2009 (the “Effective Time”), and that, from and after the Effective Time, neither C&C,
BCG nor Bird shall have any further rights, duties or obligations under the Prior Agreement, including without limitation any obligations on the part of C&C to make payments related to the potential short- and long-term bonuses described in
Sections 3 and 4 of the Prior Agreement. Bird hereby resigns as both a director and an officer of C&C, such resignations to be effective as of the Effective Time. C&C hereby accepts such resignations as of the Effective Time. 
 2. Indemnification and D&O Insurance. C&C acknowledges and agrees that the Indemnification Agreement effective as of May 27, 2008, by
and between C&C and Bird shall continue in force and effect in accordance with its terms. In addition, C&C agrees to indemnify and hold harmless BCG and Bird from and against any and all losses, claims, suits, actions, judgments, damages,
costs, liabilities, and reasonable expenses (including legal and other expenses reasonably incurred by BCG or Bird in connection with investigating or defending against any such loss, claim, damage, or liability) (each a “Loss”) as
and when incurred (including, without limitation, the advancement of expenses incurred by BCG or Bird in connection with defending any Loss upon receipt of an undertaking by or on behalf of BCG or Bird to repay such amount unless it shall be
ultimately determined that it or he is entitled to be indemnified by C&C against such expenses) arising out of or based upon (a) the Prior Agreement, and/or (b) BCG’s and/or Bird’s activities or services under the Prior
Agreement. C&C shall not be liable, however, in any such case to the extent that any such Loss is found in a final judgment by a court of competent jurisdiction to have resulted primarily from bad faith, willful misconduct or gross negligence on
the part of BCG or any affiliate of BCG or to the 

  

 1 

 
extent such Losses relate to BCG’s, Bird’s or their affiliate’s activities which were at the time taken known or believed by BCG, Bird or
their affiliates to be clearly in conflict with the best interests of C&C. Furthermore, C&C shall (i) from and after the Effective Time maintain coverage of Bird under C&C’s directors and officers liability insurance policies
in existence from time to time so that Bird will continue to have coverage for any claims relating to periods during which Bird served as an officer and /or director of C&C, and (ii) fully cooperate with BCG or Bird, should BCG or Bird
desire to obtain one or more fully paid directors and officers “tail” liability insurance policies, that shall cover Bird (as a former director and officer of C&C and for the periods during which Bird was a director and/or officer of
C&C). 
 3. Mutual Release. C&C, on behalf of itself and on behalf of each of its agents, professionals, assigns, affiliates
(corporate or otherwise), and successors, and any other person who may assert a claim through or on behalf of any of them, hereby irrevocably and unconditionally releases, acquits and forever discharges BCG, Bird and each of their respective
shareholders, officers, directors, employees, agents, professionals, subsidiaries, predecessors, affiliates, successors and assigns, from any and all Released Claims, including, without limitation, all Released Claims arising out of, based upon,
resulting from or relating to (a) the Prior Agreement or any of the transactions contemplated thereby, and/or (b) BCG’s and/or Bird’s activities or services under the Prior Agreement. Each of BCG and Bird, on behalf of themselves
and on behalf of each of their agents, professionals, assigns, affiliates (corporate or otherwise), and successors, and any other person who may assert a claim through or on behalf of any of them, hereby irrevocably and unconditionally releases,
acquits and forever discharges C&C and each of its shareholders, officers, directors, employees, agents, professionals, subsidiaries, predecessors, affiliates, successors and assigns, from any and all Released Claims, including, without
limitation, all Released Claims arising out of, based upon, resulting from or relating to the Prior Agreement or any of the transactions contemplated thereby. “Released Claims” as used herein shall mean any and all rights, charges,
complaints, claims, causes of action, promises, agreements, rights to payment, rights to any equitable remedy, rights to any equitable subordination, rights to any financial, economic or equity interest, breaches of contract, breaches of duty or of
any relationship, acts, omissions, misfeasance, malfeasance, demands, indebtedness, liabilities, obligations, express or implied contracts, controversies, obligations of payment or performance, rights of offset or recoupment, accounts, sums of
money, compensation, remuneration, damages, costs, losses or expenses (including attorneys’ and other professional fees and expenses) of every type, kind, nature, description or character, and irrespective of how, why or by reason of what
facts, whether heretofore or now existing or disclosed or undisclosed, or that could, might or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, claimed or unclaimed,
absolute or contingent, direct or derivative, whether based on contract, tort, breach of any duty, or other legal or equitable theory of recovery, each as though fully set forth herein at length (collectively, “Claims”), that arose,
or whose underlying events occurred, prior to the date of this Agreement, whether asserted prior to the date of this Agreement or thereafter, specifically including, but without limitation, Claims arising from or out of, connected with, or relating
to the Prior Agreement and/or the transactions contemplated thereby. Notwithstanding the foregoing, “Released Claims” do not include any actual or potential Claims held by any party hereto (or any rights or duties related to such
Claims) which arise from or out of this Agreement, which Claims are expressly reserved. The parties hereto expressly understand that both direct and indirect breaches of this Section 3 are proscribed, and, therefore, each party hereto covenants
that it will not directly or indirectly encourage or aid, 

 
except as required by due legal process, the commencement or prosecution of any action or other proceeding based upon any Released Claim. 
 4. Non-Disparagement. Each party hereto agrees that he or it will not directly or indirectly disparage or criticize any other party hereto, or
issue any communication, written or otherwise, that reflects adversely on or encourages any adverse action against any other party hereto; provided that nothing contained herein shall prevent any party from testifying truthfully under oath pursuant
to any lawful court order or subpoena or otherwise responding to or providing disclosures required by law. 
 5. Representations and
Warranties of the Parties Hereto. Each party hereto represents and warrants to the other as follows: 
 (a) Such party has the requisite
corporate or other legal power and authority to execute, deliver and carry out this Agreement, and has taken all necessary corporate or other legal action, as applicable, to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. 
 (b) This Agreement has been duly and validly authorized, executed and delivered by such party and
constitutes a valid and binding obligation of such party, enforceable against such party in accordance with its terms. 
 (c) Neither the
execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will conflict with or constitute a violation of or default under any contract, commitment, agreement, arrangement or restriction of any kind to
which such party is a party or by which such party is bound. 
 (d) As of the date on which this Agreement is executed on its behalf, such
party has the sole right, power, capacity and authority to execute this Agreement and that it has not assigned, conveyed, sold, transferred or otherwise disposed of its rights in or to any Released Claims. 
 6. Attorney’s Fees. If any party to this Agreement breaches or fails to honor any of the terms or conditions of this Agreement, then such
party shall pay reasonable attorneys’ fees, costs and expenses incurred by any other party (including any third-party beneficiary hereof) in the prosecution and enforcement of the terms and conditions of this Agreement. 
 7. Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto as well as the other parties being released
pursuant to Section 3, who shall be deemed to be third-party beneficiaries hereunder. Each such other released party may enforce any provision hereof, notwithstanding that such party is not a signatory to this Agreement. 
 8. Governing Law; Exclusive Venue. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NORTH CAROLINA AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WITHIN SAID STATE WITHOUT CONSIDERATION OF ANY CONFLICTS OF LAW PROVISIONS THEREOF. Each party to this Agreement (i) hereby
irrevocably submits to the 

 
exclusive jurisdiction of any United States District Court sitting in North Carolina for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated hereby, (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that he or it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper, and (iii) hereby waives any and all rights he or it may have to a trial by jury with respect to any suit,
action or proceeding based on, or arising out of, under, or in connection with, this Agreement. 
 9. Headings. The headings contained
in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
 10.
Entire Agreement. This Agreement evidences the entire understanding and agreement of the parties hereto relative to the matters discussed herein. This Agreement supersedes any and all other agreements and understandings, whether written or
oral, relative to the matters discussed herein. 
 11. Covenant Not to Compete. During the period beginning at the Effective Time and
continuing for eighteen (18) months thereafter, and within the Territory as defined herein, BCG and Bird (the “Covenanting Parties”) shall not knowingly, either directly or indirectly, invest in, own, manage, operate, or
control or participate in the ownership, management, operation or control of, as employee, consultant or otherwise, any business or entity engaged in, planning to become engaged in and/or otherwise generally conducting the business of manufacturing,
distributing or selling silicon carbide jewels or silicon carbide jewelry. For purposes hereof “Territory” shall mean the entire world, including without limitation the United States of America, Canada, Mexico, the North American
continent, the South American continent, India, China, Japan, England, Ireland, the continents of Europe, Asia, Africa, Antarctica and Australia, New Zealand, Bermuda, the Caribbean islands, the islands of the South Pacific, the Channel Islands and
Iceland. The Covenanting Parties acknowledge that C&C conducts a world-wide business and that the covenant herein is a reasonable restriction with respect to time, scope and territory and is entered into for a valuable consideration. C&C may
enforce this covenant by injunction and exercise such other remedies as are available at law and in equity. 
 12. Return of All Assets of
C&C; Expense Reimbursements. BCG and Bird shall return to C&C all assets of C&C not required for the services to be provided under the Consulting Agreement to be entered into between the parties covering periods following the
Effective Time, including but not limited to any confidential or proprietary material, any marketing material, surveys, reports and related materials in connection with the K&G lawsuit and sales and marketing notes (the “C&C
Assets”). During the term of such Consulting Agreement, BCG and Bird shall fully cooperate to update C&C concerning all C&C Assets, and upon the termination of the Consulting Agreement shall return the C&C Assets to C&C.
C&C shall reimburse BCG and Bird for all expenses reimbursable under the Prior Agreement for periods prior to the Effective Time for which BCG or Bird has submitted (or will submit) to the Company appropriate documentation of such unreimbursed
expenses. Each such expense reimbursement shall be made by the Company (a) with respect to appropriate documentation which has been or is submitted to the Company prior to the Effective Time, within 10 days of the Effective 

 
Time, or (b) with respect to appropriate documentation which is submitted to the Company after the Effective Time, within 10 days of the submission of
such documentation. 
 13. Notices. All notices hereunder shall be in writing and shall be delivered personally or sent by recognized
overnight courier (such as Federal Express) for next business day delivery, postage prepaid, by certified U.S. Mail, return receipt requested and postage prepaid, or by facsimile with electronic confirmation of receipt, to the parties at
the following addresses: to BCG and/or Bird, 1330 Post Oak Boulevard, Suite 1600, Houston, Texas 77056, attn: Richard A. Bird, Telephone No. 713-302-3312, with a copy to Warren W. Garden, Esq., Block & Garden, LLP, Sterling Plaza, 5949
Sherry Lane, Suite 900, Dallas Texas 75225, Telephone No. 214-866-0993, Fax No. 214-866-0991; and to C&C, 20 South Hampshire Court, Wilmington, Delaware 19807, attn: George R. Cattermole, Fax No. 302-636-0559, with a copy to
Womble Carlyle Sandridge & Rice, PLLC, One Wachovia Center, Suite 3500, 301 South College Street, Charlotte, North Carolina 28202-6037, attn: Cyrus M. Johnson, Jr., Fax No. 704-338-7809. A notice shall be deemed to be given only upon
the confirmation of delivery by receipt by the party or refusal of acceptance of delivery. Any party may change the address to which notice is given by giving notice of such change of address in accordance herewith. 
 14. Severability. If any term, provision covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ a valid, legal, nonvoid and enforceable alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated
and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 15. Assignment. This Agreement and the rights and obligations of the parties hereunder shall not be assignable, in whole or in
part, by any party hereto without the prior written consent of the other party hereto, except by operation of law. 
 16. Binding
Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, permitted assigns, spouses, heirs and personal and legal representatives. 
 17. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument. 
 18. Amendments/Waivers. No
supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 
 [Remainder of page intentionally left blank;
signature page to follow.] 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above
written. 
  

			
	CHARLES & COLVARD, LTD.
		
	By:	 	 /s/ George R. Cattermole

		 	George R. Cattermole, Chairman
	
	BIRD CAPITAL GROUP, INC.
		
	By:	 	 /s/ Richard A. Bird

		 	Richard A. Bird, President
		
		 	 /s/ Richard A. Bird

		 	Richard A. Bird, individually

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