Document:

Exhibit 10.3

          

          

          Portions of this exhibit marked as “[***]” have been excluded because they are both not material and would likely cause competitive harm to the
            registrant if publicly disclosed.

        

      

      
         

        

        SECOND AMENDMENT TO

        EXCLUSIVE SUPPLY AGREEMENT

        

        

        This SECOND AMENDMENT TO EXCLUSIVE SUPPLY AGREEMENT (“Second Amendment”) is entered into as of June 30, 2020 (the “Second Amendment Effective Date”), by and between CHARLES & COLVARD, LTD., a North Carolina corporation, with its principal
          place of business at 170 Southport Drive, Morrisville, North Carolina 27560 (“C&C”), and CREE, INC., a North Carolina corporation, with its principal place of business located at 4600 Silicon Dr., Durham, North Carolina 27703 (“Cree”). 
          C&C and Cree may be referred to hereinafter individually as “Party” and collectively as “Parties.”  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.

         

        WHEREAS, Cree is in the business of developing, manufacturing and selling silicon carbide (SiC) substrates and materials for various electronic applications; and

         

        WHEREAS, C&C develops, manufactures and markets gemstones fabricated from SiC material and desires to purchase certain material from Cree; and

         

        WHEREAS, C&C and Cree previously entered into an Exclusive Supply Agreement dated December 12, 2014 (the “Agreement”), as amended June 22, 2018 by that First Amendment to Exclusive Supply Agreement
          (the “First Amendment”); and

         

        WHEREAS, C&C declared an event of Force Majeure (as that term is defined in the Agreement) due to emergency restrictions and executive orders issued by federal, state and local governments in
          response to the Coronavirus pandemic; and

         

        WHEREAS, the Parties desire to enter into this Second Amendment to modify certain terms of the Agreement as of the Second Amendment Effective Date.

         

        NOW, THEREFORE, the Parties, in consideration of the foregoing premises and the covenants and undertakings herein contained, mutually agree as follows:

         

        	1.	
                Term.

              

         

        	

              	a.	
                Paragraph 2(a) of the Agreement is hereby deleted in its entirety and replaced with the following:

              

         

        “(a)  The term of this Agreement shall begin on the Effective Date and expire on June 29, 2025, unless earlier terminated as provided herein or extended by mutual written agreement of the Parties. The period from the
          Effective Date until the expiration or termination of this Agreement in accordance with its terms shall be referred to as the ‘Term.’  At least [***] months prior to the expiration date of the Term, C&C will notify Cree in writing of
          C&C’s desire to continue the business relationship after the expiration of the Term.  Promptly following such notification, the Parties will meet in person or by telephone to discuss a possible extension to the Term, including but not limited
          to discussing production volumes, purchase commitments, pricing, and third-party sourcing percentages for the extension period; provided, however, that neither Party shall be obligated to continue the business relationship beyond the Term.”

         

        	

              	b.	
                Paragraph 2(b) of the Agreement is hereby deleted in its entirety.

              

         

        
          
            	
                    Page 1 of 4

                    

                  

          

          
            

        

        	2.	
                Price/Payment Terms.

              

        

        

        The third sentence of Paragraph 6(b) is hereby deleted in its entirety and replaced with the following:

        

        

        “As of the Second Amendment Effective Date, C&C has [***]. The Parties have agreed to a payment schedule (set forth below in Section 5 of this Second Amendment) that is intended to [***].  For the time period of
          [***] through [***] and unless otherwise agreed upon in writing, C&C shall pay Cree net [***] days following the invoice date.  For the remainder of the Term as long as [***] (based on these net [***] days payment terms) and unless otherwise
          agreed upon in writing, C&C shall pay Cree net [***] days following the invoice date.  Cree may adjust the payment terms in its sole discretion, [***].”

        

        

        	3.	
                Buyer’s Exclusivity Commitment.

              

        

        

        	

              	a.	
                Section 7(a) is hereby modified by adding the following new language at the end of the section:

              

        

        

        “C&C has requested that Cree consider accepting Purchase Orders in excess of the of the agreed-upon Minimum Purchase Commitment for a particular quarter (such amounts, “Upside”). Cree is willing to consider such
          Upside requests, but only if such requests are made by C&C with at least the amount of lead times below:

        

        

        	 	
                Requested Product Amount

              	 	
                Lead Time

              
	 	
                Up to [***] kilograms

              	 	
                At least [***] weeks

              
	 	 	 	 
	 	
                [***] kilograms

              	 	
                At least [***] weeks

              

        

        

        	

              	b.	
                Section 7(g) is hereby modified by deleting (ii) and replacing it with the following:

              

        

        

        “(ii) the maximum quantity of Alternative SiC Material purchased by C&C from all third-party suppliers does not exceed [***] for Fiscal Year [***], [***] for Fiscal Year [***], [***] for Fiscal Year [***], [***]
          for Fiscal Year [***], [***] for Fiscal Year [***], [***] for Fiscal Year [***], and [***] for Fiscal Year [***] of the Minimum Purchase Commitment applicable to that Fiscal Year;”

        

        

        	4.	
                Seller’s Exclusivity Commitment.

              

        

        

        The following is hereby added to the end of Section 8(b):

        

        

        “For the avoidance of doubt, C&C’s timely adherence to the payment schedule set forth below for [***] shall [***].”

        

        

        Payment Schedule:

        

        

        
          	
                  Time Period

                	
                  Payment Amount

                
	
                  [***]

                	
                  $[***]

                
	
                  [***]

                	
                  $[***]

                
	
                  [***]

                	
                  $[***]

                
	
                  [***]

                	
                  $[***]

                
	
                  [***]

                	
                  $[***]

                

        

        

        

        	5.	
                Buyer’s Purchase Commitments.

              

        

        

        Paragraph 9(a) is hereby deleted in its entirety and replaced with the following:

        

        

        	

              	“(a)	
                Each Fiscal Quarter, C&C agrees to purchase Products from Cree in quantities at or above the Minimum Purchase Commitment amount for such Fiscal Quarter.  Failure to do so will, except as contemplated below, be considered a breach
                  of the Agreement.  The ‘Minimum Purchase Commitment’ for each Fiscal Quarter will be [***] (i) at least [***]% of C&C's requirements for SiC materials for the production of gemstones in colors
                  available from Cree, excluding from such calculation any SiC materials purchased from third parties as expressly permitted in Paragraph 7(a) (but including any SiC materials purchased from third parties as expressly permitted in Paragraph
                  7(b), 7(c), 7(d) or 7(g)), or (ii) (A) [***] kilograms in the [***] Quarter of [***]; (B) [***] kilograms in the [***] Quarter of [***]; (C) [***] kilograms in [***] Quarter of [***]; (D) [***] kilograms in [***] Quarter of [***]; (E)
                  [***] kilograms in [***] Quarter of [***]; (F) [***] kilograms in [***] Quarter of [***]; (G) [***] kilograms in [***]  Quarters of [***]; (H) [***] kilograms in the [***] Quarter of [***]; (I) [***]
                  kilograms in the [***] Quarter of [***]; (J) [***] kilograms in the [***] Quarter of [***]; (K) [***]  kilograms in the [***] Quarter of [***]; (L) [***] kilograms in the [***] Quarter of [***]; (M) [***] kilograms in [***] Quarters of
                  [***]; (N) [***] kilograms in the [***] Quarter of [***]; (O) [***]  kilograms in the [***] Quarter of [***]; (P) [***] kilograms in [***] Quarters of [***]; (Q) [***] kilograms in the [***] Quarter of [***]; (R) [***] kilograms in [***]
                  Quarter of [***]; (S) [***] kilograms in [***] Quarters of [***]; and (T) [***] kilograms in [***]  Quarters of [***].

              

        

        

        
          
            	
                    Page 2 of 4

                    

                  

          

          
            

        

        	

              	6.	
                Exhibit A.

              

        

        

        	

              	a.	
                The “Pricing for [***] SiC [***] crystals (all prices are per gram) Meeting Forever OneTM Specifications” section in Exhibit A is hereby deleted in its entirety and replaced with the following:

              

        

        

        “Pricing for [***] SiC [***] crystals (all prices are per gram) Meeting Forever OneTM Specifications:

        

        

        
          	
                  Fiscal 

                  Year

                	
                  Volume 

                  (kg)

                	
                  Volume 

                  (grams)

                	
                  Revenue

                	
                  Price per gram 

                  of Product 

                  meeting Forever 

                  OneTM

                  Specifications

                
	
                  2019

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2020

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2021

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2022

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2023

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2024

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  2025

                	
                  [***]

                	
                  [***]

                	
                  $[***]

                	
                  $[***]

                
	
                  Total

                	
                  [***]

                	
                  [***]

                	
                  $52,945,000

                	
                  $[***]

                

        

        

        

        The prices will be determined based on the Fiscal Year in which the Product is originally scheduled for delivery.  The Parties agree that the foregoing pricing shall be subject to change from time to time, as
          mutually agreed upon in writing by the Parties, based upon any improvements made by Cree to the Specifications of the SiC Materials.

        

        

        	

              	7.	
                Miscellaneous.

              

        

        

        All modifications and changes in this Second Amendment shall be effective as of the Second Amendment Effective Date, notwithstanding a later or earlier execution date.  The Agreement, as amended
          herein, shall continue in effect in accordance with its terms.  In the event of conflict between the terms and conditions in this Second Amendment and in the Agreement as amended previously, the terms and conditions in this Second Amendment will
          control. The Agreement and Exhibits, as modified by this Second Amendment, and the NDA contain the entire agreement between C&C and Cree with respect to the subject matter of the Agreement
          and supersede all other prior written or oral agreements relating to the purchase and sale of Products.  This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall
          constitute one and the same instrument.  Any signed copy of this Second Amendment copied or reproduced and transmitted via photocopy, facsimile or other process that accurately transmits the original document shall be considered an original
          document.

         

        

        
          
            	
                    Page 3 of 4

                    

                  

          

          
            

        

        IN WITNESS WHEREOF, each of the Parties has duly executed this Second Amendment as of the dates indicated below to be effective as of the Second Amendment Effective Date, notwithstanding an earlier or
          later execution date.

        

        

      

      
        	
                CREE, INC.

              	 	
                CHARLES & COLVARD, LTD.

              	 
	 	 	 	 	 	 
	
                By:

              	
                /s/ Cengiz Balkas 

                

              	 	
                By:

              	
                /s/ Don O’Connell

              	 
	 	 	 	 
	
                Cengiz Balkas

              	 	
                Don O’Connell

              	 
	 	 	 	 
	
                Title:

              	
                Senior Vice President, Wolfspeed

              	 	
                Title:

              	
                President and CEO

              	 
	 	 	 	 	 	 
	
                Date:

              	
                August 26, 2020

              	 	
                Date:

              	
                August 25, 2020

              	 

        

        

      

      
        	
                Address for Notices

                Cree, Inc.

                4600 Silicon Drive

                Durham, North Carolina 27703

                Attn:  Cengiz Balkas

                Email:  [***]

                Fax No.:  919-[***]

              	
                Address for Notices

                Charles & Colvard, Ltd.

                170 Southport Drive

                Morrisville, North Carolina 27560

                Attn: Maria Flanagan

                Email: [***]

                Fax No.: 919-[***]

              
	 	 
	
                With copy of any notices of a legal nature to:

                Cree, Inc.

                Attn: General Counsel

                4600 Silicon Dr.

                Durham, North Carolina 27703

                Email:  [***]

                Fax No.:  919-[***]

              	
                With copy of any notices of a legal nature to:

                Wyrick Robbins Yates & Ponton LLP

                Attn: Jason Wood

                4101 Lake Boone Trail

                Raleigh, NC 27607

                Email:  [***]

                Fax No.:  919-[***]

              

      

       

      

       

      

      
        
          	
                  Page 4 of 4Exhibit 10.7

    

    
       

      

      FIRST AMENDMENT TO

      CREDIT AGREEMENT

      

      

      THIS  FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 15, 2020, by and among CHARLES & COLVARD, LTD., a North Carolina corporation (“Company”),
          charlesandcolvard.com, LLC, a North Carolina limited liability company (together with Company, “Borrowers”), CHARLES & COLVARD DIRECT, LLC, a North Carolina
          limited liability company (“Guarantor”) and WHITE OAK COMMERCIAL FINANCE, LLC, a Delaware limited liability company (the “Lender”).

       

      STATEMENT OF PURPOSE

       

      The Borrowers, Guarantor and the Lender are parties to that certain Credit Agreement dated as of July 13, 2018 (as may be further amended, restated, supplemented or otherwise modified from time to
        time, the “Credit Agreement”).

       

      Borrowers, Guarantor and Lender desire to amend certain terms of the Credit Agreement, pursuant to the terms hereof.

       

      NOW, THEREFORE: for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

       

      SECTION 1.        Capitalized Terms. All capitalized undefined terms used in this Amendment (including without limitation, in the Statement of Purpose hereto) shall have the meanings
        assigned thereto in the Credit Agreement.

       

      SECTION 2.        Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

       

      2.1          Article II of the Credit Agreement is hereby amended by inserting the following new Section 2.14 immediately after the existing Section 2.13
        of the Credit Agreement as follows:

       

      “SECTION 2.14 CARES DEBT. All applications, documents and other information submitted to any Governmental Authority with respect to the CARES Debt shall be true and correct.
        Neither Lender nor any of its Affiliates is deemed an “affiliate” of any Loan Party or any of its Subsidiaries for any purpose related to the CARES Debt, including the eligibility criteria with respect thereto.  Each Loan Party acknowledges and
        agrees that (a) it has consulted its own legal and financial advisors with respect to all matters related to CARES Debt (including eligibility criteria) and the CARES Act – Title I, (b) it is responsible for making its own independent judgment with
        respect to CARES Debt and the process leading thereto, and (c) it has not relied on Lender or any of its respective Affiliates with respect to any of such matters.”

       

      2.2         Article IV of the Credit Agreement is hereby amended by inserting the following new Section 4.14 immediately after the existing Section 4.13
        of the Credit Agreement as follows:

       

      
        

        
          

        

      

      
      “SECTION 4.14  CARES DEBT.

       

      (a)        The Loan Parties shall timely (and, in any event, not later than thirty (30) days (or such longer period as may be agreed by Lender) after the seven-week anniversary
        of the initial incurrence thereof or, if later, the final submission deadline under the CARES Act) submit all applications and required documentation necessary for the lender of the CARES Debt and/or the Small Business Administration to make a
        determination regarding the amount of the CARES Debt that is eligible to be forgiven.

       

      (b)      The Loan Parties shall provide to Lender copies of any amendments, modifications, waivers, supplements or consents executed and delivered with respect to CARES Debt
        promptly (and in any event within three (3) Business Days) upon execution and delivery thereof, and copies of any notices of default received by any Loan Party with respect to the CARES Debt.

       

      (c)         The Loan Parties shall, to the extent not included in the foregoing clause (a) or (b), promptly (and in any event within three (3) Business Days) upon receipt or
        filing thereof, as applicable, provide to Lender copies of all material documents, applications and correspondence with the applicable lender or any Governmental Authority relating to CARES Debt, including with respect to loan forgiveness.

       

       (d)      On the CARES Forgiveness Date, the Loan Parties shall deliver to Lender a certificate of an authorized officer of the Loan Parties certifying as to the amount of the
        CARES Debt that the lender of the CARES Debt (and to the extent required, the Small Business Administration) has determined will be forgiven pursuant to the provisions of the CARES Act - Title I, together with reasonably detailed description
        thereof, all in form reasonably satisfactory to Lender.

       

      (e)         Each Loan Party agrees that it will not make any claim that Lender or any of its respective Affiliates has rendered advisory services of any nature or respect in
        connection with any CARES Debt, the CARES Act – Title I or the process leading thereto.”

       

      2.3         Section 5.2 of the Credit Agreement is hereby amended by restating the definition of “Permitted Indebtedness” set forth therein in its entirety as
        follows:

       

      “Permitted Indebtedness” means (a) Indebtedness of Borrowers described on Schedule B; (b) purchase money indebtedness incurred in connection with the financing of the
        purchase by Borrowers of fixed assets (including capitalized leases) in an aggregate amount outstanding at any time not to exceed $500,000; (c) unsecured Indebtedness to financial institutions incurred in connection with hedging of the prices of
        precious metals covering 90 days of purchases, provided such Indebtedness does not exceed the aggregate amount of $500,000 at any time outstanding; and (d) unsecured Indebtedness  in an aggregate principal amount not to exceed $965,000 advanced by
        (i) any Governmental Authority (including the Small Business Administration) or any other Person  acting as a financial agent of a Governmental Authority or (ii) any other Person to the extent such Indebtedness under this clause (ii) is guaranteed
        by a Governmental Authority (including the Small Business Administration), in each case under this clause (d), pursuant to the CARES Act - Title I (such unsecured Indebtedness, “CARES Debt”); provided that, unless otherwise approved
        by Lender, (A) no Event of Default shall have occurred and be continuing at the time of incurrence thereof and (B) CARES Debt shall (1) be used by the Loan Parties and their Subsidiaries solely for purposes permitted under the CARES Act - Title I,
        (2) have a maturity date not less than two (2) years after the date of incurrence of the CARES Debt, (3) bear interest at a rate not greater than one percent (1%) per annum, (4) not require any payments of principal prior to maturity and (5)
        otherwise have terms customary for loans made pursuant to the CARES Act - Title I (taken as a whole).”

       

      
        

        2

        
          

        

      

      2.4         Article V of the Credit Agreement is hereby amended by inserting the following new Section 5.13 immediately after the existing Section 5.12 of
        the Credit Agreement as follows

       

      “SECTION 5.13  CARES DEBT. Agree to any amendment, restatement, supplement, waiver or other modification of the CARES Debt (other than to effect its forgiveness or prepayment) if
        the effect of such amendment, restatement, supplement, waiver or other modification would be materially adverse to the Loan Parties or Lender.”

       

      2.5        Section 6.1 of the Credit Agreement is hereby amended by restating clause (e) in its entirety as follows:

       

      “(e)      Any (i) default in the payment or performance of any obligation under, or any defined event of default occurs, under the terms of any contract, instrument or document
        evidencing Indebtedness (other than any of the Loan Documents) of Loan Party to any third party or which Loan Party has guaranteed involving an amount in excess of $250,000 in the aggregate, or (ii) any event of default occurs with respect to the
        CARES Debt or any event or condition occurs that results in the CARES Debt becoming due prior to its scheduled maturity or that enables or permits the holder or holders thereof to declare the CARES Debt to be due, or to require the prepayment,
        repurchase, redemption or defeasance thereof, prior to its scheduled maturity.”

       

      2.6      New Definitions.  The following definitions are inserted into Section 7.1 in the appropriate alphabetical order:

       

       “CARES Act - Title I” means Title I of the Coronavirus Aid, Relief and Economic Security Act, as amended (including any successor thereto), and all requests, rules,
        guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, regardless of the date enacted, adopted, issued or implemented.

       

       “CARES Debt” has the meaning set forth in Section 5.2.

       

      “CARES Forgiveness Date” means the fifth (5th) Business Day after the date that the Borrowers obtains a final determination by the lender of the CARES Debt
        (and, to the extent required, the Small Business Administration) (or such longer period as may be approved in writing by Lender) regarding the amount of CARES Debt, if any, that will be forgiven pursuant to the provisions of the CARES Act - Title
        I.

       

       “Small Business Administration” means the U.S. Small Business Administration.

       

      SECTION 3.      Effectiveness. This Amendment shall become effective on the date upon which the Lender shall have received counterparts of this Amendment, duly executed by the Borrowers and Guarantor.

       

      
        

        3

        
          

        

      

      SECTION 4.        Limited Effect.  Except as expressly provided herein, the Credit Agreement and the other Loan Documents shall remain unmodified and in full force and effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit
        Agreement or any other Loan Document or a waiver of any other Default or Event of Default, (b) to
          prejudice any right or rights the Lender may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same
          may be amended, restated, supplemented or modified from time to time, or (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrower or any other Person with respect to any waiver, amendment, modification or any other change to the Credit
        Agreement or the Loan Documents or any rights or remedies arising in favor of the Lender, under or with
        respect to any such documents.

       

      SECTION 5.       Representations and Warranties.  Each Borrower and
        Guarantor represents and warrants that (a) it has the corporate power and authority to make, deliver and perform this Amendment, (b) it has taken all necessary corporate or other action to authorize the execution, delivery and performance of this
        Amendment, (c) this Amendment has been duly executed and delivered on behalf of the Borrowers and Guarantor, (d) this Amendment constitutes a legal, valid and binding obligation of the Borrowers and Guarantor,
        enforceable against the Borrowers and Guarantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights
        generally and by general equitable principles, (e) each of the representations and warranties made by the Borrowers and Guarantor in or pursuant to the Loan Documents is true and correct in all material respects on and as of the date hereof as if
        made on and as of the date hereof, except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date; provided that any representation or warranty that is
        qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates, (f) as of the date hereof, it has no defenses,
        setoffs, rights of recoupment, counterclaims or claims of any nature whatsoever with respect to the Loan Documents or the Obligations due thereunder, and to the extent any such defenses, setoffs, rights of recoupment, counterclaims or claims may
        exist on or prior to the date hereof, the same are hereby expressly waived, released and discharged, and (g) no Default or Event of Default has occurred and is continuing as of the date hereof or after giving effect hereto.

       

      SECTION 6.      Acknowledgment and Reaffirmation. By its execution hereof, each Borrower and Guarantor hereby
          expressly (a) acknowledges and agrees to the terms and conditions of this Amendment, (b) reaffirms all of its respective covenants, representations, warranties and other obligations set forth in the Credit Agreement and the other Loan Documents
          to which it is a party, (c) ratifies and confirms all security interests granted to the Lender under the Loan Documents, and (d) acknowledges that its respective covenants, representations, warranties and
          other obligations set forth in the Credit Agreement and the other Loan Documents to which it is a party remain in full force and effect.  This Amendment shall be deemed to be a Loan Document, as such term is defined in the Credit Agreement.

       

      SECTION 7.      Costs and Expenses. Borrowers agree to pay in accordance with Section 7.4 of the Credit Agreement all reasonable costs and
        expenses of the Lender in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of
        counsel for the Lender with respect thereto and with respect to advising Lender as to its rights and responsibilities hereunder and thereunder.

       

      SECTION 8.     Execution in Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts
        taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

       

      
        

        4

        
          

        

      

      SECTION 9.      Governing Law. The validity, interpretation and enforcement of this Amendment shall be governed by the internal laws of the State of New York but excluding any principles of
        conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

       

      SECTION 10.    Entire Agreement.  This Amendment is the entire agreement, and supersedes any prior agreements and contemporaneous oral agreements, of the parties concerning its subject
        matter.

       

      SECTION 11.     Successors and Assigns. This Amendment shall be binding on and inure to the benefit of the parties and their respective heirs, beneficiaries, successors and permitted
        assigns.

       

      SECTION 12.     Waiver of Jury Trial; Arbitration; EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
          RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
          FOREGOING WAIVER AND CONSENT AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

       

      [SIGNATURE PAGES FOLLOW]

       

      
        

        5

        
          

        

      

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers, all as of the day and year first written above.

       

      	 	
              BORROWERS:

            
	 	 
	 	
              CHARLES & COLVARD, LTD.

            
	 	 
	 	
              By:

            	
              /s/ Clint J. Pete

            
	 	
              Name: Clint J. Pete

            
	 	
              Title: Chief Financial Officer

            
	 	  
	 	
              charlesandcolvard.com, LLC

            
	 	 
	 	
              By:

            	
              /s/ Clint J. Pete

            
	 	
              Name: Clint J. Pete

            
	 	
              Title: Manager

            
	 	  
	 	
              GUARANTOR:

            
	 	 
	 	
              CHARLES & COLVARD DIRECT, LLC

            
	 	  
	 	
              By:

            	
              /s/ Clint J. Pete

            
	 	
              Name: Clint J. Pete

            
	 	
              Title: Manager

            

      

      

      
        

        6

        
          

        

      

      	 	
              LENDER:

            
	 	 
	 	
              WHITE OAK COMMERCIAL FINANCE, LLC

            
	 	 
	 	
              By:

            	
              /s/ Carlos Acedo

            
	 	
              Name:   Carlos Acedo

            
	 	
              Title:  Vice President

            

      

      

      

      

      7

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