Document:

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.

      

      

      Exhibit 10.1

      

      

      March 22, 2010

       

      	
              Randy N. McCullough

            	
              Stephen D. Kelley

            
	
              CEO

            	
              Chief Operating Officer

            
	
              Charles & Colvard, Ltd.

            	
              Cree, Inc.

            
	
              300 Perimeter Park, Suite A

            	
              4600 Silicon Drive

            
	
              Morrisville, North Carolina 27560

            	
              Durham, North Carolina 27703

            

       

      This letter, when signed on behalf of Charles & Colvard, Ltd. (“C&C”) and Cree, Inc. (“Cree”), will serve as an agreement between C&C and Cree, effective as of the date first set forth above (the “Agreement”), to amend the parties'
        letter agreement dated November 12, 2007 (which was effective on and after December 25, 2007 and previously amended by the letter dated September 18, 2008) (the “Letter Agreement”) and to document such other mutual agreements as set forth
        herein.  Except as expressly provided herein, the supply and purchase of SiC Materials will be governed by the terms and conditions of the parties’ Amended and Restated Exclusive Supply Agreement dated June 6, 1997 (the “Supply Agreement”, as
        amended).  Capitalized terms used herein which are not defined herein but are defined in the Supply Agreement shall have the meanings specified in the Supply Agreement.

      

      

      	1.	
              Cree and C&C agree that C&C is obligated to purchase [***] kilograms of SiC production crystals previously manufactured by Cree for C&C pursuant the Letter Agreement at a price of $[***] per gram for grade 10 and $[***] per
                gram for grade 20.  This material was previously graded and approved by C&C as “usable material” in accordance with the applicable specifications (Reference: Attachment A).

            

      

      

      	2.	
              Notwithstanding any contrary language in the Letter Agreement, Cree and C&C agree that on or before March 31, 2010, and each calendar month thereafter, C&C will purchase at least [***] kilograms of this previously manufactured
                SiC production crystals until the full amount (i.e., [***] kilograms) of the material identified in Paragraph 1 has been purchased by C&C.

            

      

      

      	3.	
              Notwithstanding any contrary language in the Supply Agreement, the following new provisions shall apply to purchase orders for SiC Materials (other than those orders contemplated by Paragraph 2 above) placed on or after the date of this
                Agreement (each a “New Order”):

            

      

      

      	

            	(a)	
              Lead time for each New Order shall be [***] months.  For example, for delivery of newly manufactured SiC Materials in [***], a New Order must be placed by C&C in [***].  When [***], Cree will advise C&C of any reduction in the
                applicable lead time for subsequent orders; and

            

      

      

      	

            	(b)	
              The minimum order quantity for each New Order placed by C&C in accordance with the terms defined by the Supply Agreement shall be [***] kilograms.

            

      

      

      	4.	
              Planning: On or before the first day of each calendar quarter during the Term of this Agreement, starting with the calendar quarter beginning on October 1, 2010, C&C will submit to Cree via facsimile or e-mail a rolling forecast of
                its projected requirements for SiC Materials to be purchased from Cree during the next four (4) calendar quarters in a format to be agreed upon by the parties. Although such forecasts are for planning purposes only and do not represent a
                commitment by C&C to purchase or Cree to sell any SiC Materials, C&C will endeavor to submit timely and accurate forecasts to ensure that Cree has the most current information available to anticipate and plan its production
                schedule.

            

      

      

      	5.	
              When the rolling forecast first indicates that newly manufactured SiC Materials are needed by C&C in [***] months, Cree and C&C will begin proactive discussions on the specifications and prices that will be applicable to such
                materials, including any necessary changes in the crystal diameter and grading process due to interim changes in Cree’s manufacturing process.  Consistent with past practices, the parties shall agree in writing on prices, quarterly
                quantities, and any necessary modifications to the specifications prior to the resumption of New Orders; provided however, this provision does not alter the rights and duties of the parties under the Supply Agreement.

            

      

      

      
        
          

      

      
      	6.	
              To the parties’ knowledge, as of the effective date of this Agreement there are no existing defaults under the Supply Agreement nor events which have occurred that, with the giving of notice or the passing of time, will become a default
                under the Supply Agreement.

            

      

      

      	7.	
              The contents of this Agreement shall be considered “Confidential Information” of each party subject to the provisions of Section 5 of the Supply Agreement.

            

      

      

      ACKNOWLEDGED AND AGREED:

       

      	
              CHARLES & COLVARD, LTD.

            	
              CREE, INC.

            
	
               

            	
               

            
	
              By: /s/ Randy N. McCullough

            	
              By: /s/ John T. Kurtzweil 

            
	
              Randy N. McCullough

            	
              John T. Kurtzweil

            
	
              Chief Executive Officer 

            	
              Chief Financial Officer

            
	
               

            	
               

            
	
              Date:  March 24, 2010

            	
              Date:  March 23, 2010

            

       

      Cree, Inc. and Charles and Colvard, Ltd. Proprietary

      

      

      
        2 of 3

        
          

      

      ATTACHMENT A

      

      

      Specification of usable material as referenced in paragraph 1 above.

      

      

      The quantity of “usable material” of crystals delivered to C&C pursuant to the Letter Agreement will be determined according to the following:

      

      

      	

            	A.	
              Material will be graded according to the specifications defined below.

            

      

      

      	

            	B.	
              Grams of usable material will be calculated on a crystal-by-crystal basis according to the following equation:  (usable mm) as a percent of total length of the crystal in mm multiplied by the actual weight of the crystal in grams.
                “Usable mm” means millimeters of usable material as defined in Attachment A.

            

      

      

      	

            	C.	
              Crystals shipped to C&C must contain at least [***] grams of usable material for the 2" crystals, [***] grams for 2.25" crystals, [***] grams for 2.40” crystals or [***] grams for 3" crystals.  This usable area must be
                contiguous.  Crystal diameter to be shipped will be 2", 2.25", 2.40" or 3", as determined by Cree.

            

       

      COLOR:   Usable material is calculated as "light gray” or “very light gray".  Specifically tone/color number 20 and 10 1 as used in the C&C boule-grading
        screen will be considered acceptable tone and color material.  (Note: Grade 10 is preferred.  Grade 20 material will be valued at $[***] per-gram.)

      

      

      DEFECTS:

      Material volume of acceptable color will be reduced by the percentage of the defects listed in the table below.  C&C shall set the acceptable standards for the quality of both the color and defects of all material purchased pursuant to the
        Letter Agreement. Unless otherwise mutually agreed by the parties in writing, however, the grading of the material by both Cree and C&C will adhere to those standards and methods identified in Notes 1 & 2 below, applied on a consistent
        basis in the same manner as applied during September, October and November of calendar 2003.  Should C&C deem such standards and methods or new defects unacceptable, it can request changes to its volume commitment or the methods, standards or
        list of price reducing defects, with such changes to be effective sixty (60) days after giving Cree notice of the changes.  Cree may request changes to its pricing and/or volume commitment.  If the parties do not agree in writing on the changes to
        be made, before the effective date of the requested changes, either party can terminate the Letter Agreement upon notice and, in that event, the Supply Agreement will govern the parties’ obligations thereafter.

      

      

      	
              ID

            	
              D-Type

            	
               

            	
               

            
	
              1

            	
              [***]

            	
               

            	
              Reduce

            
	
              2

            	
              [***]

            	
               

            	
              Reduce

            
	
              3

            	
              [***]

            	
               

            	
              Reduce

            
	
              4

            	
              [***]

            	
               

            	
              No reduction

            
	
              5

            	
              [***]

            	
               

            	
              Reduce

            
	
              6

            	
              [***]

            	
               

            	
              Reduce

            
	
              7

            	
              [***]

            	
               

            	
               No reduction

            
	
              8

            	
              [***]

            	
               

            	
              Reduce

            
	
              9

            	
              [***]

            	
               

            	
              Reduce

            

      

      

      Notes

      

      

      	1

            	
              CH0257R 17.4mm tone/color 20 (lightest 20), new gray boules that are lighter than this will grade as 10, CE0269R 9.5mm tone/color 30 (lightest 30), new gray boules that are lighter than this will grade as 20

            

      

      

      	2

            	
              Micropipe grading will be performed according to the Cree document identified as the CCG – 948 Rev C, Dense Fine Pipe Grading procedure (Revision 8/17/06).  The area determined according to this procedure multiplied by 1.2, (“20%
                adder”), defines the area of non-usable material for micropipes.

            

      

      

      Cree, Inc. and Charles and Colvard, Ltd. Proprietary

      

      

      

      

      
        3 of 3Portions 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.

      

      

      Exhibit 10.2

    

    
      February 1, 2013

        

      Via Email

      Randy N. McCullough

      Chief Executive Officer

      Charles & Colvard, Ltd.

      300 Perimeter Park, Suite A

      Morrisville, North Carolina 27560

       

      Dear Randy:

       

      This document serves as an amendment to the Letter Agreement between the parties dated March 22, 2010 (“Letter Agreement”).  Except as expressly set forth in the Letter Agreement, as modified herein, the supply and purchase of SiC Materials will
        be governed in all respects by the terms and conditions of the parties’ Amended and Restated Exclusive Supply Agreement dated June 6, 1997 (the “Supply Agreement,” as amended).  Capitalized terms used herein that are not defined shall have the
        meanings specified in the Letter Agreement or the Supply Agreement, as the case may be.

       

      Pursuant to C&C’s recent verbal request for the supply of newly-manufactured SiC Materials on an expedited basis (that is, earlier than the lead time prescribed under the Letter Agreement), Cree
        agrees to use its best efforts to satisfy such need for SiC Materials on the terms provided herein:

       

      	
              

              

            	1)  	
              Timeline for the Reestablishment of Manufacturing Capability, Production of Sample Material and Fulfillment of Initial New Order.

            

       

      
        	
                

                

              	
                (a)

              	
                By way of background, under the terms of the Letter Agreement, the parties agreed that a lead time of [****] months for the fulfillment of each New Order for SiC Materials was reasonable, based upon the time required for Cree to
                  reestablish its manufacturing capability.  The parties further agreed that once [****], the lead time required for subsequent orders could be reduced by Cree in its discretion.

              

      

       

      
        	 	
                (b)

              	
                Notwithstanding the foregoing agreements and understandings, upon its receipt of an initial New Order consisting of SiC Materials requirements amounting to no less than $4 million to be delivered by [****], Cree will use best efforts
                  to reestablish the necessary manufacturing capability and begin producing a limited quantity of sample material as soon as reasonably possible, with the goal of submitting such sample material to C&C for review within [****] from the
                  date of Cree’s receipt of such order.

              

      

       

      
        	 	
                (c)

              	
                C&C acknowledges and agrees that in no event will Cree commence the mass manufacture of SiC Materials in fulfillment of the volume of SiC Materials required under the initial New Order until such sample material demonstrates to the
                  reasonable satisfaction of the parties that such materials satisfy the specifications agreed to herein in all material respects. Upon receipt of the sample material, C&C will promptly verify whether the sample material meets the
                  applicable specifications. Following confirmation from C&C, Cree will ramp up production and will commence weekly deliveries as SiC Materials meeting the specifications are produced until the total initial New Order quantity is
                  produced and delivered. C&C agrees to accept such deliveries when made notwithstanding the due date set forth in the initial New Order. It is anticipated that with both parties acting reasonably, the requested volume of SiC Materials
                  set forth under the initial New Order will be delivered no later than [****].

              

      

       

      
        
          

      

      	 	2)

              	
              New Order Requirements.  In recognition of the redeployment of personnel and capital expenditure necessary to reestablish the manufacturing capability
                to fulfill the requirements under the initial New Order, C&C agrees to (a) issue a non-cancellable New Order for the supply of SiC Materials to be delivered in the [****] quarter of [****] upon delivery of $[****] of SiC Materials
                pursuant to the initial New Order; and (b) issue non-cancellable New Orders for SiC Materials for delivery in each consecutive calendar quarter thereafter during the remainder of the term of the Supply Agreement.  The minimum order quantity
                for each New Order after the initial New Order shall be [****] kilograms for delivery in the [****] quarter of [****], [****] kilograms for delivery in the [****] quarter of [****], [****] kilograms for delivery in [****] quarter of [****],
                and [****] kilograms for delivery in the [****] quarters of [****] and for each quarter shall request weekly delivery in nearly equal quantities per week.

            

       

      	 	3)

            	
              Specifications.  Notwithstanding anything to the contrary in the Supply Agreement, Cree agrees to provide C&C with crystals of a quality and grade
                that is similar in all materials respects with the requirements set forth under Attachment A of the Letter Agreement.  The parties acknowledge and agree that any changes to the foregoing specifications must be mutually agreed upon by
                the parties in writing and could impact Cree’s manufacturing process, leading to changes in the price or delivery of SiC Materials hereunder.

            

       

      	 	4)

            	
              Price.  $[****]/gram for grade 10; $[****]/gram for grade 20.  The parties agree that the foregoing pricing shall be subject to change from time to time based upon improvements made by Cree
                to the specifications of the SiC Materials.

            

       

      	 	5)

            	
              Exclusivity.  Exclusivity shall remain in effect as provided in the Supply Agreement.

            

       

      The contents of this amendment to the Letter Agreement shall be considered “Confidential Information” of each party subject to the provisions of Section 5 of the Supply Agreement.  No amendment or modification of this amendment shall be
        effective unless reduced to writing and executed by an officer of each party hereto.

       

      If the foregoing terms and conditions meet with your approval, please execute this document where indicated below and return a signed copy to my attention via fax at (919) [****] or via email at [****].

      

      

      	
              Regards,

            	
              AGREED AND ACCEPTED BY:

            
	 	
              CHARLES & COLVARD, LTD.

            
	
               

            	 
	
              /s/ David T. Emerson

            	
              By /s/ Randy N. McCullough

            
	
              David T. Emerson

            	
              Name  Randy N. McCullough

            
	
              Vice President – Chips and Materials

            	
              Title    Chief Executive Officer

            
	 	
              Date   2/8/13

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