Document:

Security Agreement

 EXHIBIT 10.65 
 EXECUTION COPY 
  
 SECURITY
AGREEMENT 
  
 THIS SECURITY AGREEMENT (this “Agreement”), dated
effective as of August 15, 2004, between REEVES PARK, INC., a Minnesota corporation whose mailing address is 5050 Lincoln Drive, Suite 470, Edina, MN 55436, Attention: Klaus Jung (hereinafter referred to as “Debtor”) and CHARLES &
COLVARD, LTD, a North Carolina corporation whose mailing address is 300 Perimeter Park Drive, Suite A, Morrisville, NC 27560 (hereinafter referred to as “Secured Party”). 
  
 R E C I T A L S: 
  
 A. Debtor has entered into that certain Moissanite Consignment Agreement (as defined below). 
  
 B. The execution and delivery of this Agreement is required by the Moissanite Consignment Agreement as a condition to making
extensions of credit thereunder. 
  
 NOW THEREFORE, in
consideration of the premises and for other good and valuable consideration, the adequacy, receipt, and sufficiency of which are hereby acknowledged, and in order to induce Secured Party to enter the Transaction pursuant to the Moissanite
Consignment Agreement, the parties hereto hereby agree as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 Section 1.1. Definitions. As used in this Agreement, the following terms have the following meanings: 
  
 “Account” means any “account,” as such term is
defined in Article 9 of the UCC, now owned or hereafter acquired by Debtor 
  
 “Collateral” has the meaning specified in Section 2.1 of this Agreement. 
  
 “Event of Default” means the occurrence of any of the following: (i) any failure by Debtor to pay any amount due to Secured Party when
and as due under the Moissanite Consignment Agreement, any other Transaction Document or in connection with the Transaction, (ii) Debtor shall default in the due observance or performance of any other covenant, condition or agreement set forth in
this Agreement, the Moissanite Consignment Agreement, any other Transaction Document; (iii) entry of any single judgment against Debtor in excess of $100,000, or entry of judgments against Debtor that in the aggregate exceed $100,000 and that are
not bonded over or discharged within 30 days; (iv) Debtor shall become insolvent or shall be adjudicated bankrupt; bankruptcy, insolvency, reorganization, arrangement, debt 

 adjustment, liquidation, or receivership proceedings in which Debtor is alleged to be insolvent or unable to pay its
debts as they mature, are instituted by or against Debtor, and Debtor shall consent to the same or shall admit in writing the material allegations of the petition filed in such proceedings, or the proceedings are not dismissed within the time
permitted for the posting of bond and no bond shall have been posted in the matter (v) any material statement, representation or warranty of Debtor herein is untrue in any material respect; or (vi) Debtor shall default under its fine jewelry
consignment agreement with J.C. Penny Corporation dated July 20, 2004. 
  
 “General Intangibles” means any “general intangibles,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Debtor. 
  
 “Lien” means any lien, mortgage, security interest, tax lien, financing statement, pledge, charge,
hypothecation or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law or otherwise. 
  
 “Moissanite Consignment Agreement” means that certain
agreement dated effective as of August 15, 2004 by and between Secured Party as “Consignor” and Debtor as “Consignee” pursuant to which Secured Party has and will consign and deliver Charles & Colvard created Moisssanite
jewels to Debtor, as such agreement may be amended, restated, restated or otherwise modified from time to time. 
  
 “Obligations” shall mean and include (a) the due and punctual payment by the Debtor of: (i) all amounts payable to Secured Party pursuant
to the Moissanite Consignment Agreement or otherwise payable to Secured Party in connection with the Transaction, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and any renewals,
modifications or extensions thereof, in whole or in part and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) of the Debtor to the Secured Party under the Transaction Documents, (b) the due and
punctual payment and performance of all other obligations of the Debtor under or pursuant to the Moissanite Consignment Agreement and the other Transaction Documents, and any renewals, modifications or extensions thereof, in whole or in part; (c)
the payment and performance by Debtor of all obligations, agreements, covenants, representations and warranties in this Agreement, the Moissanite Consignment Agreement, the Transaction Documents and any other document executed and delivered in
connection therewith (the liabilities, obligations and indebtedness described in clauses (a) through (c), inclusive, of this paragraph are herein collectively referred to as the “Obligations”). 
  
 “Payment Intangibles” means “payment intangibles”
as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Debtor. 
  
 “Proceeds” means any “proceeds,” as such term is defined in Article 9 of the UCC. 
  
 “Security Agreement” means this Security Agreement dated as of August 15, 2004 by and between Secured Party and Debtor. 
  

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 “Transaction” means the consignment transactions between Secured Party and Debtor
pursuant to and as described in and contemplated by the Moissanite Consignment Agreement. 
  
 “Transaction Documents” means and refers collectively to the Moissanite Consignment Agreement, this Security Agreement and all other documents now or hereafter evidencing or securing the Transaction,
and any renewals, modifications or extensions thereof, in whole or in part; 
  
 “UCC” means the Uniform Commercial Code as in effect in the State of North Carolina and/or any other jurisdiction the laws of which may be applicable to or in connection with the creation, perfection
or priority of any Lien on any Collateral. 
  
 Terms used herein, which are
defined in the UCC, shall have the meanings determined in accordance with the UCC. 
  
 ARTICLE II 
 SECURITY INTEREST 
  
 Section 2.1. Security Interest. As Collateral security for the prompt payment and performance in full when due of the
Obligations, Debtor hereby pledges and assigns to Secured Party, and grants to Secured Party a continuing lien on and security interest in, all of Debtor’s right, title, and interest in and to the following, whether now owned or hereafter
arising or acquired and wherever located (collectively, the “Collateral”): 
  
 (a) all Accounts of Debtor from J.C Penney Corporation (“JC Penney”) at any time owing to Debtor; 
  
 (b) all General Intangibles paid or payable by JC Penney to
Debtor; 
  
 (c) all Payment Intangibles paid or
payable by JC Penney to Debtor; 
  
 (d) all
products and Proceeds, in cash or otherwise, of any of the property described in the foregoing clauses (a) through (c); 
  
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES

  
 To induce Secured Party to enter into this Agreement and the
Moissanite Consignment Agreement, Debtor represents and warrants as follows: 
  
 Section 3.1. Office and Tax Identification Number. On the date hereof, the principal place of business, mailing address and the chief executive office of Debtor is identified in the first paragraph of this
Agreement Debtor’s United States Federal Income Tax Identification Number is set forth on the signature page hereof. 
  
 Section 3.2. Ownership; No Encumbrances. Except for the security interest (and pledges and assignments as applicable) granted hereby, and
subject to the terms of any Intercreditor Agreement entered into by Secured Party with SPECTRUM Commercial Services 
  

 -3 

 Company, the Debtor is, and as to any property acquired after the date hereof which is included within the Collateral,
Debtor will be, the owner of all such Collateral free and clear from all charges, Liens, security interests, adverse claims and encumbrances of any and every nature whatsoever. 
  
 ARTICLE IV 
 COVENANTS 
  
 Debtor covenants and agrees that, as long
as the Obligations or any part thereof are outstanding or any amount payable under the Transaction remains unpaid under the Moissanite Consignment Agreement, Debtor will perform and observe each of the following covenants: 
  
 Section 4.1. Accounts. Debtor shall, in accordance with its customary
business practices, endeavor to collect or cause to be collected from JC Penney as Account Debtor under its Accounts, as and when due, any and all amounts owing under such Accounts. Without the prior written consent of Secured Party, Debtor shall
not, except in the ordinary course of business, and in no event when any Event of Default exists, (a) grant any extension of time for any payment with respect to any of the Accounts beyond sixty (60) days after such payment’s due date, (b)
compromise, compound, or settle any of the Accounts for less than the full amount thereof, (c) release, in whole or in part, any Person liable for payment of any of the Accounts, (d) allow any credit or discount for payment with respect to any
Account other than trade or other customary discounts granted in the ordinary course of business, or (e) release any Lien or guaranty securing any Account unless the Account has been paid. 
  
 Section 4.2. Corporate Changes. Debtor shall not change its name,
identity, corporate structure, or its United States Tax Identification Number in any manner that might make any financing statement filed in connection with this Agreement seriously misleading unless Debtor shall have given Secured Party not less
than thirty (30) days prior written notice thereof and shall have taken all action reasonably deemed necessary or desirable by Secured Party to protect its liens with the perfection and priority thereof required by the Transaction Documents.

  
 ARTICLE V 
 RIGHTS OF SECURED PARTY 
  
 Section 5.1. Power of Attorney. To the extent permitted by applicable law, Debtor hereby irrevocably constitutes and appoints Secured Party, with
full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the name of Debtor or in its own name, to take, after the occurrence and during the continuance of an Event of Default, any and all
actions and to execute any and all documents and instruments which Secured Party at any time and from time to time deems necessary to accomplish the purposes of this agreement and, without limiting the generality of the foregoing, such Debtor hereby
gives Secured Party the power and right on behalf of Debtor and in its own name to do any of the following after the occurrence and during the continuance of an Event of Default, without notice to, or the consent of, Debtor: 
  
 (a) to demand, sue for, collect, or receive, in the name of
Debtor or in Secured Party’s own name, any money or property at any time payable or receivable on account of 
  

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 or in exchange for any of the Collateral and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, documents of title, or any other instruments for the payment of money under the Collateral or any policy of insurance; 
  
 (b) (i) to direct Account Debtors and any other parties liable for any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to Secured Party or as Secured Party shall direct (Debtor agrees that if any Proceeds of any Collateral (including payments made in respect of Accounts) shall be received by Debtor while an Event of
Default exists, Debtor shall promptly deliver such Proceeds to Secured Party with any necessary endorsements, and until such Proceeds are delivered to Secured Party, such Proceeds shall be held in trust by Debtor for the benefit of Secured Party and
shall not be commingled with any other funds or property of Debtor); (ii) to receive payment of and receipt for any and all monies, claims and other amounts due and to become due at any time in respect of or arising out of any Collateral; (iii) to
commence and prosecute any suit, action, or proceeding at law or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral; (iv) to defend any suit,
action, or proceeding brought against Debtor with respect to any Collateral; (v) to settle, compromise, or adjust any suit, action, or proceeding described above and, in connection therewith, to give such discharges or releases as Secured Party may
deem appropriate; insurance); and (vi) to sell, transfer, pledge, convey, make any agreement with respect to, or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party’s option and Debtor’s expense, at any time, or from time to time, all acts and things which Secured Party deems necessary to protect, preserve, maintain, or realize upon the Collateral and Secured
Party’s security interest therein. 
  
 THIS POWER OF
ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE HEREOF. 
  
 ARTICLE VI 
 DEFAULT 
  
 Section 6.1. Rights and Remedies. If an Event of Default shall have
occurred and be continuing, Secured Party shall have the following rights and remedies: 
  
 (a) In addition to all other rights and remedies granted to Secured Party in this Agreement or in any other Transaction Document or by
applicable law, Secured Party shall have all of the rights and remedies of a Secured Party under the UCC (whether or not the UCC applies to the affected Collateral). Debtor shall be liable for all reasonable expenses of retaking, holding, preparing
for sale, or the like, and all reasonable attorneys’ fees, legal expenses, and other costs and expenses incurred by Secured Party in connection with the collection of the Obligations and the enforcement of Secured Party’s rights under this
Agreement. Debtor shall remain liable for any deficiency if the Proceeds of any sale or other disposition of the Collateral applied to the Obligations are insufficient to pay the Obligations in full. Debtor waives all rights of marshaling,
valuation, and appraisal in respect of the Collateral. 
  

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 (b) Secured Party may cause any or all of the Collateral held by it to be transferred
into the name of Secured Party or the name or names of Secured Party’s nominee or nominees. 
  
 (c) Secured Party may exercise any and all rights and remedies of Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of Debtor to demand or otherwise require payment of any amount under, or performance of any provision of, any of the Collateral. 
  

ARTICLE VII 
 MISCELLANEOUS 
  
 Section 7.1. No Waiver; Cumulative Remedies. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or
privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement are cumulative and not exclusive of any rights and remedies
provided by law. 
  
 Section 7.2. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their respective successors and assigns, except that Debtor may not assign any of its rights or obligations under this Agreement without the prior written
consent of Secured Party. 
  
 Section 7.3. Amendment. The
provisions of this agreement may be amended or waived only by an instrument in writing signed by the parties hereto. 
  
 Section 7.4. Notices. All notices and other communications provided for in this Agreement shall be given or made by telefax, overnight courier
service, personal delivery or U.S. Mail at the addresses shown for each party in the first paragraph of this Agreement . 
  
 Section 7.5. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of North Carolina

  
 Section 7.6. Survival of Representations and
Warranties. All representations and warranties made in this Agreement or in any certificate delivered pursuant hereto shall survive the execution and delivery of this Agreement 
  
 Section 7.7. Severability. Any provision of this Agreement which is determined by a court of competent jurisdiction
to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
  

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 Section 7.8. Termination. If all of the Obligations shall have been paid and performed in full,
Secured Party shall, upon the written request of Debtor, execute and deliver to the Debtor a proper instrument or instruments acknowledging the release and termination of the security interests created by this Agreement Notwithstanding anything to
the contrary contained in this Agreement, if the payment of any amount of the Obligations is rescinded, voided or must otherwise be refunded by Secured Party upon the insolvency, bankruptcy or reorganization of the Debtor or otherwise for any reason
whatsoever, then the security interests created by this Agreement will be automatically reinstated and become automatically effective and in full force and effect, all to the extent that and as though such payment so rescinded, voided or otherwise
refunded had never been made and such release and termination of such security interest had never been given. 
  
 Section 7.9. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of
which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement. 
  

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

  

			
	DEBTOR:
	
	 REEVES PARK, INC.

		
	 By:
	 	 /s/ Klaus Jung

	 Name:
	 	Klaus Jung
	 Title:
	 	President

  
 Debtor’s Federal Income Tax
Identification Number: 
  
 _______________________________________ 

			
	SECURED PARTY:
	
	 CHARLES & COLVARD, LTD

		
	 By:
	 	 /s/ James R. Braun

	 Name:
	 	James R. Braun
	 Title:
	 	Vice President Finance & CFO

  

 -8Consignment Agreement

 Exhibit 10.66 
  
 Reeves Park, Inc. 
 August 16, 2004 
 Page 1 
  
 REDACTED – OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE 
 COMMISSION AND IS DENOTED HEREIN BY XXXXX. 
  
 August 16, 2004 
  
 Reeves Park, Inc. 
 5050 Lincoln Drive, Suite 470 
 Edina, MN 55436 
 Attention: Klaus Jung 
  
 Re: Charles & Colvard Created Moissanite Jewel
Consignment Agreement 
  
 Dear Klaus: 
  
 This letter sets forth the terms of the agreement (“Agreement”)
made effective as of August 15, 2004 (“Effective Date”) by and between Charles & Colvard, Ltd. (“Consignor”) a North Carolina corporation, and Reeves Park, Inc. (“Reeves Park”), a Minnesota corporation, pursuant to
which Consignor will consign and deliver Charles & Colvard created moisssanite Jewels (the “Jewels”) to Reeves Park. 
  
 1. Consigned Merchandise. This Agreement pertains to any and all Jewels that Consignor consigns or delivers on consignment to or for the account of
Reeves Park during the term of this Agreement. It is understood by the parties that Reeves Park shall incorporate all Jewels into fine jewelry items it shall consign to J.C. Penney Corporation, Inc. (“JCPenney”) for the purpose of
introducing moissanite into approximately 450 JCPenney retail locations. 
  
 The assortment of the Jewels being consigned and delivered to Reeves Park by Consignor will, subject to availability, be initially as set forth on Exhibit A, and subsequently such Exhibit A may be amended by a revised
Exhibit A signed by both parties. Any such amended Exhibit A shall be incorporated and made a part of this Agreement. 
  
 2. Title; Security Interest. 
  
 a. This Agreement is intended to be a true consignment of the Jewels. Therefore Consignor will retain title to the Jewels until sold to
customers of JCPenney. The preceding sentence shall not be deemed to waive Consignor’s right to receive payments as set forth in this Agreement. 

 Reeves Park, Inc. 
 August 16, 2004 
 Page 2 
  
 b. If, however, it is
determined that the consignment created by this Agreement is one intended as security, or the consignment is a sale or return transaction, or other sale, this Agreement will constitute a security agreement pursuant to which Reeves Park grants
Consignor a purchase money security interest in the Jewels. Reeves Park hereby authorizes Consignor to file UCC-1 financing statements with respect to its security interest in the Jewels. In any UCC filings made by Consignor with respect to the
Jewels, Consignor agrees to describe the collateral as follows: 
  
 “All Charles & Colvard created moissanite Jewels that are now or may at any time hereafter be delivered on consignment or consigned by secured party to debtor. Future consignments and deliveries are covered.

  
 Upon Reeves Park’s satisfaction of its obligations to
Consignor under this Agreement, including the payment of all amounts due Consignor and the return of all unsold Jewels, Consignor will make all appropriate filings necessary to terminate the UCC-1 filings and any other UCC filings made by Consignor
with respect to the Jewels. Consignor further agrees to provide Reeves Park with “as filed” copies of all UCC filings made by it regarding the Jewels. 
  

Within 15 days after each shipment of fine jewelry by Reeves Park to JCPenney, Reeves Park shall present evidence to Consignor of an enforceable
security agreement for merchandise sent to JCPenney, as well as providing proof of insurance by either JCPenney or Reeves Park. Copies of the UCC filings will be made available to Consignor on a timely basis. Reeves Park covenants and agrees that it
shall retain a perfected first priority purchase money security interest in all merchandise delivered to JCPenney and shall cause UCC Financing Statements to be timely filed in all appropriate jurisdictions with respect to such merchandise as
purchase money transactions in inventory under Section 9-103 and other applicable sections of the Uniform Commercial Code so as to maintain a first priority perfected security interest in all merchandise delivered to JCPenney. Reeves Park shall also
execute and deliver prior to the delivery of any merchandise to JCPenney, a collateral assignment and security agreement in form and substance satisfactory to Consignor and its counsel granting to Consignor as security for performance of all of
Reeves Park’s obligations to Consignor a first priority security interest in (i) the Fine Jewelry Consignment Agreement between Reeves Park and JCPenney and (ii) any and all security agreements executed by JCPenney to or for the benefit of
Reeves Park in connection with the merchandise delivered to JCPenney together with all of Reeves Park rights in and to the collateral secured thereby, and proceeds thereof and all of its rights as secured party thereunder. 
  
 Reeves Park is responsible for tracking the specific locations of the Jewels
and Consignor shall, upon reasonable notice, have the right to physically inspect the Jewels at all such locations. 
  
 3. Delivery. Delivery of the Jewels shall be on the terms set out in the Manufacturer’s Agreement between the parties (the
“Manufacturer’s Agreement”). Freight charges shall be calculated and charged as set out in the Manufacturer’s Agreement. 
  
 4. Invoices; Payment Terms; Replenishment; Reconciliation. 
  
 a. For each shipment of Jewels, Consignor will send Reeves Park a memo invoice for such Jewels at
Consignor’s prices as provided in the Manufacturer’s Agreement. 

 Reeves Park, Inc. 
 August 16, 2004 
 Page 3 
  
 b. Consignor will be paid for
the Jewels upon the sale of the fine jewelry. JCPenney will furnish Reeves Park with a biweekly sales report, which will report the fine jewelry (and thus Jewels) sold in the previous two JCPenney fiscal weeks. Reeves Park shall immediately upon
receipt furnish such biweekly sales report to Consignor, accompanied by a list of Jewels incorporated in such fine jewelry. Reeves Park shall grant Consignor full access to the JCPenney vendor system to monitor and verify the sales activity at
JCPenney. Consignor shall invoice Reeves Park for all such Jewels sold on net 30 day terms upon receipt of the biweekly sales report, and Consignor, at its discretion, shall have the right to invoice Reeves Park for all sales activity reported on
the JCPenney vendor system prior to the end of each calendar quarter. 
  
 c. Subject to the terms of this Agreement, the availability of the Jewels, and unless directed otherwise by JCPenney, Consignor shall provide Reeves Park with full replenishment of all Jewels in the fine jewelry upon
receipt of information from JCPenney or Reeves Park that such fine jewelry has been sold by JCPenney. Such Jewels shall be shipped subject to the terms of this Agreement. 
  
 d. Upon Consignor’s reasonable request, Reeves Park will furnish a report indicating the number, size
and style of Jewels held by JCPenney on consignment from Reeves Park according to its accounting records. At least once per year, when JCPenney physically inventories the fine jewelry on consignment from Reeves Park and pays Reeves Park for any fine
jewelry that is determined to have been lost, stolen, damaged or unaccounted for while in JCPenney’s possession, Reeves Park shall immediately provide Consignor with a listing of such fine jewelry and shall pay Consignor for all Jewels used in
such fine jewelry. In the event, JCPenney elects to undertake such physical inventory on a rolling basis over a period of months, payment by Reeves Park to Consignor shall be adjusted to reflect the actual schedule of payments received by Reeves
Park. For the avoidance of doubt, Reeves Park will not be obligated to pay for any Jewels that were omitted from packing, or defective or damaged at the time of delivery to Reeves Park; provided, in the case of defective or damaged items, the same
are promptly returned to Consignor. 
  
 e. A
final full reconciliation will be made within 60 days of the date that (i) all unsold Jewels are returned to Consignor, or (ii) all Jewels have been sold and no further consignments are contemplated. 
  
 5. Risk of Loss. Even though Consignor retains title to the Jewels,
Reeves Park will bear the risk of loss with respect to the Jewels while in Reeves Park’s possession. For the avoidance of doubt, the preceding sentence does not apply to any Jewels that were omitted from packing, or defective or damaged at the
time of delivery to Reeves Park. 
  
 6. Return of Jewels to
Consignor. Reeves Park shall have the right to return some or all of the Jewels to Consignor upon prior notice to Consignor. If Reeves Park exercises this right, Reeves Park shall return the designated Jewels not later than 60 days from the date
such notice is given by it. All Jewels shall be returned as loose jewels and not in fine jewelry. 

 Reeves Park, Inc. 
 August 16, 2004 
 Page 4 
  
 Reeves Park shall bear any and all costs
associated with its return of the Jewels to Consignor’s facility pursuant to this section. The risk of loss with respect to the Jewels returned to Consignor pursuant to this section shall be on Reeves Park until delivery to Consignor’s
facility, at which time risk of loss shall pass to Consignor. 
  
 7. Events of Default. The following shall constitute an “Event of Default” under this Agreement: (a) Reeves Park’s failure to pay any and all payments required to be made by it under this Agreement; (b) either party
breaches a representation, warranty, guaranty or other obligation of it under this Agreement; or (c) either party becomes insolvent or subject to any bankruptcy, insolvency, or receivership proceeding. Upon the occurrence of an Event of Default, the
non-defaulting party shall notify the defaulting party, and the defaulting party shall have a period of 15 days from receipt of notice to cure the Event of Default. If the Event of Default is not cured within the 15-day period, the non-defaulting
party may terminate Agreement immediately upon notice to the defaulting party. 
  
 8. Term; Termination. The term of this Agreement will commence on the Effective Date and continue until January 31, 2005. Termination shall not relieve Reeves Park of any liability to Consignor for payment for
any Jewels not returned to Consignor. Upon termination, Reeves Park shall return all unsold Jewels to Consignor’s facility as loose Jewels, promptly following, but in no event later than 60 days from the effective date of, such termination. The
provisions of section 6 of this Agreement will apply to such return. 
  
 9. Property Taxes. Reeves Park will pay any taxes, levies and/or assessments that may be owed or imposed by virtue of Reeves Park’s possession of the Jewels in its facilities, or its customers. 
  
 10. Consignor’s Standard Terms and Conditions. Except to the
extent expressly modified by or inconsistent with this Agreement, or inconsistent with the consignment nature of the contemplated transactions, Consignor’s standard terms and conditions as set out in its Manufacturing Agreement with Reeves Park
will apply to the consignment transactions and the Jewels. 
  
 11.
Notice. Any notice given by either party pursuant to this Agreement shall be given in writing and be deemed to have been received by the other party upon the sending thereof by receipted courier, express mail, registered or certified mail, or
facsimile transmission, addressed to such party at the address or facsimile number, designated by that party. A notice given by facsimile transmission shall not be effective until the original of such notice is also sent by receipted courier,
express mail, or registered or certified mail. 
  
 12.
Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE PARTIES HEREBY SUBMIT TO EXCLUSIVE JURISDICTION AND
VENUE IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA IN RALEIGH, NORTH CAROLINA. 

 Reeves Park, Inc. 
 August 16, 2004 
 Page 5 
  
 13. General. 
  
 a. This Agreement may not be modified except in writing
signed by both parties. 
  
 b. This Agreement
shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns (with prior written consent), and any subsidiary or affiliated company effectively controlled by any of them. 
  
 c. Each party has caused this Agreement to be properly
executed on its behalf as of the Effective Date first above written. 
  
 We have sent two originals of this Agreement. Please have both signed by an authorized officer where indicated below, and return one to us. 
  

			
	 Sincerely,

	
	 CHARLES & COLVARD, LTD.

		
	 By:
	 	 /s/ Robert S. Thomas

	 	 	Robert S. Thomas, President

  
 ACCEPTED AND AGREED this 16th
day 
 of August, 2004. 
  

			
	 REEVES PARK, INC.

		
	 By:
	 	 /s/ Klaus Jung

		
	 Print Name:
	 	Klaus Jung
		
	 Title:
	 	President

 Reeves Park, Inc. 
 August 16, 2004 
 Page 6 
  
 EXHIBIT A 
  
 Page 1 of 9 
 8/13/2004 11:14:03 
  
 SALES ORDER ACKNOWLEDGEMENT 
  

			
	 Order No: 29842-0
	  	        Date Entered: 8/5/2004
		
	 Cust. PO No:
	  	            Date Sched Ship: 8/5/2004
		
	 Sold To: 3268
	  	Ship To:
		
	                    REEVES PARK INC.	  	                        XXXXXXXX
	                    P.O. Box 455	  	                        XXXXXXXX
	                    HOPKINS, MN55345-0455	  	                        XXXXXXXX
	 	  	                        XXXXXXXXXXXXXXXX
		
	 Carrier: XXXXXXXXXXXXXXXXXXXXXX
	  	Terms: XXXXXXXXXXXX
		
	 FOB: XXXXXXX
	  	Tax: XXXXXXXXXXXXXXXXXXX

  
 Location: XXXXXX 
  

									
	 Item No/Description

	  	UOM

	  	Ordered

	  	Unit Price

	  	Amount

	 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
	  	XX	  	XXXXX	  	XXXXX	  	XXXXX
	 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
	  	XX	  	XXXXX	  	XXXXX	  	XXXXX
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]