EXCLUSIVE SUPPLY AGREEMENT

Exhibit 10.72

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EXCLUSIVE SUPPLY AGREEMENT

THIS EXCLUSIVE SUPPLY AGREEMENT (“Agreement”) is made and entered into effective as of the 14th day of February, 2005, by and between Jesperator AB (“Jesperator”), an entity organized under the laws of Sweden having its address at Box 255, 178 23 Ekerö, Sweden, with telefax +46 8 560 34354, and Charles & Colvard, Ltd. (“C&C”), a North Carolina corporation having its address at 300 Perimeter Park, Suite A, Morrisville, North Carolina 27560, telefax +1 919 468 5052.

Recitals

WHEREAS, Jesperator is engaged in the business of developing, manufacturing and selling silicon carbide material (SiC) for various applications and desires to supply C&C with SiC; and

WHEREAS, C&C manufactures and markets gemstones fabricated from SiC and desires to purchase SiC from Jesperator; and

WHEREAS, Jesperator and C&C desire to enter into an Exclusive Supply and Loan Agreement for Jesperator to supply C&C with SiC and C&C agrees to purchase SiC from Jesperator as provided herein;

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

1. Exclusivity. During the Initial Term and any Additional Term (as defined below) of this Agreement, Jesperator (including any affiliates of Jesperator) shall not sell SiC in any form to any customer other than C&C if Jesperator has knowledge or has reason to believe that such customer, or its customers, intend to use such material for the purpose of fabricating, distributing or selling faceted jewels or gemstones. Upon termination of this Agreement pursuant to Section 4.3 hereof due to a material breach by Jesperator, Jesperator (including any affiliates of Jesperator) agrees that for the period equal to the Initial Term and the Additional Term, Jesperator shall not sell SiC to any customer if Jesperator has knowledge or has reason to believe that such customer, or its customers, intend to use such material for the purpose of fabricating, distributing or selling faceted jewels or gemstones. This condition, however, is only valid in case C&C continues to stay in the business of fabricating, distribution and selling faceted jewels or gemstones made from SiC and is only valid to the extent it is not in violation of any applicable law in Sweden or in any other relevant jurisdiction.

2. Purchase and Sale of SiC

2.1 Minimum Purchase and Sale Quantities. (a) Minimum Quantities. C&C shall purchase from Jesperator and Jesperator shall sell to C&C SiC meeting the specifications for useable material set out on Exhibit A, in the minimum quantities (“Minimum Quantities”) and at the prices set out on Exhibit B during the periods set forth therein. (b) Minimum Quantities Subject to Capacity. If and to the extent that Jesperator has the production capacity to deliver up to the minimum quantities subject to capacity set

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out on Exhibit B (the “Minimum Quantities Subject to Capacity”), C&C shall purchase from Jesperator and Jesperator shall sell to C&C such Minimum Quantities Subject to Capacity of SiC meeting the specifications for useable material set out on Exhibit A during the periods set forth in Exhibit B. (c) Minimum Quantities Subject to Capacity Commencing September 1, 2006. Commencing September 1, 2006, such Minimum Quantities Subject to Capacity shall, subject to Jesperator’s production capacity, be amount set forth in Exhibit B. No later than 90 days prior to the end of each calendar quarter, Jesperator shall inform C&C of its expected production capacity of SiC meeting the specifications set forth on Exhibit A for the upcoming quarter.

2.2 Useable Material Assessment . Within 10 days of receipt of SiC from Jesperator, C&C shall grade all SiC received from Jesperator according to the specifications set out on Exhibit A. C&C shall provide regular feedback to Jesperator concerning the grading of all SiC. Upon Jesperator’s request and at Jesperator’s expense, SiC not meeting the minimum specifications for useable material shall be returned to Jesperator for analysis. All SiC delivered to C&C and not returned to Jesperator at its expense shall be the property of C&C.

3. Loan to Purchase HTCVD Reactor and Equipment.

3.1 Loan . Concurrent with the execution of this Agreement and as a condition precedent to its effectiveness, C&C shall loan to Jesperator the sum of 400,000 USD (the “Loan”), to be used and repaid by Jesperator in accordance with the terms of this Agreement. The Loan shall not bear interest.

3.2 Use of Proceeds of the Loan . Jesperator shall use the proceeds of the Loan to acquire an HTCVD Reactor (“Reactor”) and equipment to install and operate Reactor (“Equipment”). If the cost of Reactor and Equipment exceed 400,000 USD, Jesperator shall be responsible for such additional purchase price from its own funds.

3.3 Repayment of the Loan . Jesperator shall, for deliveries of SiC to C&C made after December 31, 2005, repay such portion of the Loan as a 35% deduction of the cash payments invoiced to C&C and actually paid by C&C, in the aggregate amount up to the 400,000 USD total of the Loan. Upon the termination of this Agreement (including additional terms) due to Jesperator’s breach, any portion of the Loan remaining unpaid shall be immediately due and payable to C&C. The Loan repayments described above shall be the only repayments required to be made by Jesperator.

3.4 Default in Repayment . Upon default by Jesperator in repayment of the Loan, which default exists on or following June 1, 2006 and is not cured within ninety (90) days of written notice thereof by C&C to Jesperator, C&C may declare the total unpaid balance due and payable, or may, in lieu of further repayment of the loan convert any unpaid portion of the Loan into equity in Jesperator pursuant to Section 3.5 below.

3.5 Conversion to Equity . In the event C&C elects to convert the unpaid portion of the Loan to equity pursuant to Section 3.4 above, a new selected issue of shares shall be directed to C & C by Jesperator whereby C & C shall subscribe for such shares and pay the subscription price by way of setting off in full the unpaid portion of the Loan against the issue price. The number of shares of Common

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Stock of Jesperator (“Common Stock”) to be issued shall be calculated according to the following formula:

Where:

Any election to convert the unpaid portion of the Loan to equity shall be made by written notice to Jesperator, delivered no later than the 20 ^th of a calendar month; the pricing shall be made on the last business day of such month at Jesperator’s notice address, and the shares issued as soon thereafter as practicable.

3.6 Restrictions on C&C’s Ownership of Equity Following Conversion of Debt . C&C shall not sell, mortgage, transfer, assign or otherwise encumber the shares issued as a result of the conversion of the Loan to Common Stock for a period of two (2) years following issuance; provided, however, that in the event Jesperator or its shareholders enters into any merger, stock or asset sale resulting in the transfer of control in Jesperator or its principal business during such period, the shares of Common Stock owned by C&C shall be entitled to participate in any such transaction equally with other shares of Common Stock. Jesperator or its designated party may, at Jesperator’s option, repurchase its Common Stock issued pursuant to Section 3.5 at any time within six months of such purchase by C&C at a price equal to the full amount of the unpaid Loan. In addition, C&C agrees that until July 1, 2008, in the event that any shareholder of Jesperator owning more than 10% of its Common Stock enters into any agreement restricting the sale or transfer of its shares in connection with a private placement or public offering of the Common Stock of Jesperator, shares of the Common Stock owned by C&C shall be subject to the same restrictions and conditions. Any share certificate for Common Stock issued to C&C may bear a legend describing these restrictions.

4. Term and Termination

4.1 Initial Term . The term of this Agreement shall extend through February 28, 2008 unless sooner terminated in accordance with Section 4.3 or by written mutual consent of both parties.

4.2 Additional Term . C&C shall have an option to extend this Agreement for one (1) additional term of four (4) years. Such option shall become exercisable at any time by written notice given no less than ninety (90) days prior to expiration of the initial term.

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4.3 Termination . In the event of a material breach by either party under this Agreement of any obligation to the other party, the other party may terminate this Agreement upon written notice if the breach is not cured within ninety (90) days after giving written notice to the party in breach setting out the nature of the breach in reasonable detail. Sections 1, 3.3, 3.4, 3.5, 3.6, 4.3, 5.8, 6, 7.7, 7.8 and 7.9 shall survive any termination of this Agreement.

5. Terms and Conditions of Purchase

5.1 Standard Orders . C&C agrees to accept and purchase and Jesperator shall sell and ship such minimum monthly quantities of SiC in the indicated periods meeting the specifications as provided in the Agreement. C&C shall submit a detailed specification of types and quantities at least 30 days before the start of the month in question

5.2 Additional Orders . C&C shall submit any additional orders for SiC exceeding the minimum quantities set forth in Exhibit B at least ninety (90) days prior to the requested shipping date. Subject to the foregoing, Jesperator shall use all reasonable efforts to ship the requested SiC on or before the date requested by C&C in its order.

5.3 Invoicing and Payment . Jesperator shall invoice C&C upon shipment of SiC. Payment of each invoice is due within thirty (30) days after the completion of the assessment of useable material by C&C as set out in Section 2.2.

5.4 Taxes or Duties . C&C shall not be liable for any applicable sales, use taxes or other taxes or duties of any nature imposed by any governmental authority with respect to purchases of SiC under this Agreement.

5.5 Shipping Expenses . All shipping expenses, including insurance against loss or damage in transit, will be invoiced to and paid by Jesperator. Material shall be shipped by Jesperator F.O.B. to any U.S. location designated by C&C.

5.6 Force Majeure . Jesperator shall not be liable for or be in default of this Agreement for any delay in delivery or failure to perform due to strike, lockout, riot, war, fire, act of God, act of terrorism or compliance with any law, regulation, order or direction, whether valid or invalid, of any governmental authority or instrumentality thereof. C&C agrees that such delay in delivery or failure to perform any part of this Agreement shall not be grounds to terminate or refuse to comply with any provisions hereof and no penalty of any kind shall be effective against Jesperator for such delay or failure; provided, however, that if such delay or failure extends beyond three (3) months from the originally scheduled date either party may, with written notice to the other, terminate this Agreement without further liability.

5.7 Warranty . All standard “material sales grade” products supplied by Jesperator under this Agreement shall conform to the specifications in Exhibit A, or as may otherwise be agreed in writing by Jesperator and C&C. Non-conforming products as defined in Exhibit A shall be replaced by Jesperator upon return of the defective product, if such