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Exhibit 10.71
REDACTED – OMITTED MATERIAL HAS BEEN
SEPARATELY FILED WITH THE COMMISSION
AND IS DENOTED HEREIN BY *****
February 9, 2005
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Robert S.
Thomas
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Charles
M. Swoboda
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President &
CEO
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President & CEO
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Charles &
Colvard, Ltd.
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Cree,
Inc.
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300 Perimeter
Park, Suite A
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4600
Silicon Drive
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Morrisville, NC
27560
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Durham,
NC 27703
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This letter, when signed on behalf of Charles
& Colvard, Ltd. (formerly C3 Inc.) and Cree, Inc., will serve
as an agreement between Charles & Colvard and Cree amending the
parties’ December 14 th , 2003 letter agreement to provide
the following terms, effective on and after December 27,
2004.
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1.
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Cree will
supply SiC production crystals to Charles & Colvard, and
Charles & Colvard will purchase SiC production crystals from
Cree, according to the terms stated in this agreement.
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2.
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Charles &
Colvard will purchase ***** kg each quarter of calendar 2005 of
“usable material” (where “usable material”
will be determined in the manner described in Paragraph 3) at a
price of *****. Provided that Cree uses its best commercially
reasonable efforts to deliver the quantities of usable material
required by this agreement, Cree will not be held in breach for
delays in delivery. As used in this agreement,
“quarter” refers to fiscal quarters of Cree ending
during the indicated period.
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3.
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The quantity of
“usable material” of crystals delivered to Charles
& Colvard pursuant to this agreement will be determined
according to the following:
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A.
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Material will
be graded according to the specifications in Attachment
A.
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B.
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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.
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C.
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Crystals
shipped to Charles & Colvard must contain at least ***** of
usable material for the 2” crystals, ***** for 2.25”
crystals or ***** for 3” crystals. This usable area must be
contiguous. Crystal diameter to be shipped will be 2”,
2,25” or 3” as determined by Cree.
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4.
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Except as
provided above, the supply and purchase of SiC material will be
governed
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