SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KA
                                 AMENDMENT NO. 1

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                     For the fiscal year ended June 30, 1996

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
         For the transition period from ______________ to _____________

                         Commission File number 0-21154

                               CREE RESEARCH, INC.
             (Exact name of registrant as specified in its charter)

    North Carolina                                            56-1572719
    (State or other jurisdiction of                        (I.R.S. Employer
         incorporation or organization)                    Identification No.)

         2810 Meridian Parkway, Suite 176
         Durham, North Carolina                                 27713
         (Address of principal executive offices)             (Zip code)

       Registrant's telephone number, including area code: (919) 361-5709

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.005 par value
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X].

The approximate aggregate market value of the Registrant's voting stock held by
nonaffiliates of the registrant, as of September 26, 1996, was approximately
$124,247,457 (based on the average bid and asked sales prices on that date of
$12.69).

Number of registrant's shares of Common Stock, par value $0.005 per share,
outstanding of September 26, 1996, was 12,300,858.

Documents incorporated by reference: Portions of Proxy Statement accompanying
the notice of the annual meeting of the shareholders of Cree Research, Inc. to
be held on November 12, 1996 (Part III).

The Exhibit Index Appears on Page 4 hereof.



<PAGE>


                                EXPLANATORY NOTE

         This Amendment is being filed solely to provide the Contract between
the Company and Siemens A.G., dated September 11, 1996. Confidential treatment
for certain portions of the Contract was requested pursuant to Rule 24b-2.
Certain portions of the Contract that were not previously disclosed pending the
Securities and Exchange Commission's determination of the Company's request for
confidential treatment are included herein.


                                     PART IV


Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.


(a) (3)           Exhibits (* filed herewith):

Exhibit No.                Description

10.53*            Contract between the Company and Siemens A.G., dated
                           September 11, 1996




                                       2



<PAGE>



                                   SIGNATURES



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant duly caused this report on Form 10-K/A to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                   CREE RESEARCH, INC.


                                   By: /s/ F. Neal Hunter
                                   Name:  F. Neal Hunter
                                   Title: President and Chief Executive Officer

Date: November 18, 1996





                                       3


<PAGE>



                                  EXHIBIT INDEX

Exhibit No.         Description                             Sequential Page No.

10.53*              Contract between the
                    Company and Siemens A.G.,
                    dated September 11, 1996




                                       4






<PAGE>

[*] -- Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Rule 24b-2 of the Commission.


                               PURCHASE AGREEMENT



                                     between



                               CREE RESEARCH, INC.

                           Durham, North Carolina, USA
                                   ("Seller")


                                       and



                           SIEMENS AKTIENGESELLSCHAFT

                                Berlin and Munich
                           Federal Republic of Germany
                                  ("Purchaser")







                             Dated September 6, 1996




<PAGE>





                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                              <C>

1. CONTRACT DOCUMENTS; DEFINITIONS................................................................................1
         1.1. Documents...........................................................................................1
         1.2. Definitions.........................................................................................1


2. PURCHASE AND SALE..............................................................................................2
         2.1. Purchase Commitment.................................................................................2
         2.2. Price...............................................................................................2
         2.3. Payment Terms.......................................................................................2


3. DELIVERY.......................................................................................................3
         3.1. Shipment Schedule...................................................................................3
         3.2. Packaging...........................................................................................3
         3.3. Manner of Shipment..................................................................................3


4. NON-CONFORMING SHIPMENTS.......................................................................................3
         4.1. Reporting of Claims.................................................................................3
         4.2. Remedies for Non-Conforming Shipments...............................................................4
         4.3. Compliance with Instructions........................................................................4


5. TECHNICAL COOPERATION..........................................................................................4


6. WARRANTIES.....................................................................................................4
         6.1. Limited Warranty....................................................................................4
         6.2. Warranty Disclaimer.................................................................................5


7. INDEMNIFICATION................................................................................................5
         7.1. By Seller...........................................................................................5
         7.2. Conditions of Indemnification.......................................................................5


8. LIMITATIONS OF LIABILITY.......................................................................................5


9. FORCE MAJEURE..................................................................................................5


10. TERMINATION...................................................................................................6
         10.1. Termination upon Default or Insolvency.............................................................6
         10.2. Effect of Termination..............................................................................6


11. CONFIDENTIAL INFORMATION......................................................................................6
         11.1. Definition.........................................................................................6



                                     Page i



<PAGE>




         11.2. Identification.....................................................................................6
         11.3. Confidentiality Obligations........................................................................7
         11.4. Terms of Agreement.................................................................................7


12. ADDITIONAL UNDERTAKINGS.......................................................................................7
         12.1.
 Publicity..........................................................................................7
         12.2. Use of Trademarks, Etc.............................................................................7


13. GENERAL.......................................................................................................8
         13.1. Notices............................................................................................8
         13.2. Authority; No Conflicting Obligations..............................................................8
         13.3. Relationship of the Parties........................................................................8
         13.4. Assignment.........................................................................................8
         13.5. Dispute Resolution.................................................................................8
         13.6. Severability.......................................................................................9
         13.7. Amendments; Waiver.................................................................................9
         13.8. No Implied License.................................................................................9
         13.9. Export Regulation..................................................................................9
         13.10. Enforcement Costs.................................................................................9
         13.11. Governing Law.....................................................................................9
         13.12. Construction......................................................................................9
         13.13. United Nations Convention.........................................................................9
         13.14. Entire Agreement..................................................................................9


</TABLE>



                                     Page ii


<PAGE>


[*]-Certain information omitted and filed separately with the Commission 
pursuant to a confidential treatment request under Rule 24b-2 of the Commission.


                                     

                               PURCHASE AGREEMENT


PURCHASE AGREEMENT (this "Agreement"), made and effective as of the 6th day of
September, 1996 (the "Effective Date"), by and between CREE RESEARCH, INC.
(hereinafter referred to as "Seller"), a corporation organized under the laws of
the State of North Carolina, the United States of America, and SIEMENS
AKTIENGESELLSCHAFT (hereinafter referred to as "Purchaser"), a corporation
organized under the laws of the Federal Republic of Germany.

                                                     Recitals

WHEREAS, Seller is engaged in the business, among others, of manufacturing and 
selling LED's in die form; and

WHEREAS, Purchaser is engaged in the business, among others, of manufacturing
LED's packaged in lamp form and desires to purchase a quantity of custom LED die
products from Seller; and

WHEREAS, the parties have agreed on the terms and conditions under which Seller
will sell such LED's to Purchaser and desire to memorialize such terms in this
Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the mutual obligations
undertaken in this Agreement, the parties agree as follows:

1.       CONTRACT DOCUMENTS; DEFINITIONS

         1.1  Documents.

                  The following documents are annexed to and made a part of this
Agreement:

                  (a)    Schedule 1  -- Quantity and Shipment Schedule

                  (b)    Schedule 2 -- Price and Payment Schedule

                  (c)    Schedule 3 -- Product Specifications

                  (d)    Schedule 4 -- Technical Cooperation

         1.2   Definitions.

                  For purposes of this Agreement, the terms defined in this
                  Section 1.2 shall have the meaning specified and such
                  definitions shall apply to both singular and plural forms:

                 (a)  "Affiliates" of a designated corporation, company or other
                      entity (as such term is used in Articles 11 and 12)
                      means all entities which control, are controlled by,
                      or are under common control with the named entity,
                      whether directly or through one or more
                      intermediaries. For purposes of this definition
                      "controlled" and "control" mean ownership of more
                      than fifty percent (50%) of the voting capital stock
                      or other interest having voting rights with respect
                      to the election of the board of directors or similar
                      governing authority.

                  (b)  "Confidential Information" shall have the meaning defined
                       in Section 11.1.




<PAGE>


                  (c)  "Product Specifications" means the specifications set
                       forth in Schedule 3, as the same may be amended from time
                       to time by mutual written agreement of the parties or
                       pursuant to the terms and conditions set forth in such
                       schedule.

                  (d)  "Products" mean LED chips conforming to the Product 
                       Specifications.

2.    PURCHASE AND SALE

      2.1      Purchase Commitment.

               (a) Purchaser will purchase from Seller and Seller will sell to
                   Purchaser the quantity of Products shown in Schedule 1, 
                   subject to and in accordance with the terms and
                   conditions of this Agreement.

               (b)  Concurrently with the execution of this Agreement, Purchaser
                    shall issue a purchase order to Seller evidencing
                    Purchaser's commitment to purchase Products
                    hereunder. The terms and conditions of this Agreement
                    shall govern the purchase of Products hereunder
                    notwithstanding any contrary provisions of such
                    purchase order.

               (c)  Purchaser shall be entitled to reduce the quantity of 
                    Products to be purchased under this Agreement only under the
                    terms and conditions and upon payment of the
                    cancellation charges specified in Schedule 1.

      2.2     Price.

               (a)  The purchase price of the Products is set forth in Schedule
                    2.

               (b)  The prices stated in this Agreement do not include
                    transportation or insurance costs, or any sales, use,
                    excise or other taxes, duties, fees or assessments
                    imposed by any jurisdiction.

               (c)  All applicable taxes, duties, fees or assessments imposed
                    by any jurisdiction with respect to the purchase of
                    the Products (other than taxes on Seller's net
                    income) will be paid by Purchaser. Any taxes, duties,
                    fees or assessments at any time paid by Seller which
                    are to be paid by Purchaser under this Agreement
                    shall be invoiced to Purchaser and reimbursed to
                    Seller.

      2.3      Payment Terms.

               (a)   Purchaser will pay for Products to be purchased under this
                     Agreement in accordance with the payment terms in
                     Schedule 2.

                (b)  Payment will be made in U.S. dollars by wire transfer to an
                     account designated in writing by Seller, without
                     reduction for any currency exchange or other charges.

                (c)  Seller will provide Purchaser an invoice and/or shipping
                     documentation for each shipment showing the quantity
                     shipped, the applicable price, any amounts prepaid by
                     Purchaser for the shipment, and any taxes, duties,
                     fees or other assessments due from Purchaser with
                     respect to the shipment.



                                     Page 2


<PAGE>


                 (d)  Amounts not paid when due under this Agreement shall
                      accrue interest at the rate of twelve percent (12%) per
                      annum or, if less, the maximum rate permitted by law.

3.  DELIVERY

    3.1.     Shipment Schedule.

             (a)     Seller will use all commercially reasonable efforts to ship
                     Products in accordance with the shipment schedule set
                     forth in Schedule 1. Seller reserves the right to
                     ship quantities prior to the scheduled dates;
                     provided, however, that no shipment shall be made
                     such that Purchaser receives the shipment earlier
                     than the calendar month immediately preceding the
                     month such quantity was originally scheduled to be shipped.
                           

              (b)    Seller shall be deemed in default due to a delay in meeting
                     the shipment schedule set forth in Schedule 1 only
                     if, immediately after the last day of any calendar
                     month specified therein, the cumulative quantity
                     actually shipped by Seller is less than ninety-five
                     percent (95%) of the cumulative quantity due to have
                     been shipped.

              (c)    In the event of a default by Seller as provided in
                     Section 3.1(b), Purchaser shall be entitled to
                     liquidated damages of *** percent (*%) per week of
                     the purchase price of the delayed Products, subject
                     to a maximum of *** percent (**%) of such purchase
                     price. If Product shipments are delayed six weeks or
                     more due to circumstances within Seller's reasonable
                     control, then in lieu of the foregoing liquidated
                     damages Purchaser may claim damages actually
                     resulting from the delay up to ***** percent (**%) of
                     the purchase price of the delayed Products.

    3.2.     Packaging.

                  Seller will ship Products in Seller's standard packaging or
                  packaged in such other manner as the parties may mutually
                  agree in writing.

    3.3.     Manner of Shipment.

                  Products shall be shipped F.O.B. Seller's manufacturing
                  facilities by delivery to a transportation company designated
                  by Purchaser. Products shall be deemed delivered to Purchaser
                  when delivered to the transportation company at the shipping
                  point. Title and risk of loss or damage shall pass to
                  Purchaser upon delivery. All transportation charges and
                  expenses, including the cost of insurance against loss or
                  damage in transit, shall be Purchaser's sole responsibility.
                  Any such amounts paid by Seller will be invoiced to and paid
                  by Purchaser.

4.       NON-CONFORMING SHIPMENTS.

         4.1.  Reporting of Claims.

               Except for warranty claims under Article 6, in the event any
               shipment does not conform to the ordered amount and type of
               Product or suffers other faults or defects clearly discernible
               upon reasonable inspection, such non-conformity will be
               reported in writing to Seller as soon as possible and in any
               event no later than thirty (30) days after shipment of the
               Product to Purchaser. All other non-conformities in shipments
               shall be reported in

                                     Page 3



<PAGE>


               writing to Seller promptly upon discovery.  If not so reported, 
               the non-conformity shall be deemed waived.

         4.2.  Remedies for Non-Conforming Shipments.

                  Seller's sole obligation with respect to shipments determined
                  to be non-conforming shall be, at its option, to replace the
                  non-conforming Products (with shipment at Seller's expense) or
                  to issue a credit to Purchaser in the amount of the price paid
                  for such Products with interest calculated at the rate of
                  twelve percent (12%) per annum from the date of payment to the
                  date of credit. This paragraph states Seller's sole
                  obligations with respect to non-conforming shipments. After
                  acceptance of any shipment Purchaser's sole remedies for
                  defects in such shipment shall be as provided in the warranty
                  provisions of this Agreement.

         4.3.   Compliance with Instructions.

                  In addition to such other duties as may be imposed by law,
                  Purchaser will comply with all of Seller's reasonable
                  instructions regarding rejected goods. If Purchaser incurs any
                  expenses in complying with such instructions, Seller shall
                  reimburse Purchaser for such expenses promptly upon receipt of
                  Purchaser's written request therefor.

5.      TECHNICAL COOPERATION

         Purchaser and Seller agree to cooperate in the development of
         improvements to the Products in the manner set forth in and subject to
         the terms and conditions of Schedule 4.

6.      WARRANTIES

        6.1.  Limited Warranty.

              (a)    Seller warrants to Purchaser that Products purchased from
                     Seller under this Agreement will conform to and perform in 
                     accordance with the applicable Product Specifications.

              (b)    This warranty is extended only to Purchaser and does not
                     constitute a warranty to Purchaser's customers or any
                     other person. This warranty shall not apply to any
                     defect or failure to perform resulting in whole or in
                     part from improper use, application, installation or
                     operation, and Seller shall have no liability of any
                     kind for failure of any equipment or other items in
                     which the Products are incorporated.

              (c)    All claims under this warranty must be reported in
                     writing to Seller (with such report accompanied by
                     the Product claimed to be defective, including the
                     die "package" in the case of Products sold in die
                     form) as soon as possible, but in any event no later
                     than three hundred sixty (360) days after shipment of
                     the Products to Purchaser. If not so reported, such
                     claims shall be waived.

              (d)    Seller's sole obligation with respect to Product
                     determined not to meet the terms of this warranty shall be,
                     at its option, to replace such Products or to issue a
                     credit or refund to Purchaser in the amount of the
                     price received by Seller for the Products. This
                     paragraph states the exclusive remedy against Seller
                     with respect to breach of the warranty given herein
                     or other alleged defects in the Products.

                                     Page 4

<PAGE>


            6.2.  Warranty Disclaimer.

                  THE WARRANTY IN SECTION 6.1 ABOVE IS GIVEN IN LIEU OF ALL
                  OTHER WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED,
                  OR IMPOSED BY STATUTE OR OTHERWISE. ALL IMPLIED WARRANTIES OF
                  FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY ARE
                  EXPRESSLY DISCLAIMED BY SELLER.

7.        INDEMNIFICATION

            7.1.  By Seller.




                   (a)     Seller at its expense will defend any claim or
                           judicial action brought against Purchaser by a third
                           party, and indemnify Purchaser against any liability
                           for damages finally awarded in any such action,
                           insofar as the same is based on a claim that Products
                           purchased under this Agreement infringe any patent of
                           a third party.

                   (b)     If any Products are held to be infringing and their
                           use or sale enjoined, or if in the opinion of Seller
                           any Products are likely to become the subject of such
                           a claim of infringement, Seller may, in its sole
                           discretion and at its own expense, procure a license
                           which will protect Purchaser against such claim
                           without cost to Purchaser, replace Seller's inventory
                           of Products with non-infringing Products, or require
                           return of Products in Seller's inventory and refund
                           the price paid by Purchaser for such Products.

                   (c)     Seller shall have no obligation hereunder for or with
                           respect to claims, actions or demands alleging
                           infringement that arise by reason of combination of
                           noninfringing items with any items not supplied by
                           Seller.

                   (d)     This Section 7.1 states the entire liability of
                           Seller with respect to any claim of infringement.

         7.2. Conditions of Indemnification.

                  Seller's obligations under the foregoing indemnity are subject
                  to the condition that the Purchaser give the Seller: (1)
                  prompt written notice of any claim or action for which
                  indemnity is sought; (2) complete control of the defense and
                  settlement thereof by Seller; and (3) cooperation of the
                  Purchaser in such defense. The obligations under the foregoing
                  indemnity are also subject to the condition that the Purchaser
                  not enter into any compromise or settlement or make any
                  admission of liability without the prior written consent of
                  the Seller.

8. LIMITATIONS OF LIABILITY

         EXCEPT AS PROVIDED IN ARTICLE 7, NEITHER SELLER NOR PURCHASER WILL HAVE
         ANY LIABILITY TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT
         OR SPECIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
         OR THE USE OR PERFORMANCE OF ANY PRODUCTS, EVEN IF ADVISED OF THE
         POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION APPLIES REGARDLESS OF
         WHETHER SUCH CLAIM IS BASED ON TORT, CONTRACT, WARRANTY, NEGLIGENCE,
         STRICT LIABILITY OR ANY OTHER THEORY. This limitation shall not apply
         if liability is mandatory by law, as for example in cases of intent or
         gross negligence.


                                     Page 5


<PAGE>


9. FORCE MAJEURE

         Seller shall not be in default or liable for any delay or failure in
         performance of this Agreement due to strike, lockout, riot, war, fire,
         act of God, accident, delays caused by Purchaser or compliance with any
         law, regulation, order or direction, whether valid or invalid, of any
         governmental authority or instrumentality thereof or due to any causes
         beyond its reasonable control, whether similar or dissimilar to the
         foregoing and whether or not foreseen. Seller shall use all
         commercially reasonable efforts to avoid or remove such causes of
         non-performance or to limit the impact of the event on Seller's
         performance and shall continue performance with the utmost dispatch
         whenever such causes as removed.

10. TERMINATION

         10.1 Termination upon Default or Insolvency.

                  Either party may terminate this Agreement by giving written
notice of termination to the other:

                   (a)     if the other party commits a material breach of its
                           obligations under this Agreement or any other
                           agreement between the parties (including but not
                           limited to the Development, License and Supply
                           Agreement dated October 25, 1995) and does not cure
                           such breach within thirty (30) after receipt of
                           written notice of the breach from the non-breaching
                           party; or

                   (b)     if the other party becomes insolvent, or any
                           voluntary or involuntary petition for bankruptcy or
                           for reorganization is filed by or against the other
                           party, or a receiver is appointed with respect to all
                           or any substantial portion of the assets of the other
                           party, or a liquidation proceeding is commenced by or
                           against the other party; provided that, in the case
                           of any involuntary petition or proceeding filed or
                           commenced against a party, the same is not dismissed
                           within sixty (60) days.

         10.2 Effect of Termination.

                  Nothing in this Article 10 shall affect, be construed or
                  operate as a waiver of any right of the party aggrieved by any
                  breach of this Agreement to recover any loss or damage
                  incurred as a result of such breach, either before or after
                  the termination hereof.

11. CONFIDENTIAL INFORMATION

         11.1. Definition.

                  "Confidential Information" means any information received by
                  one party or its Affiliates (the "receiving party") from the
                  other party or its Affiliates (the "disclosing party") and
                  which the receiving party has been informed or has a
                  reasonable basis to believe is confidential to the disclosing
                  party, unless such information: (1) was known to the receiving
                  party prior to receipt from the disclosing party; (2) was
                  lawfully available to the public prior to receipt from the
                  disclosing party; (3) becomes lawfully available to the public
                  after receipt from the disclosing party, through no act or
                  omission on the part of the receiving party; (4) corresponds
                  in substance to any information received in good faith by the
                  receiving party from any third party without restriction as to
                  confidentiality; or (5) is independently developed by an
                  employee or agent of the receiving party who has not received
                  or had access to such information.

                                     Page 6


<PAGE>


         11.2. Identification.

                  Information which the disclosing party wishes to have treated
                  as Confidential Information under this Agreement shall be
                  identified at the time of disclosure as "confidential" by
                  marking, or in the case of oral disclosures, shall be
                  confirmed as such in writing within thirty (30) days following
                  the oral disclosure.

         11.3. Confidentiality Obligations.

                   (a)     Each party agrees to maintain Confidential
                           Information received from the other in confidence and
                           neither use nor disclose such Confidential
                           Information, without the prior written approval of
                           the disclosing party, except as required to comply
                           with any order of a court or any applicable rule,
                           regulation or law of any jurisdiction or as provided
                           in Section 11.4.

                   (b)     In the event that a receiving party is required by
                           judicial or administrative process to disclose
                           Confidential Information of the disclosing party, it
                           shall promptly notify the disclosing party and allow
                           the disclosing party a reasonable time to oppose such
                           process.

                   (c)     Within each party and their respective Affiliates,
                           Confidential Information shall be disclosed only on a
                           need-to-know basis. Each party shall protect
                           Confidential Information of the other by using the
                           same degree of care, but not less than a reasonable
                           degree of care, to prevent unauthorized disclosure or
                           use as that party uses to protect its own
                           confidential information of like nature.

                   (d)     The foregoing obligations shall remain in force for
                           five (5) years following any termination or
                           expiration of this Agreement.

                   (e)     Each party represents and warrants to the other that
                           its employees, agents or consultants having access to
                           any Confidential Information of the other party shall
                           be subject to a valid, binding and enforceable
                           agreement to maintain such Confidential Information
                           in confidence.

                   (f)     Each party agrees upon request of the other party to
                           return all Confidential Information received from the
                           other party under this Agreement.

         11.4. Terms of Agreement.

                  Purchaser and Seller agree that the terms of this Agreement
                  shall be treated as Confidential Information of each other
                  subject to this Article 11; provided, however, that either
                  party may, upon notice to the other, make such public
                  disclosures regarding this Agreement as in the opinion of
                  counsel for such party are required by applicable securities
                  laws or regulations.

12. ADDITIONAL UNDERTAKINGS

         12.1. Publicity.

                  The parties agree to cooperate in the preparation of a
                  mutually acceptable joint press release, to be issued promptly
                  following execution of this Agreement, but shall otherwise
                  make no public announcement regarding the terms of this
                  Agreement.

                                     Page 7


<PAGE>


         12.2. Use of Trademarks, Etc.

                  Neither party will, without the prior written consent of the
                  other, (a) use in advertising, publicity or otherwise in
                  connection with any Products sold under this Agreement, any
                  trade name, trademark, trade device, service mark, or symbol
                  owned by the other party or its Affiliates; or (b) represent,
                  either directly or indirectly, that any product of such party
                  or its Affiliates is a product manufactured by the other party
                  or its Affiliates, or vice versa.

13. GENERAL

         13.1. Notices.

                  All notices under this Agreement shall be in writing and sent
                  by prepaid airmail post, by reputable courier service, or by
                  facsimile message (with a confirmation copy concurrently
                  dispatched by prepaid airmail post or courier service), to the
                  addresses of the respective parties as set forth by their
                  signatures below or to such other address as the party may
                  hereafter specify by written notice so given. Notices shall be
                  effective upon receipt at the location of the specified
                  address.

         13.2. Authority; No Conflicting Obligations.

                  Each party warrants that its has all requisite power and
                  authority to enter into and perform this Agreement, and that
                  it has no agreement with any third party or commitments or
                  obligations which conflict in any way with its obligations
                  hereunder.

         13.3. Relationship of the Parties.

                  The relationship of Purchaser and Seller under this Agreement
                  is intended to be that of independent contractors. Nothing
                  herein shall be construed to create any partnership, joint
                  venture or agency relationship of any kind. Neither party has
                  any authority under this Agreement to assume or create any
                  obligations on behalf of or in the name of the other party or
                  to bind the other party to any contract, agreement or
                  undertaking with any third party.

         13.4. Assignment.

                  Except as expressly provided for in this Agreement, neither
                  this Agreement nor any right or obligations hereunder shall be
                  assignable by either party without the prior written consent
                  of the other party and any purported assignment without such
                  consent shall be void. Either party may assign this Agreement
                  without such consent in connection with the sale or transfer
                  of all or substantially all of the assets of the assigning
                  party. Any permitted assignee shall assume all obligations of
                  its assignor under this Agreement. No assignment shall relieve
                  any party of responsibility for the performance of its
                  obligations hereunder.

         13.5. Dispute Resolution.

                  Any disputes or claims arising from this Agreement or its
                  breach shall be submitted to and resolved exclusively by
                  arbitration conducted in accordance with the Rules of
                  Conciliation and Arbitration of the International Chamber of
                  Commerce. The arbitration shall be conducted by three (3)
                  arbitrators appointed in accordance with such rules. The place
                  of arbitration shall be in Geneva, Switzerland. An award
                  rendered in the arbitration shall be

                                     Page 8


<PAGE>


                  final and binding upon the parties and judgment may be entered
                  thereon in any court of competent jurisdiction.

         13.6. Severability.

                  If any provision of this Agreement is found invalid or
                  unenforceable, the remaining provisions will be given effect
                  as if the invalid or unenforceable provision were not a part
                  of this Agreement.

         13.7. Amendments; Waiver.

                  This Agreement may not be amended except in a writing signed
                  by the authorized representatives of both parties. No waiver
                  of any provision of this Agreement shall be effective unless
                  made in writing and signed by the party sought to be charged
                  therewith. The failure of either party to enforce any
                  provision of this Agreement shall not constitute or be
                  construed as a waiver of such provision or of the right to
                  enforce it at a later time.

         13.8. No Implied License.

                  Nothing in this Agreement shall be construed to convey any
                  license under any patent, copyright, trademark or other
                  proprietary rights owned or controlled by either party,
                  whether relating to the Products sold or any other matter.

         13.9. Export Regulation.

                  Purchaser shall comply in all respects with all laws and
                  regulations of the United States government or any agency
                  thereof pertaining to exports.

         13.10. Enforcement Costs.

                  The prevailing party in any arbitration or judicial action
                  brought to enforce the provisions of this Agreement shall be
                  entitled to recover its costs and expenses, including
                  reasonable attorneys' fees, incurred in filing and prosecuting
                  or defending such action.

         13.11. Governing Law.

                  This Agreement shall be governed by and construed in
                  accordance with the internal laws of Switzerland, without
                  regard to conflicts of laws principles.

         13.12. Construction.

                  The captions contained in this Agreement are for reference
                  only and shall not be used in its construction or
                  interpretation. The provisions of this Agreement shall be
                  construed and interpreted fairly to both parties without
                  regard to which party drafted the same.

         13.13. United Nations Convention.

                  The United Nations Convention on Contracts for the
                  International Sale of Goods shall not apply to this Agreement.


                                     Page 9


<PAGE>


         13.14. Entire Agreement.

                  This Agreement sets forth the entire agreement between the
                  parties with respect to the subject matter hereof and
                  supersedes all previous agreements and understandings between
                  the parties, whether oral or written, relating to such subject
                  matter.

IN WITNESS WHEREOF, the parties, through their respective duly authorized
officers, have executed this Agreement to be effective as of the Effective Date
set out in the preamble hereto.


<TABLE>
<CAPTION>
CREE RESEARCH, INC.                            SIEMENS AKTIENGESELLSCHAFT
<S>                                            <C>
By          /s/ F. Neal Hunter                 By   /s/ R. Mueller           /s/ C. Hagan
Name     F. Neal Hunter                        Name     R. Mueller               C. Hagan
Title        President                         Title  President Opto Semicond.   VP Fin.&Adm.
Date   Sept. 11, 1996                          Date Sept. 11, 1996               Sept. 11, 1996

Address for Notices                            Address for Notices

Cree Research, Inc.                            Siemens AG
2810 Meridian Parkway, Suite 176               Semiconductor Group, Opto Semiconductors
Durham, North Carolina 27713                   Wernerwerkstr. 2
USA                                            8400 Regensburg 1, Germany
Attention:  President                          Attention:  R. Mueller and C. Hagan
Fax No:  (919) 361-4630                        Fax No:  49 341 202 2951
</TABLE>



                                    Page 10


<PAGE>


                                   SCHEDULE 1

                         Quantity and Shipment Schedule

A.       Quantity. Purchaser will purchase ********** units of the Product (one
         unit being one LED die) from Seller under this Agreement.

2.       Shipment Schedule. The shipment schedule for the Products is as
         follows, with each monthly quantity commencing in ************* to be
         shipped in approximately equal installments on a weekly basis during
         the month:

                ------------------------------------ --------------------------
                               Month                         Quantity
                ------------------------------------ --------------------------

                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *
                *                                                *

                ------------------------------------ --------------------------
                ------------------------------------ --------------------------
                Total                                            *
                ------------------------------------ --------------------------


         The shipment schedule above presupposes that Seller's supplier of epi
         reactors will deliver and install an additional epi reactor system at
         Seller's facilities not later than November 1, 1996. Seller's
         obligations under this Agreement are subject to the condition that such
         epi reactor system is delivered and installed not later than November
         1, 1996. If installation is not completed to Seller's satisfaction by
         such date, the shipment schedule above beginning with February 1997
         shipments will be delayed until such time as installation is complete.
         Installation will be considered complete only upon written acceptance
         of the epi reactor by Seller. Purchaser and Seller agree to cooperate
         in obtaining installation of the epi reactor system as promptly as
         possible, but Seller shall be solely responsible for the costs of
         purchasing and installing the system.

         Seller will use all commercially reasonable efforts to ramp up its
         manufacturing capacity as necessary meet the shipment schedule above.
         Without limiting the foregoing, in order to provide a margin of safety
         to meet such schedule, Seller will use all commercially reasonable
         efforts to increase its capacity to manufacture Products available for
         shipment under this Agreement to a minimum planned capacity of
         ********* units per month by the end of **************. If Seller
         determines that such increase will not be completed by that date,
         Seller will promptly notify Purchaser of the delay and Seller and
         Purchaser shall in good faith negotiate and use their best efforts to
         implement a mutually agreeable emergency program to rectify the delay.


                                    Page 11


<PAGE>


3.       Delay and Cancellation of Shipments. Purchaser shall be entitled to
         delay or cancel shipment of all or any portion of the quantities
         scheduled to be shipped during the period from ************* through
         ***************** under the following terms and conditions:

         (a)      Purchaser may without charge reschedule shipment of such
                  quantities to a date not later than ***************** provided
                  Purchaser gives Seller written notice at least ninety (90)
                  days prior to the beginning of the calendar month in which
                  such quantities are scheduled to be shipped. Purchaser's
                  notice must specify the quantities to be deferred and the
                  calendar month in which shipment of such quantities is to be
                  made. In no event, however, shall Seller be obligated to ship
                  more than ********* units in any calendar month. Subject to
                  the foregoing, a shipment may be rescheduled any number of
                  times under this paragraph.

         (b)      Purchaser may cancel shipment of such quantities provided
                  Purchaser pays Seller a cancellation charge of $******* per
                  unit for all quantities canceled and gives Seller written
                  notice specifying the canceled quantities at least ninety (90)
                  days prior to the beginning of the calendar month in which
                  such quantities are scheduled to be shipped. The cancellation
                  charges shall be due and payable within thirty (30) days after
                  the date notice of cancellation is given. The parties agree
                  that the amount of such cancellation charges represents a
                  reasonable estimate of Seller's damages resulting from
                  cancellation of the shipments scheduled during the period from
                  *********** through *************** and shall be due and
                  payable as liquidated damages and not as a penalty.


                                    Page 12


<PAGE>


                                   SCHEDULE 2

                           Price and Payment Schedule

1.       Prices. The prices for Products purchased under this Agreement shall be
         as follows:


<TABLE>
<CAPTION>

                --------------------------------------- ------------------------- -------------------------
                    Incremental Quantities Shipped          Unit Price (US$)           Extended Price
                --------------------------------------- ------------------------- -------------------------
<S>                                                     <C>                       <C>
                                  *                                *                                     *
                                  *                                *                                     *
                                  *                                *                                     *
                                  *                                *                                     *

                --------------------------------------- ------------------------- -------------------------
                --------------------------------------- ------------------------- -------------------------
                Total                                                                       $12,159,000.00
                --------------------------------------- ------------------------- -------------------------
</TABLE>



         Before shipment of more than ********** units under this Agreement,
         representatives of Seller and Purchaser will meet to review the price
         applicable to quantities in excess of ********** units. If mutually
         agreed the parties may reduce the price stated above.

         Purchaser acknowledges that the Products to be shipped hereunder have
         different specifications than the standard products generally offered
         by Seller and that the prices stated above may be higher than the
         prices Seller charges for its standard products. If Seller commences
         offering a standard product having the same specifications as the
         Products to be purchased under this Agreement, and if the prices
         charged by Seller for purchase of the standard product, under terms and
         conditions comparable to those of this Agreement, are less than the
         prices applicable to the Products not then shipped hereunder, Seller
         will offer in writing to amend this Agreement to reduce the prices
         applicable to Products not then shipped hereunder to the prices Seller
         charges for the standard product.

2.       Payment Terms.

         The purchase price of the first ********* units, or $*********, shall
         be due and payable in ********* equal installments on or before
         *********************** and *******************. The purchase price of
         the next ********** units, or $*********, shall be due and payable in
         ****** equal installments on
         **********************************************************************.
         The purchase price of the remaining units shall be invoiced to
         Purchaser upon shipment and shall be due and payable within ten (10)
         days from the date of the invoice.

         If Seller fails to ship Products in accordance with the shipment
         schedule set forth in Schedule 1 and Purchaser terminates this
         Agreement on account of such failure in accordance with Section 10.1,
         then upon such termination Seller refund to Purchaser any payment made
         in advance for Products not then shipped. Seller agrees to grant
         Purchaser a security interest in certain manufacturing equipment --
         namely, two epi reactor systems to be ordered by Seller upon or
         promptly after execution of this Agreement -- to secure such obligation
         of Seller to refund any payment made in advance for Products not
         shipped. The security interest shall be granted pursuant to a mutually
         agreeable Security Agreement to be executed by the parties on or before
         October 1, 1997.


                                    Page 13


<PAGE>


                                   SCHEDULE 3

                                              Product Specifications

1.       Product Specifications for Products purchased under this Agreement
         shall be the current published specifications for Seller's Model DH-85
         LED die product (as set forth in Attachment A hereto), except that the
         Products purchased under this Agreement shall have:

         (a)   ****************************************************************
         (b)   ****************************************************************

2.       Seller may elect to substitute a version of the Products
         ************************************************
         subject to Purchaser's approval which shall be given under the terms
         and conditions set forth below. Commencing thirty (30) days after the
         date of such approval, or such earlier date as may be agreed by the
         parties, the Product Specifications applicable to shipments made
         thereafter shall be the specifications of the new version supplied by
         Seller as provided below, and Seller may not ship the original version
         without Purchaser's prior written consent.

         (a)      The new version must meet the original specifications except
                  that
                  *************************************************************
                  *************************************************************
                  *************************************************************
                  *************************************************************
                  **************************.

         (b)      Seller will provide Purchaser with production prototypes of
                  the new version manufactured from wafers from at least three
                  different epi runs and will provide Purchaser the
                  specifications applicable to the new version and such
                  qualification data as may then be available to Seller.

         (c)      Purchaser will give Seller notice of Purchaser's approval or
                  disapproval within seventy-five (75) days after receipt of the
                  prototypes and specifications.

         (d)      Purchaser may withhold its approval only if new version does
                  not meet the minimum specifications described in (a) above.



                                    Page 14



<PAGE>


                                   SCHEDULE 4

                              Technical Cooperation

1.       Seller and Purchaser intend to work to improve the forward voltage,
         brightness and ESD of the Product (with an ESD target of *********) and
         to develop a conductive buffer layer version. Such efforts shall be
         conducted as part of the Joint Development Program under the
         Development, License and Supply Agreement dated October 25, 1995
         between the parties (the "Development Agreement"), and all of the terms
         and conditions of the Development Agreement (including without
         limitation the provisions regarding joint ownership of inventions)
         shall be applicable to such work.

2.       To facilitate such additional work in the Joint Development Program,
         Purchaser agrees with Seller as follows:

         (a)      Purchaser will make available to Seller, at Seller's
                  facilities for a period of six months beginning not later than
                  September 30, 1996, the full-time services of one scientist
                  and one specialist, each with expertise in epitaxial growth,
                  and two device fabrication engineers, all of whom shall be
                  Purchaser's employees with adequate qualifications.

         (b)      Purchaser will be responsible for all compensation, benefits
                  and expenses of such personnel.

         (c)      Purchaser's scientific personnel will work on tasks, in
                  accordance with the mutually agreed Joint Development Program,
                  which shall be directed to (i) improving device yields, (ii)
                  improving forward voltage, brightness and ESD, and (iii)
                  developing an improved product using a conductive buffer
                  layer.

         (e)      Purchaser's fabrication engineers will work on tasks, in
                  accordance with the mutually agreed Joint Development Program,
                  which shall be directed to the production of Products to be
                  purchased by Purchaser and to providing assistance to
                  Purchaser's scientific personnel in carrying out the work
                  described above.

         (f)      Purchaser agrees to hold Seller harmless from any claims by
                  Purchaser's personnel arising from work performed at Seller's
                  facilities, other than claims for intentional misconduct or
                  gross negligence of Seller.

         (g)      Purchaser's personnel assigned to Seller may be required by
                  Seller to execute an acknowledgment of confidentiality
                  obligations in the form annexed hereto as Attachment B.

                                    Page 15


<PAGE>


                                                                    ATTACHMENT A
Information in attachment omitted in its entirety and                   
filed separately with the Commission pursuant to a confidential treatment
request under Rule 24b-2 of the Commission.


                        C430-DH85 PRODUCT SPECIFICATIONS







<PAGE>













                                                                    ATTACHMENT B


                                ACKNOWLEDGMENT OF
                           CONFIDENTIALITY OBLIGATIONS


As a condition of being permitted access to premises of Cree Research, Inc.
("Cree"), and to induce Cree to disclose to the undersigned certain confidential
information, the undersigned, an employee of Siemens AG ("Siemens"), hereby
acknowledges and represents as follows:

1.    The undersigned has been advised that:

      (a)  Siemens and Cree entered into a Development, License and Supply
           Agreement dated as of October 25, 1995 (the "Development Agreement").

      (b)  The Development Agreement imposes certain obligations regarding
           "Confidential Information" (as defined in the agreement) disclosed by
           either party to the other.

      (c)  Siemens and Cree represented and warranted to each other in the
           Development Agreement that their respective employees having access
           to Confidential Information of the other party would be subject to a
           valid, binding and enforceable agreement to maintain such information
           in confidence.

      (d)  The Development Agreement defines Confidential Information, with
           certain exceptions, to include "any information, including data,
           diagrams, drawings, reports, samples, research results and in general
           all information or know-how, whether in written form or oral and
           whether on tape, diskette, paper, files or on whatever other
           material, . . . which the receiving party has been informed or has a
           reasonable basis to believe is confidential to the disclosing party
           or is treated by the disclosing party as confidential . . . ."

      (e)  The Development Agreement further provides that: "In the event that
           visiting personnel are present on the premises of the host party, all
           information of the host Party received or learned by the visiting
           personnel shall be treated as Confidential Information of the host
           party, regardless of whether such information is related to the
           Subject Technology [as defined in the agreement] or marked or
           otherwise identified as confidential."

2.    The undersigned hereby represents to Cree that he or she is subject to a
      valid, binding and enforceable agreement to maintain in confidence all
      Confidential Information of Cree disclosed to the undersigned pursuant to
      the Development Agreement, including all Confidential Information of Cree
      received or learned while present on Cree's premises.

      Signed this the ___ day of __________, 19____.



                                                Signature
                                                Typed or Printed Name