Document:

Exhibit 10.2

 

 

	Committed
                                                                  Line of Credit Note

                                                                  

(Daily LIBOR)

	 

 

 

	$10,000,000.00	September 20, 2013

  

 

FOR
VALUE RECEIVED, CHARLES & COLVARD, LTD., a North Carolina
corporation (the “Borrower”),
with an address at 300 Perimiter Park Drive, Suite A, Morrisville, North Carolina 27560, Attention: Chief Financial Officer,
promises to pay to the order of PNC BANK, NATIONAL
ASSOCIATION (the “Bank”), in lawful money of the United States of America in immediately available funds
at its offices located at 134 North Church Street, Rocky Mount, North Carolina 27804, or
at such other location as the Bank may designate from time to time, the principal sum of
TEN MILLION AND 00/100 DOLLARS
($10,000,000.00) (the “Facility”)
or such lesser amount as may be advanced to or for the benefit of the Borrower hereunder, together with interest accruing on the
outstanding principal balance from the date hereof, all as provided below. 

 

1.           Advances. The Borrower
may borrow, repay and reborrow hereunder until the Expiration Date, subject to the terms and conditions of this Note and the Loan
Documents (as defined herein). The “Expiration Date” shall mean June 15, 2015, or such later date
as may be designated by the Bank by written notice from the Bank to the Borrower. The Borrower acknowledges and agrees that in
no event will the Bank be under any obligation to extend or renew the Facility or this Note beyond the Expiration Date. In no event
shall the aggregate unpaid principal amount of advances under this Note exceed the face amount of this Note.

 

2.           Rate
of Interest. Amounts outstanding under this Note will bear interest at a rate per annum which is at all times equal
to (A) the Daily LIBOR Rate plus (B)
one hundred fifty (150) basis points (1.50%). Interest hereunder will be calculated based on the actual number of days that principal
is outstanding over a year of 360 days. In no event will the rate of interest hereunder exceed the maximum rate allowed by law.

 

If
the Bank determines (which determination shall be final and conclusive) that, by reason of circumstances affecting the eurodollar
market generally, deposits in dollars (in the applicable amounts) are not being offered to banks in the eurodollar market for the
selected term, or adequate means do not exist for ascertaining the Daily LIBOR Rate, then the Bank shall give notice thereof to
the Borrower. Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer
exist, the interest rate for all amounts outstanding under this Note shall be equal to the Base Rate (the “Alternate
Rate”).

 

In
addition, if, after the date of this Note, the Bank shall determine (which determination shall be final and conclusive) that any
enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank with any guideline, request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or impossible for the Bank to make or maintain or fund loans
based on the Daily LIBOR Rate, the Bank shall notify the Borrower. Upon receipt of such notice, until the Bank notifies the Borrower
that the circumstances giving rise to such determination no longer apply, the interest rate on all amounts outstanding under
this Note shall be the Alternate Rate.

 

    	 

    	 

    

 

For purposes hereof, the following terms
shall have the following meanings:

 

“Base Rate”
shall mean the higher of (A) the Prime Rate, and (B) the sum of the Federal Funds Open Rate plus fifty (50) basis points
(0.50%). If and when the Base Rate (or any component thereof) changes, the rate of interest with respect to any amounts hereunder
to which the Base Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.

 

“Business
Day” shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or
required by law to be closed for business in Rocky Mount, North Carolina.

 

“Daily
LIBOR Rate” shall mean, for any day, the rate per annum determined by the Bank by dividing (A) the Published Rate by
(B) a number equal to 1.00 minus the percentage prescribed by the Federal Reserve for determining the maximum reserve requirements
with respect to any eurocurrency fundings by banks on such day. The rate of interest will be adjusted automatically as of
each Business Day based on changes in the Daily LIBOR Rate without notice to the Borrower.

 

“Federal Funds Open
Rate” shall mean, for any day, the rate per annum (based on a year of 360 days and actual days elapsed) which
is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen
BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate),
or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Bank
(an “Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute
screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or
any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Bank at such time (which determination
shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate
for such day shall be the “open” rate on the immediately preceding Business Day. The rate of interest charged shall
be adjusted as of each Business Day based on changes in the Federal Funds Open Rate without notice to the Borrower.

 

“Prime Rate”
shall mean the rate publicly announced by the Bank from time to time as its prime rate. The Prime Rate is determined from time
to time by the Bank as a means of pricing some loans to its borrowers. The Prime Rate is not tied to any external rate of interest
or index, and does not necessarily reflect the lowest rate of interest actually charged by the Bank to any particular class or
category of customers.

 

“Published Rate”
shall mean the rate of interest published each Business Day in the Wall Street Journal “Money Rates” listing under
the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any
reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication selected
by the Bank).

 

3.           Advance
Procedures. If permitted by the Bank, a request for advance may be made by telephone or electronic mail, with such
confirmation or verification (if any) as the Bank may require in its discretion from time to time. A request for advance by any
Borrower shall be binding upon Borrower, jointly and severally. The Borrower authorizes the Bank to accept telephonic and electronic
requests for advances, and the Bank shall be entitled to rely upon the authority of any person providing such instructions. The
Borrower hereby indemnifies and holds the Bank harmless from and against any and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys’ fees and expenses) which may arise or be created by the acceptance of such telephonic and
electronic requests or by the making of such advances. The Bank will enter on its books and records, which entry when made will
be presumed correct, the date and amount of each advance, as well as the date and amount of each payment made by the Borrower.

 

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4.           Payment Terms. Accrued
interest will be due and payable monthly in arrears on the last day of each month. The outstanding principal balance and any accrued
but unpaid interest shall be due and payable on the Expiration Date.

 

If any payment
under this Note shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in computing interest in connection with such payment. The
Borrower hereby authorizes the Bank to charge the Borrower’s deposit account at the Bank for any payment when due hereunder.
 If the Borrower revokes this authorization for any reason whatsoever or fails to maintain a deposit account with the Bank
which may be charged, the Bank may, at its option, upon thirty (30) days notice to the Borrower, increase the interest rate payable
by the Borrower under this Note by twenty-five (25) basis points (0.25%). Payments
received will be applied to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any
order the Bank may choose, in its sole discretion.

 

5.           Late Payments; Default Rate.
If the Borrower fails to make any payment of principal, interest or other amount coming due pursuant to the provisions of this
Note within fifteen (15) calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge equal
to the lesser of five percent (5%) of the amount of such payment or $100.00 (the “Late Charge”). Such fifteen
(15) day period shall not be construed in any way to extend the due date of any such payment. Upon maturity, whether by acceleration,
demand or otherwise, and at the Bank’s option upon the occurrence of any Event of Default (as hereinafter defined) and during
the continuance thereof, amounts outstanding under this Note shall bear interest at a rate per annum (based on the actual number
of days that principal is outstanding over a year of 360 days) which shall be three percentage points (3%) in excess of the interest
rate in effect from time to time under this Note but not more than the maximum rate allowed by law (the “Default Rate”).
The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. Both the Late Charge and the Default
Rate are imposed as liquidated damages for the purpose of defraying the Bank’s expenses incident to the handling of delinquent
payments, but are in addition to, and not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under the
other Loan Documents or under applicable law, and any fees and expenses of any agents or attorneys which the Bank may employ. In
addition, the Default Rate reflects the increased credit risk to the Bank of carrying a loan that is in default. The Borrower agrees
that the Late Charge and Default Rate are reasonable forecasts of just compensation for anticipated and actual harm incurred by
the Bank, and that the actual harm incurred by the Bank cannot be estimated with certainty and without difficulty.

 

6.           Prepayment. The indebtedness
evidenced by this Note may be prepaid in whole or in part at any time without penalty.

 

7.           Increased Costs; Yield
Protection. On written demand, together with written evidence of the justification therefor, the Borrower agrees to pay
the Bank all direct costs incurred, any losses suffered or payments made by the Bank as a result of any Change in Law (hereinafter
defined), imposing any reserve, deposit, allocation of capital or similar requirement (including without limitation, Regulation
D of the Board of Governors of the Federal Reserve System) on the Bank, its holding company or any of their respective assets relative
to the Facility. “Change in Law” means the occurrence, after the date of this Agreement, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty
or in the administration, interpretation, implementation or application thereof by any governmental authority or (c) the making
or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any governmental authority;
provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines
or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor
or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each
case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

8.           Other
Loan Documents. This Note is issued in connection with a Loan Agreement between
the Borrower and the Bank, dated on or before the date hereof, and
the other agreements and documents executed and/or delivered in connection therewith or referred to therein, the terms of which
are incorporated herein by reference (as amended, modified or renewed from time to time, collectively the “Loan Documents”),
and is secured by the property (if any) described in the Loan Documents and by such other collateral as previously may have been
or may in the future be granted to the Bank to secure this Note. 

 

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9.           Events
of Default. The occurrence of any of the following events will be deemed to be an “Event of Default”
under this Note: (i) the nonpayment of any principal, interest or other indebtedness under this Note when due; (ii) the occurrence
of any event of default or any default, or any Obligor’s failure to observe or perform any covenant or other agreement, under
or contained in any Loan Document or any other document now or in the future evidencing or securing any debt, liability or obligation
of any Obligor to the Bank; provided, however, that, no such failure to observe or perform any such covenant or agreement (excluding
financing covenants, financial reporting covenants, and negative covenants) shall constitute an Event of Default unless such failure
continues for a period of 30 days after the earlier to occur of (a) the date when any Obligor becomes aware of such failure, and
(b) the date when the Bank gives written notice to the Borrower of such failure; (iii) the filing by or against any Obligor of
any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding (and,
in the case of any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed within 30 days of
the commencement thereof, provided that the Bank shall not be obligated to advance additional funds hereunder during such period);
(iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment, attachment or similar proceeding is
instituted against any property of any Obligor held by or deposited with the Bank; (v) a default with respect to any other indebtedness
of any Obligor for borrowed money, if the effect of such default is to cause or permit the acceleration of such debt; (vi) the
commencement of any foreclosure or forfeiture proceeding, execution or attachment against any collateral securing the obligations
of any Obligor to the Bank; (vii) the entry of one or more final judgments against any Obligor in excess of $100,000.00 individually
or in the aggregate and the failure of such Obligor to discharge the judgments within ten (10) days of the entry thereof; (viii)
any change in any Obligor’s business, assets, operations, financial condition or results of operations that has or could
reasonably be expected to have any material adverse effect on any Obligor; (ix)
any Obligor ceases doing business as a going concern; (x) any representation or warranty made by any Obligor to the Bank in any
Loan Document or any other documents now or in the future evidencing or securing the obligations of any Obligor to the Bank, is
false, erroneous or misleading in any material respect; (xi) if this Note or any guarantee executed by any Obligor is secured,
the failure of any Obligor to provide the Bank with additional collateral if in the Bank’s reasonable opinion at any time
or times, the market value of any of the collateral securing this Note or any guarantee has depreciated below that required pursuant
to the Loan Documents or, if no specific value is so required, then in an amount reasonably deemed material by the Bank; (xii)
the revocation or attempted revocation, in whole or in part, of any guarantee by any Obligor; or (xiii) the death, incarceration,
indictment or legal incompetency of any individual Obligor or, if any Obligor is a partnership or limited liability company, the
death, incarceration, indictment or legal incompetency of any individual general partner or member. As used herein, the term “Obligor”
means any Borrower and any guarantor of, or any pledgor, mortgagor or other person or entity providing collateral support for,
the Borrower’s obligations to the Bank existing on the date of this Note or arising in the future.

 

Upon the occurrence of an Event of Default:
(a) the Bank shall be under no further obligation to make advances hereunder; (b) if an Event of Default specified in clause (iii)
or (iv) above shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice of any kind; (c) if any other Event of Default
shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder,
at the Bank’s option and without demand or notice of any kind, may be accelerated and become immediately due and payable;
(d) at the Bank’s option, this Note will bear interest at the Default Rate from the date of the occurrence of the Event
of Default; and (e) the Bank may exercise from time to time any of the rights and remedies available under the Loan Documents
or under applicable law.

 

10.         Right of Setoff. In
addition to all liens upon and rights of setoff against the Borrower’s money, securities or other property given to the Bank
by law, the Bank shall have, with respect to the Borrower’s obligations to the Bank under this Note and to the extent permitted
by law, a contractual possessory security interest in and a contractual right of setoff against, and the Borrower hereby grants
the Bank a security interest in, and hereby assigns, conveys, delivers, pledges and transfers to the Bank, all of the Borrower’s
right, title and interest in and to, all of the Borrower’s deposits, moneys, securities and other property now or hereafter
in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial
Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or whether
held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right
of setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff shall be deemed to have been
exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may
enter such setoff on its books and records at a later time.

 

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11.         Anti-Money Laundering/International
Trade Law Compliance. The Borrower represents and warrants to the Bank, as of the date of this Note, the date of each advance
of proceeds under the Facility, the date of any renewal, extension or modification of the Facility, and at all times until the
Facility has been terminated and all amounts thereunder have been indefeasibly paid in full, that: (a) no Covered Entity (i) is
a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned
Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any
Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority;
(b) the proceeds of the Facility will not be used to fund any operations in, finance any investments or activities in, or, make
any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by
any Compliance Authority; (c) the funds used to repay the Facility are not derived from any unlawful activity; and (d) each Covered
Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United
States, including but not limited to any Anti-Terrorism Laws. Borrower covenants and agrees that it shall immediately notify the
Bank in writing upon the occurrence of a Reportable Compliance Event.

 

As used herein: “Anti-Terrorism
Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering,
or bribery, all as amended, supplemented or replaced from time to time; “Compliance Authority” means
each and all of the (a) U.S. Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes
Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S. Commerce Department/Bureau of Industry
and Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) U.S. Securities and Exchange Commission;
“Covered Entity” means the Borrower, its affiliates and subsidiaries, all guarantors, pledgors of collateral,
all owners of the foregoing, and all brokers or other agents of the Borrower acting in any capacity in connection with the Facility;
“Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned,
investigated or custodially detained, or receives an inquiry from regulatory or law enforcement officials, in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or self-discovers facts or circumstances implicating any aspect
of its operations with the actual or possible violation of any Anti-Terrorism Law; “Sanctioned Country” means
a country subject to a sanctions program maintained by any Compliance Authority; and “Sanctioned Person” means
any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned
or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property
or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated
under, any sanctions program maintained by any Compliance Authority.

 

12.         Indemnity. The Borrower
agrees to indemnify each of the Bank, each legal entity, if any, who controls, is controlled by or is under common control with
the Bank, and each of their respective directors, officers and employees (the “Indemnified Parties”), and to
defend and hold each Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and expenses
(including all fees and charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of
litigation and preparation therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party
by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Borrower),
in connection with or arising out of or relating to the matters referred to in this Note or in the other Loan Documents or the
use of any advance hereunder, whether (a) arising from or incurred in connection with any breach of a representation, warranty
or covenant by the Borrower, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation,
pending or threatened, whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental
authority; provided, however, that the foregoing indemnity agreement shall not apply to any claims, damages, losses,
liabilities and expenses solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnity agreement
contained in this Section shall survive the termination of this Note, payment of any advance hereunder and the assignment of any
rights hereunder. The Borrower may participate at its expense in the defense of any such action or claim.

 

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13.         Miscellaneous.
All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”)
must be in writing (except as may be agreed otherwise above with respect to borrowing requests) and will be effective upon receipt.
Notices may be given in any manner to which the parties may separately agree, including electronic mail. Without limiting the foregoing,
first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices.
Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth above or to such other
address as any party may give to the other for such purpose in accordance with this paragraph. No delay or omission on the Bank’s
part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such
right or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights and remedies
hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law
or in equity. No modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this
Note will be effective unless made in a writing signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Notwithstanding the foregoing, the Bank may modify this Note
for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided
that the Bank shall send a copy of any such modification to the Borrower (which notice may be given by electronic mail). The
Borrower agrees to pay on demand, to the extent permitted by law, all costs and expenses incurred by the Bank in the enforcement
of its rights in this Note and in any security therefor, including without limitation reasonable fees and expenses of the Bank’s
counsel. If any provision of this Note is found to be invalid, illegal or unenforceable in any respect by a court, all the other
provisions of this Note will remain in full force and effect. The Borrower and all other makers and indorsers of this Note hereby
forever waive presentment, protest, notice of dishonor and notice of non-payment. The Borrower also waives all defenses based on
suretyship or impairment of collateral. If this Note is executed by more than one Borrower, the obligations of such persons or
entities hereunder will be joint and several. This Note shall bind the Borrower and its heirs, executors, administrators, successors
and assigns, and the benefits hereof shall inure to the benefit of the Bank and its successors and assigns; provided, however,
that the Borrower may not assign this Note in whole or in part without the Bank’s written consent and the Bank at any time
may assign this Note in whole or in part.

 

This Note has been delivered to and accepted
by the Bank and will be deemed to be made in the State where the Bank’s office indicated above is located. This
Note will be interpreted and the rights and liabilities of the Bank and the Borrower determined in accordance with the laws of
the State where the Bank’s office indicated above is located, excluding its conflict of laws rules. The Borrower
hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where
the Bank’s office indicated above is located; provided that nothing contained in this Note will prevent the Bank from bringing
any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Borrower acknowledges
and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any action instituted under this Note.

 

14.         Commercial Purpose.
The Borrower represents that the indebtedness evidenced by this Note is being incurred by the Borrower solely for the purpose of
acquiring or carrying on a business, professional or commercial activity, and not for personal, family or household purposes.

 

15.         USA PATRIOT Act Notice.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions
to obtain, verify and record information that identifies each Borrower that opens an account. What this means: when the Borrower
opens an account, the Bank will ask for the business name, business address, taxpayer identifying number and other information
that will allow the Bank to identify the Borrower, such as organizational documents. For some businesses and organizations, the
Bank may also need to ask for identifying information and documentation relating to certain individuals associated with the business
or organization.

 

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16.         Authorization to Obtain Credit
Reports. By signing below, each Borrower who is an individual provides written authorization to the Bank or its designee
(and any assignee or potential assignee hereof) to obtain the Borrower’s personal credit profile from one or more national
credit bureaus. Such authorization shall extend to obtaining a credit profile in considering this Note and subsequently for the
purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account.

 

17.         Depository.
The Borrower will establish and maintain with the Bank the Borrower’s primary depository accounts. If the Borrower fails
to establish and/or maintain its primary depository accounts with the Bank, the Bank may, at its option, upon thirty (30) days
notice to the Borrower, increase the interest rate payable by the Borrower under this Note by up to 1.00 percentage points (1.00%).
The Bank’s right to increase the interest rate pursuant to this paragraph shall be in addition to any other rights or remedies
the Bank may have under this Note, all of which are hereby reserved, and shall not constitute a waiver, release or limitation upon
the Bank’s exercise of any such rights or remedies. 

 

18.         Dispute
Resolution. 

 

(a)         Arbitration of Disputes.
The Borrower and the Bank shall submit any and all disputes arising out of or relating to this Note or the breach thereof (a “Dispute”)
to binding arbitration pursuant to and in accordance with the AAA Commercial Arbitration Rules and, where applicable, the Supplementary
Rules for Large, Complex Commercial Disputes, and judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Such arbitration shall be conducted in a mutually acceptable location. The procedures specified herein
shall be the sole and exclusive procedures for the resolution of Disputes; provided, however, that the Borrower or the Bank may
seek provisional or ancillary remedies, such as preliminary injunctive relief, from a court having jurisdiction, before, during
or after the pendency of any arbitration proceeding. The institution and maintenance of any action for such judicial relief, or
pursuit of provisional or ancillary remedies, shall not constitute a waiver of the right or obligation of any party to submit any
claim or dispute to arbitration. Nothing herein shall in any way limit or modify any remedies available to the Bank under the Loan
Documents or otherwise at law or in equity.

 

(b)        Motion
Practice. In any arbitration hereunder, the arbitrator(s) shall decide any pre-hearing motions which are substantially similar
to pre-hearing motions to dismiss for failure to state a claim or motions for summary adjudication.

 

(c)         Discovery. Discovery
shall be limited to the pre-hearing exchange of all documents which the Borrower and the Bank intend to introduce at the hearing
and any expert reports prepared by any expert who will testify at the hearing.

 

(d)        Sequential Hearing Days.
At the administrative conference conducted by the AAA, the Borrower and the Bank and the AAA shall determine how to ensure that
the hearing is started and completed on sequential hearing days. Potential arbitrators shall be informed of the anticipated length
of the hearing and they shall not be subject to appointment unless they agree to abide by the parties’ intent that, absent
exigent circumstances, the hearing shall be conducted on sequential days.

 

(e)         Award. The award of the
arbitrator(s) shall be accompanied by a statement of the reasons upon which such award is based.

 

(f)         Fees and Expenses. The
Borrower and the Bank shall each bear equally all fees and costs and expenses of the arbitration, and each shall bear its own legal
fees and expenses and the costs of its experts and witnesses; provided, however, that if the arbitration panel shall award to a
party substantially all relief sought by such party, then, notwithstanding any applicable governing law provisions, the other party
shall pay all costs, fees and expenses incurred by the prevailing party and such costs, fees and expenses shall be included in
such award.

 

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(g)        Confidentiality
of Disputes. The entire procedure shall be confidential and none of the parties nor arbitrator(s) may disclose the existence,
content, or results of any arbitration hereunder without the written consent of all parties to the Dispute, except (i)
to the extent disclosure is required to enforce any applicable arbitration award or may otherwise
be required by law and (ii) that either party may make
such disclosures to its regulators, auditors, accountants, attorneys and insurance representatives. No conduct, statements, promises,
offers, views, or opinions of any party involved in an arbitration hereunder shall be discoverable or admissible for any purposes
in litigation or other proceedings involving the parties to the Dispute and shall not be disclosed to anyone not an agent, employee,
expert, witness, or representative for any of such parties.

 

The Borrower acknowledges that it has
read and understood all the provisions of this Note, and has been advised by counsel as necessary or appropriate.

 

WITNESS the due execution hereof
as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

 

 

	WITNESS / ATTEST:	 	CHARLES & COLVARD, LTD.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Kyle S. Macemore	 	By: 	/s/ Randall N. McCullough	 
	 	 	 	(SEAL)	 
	Print Name: Kyle S. Macemore	 	 	Randall N. McCullough	 
	Title: Senior Vice President and Chief Financial Officer	 	 	President and Chief Executive Officer	 
	(Include title only if an officer of entity signing to the right)	 	 	 	 

 

    	-8-Exhibit 10.9

 

 

  

ENZYMOTEC LTD.

 

AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT

 

DATED SEPTEMBER 22, 2013

  

 

  

    	 

    	 

    

 

AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT

 

This AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT (“Agreement”) is made as of the 22nd of September, 2013, by and among
Enzymotec Ltd., an Israeli company (the “Company”) and each of the investors listed on Schedule A
hereto, each of which is referred to in this Agreement as an “Investor” and collectively “Investors”.

  

RECITALS

 

WHEREAS, the
Investors are the holders of all of the issued and outstanding Preferred A Shares of the Company, nominal value NIS 0.01 each (“Preferred
A Shares”), Preferred B Shares of the Company, nominal value NIS 0.01 each (“Preferred B Shares”),
Preferred B1 Shares of the Company, nominal value NIS 0.01 each (“Preferred B1 Shares”) and Preferred B2 Shares
of the Company, nominal value NIS 0.01 each (“Preferred B2 Shares”, and together with the Preferred A Shares,
the Preferred B Shares and the Preferred B1 Shares, the “Preferred Shares”).

 

WHEREAS, the
Investors are party to that certain Investors’ Rights Agreement dated September 27, 2011 setting forth certain matters regarding
their ownership of shares of the Company.

 

WHEREAS, the
requisite majority of the Investors wish to amend and restated such agreement in its entirety.

 

NOW, THEREFORE,
in consideration of the mutual promises and covenants set forth herein, the parties hereby agree as follows:

 

1.          Definitions.
For purposes of this Agreement:

 

“Affiliate”
means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by,
or is under common control with such Person, including without limitation any general
partner, managing member, officer, director,
or manager of such Person and any venture capital fund now or hereafter existing that is controlled by one or more
general partners or managing members of, or shares the same management company with, such Person.

 

“Articles
of Association” means the articles of association of the Company, as may be amended from time to time.

 

“Business
Day” means any day that is not a Friday, Saturday, Sunday or any other day on which banks are required or authorized
to be closed in The City of New York or in the State of Israel

 

“Damages”
means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the
Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement
of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;
(ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstance in which they are made, not misleading; or (iii) any violation or alleged
violation by the indemnifying
party (or any of its agents or Affiliates)
of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities
Act, the Exchange Act, or any state securities law.

 

    	 

    	 

    

 

“Derivative
Securities” means any securities or rights convertible into, or exercisable or exchangeable for
(in each case, directly or indirectly), Ordinary Shares, including options and warrants.

 

“Deemed Liquidation”
has the meaning assigned to it in the Articles of Association.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Excluded
Registration” means (i) a registration relating to
the sale of securities to employees of the Company or a subsidiary pursuant to a share option, share purchase, or similar plan;
(ii) a registration relating to a SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially
the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities;
or (iv) a registration in which the only Ordinary Shares being registered are Ordinary Shares issuable upon conversion of debt
securities that are also being registered.

 

“Form
S-1” means such form under the Securities Act as in effect on the date hereof or any
successor registration form under the Securities Act subsequently adopted by the SEC.

 

“Form
F-1” means such form under the Securities Act as in effect on the date hereof or any
successor registration form under the Securities Act subsequently adopted by the SEC.

 

“Form S-3”
means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with
the SEC.

 

“Form F-3”
means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with
the SEC.

 

“Holder”
means any holder of Registrable Securities who is a party to this Agreement.

 

“Initiating
Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

“IPO”
means the Company’s first public offering pursuant to a registration statement under the Securities Act or
of other similar securities law of another jurisdiction.

 

“Ordinary
Registrable Securities” means the Ordinary Shares held by each Investor at the time of the IPO.

 

“Ordinary
Shares” means the Ordinary Shares of the Company, NIS 0.01 nominal value each.

 

“Major Investor”
means any Investor that, individually or together with such Investor’s Affiliates, holds at least 5% of the issued and outstanding
share capital of the Company.

 

    	 

    	 

    

 

“Permitted
Transferee” means (i)
in the case of an individual Shareholder - a spouse, parents, child, brother, sister or trustee of the shareholder (or his/her
spouse) and any corporate entity which is controlled by him/her; (ii) in the case of any incorporated Shareholder - an entity that
controls, is controlled by, or is under common control with such incorporated shareholders, and (iii) in case of any Shareholder
which is a limited or general partnership - its partners, affiliated partnerships managed by the same management company or managing
(general) partner or by an entity which controls, is controlled by, or is under common control with, such management company or
managing (general) partner). In addition to the above: (i) BIP, Glenrock, Vintage, M-4, Israel Secondary Fund (ISR) L.P., Israel
Secondary Investments (BVI) L.P. and Plason shall be deemed a Permitted
Transferee of MMT; (ii) Ochmanit the Economic Union for Maanit Agricultural Cooperative Society Ltd, reg. no. 57-004138-4,
Kibbutz Maanit, reg. no. 57-000302-0, Hamanit (Maanit members) Ltd., reg. no. 51-331237-1, Rakefet 2012 (Maanit members) Ltd.,
reg. no. 51-484277-2, Manof Ia limited partnership, reg. no. 55-023402-5, and Manof Ib limited partnership, reg. no. 55-023403-3
(including any entity that is a partner and/or investor in such limited partnership(s)) shall each be deemed a Permitted Transferee
of Galam Ltd. and/or of Galam Management and Marketing Agricultural Cooperative Society Ltd., reg. no. 57-004137-6 and/or
of each other and (iii) all the entities which are part of the XT Group
(as defined below) will be Permitted Transferees of each other. The “XT Group” shall mean: the direct and indirect
shareholders and subsidiaries of XT Hi-Tech Investments (1992) Ltd. (formerly Ofer Hi-Tech Investments Ltd.), as well as the beneficial
owners of the shares of such shareholders..

 

“Person”
means any individual, corporation, partnership, trust, limited liability company, association or
other entity.

 

“Preferred
Registrable Securities” means all Registrable Securities issued or issuable upon conversion of the Preferred Shares.

 

“Qualified
IPO” or “QIPO” means an
IPO at a Company’s pre-money valuation of at least US$50,000,000 (fifty million US dollars) and generating net proceeds to
the Company of at least US$10,000,000 (ten million US dollars).

 

“Registrable
Securities” means (i) the Ordinary Registrable Securities; (ii) the Preferred Registrable Securities; (iii) any
Ordinary Shares issued or issuable (directly or indirectly)
upon conversion and/or exercise of any other
securities of the Company, acquired by the Investors prior
to the closing of the IPO; and (iv) any Ordinary Shares issued as (or issuable upon the conversion or exercise of any warrant,
right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement
of, the shares referenced in clauses (i)-(iii) above; excluding in all cases, however, any Registrable Securities sold by a Person
in a transaction in which the applicable rights under this
Agreement are not assigned pursuant to Section
4.1, and excluding for purposes of Section
2 any shares for which registration rights have terminated pursuant to Section 2.13
of this Agreement. The Registrable Securities held by each Investor as of the date hereof are set forth on Schedule A
hereto.

 

“Registrable
Securities then Outstanding” means the number of shares determined by adding the number
of outstanding Ordinary Shares that are Registrable Securities
and the number of Ordinary Shares issuable (directly
or indirectly) pursuant to then exercisable and/or
convertible securities that are Registrable Securities.

 

“Restricted
Securities” means the securities of the Company required to bear the legend set forth in Section 2.12(b)
hereof.

 

“SEC”
means the Securities and Exchange Commission.

 

“SEC Rule
144” means Rule 144 promulgated by the SEC under the Securities Act.

 

“SEC Rule
144(b)(1)” means Rule 144(b)(1) promulgated by the SEC under the Securities Act.

 

“SEC Rule
145” means Rule 145 promulgated by the SEC under the Securities Act.

 

    	 

    	 

    

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Selling Expenses”
means all underwriting discounts, selling commissions, and share transfer taxes applicable to the sale of Registrable Securities,
except for the fees and disbursements of the Selling
Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

“U.S.
GAAP” means generally accepted accounting principles in the United States of America.

 

2.    Registration
Rights. The Company covenants and agrees as follows:

 

2.1  Demand
Registration.

 

(a)   Form
S-1/F-1 Demand. If
at any time after the closing of the IPO, but subject to the terms of any “lock-up agreement” entered into with an
underwriter (unless waived by such underwriter), the Company receives a request from Holders of a majority of the Registrable Securities
then Outstanding, that the Company file a Form S-1 (or any comparable
successor form or similar form available to foreign issuers, such as Form F-1, if available) registration
statement with respect to outstanding Registrable
Securities of such Holders having an anticipated aggregate offering price of at least US$ 5,000,000, then the Company shall
(i) within ten (10) business days after the date such request is given, give notice thereof (the “Demand Notice”)
to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within sixty (60) days after
the date such request is given by the Initiating Holders, file a
Form S-1 (or
any comparable successor form or similar form available to foreign issuers, such as Form F-1, if available) registration
statement under the Securities Act covering all Registrable Securities that the Initiating
Holders requested
to be registered and any additional Registrable
Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder
to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject
to the limitations of Section 2.1(c)
and Section 2.3.

 

(b)          Form
S-3/F-3 Demand. If at any
time when it is eligible to use a Form S-3 (or any comparable successor form or similar form available to foreign issuers,
such as Form F-3, if available) registration statement, the Company receives a request from
Holders of a majority of the Registrable Securities then Outstanding,
that the Company file a Form S-3 (or any comparable successor form or similar form available to foreign issuers, such as Form F-3,
if available) registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate
offering price, of at least US $1,000,000, then the Company shall (i) within ten (10) business days after the date such request
is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event
within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 (or any comparable
successor form or similar form available to foreign issuers, such as Form F-3, if available) registration statement under the Securities
Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice
given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject
to the limitations of Section
2.1(c) and Section 2.3.

 

    	 

    	 

    

 

(c)          Notwithstanding
the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a
certificate signed by the Company’s Chairman of the Board of Directors stating that in the good faith judgment of the Company’s
Board of Directors it would be materially detrimental to the Company and its shareholders for such registration statement to either
become effective or remain effective for as long as such registration statement otherwise would be required to remain effective,
because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction
involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose
for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange
Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect
to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request
of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any
twelve (12) month period; and provided further that the Company shall not register any securities for its own account or
that of any other shareholder during such ninety (90) day period other than pursuant to a
registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a share option, share purchase,
or similar plan; a registration on any form that does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable Securities; or a registration in which the only Ordinary
Shares being registered is Ordinary Shares issuable upon conversion of debt securities that are also being registered.

 

(d)          The
Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a)
(i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending
on a date that is one hundred and eighty (180) days after the effective date of, a Company-initiated registration, provided,
that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become
effective; (ii) after the Company has effected two (2) registrations
pursuant to Section
2.1(a); or (iii) if the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3 (or
any comparable successor form or similar form available to foreign issuers, such as Form F-3, if available) pursuant
to a request made pursuant to Section 2.1(b).
The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section
2.1(b) (i) during the period
that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is
ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing
in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company
has effected two registrations pursuant to Section
2.1(b) within the twelve
(12) month period immediately preceding the date of such request or has effected another registration pursuant to Section 2.1(b)
within the ninety (90) day period immediately preceeding the date of such request.
A registration shall not be counted as “effected” for purposes of this Section 2.1(d)
until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders
(i) withdraw their request for such registration (except, if at the time of such withdrawal, the Holders shall have learned of
a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of
their request and have withdrawn the request with reasonable promptness after learning of such information), (ii) elect not to
pay the registration expenses therefor, and (iii) forfeit their right to one demand registration
statement pursuant to Section 2.6, in which case such withdrawn registration statement
shall be counted as “effected” for purposes of this Section 2.1(d). 

 

    	 

    	 

    

 

2.2  Company
Registration.

 

(a)   Other
than in connection with the IPO, if at any time the Company, including if the Company qualifies as a well-known seasoned issuer
(within the meaning of Rule 405 under the Securities Act) (a “WKSI”), proposes to file (i) a prospectus supplement
to an effective shelf registration statement (a “Shelf Registration Statement”), or (ii) a registration statement,
other than a Shelf Registration Statement for a delayed or continuous offering pursuant to Rule 415 under the Securities Act, in
either case, for the sale of Ordinary Shares for its own account, or for the benefit of the holders of any of its securities other
than the Holders, to an underwriter on a firm commitment basis for reoffering to the public or in a “bought deal” or
“registered direct offering” with one or more investment banks (collectively, a “Piggy-Back Underwritten Offering”),
then as soon as practicable but not less than ten (10) days prior to the filing of (a) any preliminary prospectus supplement relating
to such Piggy-Back Underwritten Offering pursuant to Rule 424(b) under the Securities Act, (b) any prospectus supplement relating
to such Piggy-Back Underwritten Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary prospectus supplement
is used) or (c) such Registration Statement, as the case may be, the Company shall give notice of such proposed Piggy-Back Underwritten
Offering to the Holders and such notice shall offer the Holders the opportunity to include in such Piggy-Back Underwritten Offering
such number of Registrable Securities (the “Included Registrable Securities”) as each such Holder may request
in writing. Prior to the commencement of any “road show,” any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any Registration by giving written notice to the Company of its request to withdraw
and such withdrawal shall be irrevocable and, after making such withdrawal, such Holder shall no longer have any right to include
Registrable Securities in the Piggy-Back Underwritten Offering as to which such withdrawal was made. The notice required to be
provided to Holders shall be provided on a Business Day. Each such Holder shall then have seven (7) days after receiving such notice
to request in writing to the Company inclusion of Registrable Securities in the Piggy-Back Underwritten Offering, except that such
Holder shall have two (2) Business Days after such Holder confirms receipt of the notice to request inclusion of Registrable Securities
in the Piggy Back Underwritten Offering in the case of a “bought deal”, “registered direct offering” or
“overnight transaction” where no preliminary prospectus is used. Upon receipt of any such request for inclusion from
a Holder received within the specified time, the Company shall use reasonable best efforts to effect the registration in any Registration
Statement of any of the Holders’ Registrable Securities requested to be included on the terms set forth in this Agreement.
If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate
in such Piggy-Back Underwritten Offering.

 

(b)   Unless
the Company qualifies as a WKSI, (i) the Company shall give each Holder ten (10) days’ notice prior to filing a Shelf Registration
Statement and, upon the written request of any Holder, received by the Company within seven (7) days of such notice to the Holder,
the Company shall include in such Shelf Registration Statement a number of Ordinary Shares equal to the aggregate number of Registrable
Securities requested to be included without naming any requesting Holder as a selling shareholder and including only a generic
description of the holder of such securities (the “Undesignated Registrable Securities”), (ii) the Company shall
not be required to give notice to any Holder in connection with a filing pursuant to Section 2.2(a) unless such Holder provided
such notice to the Company pursuant to this Section 2.2(b) and included Undesignated Registrable Securities in the Shelf
Registration Statement related to such filing, and (iii) at the written request of a Holder given to the Company more than seven
(7) days before the date specified in writing by the Company as the Company’s good faith estimate of a launch of a Piggy-Back
Underwritten Offering (or such shorter period to which the Company in its sole discretion consents), the Company shall use reasonable
best efforts to effect the registration of any of the Holders’ Undesignated Registrable Securities so requested to be included
and shall file a post-effective amendment or, if available, a prospectus supplement to a Shelf Registration Statement to include
such Undesignated Registrable Securities as any Holder may request, provided that (a) the Company is actively employing its reasonable
best efforts to effect such Piggy-Back Underwritten Offering; and (b) the Company shall not be required to effect a post-effective
amendment more than two (2) times in any twelve (12)-month period.

 

(c)   The
Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the
effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration.
The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section
2.6.

 

    	 

    	 

    

 

2.3  Underwriting
Requirements.

 

(a)          If,
pursuant to Section 2.1,
the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to Section 2.1,
and the Company shall include such information in the Demand Notice. The underwriter(s)
will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such
event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in Section 2.4(e))
enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding
any other provision of this Section 2.3,
if the managing underwriter(s) advise(s) the Company in writing that marketing factors require a limitation on the number of shares
to be underwritten, then the amount of Registrable Securities proposed to be registered shall be in the following order of priority:
first, the Holders of Preferred Registrable Securities shall be entitled to register all of the Preferred Registrable Securities
requested to be registered by them (pro rata to the respective number of Preferred Registrable Securities held by such Holders);
second, the Holders of remaining Registrable Securities shall be entitled to register all of the Registrable Securities
requested to be registered by them (pro rata to the respective number of Registrable Securities held by such Holders); third,
if remaining, securities which the Company wishes to register for its own account; and fourth, if remaining, any other securities
of the Company.

 

(b)          In
connection with any offering involving an underwriting of shares of the Company’s share capital pursuant to Section 2.2,
the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders
accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as
the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total
number of securities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the number
of securities to be sold (other than by the Company) that the underwriters, in their reasonable discretion, determine is compatible
with the success of the offering, then the Company shall be required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters and the Company, in their sole discretion, determine will not jeopardize
the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered
can be included in such offering, then the number of shares of securities that are entitled to be included in the registration
shall be allocated in the following order of priority: first, the Company shall be entitled to register all of the securities
the Company wishes to register for its own account, subject to the provisions of Section 2.2; second, if remaining, the
Holders of Preferred Registrable Securities shall be entitled to register such number of Preferred Registrable Securities requested
to be registered by them (pro rata to the respective number of Preferred Registrable Securities held by such Holders); third,
if remaining, the Holders of remaining Registrable Securities shall be entitled to register such number of Registrable Securities
requested to be registered by them (pro rata to the respective number of Registrable Securities held by such Holders); and fourth,
if remaining, any other securities of the Company held by other shareholders. Notwithstanding the foregoing, in no event shall
(i) the number of Registrable Securities included in
the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded
from the offering, and (ii) the number of Registrable Securities included in the offering be reduced below thirty percent
(30%) of the total number of securities included in such offering. For purposes of the provision in this Section 2.3(b)
concerning apportionment, for any selling Holder, such Holder and the Permitted Transferee of such Holder shall be deemed to be
a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based
upon the aggregate number of Registrable Securities held by all Persons included in such “selling Holder,” as defined
in this sentence.

 

    	 

    	 

    

 

(c)          For
purposes of Section 2.1,
a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback
provisions in Section 2.3(a), fewer
than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration
statement are actually included.

 

2.4  Obligations
of the Company. Whenever required under this Section 2 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)          prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days
or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however,
that such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at
the request of an underwriter of Ordinary Shares (or other securities) of the Company, from selling any securities included in
such registration;

 

(b)          prepare
and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with
such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities
covered by such registration statement;

 

(c)          furnish
to the selling Holders participating in such registration such numbers of copies of a prospectus, including a preliminary prospectus,
as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their
disposition of their Registrable Securities;

 

(d)          use
its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that
the Company shall not be required to qualify to do business, subject itself to taxation or to file a general consent to service
of process in any such states or jurisdictions, in each case where it would not otherwise do so but for this Section 2.4(d);

 

(e)          in
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the underwriter(s)
of such offering;

 

(f)          use
its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed
on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities
issued by the Company are then listed;

 

(g)          provide
a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such registration;

 

    	 

    	 

    

 

(h)         promptly
make available for inspection by the selling Holders, any underwriter(s)
participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained
by any such underwriter or the Selling Holders Counsel, all financial and other records, pertinent corporate documents, and properties
of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant, or agent,
in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct
appropriate due diligence in connection therewith,
subject, in each case, to such confidentiality agreements as the Company shall reasonably request;

 

(i)           notify
each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been
declared effective or a supplement to any prospectus forming a part of such registration statement has been filed;

 

(j)           after
such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement
such registration statement or prospectus;

 

(k)          use
its reasonable best efforts to make available its employees and personnel for participation in “road shows” and other
marketing efforts and otherwise provide reasonable assistance to the underwriters (taking into account the reasonable needs of
the Company’s businesses and the reasonable requirements of the marketing process) in the marketing of Registrable Securities
in any underwritten offering; and

 

(l)           use
its reasonable best efforts to take all other actions necessary to effect the registration and sale of the Registrable Securities
contemplated hereby.

 

2.5  Furnish
Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section
2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably
required to effect the registration of such Holder’s Registrable Securities.

 

2.6  Expenses
of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications
pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees;
fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the selling Holders
(“Selling Holders Counsel”),
shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses
of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear
such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration),
unless the Holders of a majority of the Registrable Securities then Outstanding agree to forfeit their right to one registration
pursuant to Section 2.1(a) or Section 2.1(b),
as the case may be; provided further that if, at the time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have
withdrawn the request with reasonable promptness after learning of such information, then the Holders shall not be required to
pay any of such expenses and shall not forfeit their right to one registration pursuant to Section 2.1(a)
or Section 2.1(b). All Selling Expenses relating
to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis
of the number of Registrable Securities registered on their behalf and each Holder shall bear and pay the fees and disbursements
of counsel for such Holder (except the Selling Holders Counsel).

 

    	 

    	 

    

 

2.7  Delay
of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration
pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation
of this Section 2.

 

2.8  Indemnification.
If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)          To
the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers,
directors, and shareholders of each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each
Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any
Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal
or other expenses reasonably incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 2.8(a)
shall not apply to amounts paid in settlement of any such claim
or proceeding if such settlement is effected without the consent of the Company, nor shall the Company be liable for any Damages
to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written
information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly
for use in connection with such registration.

 

(b)          To
the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and
each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company
within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities
Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or
other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or
omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly
for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned
Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 2.8(b)
shall not apply to amounts paid in settlement of any such claim
or proceeding if such settlement is effected without the consent of the Holder; and provided further that in no event shall any
indemnity under this Section 2.8(b) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses
paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)          Promptly
after receipt by an indemnified party under this Section 2.8
of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification
hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section
2.8,
give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such
action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice
has been given, and to assume the defense thereof with counsel retained by the indemnifying party who shall be reasonably satisfactory
to the indemnified party; provided, however, that an indemnified party (together with all other indemnified parties that
may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented
by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement
of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8,
to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure
to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 2.8.

 

    	 

    	 

    

 

(e)          To
provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party
otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8
but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding
the fact that this Section 2.8 provides
for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto
for which indemnification is provided under this Section 2.8,
then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to
which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of
each of the indemnifying party and the indemnified
party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense,
as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact,
or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement
or omission; provided, however, that, in any such case, (x) no Holder will be required to contribute any amount in excess
of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement,
and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled
to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no
event shall a Holder’s liability pursuant to this Section 2.8(e),
when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b),
exceed the proceeds from the offering received by such
Holder (net of any Selling Expenses) paid
by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

(f)          The
obligations of the Company and Holders under this Section 2.8
shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise
shall survive the termination of this Agreement.

 

2.9  Reports
Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation
of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3 (or any comparable successor form or
similar form available to foreign issuers, such as Form F-3, if available), the Company shall:

 

(a)          make
and keep available adequate current public information,
as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement
filed by the Company for the IPO;

 

(b)          use
commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements);
and

 

    	 

    	 

    

  

(c)          furnish
to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to
the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule
144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO),
the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (or any comparable successor form or similar
form available to foreign issuers, such as Form F-3, if available) (at any time after the Company so qualifies); (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii)
such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits
the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements
under the Exchange Act) or pursuant to Form S-3 (or any comparable successor form or similar form available to foreign issuers,
such as Form F-3, if available) (at any time after the Company so qualifies to use such form).

 

2.10  Limitations
on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then Outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such holder or prospective holder: (i) to include such securities
in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities
of the Holders that are included, or (ii) to demand registration of any securities held by such holder or prospective holder; provided
that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Section
4.9, and provided, further, that the Company may enter into an agreement with any holder or prospective holder of any securities
of the Company related to the filing of a resale shelf registration statement to register shares issued to such holder or prospective
holder in an acquisition, if and only if such resale shelf registration statement does not permit underwritten offerings.

 

2.11  “Market
Stand-Off” Agreement. In connection with a registration pursuant to Section
2.1 or 2.2, each Holder agrees that it will not, without the prior written consent of the managing underwriter, during the period
commencing on the date of the final prospectus relating to the IPO or other
offering by the Company and ending on the date specified by the Company and the managing underwriter (such period not to exceed
(x) one hundred eighty (180) days in the case of the IPO, or (y) ninety (90) days in the case of any registration other than the
IPO, which period may be extended upon the request of the managing underwriter, to the extent required by any FINRA rules, for
an additional period of up to fifteen (15) days if the Company issues or proposes to issue an earnings or other public release
within fifteen (15) days of the expiration of the 90 or 180-day (as applicable) lockup period), (i) lend; offer; pledge;
sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right,
or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any securities convertible
into or exercisable or exchangeable (directly or indirectly) for
Ordinary Shares held immediately before the effective date of the registration statement for such offering or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of such securities, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares or other securities, in cash, or otherwise. The foregoing
provisions of this Section 2.11 shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Holders,
in the case of the IPO, only if all officers, directors, and shareholders individually owning more than one percent (1%) of the
Company’s outstanding Ordinary Shares (after giving effect
to conversion into Ordinary Shares of all outstanding Preferred Shares) are subject to the same restrictions, and in the
case of another offering, only if all officers, directors and the other Holders are subject to the same restrictions. The underwriters
in connection with such registration
are intended third-party beneficiaries of this Section 2.11
and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Holder
further agrees to execute such agreements as may be reasonably requested by the underwriters in connection
with such registration that are consistent with this Section 2.11
or that are necessary to give further effect thereto.

 

    	 

    	 

    

 

2.12
Restrictions on Transfer.

 

(a)          The
Preferred Shares and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not
recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer,
except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions
of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Shares
and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon
the conditions specified in this Agreement.

 

(b)          Each
certificate or instrument representing
(i) the Preferred Shares, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the
securities referenced in clauses (i) and (ii), upon any share split, share dividend, recapitalization, merger, consolidation,
or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c))
be stamped or otherwise imprinted with a legend substantially in
the following form:

 

THE SECURITIES
REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE SECURITIES
REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH
THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.

 

The Holders consent to the Company making
a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the
restrictions on transfer set forth in this Section 2.12.

 

(c)          The
holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the
provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there
is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give
notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe
the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the
Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and
whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed
transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the
SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result
in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably
satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may
be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled
to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company.
The Company will not require such a legal opinion or “no action” letter in any transaction in compliance with
SEC Rule 144.
Each certificate or instrument evidencing the
Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC
Rule 144, the appropriate restrictive legend set forth in Section 2.12(b),
except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company,
such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

    	 

    	 

    

 

2.13
Termination of Registration Rights. The right of any Holder to request
registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1
or Section 2.2 shall terminate upon the earliest
to occur of:

 

(a)          the
closing of a Deemed Liquidation;

 

(b)          when
such Holder holds less than 5% of the outstanding Ordinary Shraes of the Company and all of such Holder’s Registrable Securities
could be sold without restriction under SEC Rule 144(b)(1).

 

2.14
Legending of Share Register and Book Entry Notifications.

 

(a)          Each
share certificate issued by the Company and representing an Ordinary Registrable Security or Preferred Registrable Security shall
bear the following legend:

 

The shares represented
hereby and are subject to certain obligations under an Amended and Restated Investors’ Rights Agreement, dated September
22, 2013, among Enzymotec Ltd. and the other parties thereto. For the purpose of such agreement, these shares are [Ordinary Registrable
Securities][Preferred Registrable Securities].

 

(b)    In
the event of any transfer of Registrable Securities subject to such a notation in a transaction pursuant to which registration
rights are assigned in accordance with Section 4.1, the Registrable Securities held by the transferee following such
transfer shall also bear such legend. The notation may be removed at the request of the Company to its transfer agent (a) in the
event of a transfer in which registration rights are not assigned to the transferee in accordance with Section 4.1,
or (b) following the termination of registration rights in accordance with Section 2.13, or in case such securities
are otherwise no longer Registrable Securities.

 

3.   Information
and Observer Rights.

 

3.1  Delivery
of Financial Statements. The Company shall deliver to each Major Investor, provided that the Board of Directors has
not reasonably determined that such Major Investor is a competitor of the Company:

 

(a)          as
soon as practicable, but in any event within ninety (90) days (or within sixty (60) days, in case one of the Major Investors so
request in writing pursuant to a regulatory requirement imposed on such investor) after the end of each fiscal year of the Company,
(i) a balance sheet as of the end of such year; (ii) statements of income and of cash flows for such year setting
forth in comparative form the figure for the previous fiscal year, all in reasonable detail; and (iii) a statement of shareholders’
equity as of the end of such year, all such
financial statements audited and certified by independent public accountants of nationally
recognized standing, who are among the “Big-4” accounting firms, selected by the Company and approved by the Company’s
Board of Directors; 

 

    	 

    	 

    

 

(b)          as
soon as practicable, but in any event within sixty (60) days (or within forty-five (45) days, in case one of the Major Investors
so request in writing pursuant to a regulatory requirement imposed on such investor) after the end of
each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of cash flows for such
fiscal quarter, and an unaudited balance sheet and a statement of shareholders’ equity as of the end of such fiscal quarter,
all prepared in accordance with U.S. GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments
and (ii) not contain all notes thereto that may be required in accordance with U.S. GAAP);

 

(c)          as
soon as practicable, but in any event fifteen (15) days before the end of each fiscal year, a budget and operating plan for the
next fiscal year (collectively, the “Budget”),
approved by the Board of Directors and prepared on a quarterly basis, including balance sheets, income statements, and statements
of cash flow for such quarters and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

 

(d)          a
monthly cash flow report in such format as shall be determined by the Company, Galam Ltd., XT Hi-Tech Investments (1992) Ltd. and
Millennium II Materials Technology Fund L.P.;

 

(e)          with
respect to the financial statements called for in Section 3.1(b) above, and only to the extent that one of the Major Investors
so request in writing pursuant to a regulatory requirement imposed on such investor, an instrument executed by the chief financial
officer or chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP
consistently applied with prior practice for earlier periods (except as otherwise set forth in Section 3.1(b)) and fairly present
the financial condition of the Company and its results of operation for the periods specified therein; and

 

(f)          such
other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Major Investor
may from time to time reasonably request.

 

If, for any period, the Company has any
subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered
pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such
consolidated subsidiaries.

 

Notwithstanding anything else in this Section
3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period
starting with the date sixty (60) days before
the Company’s good-faith estimate of the date of filing
of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration
statement and related offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated
at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement
to become effective.

 

    	 

    	 

    

 

3.2  Inspection.
The Company shall permit each Major Investor, at such Major Investor’s expense, to visit and inspect the Company’s
properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its
officers, during normal business hours of the Company and after providing a reasonable prior written notice to the Company, as
may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to
this Section 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret
or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or
the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.3  Termination
of Information. The covenants set forth in Section 3.1 and Section
3.2 shall terminate and be of no further force or effect (i) immediately before the consummation of an Qualified IPO,
or (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange
Act.

 

3.4  Confidentiality.
Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than
to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this
Agreement (including, without limitation, notice of the Company’s intention to file a registration statement), unless such
confidential information: (a) is known or becomes known to the public in general (other than as a result of a breach of this Section
3.4 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s
confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any
obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose
confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain
their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable
Securities from such Investor, if such prospective purchaser agrees in writing to be bound by the provisions of this Section
3.4; (iii) in connection with periodic reports to its shareholders, partners, affiliates, or members, each Investor may provide
summary information regarding the Company's financial information in such reports, as long as such shareholders and partners are
advised that such information is confidential but may not annex to
such reports the full financial information to be provided hereunder by the Company; or (iv) as may otherwise be required
by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize
the extent of any such required disclosure. 

 

4.   Miscellaneous.

 

4.1  Successors
and Assigns. The rights under this Agreement may be
assigned (but only with all related obligations) by
a Holder to a transferee of Registrable Securities that (i)
is a Permitted Transferee of the Holder; or (ii) after such transfer, holds at least 8,000 Registrable Securities (as adjusted
for any share split, share dividend, bonus share issuance, recapitalization or similar transaction); provided,
however,
that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of
such transferee and the Registrable Securities with respect to which
such rights are being transferred; and (y) such transferee
agrees in a written instrument delivered to the Company
to be bound by and subject to the terms and
conditions of this Agreement, including the provisions of
Section 2.11.
For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee
that is a permitted Transferee shall be aggregated together and with those of the transferring Holder; provided further that all
transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement
inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors
and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided herein.

 

    	 

    	 

    

 

4.2  Governing
Law. This Agreement shall be governed by and construed according to the laws of the State of Israel, without regard to the
conflict of laws provisions thereof. Any dispute arising under or in relation to this Agreement shall be resolved exclusively in
the competent court for Tel Aviv-Jaffa district, and each of the parties hereby irrevocably submits to the exclusive jurisdiction
of such court.

 

4.3  Counterparts;
Facsimile.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature and in two
or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

4.4  Titles
and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing
or interpreting this Agreement.

 

4.5  Notices.
All notices, requests, and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed
effectively given, delivered and received (i) upon personal
delivery to the party to be notified; (ii) when sent by electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day; (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one (1) business
day after the business day of deposit with a nationally
recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at their addresses as set forth on Schedule A, or to the
principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such
email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Section 4.5.

 

4.6  Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company
and the holders of at least 66.67% of the Registrable Securities then Outstanding; provided that the Company may in its
sole discretion waive compliance with Section 2.12(c)
(and the Company’s failure to object promptly in writing after
notification of a proposed assignment allegedly in violation of Section 2.12(c)
shall be deemed to be a waiver); and provided
further that any provision hereof may be waived by any
waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, this
Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor
without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in the same
fashion. The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that
did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance
with this Section 4.6 shall be binding on all parties
hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision
of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such
term, condition, or provision.

 

4.7  Severability.
In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such
invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to
the maximum extent permitted by law.

 

    	 

    	 

    

 

4.8  Aggregation
of Shares. All shares of Registrable Securities held or acquired by Permitted Transferees shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement and such Permitted Transferees may apportion such
rights as among themselves in any manner they deem appropriate.

 

4.9  Additional
Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional preferred shares of
the Company after the date hereof, any purchaser of such preferred shares may become a party to this Agreement by executing and
delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor”
for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such
additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor”
hereunder.

 

4.10  Entire
Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement
among the parties with respect to the subject matter hereof,
and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

4.11  Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon
any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such non-breaching
or non-defaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar
breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach
or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

 

4.12  Acknowledgment.
The Company acknowledges that the Investors review the business plans and related proprietary information of many enterprises,
including enterprises which may have products or services which compete directly or indirectly with those of the Company. Subject
to Section 3.4 (Confidentiality), nothing in this Agreement shall preclude or in any way restrict the Investors from investing
or participating in any particular enterprise whether or not such enterprise has products or services which compete with those
of the Company and such investments shall not cause the Investors to be deemed competitors for the purpose of this Agreement.

 

4.13  Application
in Other Jurisdictions. The Parties hereby acknowledge and Agree that the provisions of this Agreement shall be in force and
effect and apply to any registration of the Company’s securities (including, without limitation, the Registrable Securities)
in any other jurisdiction and undertake to take reasonable actions to cause this Agreement to become effective and apply to such
other jurisdiction, mutatis mutandis.

 

[Signature Page to Follow]

 

    	 

    	 

    

 

[Amended and Restated Investors’
Rights Agreement – Company’s Signature Page]

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

	COMPANY:	 
	 	 
	Enzymotec Ltd.	 
	 	 
	By :	/s/
Oren Bryan                      	 
	Name: 	Oren
    Bryan                                         	 
	Title: 	Chief     Financial
    Officer                                       	 
	 	 

  

    	 

    	 

    

 

[Amended and Restated Investors’
Rights Agreement – Investors’ Signature Page]

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

	INVESTORS:	 
	 	 
	 	/s/ Yossi Peled
	 	GALAM LTD.
	 	 
	 	Name:  	Yossi Peled
	 	Title: 	Managing Director

  

	 	/s/ Yossi Peled
	 	GALAM MANAGEMENT AND

 MARKETING AGRICULTURE

COOPERATIVE SOCIETY.
	 	 
	 	Name:  	Yossi Peled 
	 	Title: 	 

  

	 	/s/ Yoav Doppelt
	 	XT HI-TECH INVESTMENTS (1992) LTD.
	 	 
	 	Name: 	Yoav Doppelt 
	 	Title:	CEO 

  

	 	/s/ Zwi Vromen               /s/
Nir Belzer
	 	MILLENNIUM II MATERIALS 
	 	TECHNOLOGY FUND L.P.
	 	 
	 	Name:  	Zwi Vromen                        Nir Belzer
	 	Title: 	Managing Partners

 

	 	/s/ Ignacio Aranguren-Trellez
	 	ARANCIA INTERNATIONL, INC.
	 	 
	 	Name:   	Ignacio Aranguren-Trellez
	 	Title: 	President

  

    	 

    	 

    

  

[Amended and Restated Investors’
Rights Agreement – Investors’ Signature Page]

  

	 	/s/ Leon Recanati
	 	GLENROCK ISRAEL LTD.
	 	 
	 	Name:  	Leon Recanati
	 	Title:	Chairman and CEO

  

	 	/s/ Bruno Lambert               /s/ Natalia Sutugina
	 	BIP VENTURE PARTNERS SA, SICAR
	 	 	 
	 	Name:	  Bruno Lambert               Natalia
Sutugina
	 	Title:	Chief Executive Officer    Investment Director

 

	 	/s/ Nir Belzer
	 	M-4 MANAGEMENT 
	 	LIMITED PARTNERSHIP
	 	 	 
	 	Name:	Nir Belzer
	 	Title:	GP   Managing Partner

  

	 	/s/ Alan Feld
	 	VINTAGE VENTURE PARTNERS, L.P.
	 	 
	 	By: its general partner Vintage Ventures LP
	 	By: its general partner Vintage Venture Fund I Ltd
	 	 
	 	Name:  	Alan Feld
	 	Title: 	Managing Partner

  

	 	/s/ Alan Feld
	 	VINTAGE VENTURE 
	 	PARTNERS (ISRAEL), L.P.
	 	 
	 	By: its general partner Vintage Ventures LP
	 	By: its general partner Vintage Venture Fund I Ltd
	 	 
	 	Name:  	Alan Feld
	 	Title: 	Managing Partner

  

    	 

    	 

    

  

[Amended and Restated Investors’
Rights Agreement – Investors’ Signature Page]

  

	 	/s/ Alan Feld
	 	VINTAGE VENTURE

PARTNERS (PARALLEL), L.P.
	 	 
	 	By: its general partner Vintage Ventures LP
	 	By: its general partner Vintage Venture Fund I Ltd
	 	 
	 	Name: 	Alan Feld
	 	Title: 	Managing Partner
	 	 

  

	 	/s/ Alan Feld               /s/ Hagai Goldhirsch
	 	VINTAGE VENTURE

PARTNERS III (CAYMAN), L.P.
	 	 
	 	By: its general partner Vintage Ventures III LP
	 	By: its general partner Vintage Venture Fund 3 Ltd
	 	 
	 	By: 	Alan Feld               Hagai Goldhirsch 
	 	Title: 	President                CFO

  

	 	/s/ Alan Feld    /s/ Hagai Goldhirsch
	 	VINTAGE VENTUREPARTNERS III (ISRAEL), L.P.
	 	 
	 	By: its general partner Vintage Ventures III LP
	 	By: its general partner Vintage Venture Fund 3 Ltd
	 	 
	 	By: 	Alan Feld               Hagai Goldhirsch 
	 	Title: 	President               CFO

  

	 	/s/ Gilad Agmon               /s/ Ofer Borovsky
	 	PLASON LTD.
	 	 
	 	Name: 	Gilad Agmon               Ofer Borovsky
	 	Title: 	CEO                                  Joint CFO

  

	 	/s/ Shmuel Shilo    /s/ Dror Glass
	 	ISRAEL SECONDARY FUND (ISR) L.P.
	 	 
	 	Name:   	Shmuel Shilo               Dror Glass
	 	Title: 	Managing Partners

  

    	 

    	 

    

  

[Amended and Restated Investors’
Rights Agreement – Investors’ Signature Page]

  

	 	/s/ Shmuel Shilo               /s/ Dror Glass
	 	ISRAEL SECONDARY INVESTMENTS (BVI) L.P.
	 	 
	 	Name: 	Shmuel Shilo               Dror Glass
	 	Title: 	Managing Partners

  

	 	/s/ Joseph Tache                /s/ Jacques Tache
	 	TPY CAPITAL SA
	 	 
	 	Name:   	Joseph Tache               Jacques Tache
	 	Title: 	Directors
	 

 

    	 

    	 

    

 

SCHEDULE A

 

INVESTORS

 

	Name	 	Address	 	 	Ordinary
 Registrable
 Securities	 	 	Preferred
 Registrable
 Securities	 	 	Registrable
 Securities
 Issuable upon the
 Exercise of
 Warrants	 
	GALAM LTD.	 	 	 	 	 	 	0	 	 	 	19,044	 	 	 	138	 
	GALAM MANAGEMENT AND MARKETING AGRICULTURE COOPERATIVE SOCIETY. 	 	 		 	 	 	8,107	 	 	 	68,071	 	 	 	550	 
	XT HI-TECH INVESTMENTS (1992) LTD.	 	 	 	 	 	 	9,167	 	 	 	35,025	 	 	 	1,514	 
	MILLENNIUM II MATERIALS TECHNOLOGY FUND L.P.	 	 	 	 	 	 	311	 	 	 	24,206	 	 	 	0	 
	ARANCIA INTERNATIONAL, INC.	 	 	 	 	 	 	0	 	 	 	15,140	 	 	 	1,101	 
	GLENROCK ISRAEL LTD.	 	 	 	 	 	 	0	 	 	 	569	 	 	 	28	 
	BIP VENTURE PARTNERS SA, SICAR 
	 	 	 	 	 	 	1,372	 	 	 	12,835	 	 	 	826	 
	M-4 MANAGEMENT LIMITED PARTNERSHIP	 	 	 	 	 	 	3,273	 	 	 	140	 	 	 	0	 
	VINTAGE VENTURE PARTNERS, L.P.	 	 	 	 	 	 	376	 	 	 	103	 	 	 	7	 
	VINTAGE VENTURE PARTNERS (ISRAEL), L.P.	 	 	 	 	 	 	164	 	 	 	110	 	 	 	16	 
	VINTAGE VENTURE PARTNERS (PARALLEL), L.P.	 	 	 	 	 	 	89	 	 	 	35	 	 	 	4	 
	VINTAGE VENTURE PARTNERS III (CAYMAN), L.P.	 	 	 	 	 	 	2,653	 	 	 	2,590	 	 	 	375	 
	VINTAGE VENTURE PARTNERS III (ISRAEL), L.P.	 	 	 	 	 	 	1,052	 	 	 	1,028	 	 	 	148	 
	PLASON LTD.	 	 	 	 	 	 	0	 	 	 	1,376	 	 	 	275	 
	ISRAEL SECONDARY FUND (ISR) L.P.	 	 	 	 	 	 	0	 	 	 	660	 	 	 	132	 
	ISRAEL SECONDARY INVESTMENTS (BVI) L.P.	 	 	 	 	 	 	0	 	 	 	28	 	 	 	6	 
	TPY CAPITAL SA	 	 	 	 	 	 	0	 	 	 	8,808	 	 	 	1,762	 
	ILAN LEVITEH	 	 	 	 	 	 	0	 	 	 	16	 	 	 	0	 

 

* * * * *

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