Document:

Exhibit 10.1

 

Execution Version

 

SENIOR SECURED CONVERTIBLE LOAN AGREEMENT

 

This Senior Secured Convertible Loan Agreement
(the “Agreement”) is made and entered into as of January 27, 2022 (the “Effective Date”), by and
between On Track Innovations Ltd., a company organized under the laws of the State of Israel with registration no. 520042862 (the “Company”),
and Nayax Ltd., a company organized under the laws of the State of Israel with registration no. 513639013 (the “Lender”
and together with the Company, the “Parties”).

 

WHEREAS, on January 10, 2022, the Company
filed with the Nazareth District Court certain petitions under the Israeli Insolvency and Economic Rehabilitation Law – 2018 (the
“Insolvency Proceedings”);

 

WHEREAS, on January 19, 2022, in order
to avoid the Insolvency Proceedings, the Parties entered into a Term Sheet (the “Term Sheet”), pursuant to which the
Lender, among other things, agreed to extend to the Company this senior secured convertible loan and subsequently, the Company’s
petitions in the Insolvency Proceedings were, with the court’s approval, withdrawn by the Company;

 

WHEREAS, this Agreement is intended as
the first step in a two-step transaction where ultimately the Lender shall purchase 100% of the share capital of the Company; and

 

WHEREAS, the board of directors of each
Party has determined that it is in the best interests of the Company and the Lender, as applicable, to enter into this Agreement;

 

NOW, THEREFORE, in consideration of these
premises, the respective covenants of the Company and the Lender set forth below and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

		1.	TERMS OF LOAN

 

		1.1.	Loan. Subject to the terms of this Agreement, the Lender shall lend to the Company an amount of
US$5,500,000 (five million and five hundred thousand U.S. dollars) (the “Principal Amount”). The Principal Amount,
minus the Advancement (as defined below), shall be wired by the Lender to the Company (or directly to the Company’s creditors in
such amounts and allocation as set out in Exhibit A to the extent the Company may so request from the Lender) no later than
one (1) business day after the Effective Date, by means of wire transfer of immediately available funds.

 

		1.2.	Advancement. The Company confirms that an amount of US$173,178 (one hundred seventy-three thousand
and one hundred seventy-eight U.S. dollars)1 was transferred on January 19, 2022, from
the Lender, on behalf of the Company, to the Company’s employees’ bank accounts, as an advancement on account of the Principal
Amount (the “Advancement”).

 

		1.3.	Use of Proceeds. The Company undertakes to utilize the Principal Amount to fund only the
items listed on Exhibit A attached hereto. Exhibit A also indicates what portions of the Principal Amount
shall be paid to the Company, and what portions of the Principal Amount shall be paid directly to the Company’s creditors (including
secured lenders). Until such time as the Company and the Lender shall enter into a Merger Agreement (as defined below), the Company shall
provide the Lender with a periodic report outlining the uses of the Principal Amount in the previous week, in a form and timing to be
agreed by the Parties.

 

		1.4.	Additional Amounts. The Lender may, at its sole discretion, extend additional amounts to the Company
under this Agreement (the “Additional Amounts”) in order, among other things, to allow the Company to pay its debts
as they become due, provided that with respect to such Additional Amounts, if extended by the Lender to the Company (a) the uses of such
Additional Amounts shall be approved in advance and in writing by the Lender, and (b) such Additional Amounts shall be deemed a part of
the Principal Amount and the terms of the Agreement and any related security interest shall apply to such Additional Amounts in full.

 

 

1 Based on wire in an amount of ILS
541,180.73 dated January 19, 2022, and the Bank of Israel representative exchange rate of ILS 3.125 / $1.

 

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		1.5.	Interest. The Principal Amount shall bear interest at an annual compounded rate of 10% (ten percent),
which shall accrue daily until the Maturity Date (as defined below) (the “Interest”). Each fiscal quarter, commencing
on April 1, 2022 (and following on the first date of the first month of each subsequent quarter), the Company shall pay to the Lender
the Interest accumulated during the previous quarter and any additional Value Added Tax (as applicable, upon receipt of an invoice), by
a wire transfer of immediately available funds. The Principal Amount together with the accrued Interest, and any Additional Amounts (and
any Interest accrued thereon) shall be referred to herein, in the aggregate, as the “Loan Amount”.

 

		1.6.	Ranking. The Principal Amount shall be used, among other things, to irrevocably pay in full the
Company’s debts to Bank Leumi and repayment of the loan under that certain loan financing agreement dated December 9, 2020 between
the Company and Jerry L. Ivy, Jr., Descendants’ Trust, as amended (the “Ivy Agreement”). Upon full payment of
the debts to Bank Leumi and the repayment in full of the loans under the Ivy Agreement (the “Secured Lenders Repayment”)
and removal of security interests relating thereto, the Loan Amount shall rank senior to any other indebtedness of the Company.

 

		1.7.	Repayment. The Principal Amount shall be due and payable in full by the Company on the second (2nd)
anniversary of the Effective Date (the “Maturity Date”), by wire transfer to the Lender’s bank account which
details shall be provided to the Company in writing prior to the Maturity Date. If the Maturity Date is not a business day in Israel,
such payment shall be made on the following business day. Except for in the case of Conversion, the Principal Amount may not be repaid
by the Company prior to the Maturity Date.

 

		2.	COLLATERAL

 

		2.1.	Floating Charge. On the Effective Date, the Company shall enter into a debenture, in the form attached
hereto as Exhibit B, as security for the Loan Amount (including any Additional Amounts), granting to the Lender a first
priority floating charge over all the assets of the Company as of the date hereof or hereafter acquired (the “Floating Charge”).

 

		2.2.	Removal of Existing Charges. After the Effective Date, and provided that the Secured Lenders Repayment
shall have taken place, the Company shall present to the Lender duly exercised approvals of all of the secured lenders of the Company
approving the removal and release of the existing charges registered in the name of such secured lenders from the registry of the Companies
Registrar, which approvals shall be filed with the Companies Registrar within one (1) business day from the date of receipt thereof.

 

		2.3.	Negative Pledge. As of the Effective Date and until full and complete repayment of the Loan Amount,
the Company shall not, without the Lender’s prior express written consent, create any lien, pledge, charge, encumbrance, hypothecation
or similar arrangements or other third-party rights of any kind with respect to its assets or property, including intellectual property
rights.

 

		2.4.	Repayment on Maturity. Upon the repayment or conversion in full of the Loan Amount, the Lender
shall promptly execute any documents required by the Company in order to remove the Floating Charge and Fixed Charges.

 

		3.	CONVERSION

 

		3.1.	At any time after the earlier to occur: (b) an Event of Default (as defined below), or (b) the completion
of the Merger Agreement (as defined below), and prior to the repayment in full of the Loan Amount, the Lender shall be entitled, at its
sole and absolute discretion, by written notice to the Company (the “Conversion Notice”), to demand to convert the
entire outstanding Loan Amount into Ordinary Shares, par value NIS 0.1 each, of the Company (the “Ordinary Shares”),
at a price per Ordinary Share equal to $0.043 (the “Conversion”). The Company shall take all necessary actions to cause
the Conversion to occur within no more than three (3) business days from receipt of the Conversion Notice.

 

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		3.2.	Insufficient Registered Share Capital. If, upon receipt of a Conversion Notice, the Company shall
not have sufficient registered capital to issue the Ordinary Shares required to perform the Conversion, then (a) it shall issue to the
Lender the maximum number of Ordinary Shares then available within three (3) business days from receipt of the Conversion Notice, and
(b) convene, within no more than fifty (50) days, a general meeting of the shareholders of the Company to: (i) increase the registered
share capital to allow the Conversion in full; and (ii) to the extent required, approve the Conversion under Section 328 of the Companies
Law, 1999 (“Section 328”). Should the general meeting of shareholders of the Company fail to approve the increase of
the registered share capital of the Company as required in order to allow for the Conversion of the Loan Amount in full into Ordinary
Shares, or that an approval under Section 328 is not obtained, then only such portion of the Loan Amount which conversion did not require
the increase in the registered share capital of the Company and that does not violate Section 328, if applicable, shall be converted into
Ordinary Shares; such failure shall constitute an “Event of Default” and the provisions of Section ‎4 of this Agreement
shall apply with respect to the remainder of the Loan Amount not so converted.

 

		3.3.	Until such time when the Loan Amount shall have been repaid in full or have otherwise been converted into
Ordinary Shares, the Company shall not issue and shall not undertake to issue to any third party any shares, options, warrants, or any
other instrument convertible into Ordinary Shares, without the prior written consent of the Lender.

 

		4.	EVENTS OF DEFAULT

 

Any of the following events
shall cause an event of default (each an “Event of Default”):

 

		4.1.	Failure to timely pay the Loan Amount, or any portion thereof;

 

		4.2.	Any representation, warranty or statement made by the Company in this Agreement (including the Exhibits
herein), and/or in any filing made by the Company with the U.S. Securities and Exchange Commission (the “SEC”), or
any other governmental agency, is incorrect, untrue or misleading in any material respect when it is made or deemed repeated;

 

		4.3.	A breach by the Company of this Agreement, failure to fully or timely perform any covenant set forth herein
or a legal determination by a court that the Agreement has not been duly authorized by the Company;

 

		4.4.	Any material financial indebtedness of the Company or a subsidiary of the Company is not paid when due,
or any security interests over any material part of the assets of the Company or any subsidiary of the Company is lawfully enforced;

 

		4.5.	Any event that triggers an acceleration of any material rights or obligations of the Company or any subsidiary
of the Company, such as rights held by employees and service providers, or repayment obligations towards lenders or noteholders;

 

		4.6.	Any judgment made against the Company or any subsidiary of the Company which is not paid, stayed or discharged
within thirty (30) days;

 

		4.7.	The Company or any subsidiary of the Company shall stop payment or shall be unable to, or shall admit
inability to, pay its debts as they become due, or shall be adjudicated or declared bankrupt or insolvent or shall enter into any composition
or other arrangement with its creditors generally;

 

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		4.8.	The commencement by the Company, by any of its subsidiaries, or by any third party, of any liquidation,
insolvency, or winding up proceedings, provided that if any of the proceedings above was initiated by a third party, then the proceedings
were not withdrawn or dismissed within fourteen (14 or the adoption of a resolution by the Company or any of its subsidiaries to commence
any such proceedings;

 

		4.9.	The appointment of a receiver or trustee over any part or the Company’s assets or any of its subsidiaries’
assets;

 

		4.10.	The levy of an attachment or the institution of execution proceedings against all or a substantial part
of Company’s or any of its subsidiaries’ assets, and the levy is not discharged or stayed (whether through the posting of
a bond or otherwise) within fourteen (14) days after the occurrence thereof;

 

		4.11.	Any event or series of events occur(s), which in the reasonable opinion of the Lender (after receiving
a written explanation from the Company within three (3) business days of the Lender’s written notice to the Company regarding the
facts triggering the material adverse effect) has a material adverse effect on the ability of the Company or any subsidiary of the Company
to comply with any of its material obligations hereunder;

 

		4.12.	The Company and the subsidiaries of the Company cease, threaten to cease, or suspend carrying on their
business or a material part of their business;

 

		4.13.	Failure to enter into the Merger Agreement. Failure to (a) put to the vote of the Company’s
shareholders’, by May 5, 2022, a Merger Agreement between the Company and the Lender (the “Merger Agreement”),
in form and substance to the Lender’s satisfaction, or (b) have the Merger Agreement approved by the Company’s board of directors
or the Company’s shareholders by May 31, 2022;

 

		4.14.	Breach of Section ‎6.1 [Exclusivity] or Section ‎6.2 [Standstill] of this Agreement; or

 

		4.15.	Failure to approve the share capital increase in connection with the Conversion, in accordance with Section
‎3.2 of this Agreement.

 

Notwithstanding the above, any event
that occurs primarily from a set of circumstances that existed as of the Effective Date and were disclosed to the Lender (including with
respect to any past due debts the Company disclosed to the Lender) shall not be deemed an Event of Default.

 

		5.	REMEDIES UPON AN EVENT OF DEFAULT

 

Upon the occurrence of an Event of
Default, at the election of the Lender in its sole discretion: (a) the Loan Amount shall become immediately due and payable by the Company
only (“Acceleration”); or (b) the interest on the Loan Amount shall be increased to an annual rate of 16% (sixteen
percent), calculated in accordance with Section 1.5 of this Agreement retroactively as of the date on which the Event of Default occurred,
until actual payment (the “Step-up Rate”). Should the Lender elect Acceleration, the Step-up Rate shall apply until
actual payment thereof. Value Added Tax shall be added to any payment hereunder.

 

		6.	EXCLUSIVITY & STANDSTILL

 

		6.1.	Exclusivity. From the Effective Date and until the earlier to occur of: (i) consummation of the
Merger Agreement, or (ii) the date that is six months following the Effective Date (the “Exclusivity Period”), the
Company, its board of directors, any of its executive officers, their agents or representatives in their capacity as such (collectively,
the “Standstill Parties”) shall cease all discussions, negotiations, solicitation of offers, or provision of information
to any third party regarding a competing transaction.

 

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		6.2.	Standstill. None of the Standstill Parties shall sell, transfer, pledge or perform any other transactions
with the Company’s shares or debt, during Exclusivity Period except with the prior written approval of the Lender. The Company shall
not enter into, during the Exclusivity Period, any loan, financing, credit or similar agreement with any third party, except for with
Lender’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed.

 

		6.3.	Ordinary Course. Except as expressly permitted by this Agreement or with the prior written consent
of the Lender (not to be unreasonably withheld, conditioned or delayed), during the Exclusivity Period, the Company shall, and shall cause
each of its subsidiaries to, (a) conduct its business in the ordinary course consistent with past practice, (b) comply in all material
respects with all applicable laws and the requirements of all of its material contracts, (c) use commercially reasonable efforts to maintain
and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services
of its present officers and key employees, and (d) keep in full force and effect all material insurance policies maintained by the Company
and its subsidiaries, other than changes to such policies made in the ordinary course of business. Without limiting the generality of
the foregoing, except as expressly permitted by this Agreement or with the Lender’s prior written consent (not to be unreasonably
withheld, conditioned or delayed), during the Exclusivity Period, the Company shall not, and shall not permit any of its subsidiaries
to: (i) issue, sell, grant, dispose of, pledge or otherwise encumber any shares of its capital stock, voting securities or equity interests,
or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of
its capital stock, (ii) incur or assume any indebtedness, borrow any funds, guarantee any indebtedness unless in the ordinary course of
business consistent with past practice, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any
debt securities, (iii) sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any lien or pledge any of its properties
or assets, (iv) make any capital expenditure in excess of US$25,000, (v) directly or indirectly acquire, dispose or invest in any equity
interest or businesses of any person, (vi) enter into, terminate or amend any material contract, (vii) increase in any manner the compensation
of any of its directors, officers or employees or enter into, establish, amend or terminate any employment, consulting, retention, change
in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other
equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy,
agreement, trust, fund or arrangement with, for or in respect of, any stockholder, director, officer, other employee, consultant or affiliate,
other than with respect to employees – in the ordinary course of business consistent with past practices, (viii) make any changes
in financial or tax accounting methods, principles or practices, (ix) amend the Company’s articles of association or other governing
documents or any governing documents of any subsidiary of the Company, (x) pay, discharge, settle or satisfy any claims, liabilities,
indebtedness or obligations (absolute, accrued, asserted or un-asserted, contingent or otherwise), (xi) settle or compromise any litigation
or proceeding, and (xii) agree, in writing or otherwise, to take any of the foregoing actions, or take any action or agree, in writing
or otherwise, to take any action which would cause any of the representations or warranties of the Company set forth in this Agreement
to be untrue or delay the ability of the Parties to satisfy any of the terms and conditions forth in this Agreement. Nothing in the above
shall prevent the Company from continue to operate its business as done before, on a consistent basis.

 

		7.	COMPANY REPRESENTATIONS

 

The Company hereby represents and warrants,
as of the Effective Date, as follows. Any reference in this Section ‎7 to the Company shall be deemed to apply to the Company and
all of its subsidiaries. Other than the express representation set forth below, the Company does not make any additional representations,
and the transaction set forth in this Agreement is entered into on an "as is" basis without any other representations or warranties.

 

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		7.1.	Due Incorporation and Power. The Company is a corporation duly organized and validly existing under
the laws of the state of Israel (with respect to any of its subsidiaries, any other relevant jurisdiction, as applicable) and has the
power to own and lease its properties and to carry on its business as now being conducted and as proposed to be conducted.

 

		7.2.	Power and Authority. Unless otherwise provided in this Agreement, no consents, authorizations or
approvals of any kind of any governmental authority or other third party are required in connection with the execution or performance
of this Agreement by Company, or such consents shall have been obtained. The Company is not aware of any party claiming that the transactions
set forth herein or in the Term Sheet were not duly approved.

 

		7.3.	No Violations. The consummation of the transactions contemplated hereunder and the performance
of the Company’s obligations hereunder do not violate the provisions of the articles of association of the Company, and will not
result in any breach of, or constitute a default under, any agreement or instrument to which the Company is a party or under which it
is bound. The execution of the Term Sheet, this Agreement, and any ancillary document herein and therein (the “Transaction Documents”)
and performance of the transactions contemplated hereby and thereby by the Company have been authorized by the Company’s Board of
Directors, and the Transaction Documents have been executed and delivered by the Company.

 

		7.4.	No Consents. Unless otherwise provided in this Agreement, the execution and performance of the
Transaction Documents by the Company will not (a) give to others any rights, including rights of termination, cancellation or acceleration,
in or with respect to any agreement, contract or commitment referred to in this paragraph, or to any of the properties of the Company,
or (b)s require the consent or approval of any person or entity.

 

		7.5.	Intellectual Property. In this Agreement, all patents, trademarks, service marks, trade names,
copyrights and all trade secrets, including know-how, invention, designs, processes, computer programs, algorithms, drawings, photographs,
models, and any other form of intellectual property, shall collectively be referred to herein as “Intellectual Property”.
The Company’s registered or registrable Intellectual Property is listed on Exhibit C hereto (the “Registered
IP”). Intellectual Property which is not listed in Exhibit C shall be referred to as “Un-Registered IP”.
Other than any pledges in favor or Bank Leumi or under the Ivy Agreement, the Company possesses all right, title, and interest in and
to the Registered IP (it being understood that with respect to patents, the foregoing representations shall apply only to the ownership
of a patent application and the inventions covered thereunder and not as a representation regarding the patentability of any invention
or the scope of any patent that may be granted pursuant to such application). All Un-Registered IP which the Company currently uses or
intends to use is either owned by the Company or the Company has the right to use such Un-Registered IP pursuant to written license, sublicense,
agreement, or permission, free and clear of any security interest, third party rights and royalties or other fees. Each item of Intellectual
Property owned or used by the Company immediately prior to the Effective Date will be owned or available for use by the Company on substantially
the same terms and conditions immediately subsequent to the Effective Date.

 

		7.6.	No Infringement. (i) To the Company’s best knowledge, the Company has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any intellectual property rights of any third party nor will the
conducting by it of its business, or use of the Intellectual Property, as presently conducted and as proposed to be conducted interfere,
infringe upon, misappropriate or otherwise come into conflict with any Intellectual Property rights of any third party; (ii) since January
1, 2019, the Company has not received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation,
or violation (including any claim that the Company must license or refrain from using any intellectual property rights of any third party)
and to the Company’s best knowledge there is no basis for such; and (iii) to the Company’s best knowledge, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property of the Company.

 

		7.7.	Protection of IP Rights and Trade Secrets. The Company takes such action to maintain and protect
each item of Intellectual Property that it owns or uses which actions are reasonable and customary in the industry in which the Company
operates. All of the Company’s confidential information is being (and has been) continuously maintained in confidence by the Company
by taking reasonable precautions to protect and prevent its disclosure to unauthorized parties. The Company has complied in all material
respects with the requirements of, and has filed all material documentation required in dealing with, all patent and trademark offices
and any other patent registry agency in which its patent applications were filed; and all patents (if any) and patent applications are
in effect, and, to the Company’s best knowledge, there is no prior art or any other possible claim which renders the inventions
of the Company referred to in the patents, patent applications and related documentation (if any) invalid in any manner.

 

		7.8.	Litigation. Except for potential claims from the Company's creditors that were disclosed to the
Lender, the Company is not: (i) subject to any outstanding injunction, judgment, order, decree, writ, stipulation, ruling, or charge of
any court or any governmental agency or any arbitrator; or (ii) a party or to the Company’s knowledge, is threatened in writing
to be made a party to, any action, suit, proceeding, hearing, complaint, charge or investigation of, in, or before any court or quasi-judicial
or administrative agency of any state, municipal, or foreign jurisdiction or before any arbitrator or other method of settling disputes
or disagreements. The Company does not know, anticipate, or has any basis to believe that any such action, suit, proceeding, hearing,
complaint, charge or investigation may be brought or threatened against the Company and the Company does not intend to initiate any such
action, suit, proceeding, hearing, complaint, charge or investigation. Without derogating from any of the foregoing, there is no action,
suit, proceeding, or investigation pending or to the Company’s knowledge, currently threatened in writing involving any of the Company’s
employees, their use in connection with the Company’s business of any information or techniques allegedly proprietary to any of
their former employers, or their obligations under any agreement with prior employers.

 

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		7.9.	Financial Statements. Attached as Exhibit D hereto are (a) unaudited consolidated
financial statements of the Company as of and for the period that ended on September 30, 2021, (b) the audited financial statements of
the Company as of and for the period that ended on December 31, 2020 (collectively (a) and (b) - the “Financial Statements”),
and (c) the trial balance sheets as of December 31, 2021. The Financial Statements: (i) have been prepared in accordance with accounting
practices generally accepted in the United States (“US GAAP”) applied on a consistent basis, (ii) are in accordance
with the books and records of the Company, and (iii) are true and correct in all respects and present fairly the financial condition of
the Company at the date or dates therein indicated and the results of operations and cash flows for the periods therein specified; provided,
however, that, other than the audited Financial Statements, the Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items. All proper and necessary books of account and accounting records have been maintained by the Company,
are in its possession and contain accurate information in accordance with generally accepted principles consistently applied relating
to all transactions to which the Company has been a party. Except as set forth in the Financial Statements, the Company has no known liabilities,
contingent or otherwise, and obligations under contracts and commitments incurred in the ordinary course of business and not required
under US GAAP to be reflected in the Financial Statements. The Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with US GAAP.

 

		7.10.	Compliance with Law and other Instruments. The Company has conducted its business in accordance
with all applicable laws of the countries in which it is conducting or has conducted its business and is not in violation or default that
could cause a material adverse effect on the Company with respect to any law, or judgment of any court or any governmental agency, or
any of the Company’s permits. To the Company’s best knowledge, there is no existing law, rule, regulation or order which would
prohibit or restrict the Company from, or otherwise materially adversely affect the Company in, conducting its business in any jurisdiction
in which it is now conducting business or in which it currently proposes to conduct business.

 

		7.11.	Debts and Loan Facilities. Except as set forth in Exhibit E, there are no debts owing
by or liabilities of the Company, nor has the Company borrowed or lent any money which has not yet been repaid. Other than with respect
to the financing by Bank Leumi, the Company is not in default under any instrument constituting any material indebtedness or under any
guarantee of any material indebtedness and no event has occurred which, under the terms of any such instrument or guarantee, such indebtedness
or guarantee should be called or the liabilities thereunder accelerated before their due date (if any) or any loan facilities terminated.

 

		7.12.	Security Interests. Exhibit F sets forth any and all the security interests existing
in connection with any tangible or intangible assets and other property of the Company. Except as set forth in Exhibit F, no other security
interest is existing and/or registered on the assets and property of the Company, except for the security interests created for the benefit
of the Lender hereunder.

 

		7.13.	Reports. The Company has filed or furnished all material forms, reports and documents with the
SEC and other governmental agency that it has been required to file or furnish under any applicable securities or other law (all such
forms, reports and documents, including exhibits and schedules, filed or furnished, together with any amendments thereto, the “Reports”).
As of its filing or furnishing date (or, if amended or superseded by a filing or furnishing prior to the date of this Agreement, on the
date of such amended or superseded filing or furnishing), (i) the Reports complied in all material respects with the applicable requirements
of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the Sarbanes-Oxley Act and any other applicable law, and
(ii) the Reports did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

		7.14.	Liabilities. Except as set forth in the Reports, Financial Statements and Exhibit E
and except for normal liabilities arising in the ordinary course of business consistent with past practice, the Company does not have
any liabilities, either accrued, contingent or otherwise, whether due or to become due, that individually or in the aggregate have had
or would reasonably be expected to have a material adverse effect on the Company.

 

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		7.15.	Capitalization. As of the date hereof, the authorized and registered share capital of the Company
is NIS 12,000,000, divided into 120,000,000 Ordinary Shares, 75,775,393 shares of which are issued and outstanding as of the Effective
Date (except, for the avoidance of doubt, treasury shares). As of the Effective Date, the Company’s share capital also consists
of the following securities: options outstanding that are issued under the 2001 stock option plan of the Company (the “Option
Plan”) – 546,500 options, options remaining available for future issuance under the Option Plan - 3,886,046 options, 6,000,000
shares reserved under the Company’s 2021 Incentive Option Plan, of which 3,615,500 shares have been, or are committed, to be issued
to employees and directors. In addition, up to 14,175,927 Ordinary Shares are reserved for issuance upon conversion under the Ivy Agreement.
Except as set forth herein and as arising under this Agreement, there are no other shares, convertible or other securities, outstanding
warrants, options, or other rights to subscribe for, purchase, or acquire from the Company any securities of the Company, or under which
the Company is, or may become, obligated to issue any securities.

 

		7.16.	Taxation. The Company (i) other than as disclosed to the Lender, has timely filed (taking into
account any extensions of time in which to file) all returns and reports (including elections, declarations and disclosures) relating
to VAT, income taxes, deductions and withholding taxes, social security and any other applicable taxes (“Tax Returns”)
required to be filed with any governmental authority by the Company and (ii) other than as set forth in Exhibit E, has paid, or adequately
reserved (in accordance with US GAAP) on the most recent Financial Statements for the payment of, all taxes required to be paid. The Company
is not aware of any outstanding dispute, audit, investigation, proceeding or claim with any relevant taxation authority in relation to
any material liability of the Company for taxation, any material relief, deduction, or allowance afforded to it, or in relation to the
status or characterization of the Company or any of its enterprises under or for the purpose of any provision of any legislation relating
to taxation.

 

		8.	GENERAL PROVISIONS

 

		8.1.	Entire Agreement; Amendment; Waiver. This Agreement, along with Term Sheet, constitute the full
and entire understanding and agreement between the Parties hereto with regard to the subject matters hereof. In case of any contradiction
or discrepancy between this Agreement and the Term Sheet, the provisions of this Agreement shall override, provided that nothing in this
Agreement shall derogate from the Parties’ obligations under the Term Sheet (including, specifically, with respect to the Break-up
Fee (as defined in the Term Sheet)). Any term of this Agreement may be amended with the written consent of the Company and the Lender.
No delay or omission to exercise any right, power or remedy accruing to any Party upon any breach or default under this Agreement, shall
be deemed a waiver thereof or of any other breach or default theretofore or thereafter occurring. Except as otherwise provided for herein,
the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance)
only with the written consent of the Party against such waiver is sought.

 

		8.2.	Successors and Assigns; Assignment. Each of the Parties shall not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of the other Party, provided that the Lender may assign or
transfer its rights under this Agreement without the Company’s consent to any entity controlled by, controlling (directly or indirectly),
or under common control of the Lender (the term 'control' shall be as defined under the Securities Law of 1968). The rights and obligations
of the Parties under this Agreement shall be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors,
administrators and legal representatives.

 

		8.3.	Further Actions. At any time and from time to time, each of the Parties agrees, without further
consideration, to take such actions and to execute and deliver such documents as, in the other Party's opinion, may be reasonably necessary
to carry out and give full effect to the provisions of this Agreement and the intentions of the Parties as reflected hereby and thereby.

 

		8.4.	No Third Party Rights. Nothing in this Agreement shall be deemed to create any right on the
part of any person or entity not a party to this Agreement other than as expressly set forth herein.

 

		8.5.	Governing Law. This Agreement shall be governed by, and construed, enforced and interpreted in
accordance with, the laws of the State of Israel. The competent courts in Tel Aviv-Jaffa district shall have exclusive jurisdiction over
any dispute or claim arising in connection with or as a result of this Agreement, and each of the Parties irrevocably submits to the exclusive
jurisdiction of such court.

 

		8.6.	Counterparts. This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the same instrument.

 

		8.7.	Reporting. The Lender acknowledges that this Agreement and relating documents, such as the Debenture,
may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K promulgated under the
Securities Exchange Act of 1934 (the “Exchange Act”), and that the Company may therefore be required to file such documents
as an exhibits to reports or registration statements filed under the Securities Act of 1933 or the Exchange Act. The Lender further agrees
that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with
its counsel.

 

[Signature Page Follows]

 

    8

     

    

 

IN WITNESS WHEREOF, this Agreement has
been executed by the Parties as of the date first hereinabove written.

COMPANY

 

On Track Innovations Ltd.

 

	By:	 /s/ Amir Eilam	 	/s/ Assaf Cohen
	Title:	 Chief Executive Officer	 	Chief Financial Officer 

 

LENDER

 

Nayax Ltd.

 

	By:	 /s/ Yair Nechmad	 	/s/ David Ben Avi
	Title:	 Chief Executive Officer	 	Cofounder and Chief Technology Officer

 

[Signature Page to Senior Secured Convertible
Loan Agreement]

 

 

9Exhibit 4.1

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT
(this “Agreement”), is made as of November 3, 2021 (the “Effective Date”), by and among AKANDA CORP.,
an Ontario corporation (the “Company”), and HALO COLLECTIVE INC., an Ontario corporation, as further identified on
Schedule A hereto (the “Investor”).

 

RECITALS

 

WHEREAS, the Company
and Investor have to entered into that certain Share Purchase Agreement between Company and Investor dated September 29, 2021(the “Share
Purchase Agreement”), which contemplates the sale of all of the shares of Cannahealth Limited, a wholly owned subsidiary of
Investor, to Company, upon the terms and conditions of the Share Purchase Agreement, resulting in Investor owning 13,129,212 Common Shares.

 

WHEREAS, in connection
with the entering into of the Share Purchase Agreement , the Investor and the Company hereby agree that this Agreement shall govern the
rights of the Investor, to receive certain information from the Company, to nominate an Investor Director, to exercise Board of Directors
observer rights, and shall govern certain other matters as set forth in this Agreement;

 

NOW, THEREFORE, the
parties hereby agree as follows:

 

		1.	Definitions. For purposes of this Agreement:

 

1.1             
“Affiliate” means, with respect to any specified Person, any other Person who, 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 trustee of such Person, or any venture capital fund or other investment fund now or hereafter existing that is controlled
by one (1) or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser
with, such Person.

 

1.2             
“AGM” means the Company’s annual general meeting.

 

1.3             
“Articles of Incorporation” means the Company’s Articles of Incorporation, as amended and/or restated
from time to time.

 

1.4             
“Board of Directors” means the board of directors of the Company.

 

1.5             
“Common Shares” means the Company’s common shares, no par value.

 

1.6              “Damages”
means any loss, damage, claim 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, claim 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 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.

 

INVESTOR RIGHTS AGREEMENT

 

    1

     

    

 

1.7             
“Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for
(in each case, directly or indirectly), Common Shares, including options and warrants.

 

1.8             
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

1.9             
“FOIA Party” means a Person that, in the reasonable determination of the Board of Directors, may be subject
to, and thereby required to disclose non-public information furnished by or relating to the Company under, the Freedom of Information
Act, 5 U.S.C. 552 (“FOIA”), any state public records access law, any state or other jurisdiction’s laws similar
in intent or effect to FOIA, or any other similar statutory or regulatory requirement.

 

1.10         
“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, as it relates to the Company, a corporation foreign to the United States.

 

1.11         
“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 forward incorporation of substantial information by reference to
other documents filed by the Company with the SEC, as it relates to the Company, a corporation foreign to the United States.

 

1.12         
“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

1.13         
“Holder” means Investor.

 

1.14         
“IFRS” means the international financial reporting standards, commonly called IFRS, the accounting standard
in Canada as in effect from time to time.

 

1.15         
“Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, life
partner or similar statutorily-recognized domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, including adoptive relationships of a natural person referred to herein.

 

1.16         
“Investor Director” means an individual nominated to the Board of Directors by Investor.

 

1.17         
“IPO” means the Company’s first underwritten public offering of its Common Shares under the Securities
Act.

 

1.18          “New
Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights,
options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible
or exchangeable into or exercisable for such equity securities.

 

INVESTOR RIGHTS AGREEMENT

 

    2

     

    

 

1.19         
“Person” means any individual, corporation, partnership, trust, limited liability company, association or other
entity.

 

1.20         
“SEC” means the Securities and Exchange Commission.

 

1.21         
“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.22         
“SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.23         
“Securities” means (i) any Common Shares, or any Common Shares issued or issuable (directly or indirectly) upon
conversion and/or exercise of any other securities of the Company, acquired by a Holder of even date or after the date hereof, and (ii)
any Common 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 clause (i) above;
excluding in all cases, however, any Securities sold by a Person in a transaction in which the applicable rights under this Agreement
are not assigned pursuant to Section 5.1.

 

1.24         
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

		2.	Reports: “Lock-up”.

 

2.1             
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 F-3, 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 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 F-3 (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 F-3 (at any time after the Company so qualifies to use such form).

 

INVESTOR RIGHTS AGREEMENT

 

    3

     

    

 

2.2             
“Lock-Up” Agreement. The Holders agree hereby not to, and agree to execute and deliver a lock-up agreement with
the underwriter(s) of the IPO restricting its right to, (a) offer, pledge, sell, contract to sell, sell any options 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 securities of the Company, or (b) enter into any swap or other arrangement or any transaction that transfers, in whole
or in part, directly or indirectly, to another any of the economic consequences of ownership of such securities during the period of up
to 270 days from the date on which the trading of the Securities on the Nasdaq Stock Exchange commences (the “Lock-Up Trigger
Date”), in each case, excluding transfers pursuant to any carve-outs in the applicable lock-up agreement. The terms of such
lock-up agreements shall be negotiated among the Investor, the Company and the underwriters in the IPO and shall include customary carve-outs
from the restrictions on transfer set forth therein and shall permit that up to 50% of such securities may be transferred or sold from
the 271st day through the 365th day following the Lock-Up Trigger Date; the remaining 50% of such securities will
be entitled to be transferred without such lock-up restrictions beginning on the 366th day following the Lock-Up Trigger Date.
Any such transfers remain subject to rules of the Securities and Exchange Commission applicable to securities held by Affiliates, provided
that the Company agrees to cooperate with Investor to facilitate the transfer of Securities by Investor following the expiration of the
lock-up restrictions as set forth herein, including with respect to the removal of restrictive legends from the Securities applicable
to Affiliates, if Investor furnishes to the Company an opinion of counsel reasonably satisfactory to the Company that Investor is not
an “affiliate” of the Company under the Securities Act. Notwithstanding the foregoing, nothing in this Section 2.2
shall prohibit the sale by the Investor of such number of Common Shares as is required in order for the Investor to comply with its covenants
relating to control of the Company, found in that secured convertible debenture, dated the date here of, issued by the Company and acknowledged
and agreed to by the Investor, evidencing indebtedness in the principal amount of USD$6,559,294.

 

		3.	Information, Board Nominee and Observer Rights.

 

3.1             
Delivery of Financial Statements. Upon written request by Investor, the Company shall deliver the following to Investor:

 

(a)              
as soon as practicable, but in any event within ninety (90) days 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, and a comparison between (x) the actual amounts
as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the Budget (as defined in Section
3.1(d)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications
of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year;

 

INVESTOR RIGHTS AGREEMENT

 

    4

     

    

 

(b)              
 as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the
Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’
equity as of the end of such fiscal quarter, all prepared in accordance with IFRS or 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 IFRS or
GAAP);

 

(c)              
as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company,
a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for
shares of capital stock outstanding at the end of the period, the Common Shares issuable upon conversion or exercise of any outstanding
securities convertible or exercisable for Common Shares and the exchange ratio or exercise price applicable thereto, and the number of
shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit
Investor to calculate its percentage equity ownership in the Company, and certified by the chief financial officer or chief executive
officer of the Company as being true, complete, and correct;

 

(d)              
as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the
next fiscal year, prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months
and, promptly after prepared, any other budgets or revised budgets prepared by the Company (such budget and business plan that is approved
by the Board of Directors is collectively referred to herein as the “Budget”); and

 

(e)              
with respect to the financial statements called for in Section 3.1(a) and Section 3.1(b), an instrument executed
by the chief financial officer and chief executive officer of the Company certifying that such financial statements were prepared in accordance
with IFRS or GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Section 3.1(b) or
as disclosed otherwise) and fairly present, in all material respects, the financial condition of the Company and its financial performance
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 Investor
may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section
3.1 to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information
(unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company); or (ii) the disclosure of which would
adversely affect the attorney-client privilege between the Company and its counsel.

 

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.

 

INVESTOR RIGHTS AGREEMENT

 

    5

     

    

 

Notwithstanding anything
else in this Section 3.1 to the contrary, the Company shall have no obligation to provide any information requested pursuant
to this Section 3.1 during (i) any period in which the Company has a public filing obligation to provide substantially
similar information or (ii) the period starting with the date thirty (30) 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 Investor, at 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 as may be reasonably requested by the 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             
Director Nominee Rights. Upon written notice of Investor, so long as Investor holds at least ten percent (10%) of the shares
of Common Shares (subject to appropriate adjustment for any stock splits, stock dividends, combinations, recapitalizations and the like),
Investor shall have the right, but not the obligation, to nominate an Investor Director to the Board of Directors of the Company at any
election of the Board of Directors of the Company, at an AGM or otherwise, or within sixty (60) days of Investor’s notice to fill
any vacancy. Any vacancies created by the resignation, removal or death of an Investor Director shall be filled by nomination of Investor,
pursuant to the provisions of this Section 3.3.

 

3.4             
Failure to Nominate an Investor Director. In the absence of any new nomination from the Investor as specified in Section
3.3 above, any Investor Director previously nominated by Investor and then serving shall be automatically re-nominated if willing
to serve unless such individual has been removed by the Board of Directors, and otherwise such seat shall remain vacant until otherwise
filled as provided in Section 3.4.

 

3.5             
No Liability for Election of Nominated Directors. Investor, nor any Affiliate of any the same, shall have any liability
as a result of nominating an individual for election as a director for any act or omission by such Investor Director in his or her capacity
as a director of the Company, nor shall Investor or any Investor Affiliate have any liability as a result of voting for any such designee
in accordance with the provisions of this Agreement.

 

INVESTOR RIGHTS AGREEMENT

 

    6

     

    

 

3.6              Observer
Rights. Upon written notice of Investor, so long as Investor holds at least ten percent (10%) of the shares of the then issued
and outstanding Common Shares (subject to appropriate adjustment for any stock splits, stock dividends, combinations,
recapitalizations and the like) and the Investor Director is not a then-current member of the Board of Directors, the Company shall
invite a representative of Investor to attend all meetings of the Board of Directors in a nonvoting observer capacity and, in this
respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its
directors at the same time and in the same manner as provided to such directors; provided, however, that such
representative shall agree to hold in confidence all information so provided; and provided further, that the Company reserves
the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such
information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel
or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the
Company.

 

3.7             
Termination of Information, Board Nominee and Observer Rights. The covenants set forth in Sections 3.1, 3.2,
4.3 and 4.6 shall terminate upon the date on which the Investor no longer holds any Securities or if the Investor receives
information, nominee and observer rights from the acquiring company or other successor to the Company substantially similar to those set
forth in Section 4.

 

3.8             
Confidentiality. Investor agrees that it will keep confidential and will not disclose, divulge, or use for any purpose (other
than to monitor or make decisions with respect to its investment in the Company) any confidential information obtained from the Company
pursuant to the terms of this Agreement (including 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
3.8 by such Investor), (b) is or has been independently developed or conceived by such Investor without use of the Company’s
confidential information, or (c) is or has been made known or disclosed to such 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 reasonably necessary to obtain their
services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Securities from such Investor,
if such prospective purchaser agrees to be bound by the provisions of this Section 3.8; (iii) to any existing or prospective Affiliate,
partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such
Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information;
or (iv) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that such Investor promptly notifies
the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

		4.	Additional Covenants.

 

4.1             
Insurance. The Company shall obtain, within ninety (90) days of the effective date of this Agreement, from financially sound
and reputable insurers, Directors and Officers liability insurance and term “key person” insurance, each in an amount and
on terms and conditions satisfactory to the Board of Directors, and will use commercially reasonable efforts to cause such insurance policies
to be maintained until such time as the Board of Directors determines that such insurance should be discontinued. The key person policy
shall name the Company as loss payee, and neither policy shall be cancelable by the Company without prior approval by the Board of Directors.

 

INVESTOR RIGHTS AGREEMENT

 

    7

     

    

 

4.2              Board
Matters. The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred
(consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors, if so approved
by the Board of Directors. The Company shall cause to be established, as soon as practicable after such request, and will maintain,
an audit and compensation committee, each of which shall consist solely of non-management directors. Each non-employee director
shall be entitled in such person’s discretion to be a member of all the audit and compensation committees of the Board of
Directors.

 

4.3             
Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper
provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification
of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s
Bylaws, the Articles of Incorporation, or elsewhere, as the case may be.

 

4.4             
Indemnification Matters. The Company hereby acknowledges that one (1) or more of the Investor Directors nominated to serve
on the Board of Directors by one Investor may have certain rights to indemnification, advancement of expenses and/or insurance provided
by the Investor (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor
of first resort (i.e., its obligations to any such Investor Director are primary and any obligation of the Investor Indemnitors
to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Investor Director are secondary),
(b) that it shall be required to advance the full amount of expenses incurred by such Investor Director and shall be liable for the full
amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Investor Director to the
extent legally permitted and as required by the Articles of Incorporation or Bylaws of the Company (or any agreement between the Company
and such Investor Director), without regard to any rights such Investor Director may have against the Investor Indemnitors, and, (c) that
it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for
contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment
by the Investor Indemnitors on behalf of any such Investor Director with respect to any claim for which such Investor Director has sought
indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of the rights of recovery of such Investor Director against the Company.
The Investor Directors and the Investor Indemnitors are intended third-party beneficiaries of this Section 4.4 and shall have the
right, power and authority to enforce the provisions of this Section 4.4 as though they were a party to this Agreement.

 

INVESTOR RIGHTS AGREEMENT

 

    8

     

    

 

4.5              FCPA.
The Company covenants that it shall not (and shall not permit any of its subsidiaries or Affiliates or any of its or their
respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or
make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any
Non-U.S. Official (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the
 “FCPA”)), in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or
anti-corruption law. The Company further covenants that it shall (and shall cause each of its subsidiaries and Affiliates to) cease
all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or Affiliates, or
any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of
the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further covenants that it
shall (and shall cause each of its subsidiaries and Affiliates to) maintain systems of internal controls (including, but not limited
to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any
other applicable anti-bribery or anti-corruption law. Upon request, the Company agrees to provide responsive information and/or
certifications concerning its compliance with applicable anti-corruption laws. The Company shall promptly notify each Investor if
the Company becomes aware of any enforcement. The Company shall, and shall cause any direct or indirect subsidiary or entity
controlled by it, whether now in existence or formed in the future, to comply with the FCPA. The Company shall use its best efforts
to cause any direct or indirect subsidiary, whether now in existence or formed in the future, to comply in all material respects
with all applicable laws.

 

4.6             
Cybersecurity. The Company shall use commercially reasonable efforts to (a) identify and restrict access (including through
physical and/or technical controls) to the Company’s confidential business information and trade secrets and any information about
identified or identifiable natural persons maintained by or on behalf of the Company (collectively, “Protected Data”)
to those individuals who have a need to access it and (b) implement reasonable physical, technical and administrative safeguards (“Cybersecurity
Solutions”) designed to protect the confidentiality, integrity and availability of its technology and systems (including servers,
laptops, desktops, cloud, containers, virtual environments and data centers) and all Protected Data. The Company shall use commercially
reasonable efforts to ensure that the Cybersecurity Solutions (x) are up-to-date and include industry-standard protections (e.g.,
antivirus, endpoint detection and response and threat hunting), (y) to the extent determined necessary by the Company or the Board of
Directors, are backed by a breach prevention warranty from the vendor certifying the effectiveness of such solutions, and (z) require
the vendors to notify the Company of any security incidents posing a risk to the Company’s information (regardless of whether information
was actually compromised). The Company shall evaluate on a periodic basis at least annually whether such safeguards should be updated
to maintain a level of security appropriate to the risk posed to Company systems and Protected Data. The Company shall educate its employees
about the proper use and storage of Protected Data, including periodic training as determined reasonably necessary by the Company or the
Board of Directors.

 

INVESTOR RIGHTS AGREEMENT

 

    9

     

    

 

		5.	Miscellaneous.

 

5.1              Successors
and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee
of Securities for no monetary consideration that (i) is an Affiliate of a Holder; or (ii) is a Holder’s Immediate Family
Member or trust for the benefit of an individual Holder or one (1) or more of such Holder’s Immediate Family Members; 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 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 2.2. For the purposes of determining the number of shares of Securities held by a transferee, the
holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member;
or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member 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, as a condition to the applicable transfer, establish 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.

 

5.2             
Governing Law. This Agreement shall be governed by the internal laws of the Province of Ontario, without regard to conflict
of law principles that would result in the application of any law other than the laws of the Province of Ontario.

 

5.3             
Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf
or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

5.4             
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.

 

5.5             
Notices.

 

(a)              
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail
during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s 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 Investor at its addresses as set forth on Schedule
A, or (as to the Company) to the principal office of the Company and to the attention of the Chief Executive Officer, or in any case
to such email address or address as subsequently modified by written notice given in accordance with this Section 5.5. If notice
is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to the Company’s legal counsel (Greenberg
Traurig LLP) and if notice is given to Investor, a copy (which copy shall not constitute notice) shall also be given to Dentons Canada
LLP.

 

INVESTOR RIGHTS AGREEMENT

 

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5.6              Amendments
and Waivers. Any term of this Agreement may be amended, modified or terminated 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 Investor; provided that any provision hereof may be waived by any waiving party on such
party’s own behalf, without the consent of any other party. 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.

 

5.7             
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.

 

5.8             
Aggregation of Stock; Apportionment. All shares of Securities held or acquired by Affiliates shall be aggregated together
for the purpose of determining the availability of any rights under this Agreement and such Affiliated Persons may apportion such rights
as among themselves in any manner they deem appropriate.

 

5.9             
Entire Agreement. This Agreement (including any Schedules 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.

 

5.10         
Dispute Resolution. The parties hereto irrevocably attorn and submit to the jurisdiction of the courts of the Province of
Ontario, sitting in the City of Toronto, with respect to any dispute for the purpose of any suit, action or other proceeding arising out
of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement
except in the courts of the Province of Ontario, sitting in the City of Toronto, and (c) hereby waive, and agree not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.

 

INVESTOR RIGHTS AGREEMENT

 

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WAIVER OF JURY TRIAL: EACH
PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER
TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

Each party will bear its own
costs in respect of any disputes arising under this Agreement. The prevailing party shall be entitled to reasonable attorney’s fees,
costs, and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the parties to this Agreement
consents to personal jurisdiction for any equitable action sought in any court of the Province of Ontario, sitting in the City of Toronto
having subject matter jurisdiction.

 

5.11         
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 nonbreaching
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.

 

[Signature page follows]

 

INVESTOR RIGHTS AGREEMENT

 

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

 

	              	COMPANY:
	 	 	 
	 	AKANDA CORP.
	 	 	 
	 	By:	/s/ Tejinder Virk
	 	 	 
	 	Name:	Tejinder Virk
	 	 	 
	 	Title:	Chief Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	INVESTOR:
	 	 	 
	 	HALO COLLECTIVE INC.
	 	 	 
	 	By:	/s/ Kiran Sidhu
	 	 	 
	 	Name:	Kiran Sidhu
	 	 	 
	 	Title:	Chief Executive Officer

 

INVESTOR RIGHTS AGREEMENT

 

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SCHEDULE A

 

Investor

 

	Name and Address
	 
	
    HALO COLLECTIVE INC.

    Attn: Kiran Sidhu

    504 - 100 Park Royal

    West Vancouver, BC V7T 1A2

    Phone: 1-541-816-5410

    Email: kiran@haloco.com

     

    Copy to:

    DENTONS CANADA LLP

    Attn: Eric Foster

    77 King Street West, Suite 400

    Toronto-Dominion Centre Toronto, ON M5K 0A1

    Phone: 1-416-558-3531

    Email: eric.foster@dentons.com 

 

SCHEDULE A: INVESTOR RIGHTS AGREEMENT

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