Exhibit 10.16

Loan Agreement

dated December 2, 2020

therefore the Parties have agreed upon, declared and conditioned the following:

Unless any other intention is understood from the content of matters or there link, in this Agreement the following expressions shall have the meaning listed next to them, as follows:

The Borrower shall be entitled to use the credit in the following manner:

“EBITDA” – The annual accumulated sum of the net earnings on neutralizing interest expenses, financial expenses, tax expenses, depreciation on fixed property and amortization of other assets.

To obviate any doubt, one-time revenues and expenses, which do not reflect the Borrower’s normal course of business, for example but not limited to: gains/losses from evaluating real estate for investment, capital gains/losses and gains/losses from revaluing options to employees, will not be included in the EBITDA.

In 2022, subject to the individual approval of the Lender, the EBITDA used for the purposes of examining the Borrower’s compliance with the various conditions detailed below, will be amended so that new expenses that were expended by the Company during that period in order to result in gross (such as employing additional sales personnel etc.) will be added to it (i.e. they will not be neutralized).

“The cover/debt ratio” – The result received from dividing the balance of the credit principal as shall be from time to time, by the normalized annual EBITDA (as defined below). Despite the aforementioned for the purposes of calculating the cover/debt ratio, the balance of the funds in the designated account (at that date) and the withdrawal sum for increasing inventory as detailed in Section 4.2.6.3a below, will be deducted from the credit principal balance.

“Current assets” – The total of the balance sheet entries – cash and cash equivalents, accounts receivable, trade receivables and inventory as appear in the Company’s books.

If the finished product inventory supply forecast from the Borrower’s inventory suppliers in each calendar quarter (“the expected quarterly supply “) exceeds $700 thousand, the Borrower shall be entitled to withdraw the difference between the expected quarterly supply (as appears in the Borrower’s inventory management system reports) and $700,000 from the designated account, up to and accumulated withdrawal of $500 thousand (hereinafter: “the withdrawal for increasing current inventory”).

If the Borrower has used the withdrawal for increasing current inventory, the Borrower must return the money for the withdrawal for increasing current inventory to the designated account if the expected quarterly supply (as appears in the Borrower’s inventory management system reports) (hereinafter: “repayment of the inventory withdrawal”) is lower than $700 thousand with the addition of the sum of the Borrower’s inventory withdrawals up to that date. The Borrower shall be entitled to again withdraw from the designated account in the event in which the Borrower’s expected quarterly supply returns to being no less than the current inventory withdrawal (executed up to the examination quarter), if it is withdrawn in addition to $700 thousand..

The aforementioned mechanism in the section must be repeated every quarter.

The Borrower shall be entitled to present an inventory acquisition program at the beginning of each quarter and can, pursuant to it execute inventory withdrawals pursuant to Section 4.2.6.4 above.

Despite the aforementioned, in the event in which: (1) the EBITDA in four quarters that preceded the date of the measure, is higher than the results of the normalized annual EBITDA (that was obtained as detailed above) and (2) the EBITDA of Q1 that preceded the date of the measuring is positive, then the EBITDA in the four quarters that preceded the date of measuring will be calculated for the purposes of this Agreement as “the normalized annual EBITDA.”

The Borrower shall be entitled to once again withdraw, including a repeat withdrawal of the sums (or some of them) that were returned by it in the framework of the repayment of the cover/death difference, this if it once again meets the required cover/debt ratio.

To this purpose and subject to the provisions in this Agreement, the Borrower hereby irrevocably consents to the Lender executing any action required for the purposes of implementing the provisions in this section and, to this purpose, to give any instruction to the bank accordingly.

Without derogating from the aforementioned, the Lender shall be entitled to approach the competent Court to receive orders to comply with the provisions in Section 4.3.4 to the Lender’s satisfaction,

The Lender (and the trustee on behalf of the Lender) shall be entitled to observation rights in the designated account and to receive information and full details from the bank regarding the designated account, including its balance, details of the transactions that the Borrower executed in it and the Borrower hereby waives any claim of confidentiality whatsoever in relation to the designated account.

The credit bears annual interest at a rate of 9.6% (above and below: “the interest”).

If the payment date of any sum whatsoever that the Borrower has to pay for the debt (including principal and interest) falls on a day that is not a business day, the payment must be made on the first business day thereafter. It is hereby clarified that the sum for which payment was delayed, as aforementioned, will continue to bear interest pursuant to the provisions in this Agreement until the date of its payment as aforementioned, all pursuant and subject to the provisions in this Agreement.

The loan Spitzer Table is attached as Appendix 6.1a. If the Lender extends the additional credit to the Borrower as detailed above, the settlement schedule will be updated accordingly (the settlement schedule that includes the additional credit under the assumption that it was extended on March 1, 2021 is attached to the Agreement as Appendix 6.1b ).

To obviate any doubt the early payment of the credit as aforementioned contains nothing to derogate from the Lender’s rights in all relating to the accompanying payments and rights for the Lender as detailed in Section 9 below.

If, on any date whatsoever after the date of signing this Agreement, execution of any of the Lender’s obligations pursuant to the financing documents or continuing to extend the credit to the Borrower becomes illegal pursuant to Israeli law and/or if, after the date of signing this Agreement there is a change in Israeli law, in the application, interpretation or enforcement of the law (whether they have the force of law or not and, provided that, in the event that they do not have the force of law, lenders of the Lender’s type are custom to comply with them), or the legislation of the new Israeli law (which includes a binding instruction, demand or circular of the Commissioner of the Capital Market Insurance and Savings at the Ministry of Finance), or a change made by an authority and, as a result of which continuing to extend the credit to the Borrower becomes illegal according to the law (hereinafter: “a change of the law” and “an event of illegality,” respectively), then the following instructions shall apply:

Rights Relating to Receipt of Consideration in the Event of a Sale of Actelis Networks Inc. Shares (“Actelis”)

Despite the aforementioned, it has hereby been agreed that a merger by way of a share swap only between Actelis and third parties whose shares are not listed for trading on any exchange whatsoever (without any financial payment transfer between the Parties), shall not be deemed as “a sales event.” In such an event, the Parties must reach an agreed-upon course in the framework of which the economic rights of the Lender will be preserved in the sales event, in a manner suitable for its aforementioned rights.

A = The consideration of the option shares ($1,500,000), as defined above;

B = Actelis’ worth, as defined above;

C = the basis value, as defined above;

It must be clarified that, in the case of an issue event, the consideration will be given to the Lender in the Borrower’s shares, in a quantity that must be calculated via dividing the sum received from the aforementioned equation (D) by the share price in the framework of the issue.

It must be clarified that, in the case of a sales event in which not all the consideration is received in one payment, the Borrower shall be entitled to pay the Lender the consideration to the Lender (as defined above) in payments pursuant to the payment dates of the sales event as aforementioned (and pursuant to the proportionate share that is paid in the framework of each and every payment).

Waiver of Exercising the Option

For example if early settlement of the loan is made after 48 months – the consideration for waiving of exercising the option will be 2.5/4 multiplied by $1.25 million, i.e. a sum of $781,250.

“Further to the Loan Agreement dated _____that we signed on, ______, I hereby inform you that we have waived exercising the option.”

(Hereinafter: “the Waiver notice”).

If the consideration for waiving exercising the option exceeds 50% of the EBITDA in a joint calculation of the Borrower and Actelis in the last 12 months, then the Borrower shall be entitled to pay the consideration for waiving exercising the option in 12 equal monthly payments.

Grants

In addition to the Lender’s aforementioned rights in Sections 9.1-9.15:

The Borrower and Actelis declare vis-à-vis the Lender that, to the best of their knowledge and to the best of the knowledge of their Directors and/or anyone on their behalf, each of the presentations, authorizations, affidavits of the Borrower and/or Actelis detailed in this Section 10 below, is correct, full and accurate in all its sections. The Borrower and Actelis hereby confirm that they are aware that the Lender relies on the presentations and affidavits as detailed in this section below (without derogating and/or prejudicing any affidavit and/or presentation and/or commitment of the Borrower and/or Actelis in this Agreement and/or in the other financing documents and/or in any agreement and/or other document furnished and/or that shall be furnished to the Lender in relation to the credit and/or in relation to the collateral).

For the purposes of this section below, both the Borrower and Actelis shall be called – “the Borrower” (thus the following affidavits and presentations will refer to both the Borrower and Actelis).

Appendix 10 (hereinafter: “the Disclosure Appendix,”) which was not attached when signing this Agreement and was attached to the Agreement and confirmed by the Lender (to its full satisfaction), including confirmation of its content, is a condition precedent to the Agreement (all as detailed in Section 3.1.9 above).

No breach event expected breach event whatsoever of the financing documents has occurred and, to the best of the Borrower Parties knowledge no matter or circumstance whatsoever that could have a material detrimental effect has occurred.

The Borrower and/or the associated company do not have any financial obligations of any kind and type whatsoever, apart from a permitted financial obligation.

As of the date of extending the credit (subject to removing the encumbrances in favor of Bank Mizrahi and the existence of the conditions precedent), the Borrower’s commitments pursuant to the financing documents vis-à-vis the Lender are and the Borrower will ensure that they continue to be, direct unconditional and first commitments, compared with all the other financial obligations of the Borrower.

Apart from as detailed in Section 10.13 of the Disclosure Appendix, the Borrower is not a party to any transaction and/or agreement and/or any commitment whatsoever that constitutes a transaction with an interested party or a transaction in which an interested party in the Borrower and/or in the associated company has a personal interest.

All the Borrower’s affidavits, authorizations and presentations detailed in this Section 10 will remain valid after signing this Agreement as well and the Borrower will be perceived as having repeated the presentations, authorizations and declarations on the date of extending the credit as well.

As of the date of signing this Agreement and as long as there is any debt whatsoever that is as yet unpaid, the Borrower and Actelis undertake, vis-à-vis the Lender, in the commitments detailed in this Section 12 below. To obviate any doubt, the aforementioned commitments apply vis-à-vis the Borrower and Actelis.]

For the purposes of this section below, both the Borrower and Actelis (so that the obligations and commitments below will relate to both the Borrower and Actelis)

The Borrower will not engaged and/or execute access undertake to execute and/or adopt a resolution for the purposes of executing exceptional transactions with interested parties, apart from as detailed in this Agreement.

The Borrower shall not declare, execute and/or undertake to execute and/or adopt a resolution for the purposes of executing any distribution.

The Borrower shall not create or allow the creation of any collateral right whatsoever on its existing or future assets, apart from the encumbrance of assets that are encumbered in favor of the Lender pursuant to the collateral documents) without the Lender’s consent (apart from encumbrances that were permitted in the framework of this Agreement). It must see to the fact that its existing and future assets as aforementioned will remain clear and three at any time (apart from the encumbrance of the encumbered assets in favor of the Borrower pursuant to the collateral documents), all whether in Israel or overseas.

The Borrower undertakes that it will submit legal returns and reports to the tax authorities punctually, all pursuant to the requirements of the law applicable to it and it will pay all the taxes pursuant to the returns and reports as aforementioned, all pursuant to assessment notices or other similar documents that were prepared regarding it, all pursuant to the requirements of the law applicable to it.

The Borrower must sign and confirm all the certificates, forms, affidavits, requests, authorizations and documents and execute and perform any action, the signature on which were (according to the matter) executing its by them, will be required by the Lender in relation to the Borrower’s commitments pursuant to the financing documents and to execute the actions that must be executed and to complete them pursuant to the financing documents.

The Borrower (to obviate any doubt each of the Borrower’s individuals) must furnish the Lender:

The Borrower declares the following:

In this regard “essential agreement” means ad essential agreement as defined in Section 10.17 above or any other agreement the annual revenues of the company from it constitute more than 7% of the total revenues of the Company in the year preceding the date of the notice/breach as aforementioned, provided that the Company had not engaged simultaneously in another agreement by virtue of which the company is expected to derive revenues of a similar volume to the revenues of the relevant essential agreement.

(The aforementioned collateral documents shall be in the format as agreed upon between the Parties by the date of extending the credit and which shall be to the Lender’s satisfaction and which must be attached to this Agreement. The collateral documents must be signed from time to time in relation to any additional guarantee and those mentioned in Section 12 above will be called jointly below: “the collateral documents”)

The Borrower undertakes that all the aforementioned encumbrances will be registered as early as possible subject to the provisions in the Letter of Intent and that it will furnish the Lender with registration certificates for them, as early as possible (subject to the proceedings at the authorities).

Compliance with the Financial Criteria

Despite the aforementioned, if it becomes clear that the Borrower does not comply with the financial criteria, but the current assets of the Borrower as defined in Section 4.2.6.1, are higher than the balance of the unpaid credit principal, or if it is higher than 90% of the unpaid credit principal balance, with the approval of the Lender, this shall not be deemed to be failure to comply with the financial criteria.

Each of the events and each of the circumstances detailed in this Section 14 constitutes a breach event (regarding compliance with the provisions in Section 4.2.6 – pursuant to the content therein). To obviate any doubt, the events and circumstances detailed below relate to both the Borrower and to Actelis and a breach event that applies to any of the aforementioned individuals, applies to the Borrower and Actelis (jointly and severally).

For the purposes of this section below, both the Borrower and Actelis shall be called – “the Borrower” (thus, the breach events detailed below will relate to both the Borrower and Actelis).

Any sum whatsoever that must be paid pursuant to the financing documents by the Borrower, including failure to pay the principal sum, interest, arrears interest, linkage differentials, auditing and inspection payments, fees and expenses, additional payments to the Lender, not paid in full on the date established for its payment or if no dates was established as aforementioned within 7 days from the date of being required to p be paid by the Borrower. It must be clarified that the rails in making the payment in a period that is not exceed 3 business days, shall not constitute a breach.

A breach of any instruction whatsoever included in any document of the financing documents by the Borrower that was not corrected within 10 (ten) business days (or within a shorter period, should this be established regarding it in the financing documents), to the extent possible to correct it within the aforementioned period.

A presentation or affidavit that was given by the Borrower or the Borrower is perceived as having rescinded them, in any of the financing documents (including the Borrower’s affidavits and presentations pursuant to Section 9 of this Agreement), or in the confirmation, the certificate or document that was furnished by the Borrower and/or anyone on its behalf in relation to any of the financing documents or pursuant to a document from the financing documents, are not correct or full, on the date on which they were given or on the date on which the Borrower is perceived as someone who has rescinded them and this was not corrected within 7 business days from the date of the occurrence of the breach event as aforementioned.

Any of the financing documents failed to be enforceable from any aspect whatsoever or failed to constitute a legal, valid, binding enforceable commitment, or any of the collateral documents that does not provide valid security in the encumbered assets and subject to the conditions, or the enforcement of the commitment as aforementioned or collateral as aforementioned will be illegal or it will impossible to execute in a manner that it would have a sort of full realization of the rights of the Lender pursuant to any of the financing documents, all unless caused in view of a deed or default of the Lender.

The Borrower was insolvent and/or is unable to pay its debts and/or meet its commitments on time or there is a real probability that, pursuant to a judicial decision, it will not be able to pay its debts and/or meet its commitments on the date and/or it stopped its payments and/or commenced conducting negotiations with its creditors or any of them, in a trend to reach an arrangement for staggering its debts with them or any other similar debt arrangement, all whether in Israel or overseas.

The Borrower commenced adopting any measures whatsoever (including by convening a meeting of shareholders and/or creditors), and/or any measures or proceedings whatsoever were adopted by it or against it (and/or against its assets), or it agrees to any measures or proceedings whatsoever of the solution and/or appointing an official functionary or other similar legal proceedings were adopted against it and/or against its assets or another similar order given against it and/or against its assets, including in relation to exercising the collateral and all whether the proceedings and/or aforementioned order are interim or temporary and whether they are permanent, whether in Israel or overseas, provided, in relation to the measures are proceedings, that these were not canceled within 45 (forty five) business days, but, if the measures are proceedings were adopted by the Borrower and/or its shareholders and the Borrower and/or its shareholders (according to the matter) consented to the aforementioned measures or proceedings, then adopting the aforementioned measures are proceedings, on their occurrence constitute a breach event.

15.7.1 If the name of the Borrower is erased from the Register of Companies Register.

The Borrower does not comply with any judgment whatsoever that applies to it and/or to its assets and/or to its operations and, in the opinion of the Lender, the failure to comply prejudices the Borrower’s ability to meet its commitments pursuant to the financing documents to which it is a Party or could prejudice the Lender’s rights pursuant to the financing documents and/or the encumbered assets and the aforementioned was not corrected within 7 business days from the date of the occurrence of the aforementioned breaching event.

Any financial creditor of the Borrower (insured and not insured), including banks, bondholders and/or other financial institutions, all whether in Israel or overseas, placed debts and commitments of the Borrower for immediate settlement and/or appointed an official functionary against and/or regarding the Borrower and/or its assets and/or exercise any collateral whatsoever imparted on it.

The Borrower has ceased or threatened to cease managing its businesses or a material part of them.

An event or series of events occurred in the Borrower that is or are likely to have a detrimental effect.

If there was a change in the structure (as defined in Section 2 of this Agreement) in the Borrower without receiving the Lender’s prior written consent. The Lender will not refuse to give consent as aforementioned as long as its rights pursuant to the financing documents and/or pursuant to any law are not prejudiced.

If any of the permits, authorities, licenses and/or other qualifications required pursuant to any law and agreement in relation to the Borrower’s operations and its business management and its regular operations have expired, been canceled, conditioned or ended operated without renewal) or have ceased to be enforceable for any other reason, and/or the Borrower violated the conditions or instructions of any of the aforementioned permits, authorizations, licenses and/or qualifications and this was not corrected within 20 business days from the date of the occurrence of the aforementioned breaching event.

The Borrower did not cooperate with its accountant and did not furnish him with a copy of any document or datum whatsoever that are at its disposal within 7 (seven) business days from the date of receiving his written demand to furnish a copy of any document or datum as aforementioned.

Despite any contrary instruction, in any event in which the Lender, at its sole discretion, believes that giving a warning or a healing period to the Borrower or waiting and delaying exercising the Lender’s rights are likely to materially prejudice any right whatsoever of the Lender’s rights pursuant to the financing documents or the value of the collateral or their ability to settle the debt, the Lender shall be entitled to shorten giving the warning or the healing period.

Without derogating from any other commitment pursuant to this Agreement and the other financing documents, as a separate commitment, the Borrower must indemnify the Lender, within thirty (30) days from the date of its demand for and in relation to all the damages, costs, expenses, losses, payments, taxes and commissions and the other payments that were caused to the Lender and/or anyone on its behalf (hereinafter jointly: “the damage sums”) as a direct result of the following actions:

Subject to the provisions in this section, this Agreement and the other financing documents will obligate and credit the Parties to them and their permitted transferees from time to time.

No Party to this Agreement is entitled to transfer, endorse or assign all or some of its rights and/or obligations pursuant to this Agreement and the other financing documents to any third party whatsoever.

The Borrower confirms that it has been informed by the Lender pursuant to the Protection of Privacy Law, 5741 – 1981 that all the items that shall be furnished to the Lender will serve the Lender as is acceptable in its regular work at its sole discretion, and that any items furnished to the Lender will be stored pursuant to the Lender a pattern needs in the Lender’s databanks and/or of anyone who provides the Lender from time to time with computer and data processing services.

The Borrower undertakes that it and/or anyone on its behalf will not disclose nor furnish all or some of the financing documents to any third party whatsoever, apart from: (a) the Borrower’s shareholders, officers in the Borrower, its Attorneys, Accountants and other consultants, who advise and/or represent the Borrower in relation to the financing documents and subject to the fact that prior to transferring the information, the information recipient must sign (if he is not obligated to confidentiality by virtue of the law) a non-disclosure and commitment letter in the acceptable format; (b) to other Lender’s, banks, investment/loan funds, private lenders etc.; (c) Furnishing information as aforementioned, which is obligated in its framework pursuant to and subject to the provisions of any law and/or any competent authority and provided that: the Borrower furnished written notice to the Lender regarding its obligation to deliver the information as aforementioned, to the extent that there is no impediment pursuant to the law to furnish notice as aforementioned and to adopt all the reasonable means for the purposes of preventing disclosure as aforementioned, and the disclosure will be made to the minimal necessary degree only and the Borrower will act reasonably in order to allow the Lender reasonable time to the extent that this is possible, to defend against the demand and (c) the information as aforementioned is mass published by the Lender or information that at the time of its delivery was already in the bounds of public knowledge and provided that the information did not become public knowledge in view of a breach of the commitment to confidentiality, whether directly or indirectly.

At the Borrower: C/o _________________ Electronic Mail: __________________________

At the Lender: C/o Maoz Franco Electronic Mail maozf@migdalor.group and office@migdalor.group

[signatures on the next page]

In witness whereof, the Parties have hereunto set their signatures

The Lender The Borrower

The Borrower’s Attorney at Law’s Verification

I, the undersigned [____________], Atty. at Law, License Number [___________] of [______________], hereby verify that Messrs. [___________], bearer of ID Numbered ______________ / with whom I am personally acquainted and [____________], bearer of ID Numbered [________________] /with whom I am personally acquainted and, who have signed this Agreement in the name of [_______________] (Pty.) Ltd. (Co no [__________] ) (hereinafter: “the Company”), have been authorized by the Company in a Board of Directors’ Resolution that was adopted legally and pursuant to the Company’s foundation documents, to sign this Agreement in the name of the Company and that their signature with the addition of the Company’s stamp or its name in print is binding on the Company to all intents and purposes.

Atty. at Law’s Name: _________________ Atty. at Law’s Signature: __________________