Document:

Exhibit 10.16

 

 

LOAN
AGREEMENT

 

THIS
LOAN AGREEMENT (this “Loan Agreement”) dated effective as of April 11, 2018 (the “Effective Date”)
is made and executed by and between Jain Investments, LLC, a Texas limited liability company (the “Lender”)
and Arog Pharmaceuticals, Inc., a Delaware corporation (the “Borrower”).

 

WHEREAS,
Lender wishes to provide, and Borrower wishes to accept, certain loans pursuant to reasonable terms as set forth herein.

 

NOW
THEREFORE, in consideration of the premises set forth above and the promises contained herein, the sufficiency and receipt of
which are hereby acknowledged, the parties agree as follows:

 

1.            Line
of Credit. Lender agrees to make available to Borrower an operating line of credit (the “Line of Credit”)
in an amount of principal not to exceed Four Million and No/100 Dollars ($4,000,000.00) (the “Maximum Amount”).
Advances shall be made under the Line of Credit only upon written request, signed by an authorized officer of Borrower, specifying
in reasonable detail the intended use of the funds and the requested amount of principal to be advanced, up to the Maximum Amount.
All funds advanced pursuant to this Section 1 (each an “Advance”) shall be evidenced by the Promissory
Note substantially in the form attached hereto as Exhibit A (the “Promissory Note”). Borrower authorizes
Lender to endorse on Schedule A to the Promissory Note the date and principal amount of each Advance, with each endorsement to
be binding on the Borrower absent manifest error; provided that the failure of Lender to make any such endorsement shall not affect
the obligation of Borrower to repay each Advance and to pay interest accrued thereon and other sums payable under the Promissory
Note.

 

2.            First
Advance. Upon signing this Agreement, Lender agrees to make a first Advance to Borrower in the amount of One Million and
No/100 Dollars ($1,000,000.00), to be used for general corporate business purposes (the “First Advance”). The
First Advance shall bear interest from the date advanced until the date of repayment at an interest rate equal to 3.04% per annum
and shall compound annually. The parties hereby agree and acknowledge that the interest rate of the First Advance set forth herein
is consistent with prevailing fair market rates for similar loans. Accrued interest on the First Advance shall be due and payable
at maturity. Lender’s calculations of accrued interest on the First Advance shall be binding and conclusive in the absence
of manifest error.

 

3.            Interest.
All subsequent Advances after the First Advance under the Line of Credit shall bear interest from the date of such Advance until
the date of repayment at such interest rate as shall be fixed on the date the Advance is made and shall compound annually. Such
interest shall be calculated based on a 365-day year and shall be paid from the actual number of days elapsed. Accrued interest
on amounts borrowed under this Agreement shall be due and payable at maturity. Lender’s calculations of accrued interest
hereunder shall be binding and conclusive in the absence of manifest error.

 

4.            Repayment.
The outstanding principal balance and accrued but unpaid interest under the Promissory Note is due and payable in full upon the
demand by Lender. Prior to such demand, Borrower shall have the right, upon payment of all accrued but unpaid interest, to repay
without premium or penalty, all or part of the outstanding principal under the Promissory Note. Any such repayment of principal
by the Borrower, unless the repayment is the result of a demand for payment in full by the Lender, shall increase the availability
of funds which the Borrower may re-borrow up to the Maximum Amount.

 

	 	Loan Agreement	1

 

     

     

    

 

5.            Term.
The term of this Agreement shall be for a period often (10) years from the Effective Date. Thereafter, this Agreement may be renewed
for additional five-year terms upon the mutual written consent of both parties. If not renewed, this Agreement shall expire, and
the outstanding principal balance of all Advances shall mature and be due and payable in full, together with all interest thereon.

 

6.            Representations.
Borrower makes the following representations and warranties, which shall survive the execution of this Loan Agreement and the
making of each Advance hereunder:

 

a.                  
Borrower is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware;

 

b.                 
Borrower has the corporate power to enter into and perform this Loan Agreement and to borrower
hereunder and has taken all necessary corporate actions to authorize the borrowings upon the terms and conditions of this Loan
Agreement and to authorize the borrowings upon the terms and conditions of this Loan Agreement and to authorize the execution,
deliver and performance of this Loan Agreement in accordance with its terms; and

 

c.                  
This Loan Agreement and the Promissory Note are valid and legally enforceable against the
Borrower in accordance with their terms except to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors’ rights generally.

 

7.            Covenants.

 

a.                  
In the event of a sale, merger, consolidation, reorganization or similar transaction or series
of transactions as a result of which the stockholders of Borrower immediately prior to such transaction or series of transactions
hold less than a majority of the equity entitled to vote in the election of directors of Borrower (a “Change of Control”)
or an Initial Public Offering (an “IPO”), Lender may at any time thereafter, with or without notice to the
Borrower, terminate its commitment hereunder, and declare the Promissory Note, together with accrued interest thereon and any
other amounts payable hereunder to be, and the Promissory Note and all such amounts shall become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower;

 

b.                 
So long as this Loan Agreement shall remain in effect, Borrower shall not, without the consent
of Lender, consolidate or merge with or into any other person or convey, transfer or lease all or substantially all of its assets
to any person or entity; and

 

c.                  
So long as this Loan Agreement shall remain in effect, the Borrower shall not mortgage, lease
or allow any liens upon its properties except liens which have not matured (including any which Borrower is contesting in good
faith by adequate proceedings).

 

	 	Loan Agreement	2

     

     

    

 

8.            Events
of Default. Each of the following, if unremedied, shall constitute an event of default under this Loan Agreement

 

a.                  
Borrower’s default in the payment when due of any principal balance under this Loan
Agreement or of any Advance;

 

b.                 
Borrower’s default for five (5) days in the payment when due of any interest under
this Loan Agreement or of any Advance;

 

c.                  
Borrower’s consent to the appointment of a receiver, trustee or liquidator of all or
substantially all of its assets due to Borrower’s inability to meet debts, or Borrower’s filing of bankruptcy;

 

d.                 
The filing against Borrower of any receivership, bankruptcy or other similar proceedings
unless same is stayed or dismissed within sixty (60) days;

 

e.                  
Any material misrepresentation or omission made by Borrower in this Loan Agreement; and

 

f.                   
Borrower’s failure to observe or perform any covenant contained in this Loan Agreement.

 

In the event
of default, the maturity dates of the Promissory Note, if any, shall be accelerated, Lender shall have the right to demand payment
by Borrower of any and all funds outstanding under this Loan Agreement, and Lender’s commitment shall terminate immediately.

 

9.            Increased
Costs. If Lender’s cost of borrowing is increased by an amount deemed by Lender in its sole discretion to be material,
Lender will provide notice thereof to Borrower as soon as practicable and Borrower shall compensate Lender for all such increased
costs. Borrower may, upon receiving such a notice, terminate any applicable Advance upon payment of all outstanding amounts owed
with respect thereto, including increased costs accrued to the date of such termination and owing to Lender pursuant to the foregoing.
Any certificate of Lender in respect of the foregoing will be conclusive and binding upon the Borrower, absent manifest error,
provided that the Lender shall determine the amounts owing to it in good faith using any reasonable averaging and attribution
methods.

 

10.          Attorneys’
Fees. In the event of any litigation or other action to enforce Borrower’s obligations hereunder, Lender shall be
entitled to recover, in addition to any other damages, its reasonable attorneys’ fees, and all other costs and expenses
incurred in connection with such litigation or action.

 

	 	Loan Agreement	3

     

     

    

 

11.          Notices.
The parties shall send notices in writing, references this Loan Agreement. Notices shall be deemed given when: (i) delivered personally;
(ii) one (1) day after having sent by facsimile, with a copy sent promptly by registered or certified mail, return receipt requested,
postage prepaid; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iv) two (2) days after deposit with a nationally recognized overnight carrier, with written verification of receipt.
Notice shall be given to the parties to the addressees set forth below (or to such other addressee as a party subsequently designates):

 

If
to Jain Investments LLC:

 

Attn:
Vinay Jain, Manager

Two Lincoln Centre

5420 LBJ Freeway, Ste 410

Dallas, Texas 75240

214.593.0500

214.594.0002 fax

 

If
to Arog Pharmaceuticals, Inc.:

 

Attn:
Vinay Jain, President

Two Lincoln Centre

5420 LBJ Freeway, Ste 410

Dallas, Texas 75240

214.593.0500

214.594.0002 fax

 

12.          Miscellaneous.

 

a.                  
This Loan Agreement and the rights, duties and obligations contained herein shall be solely
for the benefit of the parties hereto and their permitted assignees and transferees, and no third person or entities shall have
any rights hereunder as a third-party beneficiary, or otherwise.

 

b.                 
Borrower shall not assign any of its rights or duties under this Loan Agreement or the Promissory
Note, whether voluntarily or by operation of law, without Lender’s prior written consent.

 

c.                  
Any prov1s1on of this Loan Agreement which is invalid, illegal or unenforceable in any respect
in any given instance in any jurisdiction shall, as to such instance and jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without in any way affecting the validity, legality or enforceability of the remaining provisions
hereof, and any such invalidity, illegality or unenforceability in any instance in any jurisdiction shall not invalidate or in
any way affect the validity, legality or enforceability of such provisions in any other instance or in any other jurisdiction.
A waiver by either party with respect to the breach of any provision hereof shall not be deemed a waiver of any other provision
in this Loan Agreement or of a subsequent breach of the same provision.

 

d.                 
This Loan Agreement, together with the attached exhibits, constitutes the entire agreement
between the parties hereto with respect to its subject matter and supersedes all prior and contemporaneous written or oral agreements
or promises. This Loan Agreement shall be modified only by a written instrument executed by both parties.

 

	 	Loan Agreement	4

     

     

    

 

e.                  
Section headings are inserted in this Loan Agreement for convenience of reference only and
shall not be used to construe any provision hereof.

 

f.                   
This Loan 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
facsimile, 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

 

g.                 
In the event any interest is paid on the Promissory Note that is deemed to be in excess of
the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of the Promissory Note.

 

h.                 
This Loan Agreement and the Promissory Note shall be construed in accordance with and governed
in all other respects by the internal substantive laws of the State of Texas without regard to its provisions concerning choice
of law.

 

13.         WAIVER
OF JURY TRIAL. BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

[Signature
Page Follows]

 

 

	 	Loan Agreement	5

     

     

    

 

IN
WITNESS WHEREOF, the pai1ies have executed this Loan Agreement as of the date first above written.

 

	LENDER:

         

        Jain
        Investments, LLC

         

	By:	/s/
    Vinay K. Jain
	Name:Vinay K. Jain
	Title:Manager

	BORROWER:

         

        Arog
        Pharmaceuticals, Inc.

         

	By:	/s/
    Vinay K. Jain
	Name:Vinay K. Jain
	Title:Manager

 

 

Signature
Page to Loan Agreement

 

     

     

    

 

EXHIBIT
A

 

PROMISSORY
NOTE

 

April 11,
2018

 

FOR
VALUE RECEIVED, the undersigned promises and agrees as follows:

 

1.       Promise
to Pay. For value received, Arog Pharmaceuticals, Inc. (“Borrower”) promises to pay to the order of
Jain Investments, LLC (“Lender”), at the address of Lender at Two Lincoln Centre, 5420 LBJ Freeway, Ste 410,
Dallas, Texas 75240, the principal sum of each cash advance (each an “Advance”) made by Lender to Borrower
pursuant to the terms and conditions as set forth in the Loan Agreement by and between the Borrower and Lender dated April 11,
2018, as same may be amended form time to time (the “Loan Agreement”). Said Loan Agreement is incorporated
herein as if fully set forth. Terms defined in the Loan Agreement are used herein with the same meaning.

 

2.       Borrower
promises to pay interest on each Advance from the date of such Advance to the date of repayment in full of such Advance on the
dates and at the rate or rates provided for in the Loan Agreement.

 

3.       Reference
is made to the Loan Agreement for provisions regarding demand, prepayment, default and acceleration of maturity. All payments
of principal and interest shall be made in lawful money of the United States.

 

4.       Borrower
hereby authorizes Lender to endorse on the grid attached hereto Schedule A the date and principal amount of each Advance, each
endorsement to be binding on the Borrower absent manifest error; provided that Lender’s failure to make any such endorsement
shall not affect Borrower’s obligation to repay each Advance and to pay interest accrued thereon and other sums payable
hereunder. The aggregate principal amount of all Advances outstanding at any time under this Promissory Note shall not exceed
Four Million and Noll 00 Dollars ($4,000,000) at any one time.

 

5.       Borrower
specifically and knowingly waives any right to offset or any other similar defense to this Promissory Note, and Borrower waives
presentment, notice of nonpayment or dishonor, protest, notice of protest, and all other notices in connection with the delivery,
acceptance, performance, default, or enforcement of this Promissory Note.

 

6.       This
Promissory Note shall be governed and construed in accordance with the internal substantive laws of the State of Texas, exclusive
of its provisions regarding conflicts of law.

 

[Signature
Page Follows]

 

	 	Exhibit A	1

     

     

    

 

IN
WITNESS WHEREOF, the Borrower has executed this Promissory Note as of the day and year set forth above.

 

	 	BORROWER:

         

        Arog
        Pharmaceuticals, Inc.

         

	 	By:	 
	 	Name:	Vinay K. Jain
	 	Title:	President

 

 

 

 

	 	Exhibit A	2

     

     

    
 

SCHEDULE
A TO PROMISSORY NOTE

 

Arog Pharmaceuticals,
Inc.

 

	Date of
    Advance	Amount
    of Advance	Principal
    Balance	Date
    of Advance	Amount
    of Advance	Principal
    Balance
	4/11/2018	$1,000,000	$1,000,000	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$
	 	$	$	 	$	$

 

 

	 	Exhibit A	3Exhibit 10.17

 

 

First
Amendment to the April 11, 2018 Loan Agreement between

AROG Pharmaceuticals, Inc. and Jain Investments, LLC

 

This
First Amendment (“Amendment”), dated May 30, 2018, is made by and between AROG Pharmaceuticals, Inc. (the “Borrower”),
with a place of business at 5420 LBJ Freeway, Suite. 410, Dallas, Texas 75240, and Jain Investments, LLC (the “Lender”),
with a place of business at 5420 LBJ Freeway, Suite 410, Dallas, Texas 75240.

 

WHEREAS,
Lender and Borrower entered into a Loan Agreement effective April 11, 2018 (the “Loan Agreement”);

 

WHEREAS,
Lender and Borrower have agreed to increase the operating line of credit and have agreed to amend the Loan Agreement;

 

NOW,
THEREFORE, the Parties agree to amend the Agreement as follows:

 

		1.	The first
                                         sentence of Section 1 of the Agreement, entitled “Line of Credit,” shall
                                         be deleted in its entirety and replaced with the following sentence:

 

“Lender
agrees to make available to Borrower an operating line of credit (the “Line of Credit”) in an amount of principal
not to exceed Twenty Million and No/100 Dollars ($20,000,000.00) (the “Maximum Amount”).

 

		2.	Except
                                         as modified herein, the Agreement, remains in full force and effect and is hereby incorporated
                                         by this reference. Capitalized terms not otherwise defined herein shall have the meanings
                                         contained in the Agreement.

 

IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives as of the
first date provided above.

 

	 	LENDER:

    Jain Investments, LLC
	 	 
	 	 
	 	By:	/s/
    Vinay K. Jain
	 	Name:	Vinay K. Jain
	 	Title:	Manager

 

 

	 	BORROWER:

    Jain Investments, LLC
	 	 
	 	 
	 	By:	/s/
    Vinay K. Jain
	 	Name:	Vinay K. Jain
	 	Title:	Manager

 

Amendment
1 to Loan Agreement

30 May 2018

Page 1 of 1

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