Exhibit 10.2

 

AMENDMENT TO LOAN AGREEMENT

THIS AMENDMENT TO LOAN AGREEMENT (“Agreement”) is made and entered into
effective as of _____________________, 2015 (the “Effective Date”), by and
between KIRKPATRICK BANK, an Oklahoma banking (“Lender), and PAYCOM PAYROLL,
LLC, a Delaware limited liability company (“Borrower”), with reference to the
following:

RECITALS:

A.Borrower and Lender are parties to that certain Loan Agreement, dated May 13,
2015 (the “Loan Agreement”), which includes, among other things, a Fixed Charge
Coverage Ratio loan covenant (the “Fixed Charge Coverage Ratio”).  All
capitalized terms used but not otherwise defined in this Agreement shall have
the respective meanings ascribed to those terms in the Loan Agreement, as
amended hereby.

B.At Borrower’s request, Lender and Borrower mutually desire to amend the
calculation of the Fixed Charge Coverage Ratio within the Loan Agreement as
described herein below.

AGREEMENT:

In consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Lender and Borrower hereby agree as follows:

1.Recital Paragraphs.  The recital paragraphs set forth above are hereby
incorporated as a part of this Agreement.

2.Modification of Loan Agreement. As of the Effective Date, Section 8.12 the
Loan Agreement is hereby amended and restated in its entirety as follows:

8.12Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio (defined
below) of the Guarantor shall not be less than 1.2:1.00 on a quarterly basis.
The Fixed Charge Coverage Ratio shall be calculated by Lender on a quarterly
basis based on the Guarantor’s quarterly financial statements delivered pursuant
to paragraph 7.1 of this Agreement as set forth below.

(a)Calculation.  The term “Fixed Charge Coverage Ratio” means actual Net
Operating Income plus interest expense, depreciation expense and amortization
expense for the most recent four (4) calendar quarters, divided by Debt Service
Requirements plus rent expense.

(b)Debt Service Requirements. The term “Debt Service Requirements” shall mean
principal and interest payments due and owing for the prior calendar quarter
multiplied by four (4), based upon, (i) all debt of Guarantor payable to Lender
and any other non-subordinated debt, excluding balloon payments, if any, due to
Lender, and (ii) the then applicable interest rate(s) on such debt.

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Exhibit 10.2

 

(c)Net Operating Income.  The term “Net Operating Income” means all revenues
collected from the operations of Guarantor (excluding non-recurring income, as
determined by Lender) less expenses.

(d)Curative Action.  In the event the Fixed Charge Coverage Ratio for any
calendar quarter should be less than 1.20 to 1.00, then, within fifteen (15)
days after written notice from Lender to Borrower, Borrower shall pay the
Curative Amount such that a minimum Fixed Charge Coverage Ratio of 1.20 to 1.00
or more is created based on (A) the actual Net Operating Income for the
immediately preceding calendar quarter and (B) the hypothetical Debt Service
Requirement for the then current calendar quarter which would result from a
reamortization of such reduced outstanding principal balance of the Loan.

Irrespective of any hypothetical Debt Service Requirement utilized to calculate
the curative amount, the actual amount of the required payments shall continue
to be as provided in the Note.  

3.Borrower’s Representations and Warranties.  Without limitation of any
obligations, representations, warranties or liabilities of Borrower pursuant to
the Loan Documents, Borrower represents and warrants to Lender that:

(a)Agreements.  Borrower is not a party to any agreement or instrument,
materially and aversely affecting the operations or condition, financial or
otherwise, of Borrower, and Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
would have a material adverse effect upon the business, properties or assets,
operations or condition, financial or otherwise of Borrower.

(b)Governmental Consents.  Borrower is not required to obtain any order,
consent, approval or authorization of, or to make any declaration or filing
with, any governmental authority in connection with the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
the issuance and delivery of this Agreement.

(c)No Offsets.  There are no defenses, offsets or counterclaims against the
Loan, and no Event of Default exists under the Loan.

4.Ratification.  Except as expressly modified herein or by documents signed
pursuant to this Agreement, all of the terms and conditions of the Loan
Agreement and Loan Documents (i) remain unmodified and in full force and effect
and (ii) are hereby ratified and confirmed by Borrower.  

5.Payment of Costs.  Borrower shall pay or cause to be paid, at the time of
execution of this Agreement, any and all fees and expenses incurred by Lender
and/or its counsel in connection with the preparation and execution of this
Agreement, including without limitation, all legal fees and expenses, and any
unpaid sums due to Lender.  

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Exhibit 10.2

 

6.Default Under this Agreement.  The failure of Borrower to comply with any
provisions of this Agreement shall constitute a default under the Loan
Documents, entitling Lender to exercise any and all remedies to which it may be
entitled thereunder and hereunder, at law and/or in equity (after such notice
and such opportunity to cure such default as may be required by the Loan
Agreement).

7.Headings; Time of Essence.  The headings used in this Agreement are for
convenience only and shall be disregarded in interpreting the substantive
provisions of this Agreement.  Time is of the essence of each term of this
Agreement.

8.Severability.  If any provision of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, that
portion shall be deemed severed from this Agreement and the remaining parts
shall remain in full force as though the invalid, illegal, or unenforceable
portion had never been a part thereof.

9.Descriptive Headings.  The descriptive headings of the paragraphs of this
Agreement are for convenience only and shall not be used in the construction of
the terms hereof.

10.No Oral Agreements.  THIS AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT UNWRITTEN ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

 

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Exhibit 10.2

 

IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement effective
as of the date set forth above.

 

“Borrower”:

PAYCOM PAYROLL, LLC,

 

a Delaware limited liability company

 

 

 

By:

/s/ Craig Boelte

 

 

Craig Boelte, President

 

 

“Lender”:

KIRKPATRICK BANK,

 

an Oklahoma state banking association

 

 

 

By:

/s/ David Sutter

 

 

David Sutter, Executive Vice President