Exhibit 10.3

CONSOLIDATED, AMENDED, RESTATED AND INCREASED

PROMISSORY NOTE

 

$27,420,538.01    June 17, 2014

As used in this Note, the following terms shall have the meanings ascribed to
each:

 

BUSINESS DAY:    That portion of any day, other than a Saturday, a Sunday or a
day on which Kirkpatrick Bank is permitted or required to be closed under the
laws of the State of Oklahoma or applicable Federal law, during which the Holder
of this Note is open for substantially all of such Holder’s normal banking
functions. DEFAULT RATE:    The lesser of (a) the Interest Rate (as adjusted
from time to time pursuant to the terms of this Note) plus five hundred basis
points (5.00%) per annum or (b) the Maximum Rate. DISCOUNTED RATE:    A rate
determined by the following method:   

(1) secure an issue of the Wall Street Journal date five (5) working days prior
to the prepayment date and locate the listing of Treasury Bonds, Notes, and
Bills therein (representative mid-afternoon over-the-counter quotations supplied
by the Federal Reserve Bank of New York, based on transactions of $1 million or
more);

 

  

(2) select the five (5) issues which mature closest to the Maturity Date of this
Note (in the event there are more than five (5) issues which mature closest to
the Maturity Date, Lender shall, in its sole discretion, select which five (5)
issues to use); and

 

(3) discard the highest and lowest yields-to-maturity and ascertain the average
of the remaining three (3) and add seventy-five (75) basis points to arrive at
the Discount Rate.

 

EVENTS OF DEFAULT:    This term shall have the meaning ascribed to it in
paragraph 5.1 of this Note. HOLDER AND PAYEE:    KIRKPATRICK BANK, an Oklahoma
banking corporation, and its successors and assigns INDEBTEDNESS:    The
indebtedness evidenced by this Note. INTEREST RATE:    The Interest Rate in
effect under this Note shall be a fixed rate equal to 4.75%. LATE CHARGE:   
Five percent (5%) of each delinquent payment.

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LOAN:    The loan from Holder to Maker evidenced by this Note and secured by the
Loan Documents. LOAN AGREEMENT:    The Loan Agreement, dated March 28, 2013, as
amended by the First Loan Modification Agreement, dated December 31, 2013, as
amended by the Second Loan Modification Agreement of even date herewith between
Holder, as lender, and the Maker, as borrower, as amended, modified, renewed
and/or restated from time to time. LOAN DOCUMENTS:    This term shall have the
meaning ascribed to it in the Loan Agreement. MAKER:    PAYCOM PAYROLL, LLC, a
Delaware limited liability company MAKER’S ADDRESS:    7501 West Memorial Road,
Oklahoma City, Oklahoma 73142. MATURITY DATE:    The Maturity Date shall be May
30, 2021, or any earlier date on which the entire unpaid Principal Amount shall
be paid or required to be paid in full, whether by prepayment, acceleration or
otherwise. MAXIMUM RATE:    The maximum rate of interest permitted by applicable
law. MORTGAGES:    This term shall collectively mean Mortgage 1, the Mortgage,
the Second Mortgage and the Land Mortgage, each of which has the meaning
ascribed to it in the Loan Agreement. MORTGAGED PROPERTY:    Collectively, all
of the real and personal property described in the Mortgages. NET PRESENT VALUE:
   The present value of the payments of principal and interest required under
this Note calculated using a Discounted Rate over the period commencing with the
date of determination of such present value and ending on the scheduled Maturity
Date. NOTE:    This Consolidated, Amended, Restated and Increased Promissory
Note and any amendments, modifications, renewals or extensions thereto and any
substitutions thereto. NPV DIFFERENTIAL:    The amount by which the Net Present
Value of the Note exceeds the then outstanding Principal Amount. PAYMENT
ADDRESS:    Kirkpatrick Bank, 15 East 15th Street, Edmond, Oklahoma 73013, or
such other address as Holder may hereafter designate in writing to Maker.
PRINCIPAL AMOUNT:    Initially, Twenty-Seven Million Four Hundred Twenty
Thousand Five Hundred Thirty-Eight and 01/100 Dollars ($27,420,538.01), together
with all other amounts added thereto pursuant to this Note or otherwise payable
in accordance with the Loan Documents.

 

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1. Promise to Pay. FOR VALUE RECEIVED, Maker promises to pay to the order of
Holder at the Payment Address the Principal Amount (or so much thereof as may
from time to time be outstanding) on or before the Maturity Date, together with
interest accrued on the outstanding Principal Amount at the Interest Rate
through the Maturity Date, payable in lawful money of the United States of
America as set forth in this Note.

2. Payment Requirements. Subject to paragraph 5.2, interest shall accrue on the
outstanding Principal Amount at the Interest Rate. Commencing on July 1, 2014
and continuing on the first day of each calendar month thereafter, Maker shall
pay to Holder monthly installments of principal and interest equal to the
amount, determined by Holder from time to time, that is necessary to amortize
the unpaid principal balance of this Note, together with interest accrued at the
Interest Rate, over a twenty (20) year amortization period. If not paid sooner,
the entire unpaid principal balance of this Note and all unpaid accrued interest
thereon shall be due and payable on the Maturity Date.

3. Application of Payments. Whenever any payment is stated to be due or a
computation is to be made on a day which is not a Business Day, such payment or
computation will be made on the next succeeding Business Day, and such extension
of time will be included in the computation of interest. Interest due under this
Note shall be calculated on the unpaid principal to the date of each installment
paid. All payments of interest shall be computed on the basis of a three hundred
sixty (360) day year comprised of twelve (12) equal months of thirty (30) days
each.

4. Prepayment. Borrower may prepay this Note in full, but not in part, on any
due date so long as: (i) Borrower provides Lender not less than sixty (60) days
advance written notice thereof, and (ii) Borrower pays to Lender prior to or
concurrently with such prepayment, as consideration for the privilege of making
such payment, a prepayment fee equal to:

 

  (A) the larger of (I) 1% of the unpaid principal balance outstanding under
this Note (the “1% Fee”), or (II) a prepayment premium consisting of the amount
of the NPV Differential, and

 

  (B) all other sums payable to Lender as of the date of the prepayment,
including, but not limited to, interest to the date of prepayment.

5. Default.

5.1. Events of Default. The Events of Default listed in the Loan Agreement
and/or the Mortgages are incorporated in this Note by reference and made a part
of this Note and shall constitute “Events of Default” hereunder and under each
of the other Loan Documents. These Events of Default include, but are not
limited to, default in payment when due of any interest on or principal of this
Note. Upon the occurrence or existence of any Event of Default for which the
Holder intends to take legal action if not promptly cured, the Holder will give
the Maker written notice of the Event of Default and (i) ten (10) days from the
date of such notice to cure the Event of Default if the Event of Default
involves Maker’s failure to make any payments required by this Note or
(ii) sixty (60) days from the date of such notice to cure the Event of Default
if the Event of Default is an involuntary bankruptcy proceeding filed against
Maker (iii) or thirty (30) days from the date of such notice to cure the Event
of Default if the Event of Default does not

 

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involve Maker’s failure to make any payments required by this Note and is not an
involuntary bankruptcy proceeding filed against Maker, and if such an Event of
Default cannot be cured within such thirty (30) day cure period and the Maker
commences curative efforts within the thirty (30) day cure period and is
diligently proceeding with such curative efforts, Maker will have a reasonable
time period after expiration of the thirty (30) day cure period in which to
effect a cure of the Event of Default, but not exceeding sixty (60) additional
days in any event; provided, however, notwithstanding any language in this
paragraph to the contrary, (a) the Holder shall not be obligated to give notice
or opportunity to cure more than three (3) Events of Default per year which
involve Maker’s failure to make any payments required by this Note, (b) the
Holder shall not be required to give the Maker notice of an Event of Default
which results from the Maker’s voluntary bankruptcy, assignment for the benefit
of creditors or other similar actions, and (c) the Holder may, at its option and
without notice of any type, decline to make further advances hereunder upon the
occurrence of an Event of Default until such Event of Default is cured to the
satisfaction of the Holder hereof. The notice requirement set forth in the
preceding sentence will be satisfied by, and will run concurrently with, any
requirements for a notice of an Event of Default and opportunity to cure the
Event of Default required by the law of the State of Oklahoma. If the Event of
Default is not cured to the reasonable satisfaction of the Holder within the
applicable cure period, the Holder hereof may, without further notice, declare
the entire unpaid principal balance of this Note and all unpaid, accrued
interest on this Note and all other obligations of the Maker to the Holder,
whether direct or indirect, absolute or contingent, now existing or hereafter
arising, immediately due and payable, without further notice or demand, and the
Maker shall pay all such sums and other obligations. Further, upon the
occurrence or existence of any such Event of Default that remains uncured after
the expiration of any applicable notice and cure periods as provided above, the
Holder shall be entitled to exercise any or all remedies provided or referenced
in this Note, the Loan Agreement, the Mortgages or any other instrument or
agreement evidencing, securing or relating to the indebtedness evidenced by this
Note and any other rights and remedies under state or federal law. Failure to
exercise any such rights and remedies upon any default shall not constitute a
waiver of any rights in the event of any subsequent default. If this Note is
placed in the hands of an attorney for collection or if collected through the
probate court, bankruptcy court, or by any other legal or judicial proceedings,
the Maker agrees and is obligated to pay, in addition to the sums referred to
above, the reasonable attorneys’ fees of the Holder, together with all court
costs and other expenses paid by such Holder.

5.2. After Default Interest Rate. While any Event of Default continues to exist
under the Loan Agreement, this Note, the Mortgages, or any instrument now or
hereafter securing payment of the indebtedness evidenced by this Note,
including, without limitation, any event of Default under the Mortgages and the
failure of Maker to cure such Event of Default within fifteen (15) days
thereafter, at the option of the Holder, in its sole discretion, the entire
unpaid principal balance hereof shall bear interest, retroactively from the date
of the Event of Default, at the rate per annum equal to the lesser of (i) the
Interest Rate, adjusted as of the date of any change therein, plus five percent
(5.00%) per annum or (ii) the rate of interest which when added to all other
charges that are included in the determination of the interest rate or loan
finance charge (if applicable) on the Loan evidenced by this Note does not
exceed the maximum permissible interest rate or loan finance charge. During the
existence of any such default, the Holder may apply payments received on any
amounts due hereunder, or under the terms of any instrument now or hereafter
evidencing or securing such indebtedness, as the Holder may determine, and if
the Holder so elects, notice of election being expressly waived, the principal
hereof remaining unpaid, together with accrued interest, shall at once become
due and payable. Any and all additional interest which has accrued at the rate
provided in this paragraph shall be due and payable at the time of, and as a
condition precedent to, the curing of any default.

 

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5.3. Remedies. If an Event of Default has occurred and Holder has provided to
Maker notice of the Event of Default and opportunity to cure the Event of
Default as described in paragraph 5.1, and Maker has not cured the Event of
Default, then (a) interest shall accrue at the Default Rate from the date of the
Event of Default and shall be calculated on the daily outstanding principal
balance of this Note on the basis of a three hundred sixty (360) day year for
the actual number of days outstanding; (b) Holder may, at its option and without
notice (such notice being expressly waived), declare the unpaid Principal Amount
and all accrued and unpaid interest thereon immediately due and payable; and/or
(c) Holder may, at its option, exercise any or all other rights and options
available to Holder at law or in equity. Holder’s rights, remedies and powers,
as provided in this Note and the other Loan Documents, are cumulative and
concurrent, and may be pursued singly, successively or together against Maker,
the security described in the Loan Documents, any guarantor(s) of this Note and
any other security given at any time to secure the payment of this Note, all at
the sole discretion of Holder. Additionally, Holder may resort to every other
right or remedy available at law or in equity without first exhausting the
rights and remedies contained herein, all in Holder’s sole discretion. Failure
of Holder, for any period of time or on more than one occasion, to exercise its
option to accelerate the Maturity Date shall not constitute a waiver of the
right to exercise the same at any time during the continued existence of any
Event of Default or any subsequent Event of Default.

5.4. Attorney’s Fees. If this Note is not paid at maturity, whether by
acceleration or otherwise, and is placed in the hands of an attorney for
collection, or suit is filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, rearrangement or other legal
proceedings for collection hereof, Maker and each surety, guarantor, endorser
and other party now or hereafter primarily or secondarily liable upon or for the
payment of any sums of money payable on this note jointly and severally agree to
pay to Payee its collection costs, including a reasonable sum for attorneys’
fees, but in no event to exceed the maximum amount permitted by law.

6. Late Charge. In the event any payment provided for in this Note or in the
Mortgages shall become overdue for a period in excess of fifteen (15) days,
Maker shall pay, without notice or demand, both of which are hereby waived to
the maximum extent permitted by applicable law, the Late Charge computed on the
delinquent payment; provided, however, if such amount, when added to all other
charges contracted for, charged or received hereunder which are treated as
interest or loan finance charge under applicable federal or state law, is in
excess of the amount permitted to be charged to Maker under applicable federal
or state law, Holder shall be entitled to collect, in lieu thereof, such amount
only to the maximum amount permitted by such law on the payment so overdue,
computed from the original due date to the date such payment is made, which
amount shall become immediately due to Holder, at Holder’s option, as liquidated
damages for Maker’s failure to make prompt payment, but in no event shall such
amount, when added to all other sums deemed to be interest or loan finance
charge by applicable law, exceed the maximum amount allowed by law. Maker
acknowledges that late payment to Holder of any sum due under this Note or the
Mortgages will cause Holder to incur costs not contemplated at the time it made
the Loan to Maker which is evidenced by this Note, including, without
limitation, processing and accounting charges, but that actual damages to Holder
would be costly, inconvenient and impracticable to ascertain. Maker agrees that
the Late Charge set forth above represents a fair and reasonable estimate of
such costs and represents a reasonable sum considering all of the circumstances
existing on the date of this Note. The Late Charge shall be paid without
prejudice to the right of Holder to collect any other amounts provided to be
paid, to declare a default under this Note or under the Mortgages or to exercise
any of the other rights and remedies of Holder. Further, nothing in this Note
shall be construed as an obligation on the part of Holder to accept, at any
time, less than the full amount then due hereunder, or as a waiver or limitation
of Holder’s right to compel prompt performance.

 

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7. Lawful Rate of Interest. All agreements between Maker and Holder are
expressly limited so that in no event whatsoever, whether by reason of
disbursement of the proceeds hereof or otherwise, shall the amount of interest
or loan finance charge paid or agreed to be paid by Maker to Holder exceed the
highest lawful contractual rate of interest or the maximum finance charge
permissible under applicable federal or state law which a court of competent
jurisdiction, by final non-appealable order, determines to be applicable hereto.
If fulfillment of any agreement between Maker and Holder of this Note, at the
time the performance of such agreement becomes due, involves exceeding such
highest lawful contractual rate or such maximum permissible loan finance charge,
then the obligation to fulfill the same shall be reduced so that such obligation
does not exceed such highest lawful contractual rate or maximum permissible loan
finance charge. If by any circumstance Holder shall ever receive as interest or
loan finance charge an amount which would exceed the amount allowed by
applicable federal or state law, the amount which may be deemed excessive shall
be deemed applied to the principal of the indebtedness evidenced hereby and not
to interest. To the extent required to comply with applicable limitations on
interest or loan finance charges, all interest and loan finance charges paid or
agreed to be paid to Holder of this Note shall be prorated, allocated and spread
throughout the full period of this Note. The terms and provisions of this
paragraph shall control all other terms and provisions contained herein and in
any of the other documents executed in connection herewith.

8. Waiver. Except with respect to such notice of an Event of Default and such
opportunity to cure an Event of Default as may be required by this Note or the
Loan Agreement, to the maximum extent permitted by applicable law, Maker, for
itself and all endorsers, guarantors and sureties of this Note, and each of
them, and their respective heirs, legal representatives, successors and assigns,
hereby waives presentment for payment, demand, notice of nonpayment, notice of
dishonor, protest of any dishonor, notice of protest and protest of this Note,
and all other notices in connection with the delivery, acceptance, performance,
default or enforcement of the payment of this Note, and agrees that their
liability shall be unconditional and without regard to the liability of any
other party and shall not be in any manner affected by any indulgence, extension
of time, renewal, waiver or modification granted or consented to by Holder. To
the maximum extent permitted by applicable law, Maker, for itself and all
endorsers, guarantors and sureties of this Note, and each of them, and their
respective heirs, legal representatives, successors and assigns, hereby waives
consent to every extension of time, renewal, waiver or modification that may be
granted by Holder with respect to the payment or other provisions of this Note,
and to the release of any collateral given to secure the payment of this Note,
or any part of this Note, with or without substitution, and agrees that
additional makers or guarantors or endorsers may become parties hereto without
notice to Maker and without affecting the liability of Maker hereunder.

9. Continuation of Indebtedness. In the event that at any time any payment(s)
received by Holder hereunder shall be deemed by final order of a court of
competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than Holder, then, in any
such event, the obligation to make such payment(s) shall survive any
cancellation of this Note and/or return thereof to Maker, shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Note but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof, and the amount of such payment(s) shall
bear interest at the Default Rate from the date of such final order until repaid
hereunder.

 

 

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10. General Provisions.

10.1. Amendments. This Note may not be terminated or amended orally, but only by
a termination or amendment in writing signed by Holder.

10.2. Records of Holder. The records of the Holder shall be prima facie evidence
of the amount due hereunder.

10.3. Business Purposes. This Note is given to evidence an obligation incurred
for business purposes and not for personal, residential or agricultural
purposes.

10.4. Captions; Definitions. The captions of the paragraphs of this Note are for
convenience only and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions of this Note. Each of the terms defined before paragraph 1
of this Note shall have the meaning set forth following such term when used
throughout this Note. Any term not specifically defined in this Note shall be
accorded the same meaning set forth for such term in the Loan Agreement.

10.5. Severable Provisions. Every provision of this Note is intended to be
severable. If any term or provision hereof is declared by a court of competent
jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever,
such illegality, invalidity or unenforceability shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding
and enforceable.

10.6. Notices. Notices and other communications shall be given under this Note
in accordance with the requirements of paragraph 12.2 of the Loan Agreement.

10.7. Time of Essence. Time is of the essence of this Note and the performance
of each of the covenants and agreements contained herein.

10.8. Purpose. This Note is signed to evidence an obligation incurred by Maker
for business purposes and not for personal, residential or agricultural
purposes.

10.9. Choice of Law. Payment of this Note is secured, without limitation, by the
Mortgages, which covers real and personal property located in Oklahoma County,
Oklahoma. An Event of Default under the Mortgages, the Loan Agreement or any
other document securing or relating to this Note shall constitute an Event of
Default under this Note. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES, AND EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.

10.10. Jurisdiction and Venue. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO THIS
NOTE MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT HAVING THE MORTGAGED
PROPERTY (AS DEFINED IN THE LOAN AGREEMENT) WITHIN ITS JUDICIAL DISTRICT, AS THE
HOLDER MAY ELECT, AND BY EXECUTION AND DELIVERY OF THIS NOTE, THE MAKER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION (BOTH
SUBJECT MATTER AND PERSON) OF EACH SUCH COURT AND IRREVOCABLY AND
UNCONDITIONALLY WAIVE (I) ANY OBJECTION THAT MAKER MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN EITHER OF SUCH COURTS, AND (II) ANY CLAIM THAT ANY ACTION
OR PROCEEDING BROUGHT IN EITHER SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

 

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10.11. Jury Trial Waiver. MAKER AND HOLDER, BY ITS ACCEPTANCE OF THIS NOTE,
JOINTLY AND SEVERALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY MAKER, AND MAKER
ACKNOWLEDGES THAT NEITHER HOLDER NOR ANY PERSON ACTING ON BEHALF OF HOLDER HAS
MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS WAIVER IS
KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY HOLDER, AND HOLDER
ACKNOWLEDGES THAT NEITHER MAKER NOR ANY PERSON ACTING ON BEHALF OF MAKER HAS
MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH PARTY
FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO
BE REPRESENTED) IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL. EACH
PARTY ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION. THIS NOTE CONSTITUTES A WRITTEN CONSENT
TO WAIVER OF TRIAL BY JURY, AND EITHER PARTY IS AUTHORIZED AND EMPOWERED TO FILE
THIS NOTE WITH THE CLERK OR JUDGE OF ANY COURT OF COMPETENT JURISDICTION AS A
STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.

IN WITNESS WHEREOF, Maker executes this Note as of the date set forth above.

 

“Maker”:      

PAYCOM PAYROLL, LLC,

a Delaware limited liability company

    By  

:/s/ Chad Richison

      Chad Richison, President

 

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