Document:

payc-ex47_102.htm

 

Exhibit 4.7

AMENDMENT NO. 1 TO THE  

REGISTRATION RIGHTS AGREEMENT

This Amendment No. 1 (this “Amendment”) to the Registration Rights Agreement, dated as of December 30, 2013 (the “Registration Rights Agreement”), by and among Paycom Software, Inc., Paycom Payroll, LLC, Welsh, Carson, Anderson & Stowe X, L.P., WCAS Management Corporation, WCAS Capital Partners IV, L.P., WCAS Paycom Holdings, Inc., each of the Persons listed on the signature pages attached to the Registration Rights Agreement and each other Person who executed a joinder thereto, is entered into as of May 13, 2015. Capitalized terms used in this Amendment but not otherwise defined herein shall have the respective meanings assigned to them in the Registration Rights Agreement.

WHEREAS, pursuant to Section 11(c) of the Registration Rights Agreement, the provisions of the Registration Rights Agreement may be amended upon the prior written consent of the Company and the Holders of not less than a majority of the Registrable Securities.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the undersigned, being the Holders of not less than a majority of the Registrable Securities, give their written consent to amend the Registration Rights Agreement as follows:

1.   Amendment to Section 2(d)(i). Section 2(d)(i) of the Registration Rights Agreement is hereby deleted in its entirety and replaced with the following:

At any time that the Company is eligible to use Form S-3, upon the written request of any Holder of WCAS Registrable Securities (the “Shelf Demand Notice”), the Company shall use its best efforts to file with the Commission following the receipt of such Shelf Demand Notice, one or more registration statements with respect to the Registrable Securities under the Securities Act for the offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the “Shelf Registration  Statement”). If such Shelf Registration Statement is not automatically declared effective by the Commission or does not automatically become effective, the Company shall use its best efforts to cause such Shelf Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. The Shelf Registration Statement shall be on an appropriate form and the registration statement and any form of prospectus included therein (or prospectus supplement relating thereto) shall reflect the plan of distribution or method of sale as the Holders may from time to time notify the Company of. Following the receipt by the Company of any Shelf Demand Notice, all of the WCAS Registrable Securities shall be included in the Shelf Registration Statement without any further action unless a smaller number is requested or a dollar amount is registered. If not all of the WCAS Registrable Securities are included, a Holder of WCAS Registrable Securities may submit subsequent Shelf Demand Notices. Other Holders shall be afforded eighteen hours following facsimile or email notice or notice by personal delivery to decide to include Registrable Securities in proportion to the WCAS Registrable Securities that are included.

2.   Amendment to Section 10. Section 10 of the Registration Rights Agreement is hereby deleted in its entirety and replaced with the following:

All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, sent via a nationally recognized overnight courier, sent via facsimile to the recipient accompanied by a certified or registered mailing or sent via email. Such notices, demands and other communications will be sent to the applicable parties hereto at such address or to the attention of such other person as is specified in the Company’s books and records or such other address or to the attention of such other Person as the recipient party shall have either directly or indirectly (through a representative of the recipient party) specified to the sending party.

3.   Miscellaneous.

(a) Effect of Amendment. In the event of any inconsistency or conflict between the Registration Rights Agreement and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control. Except as modified by this Amendment, the Registration Rights Agreement shall continue in full force and effect. Nothing in this Amendment shall be construed to modify any provision of the Registration Rights Agreement or in any other document or instrument delivered in connection therewith, other than those provisions of the Registration Rights Agreement specifically amended as set forth in this Amendment.

(b) Entire Agreement. This Amendment and the Registration Rights Agreement contain the entire understanding of the parties hereto with respect to the subject matter contained herein and therein. Any reference to the Registration Rights Agreement after this Amendment is first effective shall be deemed to be a reference to the Registration Rights Agreement as amended hereby.

 

 

(c) Successors and Assigns. All covenants and agreements in this Amendment by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Amendment which are for the benefit of purchasers or Holders are also for the benefit of, and enforceable by, any subsequent Holder.

(d) Severability. Whenever possible, each provision of this Amendment will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Amendment.

(e) Counterparts. This Amendment may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Amendment.

(f) GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAWS OR CONFLICT OF LAWS PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(g) Descriptive Headings. The descriptive headings of this Amendment are inserted for convenience only and do not constitute a part of this Amendment.

* * * * *

 

 

 

2

 

IN WITNESS WHEREOF, the parties hereto have executed and consented to this Amendment No. 1 to the Registration Rights Agreement as of the date first above written.

 

	
 
	
Paycom Software, Inc.

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Chad Richison
	
 

	
 
	
 
	
Name:   Chad Richison
	
 

	
 
	
 
	
Title:     CEO
	
 

	
 
	
 
	
 
	
 

	
 
	
Paycom Payroll, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Chad Richison
	
 

	
 
	
 
	
Name:   Chad Richison
	
 

	
 
	
 
	
Title:     CEO
	
 

 

[Signature Page to Amendment No. 1 to the Registration Rights Agreement]

 

 

	
 
	
Welsh, Carson, Anderson & Stowe X, L.P.

	
 
	
 
	
 
	
 

	
 
	
By: WCAS X Associates LLC 

Its: General Partner

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Jonathan Rather
	
 

	
 
	
 
	
Name:   Jonathan Rather

	
 
	
 
	
Title:     Managing Member

	
 
	
 
	
 

	
 
	
WCAS Capital Partners IV, L.P.

	
 
	
 
	
 
	
 

	
 
	
By:  WCAS CP IV Associates LLC

Its: General Partner

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Jonathan Rather
	
 

	
 
	
 
	
Name:   Jonathan Rather

	
 
	
 
	
Title:     Managing Member

	
 
	
 
	
 
	
 

	
 
	
WCAS Management Corporation

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Jonathan Rather
	
 

	
 
	
 
	
Name:   Jonathan Rather

	
 
	
 
	
Title:     Treasurer and Assistant Secretary

	
 
	
 
	
 

	
 
	
WCAS Paycom Holdings, Inc.

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Jonathan Rather
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

[Signature Page to Amendment No. 1 to the Registration Rights Agreement]

 

 

	
 
	
Ernest Group, Inc.

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Chad Richison
	
 

	
 
	
 
	
Name:   Chad Richison

	
 
	
 
	
Title:      President

	
 
	
 
	
 

	
 
	
The Ruby Group, Inc.

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Chad Richison
	
 

	
 
	
 
	
Name:   Chad Richison

	
 
	
 
	
Title:      President

 

[Signature Page to Amendment No. 1 to the Registration Rights Agreement]payc-ex103_677.htm

Exhibit 10.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN AGREEMENT

 

between

 

KIRKPATRICK  BANK,

an Oklahoma banking association,

as Lender,

 

and

 

PAYCOM PAYROLL, LLC,

a Delaware limited liability company, as Borrower

 

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Exhibit 10.3

 

LOAN AGREEMENT

 

 

THIS LOAN AGREEMENT  is made and entered into effective as of (but not necessarily on) May 13, 2015 (the "Effective  Date"),  by and between KIRKPATRICK  BANK, an Oklahoma  banking  association  ("Lender"),  and PAYCOM  PAYROLL,  LLC,  a Delaware limited liability company ("Borrower").

 

RECITALS:

 

A.        Borrower  occupies  that certain  property consisting  of approximately  fifty (50) acres of land located  north of Kilpatrick  Turnpike  and east of Council  Road in Oklahoma City,  Oklahoma,  such  property  consisting  of  three  (3)  contiguous  tracts  of  land  identified  as "Tract  I", "Tract 2" and "Tract 3" (each hereby defined as the same and collectively  as the "Real Property") as more particularly described in Exhibit "A" attached hereto and incorporated herein.

 

B.        Borrower and Lender previously entered into that certain Second Loan Modification  Agreement,  dated  effective  June  17, 2014,  which  acted  to,  among  other  things, modify that certain Loan Agreement, dated March 28, 2013, as amended (the "Existing Loan Agreement"),  for  the  purpose  of  consolidating,   amended,  restating  and  increasing  all  of  the then-existing  indebtedness  of Borrower payable to Lender.   Such consolidation  is evidenced  by that certain Consolidated,  Amended, Restated and Increased Promissory Note in the maximum principal amount of$27,420,538.01 (the "Consolidated  Note").

 

C.        The  Consolidated  Note  is secured  by, among  other  things,  those  certain mortgages identified on Exhibit "C" attached  hereto (collectively and as amended,  the "Existing Mortgages").

 

D.        Lender   previously   extended   to   Borrower   an   advancing   loan   in  the maximum principal amount  of $1,000,000.00 for the purpose of constructing  a new parking lot (the  "New  Parking  Lot")  on  the  southwest  portion  of  the  Real  Property  within  Tract  3,  as evidenced  by that  certain  Promissory  Note,  dated  March  5, 2015,  executed  by Borrower  and payable to the order of Lender (the "Parking  Lot Note").   No monies have been advanced on this Parking Lot Note.

 

E.        The Parking Lot Note is secured by, among other things, (i) that certain Construction  Mortgage,  dated  March 5, 2015,  recorded in Book 12764, at Page 805  in the real property records of the Oklahoma  County Clerk, and (ii) that certain Mortgage,  dated March 5,

2015, recorded in Book 12764, at Page 793 in the real property records ofthe Oklahoma County

Clerk.

 

F.         Borrower has now requested that Lender lend to Borrower  Eleven Million and Noll 00 Dollars  ($11,000,000.00) to finance  (i) the construction  of an 82,000  square  foot office  building ("Building  3")  to  be situated  on  a  portion of Tract  1, as depicted  on the map attached  hereto  as  Exhibit  "B",  (ii)  the  expansion  and  renovation  of the  existing  gymnasium building  to  be situated  on  portions  of Tract  1  and Tract  2 (the "Gymnasium   Expansion"),  as depicted  on  Exhibit  "B",  and  (iii)  the  construction  of  the  New  Parking  Lot,  as  depicted  on Exhibit "B".

Subject  to the terms,  provisions,  covenants  and agreements  hereinafter  set forth, Lender has agreed to make the requested extensions of credit.

 

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Exhibit 10.3

 

 

 

AGREEMENT:

 

In consideration  of the mutual covenants contained herein and the loan to be made hereunder, and for other good and valuable consideration,  the receipt and adequacy  of which are hereby acknowledged,  Lender and Borrower hereby covenant and agree as follows:

 

I.         DEFINITIONS.     Unless  the  context  otherwise   requires  and  except  as otherwise  may be provided  herein,  (i) accounting  and financial  terms  used  in this  Agreement shall  have the meanings  ascribed  to such  terms  by generally  accepted  accounting  principles  in effect from time to time, applied on a consistent  basis, as set forth in opinions ofthe Accounting Principles Board of the American  Institute of Certified Public Accountants  and/or Statements  of the Financial  Accounting  Standards  Board which  may be applicable  in the circumstances  as of the date involved,  (ii) definitions  contained  in the  Code  (herein  defined)  shall  apply to terms, words and phrases used herein, except that in case of any conflict  between definitions  contained in Article 9 of the Code and other definitions  in the Code, the Article 9 definitions  shall apply, (iii) the singular shall  be deemed to include the plural and the plural shall  be deemed to include the singular, and (iv) the terms as used herein shall be construed and controlled  by the following definitions:

 

1.1       Account   Security   Agreement.     "Account   Security   Agreement" shall have the meaning assigned to that term in paragraph 4.2 of this Agreement.

 

1.2       Affiliate.    "Affiliate" shall  mean  any  person  or entity  (including, without limitation, an individual, a corporation,  a limited liability company, a partnership, a trust, or an incorporated  association),  which has a relationship  with Borrower  whereby either such person or entity or Borrower directly or indirectly controls  or is controlled  by or  is under common  control  with the  other,  or  holds  or  beneficially  owns  twenty-five percent (25%) or more of the equity interest in the other or twenty-five  percent (25%) or more  of any class  of  voting  securities  of  the  other,  and  shall,  in addition,  include  all members in Borrower.

 

1.3       Agreement.    "Agreement," and such  terms  as "herein,"  "hereof," "hereto," "hereby," "hereunder" and the like shall mean and refer to this Loan Agreement, together   with  any  and  all  Exhibits   attached   hereto,  and  any  and  all  supplements, modifications or amendments  hereof.

 

1.4       Amortization  Period.  "Amortization   Period"  means  two  hundred forty (240) months.

 

1.5       Appraisal.    "Appraisal" shall  mean  the  meaning  ascribed  thereto in paragraph 5.10 of this Agreement.    The Loan amount will be limited to eighty percent (80%) ofthe Appraised Value.

 

1.6       Appraised Value.         "Appraised  Value" shall  mean the value set forth in the Appraisal or any updates to the Appraisal pursuant to paragraph 5.1 0.

 

1.7 Architect. "Architect"  shall   mean   HSE  Architects   PLLC,  an

Oklahoma professional  limited liability company.

 

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Exhibit 10.3

 

 

1.8       Assignment.     "Assignment" shall  have  the  meaning  ascribed  to such term in paragraph 4.1 ofthis Agreement.

 

1.9       Building 3.   "Building  3" shall mean an 82,000  square foot office building to be situated on Tract 1.

 

1.10     Business Day.   "Business  Day" shall have the meaning assigned to that term in the Note.

 

1.11 Code. "Code"   shall   mean  the  Uniform  Commercial   Code  of

Oklahoma, as the same may from time to time be in effect.

 

1.12     Collateral  Assignments.    "Collateral  Assignments" shall  have the meaning assigned to that term in paragraph 4.3 of this Agreement.

 

1.13     Completion  Date.    "Completion Date"  shall  mean  the date  upon which all of the following  conditions  are fully satisfied:  (i) the Construction  Project has reached Substantial  Completion,  (ii) Borrower  has delivered  to Lender  a final "as-built" survey of all of the Mortgaged Property which is in form, scope and substance acceptable to Lender, (iii) Borrower has delivered to Lender prepaid property, liability, business interruption, worker's compensation  insurance, and other required insurance covering the Mortgaged Property, all in amount, form, scope and substance  satisfactory to Lender, (iv) Borrower has delivered  to Lender Certificates  of Occupancy  issued for the Construction Project and for occupancy  ofthe premises, and (v) Borrower has accepted Building 3, the gymnasium, as improved by the Gymnasium Expansion, and the New Parking Lot.

 

1.14     Completion   Deadline.     "Completion  Deadline"   shall  mean  the date which is eighteen (18) months after the Effective Date.

 

1.15     Construction   Account.     "Construction  Account"   shall  have  the meaning assigned to that term in paragraph 5.6 of this Agreement.

 

1.16     Construction  Period.   "Construction  Period" shall mean the period of time from the Effective  Date until the Completion  Date, but in no event later than the Completion  Deadline.

 

1.17     Construction   Consultant.    "Construction  Consultant"  shall  mean the individual or entity selected  by Lender, in Lender's  sole discretion  and at Borrower's cost,  to  inspect  the  Construction   Project,  review  all  plans,  construction  budgets,  time lines, permits, contracts, supporting documentation  and information,  and to advise Lender in regard to all aspects ofthe Construction  Project.

 

1.18   Construction  Contract.    "Construction  Contract"  shall mean, collectively,  the  contracts  between  Borrower  and  the  Contractor,  for  the  Construction Project, which contract  is subject to Lender's review and approval.

 

1.19     Construction  Project.   "Construction  Project" shall mean construc­ tion of Building  3, the Gymnasium  Expansion,  and the New Parking  Lot, or any one of the foregoing,  and  related  improvements, pursuant  to  plans  and  specifications  and  the Project Budget approved by Lender and located on the Real Property.

 

1\CdfsO1\Home\AIIenz\Kirkpatrick\Paycom\2015 Building 3\Loan Documents\Kirkpatrick  Bank- Paycom -Loan Agreement-7.Docx-4-

Exhibit 10.3

 

 

1.20     Contractor.    "Contractor" shall  mean  Clyde  Riggs  Construction, L.L.C., an Oklahoma limited liability company, which shall serve as Borrower's general contractor for the Construction  Project.

 

1.21 Dollars.    "Dollars" and"$" shall mean lawful money ofthe United

States of America.

 

1.22 Engineer.    "Engineer" shall mean Johnson  and Associates, Inc., an

Oklahoma corporation.

 

1.23 ERISA.   "ERISA" shall  mean  the  Employee  Retirement  Income

Security Act of I 974, as amended and as in effect from time to time.

 

1.24     Event of Default.    "Event of Default" shall mean the occurrence of any of the events specified in paragraph 10 of this Agreement.

 

1.25     Existing   Mortgages.        "Existing   Mortgages"   shall  mean  those mortgages referenced in Exhibit "C" attached hereto.

 

1.26     Financing   Statements.     "Financing   Statements"  shall  have  the meaning ascribed to that term in paragraph 4.1 of this Agreement.

 

1.27 Guarantor. "Guarantor" shall  mean  Paycom  Software,   Inc.,  a

Delaware corporation.

 

1.28     Guaranty.     "Guaranty" means the Guaranty  Agreement  executed and  delivered   by  the  Guarantor   in  favor  of  the  Lender  and  in  form  and  substance acceptable  to the Lender wherein Guarantor  guarantees  payment and performance of the Indebtedness.

 

1.29     Governmental   Authority.    "Governmental  Authority"  shall  mean any nation or government,  any federal,  state,  local or other  political  subdivision  thereof and  any  entity  exercising  executive,   legislative,  judicial,   regulatory  or  administrative functions of or pertaining to government.

 

1.30     Hazardous     Substances     Indemnity     Agreement     and     HSIA. "Hazardous    Substances   Indemnity   Agreement"    and   "HSIA"  shall   each   mean   the Hazardous Substances  Indemnity Agreement  which will be signed pursuant  to paragraph

4.5 of this Agreement.

 

1.31 Interest Rate. "Interest Rate" means:

 

(i)  commencing   with  the  Effective   Date  and  continuing until the Term Loan Conversion  Date, a floating per annum rate of  interest  equal  to the greater  of (a) the Prime  Rate plus 50 basis points (0.5%) or (b) 4.00%;

 

(ii)  commencing  with  the Term  Loan  Conversion  Date, a fixed,  per  annum  rate  of  interest  equal  the  7/20  LIBOR Swap  Rate in effect as of the Term  Loan Conversion  Date plus 225 basis points (2.25%).

 

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Exhibit 10.3

 

1.32     7/20  LIBOR  Swap  Rate.   "7/20  LIBOR  Swap  Rate"  shall  mean that certain LIBOR Swap interest rate, effective as of the Term Loan Conversion Date, identified  as  the  Swap  rate  for  a  7-year  term  and  a  20-year  amortization   the  in  the then-effective  Weeldy Swap Pricing Indications  report issued to Lender by County Club Bank pursuant to that certain SWAP Agreement  by and between the same.

 

1.33     Indebtedness.       "Indebtedness"   shall    mean    and    include    all liabilities,   obligations   or  indebtedness   of   Borrower   to  Lender   of  every   kind  and description,  now existing  or hereafter  incurred, direct or indirect, absolute  or contingent, due or to become due, matured or unmatured, and whether or not of the same or a similar class or character  as the Loan and whether or not contemplated  by Lender or Borrower, together  with  future  advances  and all extensions  and  renewals,  and  including  (without limiting the generality  of the foregoing)  all indebtedness  of Borrower  to Lender arising out  of  or  related  to  the  Loan,  the  Note,  this  Agreement   or  any  other  of  the  Loan Documents.

 

1.34 Liability. "Liability" shall  mean  any  claim  on  the  assets  of  a

Person, excluding ownership equity.

 

1.35     Liquidity  Account.    "Liquidity  Account"  shall  have the meaning ascribed to such term in paragraph 5.6 of this Agreement.

 

1.36 Loan.   "Loan" shall mean that loan to be advanced pursuant to this

Agreement and evidenced  by the Note.

 

1.37     Loan Documents.    "Loan  Documents"  shall mean collectively  this Agreement, the Note, the Mortgage, the Second Mortgage, the Existing Mortgages, the Financing  Statements,   the  Guaranty,  the  Account   Security  Agreement,   the  Account Financing Statement, the Assignment, the Collateral Assignments, the Subordination Agreements,  the Assignment  of Permits, the Existing Loan Agreement,  the Consolidated Note and all other  instruments  and documents  executed  or issued  or to be executed  or issued  pursuant  to this  Agreement  or any of said documents  or  in connection  with the Loan,  and  all  amendments,   modifications,   extensions   and  renewals   of  any  of  the foregoing documents.

 

 

1.38 Loan-to-Value. divided by the Appraised Value.

"Loan-to-Value" shall  mean  the  Indebtedness

 

 

1.39     Maturity  Date.      "Maturity   Date"  Means  May  7,  2023,  or  any earlier  date  on  which  the entire  unpaid  principal  amount  of the Note  shall  be paid or required to be paid in full, whether by prepayment, acceleration or otherwise.

 

1.40     Mortgage.    "Mortgage" shall  have  the  meaning  ascribed  to  that term in paragraph 4.1 ofthis Agreement.

 

1.41     Mortgaged    Property.      "Mortgaged    Property"   shall   have   the meaning ascribed to such term in the Mortgage, and includes, without limitation, the Real Property described  on Exhibit "A"  attached  to this Agreement  and  incorporated  herein. The Mortgaged Property does not include the property or funds of Borrower's unaffiliated clients and/or customers.

 

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Exhibit 10.3

 

 

1.42     Note.     "Note"   shall   mean   the  Promissory   Note  executed   by Borrower  and  payable  to  the  order  of  Lender  to  evidence  the  Loan  in the  maximum principal  amount  not  to  exceed  the  lesser  of  (i)  Eleven  Million  and  Noll 00  Dollars ($11,000,000.00), and (ii) eighty percent (80%) ofthe Appraised  Value ofthe Mortgaged Property.

 

1.43     PBGC.    "PBGC" shall  mean  the Pension  Benefit  Guaranty  Cor­ poration as established pursuant to Section 4002 of ERISA or any successor thereto or substitute therefor under ERISA.

 

1.44     Person.       "Person"  shall   mean   any   individual,    corporation, company, joint venture, association, partnership, trust, unincorporated organization, Governmental  Authority or other entity.

 

1.45     Prime Rate.     "Prime  Rate" shall mean the highest per annum rate of  interest  (expressed  as a percentage)  which  is identified  as the "Prime  Rate"  in the "Money  Rates" section of The Wall Street Journal, adjusted as of the date of any change therein, whether or not such prime rate is actually charged by any bank or other financial institution and whether or not a lower or better rate of interest is charged  by any bank or other institution.

 

1.46     Project Budget.   "Project  Budget" shall mean Borrower's detailed budget  for   financing   the  design   and   construction   of  Building   3,  the  Gymnasium Expansion  and the New Parking Lot on the Real Property,  and for all other costs related to or associated with the Construction  Project, a copy of which Project Budget is attached to this Agreement as Exhibit "D" and incorporated herein.

 

1.47 Project  Cost. "Project   Cost"  shall  mean  the  total  cost  of  the

Construction Project.

 

1.48     Real   Property.      "Real   Property"   shall   mean   the  certain   real property located  in Oklahoma  County,  Oklahoma,  which  is more  particularly  described on Exhibit "A" attached to this Agreement and incorporated herein by reference.

 

1.49     Request  for Funds.    "Request  for Funds"  shall  mean the Request for Funds described  in paragraph 9.3 of this Agreement.

 

 

1.50 Second Mortgage. ascribed thereto in paragraph 4.1.

"Second  Mortgage"  shall  have the meaning

 

 

1.51     Subordination   Agreements.     "Subordination  Agreements"   shall mean   the   Subordination    Agreements   described   in  paragraphs   4.3   and   4.5  of  this Agreement.

 

1.52     Substantial   Completion.       "Substantial    Completion"  or   "Sub- stantially Complete" shall mean completion  of the Construction  Project to the point that it is  legally  ready  for  occupancy   and  use,  as  evidenced   by  all  required  governmental permits, licenses and final certificates  of occupancy and by certificates  of substantial completion   signed   by   Borrower,   the   Architect,   the   Contractor,   the   Construction Consultant  and  any  inspector  that  Lender  may,  in  its discretion,  retain  at  Borrower's expense.

 

 

 

 

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-7-

 

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Exhibit 10.3

 

)1.53 Term Loan Conversion  Date.   "Term Loan Conversion  Date" shall be the date on which the Note evidencing  the Loan converts  to a so-called  "term  loan",

 

)which  such  date  shall  occur  on  the  first  (151

day  of  the  first  (151

month  after  the

 

Completion Date, but in no event later than the Completion  Deadline.

 

1.54 UCC.   "UCC"  shall  mean  the Uniform  Commercial  Code of the

State of Oklahoma.

 

2. LENDING AGREEMENT.

 

2.1       Construction   Loan.    Subject  to  the  terms,  prov1s1ons, covenants and agreements  set  forth  in this  Agreement,  Lender  agrees  to  make  construction  loan advances to Borrower until the end of the Construction  Period, in an amount equal to the lesser of (i) eighty percent (80%) of the Appraised  Value of the Mortgaged  Property, and (ii) Eleven  Million  and No/100  Dollars  ($11,000,000.00), which Loan shall  be used by Borrower for the purpose of: (a) paying contractors, architects, engineers, mechanics, materialmen,  laborers,  service  agencies  and suppliers  pursuant  to the terms of contracts for construction  of the Construction  Project, for services  in fact performed  and materials purchased for and either  incorporated  into the Construction  Project or suitably stored on the  Real  Property  for  later  incorporation,  (b)  refinancing,  amending  and  restating  the Parking Lot Note which has a principal balance of $0.00 as of the Effective Date, and the credit existing thereunder  shall now be evidenced  by the Note, (c) reimbursing  Lender for expenses incurred by Lender pursuant to this Agreement and (d) paying other costs which are incidental or related to the cost of completing  or financing the Construction  Project as set forth in the Project Budget, subject to Lender's  prior approval;  provided, however, notwithstanding  any other language set forth in this Agreement  or any of the other Loan Documents,  Loan proceeds shall not be used to pay interest, Loan fees, late charges, after default  interest  and/or  any  other  similar  costs,  as  determined   by  Lender.    Upon  the Effective  Date, the Parking  Lot Note shall  be voided, and Lender  shall  have no further obligations thereunder.

 

2.2       Term Loan.     Upon  the  Term  Loan  Conversion   Date,  provided such  date  is timely  and  in  no  event  later  than  the  Completion   Deadline,  and  further provided no Default or Event of Default then exists and remains uncured, the outstanding principal   balance   of  the  Construction   Loan   shall  be  automatically   converted   to  a seventy-eight (78) month term loan, with the monthly amount of principal and interest payments being calculated on the basis of a twenty (20) year (240 month) mortgage amortization  schedule and payable as set forth in paragraph 3 below.

 

3.         BORROWER'S NOTE.   The Loan shall be evidenced  by the Note, which Note shall be signed by Borrower and delivered to Lender concurrently with execution of this Agreement.    Principal and interest shall be payable on the Note as follow:

 

 

)(a) Commencing  on the first (151

day of the first calendar month following

 

)the  Effective  Date,  and  continuing   on  the  first  (1 51

day  of  each  successive   month

 

thereafter through  and including the Term Loan Conversion  Date, Borrower  shall pay to Lender a monthly payment of interest only, accrued at the Interest Rate on the outstanding principal balance of the Note.

 

 

)(b) Commencing  on the first (151

day of the first calendar month following

 

)the Term Loan Conversion  Date, and continuing  on the first (1 51

day of each successive

 

month thereafter  through  and  until the Maturity  Date, Borrower  shall  pay to Lender the amount  determined   by  Lender  to  be  the  monthly  payment  of  principal  and  interest

 

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Exhibit 10.3

 

 

necessary  to amortize  the  principal  balance  of the Note,  together  with  interest  on such principal  balance  at the Interest  Rate (determined  on the Term  Loan Conversion  Date), over the Amortization  Period (i.e., 240 months).

 

The Loan shall be subject to a prepayment premium as more particularly described in the Note.

 

4.         COLLATERAL   SECURITY.     The  performance   of  all  covenants   and agreements contained  in this Agreement  and  in the other documents  executed  or delivered  as a part of this transaction, and the payment of the Note shall be secured as follows:

 

4.1        Security   Documents   Covering   Mortgaged   Property.     Borrower shall (a) grant to Lender a priority Construction  Mortgage (With Power of Sale), Security Agreement and Financing  Statement  (the "Mortgage") in the form prescribed  by Lender, subject to no other liens except for the Existing  Mortgages,  covering Tract 1  and Tract 2 and a first security  interest  in all personal  property  relating to such property which shall identify the  Note  as the  indebtedness  evidenced  thereby  and  be  in form  acceptable  to Lender;   (b) grant to Lender a priority Second Mortgage (With Power of Sale), Security Agreement and Financing Statement (the "Second  Mortgage"),  in the form prescribed  by Lender, subject to no other liens except for the Existing Mortgages, covering Tract 3 and a  first  security  interest  in  all  personal  property  relating  to  such  property  which  shall identify the  Note  as the  indebtedness  evidenced  thereby  and  be in form  acceptable  to Lender; and (c) assign to Lender all leases of the Mortgaged  Property and all of the rents, issues and profits of the Mortgaged Property, which assignment  shall be evidenced  by an Assignment  of Leases,  Rents and Profits (the "Assignment"), in the form  prescribed  by Lender, which shall identify the Note as the indebtedness evidenced  thereby.

 

4.2        Security Agreements  Covering Borrower's Accounts  With Lender. Borrower shall grant to Lender a first security  interest in the Construction  Account. Such security interests shall be evidenced by a Security Agreement (the "Account  Security Agreement")  in the form prescribed by Lender.

 

4.3      Assignment and Subordination  of Architectural Agreement and Construction  Contract.    Borrower  shall sign, and shall cause  the Architect  to sign,  and deliver  to  Lender  a  Collateral   Assignment   of  Architectural   Agreement   in  the  form prescribed  by Lender  and  Borrower  shall  sign,  and  cause  the  Contractor  to sign,  and deliver   to  Lender   a  Collateral   Assignment   of   Construction    Contract   in  the  form prescribed  by Lender  (collectively,  the "Collateral  Assignments").   Borrower  shall also provide to Lender (i) a Subordination  Agreement  in the form prescribed  by Lender, which shall be properly signed and acknowledged  by the Architect for the Construction  Project, and (ii)  a Subordination   Agreement  in the  form  prescribed  by Lender,  which  shall  be properly signed and acknowledged  by the Contractor  (collectively,  the "Subordination Agreements").    If the Collateral  Assignments  and the Subordination  Agreements  are not available  prior to or at the time of execution  of this Agreement,  Lender  and  Borrower agree that the Collateral  Assignments  and Subordination  Agreements  must be provided to Lender prior to any funding of the Loan.

 

4.4 [Reserved].

 

4.5       Additional  Documents.    Borrower shall sign and deliver to Lender a  Hazardous   Substances   Indemnity   Agreement   in  the  form   prescribed   by  Lender. Borrower  shall  also  sign  and  deliver   (i)  an  Assignment   of  Permits,   Licenses   and Approvals, (ii) an Assignment of Service Agreements and Maintenance Contracts, (iii) a Security Agreement  covering  the  Borrower's Construction  Account  with  Lender, (iv) a

 

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Exhibit 10.3

 

closing  certificate,   and  (v)  such  other  documents   as  may  be  required   by  Lender  to evidence and secure the Loan, all of which will be in the forms prescribed  by Lender.   In addition,   Borrower   shall   cause   its  manager   of  the   Mortgaged   Property   to  sign  a Subordination   Agreement   in  form  prescribed   by  Lender.      Any   and   all  collateral documents  executed  by Borrower  in favor of Lender as security for any indebtedness  of Borrower  to  Lender  shall  also  expressly  secure  Borrower's obligations  hereunder  and under the Note and all documents  which evidence and secure payment of any of the Note.

 

5.         CONDITIONS    OF   LENDING.       Lender's   obligations  under   this Agreement, including the  obligation to make  any  advances under the  Note, are  subject to the performance and satisfaction of the conditions precedent listed  below:

 

5.1       No  Events  of  Default.     There  shall  not  have  occurred  and  be continuing  any Event of Default,  and the representations  and warranties  set forth in the Loan Documents shall be true and accurate in all material respects.

 

5.2       Loan  Documents   and  HSIA.     This   Agreement,   and  all  Loan Documents  required  by Lender  and  the  HSIA  shall  be duly  authorized,  executed  and delivered to Lender.

 

5.3       Existence  and Authority  of Borrower.   Borrower  shall  provide to Lender the following documents  relating to Borrower:    (i) Certificates  of Good Standing from the Secretary  of State of Delaware  and the Secretary  of State of Oklahoma,  (ii) a Delaware Secretary  of State certified  copy of the transcript  of the Certificate  of Limited Liability Company, together with all amendments  thereto, (iii) an Oklahoma  Secretary of State certified copy of the qualification  to transact  business in Oklahoma,  (iv) a certified copy of the  Operating  Agreement  of  Borrower  and  all amendments  thereto,  and (v)  a Certificate of Limited  Liability Company Authority,  in a manner and with text acceptable to Lender, evidencing  the authority of the Chief Financial Officer of Borrower to sign this Agreement  and all other  Loan Documents  and to perform  its obligations  hereunder  and thereunder.

 

5.4       Existence  and Authority  of Guarantor.    Borrower  shall provide to Lender the following documents relating to Guarantor:    (i) Certificates  of Good Standing from the Secretary  of State of Delaware  and the Secretary  of State of Oklahoma,  (ii) a Delaware   Secretary   of  State   certified   copy  of  the  transcript   of  the  Certificate   of Incorporation,  together with all amendments  thereto, (iii) an Oklahoma  Secretary of State certified copy of the qualification  to transact  business in Oklahoma,  (iv) a certified  copy ofthe Certificate oflncorporation and the By-laws and all amendments  thereto, and (v) an officer's   certificate  and  resolution  certified  and  issued  by the  proper  authority  of  the Guarantor,  or the  like,  in a manner  and  with text acceptable  to Lender,  evidencing  the authority  of  the  Chief  Financial  Officer  of the  Guarantor  to sign  the  Guaranty  and  to perform its obligations  thereunder.

 

5.5       Recording  of  Security  Documents.     The  Mortgage,  the  Second Mortgage,  and  the  Assignment  shall  be  recorded  in  the  real  property  records  of  the County Clerk of Oklahoma  County,  Oklahoma.   The Financing  Statement  shall be filed in the "central" UCC  records  of  the  Secretary  of  State  of  Delaware.    Borrower  shall provide to Lender UCC search report on Borrower and/or such other evidence as Lender may require to evidence  the senior priority of Lender's  security  interest  perfected by the Financing Statements.

 

 

 

 

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Exhibit 10.3

 

5.6       Establishment  of Construction  Account and the Liquidity Account. Borrower  shall establish  a deposit account  ("Construction  Account")  with Lender on or before the Effective  Date, into which the proceeds of the Loan (but no other funds) shall be deposited  as such  proceeds are advanced  and from which Borrower  shall  make only payments  permitted  under  the  terms  of  this  Agreement.    Borrower  shall  maintain  the existing  liquidity  account  (the "Liquidity  Account")  with Lender  in which  Borrower  is required to and shall continue  to maintain,  through the Maturity  Date, a deposit  balance of not less than Two Million and No/100 Dollars ($2,000,000.00).

 

5.7       Title   Evidence.       Borrower    shall   provide    to   Lender   (i)   a Commitment  for Title Insurance for the issuance of a lender or mortgagee policy covering the Mortgaged Property, (a) issued in an amount equal to the maximum  principal amount ofthe Loan, (b) naming Lender as the proposed insured and containing only exceptions as are expressly approved  in writing by Lender (and all requirements  for such commitment shall have  been satisfied  and the premium  therefor  shall  have  been paid  by Borrower), together  with copies  of all documents  listed  in Schedule  (or Part)  I and all documents listed in Schedule (or Part) II of the Commitment  for Title Insurance, (ii) a proforma loan policy of title insurance complying  with the foregoing  requirements  of Lender, together with proforma endorsements  required by Lender, (iii) a Closing Protection Letter from the title  insurance  company  which  is to  provide  a  loan  policy  of title  insurance  covering Lender's  Mortgage,  (iv)  an  ALTA  Loan  Policy  of  Title  Insurance  2006,  in form  and substance acceptable to Lender, issued by a title insurance company acceptable to Lender, evidencing  that  Borrower  has  good  and  marketable  fee  simple  title  to  the  Mortgaged Property and that the Mortgage will constitute a valid first Mortgage on the Mortgaged Property, subject only to those matters described in Exhibit "B" attached to the Mortgage. The loan policy of title insurance shall not include an exception  based upon mechanics' and materialmen's liens, or any exceptions  based on discrepancies,  conflicts  in boundary lines,  shortage  in  area,  encroachments   or  other  facts  which  would  be disclosed  by a proper  survey.   The   loan  policy  of  title   insurance   must   be  accompanied   by  such endorsements  thereto  as  may  be required  by Lender  or  its counsel,  including,  but  not limited to, an access and entry endorsement,  a comprehensive  endorsement,  a contiguity endorsement, an endorsement deleting the arbitration provision, an environmental  lien endorsement,  a subdivision  endorsement,  a survey endorsement,  a variable  rate endorse­ ment, and a zoning endorsement.  The premiums for the loan policy of title insurance and all endorsements  shall  be paid by Borrower  prior to or at the time of the initial advance under the Note.

 

5.8       Survey.   Borrower shall deliver to Lender a current ALTA/ACSM Land  Title  Survey  (2011)  of  the  Real  Property,  prepared  by a surveyor  approved  by Lender, which survey shall delineate all property  lines, shall  locate all improvements  on the Real  Property,  shall  show  easements  benefitting  and/or  affecting  the  Real  Property and identify them by book and page of recording, shall show adjoining  streets and access ways, and shall  show  all  other  physical  matters  affecting  the title and  use of the Real Property.    The  form  of  surveyor's certificate  shall  be acceptable  to  Lender  and  shall enable  the  issuer  of  the  required  loan  policy  of  title  insurance  to  delete  all  survey exceptions.

 

5.9       Flood  Hazard  Certification.    Borrower  shall  provide  to Lender  a flood hazard certificate  in form, scope and substance acceptable to Lender and evidencing that the Mortgaged Property does not lie in a flood hazard area.

 

5.10     Appraisal.        Borrower    shall    pay   for   a   new,    independent, "as-complete"  appraisal   of   the   Mortgaged   Property   (or   any   updates   thereto,   the

 

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Exhibit 10.3

 

"Appraisal"),  which   shall   (i)  be  prepared   by  an  appraiser  selected   and  approved   by Lender's  appraisal  committee,  (ii)  comply   with  the  standards  set  forth   by  Lender's appraisal  committee, (iii)  reflect  all existing improvements and  all  future  improvements pursuant   to  the  improvements  which  shall   exist   upon  Substantial  Completion  of  the Construction Project. At  no time  shall  the  Loan-to-Value exceed  eighty  percent  (80%). Updates  to the Appraisal may be required  by Lender due to changes in regulatory policies and/or  changes in the  Mortgaged Property.   If the Appraisal is not available prior  to the execution  of  this   Agreement  and   in  the   event   the   Appraisal  does   not  support   the Loan-to-Value condition identified  in this  paragraph,  Lender  and Borrower agree that the amount  of the Loan will be adjusted  in order  to comply  with such condition.

 

5.11     Insurance.  Prior to commencement of the Construction Project, Borrower  shall  obtain, and  furnish  to  Lender  satisfactory evidence of  insurance on  the Mortgaged Property and evidence of payment  of all premiums for such  insurance, which insurance shall  at all times  comply  with all ofthe  requirements set forth  in the Mortgage. Specifically,  Borrower  shall   maintain   Borrower's builder's  risk  insurance for  the  full completed   project    insurable   value    of   the   Construction   Project    ("Builder's   Risk Insurance"),  which   Builder's Risk  Insurance (i)  shall  meet  the  same   requirements as Special  Perils  Insurance (herein  defined), with  whatever limits  and  coverage extensions Lender  requires, (ii) shall  be written  on a "Completed Value" Form  (100%  non-reporting) or its equivalent and shall  include  an endorsement granting permission to occupy  and (iii) shall  cover   loss  of  materials, equipment,  machinery, and  supplies whether   on-site,   in transit,  or stored  off-site, or of any temporary structure, hoist,  sidewalk, retaining  wall  or underground  property,   all  soft  costs,   plans,  specifications,  blueprints and  models,  and demolition and  increased  costs  of construction, including costs  arising  from  changes  in laws  at  the  time  of  restoration, and  coverage for  operation of  building at  the  time  of restoration, all  subject to  a  sublimit   satisfactory to  Lender.     Upon   completion  of  the Construction Project, Borrower shall  furnish  to Lender  satisfactory evidence of insurance on the Mortgaged Property  and evidence of payment  of all premiums for such  insurance, which  insurance shall  at  all  times  comply  with  all  of  the  requirements set  forth  in the Mortgage.    Borrower  covenants  and  agrees   to  deposit   with   Lender   and  to  maintain throughout  the  term   of  the  Note  original   policies   of  insurance,  issued   by  insurance companies satisfactory to Lender,  in such  amounts and  against  such  risks  as required  by Lender,  including but not limited  to the following:   (a) Borrower shall  maintain  a policy against  all  risks  of loss to the Mortgaged Property  customarily covered  by "All  Risk"  or "Special Perils  Form" policies  as available in Oklahoma County,  Oklahoma (collectively, "Special Perils  Insurance'), in amounts and with  insurers  acceptable to Lender,  in its sole discretion, but  not  less  than  the  greater  of  the  Secured   Indebtedness (as  defined  in  the Mortgage) or one hundred  percent  (100%)  of the full replacement value  of the Mortgaged Property,   all  improvements  thereon,   and  all  improvements,  betterments  and  contents thereof,  including, but not limited  to, all fixtures, furnishings and equipment located  in or about  such   improvements, which  Special   Perils  Insurance (i)  shall  cover  at  least  the following perils:    building collapse, fire, flood,  hurricane, impact  of vehicles  and aircraft, lightning,  malicious mischief, mudslide, subsidence, terrorism, vandalism, water damage, windstorm, hail and  such  other  insurable perils  as, under  good  insurance practices, other commercial property  owners  from time to time  insure  against  for property  and building(s) similar  to the  Mortgaged Property in  height,  location, nature,  type  of  construction, and use,  as  evidenced  by  written   advice   from  Lender's  insurance advisor; and  (ii)  shall contain  an agreed  amount  endorsement or a coinsurance waiver  and  a replacement cost value  endorsement  without   deduction  for  depreciation; (b)  equipment and  machinery (generally   referred   to  as  boiler  and  machinery)  insurance covering  all  mechanical  and electrical   equipment against   physical   damage,  rent  loss,  extra  expense and  expediting expense   covering  the  Mortgaged  Property   and  any  insured   leasehold   property,   which

 

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Exhibit 10.3

 

 

equipment  and  machinery  insurance  shall  be maintained  on  a  replacement  cost  value basis;  (c)  if required  by Lender,  Borrower  shall  maintain  a  policy  of  business  or  rent interruption insurance on an "actual  sustained  basis" ("Business  Interruption  Insurance"), providing coverage against any loss of income by reason of any hazard referred to in this paragraph; in an amount sufficient to avoid any coinsurance  penalty, but in any event for not less than at least twelve (12) months of (i) Borrower's actual gross  receipts from all sources of income from  business  operations  occurring  on the Real  Property  and (ii) all amounts  which  Borrower  is required  to  pay to Lender  or third  parties  pursuant  to this Agreement,  the Note, the Mortgage  or any of the other  Loan Documents;  (d) Borrower shall maintain  the following  insurance for personal  injury, bodily injury, death, accident and property damage: (i) public liability insurance, including commercial  general liability insurance,  (ii) owned  (if any), hired, and non-owned  automobile  liability  insurance, and (iii) umbrella  liability insurance  as necessary (collectively,  "Liability  Insurance"),  which Liability Insurance shall  provide coverage  of at least $1,000,000.00 per occurrence  and

$2,000,000.00 in annual aggregate, per location, and if any Liability Insurance also covers other locations,  with a shared aggregate  limit, the minimum  Liability  Insurance shall  be increased  to  $5,000,000.00;  and  in  any  event,  the  Liability  Insurance  shall  include coverage   for   liability   arising   from   premises   and   operations,   elevators,   escalators, independent contractors,  contractual  liability (including  liability assumed  under contracts and  leases),  and  products  and  completed   operations;  (e)  Borrower  shall  at  all  times maintain  a  policy  of  workers'   compensation   and  employers   liability  as  required  by applicable  state  law, together  with satisfactory  evidence  of compliance  with applicable state  law  requirements   for  workers'  compensation  coverage;  (f)  Borrower  shall  at  all times maintain a policy of flood and mudslide  insurance in an amount equal to the lesser

	
of the outstanding  principal  balance of the indebtedness  secured  hereby or the maximum amount  of coverage  made  available  with  respect  to the  Mortgaged  Property  under the National Flood Insurance  Program (or evidence satisfactory to Lender that the Mortgaged Property  is  not  located  in an  area  designated  by the Secretary  of  Housing  and  Urban Development  or  any  other  governmental   department  agency,  bureau,  board  or  instru­ mentality as an area having special flood or mudslide hazards and that flood insurance is not  required  for  this  loan  under  the  terms  of  any  law,  regulation  or  rule  governing Lender's  activities);  and  (g)  when  and to the extent  required  by the Lender,  Borrower shall  maintain  a  policy or  policies  of  insurance  against  any other  risk or  risks  insured against  by persons  operating  like  properties  in the locality  of the  Mortgaged  Property. All insurance policies shall be issued by an insurance company having a rating of"A" VII or better by A.M.  Best Co.,  in Best's  Rating  Guide.  Whenever  any required  insurance specifies  any  dollar  amount,  Lender  may  increase  it  periodically   to  reflect  Lender's reasonable estimate  of inflation.   All deductibles,  coinsurance  provisions,  exceptions  to coverage and policy forms must be acceptable  to Lender in its sole subjective  discretion. Each  policy  shall   be  a  so-called  "occurrence"  policy  of  insurance. 
	
No  insurance hereunder shall be a part of a "blanket" policy maintained by Borrower or any third party unless  the  policy  expressly  provides  that  the  amount  of  insurance  required  under  the Mortgage  will  in no way  be prejudiced  by other  losses covered  by such  policy.   Each policy of insurance required under this paragraph 5.12 shall provide that (i) the interest of Lender shall be insured regardless of any act or negligence by Borrower or any breach or violation  by Borrower  of any warranties,  declarations  or conditions  of such  policy, and (ii) the insurer  under each  policy of  insurance  required  hereunder  shall  agree  that any cancellation  of its insurance policy or any endorsement  of its insurance policy to effect a change in coverage for any reason shall not be effective until thirty (30) days after receipt by Lender  of  notice  of  such  cancellation   or  such  endorsement   to  effect  a  change  in coverage.   The  Borrower  further  covenants  and  agrees  that,  regardless  of the types or amounts  of  insurance  required  and  approved  by the  Lender,  Borrower  will  cause  the Lender to be named as an additional  insured in each policy of builder's  risk insurance and

 

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Exhibit 10.3

 

 

all policies of Liability  Insurance, which shall  be evidenced  by endorsements  acceptable to Lender; and the Borrower will assign and deliver to the Lender all policies of insurance which  insure  against  any  loss or  damage  to the  Mortgaged  Property,  as collateral  and further  security  for  the  Secured  Indebtedness,  which  policies  shall  contain  a mortgage clause in favor of Lender, naming Lender as "Mortgagee  and Loss Payee" on a standard noncontributory  mortgagee endorsement  (or its equivalent)  naming Lender or its designee as the  party to  receive  insurance  proceeds,  and  shall  otherwise  be in form,  scope  and substance acceptable  to Lender.   In addition,  Borrower shall furnish to Lender duplicate copies of each policy of insurance at execution  hereof, and copies of each renewal policy, together with receipts or other evidence that premiums have been paid.   In the event of a casualty to the Mortgaged  Property,  all  hazard  insurance  proceeds  shall  be paid to the Lender.   Proceeds  of insurance  paid to the Lender shall, at the option  of the Lender, be applied to payment of the Secured Indebtedness  or made available  to Borrower to pay for repair,  restoration   and   rebuilding   of  the   Mortgaged   Property,   as  described   in  the Mortgage.

 

5.12     Zoning  and  Use.    Borrower  shall  furnish  to  Lender  satisfactory written evidence that the Real Property is presently zoned for its intended use and that the Real Property is in full compliance  with all municipal ordinances,  codes, rules or regula­ tions.   The Borrower's confirmation  of zoning  shall  include,  without  limitation,  a title insurance Zoning  Endorsement  (ALTA 3.1-06)  in form, scope and substance  acceptable to Lender.

 

5.13     Permits.    Borrower  shall  obtain  and  provide  to Lender  copies  of all permits required for the Construction  Project or any part thereof, including, without limitation, building permits issued by the City of Oklahoma City or Oklahoma County. Specifically,   Borrower   shall  provide  to  Lender  and  its  Construction   Consultant,   all required  City  of  Oklahoma  City  Building  Permits  for  the  Construction   Project,  all  in form, scope and substance  acceptable  to Lender and its Construction  Consultant.    If any permit(s)  is not available  prior to or at the time of execution  of this Agreement,  Lender and Borrower agree that such permit(s)  must be provided to Lender prior to any funding of the Loan.

 

5.14     Plans and Specifications.    Borrower  shall  submit  for approval  by Lender copies  of  the final  plans  and specifications  for  the  Construction  Project  which have  been  approved   in  writing  by  Borrower,  the  Architect,   the  Contractor,  and  all applicable governmental  authorities.    Following approval by Lender, such plans and specifications  shall  not  be substantially  changed,  without  the  prior  written  consent  of Lender.   Regardless  of its review  and approval  of the plans  and  specifications,  Lender shall have no responsibility,  obligation or liability to Borrower or any other individual or entity based on, arising  from or relating  to any such review  or approval,  and Borrower shall at all times  have exclusive  control  over  its work  on the Construction  Project  and sole responsibility  for compliance  with all governmental,  quasi-governmental and private laws,  rules, regulations,  ordinances,  codes,  covenants,  restrictions,  easements  and other matters  which  control,  burden  or apply  to or otherwise  affect  the  Mortgaged  Property and/or the Construction  Project.

 

5.15     Financial Information.   Borrower shall submit to Lender in writing a satisfactory  Project  Budget which  shall show all sources  and  uses of funds,  and shall detail by line item all costs of acquisition  of the Real Property and all costs of designing, constructing,   franchising,   and  completing   the  Construction   Project,  and  all  costs  of finishing,  furnishing,   equipping   and  opening  the  completed   Construction   Project  for

 

 

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-14-

Exhibit 10.3

 

 

	
business. 
	
The  Project  Budget  shall  contain,  without  limitation,  an  interest  reserve,  a contingency reserve and a working capital reserve.

 

5.16     Environmental Site Assessments; Hazardous Substances Indemnity Agreement.     Borrower  shall  provide  to  Lender  an  environmental   assessment   report covering   the   Real   Property,   which   report  shall   be  prepared   by  an   environmental engineering   firm  acceptable   to  Lender  and  shall  be  in  form,  scope  and  substance acceptable   to  Lender.     In  addition,   Borrower   shall  sign  and  deliver   to  Lender  a Hazardous  Substances  Indemnity  Agreement  on  a form  provided  by and acceptable  to Lender.

 

5.17     Geotechnical   Report.     Borrower   shall   submit   for  review  and approval by Lender a geotechnical report (soils test) covering the Real Property, which geotechnical report shall be in form, scope and substance acceptable to Lender.

 

5.18     Loan Fees.   Borrower shall pay to Lender a loan commitment  fee equal to one-half  percent (0.50%)  of the proposed amount  of the Loan (ie. $55,000.00) payable at the closing of the Loan, which fee shall be deemed fully earned by Lender and nonrefundable at the time Lender signs this Agreement.

 

5.19     Architectural   Agreement   and  Construction   Contract.     Borrower shall deliver to Lender for its review and approval the architectural  agreement between Borrower, as owner, and the Architect for the Construction Project, which architectural agreement (i) must be in form, scope and substance acceptable to Lender, and (ii) must be subordinated to the Loan and the Loan Documents as described in paragraph 4.3 of this Agreement.    Borrower shall deliver to Lender for its review and approval the fixed price Construction  Contract  between Borrower, as owner, and the Contractor  for the Construc­ tion  Project,  which  Construction   Contract  (i)  must  be  in  form,  scope  and  substance acceptable  to Lender,  must be collaterally  assigned  to Lender as described  in paragraph

4.3 of this Agreement, and (iii) must be subordinated  to the Loan and Loan Documents as described in paragraph 4.3 ofthis Agreement.

 

5.20     Opinion  of Borrower's Counsel.    Borrower  shall  provide  Lender with a legal opinion  from its counsel  as to:   (i) the due organization,  powers and good standing of Borrower and Guarantor;    (ii) to the best knowledge of Counsel after inquiry, the absence  of  any  suits,  proceedings  or  investigations  pending,  threatened  against  or affecting Borrower and Guarantor, any of which if adversely determined,  would have a materially  adverse  effect  on  the  financial  condition,  the  business  or  the  properties  of Borrower and Guarantor;  (iii) that Borrower and Guarantor  have fully complied  with all local, state, and federal requirements  relative to the location and operation  of the project as an office building; (iv) that the documents executed and provided  by the Borrower and Guarantor  pursuant  to this  Agreement  are  fully  authorized  under all  documents  which evidence  the creation,  existence  and good  standing  of the Borrower  and Guarantor;  (v) that  all  Loan  Documents,   other  than  the  Guaranty,  have  been  duly  executed  by  the Borrower, are the legal, valid and binding obligations of Borrower and are enforceable according to their respective terms; and (vi) that the Guaranty has been duly executed by the Guarantor, is a legal, valid and binding obligation of Guarantor and is enforceable according to its respective terms.

 

5.21     Construction  Schedule;  Subcontractors and  Suppliers.    Borrower shall deliver to Lender (i) a complete, written construction  schedule for the Construction Project,  (ii)  a  list  of  all  subcontractors   and  material  suppliers,   together   with  their respective  addresses  and  main contracts,  (iii)  a copy of every subcontract  and material

 

1\CdfsOJ \Home\Allenz\Kirkpatrick\Paycom\20 15 Building 3\Loan Documents\Kirkpatrick Bank-  Paycom -Loan  Agreement-7.Docx

-15-

 

 

Exhibit 10.3

 

 

purchase order of $10,000.00  or more, and (iv) copies  of all of the  Performance  Bonds and Payment  Bonds  listed on Exhibit "E"  attached  to this Agreement  and  incorporated herein by reference.

 

6. REPRESENTATIONS  AND  WARRANTIES. In  addition  to  all  other representations and warranties of Borrower to Lender, Borrower represents and warrants that:

 

6.1       Existence   and  Authority   of  Borrower.     Borrower   is  and  will continue to be a limited liability company duly formed and validly existing under the laws of  the  State  of  Delaware,  and  is  duly  qualified  to  transact   business  in  the  State  of Oklahoma;  Borrower  has full power, authority  and legal right to own, manage and hold title to the Mortgaged Property and to occupy Building 3 and the gymnasium as renovated by the Gymnasium  Explansion,  and Borrower  has full and legal right, power and author­ ity to enter into and carry out the provisions  of this Agreement and all documents signed by Borrower pursuant to this Agreement,  to borrow money, to give security for borrowing as required  by this Agreement,  and to consummate  the transaction  contemplated  by this Agreement.

 

6.2       Conflicting  Agreements  and Restrictions.    Borrower  is not a party to  any  contracts  or  agreements  or  subject  to  any  other  restrictions   which  materially adversely  affect  its  business,  property,  assets  or  financial  condition.    To  the  best  of Borrower's  knowledge, neither the execution and delivery of the Loan Documents nor fulfillment and compliance  with the terms and provisions thereof, (i) will conflict with, or result in a breach of the terms, conditions  or provisions  of, or constitute  a default under, or result in any violation  of any agreement,  instrument,  undertaking,  judgment,  decree, order, writ, injunction,  statute,  law, rule or regulation to which Borrower  is subject or by which  the  Mortgaged  Property  is bound  or affected,  (ii)  will  result  in the  creation  or imposition  of any lien, charge  or encumbrance  on, or security  interest  in, any property now or hereafter included in the Mortgaged Property pursuant to the provisions of any mortgage,  indenture,  security agreement,  contract,  undertaking  or other  agreement  other than the liens and security interests in favor of Lender created by the Loan Documents, or (iii) will require any authorization,  consent, license, approval  or authorization  of or other action by, or notice or declaration  to, or registration  with, any court or administrative  or governmental   department,    commission,    board,   bureau,   authority,   agency   or   body (domestic  or  foreign),  or,  to  the  extent  that  any such  consent  or other  action  may  be required, it has been validly procured or duly taken.

 

6.3       Actions and Proceedings.    Borrower has not received notice of any action or proceeding against or investigation of Borrower, pending or threatened, which questions the validity of the Loan Documents,  or which is likely to result in any material adverse change in the business or operations  of Borrower or which in any way materially impairs or adversely affects the ability of Borrower to perform its obligations thereunder.

 

6.4       Financial   Condition.      Borrower   is  an   indirect,   wholly-owned subsidiary   of   Guarantor.   The   financial   statements   of  Guarantor   which   have   been furnished to Lender, are correct and complete in all material respects and fairly reflect the financial condition of both the Borrower and the Guarantor as of the date thereof.   Said financial statements have been prepared in accordance with generally accepted accounting principles consistently  applied through the periods involved therein, and to the best of Borrower's knowledge, there has occurred no material adverse change in the financial condition  of  the  Borrower  or  the  Guarantor  from  the effective  dates  of said  financial statements  to  the  date  hereof.    Neither   Borrower  or  Guarantor   have  any  contingent obligations,  unusual or long-term commitments,  unrealized or anticipated  losses from any

 

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Exhibit 10.3

 

 

unfavorable commitment or liabilities for taxes not reflected  in such financial  statements which are individually or in the aggregate substantial  in relation to the financial condition of Borrower or Guarantor,  respectively.

 

6.5       Full Disclosure.    Neither  the Loan Documents  nor any statement or  documents   referred  to  therein,   contemplated   thereby   or  delivered   to  Lender   by Borrower or any other party on its behalf contains or will contain any materially untrue statement, or omits or will omit to state a material fact necessary to make the statements therein not misleading.

 

6.6      No Violation of Applicable Law.  To the best of its knowledge, information  and  belief,  Borrower  has  not  violated  and  is not  violating  any applicable statute, regulation or ordinance of the United States of America or any foreign country, or of any state, municipality or any other jurisdiction,  or of any agency thereof in any respect materially  adversely  affecting   its  business,   property,  assets,  operations   or  condition, financial or otherwise.    To the best of its knowledge, information and belief, Borrower is in compliance  with all statutes, rules, and regulations  relating to environmental  standards and controls in all jurisdictions  where it is presently doing business.

 

6.7       Permits.    To the best of its knowledge,  Borrower  has, or will  be able to obtain, as needed, all governmental  and private permits, certificates,  consents and franchises  which  in  any  respect  (i)  are  required  for  the  Construction   Project  and  the occupancy of Building 3 and the gymnasium  as improved  by the Gymnasium  Expansion, (ii)  are  material  to  its  business,  property,  assets,  operations  or  condition,  financial  or otherwise, (iii) are necessary for it to carry on its business as now being conducted or as contemplated  to be conducted,  or (iv) are necessary for it to own,  lease and operate  the Mortgaged  Property.    All such  governmental  and  private  permits,  certificates,  consents and franchises are valid and subsisting,  and to the best of its knowledge,  information  and belief, Borrower is not in violation thereof.

 

6.8       Place  of  Business  and  Certain  Records.    Borrower  (i)  presently keeps all of its records  concerning  its accounts  and contract  rights  in its office at 7501

West Memorial  Road, Oklahoma  City, Oklahoma,  73142; (ii) intends to continue to keep the  location  of  said  records  in  its office  in said  city,  county  and  state;  and  (iii)  shall continue to keep said records in its office within said city, county and state or give Lender

ten (10) days'  prior written  notice of any relocation  of its principal  office to a location outside of Oklahoma  City, Oklahoma, or concurrent written notice of any relocation of its principal office within Oklahoma City, Oklahoma.

 

6.9       No Defaults.    To the best of its knowledge, information and belief, Borrower  is not  in default  of or  in breach  in any  respect  under any material  contract, agreement or instrument  to which such Borrower  is a party or by which  it or any of its properties may be bound.

 

6.10     Ownership of Mortgaged Property; Liens.   Borrower has good and marketable title to the Mortgaged  Property, free and clear of all liens and encumbrances except as listed on Exhibit "B" attached to the Mortgage.

 

6.11     ERISA.    To  the  best  of  its  knowledge,  information  and  belief, Borrower has not incurred any "accumulated  funding deficiency"  within  the meaning of Section 302(a)(2) of ERISA with respect to any employee pension or other benefit plan or trust  maintained   by or  related  to  Borrower.    Borrower  has  not  incurred  any  material liability  to  PBGC  or  otherwise  under  ERISA  in connection  with  any  such  plan.   No

 

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Exhibit 10.3

 

reportable event described  in Sections  4042(a)  or 4043(b)  of ERISA with respect to any such plan has occurred.

 

6.12     Taxes.    Borrower  has  filed  all  federal,  state,  local,  county  and foreign tax returns  required by law to be filed, and have paid all taxes,  assessments  and similar charges shown  to be due and payable on said returns.   At the Effective  Date, no extensions of time are in effect to assessments  of deficiencies for Federal income taxes of Borrower.

 

6.13     Compliance  with Federal  Reserve  Board  Regulations.   No part of the proceeds of the .Loan will be used, and no part of any loan repaid or to be repaid with the proceeds of the Loan was or will be used, directly or indirectly, for the purpose of purchasing  or  carrying  any  margin  security  or  margin  stock  within  the  meaning  of Regulations G or U of the Board of Governors  of the Federal Reserve System, or in any manner or under any circumstances  which would cause a violation by any person or entity of Regulations  G, T, U or X of said Board.    The assets of Borrower  do not include any margin securities or margin stock and Borrower does not have any present intention of acquiring any such security or stock.

 

6.14    Investment Company Act; Public Utility Holding Company Act. Borrower is not an "investment  company"  or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and Borrower is not a "holding  company," a "subsidiary  company" thereof or an "affiliate" of a "holding  company" or of such a "subsidiary  company," each within the meaning of the Public Utility Holding Company Act of 1935, as amended.

 

6.15     Availability  of Utility Services.    All utility services  necessary for the  Mortgaged  Property  and  for  the  use  of  the  Real  Property  for  the  above-described Building 3 and the gymnasium as improved  by the Gymnasium Expansion,  are connected to the Mortgaged Property. Such utility services include, without limitation,  water supply, sanitary and storm sewers, and electric, gas, and telephone.

 

6.16     Survival  of  Representations.   All  representations  and  warranties made herein or in any other Loan Documents  will survive the delivery of the Note and the making of the Loan, and any investigation  at any time made  by or on behalf of Lender shall not diminish  Lender's right to rely thereon.   All statements  contained  in any certif­ icate or other instrument  delivered  by or on behalf of Borrower  under or pursuant to this Agreement   or  any  other   Loan  Documents   or  in  connection   with   the  transactions contemplated  hereby or thereby shall constitute representations and warranties made hereunder.

 

7.         BORROWER'S AFFIRMATIVE  COVENANTS.   Until  the  payment  in full  of  the  Loan  and  unless  Lender  shall  otherwise  consent  in  writing,  Borrower  agrees  to perform or cause to be performed the following:

 

7.1       Financial   Statements.      Borrower   will   maintain   adequate   and accurate  books  and  records  of  account,   independent   of  those  of  the  Guarantor,   in accordance  with  sound  accounting  principles.    Lender shall  have  the  right to examine and copy such books  and records,  including  all books and records  relating to all or any part of the Mortgaged  Property, to discuss the affairs, finances and accounts of Borrower and to be informed as to the same from time to time as Lender might reasonably request. Upon   Lender's  request,   Borrower   shall   furnish   to   Lender   the   year-end   financial statements  for the immediately  prior calendar year (including  an income statement and a

 

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Exhibit 10.3

 

balance sheet) together  with the prior year tax returns and other financial  information  of the  Borrower  as  Lender  may  request.    No  later  than  forty-five  (45)  days  after  each calendar   quarter,    Borrower    will   furnish   to   Lender   copies    of   the   most-recent, publically-filed    financial   statements   of   Guarantor,   including   the   10-K  and   1 0-Q statements and such other statements as Lender may request from time-to-time.

 

7.2       Taxes.      Borrower   will   pay   prior   to   delinquency    all   taxes, assessments,  governmental  charges or levies, and all claims for labor, materials, supplies, rent and  other  obligations  which,  if unpaid,  might  become  a lien  against  its property, except to the extent  Borrower  is challenging  any of the foregoing  in good faith and with due diligence,  and has posted all required  bonds or has paid the contested  items "under protest," so that there shall not occur a foreclosure of any such liens.

 

7.3       Maintenance.     Borrower  will  maintain   its  existence,   remain  in good  standing  in each  jurisdiction  in  which  it  is required  to  be qualified  or  licensed, maintain all franchises,  permits, intellectual  properties and licenses necessary or useful in the operation  of its business  heretofore  operated  and as to  be operated  as contemplated hereby, maintain or cause to be maintained  its properties in good and workable condition, repair, and appearance,  and protect the same from deterioration,  other than normal  wear and tear, at all times.

 

7.4       Compliance  with  Laws.   Borrower  will  comply  with  all statutes, laws,  rules  or  regulations  to  which  Borrower  is  subject  or  by  which  the  Mortgaged Property  is bound  or affected,  including  without  limitation,  (i) ERISA,  (ii) all Environmental  Laws (as defined  in the Mortgage),  (iii) those pertaining  to occupational health and safety standards, (iv) those pertaining to equal employment  and credit practices and civil rights, and (v) those pertaining to its business or operations.

 

7.5       Further  Assurances.    Borrower  will, from  time  to time,  promptly cure any defects or omissions  in the execution and delivery of, or the compliance  with the Loan  Documents,   or  the  conditions   described   in  paragraph  5  hereof,  including  the execution and delivery of additional documents  reasonably requested by Lender.

 

7.6       Performance    of   Obligations.       Borrower   will   pay   the   Note according  to the reading, tenor and effect thereof and will do and perform every act and discharge all of the obligations  provided to be performed and discharged  under the Loan Documents at the time or times and in the manner therein specified.

 

7.7       Payment   of  Taxes.     All  taxes,  assessments   and  governmental charges or levies imposed on Borrower or on Borrower's assets, income or profits, will be paid on or prior to the delinquency date thereof.

 

7.8       Lender's   Access.    Borrower  will,  during  normal  business  hours and as often as Lender may reasonably request, permit any of Lender's officers, and any authorized  representatives of  Lender,  to  visit  and  inspect  any  part  of  the  Mortgaged Property.

 

7.9       Litigation.    Borrower  will  promptly  furnish  Lender  with  written notice of any litigation of which Borrower receives actual notice involving Borrower as a defendant  where the amount  sued  for or the value of property  involved  is in excess  of One  Hundred  Thousand  and  Noll 00  Dollars  ($100,000.00), or  which,  if the outcome were adverse to Borrower, could reasonably be expected to materially adversely affect the financial condition,  business or operations of Borrower.

 

\\CdfsO 1\Home\AIIenz\Kirkpatrick\Paycom\2015  Building  3\Loan  Documents\Kirkpatrick Bank- Paycom - Loan Agreement-7.Docx-19

Exhibit 10.3

 

 

 

7.10     Notification    of   Liens.      Borrower   will   notify   Lender   of   the existence or asserted  existence  of any mortgage,  pledge, lien, charge or encumbrance  on any part of the Mortgaged  Property, forthwith  upon Borrower's receiving  actual  notice thereof,  excluding  only:  (i)  encumbrances   in  favor  of  Lender;  (ii)  deposits  to  secure payment of worker's compensation,   unemployment  insurance  and similar  benefits;  and (iii) statutory  liens arising  in the ordinary  course  of Borrower's business  which secure current obligations of Borrower which are not in default.

 

7.1 1       Events  with Respect  to ERISA.   As soon  as possible  and  in any event  within  thirty  (30)  days  after  Borrower  knows  or  has  reason  to  know  that  any reportable event described  in Sections 4042(a)  or 4043(b)  of ERISA  with respect to any employee pension or other benefit plan or trust maintained  by or related to Borrower has occurred,  or  that  PBGC  has  instituted  or  will  institute  proceedings  under  ERISA  to terminate any such plan, Borrower will deliver to Lender (i) a certificate  of a manager of Borrower setting forth details as to such event and the action which Borrower proposes to take with respect thereto, and (ii) a copy of any notice delivered  by PBGC evidencing  its intent to institute such proceedings.    For all purposes of this covenant, Borrower shall be deemed  to  have  all  knowledge   or  knowledge   of  all  facts  attributable   to  the  plan administrator of such plan under ERISA.   Borrower will furnish to Lender (or cause such plan  administrator   to  furnish  to  Lender)  the  annual  report  for  each  plan  covered  by ERISA maintained by or related to Borrower as filed with the Secretary of Labor not later than ten (10) days after the receipt of a request from Lender in writing for such report.

 

7.12     Other  Notifications.    Borrower   will  notify  Lender  as  soon  as practicable, but in any event within ten (10) days after Borrower knows that any of the following  has occurred:  (i) an Event of Default,  (ii) any material  adverse  change  in the nature of or any material part of the property comprising  the Mortgaged Property, and (iii) any material change  in the accounting  practices and procedures  of Borrower, including a change in Borrower's fiscal year.   Borrower will notify Lender as soon as practicable,  but in any event within the time limitations  prescribed  for Form 8-K filings  pursuant to the Securities Exchange  Act, of any other event, occurrence  or circumstance  which indicates the reasonable  likelihood  of the occurrence  of a material adverse change  in the financial condition, business or operations of Borrower.

 

7.13     Post-Foundation and Post-Completion Surveys.   Immediately after completion  of  the  foundations  of  the  Construction   Project,  Borrower  shall  furnish  to Lender,  in form  and  substance  acceptable  to Lender,  one or  more  surveys  of the Real Property,  conforming   to  Lender's   survey  criteria,   showing   the  location  of  all  such foundations  on  the Real  Property  in addition  to  those  items  which  are  required  to  be shown by the Lender's survey criteria, and showing no encroachment  by such foundations over easements or property lines on the Property.   Immediately after completion of the Construction  Project, Borrower shall furnish to Lender, in form and substance acceptable to Lender, an update of the survey required in paragraph  5.8 of this Agreement,  showing the location of all improvements  on the Real Property in addition to those items which are required to be shown in the initial survey described in paragraph 5.8 and showing no encroachments  of easements  or property lines on the Real Property.

 

7.14 Use of Funds in Construction  Account. Funds in the Construction

Account shall be used solely for the purposes set forth in this Agreement.

 

7.1 5[Reserved].

 

 

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Exhibit 10.3

 

 

7.16   Completion Date.   Borrower shall prosecute construction and development of the Construction Project with diligence and continuity until completion thereof (which completion shall mean that the Completion Date obligations have been satisfied) and cause the Construction Project improvements to achieve completion no later than the Completion Deadline.   Borrower shall notify Lender of any cessation, stoppage or delay in the construction of the Construction Project.   Except for delays or cessations covered by factors that are beyond the control of Borrower, Borrower shall not permit cessation of the work of construction for a period in excess of fifteen (15) consecutive normal working days at any one time, or in excess of forty five (45) normal working days in the aggregate, without the prior written consent of Lender.

 

7.17     Liquidity Account.   Throughout the term of the Loan, Borrower shall maintain the Liquidity Account in accordance with the requirements of paragraph

5.6 herein.

 

8.         BORROWER'S  NEGATIVE COVENANTS.   Until  payment in full of the Loan and unless Lender shall otherwise consent in writing, Borrower will not perform or permit to be performed any of the following acts:

 

8.1       Creation or Existence of Liens.   Borrower will not create, assume or suffer to exist any mortgage, pledge, lien, charge or encumbrance on any of the properties  of  Borrower,  personal  or  real,  tangible  or  intangible,  including  without limitation the Mortgaged Property, excluding only: (i) encumbrances in favor of Lender; (ii) deposits to secure payment of workmen's  compensation, unemployment insurance and similar benefits; (iii) statutory liens, against which there are established reserves in accordance with generally accepted accounting principles; and (iv) liens covering tangible personal property which arise in the ordinary course of Borrower's  business and secure current obligations of Borrower which are not in default.

 

8.2       Loans to and Transactions With Affiliates.   Except as previously disclosed in writing to Lender, and approved  by Lender, Borrower will not make any loan, advance or other extension of credit, directly or indirectly, to or for the benefit of any Affiliate and will not enter into any other transaction, including, without limitation, the purchase, sale or exchange of property with any Affiliate.   Borrower will not make any payments to an Affiliate for services performed or equipment or materials provided to the Mortgaged Property except to reimburse the Affiliate for its actual cost of performing such services or providing such equipment or materials, which actual cost shall not, in any event, exceed the amount that would be charged by a non-Affiliate under a bona fide, arm's-length  contract for performance of such services or provision of such equipment and  materials.   Borrower  may retain an  Affiliate to manage the  Mortgaged Property under a management agreement or market and lease the property pursuant to a brokerage agreement on market terms, each of which is (i) expressly subordinate to the Mortgage and other  Loan Documents  and  (ii)  in  form  and substance  reasonably acceptable to Lender.

 

8.3       Restriction on Leasing of Mortgaged Property.   Notwithstanding any language in this Agreement or any of the other Loan Documents, Borrower shall not lease any part of the Mortgaged Property to a third party without the prior written consent of Lender.

 

8.4Limitation on Dividends, Loans and Distributions of Funds.So

 

long as an  Event  of  Default  exists  under this  Agreement or  any of  the other LoanDocuments, Borrower will not, directly or indirectly, make, or become obligated to make,1\CdfsO 1\Home\Ailenz\Kirkpatrick\Paycom\2015  Building 3\Loan Documents\Kirkpatrick Bank- Paycom - Loan Agreement-7.Docx-21-

Exhibit 10.3

 

 

any distributions  to members or set apart any sum or any of its assets for distributions  to members, or make any loans or any other distribution  of funds, by reduction of capital, or otherwise.

 

8.5       Limitation  on  Contingent  Liabilities.    Borrower  will  not, directly or indirectly, guarantee, agree to purchase or repurchase or provide funds in respect, or otherwise  become or remain  liable with  respect to indebtedness  of any character  of any other person or entity.

 

8.6       Changes  to Method  of Accounting.    Borrower  will not make any material change  in its methods of accounting  for purposes  of the reporting  requirements ofthis Agreement, except as may be mandated by sound accounting  principles.

 

8.7       Sale-Leaseback  Transactions.    Borrower  will  not make  or permit the  occurrence  of  any  sale,  transfer  or  disposition  of  any  of  the  Mortgaged  Property followed  by  Borrower's leasing  or  rental  of  such  property,  or  any  portion  thereof,  as lessee.

 

8.8       Construction  Issues.   Borrower shall not (i) incur or suffer to exist any delays in completion  of the Construction  Project, (ii) agree to any change order which would increase the Project Cost by $20,000.00  or more, or any change order(s) which, in the aggregate, would increase the Project Cost by $100,000.00  or more without the prior written  approval  of  Lender,  or  (iii)  make  any  changes  in  the  Construction   Project  to achieve  cost  savings  without  the  prior  written  approval  of  Lender.    Borrower  shall deliver  to Lender  and  Lender's Construction  Consultant  within  five  (5)  business  days after any change orders are made, a copy of such change order and an associated  update of  the  Construction   Budget   which   have  been  approved   by  the   Architect   and  the Contractor.

 

8.9       Modification  of Limited Liability Company  Documents.    Borrow- er shall not participate in, suffer or permit the amendment,  modification,  restatement, cancellation  or termination  of any organizational  document  now or hereafter evidencing or relating to Borrower without the prior written consent of Lender in each case.

 

8.10     Transfer   of  Property.     Until  all  indebtedness   of  Borrower   to Lender is paid in full, Borrower shall not sell, transfer or convey all or any part of the Mortgaged Property or any interest therein, except Borrower's leasing or rental of such property in the ordinary course of business,  and Borrower shall not permit any change in the ownership of Borrower.

 

8.11     Funded Debt Limitation.    Borrower shall not incur funded outside debt (except for the Loan provided  under this Agreement and the Consolidated  Note) in excess of $1,500,000.00 without the prior written approval of Lender.

 

8.12     Fixed 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 Net

 

Operating    Income   plus interest   expense,   depreciation    expense   and amortization  expense,  based on annualizing  the income statement  for the\\CdfsO l\Home\AIIenz\Kirkpatrick\Paycom\2015  Building 3\Loan Documents\Kirkpatrick  Bank- Paycom - Loan Agreement-7Docx-22-

Exhibit 10.3

 

 

quarter   then  ended,   divided   by  Debt  Service   Requirements   plus  rent expense  and  ownership  distributions,   fees or compensation  to Affiliates (e.g., contractor or development  fees).

 

(b)     Debt   Service   Requirements.  The   term   "Debt   Service Requirements" shall mean all principal and interest payments which would be owing during the ensuing twelve (12) month period, as determined by Lender, 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.

 

(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.    Revenues shall  be calculated  by Lender  by using actual  effective  revenues  for  the most recent four (4) calendar quarters, less ownership distributions,  fees or compensation   to  Affiliates   (e.g.,  contractor   or  development   fees)  and receipts from insurance income, security deposit forfeitures, late charges, interest  income,  miscellaneous   income  or  other  sources  of  income  not directly   related   to  the  operations   of  Guarantor.      Expenses   shall  be calculated   by   Lender   by   adjusting   actual   and   customary   operating expenses  for the previous  calendar quarter, annualized  twelve (12) month period as deemed appropriate  in Lender's  sole discretion.    Such expenses shall  include, without  limitation,  recurring  operating  expenses,  real estate taxes, and any management fee to the extent charged and paid.

 

(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.

 

9.         ADMINISTRATION   OF  LOAN.     Notwithstanding  any  language   in this   Agreement   seemingly   to   the   contrary,   Borrower   shall   not   be   entitled   to   any disbursement of Loan proceeds hereunder  unless and until Borrower  has satisfied all of the conditions of lending set forth in paragraph 5 of this Agreement. Upon satisfaction  of such conditions  of lending  to the satisfaction  of Lender,  Lender will make  Loan disbursements up to the principal amount  of the Loan provided that (i) Lender's  Construction  Consultant shall  have  completed   periodic  inspection(s)   of  the  Construction   Project  and  shall  have advised Lender in writing that work to date on the Construction  Project is satisfactory,  (ii) there is no uncured Event of Default  under any of the Loan Documents,  and (iii) all of the other requirements set forth in this Loan Agreement  for advancement of loan proceeds are satisfied.

 

 

 

 

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-23-

 

 

Exhibit 10.3

 

 

Subject to all of the terms, conditions  and provisions  of this Agreement,  Lender shall make disbursements  under the Loan in the following manner:

 

9.1       Purpose.   The  principal  sum to be disbursed  under the Note shall be used for the purposes set forth in paragraph 2.1 of this Agreement.

 

9.2       Compliance  with  Project  Budget.    All  Loan  advances  under  the Note shall  be made  in accordance  with  the Agreement  and  in amounts  set forth  in the Project  Budget.     Material  deviations   from  the  Project  Budget  must  be  approved  in advance  in writing  by Lender.   If Lender  determines  at any time,  in its sole judgment, that the direct  construction  costs,  plus the cost of the improvements  and the estimated non-construction  costs, exceed the Project Cost set forth in the Project Budget, then at the request of Lender,  Borrower  shall explain  to Lender how the overage  will be paid and will immediately deposit such funds into the Construction  Account.    Any such deposit so required shall be made prior to any additional  advance of Loan proceeds.

 

9.3       Request   for   Funds.      Loan  advances   will   be   made   no  more frequently  than  one  (1)  time  per  month.  Each  Loan  advance   request  ("Request   for Funds") (i) shall be submitted  in writing on the latest version ofthe AlA G702 and G703 forms, (ii) shall  be properly completed  and signed  by Borrower,  the Contractor  and the Architect, (iii) shall  be delivered  to Lender and the Construction  Consultant  at least five (5) days before the requested date of disbursement;  (iv) is subject to the prior approval of the  Construction   Consultant  and  the  Lender;  and  (v)  shall  be  supported  by copies  of invoices for all work and materials covered thereby. Unless Lender wishes to inspect the Construction   Project  as  set  forth  in  paragraph  9.5,  each  Request  for  Funds  shall  be approved and funded or declined  by Lender within five (5) Business  Days of receipt by Lender. All approved  Loan advances  will be deposited  into the Construction  Account  by Lender.  Borrower   shall   under  no  circumstances   be  entitled   to  Loan  advances  that individually  or cumulatively  exceed  the  Project  Costs  completed  as of the date  of the request per the Project Budget.   Borrower shall submit its last Request for Funds no later than  fifteen  (15)  days  before  the  Completion   Deadline.  In  no  event  shall  Lender  be obligated to make any Loan advances after the Completion Deadline.

 

9.4       Additional  Information.    Upon  request  by  Lender,  each  Request for Funds shall be accompanied  by:

 

9.4.1    proof, satisfactory  to Lender, that all invoices for labor and materials  have been paid, except those contained  in the current Request for Funds covering "hard costs;" and

 

9.4.2    lien  waivers  from  all  architects,   professional   engineers, landscape  architects,  land  surveyors,  contractors,  mechanics,  materialmen, landscapers and laborers; and

 

9.4.3    title information,  in the form of an endorsement  to the loan policies of title insurance held by Lender, which increases the amount of coverage and  which  confirms  the  first  lien  priority  of  the  Mortgage,  without  additional matters affecting title to the Mortgaged Property.

 

All of the above  information  shall  be obtained  and submitted  to Lender  at Borrower's expense.

 

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Exhibit 10.3

 

 

9.5       Lender's Inspection.    If, for any reason, Lender deems it necessary to cause the Construction  Project to be examined  by the Construction  Consultant  or any other representative  of  Lender  prior to making  any advance,  it shall  have a reasonable time [not exceeding  ten (10) Business  Days] within which to do so, at Borrower's cost, and Lender shall not be required to make any Loan advance  until such examination  has been made. Regardless of inspections  by the Construction  Consultant or any other representative  of  Lender,  Lender  shall  have  no responsibility,  obligation  or  liability  to Borrower or any other  individual  or entity based on, arising from or relating to any such inspections, and Borrower shall at all times have exclusive control over work on the Construction   Project   and  sole   responsibility   for  compliance   with  all  governmental, quasi-governmental and private laws, ordinances, rules, regulations, codes, covenants, restrictions,  easements  and  other  matters  which  control,  burden,  apply  to or otherwise affect either part of the Mortgaged Property and/or the Construction  Project.

 

9.6       Disbursements.    Advances  under  the  Note  may, at  the option  of Lender, be recorded on the Note and/or by deposits to the Construction  Account, and such records shall  be conclusive  evidence  of all advances  made  under  the Note.   Borrower shall prepare  and deliver  payment  from  the Construction  Account  to the Contractor  or such other appropriate subcontractors  or vendors as set forth in the Request for Funds. Borrower acknowledges  and stipulates that only checks for payment of approved costs of the  Construction   Project  and  costs  incidental  thereto  and  approved   by Lender  in  the Project Budget may be drawn against the Construction  Account.

 

9.7       Termination    of   Advances.      At   the   option   of   Lender,   Loan advances shall not be made  under the Note  unless (i) this Agreement,  the Note and the other Loan Documents  are in full force and effect, and (ii) an Event of Default does not exist under the terms of this Agreement, the Note or any of the other Loan Documents.

 

9.8       Conditions  for  Benefit  of  Lender;  No  Liability  to  Third  Parties. Any and all conditions  within this Agreement  to the obligations  of Lender to advance the proceeds of the Loan to Borrower are imposed solely and exclusively  for Lender benefit. No other person shall have any standing to require that such conditions  be satisfied nor be entitled  to  draw  any  conclusions  or  assumptions  therefrom.    Such  conditions  may  be waived,  in  whole  or  in part,  by Lender  at any  time,  in Lender's sole  discretion,  and Lender shall be under no obligation to require strict compliance  therewith.    Lender shall not be liable or responsible  to any person other than Borrower for the disbursement  of or failure to disburse the Loan proceeds.   Neither the Contractor nor the Architect, any subcontractor,  materialman  or supplier on the Construction  Project shall have any right or claim against Lender under this Loan Agreement or the administration  thereof.

 

10.       EVENTS OF DEFAULT.    If any ofthe following events (herein so called "Events of Default") shall occur and be continuing  for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be affected  by operation of law or otherwise),  then,  and  in  every  such  event,  Lender  may  accelerate  or  otherwise  declare  the principal  of  and  interest  on  all  Indebtedness   to  be  immediately   due  and  payable,  without presentment,  demand,  protest,  notice  of  protest  or other  notice  of any  kind,  all  of  which  are hereby expressly waived by Borrower:

 

I 0.1     Nonpayment   of  Note.     Default   in  payment  when  due  of  any interest on or principal or any other sum payable under the Note, or any amendment, modification  or restatement  thereof;  provided  however,  prior to declaring  default  under this paragraph 10.1, Lender shall give Borrower five (5) days'  prior written notice of the payment default,  unless one (1) payment default  notice has been provided  by Lender to

 

1\CdfsO 1\Home\Allenz\Kirkpatrick\Paycom\20 15 Building  3\Loan  Documents\Kirkpatrick Bank·Paycom- Loan Agreement-7.Docx

Exhibit 10.3

 

 

Borrower during the previous twelve (12) months, in which event no prior notice election to declare a default is necessary.

 

10.2     Breach of Covenants.    Default by Borrower  in the performance  or observance  of  any  covenant  contained   in  this  Agreement   or  any  of  the  other  Loan Documents, any other instrument delivered to Lender in connection  with this Agreement, including,  without  limitation,  the  falsity  or  breach  of  any  representation,  warranty  or covenant, and such default or breach shall not have been cured or remedied within twenty (20) days following  receipt  by Borrower  of written  notice  thereof  from  Lender,  unless such cure or remedy  cannot  reasonably  be completed  within the applicable  20-day cure period described  above,  in which event Borrower  shall commence  such cure or remedy within the applicable  20-day cure period described  above and proceed  with all diligence to complete  such cure or remedy (provided  that such grace periods shall not be deemed applicable either to the payment provisions of this Agreement or the default provisions of subsection (a) above) in any event within sixty (60) days from the initial receipt of written notice from Lender.

 

10.3     Default Under Funded Debt Limitations or Fixed Charge Coverage Ratio.   Any failure of Borrower to comply with the funded debt limitations set forth in paragraph 8.11  of this Agreement  or with the Fixed Charge Coverage  Ratio described  in paragraph  8.12  of  this  Agreement,  and  such  default  goes  uncured  after  receipt of  the notice from Lender in paragraph 8.12.

 

10.4 Bankruptcy.    The  institution  of bankruptcy,  reorganization,  liqui­

dation or receivership  proceedings by or against Borrower or Guarantor.

 

10.5     Governmental  Requirements.    The issuance of any order, decree or judgment  pursuant  to any judicial  or administrative  proceeding  declaring  that all or any part of the Mortgaged Property is in violation of any law, ordinance,  rule or regulation of any agency, department, commission,  board, bureau or instrumentality  of the municipality or county in which the Mortgaged Property is located.

 

10.6     Representation.     Any  representation,   warranty,  statement,  certif­ icate, schedule  or report made or furnished  to Lender by Borrower  proves to be false or erroneous in any material respect at the time of the making thereof.

 

10.7     Event of Default Under Other  Loan Documents.    The occurrence of any Event of Default (or continuance of such Event of Default after the applicable cure period,  if  any)  under  the  Note,  the  Mortgage,   the  Second   Mortgage,   the  Existing Mortgages  the  Assignment,  the  Subordination   Agreements  or  any  of  the  other  Loan Documents.

 

10.8     Interest After Default.   All past due obligations  or indebtedness of Borrower to Lender hereunder, whether principal, costs or expenses,  shall bear interest at a variable rate equal from day to day to the Default Rate as defined in the Note.

 

11.       REMEDIES.    If  any one  or  more  Events  of  Default  shall  occur  and  be continuing,  Lender  may,  without  any  period  of  grace  (except  as  otherwise  provided  herein), proceed  to  protect  and  enforce  all  or  any of  the  rights  with  respect  thereto  contained  in this Agreement or any other Loan Document,  or may proceed to enforce  payment of all indebtedness due  hereunder  or  enforce  any  other  legal  or  equitable  rights  or  exercise  any  other  legal  or equitable remedies, or cure or remedy any default  by Borrower for the purpose of preserving the Mortgaged   Property.     All   rights,   remedies   and   powers   conferred   upon   Lender   shall   be

 

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-26-

 

 

Exhibit 10.3

 

 

cumulative  and not exclusive  of any other  rights,  remedies  or powers  available.   No delay  in exercising or failure to exercise  any right, remedy or power shall impair any such right, remedy or power or shall be construed  to be a waiver of any Event of Default or an acquiescence  therein. Any  such  right,  remedy  or  power  may  by  exercised   from  time  to  time,   independently  or concurrently,  and as often  as shall  be deemed  expedient.   No waiver  of any Event  of Default shall  extend  to  any subsequent  Event  of  Default.   No single  or  partial  exercise  of any  right, remedy or power shall preclude other or further exercise  thereof.   Borrower  covenants  that if an Event  of  Default   shall   happen   and  be  continuing   it  will  pay  all  court   costs  and  other out-of-pocket expenses  paid or incurred by Lender in collecting the amounts  due pursuant to this Agreement,  the Note,  the Mortgage,  the  Second  Mortgage,  any other  Loan  Document  or any other document evidencing  or securing the Loan or otherwise  executed  in connection  herewith, including attorneys'  fees, together with interest on all amounts so expended  from the respective dates of each expenditure at the Default Rate (as defined in the Note).

 

12. GENERAL  PROVISIONS.   Lender and Borrower agree as follows:

 

12.1     Expenses.    Borrower  agrees to pay all fees, expenses  and charges in respect to the Loan contemplated  by this  Agreement,  including,  without  limiting  the generality thereof, the following:

 

12.1.1  reasonable   fees  and  expenses   of  counsel   employed   by Lender  in connection  with closing or administration  of the Loan and all fees and expenses  actually  incurred  by  counsel  employed  by  Lender  in  regard  to  any litigation  arising  out  of  or  relating  to  this  transaction,   each  of  the  foregoing charged  at  such  counsel's  customary   billing  rates  and  without  regard  to  any statutory presumptions;

 

12.1.2  title insurance premiums and all expenses  incidental to title insurance and title evidence;

 

12.1.3  recording and filing fees required by applicable  law;

 

12.1.4  all  fees  and  expenses  of  the  Mortgagee  identified  in  the

Mortgage, and any successor to the Mortgagee;

 

12.1.5  fees  and  expenses   of  any  appraisers   who  appraise   the

Mortgaged Property for Lender; and

 

12.1.6  other reasonable  fees and expenses  involved  in the closing of this loan and the reasonable fees and expenses payable by Lender which are incidental  to the enforcement  or defense  of this  Agreement  or any of the other Loan Documents.

 

12.2     Notices.    Any  notices  or other  communications required  or  per­ mitted  hereunder  shall  be  in  writing  and  sufficiently  delivered   and  received  for  all purposes when delivered  in person or deposited  in the United States mail, by registered or certified mail, postage  prepaid, return receipt  requested and addressed  as listed below or to such other address as the party concerned  may substitute by written notice to the other. All notices shall be deemed  received  on the earlier of actual  receipt or within three (3) days (excluding  Saturdays, Sundays and holidays recognized  by Oklahoma  banking corporations headquartered  in Oklahoma City, Oklahoma) after being mailed.

 

 

 

 

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Exhibit 10.3

 

 

To Borrower:Paycom  Payroll,  LLC

7501  West Memorial Road

Oklahoma City, Oklahoma 73142

Attn: Mr. Chad  Richison

 

With copy to: Cheek  & Falcone, PLLC

6301  Waterford  Boulevard

Suite  320

Oklahoma City, Oklahoma 73118

Attn: Mr. John  P. Falcone

 

To Lender: Kirkpatrick Bank

5801  N. Broadway  Extension, Suite  101

Oklahoma City, Oklahoma 73118

	
Attn: 
	
Mr. David  L. Sutter, Executive Vice President

 

With copy to: Crowe  & Dunlevy,  PC

324 N. Robinson Avenue, Suite  100

Oklahoma City, Oklahoma   73102

Attn: Kari Hoffuines

 

12.3     Amendment and Waiver.    This Agreement may not be amended  or modified  in any way, except  by an instrument in writing  executed   by both parties  hereto; provided, however, Lender  may,  in writing:    (i) extend  the  time  for  performance of any of the  obligations of  Borrower; (ii)  waive  any  Event  of  Default   by Borrower; and  (iii) waive  the satisfaction of any  condition that  is precedent to the  performance of Lender's obligations  under  this  Agreement.    In  the  event  of  Lender's  waiver   of  an  Event  of Default,   such  specific  Event  of  Default   shall   be  deemed   to  have  been  cured  and  not continuing, but no such  waiver  shall  extend  to any subsequent or other  Event  of Default or impair  any consequence of such subsequent or other Event  of Default.

 

12.4     Non-Waiver;  Cumulative  Remedies.   No  failure   on  the  part  of Lender  to  exercise and  no  delay  in  exercising any  right  hereunder shall  operate   as  a waiver  thereof, nor shall  any single  or partial  exercise  by Lender  of any  right  hereunder preclude  any other  or further  right of exercise thereof.    The remedies herein  provided  are cumulative and not alternative.

 

12.5     Assignment.    Neither  this   Agreement,  nor   the   loan   proceeds hereunder, shall  be assignable by Borrower without  the prior written  consent  of Lender.

 

12.6     Financing Publicity.   Lender  shall  be permitted  to obtain  publicity in connection with  the  financing of the  Mortgaged Property  through  press  releases  and any special  events  relating  to the Mortgaged Property.    Borrower will give Lender  ample advance  notice  of  such  events  and  will  give  Lender  as  much  assistance as  possible   in connection with  obtaining such  publicity  as  Lender  desires.   Lender's publicity  shall  be subject  to the reasonable approval  of Borrower, which  approval  shall  not be unreasonably withheld  or delayed.

 

12.7     No Partnership.  Nothing in this Agreement shall be construed to constitute Lender  as joint  venturer  with  Borrower, or to constitute a partnership between the parties.

 

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Exhibit 10.3

 

12.8     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.

 

12.9     Integrated Agreement.    This Agreement  and the Loan Documents signed and/or delivered pursuant to this Agreement or any of the other Loan Documents supercede and replace the Loan Commitment  signed  by Lender and Borrower,  and they collectively constitute  the entire agreement  between  Lender and Borrower,  and there are no   agreements,   understandings,    warranties   or   representations    between   the   parties regarding the financing of the Mortgaged Property other than those set forth herein.

 

12.10   Time ofEssence.   Time is ofthe essence ofthis Agreement.

 

12.11   Binding  Effect.   This Agreement  shall  be binding  upon and inure to the  benefit  of  Lender  and  Borrower  and  their  respective  successors,  legal representatives and assigns.

 

12.12   Third-Party  Beneficiary.    Nothing  in this  Agreement,  express  or implied, is intended to confer upon any person, other than Lender and Borrower and their respective  successors  and  assigns,  any  rights  or  remedies  under  or  by  reason  of  this Agreement.

 

12.13   Right to Defend.   Lender shall have the right, but not the obliga­ tion,  at  Borrower's expense,  to  commence,   to  appear  in  or  to  defend  any  action  or proceeding (initiated  by a third party against Borrower)  purporting  to affect the rights or duties of the  parties  hereunder  and  in connection  therewith  pay out of proceeds  of the Loan all necessary expenses,  including fees of counsel, if Borrower fails to so commence, appear in or defend any such action or proceeding with counsel satisfactory  to Lender.

 

12.14   Loan Participation  Agreement.    Notwithstanding any language  in this  Agreement  or  any  of the  Loan  Documents,  Lender's obligation  to  fund  the Loan pursuant  to the terms  of this Agreement  and the Loan Documents  is conditioned  upon Lender (i) securing  participant  lenders (acceptable  to Lender)  to participate  in the Loan and   (ii)   the   execution    by   Lender   and   such   participants    of   certain   Participation Agreements, in form and substance acceptable to Lender.   Borrower authorizes Lender to disclose  to any  Purchaser  or such  participants  or any  individual  or entity  acquiring  an interest  in  the  Loan  Documents   by operation  of  law  (each  a  "Transferee"), and  any prospective Transferee,  any and all information  in such Lender's possession  concerning the credit worthiness of the Borrower and all relevant information relating to the Loan Documents  and the extensions  of credit evidenced  and secured  thereby.   Closing of the Loan will evidence that Lender has loan participants acceptable to Lender.

 

12.15   Indemnity.      Borrower   hereby   agrees   to   indemnify   and   hold harmless  Lender and  participants  and each  of their  respective  directors,  officers, agents and employees  (collectively,  the "Indemnitees") from and against,  and agrees to defend the Indemnitees,  by counsel satisfactory to the lndemnitees,  against:

 

(a)        all claims,  demands  and causes  of action  asserted  against any Indemnitee  by any person or entity ("Person")  if the claim,  demand or cause of action directly or indirectly relates to (i) a claim, demand or cause of action that the Person has or asserts against the Borrower  in connection  with the Mortgaged Property,  except  those  arising  out  of  the  acts  or  omissions  of  Lender;  (ii)  the payment of any commission,  charge or brokerage fee incurred  in connection with

 

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Exhibit 10.3

 

any  of  the  Loan  Documents;  (iii)  any  act  or  omiSSIOn  by  the  Borrower,  any contractor,  subcontractor   or  material  supplier,  or  other  Person  (except  to  the extent caused by the gross negligence or willful misconduct  of Lender, its agents, servants   and   employees)   with   respect   to  the  Mortgaged   Property;   (iv)  the ownership, occupancy or use of the Mortgaged Property; and

 

(b)       all liabilities,  losses and other  costs  (including  court costs and  reasonable  attorneys'  fees)  incurred  by any  Indemnitee  as  a  result  of  any claim, demand or cause of action described in subparagraph  (a).

 

lndemnitees'  rights  hereunder  shall  not  be  directly  or  indirectly  limited,  prejudiced, impaired or eliminated  in any way by any finding or allegation  that Lender's conduct  is active, passive or subject to any other classification  or that such Indemnitee  is directly or indirectly  responsible   under  any  theory  of  any  kind  for  any  act  or  omission   by  the Borrower or any other Person other than Lender, its agents, servants or employees. BORROWER  ACKNOWLEDGES  AND  AGREES  THAT  ITS INDEMNIFICATION  OBLIGATIONS  HEREUNDER  COVER  AND  RELATE TO, WITHOUT LIMITATION, ANY NEGLIGENT ACTION OR OMISSION OF INDEMNITIES; PROVIDED, NOTWITHSTANDING THE FOREGOING, BORROWER SHALL NOT BE OBLIGATED TO INDEMNIFY INDEMNITEES WITH RESPECT TO ANY INTENTIONAL TORT OR ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT WHICH SUCH INDEMNITY IS PERSONALLY DETERMINED BY THE JUDGMENT OF A COURT OF COMPETENT JURISDICTION (SUSTAINED ON APPEAL, IF ANY) TO HAVE COMMITTED.   Borrower's obligations  under this paragraph 12.15 shall survive the repayment of the Loan and the release of the Mortgage and the other Loan Documents.

 

12.16   Survival  of  Representations and  Warranties.    All  representations and  warranties  of  Borrower  in  this  Agreement  and  the  other  Loan  Documents  shall survive the execution  and delivery of this Agreement and the Note, are material, and have been or  will  be  relied  on  by Lender  notwithstanding  any  investigation  made  by or  on behalf of Lender.    All such representations  and warranties  of Borrower  shall be deemed to be remade as of the date of each disbursement  of the proceeds of the Loan.

 

12.17   No Waiver; Consents.    Each waiver by Lender must be in writing, and no waiver may be construed as a continuing  waiver.   No waiver will be implied from Lender's   delay  in  exercising   or  failure  to  exercise  any  right  or  remedy  against  the Borrower or any security.   Lender's consent to any act or omission  by the Borrower may not be construed as a consent to any other or subsequent act or omission  or as a waiver of the requirement  for Lender's  consent to be obtained  in any future or other instance.   All Lender's  rights and remedies are cumulative.

 

12.18 Counterparts.    This Agreement may be executed  in multiple counterparts   each  of  which  shall  be  deemed  an  original  and  all  of  which  executed counterparts   shall   together   constitute   a  single  document.     Signature   pages  may  be detached  from  the  counterparts   and  attached  to  a  single  copy  of  this  Agreement  to physically form one document.

 

12.19   Incorporation  of  Exhibits.    All  Exhibits  and  Schedules  identified in this Agreement  as exhibits  to or schedules  to this Agreement  are hereby incorporated into this Agreement and made integral parts of it.

 

 

 

 

1\CdfsO I  \Home\AIIenz\Kirkpatrick\Paycom\2015  Building 3\Loan Documents\Kirkpatrick  Bank- Paycom - Loan Agreement-7.Docx

 

 

Exhibit 10.3

 

12.20  Government Regulations.  The Borrower represents, warrants and covenants  to Lender as follows,  and acknowledges  that such  representations, warranties and  covenants   shall   be  continuing   representations,   warranties   and   covenants   from Borrower to Lender:

 

(i)        The  Borrower  is and shall  remain  in compliance  with  the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations   of  the  United  States   Treasury   Department   (31  CFR,  Subtitle   B, Chapter   V,  as  amended)   and  any  other  enabling   legislation,   regulations   or executive orders relating thereto, and the Uniting and Strengthening America By Providing  Appropriate  Tools  Required  To Intercept  and Obstruct  Terrorism  Act (USA  Patriot  Act  of  2001 ),  as  amended,  and  any  other  enabling   legislation, regulations or executive orders relating thereto;

 

(ii) The  Borrower  is and  shall  remain  in compliance  with  31

U.S.C., Section  5313, as amended,  31 CFR Section 103.22,  as amended, and any

similar  laws or regulations  involving  currency  transaction  reports  or disclosures

relating to transactions  in currency of more than $10,000.00, or of more than any

other minimum amount specified by any laws or regulations;  and

 

(iii)      Borrower  (A)  is not a party whose  property  or  interest  in property  is  blocked  or  subject  to  blocking  pursuant  to  Section  1  of  Executive Order  13224 of  September  23,  2001  Blocking  Property  and  Prohibiting Transactions   With  Persons   Who  Commit,   Threaten   to  Commit,   or  Support Terrorism (66 Fed. Reg. 49079 (2001)), (B) does not engage in any dealings or transactions  prohibited by Section 2 of such executive order, and are not otherwise associated  with any such person in any manner violative of Section 2, or (C) is not a person  on  the  list of Specially  Designated  Nationals  and  Blocked  Persons  or subject  to  the  limitations  or  prohibitions   under  any  other  U.S.  Department  of Treasury's Office of Foreign Assets Control regulation or executive order.

 

The  Borrower  covenants  and  agrees  with  Lender that  no part  of any  loan  proceeds or advances evidenced  by or referenced in this Agreement,  and no part of any other amounts or sums  derived  from  any property  which  secures  repayment  of such  loan  proceeds  or advances,  including,  without  limitation  any accounts,  payment intangibles,  money, rents, issues   or   profits,   will   be   used,   directly   or   indirectly,   for   any   payments   to   any governmental  official  or employee,  political  party, official of a political  party, candidate for political office, or anyone else acting  in an official capacity, in order to obtain,  retain or direct  business  or obtain  any improper  advantage,  in violation  of  the  United  States Foreign Corrupt Practices Act of 1977, as amended.

 

12.21 Applicable    Law.         THIS   AGREEMENT   AND   THE DOCUMENTS  ISSUED  AND  EXECUTED  HEREUNDER  SHALL  BE DEEMED  TO BE A CONTRACT  MADE  UNDER  THE  LAWS OF THE  STATE  OF OKLAHOMA AND  SHALL  BE  CONSTRUED   IN  ACCORDANCE   WITH  THE  LAWS  OF  THE STATE  OF  OKLAHOMA, EXCEPT,  AND  WITHOUT  GIVING  EFFECT  TO CONFLICT OF LAWS PRINCIPLES  AND EXCEPT TO THE EXTENT PREEMPTED BY THE LAWS OF THE UNITED STATES OF AMERICA.

 

12.22 Consent     to     Jurisdiction.            BORROWER     HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION  OF ANY UNITED STATES  FEDERAL  COURT  OR OKLAHOMA  STATE  COURT  HAVING THE   MORTGAGED   PROPERTY   WITHIN   ITS  JUDICIAL   DISTRICT,   IN  ANY

 

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Exhibit 10.3

 

ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS  AND ANY OTHER DOCUMENTS EVIDENCING, SECURING  OR RELATING TO THE LOAN, AND BORROWER  HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS  IN RESPECT  OF SUCH ACTION OR PROCEEDING  MAY BE HEARD   AND   DETERMINED    IN  ANY   SUCH   COURT   AND   IRREVOCABLY WAlVES  ANY  OBJECTION  ANY  OF THEM  MAY  NOW  OR  HEREAFTER  HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING  BROUGHT IN  SUCH  COURT  OR  THAT  SUCH  COURT  IS  AN  INCONVENIENT   FORUM. NOTHING  HEREIN  SHALL  LIMIT  THE  RIGHT  OF  LENDER  TO  BRING PROCEEDINGS  AGAINST BORROWER  IN THE COURTS OF ANY OTHER JURISDICTION.    ANY JUDICIAL  PROCEEDING  BROUGHT BY BORROWER AGAINST LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANYWAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THE LOAN OR ANY LOAN DOCUMENTS  SHALL BE BROUGHT  ONLY IN A COURT IN OKLAHOMA.

 

12.23 Waiver of Jury Trial.   TO THE EXTENT PERMITTED BY APPLICABLE   LAW,  BORROWER   AND  LENDER  HEREBY   WAIVE  TRIAL  BY JURY  IN  ANY  JUDICIAL  PROCEEDING   INVOLVING,   DIRECTLY  OR INDIRECTLY,  ANY MATTER  (WHETHER  SOUNDING  IN TORT,  CONTRACT  OR OTHERWISE)  IN ANY  WAY ARISING OUT OF, RELATED  TO, OR CONNECTED WITH  THE  LOAN,  ANY  LOAN  DOCUMENT   OR  ANY  RELATIONSHIP ESTABLISHED THEREUNDER.

 

[Signatures appear on following pages]

 

 

 

 

 

Schedule of Exhibits

 

"A" -Description of Real Property

"B"- Map of Real Property with Existing and Proposed Improvements

"C" - List of Existing Mortgages

"D" - Project Budget

"E" - Required Performance Bonds and Payment Bonds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 10.3

 

IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to be duly executed effective as of the day and year first above written.

 

	
3755390119443500"Lender":
	
 "Borrower":PA YCOM PAYROLL, L

a Delaware limited lia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 10.3

 

 

EXHIBIT "A"

 

Description of Real Property

 

Tract 1:

 

All of Lot One (1), Block One (1) and Common  Area A, of Paycom, an Addition  to the City of

Oklahoma City, Oklahoma County, Oklahoma, according to the recorded plat thereof.

 

 

Tract 2:

 

A tract of land being a part of the Southwest  Quarter  (SW/4)  of Section  Eight  (8), Township Thirteen  (13) North,  Range  Four (4)  West of the  Indian Meridian,  Oklahoma  City,  Oklahoma County, Oklahoma, being more particularly described as follows:

 

Commencing  at the Southeast  (SE) Corner of said Southwest  Quarter (SW/4);  THENCE  North

00°15'38"  West, along and with the East line of said Southwest  Quarter  (SW/4),  a distance  of

1,496.10  feet to the Northeast  (NE)  Corner  of Paycom  recorded  in Book  PL68,  Page 95, said

point being the Point of Beginning;  THENCE  South 89°35'06"  West along and with the North

line of Paycom, a distance  of 667.91  feet to the Northwest  (NW) Corner  of Paycom; THENCE

North 00°01'27" West, along and with the extended  West line ofPaycom, a distance of 1,155.56

feet to the North line of Southwest  Quarter (SW/4);  THENCE  South 89°52'18"  East, along and

with the North line of said Southwest  Quarter (SW/4), a distance of 663.15 feet to the Northeast

(NE) Corner of said Southwest  Quarter (SW /4); THENCE South 00°15'38" East, along and with the  East  line  of  said  Southwest  Quarter  (SW/4),  a distance  of  1,149.24  feet  to  the  Point  of Beginning.

 

 

Tract 3:

 

 

A tract of land  being a part of the Southwest  Quarter  (SW/4)  of Section  Eight (8), Township Thirteen  (13) North,  Range Four (4)  West of the Indian Meridian,  Oklahoma  City, Oklahoma County, Oklahoma, being more particularly described as follows:

 

Commencing at the Southeast (SE) Corner of said Southwest Quarter (SW /4);

 

THENCE North 00°15'38"  West (North 00°15'26" West record), along and with the East line of said Southwest  Quarter  (SW/4),  a distance  of 575.51  feet (575.66  feet record)  to the Southeast (SE) Corner ofPaycom recorded in Book PL68, Page 95;

 

THENCE North 88°41'40"  West (North 88°42'11" West record), along and with the South  line of said Paycom and the North line of a tract of land owned by the Oklahoma  Turnpike  Authority recorded in Book 7536, Page 339, a distance of 671.88 feet to the Southwest (SW) Corner of said Paycom, said point being the POINT OF BEGINNING;

 

THENCE continuing  North 88°41'40"  West (North 88°42'11" West record) along and with the North line of a tract of land owned by the Oklahoma Turnpike Authority  recorded in Book 7536, Page 339, a distance of29.87 feet;

 

 

 

 

 

 

\\CdfsOI\Home\AIIenz\Kirkpatrick\Paycom\2015 Building 3\Loan Documents\Kirkpatoick Bank-  Paycom-  Loan Ab'feement-7.Docx

 

 

Exhibit 10.3

 

THENCE North 86°46'27"  West (North 86°48'46" West record), continuing  along and with the North line of a tract of land owned by the Oklahoma  Turnpike Authority  recorded in Book 7536, Page 339, a distance of360.72 feet;

 

THENCE North 00°01'27"  West, departing said North line, a distance of2,035.89 feet to a point on the North line of said Southwest  Quarter (SW/4);

 

THENCE  South  89°52'18"   East,  along  and  with  the  North  line  of  said  Southwest  Quarter

(SW/4), a distance of390.00 feet to an extended  West line ofPaycom;

 

THENCE South 00°01'27"  East, along and with the extended  West line ofPaycom, a distance of

2,055.99 feet to the POINT OF BEGINNING.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

\\CdfsO I \Home\Allenz\Kirkpatrick\Paycom\20 15 Building  3\Loan  Documents\Kirkpatrick Bank - Paycom- Loan Aweement-7.Docx

 

 

Exhibit 10.3

 

EXHIBIT "B"

 

Map of Real Property with Existing and Proposed Improvements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0w

 

 

 

 

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1\CdfsOI\Home\Ailenz\Kirkpatrick\Paycom\2015 Building 3\Loan Documents\Kirkpatrick Bank-  Paycom-  Loan A>,>reement-7,Docx

Exhibit 10.3

 

EXHIBIT "C"

 

Existing Mortgages

 

1.  Consolidated,   Amended   and   Restated   Mortgage   (With   Power   of   Sale),   Security Agreement and Financing Statement,  dated December  15, 2011, signed  by Borrower for the benefit of Lender and recorded in Book RE 11805, Page 1581 in the real estate records of the County Clerk for Oklahoma  County, Oklahoma,  as amended  by that certain  First Amendment  to Consolidated,  Amended  and Restated  Mortgage  (With  Power of Sale ), Security Agreement  and Financing  Statement,  dated June 17, 2014, signed  by Borrower for the benefit of Lender and recorded on June 19,2014 in Book RE12563,  Page 631 in the real estate records of the County Clerk for Oklahoma County, Oklahoma.

 

2.   Construction   Mortgage   (With   Power   of  Sale),   Security   Agreement   and  Financing Statement, dated March 28, 2013, and recorded in Book RE12202,  Page 1089 in the real estate records of the County Clerk for Oklahoma  County, Oklahoma,  as amended  by the First Amendment to Mortgage (With Power of Sale), Security Agreement and Financing Statement and Assignment of Leases, Rents and Profits, dated December 31, 2013, and recorded in Book RE 12449,  Page 230 in the real estate records of the County Clerk for Oklahoma County, Oklahoma,  as further amended  by that certain Second  Amendment to Construction   Mortgage   (With   Power   of  Sale),   Security   Agreement   and   Financing Statement  and  Assignment   of  Leases,  Rents  and  Profits,  dated  June  17,  2014  and recorded on June 19, 2014  in Book RE12563,  Page 636 in the real estate  records ofthe County Clerk of Oklahoma County, Oklahoma.

 

3.   Second  Mortgage  (With  Power  of Sale),  Security  Agreement  and  Financing  Statement, dated  March  28,  2013,  signed  by Borrower  for  the  benefit  of  Lender  and  recorded  in Book RE12202,  Page  I 135 in the real estate  records of the County  Clerk for Oklahoma County,  Oklahoma,  as amended  by that  certain  First  Amendment  to Second  Mortgage (With Power ofSale), Security Agreement and Financing Statement,  dated June 17,2014, recorded on June 19,2014, in Book RE12563,  Page 642 in the real estate records ofthe County Clerk of Oklahoma County, Oklahoma.

 

4.   Mortgage, dated November  1, 2013, and recorded in Book RE12399,  Page 295 in the real estate records of the County Clerk for Oklahoma  County, Oklahoma,  as amended  by the First  Amendment   to  Mortgage,   dated   December   31,  2013,   and   recorded   in  Book RE12449, Page 235 in the real estate records of the County Clerk for Oklahoma County, Oklahoma,  as further  amended  by that  certain  Second  Amendment  to Mortgage,  dated June 17, 2014, recorded on June 19, 2014 in Book RE12563,  Page 647 in the real estate records of the County Clerk of Oklahoma County, Oklahoma.

 

5.   Construction   Mortgage   (With   Power   of  Sale),   Security   Agreement   and  Financing Statement,  dated  March  23, 2011  and  recorded  on  March  34, 2011  in Book RE11596, Page 580 in the real estate records ofthe County Clerk of Oklahoma County, Oklahoma.

 

6.   Construction   Mortgage   (With   Power   of  Sale),   Security   Agreement   and  Financing

Statement,  dated  May 7, 2010  and  recorded  on May 10, 2010  in Book  RE11362,  Page

174 in the real estate records ofthe County Clerk of Oklahoma County, Oklahoma.

 

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Exhibit 10.3

 

 

7.   Mortgage,  dated  December   21,  2012  and  recorded  on  December  27,  2012  in  Book RE12120, Page 1496 in the real estate records of the County Clerk of Oklahoma County, Oklahoma.

 

1\CdfsO I  \Home\AIIenz\Kirkpatrick\Paycom\20 15 Building  3\Loan  Documents\Kirkpatrick Bank - Pay com - Loan Agreement-7.Docx

Exhibit 10.3

 

EXHIBIT "D"

 

Project Budget

 

[To be provided post closing.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 10.3

 

 

EXHIBIT "E"

 

Required Performance Bonds and Payment Bonds

 

[To be provided post closing.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1\CdfsO 1\Home\Allenz\Kirkpauick\Paycom\20 I 5 Building 3\Loan Documents\Kirkpatrick Bank·Paycom- Loan Aweement-7.Docx

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