Exhibit 10.16


 


PROMISSORY NOTE


 


	
   

  	
  Atlanta,
  Georgia

  
	
   

  	
  February 24,
  2004

  



 


ARTICLE I


 


PAYMENTS OF PRINCIPAL AND INTEREST


 


1.01                           For value received, the undersigned Diversified Security Corporation, a
corporation organized under the laws of the State of Georgia, (hereinafter
referred to as “Maker”), hereby promises to pay to the order of Harold Bright (“Payee”), at any location
Payee shall reasonably determine, the principal sum of ONE HUNDRED FORTY THREE THOUSAND SEVEN  HUNDRED AND NO HUNDREDTHS DOLLARS ($143,700.00)
except as may be adjusted in accordance with the terms hereof, plus simple
interest on the unpaid principal amount hereof at the rate of seven (7.0%)
percent per annum, all according to the terms hereof, and with all such
payments being payable in cash, check, wire transfer or other form reasonably
acceptable to Payee in lawful money of the United States of America.


 


1.02                           Maker shall pay the obligation hereunder by
tendering a single payment on February 28, 2005 of the full amount of the
principal due hereunder, and all accrued interest and payment.


 


1.03                           Maker may prepay any or all of the
outstanding balance hereof without penalty prior to the due date of any
payment, and Payee shall apply such prepayments first to principal, then to any
interest or other amount hereunder.


 


1.04                           Notwithstanding the stated principal amount
hereof, Maker may offset against and reduce the principal amount of this Note
by an amount equal to the amount of any indemnification obligation as allowed
in Article 6 of the Stock Purchase Agreement by and between Maker and the
Selling Shareholders, as amended (the “Stock Purchase Agreement”). Such items
are referred to herein as Indemnification Obligations.


 


1.05                           Upon Maker’s receipt of any claim or bill for
any cost or expense that would give rise to an Indemnification Obligation,
Maker shall inform the Payee by the method(s) provided in the Stock Purchase
Agreement for providing notices.


 


1.06                           Maker may deduct from the principal amount of
this Note an amount equal to the amount stated in Maker’s notice, subject to
the amount deducted being added back to the principal amount of the Note if the
amount that Maker actually incurs that is subject to the Indemnification
Obligation is less than the amount previously deducted from the principal
amount of this Note.  If an amount is
deducted from the principal amount of this Note and is later added back to the
principal amount of the Note, Maker shall be liable also for interest at the
rate of seven percent (7%) per annum on the amount of such deducted and
re-added amount, as if such amount had never been deducted.


 

















 


1.07                           Repayment of this Note shall be subject to
any Subordination Agreement agreed upon by Maker and Payee.


 


ARTICLE II


 


SECURITY


 


2.01                           As security for payment of all of the obligations
hereunder, Maker hereby pledges to Payee, pursuant to the Security Agreement of
even date herewith, 40% of the Shares of common stock of no par value of
Paragon Systems, Inc. (the “Shares”) sold by Payee to Maker pursuant to the
Stock Purchase Agreement.


 


2.02                           RESERVED


 


2.03                           Neither Payee nor any of the Selling
Shareholders shall sell, assign, give, pledge, encumber, hypothecate or
transfer any of the Shares securing payment of the Note.


 


2.04                           The number of Shares subject to this Security
Agreement, and the number of Shares subject to release from this Security
Agreement shall be adjusted for any stock split, reverse stock split, or stock
dividend of Paragon Systems, Inc.


 


ARTICLE III


 


MISCELLANEOUS


 


3.01                           Upon the failure of Maker to tender any payment
hereunder when due, Payee may, at its option, deliver written notice to Maker
of the failure to tender such payment. If Maker has not tendered payment of the
full amount of such late payment within ten business (10) days of the date of
such notice, Payee may accelerate the full amount of principal and interest due
hereunder, and upon such acceleration, the full principal amount hereof shall
be immediately due and payable.


 


3.02                           The failure of Payee to exercise any option
hereunder, or to make demand, or to proceed to collect after making demand
hereon, shall not constitute a waiver of the right to exercise such option,
make such demand or to proceed to collect.


 


3.03                           Maker waives presentment for payment, notice
of dishonor, protest, notice of protest and diligence in bringing suit against
any party hereto.


 


2

















 


3.04                           The
obligations evidenced or created by this Note, as well as all waivers of rights
by Maker contained herein shall effectively bind and be the obligations and
waivers of any and all others who may at any time become liable for the payment
of all or any part of this Note.


 


3.05                           No
party other than the Maker shall be liable for the payment of all or any part
of this Note unless such party has executed a written document agreeing to be
liable for payment of any or all of this Note.


 


3.06                           If
any provision (or any part of any provision) contained in this Note shall for
any reason be held or deemed to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision (or remaining part of the affected provision) of this Note, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision (or part thereof) had never been contained herein and the remaining
provisions of this Note shall remain in full force and effect.


 


3.07                           Payee
shall not sell, assign, give, pledge, encumber, hypothecate or transfer any of
its rights pursuant to this Note.


 


3.08                           Any
notice required hereunder shall be deemed given three (3) business days after
such notice has been transmitted and received by the party to receive such
notice by the method(s) provided in the Stock Purchase Agreement for providing
notices.


 


3.09                           Maker
and Payee hereby consent and agree to the exclusive jurisdiction and venue of
the courts of Fulton County, Georgia as proper and convenient for any action to
enforce any of the provisions of this Note.


 


3.10                           Capitalized
terms such as “Selling Shareholders” used herein and not otherwise defined
herein shall have the same definition as that term has in the Stock Purchase
Agreement.


 


3.11                           Any
party who is required to bring an action to enforce the terms of this Note
shall be entitled to reasonable attorneys’ fees, in addition to all other
amounts otherwise due hereunder.


 


3

















 


Executed
this 24 day of February, 2004


 


 


	
   

  	
  MAKER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIVERSIFIED
  SECURITY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald
  G. Farrell

  	
   

  
	
   

  	
  Name:

  	
  Ronald
  G. Farrell

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
					



 


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