Document:

EXHIBIT 10.10

 

AMENDED AND RESTATED PROMISSORY NOTE

 

	
   

  	
  Atlanta,
  Georgia

  
	
   

  	
  September
  29, 2004

  

 

ARTICLE I

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

1.01         For value received, the undersigned, Tri-S 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 Charles Keathley  (“Payee”), at any location Payee shall
reasonably determine, the principal sum of TWO MILLION NINE HUNDRED
EIGHTY-THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($2,983,750)  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.  This
Amended and Restated Promissory Note (the “Note”) amends and restates in its
entirety that certain Promissory Note in principal amount of TWO MILLION NINE
HUNDRED EIGHTY-THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($2,983,750) dated
February 24, 2004 made by Maker in favor of Payee (the “Original Note”).

 

1.02         Maker shall pay the obligation
hereunder by tendering a single payment on December 31, 2004 of the full amount
of principal due hereunder and all interest at the rate set forth above accrued
thereon since February 24, 2004.

 

1.03         Maker may prepay any or all portion of
the outstanding balance hereof without penalty prior to December 31, 2004, and
Payee shall apply all such prepayments hereunder 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 dated as of February 23,
2004 by and among 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.

 

1.08         Notwithstanding the foregoing, this
Note is an amendment and restatement of the Original Note, and as such, is
subject to the provisions of all agreements entered into by the parties
subsequent to the execution of the Original Note, including that “Amendment” to
the Stock Purchase Agreement entered into by Maker and Payee dated February 26,
2004 and that certain Letter Agreement between Maker and Charles Keathley dated
March 11, 2004 (collectively, the “Subsequent Documents”).  This Note shall be subject to any right or
defense of the Payee or Maker arising from the Subsequent Documents, and this
Note shall not constitute a waiver of any right or defense of Payee or Maker
under the Subsequent Documents.

 

ARTICLE II

 

SECURITY

 

2.01         As
security for payment of all of the obligations hereunder, Maker has pledged to
Payee, pursuant to the Security Agreement dated as of February 24, 2004,
between Maker and Payee (the “Security Agreement”), 280 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 the
Security Agreement, and the number of Shares subject to release from the
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.

 

2

 

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

 

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         Any legal proceeding instituted by
Payee concerning the matters contemplated by or relating to this Note may be
brought in a court with subject matter jurisdiction over the dispute located in
Huntsville, Alabama, and Maker hereby submits to jurisdiction in any such
court, agrees that venue properly lies in any such court, and agrees that Maker
will not attempt to defeat or deny such jurisdiction by motion or other request
for leave from any court. With respect to any legal proceeding instituted by
Payee concerning the matters contemplated by or relating to this Note, this
Note shall be governed by and construed and enforced in accordance with the
internal laws of the State of Alabama without reference to its choice of law
rules. Payee hereby (i) agrees that any failure of Maker to bring any
compulsory counterclaim (as defined by applicable law) that Maker may have with
respect to any legal proceeding instituted by Payee concerning the matters
contemplated by or relating to this Note shall not constitute a waiver of
Maker’s right to bring such counterclaim, (ii) agrees that Maker may bring such
counterclaim in any court with subject matter jurisdiction over such counter
claim located in Atlanta, Georgia, and (iii) submits to jurisdiction in any
such court, agrees that venue properly lies in any such court, and agrees that
Payee will not attempt to defeat or deny such jurisdiction by motion or other
request for leave from any court. With respect to any such counterclaim
instituted by Maker, this Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of Georgia without reference
to its choice of law rule.

 

3.10         Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to them in
the Stock Purchase Agreement.

 

3

 

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.

 

IN WITNESS WHEREOF, Maker and Payee have
executed this Note or caused this Note to be executed as of September 29, 2004.

 

 

	
   

  	
  MAKER:

  
	
   

  	
   

  
	
   

  	
  TRI-S
  SECURITY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald
  G. Farrell

  	
   

  
	
   

  	
  Name:

  	
  Ronald G.
  Farrell

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PAYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Charles
  Keathley

  	
   

  
	
   

  	
  CHARLES
  KEATHLEY

  

 

4EXHIBIT 10.11

 

AMENDED AND RESTATED PROMISSORY NOTE

 

	
   

  	
  Atlanta,
  Georgia

  
	
   

  	
  September
  29, 2004

  

 

ARTICLE I

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

1.01         For value received, the undersigned, Tri-S 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 Robert Luther  (“Payee”), at any location Payee shall
reasonably determine, the principal sum of ONE MILLION FOUR HUNDRED SIXTY-TWO
THOUSAND FOUR HUNDRED FIFTY DOLLARS ($1,462,450)  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.  This Amended and Restated
Promissory Note (the “Note”) amends and restates in its entirety that certain
Promissory Note in principal amount of ONE MILLION FOUR HUNDRED SIXTY-TWO
THOUSAND FOUR HUNDRED FIFTY DOLLARS ($1,462,450) dated February 24, 2004 made
by Maker in favor of Payee (the “Original Note”).

 

1.02         Maker shall pay the obligation
hereunder by tendering a single payment on December 31, 2004 of the full amount
of principal due hereunder and all interest at the rate set forth above accrued
thereon since February 24, 2004.

 

1.03         Maker may prepay any or all portion of
the outstanding balance hereof without penalty prior to December 31, 2004, and
Payee shall apply all such prepayments hereunder 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 dated as of February 23,
2004 by and among 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.

 

1.08         Notwithstanding the foregoing, this
Note is an amendment and restatement of the Original Note, and as such, is
subject to the provisions of all agreements entered into by the parties
subsequent to the execution of the Original Note, including that “Amendment” to
the Stock Purchase Agreement entered into by Maker and Payee dated February 26,
2004 and that certain Letter Agreement between Maker and Charles Keathley dated
March 11, 2004 (collectively, the “Subsequent Documents”).  This Note shall be subject to any right or
defense of the Payee or Maker arising from the Subsequent Documents, and this
Note shall not constitute a waiver of any right or defense of Payee or Maker
under the Subsequent Documents.

 

ARTICLE II

 

SECURITY

 

2.01         As
security for payment of all of the obligations hereunder, Maker has pledged to
Payee, pursuant to the Security Agreement dated as of February 24, 2004,
between Maker and Payee (the “Security Agreement”), 137 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 the
Security Agreement, and the number of Shares subject to release from the
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.

 

2

 

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

 

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         Any legal proceeding instituted by
Payee concerning the matters contemplated by or relating to this Note may be
brought in a court with subject matter jurisdiction over the dispute located in
Huntsville, Alabama, and Maker hereby submits to jurisdiction in any such
court, agrees that venue properly lies in any such court, and agrees that Maker
will not attempt to defeat or deny such jurisdiction by motion or other request
for leave from any court. With respect to any legal proceeding instituted by
Payee concerning the matters contemplated by or relating to this Note, this
Note shall be governed by and construed and enforced in accordance with the
internal laws of the State of Alabama without reference to its choice of law
rules. Payee hereby (i) agrees that any failure of Maker to bring any
compulsory counterclaim (as defined by applicable law) that Maker may have with
respect to any legal proceeding instituted by Payee concerning the matters
contemplated by or relating to this Note shall not constitute a waiver of
Maker’s right to bring such counterclaim, (ii) agrees that Maker may bring such
counterclaim in any court with subject matter jurisdiction over such counter
claim located in Atlanta, Georgia, and (iii) submits to jurisdiction in any
such court, agrees that venue properly lies in any such court, and agrees that
Payee will not attempt to defeat or deny such jurisdiction by motion or other
request for leave from any court. With respect to any such counterclaim
instituted by Maker, this Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of Georgia without reference
to its choice of law rule.

 

3.10         Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to them in
the Stock Purchase Agreement.

 

3

 

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

 

IN WITNESS WHEREOF, Maker and Payee have
executed this Note or caused this Note to be executed as of September 29, 2004.

 

 

	
   

  	
  MAKER:

  
	
   

  	
   

  
	
   

  	
  TRI-S
  SECURITY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald
  G. Farrell

  	
   

  
	
   

  	
  Name:

  	
  Ronald G.
  Farrell

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PAYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert
  Luther

  	
   

  
	
   

  	
  ROBERT
  LUTHER

  
					

 

4

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