EXHIBIT 4.2
AMENDED AND RESTATED PLEDGE AGREEMENT
This AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of August 5, 2004
(the "Agreement" or "Pledge"), between Integrated Security Systems, Inc., a
Delaware corporation ("Pledgor"), Renaissance US Growth Investment Trust PLC, a
public limited company registered in England and Wales ("RUSGIT"), Renaissance
Capital Growth & Income Fund III, Inc., a Texas corporation ("Renaissance III"),
BFS US Special Opportunities Trust PLC, a public limited company registered in
England and Wales ("BFS") (RUSGIT, Renaissance III and BFS collectively referred
to as "Secured Party"), and Renaissance Capital Group, Inc., a Texas
corporation, as Agent for the Lender (the "Agent").
RECITALS
A. Secured Party has lent to Pledgor the aggregate principal amount
of three million six hundred thousand dollars ($3,600,000), including but not
limited to the $1,000,000 loaned to Pledgor by BFS of even date, evidenced by
the Secured Party's promissory notes and convertible promissory notes as listed
in Schedule A attached hereto (the "Notes").
B. Pledgor is the owner of the shares of capital stock issued by
each subsidiary ("Subsidiary") named on Schedule B, and Pledgor has agreed to
pledge and assign to Secured Party a security interest in such shares, together
with any additional shares of capital stock of a Subsidiary or of any subsidiary
of Pledgor subsequently issued or acquired by Pledgor (collectively, the
"Shares"), to secure payment of the Notes of Pledgor and all other indebtedness
of Pledgor to Secured Party (collectively, the "Obligations").
C. The Pledgor previously pledged and assigned to Secured Party the
Shares to secure the payment of the Notes as evidenced by those certain Pledge
Agreements dated as of September 27, 2001 and March 11, 2003, respectively (the
"Original Pledge Agreements").
D. This Agreement is being executed to restate the Original Pledge
Agreements to consolidate the Original Pledge Agreements and secure payment of
all the Obligations of Pledgor to Secured Party.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, the parties agree as follows:
1. Pledge of Shares. Pledgor hereby pledges and assigns to the
Secured Party the Shares for the purpose of securing the full and prompt
payment, when due, by Pledgor of the Obligations.
2. Delivery of Shares. Upon execution of this Pledge, Pledgor shall
deliver to the Agent all the certificates representing the Shares, together with
duly executed stock powers, in blank. The Agent shall hold all such certificates
and stock powers subject to the terms of this Agreement.
3. Voting of Shares and Receipt of Dividends. Pledgor shall have
the right to vote the Shares and to receive dividends and distributions on the
shares, except upon the occurrence of a default in the full and prompt payment
of the Obligations, when due (a "Default"), in which event Secured Party shall
have such rights.
4. Representations and Warranties. Pledgor hereby warrants,
represents and covenants as follows:
a. Pledgor owns the Shares, free from any pledges, security
interests, adverse claims or liens;
b. Pledgor will notify Secured Party of, and will defend the
Shares against, all claims and demands of all persons at any time
claiming the Shares or any interest therein;
c. Pledgor will pay all taxes and assessments upon the Shares
prior to the date of delinquency for payment of such taxes and
assessments;
d. Pledgor has the full power, authority and capacity to
grant the security interest hereunder; and
e. The Subsidiaries are the only operating subsidiaries of
the Pledgor, and the number of shares set forth on Schedule A
constitute all of the outstanding capital stock of the Subsidiaries.
5. Return of Security. When the Obligations have been paid in full,
Agent shall promptly deliver the certificates representing the Shares then held
by it and all related stock powers to Pledgor.
6. Occurrence of a Default. If a Default occurs, Agent or Secured
Party shall have the right to exercise any rights and remedies provided under
the Uniform Commercial Code of Texas or any other applicable law with respect to
the Shares.
7. Duration of Pledge. This Pledge shall be terminated upon the
earlier of (i) foreclosure by Secured Party of the security interest granted
hereunder upon the occurrence of a Default, or (ii) return of the Shares to
Pledgor upon payment of the Obligations.
8. Miscellaneous.
a. Governing Law. This Pledge shall be governed by and
construed and enforced in accordance with the substantive laws of the
State of Texas, without regard to the conflicts of laws provisions
thereof, and the applicable laws of the United States. Venue and
jurisdiction shall be in the state or federal courts in Dallas County,
Texas.
b. Binding Effect. All of the terms, covenants,
representations, warranties and conditions herein shall be binding
upon, and inure to the benefit of, and be enforceable by the parties
and their respective successors and assignees.
2
c. Waiver. This Pledge may not be amended, modified,
superseded or canceled, nor may any of the terms, covenants,
representations, warranties or conditions hereof be waived, except by a
written instrument executed by the party against whom such amendment,
modification, supersedure, cancellation or waiver is charged. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by any party of any condition, or of any
breach of any term, covenant, representation or warranty contained
herein, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or
breach or waiver of any other condition or of any breach of any other
term, covenant, representation or warranty.
d. Attorneys' Fees. If any party brings an action in
connection with the performance, breach or interpretation of this
Pledge, or in any action related to the transaction contemplated
hereby, the prevailing party in such action shall be entitled to
recover from the losing party in such action all reasonable costs and
expenses of such litigation, including attorneys' fees, court costs,
costs of investigation, accounting and other costs reasonably incurred
or related to such litigation.
e. Severability. If any provision hereof is determined to be
illegal or unenforceable, such determination shall not affect the
validity or enforceability of the remaining provisions hereof, all of
which shall remain in full force and effect.
f. Further Documents. Each party covenants and agrees that,
from time to time, after the date hereof, at the reasonable request of
any other party, and without further consideration, such party will
execute and deliver such other documents and take such other action
reasonably required to carry out, in all respects, the transactions
contemplated and intended by this Pledge.
g. Notices. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and
instruments referred to herein must be (i) given in writing and
personally delivered, mailed by prepaid certified or registered mail or
sent by overnight service, such as FedEx, or (ii) made by telex or
facsimile transmission delivered or transmitted to the party to whom
such notice or communication is directed, with confirmation thereupon
given in writing and personally delivered or mailed by prepaid
certified or registered mail.
If to Pledgor:
Integrated Security Systems, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3
If to Secured Party:
Renaissance US Growth Investment Trust PLC
c/o Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Renaissance Capital Growth & Income Fund III, Inc.
c/o Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BFS US Special Opportunities Trust PLC
c/o Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Agent:
Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice delivered personally in the manner provided herein will be deemed
given to the party to whom it is directed upon the party's (or its agent's)
actual receipt. Any notice addressed and mailed in the manner provided herein
will be deemed given to the party to whom it is addressed at the close of
business, local time of the recipient, on the fourth business day after the day
it is placed in the mail, or, if earlier, the time of actual receipt.
h. Parties in Interest. Nothing in this Pledge, whether
express or implied, is intended to confer any rights or remedies under
or by reason of this Pledge on any persons other than the parties and
their respective successors and assigns, nor is anything in this Pledge
intended to relieve or discharge the obligation or liability of any
third persons to any party to this Pledge, nor shall any provision give
any third persons any right of subrogation or action over or against
any party to this Pledge.
4
i. Defined Terms. All capitalized terms, unless otherwise
specified, have the same meanings assigned to them in the Notes.
[The remainder of this page is intentionally left blank;
signature page follows.]
5
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
BORROWER:
INTEGRATED SECURITY SYSTEMS, INC.
By: /S/ C. A. Xxxxxxx
---------------------------
C. A. Xxxxxxx, Chairman and
Chief Executive Officer
SECURED PARTY:
RENAISSANCE US GROWTH INVESTMENT
TRUST PLC
By: /S/ Xxxxxxx Xxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxx, Director
RENAISSANCE CAPITAL GROWTH &
INCOME FUND III, INC.
By: Renaissance Capital Group, Inc.,
Investment Adviser
By: /S/ Xxxxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx, President and
Chief Executive Officer
BFS US SPECIAL OPPORTUNITIES TRUST, PLC
By: /S/ Xxxxxxx Xxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxx, Director
AGENT:
RENAISSANCE CAPITAL GROUP, INC.
By: /S/ Xxxxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx, President and
Chief Executive Officer
6
SCHEDULE A
NOTES
--------------------------------- --------------------- ------------------
LENDER DATE AMOUNT
--------------------------------- --------------------- ------------------
Renaissance Capital Growth 9/27/2001 $ 75,000
& Income Fund III, Inc.
("Renaissance III")
--------------------------------- --------------------- ------------------
Renaissance III 10/12/2001 $ 25,000
--------------------------------- --------------------- ------------------
Renaissance III 10/26/2001 $ 25,000
--------------------------------- --------------------- ------------------
Renaissance III 11/9/2001 $ 25,000
--------------------------------- --------------------- ------------------
Renaissance III 11/16/2001 $ 25,000
--------------------------------- --------------------- ------------------
Renaissance III 12/28/2001 $ 25,000
--------------------------------- --------------------- ------------------
Renaissance III 1/14/2002 $ 50,000
--------------------------------- --------------------- ------------------
Renaissance III 9/5/2002 $ 75,000
--------------------------------- --------------------- ------------------
Renaissance III 4/23/2003 $ 100,000
--------------------------------- --------------------- ------------------
Renaissance III 6/18/2003 $ 100,000
--------------------------------- --------------------- ------------------
Renaissance III 10/1/2003 $ 200,000
--------------------------------- --------------------- ------------------
Renaissance US Growth 9/27/2001 $ 75,000
Investment Trust PLC
("RUSGIT")
--------------------------------- --------------------- ------------------
RUSGIT 10/12/2001 $ 25,000
--------------------------------- --------------------- ------------------
RUSGIT 10/26/2001 $ 25,000
--------------------------------- --------------------- ------------------
RUSGIT 11/9/2001 $ 25,000
--------------------------------- --------------------- ------------------
RUSGIT 11/16/2001 $ 25,000
--------------------------------- --------------------- ------------------
RUSGIT 12/28/2001 $ 25,000
--------------------------------- --------------------- ------------------
RUSGIT 1/14/2002 $ 50,000
--------------------------------- --------------------- ------------------
RUSGIT 9/5/2002 $ 75,000
--------------------------------- --------------------- ------------------
RUSGIT 4/23/2003 $ 100,000
--------------------------------- --------------------- ------------------
RUSGIT 5/30/2003 $ 200,000
--------------------------------- --------------------- ------------------
RUSGIT 10/1/2003 $ 200,000
--------------------------------- --------------------- ------------------
BFS US Special Opportunities 3/11/2003 $ 250,000
Trust PLC ("BFS")
--------------------------------- --------------------- ------------------
BFS 4/23/2003 $ 100,000
--------------------------------- --------------------- ------------------
BFS 5/30/2003 $ 200,000
--------------------------------- --------------------- ------------------
BFS 9/5/2003 $ 500,000
--------------------------------- --------------------- ------------------
BFS 8/5/2004 $1,000,000
--------------------------------- --------------------- ------------------
7
SCHEDULE B
Subsidiaries No. of Shares
B&B ARMR Corporation 1,000
Intelli-Site, Inc. 1,000
8
