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                    RESTATED SECURITY AGREEMENT AND MORTGAGE-    Exhibit 10.8(d)

                           TRADEMARKS AND COPYRIGHTS

     THIS RESTATED SECURITY AGREEMENT AND MORTGAGE is made and delivered as of
this 30th day of April, 1999, by and between INTEGRATED INFORMATION SYSTEMS,
INC. ("GRANTOR"), an Arizona corporation, in favor of IMPERIAL BANK, a
California banking corporation ("LENDER"), who are parties to the Restated Loan
Agreement described below.

R E C I T A L S:

     A.   Grantor is the owner of the trademarks described in Schedule A-1
annexed hereto and made a part hereof, and trademark applications described in
Schedule A-2 annexed hereto and made a part hereof;

     B.   Grantor is the owner of the mask works, copyrighted material and
copyright registrations listed on Schedule B-1 hereto;

     C.   Grantor and Lender have entered into a Restated Credit Facilities
Agreement originally made by Grantor with Imperial Bank Arizona, an Arizona
banking corporation, dated as of December 18, 1997 (the "LOAN AGREEMENT"), and
thereafter assigned to Lender, and restated as of April 30, 1999, (as it may
hereafter be amended, modified, extended or restated from time to time, (the
"RESTATED LOAN AGREEMENT"); and

     D.   As a condition to Lender making any Loans under the Loan Agreement
and the Restated Loan Agreement, Lender has required the execution and delivery
of this Security Agreement and Mortgage by Grantor.

A G R E E M E N T:

     NOW, THEREFORE, in consideration of the premises set forth in the Loan
Agreement and the Restated Loan Agreement and in order to induce Lender to make
loans under the Restated Loan Agreement, Grantor hereby agrees with Lender as
follows:

     1.   Certain Defined Terms. As used in this Security Agreement and
Mortgage, unless the context otherwise requires:

     "Copyrights" shall mean (i) all original works of authorship fixed in any
tangible medium of expression, all mask works fixed in a chip product, all
right, title and interest therein and thereto, and all registrations and
recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Copyright Office or any other country or
any political subdivision thereof, all whether now or hereafter owned or
licensable by Grantor, including, but not limited to, those registrations or
applications for registrations described on Schedule B-1 annexed hereto and
made a part hereof, and (ii) all extensions or renewals thereof.

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     "Intellectual Property" shall have the meaning given to it in Paragraph 2
of this Security Agreement and Mortgage.

     "Trademarks" shall mean (i) all trademarks, trade names, trade dress,
service marks, prints and labels on which said trademarks, trade names, trade
dress and service marks have appeared or appear, designs and general intangibles
of like nature, now existing or hereafter adopted or acquired, all right, title
and interest therein and thereto, and all registrations and recordings thereof,
including, without limitation, applications (except intent-to-use applications),
registrations and recordings in the United States Patent and Trademark Office or
in any similar office or agency of the Untied States, any State thereof, or any
other country or any political subdivision thereof, all whether now or
hereafter owned or licensable by Grantor, including, but not limited to, those
described in Schedule A-1, and (ii) all reissues, extensions or renewals thereof
and all licenses thereof (including, without limitation, all license
agreements).

     "Trademark Applications" shall mean (i) all applications (except
intent-to-use applications) for Trademarks that have been filed in the U.S.
Patent and Trademark Office as of the effective date of this Security Agreement,
or in the future, that have not yet issued as trademarks, all whether now or
hereafter owned or licensable by Grantor, including, but not limited to, those
described on Schedule A-2 annexed hereto and made a party hereof, and (ii) all
reissues, continuations, continuations-in-part, divisional or term restorations
and all extensions thereof and all licenses thereof.

     Capitalized terms not defined herein shall have the meanings attributed to
such terms in the Restated Loan Agreement.

     2.  Grant of Security. As collateral security for the full and prompt
payment and performance by Grantor of the Obligations, Grantor does hereby
mortgage to and pledge with Lender and does hereby grant to Lender (also hereby
reaffirming its principal to Lender) of a first priority security interest in
all of Grantor's right, title and interest in and (also hereby reaffirming the
prior mortgage and pledge to Lender) to (i) each of the Trademarks, each of the
Trademark Applications, the goodwill of the business symbolized by each of the
Trademarks, all customer lists and other records relating to the distribution of
products bearing the Trademarks and each of the Trademark Applications described
respectively in Schedules A-1 and A-2 hereto; (ii) each of the Copyrights, and
each of the registrations listed on Schedule B-1 hereto; and (iii) any and all
proceeds of the foregoing, including, without limitation, any claims by Grantor
against third parties for infringement of the Trademarks or Copyrights
(collectively, the "Intellectual Property").

     Grantor and Lender hereby confirm and agree that the grant of security in
Paragraph 2 of this Security Agreement and Mortgage is a collateral grant and
that, at all times prior to an exercise of Lender's rights under Paragraph 4
hereof, Grantor shall be the holder of title to the Intellectual Property.

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  3. Representations, Warranties and Covenants of Grantor. Grantor hereby
represents, warrants, covenants and agrees as follows:

    (a) Title to Trademarks: Subject to the Permitted Licenses (as hereinafter
  defined) and Permitted Liens, Grantor has sole, full and clear title to the
  registered United States Trademarks and Trademark Applications of Grantor for
  the goods and services covered by the registrations or applications thereof
  and such registrations are valid and subsisting and in full force and effect.
  Notwithstanding anything to the contrary, Grantor may terminate, dispose of or
  allow to expire any Trademark or Trademark Application which the Board of
  Directors of Borrower determines in good faith is in the best interest of
  Borrower taken as a whole.

    (b) Use of Trademarks. Except to the extent that Lender, upon prior written
  notice by Grantor, shall consent, Grantor (either itself or through licensees)
  will continue to use its Trademarks on each and every trademark class of goods
  applicable to its current line as reflected in its current catalogs, brochures
  and price lists in order to maintain such Trademarks in full force free from
  any claim of abandonment for nonuse and Grantor will not (and will not permit
  any licensee thereof to) do any act or knowingly omit to do any act whereby
  any Trademark may become invalidated.

    (c) Title to Copyrights. Subject to the Permitted Licenses and Permitted
  Liens, Grantor has sole, full and clear title to the Copyrights of Grantor
  shown on Schedule B-1 and each of said Copyrights is subsisting and in full
  force and effect. None of the Copyrights has been abandoned or dedicated, and,
  except to the extent that Lender upon prior written notice by Grantor, shall
  consent, Grantor will not do any act, or omit to do any act, whereby the
  Copyrights may become abandoned or dedicated, or the remedies available
  against potential infringers weakened, and Grantor shall notify Lender
  promptly if it knows of any reason or has reason to know that any such
  copyright or registration may become abandoned or dedicated. Notwithstanding
  anything to the contrary, Grantor may terminate, dispose of or allow to expire
  any Copyright which the Board of Directors of Borrower determines in good
  faith to be in the best interest of Borrower taken as a whole.

    (d) Further Assurances. Grantor will perform all acts and execute all
  documents (including, without limitation, the documents substantially in the
  forms of Exhibits 1, and 2 annexed hereof) reasonably requested by Lender at
  any time to evidence, perfect, maintain, record and enforce Lender's interest
  in the Intellectual Property or otherwise in furtherance of the provisions of
  this Security Agreement and Mortgage, and Grantor hereby authorizes Lender to
  execute and file one or more financing statements (and similar documents) or
  copies thereof or of this Security Agreement and Mortgage with respect to the
  Intellectual Property, signed only by Lender.

    (e) Pledge of Additional Trademarks and Copyrights. In the event that
  Grantor, either itself or through Lender, or any employee, licensee or
  designee, (i) files an application for the registration of any Trademark or
  Copyright with the United States Patent and Trademark Office, United States
  Copyright Office or any similar office or agency of the United States, any
  State thereof, or any other country or any political

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  subdivision thereof, or (ii) files any assignment of any trademark or
  copyright which Grantor may acquire, own or license from a third party, with
  the United States Patent and Trademark Office, United States Copyright Office
  or any similar office or agency of the United States, any State thereof or any
  other country or any political subdivision thereof, Grantor shall promptly,
  but in no event more than fifteen (15) days subsequent to such filing, notify
  Lender thereof, and, upon request of Lender shall promptly, but in no event
  more than twenty (20) days subsequent to such notice, execute and deliver any
  and all agreements, instruments, documents and papers as Lender may reasonably
  request to evidence Lender's security interest in such Trademark or Copyright
  and the goodwill and general intangibles of Grantor relating thereto or
  represented thereby.

    (f) Lender Appointed Attorney-in-Fact. Grantor hereby constitutes and
  appoints Lender as its attorney-in-fact to execute and file, upon the
  occurrence and during the continuance of an Event of Default, all such
  writings for the foregoing purposes, all acts of such attorney being hereby
  ratified and confirmed; such power being coupled with an interest and is
  irrevocable while this Security Agreement and Mortgage remains in effect.
  Grantor hereby releases Lender from any claims, causes of action and demands
  at any time arising out of or with respect to any actions taken or omitted to
  be taken by Lender under this Security Agreement and Mortgage, other than
  actions taken or omitted to be taken through Lender's gross negligence,
  willful misconduct or knowing violation of the law.

    (g) Grantor Authority. Grantor has the right and power to grant the security
  interest herein granted; and the Intellectual Property is not now, and at all
  times hereafter will not be, subject to any Liens or assignments of any nature
  whatsoever (except for the Permitted Licenses), and Grantor has not received
  any notice from any third party claiming any right or interest in and to any
  of the Intellectual Property or that Grantor's use thereof infringes the
  rights of any third party.

    (h) Negative Pledge. Except to the extent that Lender, upon reasonable prior
  written notice by Grantor, shall consent, Grantor shall not assign (by
  operation of law or otherwise), sell, mortgage, lease, transfer, pledge,
  hypothecate, grant a security interest in or Lien upon, encumber, or otherwise
  dispose of any of the Intellectual Property, and nothing in this Security
  Agreement and Mortgage shall be deemed a consent by Lender to any such action
  except as expressly permitted herein. Grantor shall not grant an exclusive
  license or, except in the ordinary course of business, a non-exclusive license
  in any of the Intellectual Property, and nothing in this Security Agreement
  and Mortgage shall be deemed a consent by Lender to any such action except as
  expressly permitted herein. Non-exclusive licenses permitted under the terms
  of the immediately preceding sentence, together with those licenses set forth
  in Schedule C annexed hereto and made a part hereof, as the same may in either
  case be amended, extended, supplemented or renewed, are sometimes referred to
  herein as "Permitted Licenses".

    (i) No Additional Trademarks or Copyrights. As of the date hereof, neither
  Grantor nor any subsidiary of Grantor owns any Trademarks or has any
  Trademarks or Copyrights registered in, or the subject of pending applications
  in, the United States Patent and Trademark Office, United States Copyright
  Office or any similar office or agency in

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  any other country or any political subdivision thereof, other than those
  unregistered Trademarks and those grants, registration, applications for
  registrations of Trademarks and Copyrights described in Schedules A-1, A-2,
  B-1, and C hereto.

    (j) Additional Further Assurances. Grantor will take all necessary steps in
  any proceeding before the United States Patent and Trademark Office, United
  States Copyright Office or any similar office or agency in any other country,
  or any political subdivision thereof, to maintain each application and
  registration and grant of the Trademarks and Trademark Applications and
  Copyrights, including, without limitation, filing renewals, affidavits of use,
  affidavits of incontestability opposition, interference and cancellation
  proceedings (except to the extent that dedication, abandonment or invalidation
  is permitted under paragraphs 3(a) and 3(c) hereof).

    (k) Lender Not Liable.  Grantor assumes all responsibility and liability
  arising from the use of the Trademarks, and hereby indemnifies and holds
  Lender harmless from and against any claim, suit, loss, damage or reasonable
  expense (including reasonable attorneys' fees and expenses (including, without
  limitation, the allocated costs and expenses of in-house counsel)) arising out
  of any alleged defect in any product manufactured, promoted or sold by Grantor
  (or any Affiliate or Subsidiary thereof) in connection with any Trademark or
  out of the manufacture, promotion, labeling, sale or advertisement of any such
  product by Grantor (or any Affiliate or Subsidiary thereof). Grantor agrees
  that Lender does not assume, and Lender shall not have any responsibility for,
  the payment of any sums due or to become due under any agreement or contract
  included in the Intellectual Property or the performance of any obligations to
  be performed under or with respect to any such agreement or contract by
  Grantor, and Grantor hereby agrees to indemnify and hold Lender harmless with
  respect to any and all claims by any Person relating thereto (except for any
  claims arising out of the gross negligence or willful misconduct of Lender);

    (l) Lender's Rights. Lender may, in its sole discretion, pay any amount or
  do any act either required of Grantor hereunder, or as may be requested by
  Lender, to preserve, defend, protect, maintain, record or enforce Grantor's
  obligations contained herein, the Obligations, the Intellectual Property, or
  the right and interest granted Lender herein, and which Grantor fails to do or
  pay, and any such payment shall be deemed an advance by Lender to Grantor and
  shall be payable on demand together with interest thereon at the Default Rate
  as specified in the Restated Loan Agreement. Lender agrees to give Grantor
  reasonable notice of the foregoing action, except in an emergency situation or
  where immediate action is required to protect the Intellectual Property.

    (m) Protection of Trademarks. Grantor agrees that if it learns of any use by
  any Person of any term or design likely to cause confusion with any material
  Trademark that is reasonably expected to result in a Material Adverse Effect,
  it shall promptly notify Lender of such use and, if requested by Lender, shall
  cooperate with Lender, at Grantor's expense, in such manner as Lender, in its
  reasonable discretion, may deem advisable for the protection of Lender's
  interest in and to the Trademarks, it being understood that the foregoing
  shall not preclude Grantor from bringing an action against a Person for the
  protection of Grantor's interest in and to such Trademarks.

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          (n) Licenses of Trademarks and Copyrights. All licenses of its
     Trademarks and Copyrights that Grantor has granted to third parties are set
     forth in Schedule C. Notwithstanding anything to the contrary herein,
     Grantor may renew, extend, amend, supplement, terminate or allow to expire
     the licenses set forth in Schedule C.

     4. Remedies. Upon the occurrence and during the continuance of an Event
of Default, in addition to all other rights and remedies of Lender, whether
under law, the Restated Loan Agreement or otherwise (all such rights and
remedies being cumulative, not exclusive and enforceable alternatively,
successively or concurrently), Lender shall have the following rights and
remedies which it may exercise in accordance with the provisions of Section 11
of the Restated Loan Agreement:

          (a) subject to the provisions of applicable law, Lender may, at any
     time and from time to time, license, whether general, special or otherwise,
     and whether on an exclusive (subject to existing licenses, if any) or
     nonexclusive basis, any of the Patents, Trademarks or Copyrights,
     throughout the world for such term or terms, on such conditions, and in
     such manner, as Lender shall in its sole discretion determine;

          (b) after consultation with Grantor (but not subject to the consent of
     Grantor), Lender may (without assuming any obligations or liability
     thereunder), at any time, enforce (and shall have the exclusive right to
     enforce) against any licensee or sublicensee all rights and remedies of
     Grantor in, to and under any one or more license agreements with respect to
     the Intellectual Property, and take or refrain from taking any action under
     any license or sublicense thereof, and Grantor hereby releases Lender from,
     and agrees, to hold Lender free and harmless from and against, any claims
     arising out of, any action taken or omitted to be taken with respect to any
     such license agreement, except to the extent that such claims are the
     result of the gross negligence or willful misconduct of Lender;

          (c) Lender may, at any time and from time to time upon thirty (30)
     days notice to Grantor (which notice shall constitute a commercially
     reasonable notice under Section 9-504 of the UCC and other applicable law),
     assign, sell, or otherwise dispose of, the Intellectual Property of any of
     it, either with or without special or other conditions or stipulations,
     with power to buy the Intellectual Property or any part of it, and with
     power also to execute assurances, and do all other acts and things for
     completing the assignment, sale or disposition which Lender shall, in its
     sole discretion, deem appropriate or proper;

          (d) in addition to the foregoing, in order to implement the
     assignment, sale or other disposal of any of the Intellectual Property
     pursuant to Subparagraph 4(c) hereof, Lender may, at any time, pursuant to
     the authority granted in Subparagraph 3(f) hereof (such authority becoming
     effective on the occurrence and remaining effective during the continuation
     as hereinabove provided of an Event of Default), execute and deliver on
     behalf of Grantor, one or more instruments of assignment of the Patents,
     Trademarks or Copyrights (or any application or registration thereof), in a
     form suitable for filing, recording or registration in any country; and

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          (e) Lender may apply the proceeds actually received from any such
     license, assignment, sale or other disposition of the payment of the
     Obligations as provided for in the Restated Loan Agreement.

Grantor shall remain liable for any deficiency with respect to the Obligations,
which shall bear interest and be payable at the Default Rate under the Restated
Loan Agreement. The rights of Grantor to receive any surplus, if any, shall be
subject to any duty of Lender imposed by law to the holder of any subordinate
security interest in the Intellectual Property known to Lender. Nothing
contained herein shall be construed as requiring Lender to take any such action
at any time. In the event of any such license, assignment, sale or other
disposition of the Intellectual Property, or any of it, after the occurrence and
during the continuation as hereinabove provided of an Event of Default (but in
no event for a period greater than ninety (90) days) Grantor shall supply, to
the extent reasonably possible, its know-how and expertise relating to the
manufacture and sale of the products bearing the Trademarks or in connection
with the Copyrights and its customer lists and other records relating to the
Trademarks or Copyrights and to the distribution of said products, to Lender or
its designee. Grantor agrees to pay when due all reasonable costs and expenses
incurred in any such transfer of the Trademarks or Copyrights, including any
taxes, fees and reasonable attorneys' fees (including, without limitation, the
allocated costs and expenses of in-house counsel), and all such costs shall be
added to the Obligations.

     5. Amendments and Modification. No provision hereof shall be modified,
altered, waived or limited except by a written instrument expressly referring
to this Security Agreement and Mortgage and executed by the party to be charged.

     6. Binding Nature. This Security Agreement and Mortgage shall be binding
upon and inure to the benefit of the successors, assigns or other legal
representatives of Grantor, and shall, together with the rights and remedies of
Lender hereunder, be binding upon and inure to the benefit of Lender, its
successors, assigns or other legal representatives.

     7. Governing Law. This Security Agreement and Mortgage and the Obligations
shall be construed in accordance with and governed by the laws of the State of
California governing the performance of contracts wholly within the State of
California, without giving effect to the conflict of law principles thereof,
except to the extent that the validity or perfection of the
security interest hereunder, or remedies hereunder, in respect of any
particular intellectual property are governed by the laws of a jurisdiction
other than the State of California.

     8. Waiver of Jury Trial. GRANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTER-CLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT AND MORTGAGE, THE COLLATERAL OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. GRANTOR AGREES THAT THIS PARAGRAPH
8 IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY AGREEMENT AND MORTGAGE AND
ACKNOWLEDGES THAT LENDER WOULD NOT EXTEND TO GRANTOR ANY FINANCIAL
ACCOMMODATIONS UNDER THE RESTATED LOAN AGREEMENT IF

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THIS PARAGRAPH 8 WERE NOT PART OF THIS SECURITY AGREEMENT AND MORTGAGE.

     9. Claims Resolution. The parties hereto agree:

          (a) Other than matters involving the appointment of a receiver, or the
exercise of other provisional remedies (any and all of which may be initiated
pursuant to applicable law), each controversy, dispute or claim between or among
the parties hereto arising out of or relating to this Agreement (individually
and collectively, a "Claim") which is not settled in writing within thirty (30)
days after the date on which a party subject to this Agreement gives written
notice to all other parties that a Claim exists (the "CLAIM DATE"), will be
settled by a "Reference Proceeding."

          (b) "Reference Proceeding" means a proceeding in California in
accordance with the provisions of Section 638 et seq. of the California Code of
Civil Procedure, or their successor section ("CCP"), which shall constitute the
exclusive remedy for the settlement of any Claim concerning this Agreement,
including whether such controversy, dispute or claim is subject to the
reference proceeding. Except as set forth above, the parties waive their rights
to initiate any legal proceedings against each other in any court or
jurisdiction other than Los Angeles County (the "COURT").

          (c) The referee shall be a retired Judge of the Court selected by
mutual Agreement of the parties, and if they cannot so agree within forty-five
(45) days after the Claim Date, the Presiding Judge of the Court (or his
representative) shall promptly select the referee. The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to the
oath of office as provided for in Rule 244 of the California Rules of Court (or
any subsequently enacted Rule). Each party shall have one peremptory challenge
pursuant to CCP Section 170.6.

          (d) The referee shall (i) be requested to set the matter for hearing
within sixty (60) days after the Claim Date and (ii) try any and all issues of
law or fact and report a statement of decision upon them, if possible, within
ninety (90) days of the Claim Date. Any decision rendered by the referee will
be final, binding and conclusive and judgment shall be entered pursuant to CCP
Section 644 in any court in the State of California having jurisdiction.

          (e) Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.

          (f) All discovery permitted by this Agreement shall be completed no
later than fifteen (15) days before the first hearing date established by the
referee. The referee may extend such period in the event of a party's refusal
to provide requested discovery for any reason whatsoever, including, without
limitation, legal objections raised to such discovery or unavailability of a
witness due to absence or illness. No party shall be entitled to "priority" in
conducting discovery. Either party upon seven (7) days written

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     notice may take depositions, and request for production or inspection of
     documents shall be responded to within ten (10) days after service. All
     disputes relating to discovery which cannot be resolved by the parties
     shall be submitted to the referee whose decision shall be final and binding
     upon the parties. Pending appointment of the referee as provided herein,
     the Superior Court is empowered to issue temporary and/or provisional
     remedies, as appropriate.

          (g)  Except as expressly set forth in this Agreement, the referee
     shall determine the manner in which the reference proceeding is conducted
     including the time and place of all hearings, the order of presentation of
     evidence, and all other questions that arise with respect to the course of
     the reference proceeding. All proceedings and hearings conducted before the
     referee, except for trial, shall be conducted without a court reporter,
     except that when any party so requests, a court reporter will be used at
     any hearing conducted before the referee. The party making such a request
     shall have the obligation to arrange for and pay for the court reporter.
     The costs of the court reporter at the trial shall be borne equally by the
     parties.

          (h)  The referee shall be required to determine all issues in
     accordance with existing case law and the statutory laws of the State of
     California. The rules of evidence applicable to proceedings at law in the
     State of California will be applicable to the reference proceeding. The
     referee shall be empowered to enter equitable as well as legal relief, to
     provide all temporary and/or provisional remedies and to enter equitable
     orders that will be binding upon the parties. The referee shall issue a
     single judgment at the close of the reference proceeding that shall dispose
     of all of the claims of the parties that are the subject of the reference.

          (i)  The parties hereto expressly reserve the right to contest or
     appeal from the final judgment or any appealable order or appealable
     judgment entered by the referee. The parties hereto expressly reserve the
     right to findings of fact, conclusions of law, a written statement of
     decision, and the right to move for a new trial or a different judgment,
     which new trial, if granted, is also to be a reference proceeding under
     this provision.

          (j)  In the event that the enabling legislation which provides for
     appointment of a referee is repealed (and no successor statue is enacted),
     any dispute between the parties that would otherwise be determined by the
     reference procedure herein described will be resolved and determined by
     arbitration. The arbitration will be conducted by a retired judge of the
     Court, in accordance with the California Arbitration Act, Section 1280
     through Section 1294.2 of the CCP as amended from time to time. The
     limitations with respect to discovery as set forth hereinabove shall apply
     to any such arbitration proceeding.

     10.  Admissibility of Security Agreement and Mortgage.  Grantor agrees that
any copy of this Security Agreement and Mortgage signed by Grantor and
transmitted by telecopier for delivery to Lender shall be admissible in evidence
as the original itself in any judicial or administrative proceeding, whether or
not the original is in existence.

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     11.  Address for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (unless otherwise
expressly provided herein) and shall be sent and deemed to have been received as
set forth in Section 12.25 of the Restated Loan Agreement.

     12.  Security Interest Absolute. All rights of Lender and security
interests hereunder, and all of the obligations of Grantor hereunder, shall be
absolute and unconditional, irrespective of:

          (a) any lack of validity or enforceability of any of the Loan
     Documents or any other agreement relating thereto;

          (b) any change in the time, manner or place of payment of, or in any
     other term of, all or any of the Obligations or any other amendment or
     waiver of or any consent to any departure from any of the Loan Documents;

          (c) any exchange, release or non-perfection of any other collateral,
     or any release or amendment or waiver of or consent to departure from any
     guaranty, for all or any of the Obligations; or

          (d) any other circumstance which might otherwise constitute a defense
     available to, or a discharge of, Grantor or a third party grantor of a
     security interest or lien.

     13. Continuing Security Interest. This Security Agreement and Mortgage
shall create a continuing security interest in the Intellectual Property and
shall: (i) remain in full force and effect until payment in full in cash or in
another manner acceptable to Lender and termination of the Obligations, and the
expiration or termination of the Commitment, (ii) be binding upon and inure to
the benefit of, and be enforceable by, Grantor, its successors and assigns, and
(iii) be binding upon and inure to the benefit of, and be enforceable by, Lender
and its successors, transferees and assigns. Upon payment in full in cash or in
another manner acceptable to Lender and termination of the Obligations, the
security interest granted hereby shall terminate and all rights to the
Intellectual Property shall revert to Grantor. Upon any such termination, Lender
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.

     14. Counterparts. This Security Agreement and Mortgage may be executed by
the parties hereto individually or in any combination, in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same agreement.

     15. Captions; Separability. The captions of the various sections and
paragraphs of this Security Agreement and Mortgage have been inserted only for
the purposes of convenience; such captions are not a part of this Security
Agreement and Mortgage and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Security Agreement and
Mortgage.

     16. Schedules. Lender is authorized to annex hereto any schedules referred
to herein that have been delivered to it by Grantor.

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     17.  Acknowledgment of Receipt. Grantor acknowledges receipt of a copy of
this Security Agreement and Mortgage.

     IN WITNESS WHEREOF, Grantor and Lender have each executed this Security
Agreement and Mortgage as of April 30, 1999.

                                INTEGRATED INFORMATION SYSTEMS, INC.,
                                an Arizona corporation

                                By  /s/ James G. Garvey
                                    --------------------------------------------
                                    Name:  James G. Garvey
                                    Title: President and Chief Executive Officer

                                Grantor's Address:

                                Fountainhead Corporate Park
                                1560 West Fountainhead Parkway, Suite 200
                                Tempe, Arizona 85282
                                Attention:     James G. Garvey
                                               President & CEO
                                Telephone:     (602)
                                Telefacsimile: (602)

                                IMPERIAL BANK, a California banking corporation

                                By  /s/ R. Mark Chambers
                                    --------------------------------------------
                                    Name:  R. Mark Chambers
                                    Title: Vice President

                                Lender's Address:

                                One Arizona Center
                                400 East Van Buren, Suite 900
                                Phoenix, Arizona 85004
                                Attn:          R. Mark Chambers, Vice President
                                Telephone:     (602) 417-1100
                                Telefacsimile: (602) 261-7881

                                       11
<PAGE>   12
                SCHEDULE A-1 TO SECURITY AGREEMENT AND MORTGAGE
                                   TRADEMARKS

<TABLE>
<CAPTION>
                                 Application or           Application Serial No.
Trademark                        Registration Date        or Registration No.
---------                        -----------------        ----------------------
<S>                             <C>                      <C>
CitiyServe                       NONE                     NONE

CityCode

CityPlan

CityWorks

CityBuild

FundTrack

Customer Service Automation

Case Management

Strategic Sales

</TABLE>

                                       12
<PAGE>   13
                SCHEDULE A-2 TO SECURITY AGREEMENT AND MORTGAGE

                             TRADEMARK APPLICATIONS

<TABLE>
<S>                   <C>                              <C>
                      Application or                   Application Serial No.
Trademark             Registration Date                or Registration No.
---------             -----------------                ----------------------

                      NONE

</TABLE>

                                       13
<PAGE>   14
                SCHEDULE B-1 TO SECURITY AGREEMENT AND MORTGAGE

                                   COPYRIGHTS

<TABLE>
<S>                      <C>                      <C>
                         Issue or
Titles                   Filing Date              Copyright No.
------                   -----------              -------------

                                      NONE
</TABLE>

                                       14
<PAGE>   15
                 SCHEDULE C TO SECURITY AGREEMENT AND MORTGAGE

                                    LICENSES

<TABLE>
<S>                      <C>                      <C>
                                                  Description of Licensed
Licensee                 Date of License          Intellectual Property
--------                 ---------------          -----------------------

City of Phoenix                                   Software Property known as
                                                  "CityServe"
Maricopa County

City of Long Beach

City of Commerce

National Family Legal
Foundation

City of Gainsville

State of Arizona

City of San Diego

City of Palo Alto

City of Downey                                    Software Property known as
                                                  "CityCode"
City of Indio

Town of Gilbert

City of Houston

JobBank                                           Software Property known as
                                                  "Strategic Sales"
Leading Edge Technology

CDI

The Coriolis Group
</TABLE>

                                       15
<PAGE>   16
             EXHIBIT 1 TO RESTATED SECURITY AGREEMENT AND MORTGAGE

                          TRADEMARK SECURITY AGREEMENT

R E C I T A L S:

      A.    INTEGRATED INFORMATION SYSTEMS, INC., an Arizona corporation
(herein referred to as "Grantor"), having an address at Fountainhead Corporate
Parkway, Suite 200, Tempe, Arizona 85282, owns the trademarks, trade names,
trade dress and service marks listed on the annexed Schedule 1-A, which
trademarks, trade names, trade dress and service marks are registered in the
United States Patent and Trademark Office (the "Trademarks"); and

      B.    Grantor and Imperial Bank, a California banking corporation
("Lender") have entered into a Restated Credit Facilities Agreement originally
made by Grantor with Imperial Bank Arizona, an Arizona banking corporation,
dated as of December 18, 1997 (the "Loan Agreement"), and thereafter assigned
to Lender, and restated as of April 30, 1999, (as it may hereafter be amended,
modified, extended or restated from time to time, (the "Restated Loan
Agreement"); and

      C.    Lender is desirous of having a security interest and mortgage in
favor of Lender on the above-identified property in order to secure the payment
of certain obligations of Grantor now or hereafter owing to Lender; and

      D.    Grantor has entered into a Security Agreement and Mortgage -
Trademarks, Patents and Copyrights (said Agreement, as it may hereafter be
amended or otherwise modified from time to time being the "Security Agreement
and Mortgage," the terms defined therein and not otherwise defined herein being
used herein as therein defined) in favor of Lender; and

      WHEREAS, pursuant to the Security Agreement and Mortgage, Grantor has
granted to Lender a security interest in, and mortgage on, all right, title and
interest of Grantor in and to the Trademarks, together with all prints and
labels on which said Trademarks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, and
the goodwill of the business symbolized by the Trademarks and the Trademark
Applications (excluding intent-to-use applications), registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof, or any other country
or any political subdivision thereof, all whether now or hereafter owned or
licensable by Grantor, and all reissues, extensions or renewals thereof and all
proceeds thereof, including, without limitation, any claims by Grantor against
third parties for infringement thereof (the "Intellectual Property"), to secure
the payment, performance and observance of the Obligation;

                                       16

<PAGE>   17
AGREEMENT:

     NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, Grantor does hereby grant and convey to Lender (thereby
also reaffirming its prior grant and conveyance to Lender of) a security
interest in and mortgage lien on the Intellectual Property, in order to secure
the prompt payment, performance and observance of the Obligations.

     Grantor does hereby further acknowledge and affirm that the rights and
remedies of Lender with respect to the security interest in the mortgage on the
Intellectual Property made and granted hereby and more fully set forth in the
Security Agreement and Mortgage, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.

     Lender's address is One Arizona Center, 400 East Van Buren, Suite 900,
Phoenix, Arizona 85004

     IN WITNESS WHEREOF, Grantor has duly executed or caused this Security
Agreement to be duly executed as of the 30th day of April, 1999.

                                   INTEGRATED INFORMATION SYSTEMS, INC.,
                                   an Arizona corporation

                                   By: ________________________________
                                   Name:  James G. Garvey
                                   Title: Vice President and Chief
                                              Executive Officer

STATE OF ARIZONA    )
                    ) ss.
COUNTY OF MARICOPA  )

     On this _____ day of April, 1999, before me personally appeared JAMES G.
GARVEY, to me known, who, being by me duly sworn, did depose and say that he
resides at __________________________ , and that he is President and Chief
Executive Officer of Grantor; that he/she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was
affixed pursuant to authority of the Board of Directors of said corporation and
that he/she signed his/her name thereto in his/her capacity as an authorized
officer of said corporation pursuant to such authority.

                                   ____________________________________
                                   Notary Public

My Commission Expires:

_____________________

                                       17
<PAGE>   18
                  SCHEDULE 1-A TO TRADEMARK SECURITY AGREEMENT

                                   TRADEMARKS

                     Application or                  Application Serial No.
Trademark            Registration Date               or Registration No.
---------            -----------------               ----------------------

                      NONE

                                       18

<PAGE>   19
             EXHIBIT 2 TO RESTATED SECURITY AGREEMENT AND MORTGAGE

                          COPYRIGHT SECURITY AGREEMENT

R E C I T A L S:

     A.   INTEGRATED INFORMATION SYSTEMS, INC., an Arizona corporation (herein
referred to as "Grantor"), owns the copyrights listed on the annexed Schedule
2-A, which copyrights are registered in the United States Copyright Office (the
"Copyrights"); and

     B.   Grantor and Imperial Bank, a California banking corporation ("Lender")
have entered into a Restated Credit Facilities Agreement originally made by
Grantor with Imperial Bank Arizona, an Arizona banking corporation, dated as of
December 18, 1997 (the "Loan Agreement"), and thereafter assigned to Lender, and
restated as of April 30, 1999, (as it may hereafter be amended, modified,
extended or restated from time to time, (the "Restated Loan Agreement"); and

     C.   Lender is desirous of having a security interest and mortgage in favor
of Lender on the above-identified property in order to secure the payment of
certain obligations of Grantor now or hereafter owing to Lender; and

     D.   Grantor has entered into a Security Agreement and Mortgage -
Trademarks, Patents and Copyrights (said Agreement, as it may hereafter be
amended or otherwise modified from time to time being the "Security Agreement
and Mortgage," the terms defined therein and not otherwise defined herein being
used herein as therein defined) in favor of Lender; and

     E.   Pursuant to the Security Agreement and Mortgage, Grantor has granted
to Lender a security interest in, and mortgage on, all right, title and interest
of Grantor in and to the Copyrights, and the registrations and recordings
thereof in the United States Copyright Office or any other country or any
political subdivision thereof, all whether now or hereafter owned or licensable
by Grantor and all extensions or renewals thereof and all licenses thereof and
all proceeds thereof, including, without limitation, any claims by Grantor
against third parties for infringement thereof (the "Intellectual Property"), to
secure the payment, performance and observance of the Obligations.

A G R E E M E N T:

     NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, Grantor does hereby grant and convey to Lender (thereby
also reaffirming its prior grant and conveyance to Lender of) a security
interest in and mortgage lien on the Intellectual Property, in order to secure
the prompt payment, performance and observance of the Obligations.

     Grantor does hereby further acknowledge and affirm that the rights and
remedies of Lender with respect to the security interest in and mortgage on the
Intellectual Property made and granted hereby are more fully set forth in the
Security Agreement and Mortgage, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.

                                       19
<PAGE>   20
     Lender's address is One Arizona Center, 400 East Van Buren, Suite 900,
Phoenix, Arizona 85004.

     IN WITNESS WHEREOF, Grantor has duly executed or caused this Security
Agreement to be duly executed as of the 30th day of April, 1999.

                                       INTEGRATED INFORMATION SYSTEMS, INC.,
                                       an Arizona corporation

                                       By:
                                          --------------------------------------
                                          Name:  James G. Garvey
                                          Title: President and Chief Executive
                                                 Officer

STATE OF ARIZONA  )
                  )ss.
COUNTY OF MARICOPA)

     On this      day of April, 1999, before me personally appeared JAMES G.
GARVEY, to me known, who, being by me duly sworn, did depose and say that he
resides at                                                 , and that he is
President and Chief Executive Officer of Grantor; that he/she knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was affixed pursuant to authority of the Board of Directors of
said corporation and that he/she signed his/her name thereto in his/her
capacity as an authorized officer of said corporation pursuant to such
authority.

                                       -----------------------------------------
                                       Notary Public

My Commission Expires:

----------------------

                                       20

<PAGE>   21
                  SCHEDULE 2-A TO COPYRIGHT SECURITY AGREEMENT

                                   COPYRIGHTS

<TABLE>
<CAPTION>
                              Issue or
Titles                       Filing Date                  Copyright No.
------                       -----------                  -------------
<S>                            <C>                           <C>

                               NONE
</TABLE>

                                       21<PAGE>   1
                                                        Exhibit 10.8(e)

                               FIRST MODIFICATION

                                       OF

                          CREDIT FACILITIES AGREEMENT

                   RESTATED AND AMENDED AS OF APRIL 30, 1999

                                    BETWEEN

                      INTEGRATED INFORMATION SYSTEMS, INC.

                                      AND

                                 IMPERIAL BANK

                           DATED AS OF JUNE 30, 1999
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>

<C>       <C>                                                                <C>

                                                                             TAB

1.        DEFINITIONS..........................................................1

2.        PRIOR CREDIT AGREEMENTS..............................................1

   2.1    EXISTING INDEBTEDNESS................................................1
   2.2    PRIOR CREDIT AGREEMENTS ACKNOWLEDGMENTS..............................2
   2.3    RELEASE..............................................................2
   2.4    CLOSING DATE.........................................................2

3.        CONSIDERATION FOR MODIFICATION.......................................2

4.        MODIFICATION OF CREDIT FACILITIES AGREEMENT..........................3

    4.1   ADDITIONS AND SUBSTITUTIONS TO THE RECITALS OF THE RESTATED
          LOAN AGREEMENT.......................................................3
    4.2   ADDITIONS AND SUBSTITUTIONS TO THE DEFINITIONS SECTION OF THE
          RESTATED LOAN AGREEMENT..............................................3
    4.3   ADDITION OF SECTION 2.2..............................................4
    4.4   ADDITIONS AND SUBSTITUTIONS TO THE FINANCIAL AND OTHER REPORTING
          SECTION OF THE RESTATED LOAN AGREEMENT...............................6
    4.5   AMENDMENT OF THE RESTATED LOAN AGREEMENT GENERALLY...................6

5.        REAFFIRMATIONS AND ACKNOWLEDGMENTS...................................6

    5.1   REAFFIRMATIONS AND CERTIFICATIONS....................................6
    5.2   NO WAIVER............................................................7
    5.3   MISCELLANEOUS........................................................7

</TABLE>

                                       i
<PAGE>   3
                               FIRST MODIFICATION
                                       of
                          CREDIT FACILITIES AGREEMENT
                   Restated and Amended as of April 30, 1999
                                    between
                      INTEGRATED INFORMATION SYSTEMS, INC.
                                      and
                                 IMPERIAL BANK
                           Dated as of June 30, 1999

                               R E C I T A L S :

     A.        INTEGRATED INFORMATION SYSTEMS, INC., an Arizona corporation
("BORROWER"), and IMPERIAL BANK, a California banking corporation ("LENDER"),
are parties to that certain Credit Facilities Agreement restated and amended as
of April 30, 1999 (the "RESTATED LOAN AGREEMENT").

     B.        Borrower has requested that Lender modify certain financial
covenants contained in the Restated Loan Agreement. Lender is willing to modify
the covenants as requested and as herein stated, but only if and so long as
there is strict compliance by Borrower with and satisfaction of the terms and
conditions of the Restated Loan Agreement and this First Modification Agreement.

     C.        Borrower has requested that Lender make available a multiple
advance term facility in the maximum principal amount of $600,000.00, for the
purpose of purchasing furniture for Borrower's new facilities. Lender is willing
to make sure a loan as requested and as herein stated, but only if and so long
as there is strict compliance by Borrower with and satisfaction of the terms and
conditions of the Restated Loan Agreement and this First Modification Agreement.

                              A G R E E M E N T :

     NOW, THEREFORE, for due and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.   DEFINITIONS.

     Words and terms defined in the Restated Loan Agreement shall have the same
meanings when used in this First Modification Agreement, except as otherwise
indicated.

2.   PRIOR CREDIT AGREEMENTS.

     2.1       EXISTING INDEBTEDNESS. Borrower is currently indebted to Lender
in the principal amount of $0.00.
<PAGE>   4
     2.2 Prior Credit Agreements Acknowledgments. Borrower acknowledges that
the Notes, Loan Agreement, Loan Documents and Modifications, which were
previously made with Imperial Bank Arizona, and all of Imperial Bank Arizona's
rights thereunder, have been duly assigned to Lender. Borrower acknowledges
with respect to the amounts owing to Lender under the Restated Loan Documents
that Borrower has no offset, defense or counterclaim with respect thereto, no
claim or defense in abatement or reduction thereof, nor any other claim against
Lender or with respect to any document forming part of the transaction in
respect of which the Restated Loan Documents were made. Borrower acknowledges
that all interest imposed under the Restated Loan Documents through the date
hereof, and all fees and other charges that have been collected from or imposed
upon Borrower with respect to the Restated Loan evidenced by the Restated Loan
Documents were and are agreed to, and were properly computed and collected.

     2.3 Release. Borrower, effective on and from June 30, 1999, does hereby
unconditionally, absolutely and irrevocably release Lender and Imperial Bank
Arizona and their respective employees, agents and officers from any and all
Claims (as the term is defined in this SECTION 2.3) and defenses against
them or any of them, and agrees that Lender and Imperial Bank Arizona and their
respective employees, agents and officers shall have no liability to Borrower
by reason of anything occurring prior to June 30, 1999. Accordingly, this First
Modification Agreement is made to compromise, resolve, settle, and terminate
all actual and potential Claims by reason of anything occurring prior to June
30, 1999. The term "CLAIMS" as used in this SECTION 2.3 means all claims,
complaints, demands, causes of action, damages, costs, expenses, fees, and all
other debts, liabilities or obligations of every sort and description, direct
and indirect, fixed or contingent, known or unknown, and whether or not
liquidated, arising out of, caused by, or otherwise related in any way to
events or transactions occurring prior to June 30, 1999, between or affecting
any of the parties hereto. Borrower agrees that this general release extends to
Claims that Borrower may not know of or suspect to exist in its favor at the
time of executing this release, and Borrower specifically waives the
provisions of any law to the contrary.

     2.4 Closing Date. The Closing Date for purposes of the Term Loan (the
"TERM LOAN CLOSING DATE") shall mean the Business Day on which all the
requirements and conditions precedent set forth in SECTION 4 of the Restated
Loan Agreement and this First Modification Agreement shall have been satisfied
and the transaction contemplated by this First Modification Agreement shall
close, but not later than June 30, 1999.

3. CONSIDERATION FOR MODIFICATION.

     3.1 In consideration of Lender's committing to make available an
additional loan as herein stated, Borrower shall simultaneously with its
execution of this First Modification Agreement pay and reimburse Lender for all
of Lender's reasonable unreimbursed legal expenses incurred since the date of
the Loan Agreement including legal expenses incurred in the preparation of this
First Modification Agreement.

                                      -2-
<PAGE>   5
4. MODIFICATION OF CREDIT FACILITIES AGREEMENT.

     4.1 Additions and Substitutions to the Recitals of the Restated Loan
Agreement.

     In the Recitals Section of the Restated Loan Agreement, add the following
to the end of recital subparagraph C:

     Borrower has requested that Lender make a series of Advances not to exceed
     $600,000 in the aggregate, the proceeds of which will be used for the
     purchase of furniture for Borrower's new facilities. Each Advance made
     pursuant to this lending arrangement (the Advances being collectively
     referred to as the "TERM LOAN"), shall be repayable, with interest, in
     equal monthly payments. (the Restated Loan and the Term Loan may be
     referred to herein collectively as the "LOAN"). Lender is willing to make
     the Term Loan as requested and as herein described, but only if and so long
     as there is strict compliance by Borrower with and satisfaction of the
     terms and conditions of the Loan Agreement.

     In the Recitals Section of the Restated Loan Agreement, add the following
to the end of recital subparagraph D:

     A single Term Loan Note will evidence the Term Loan. Borrower's Obligations
     to Lender will continue to be secured by a security interest in all of
     Borrower's personal property as described in SECTION 1.15, to be evidenced
     by the Restated Security Documents.

     4.2 Additions and Substitutions to the Definitions Section of the Restated
Loan Agreement.

     In the Definitions Section of the Restated Loan Agreement, substitute the
following definitions for currently existing definitions of the following terms:

          "LOAN DOCUMENTS" means the First Modification, the Term Loan Note, the
     Restated Loan Documents, and any other documents executed or certified in
     connection with the Restated Loan or the Term Loan.

          "TERM LOAN MATURITY DATE" means June 30, 2004, unless such date is
     extended by written agreement between the parties hereto.

     In the Definitions Section to the Restated Loan Agreement, add the
following definitions:

          "DEBT SERVICE COVERAGE RATIO" means the sum of EBITDA for the most
     recent four (4) Fiscal Quarters plus the amount of all new Equity invested
     during the most recent four (4) Fiscal Quarters, divided by aggregate
     principal and interest payments for the most recent four (4) Fiscal
     Quarters.

                                      -3-
<PAGE>   6
     "EBITDA" for any period shall mean the Net Income for such period before
Interest Expense, income tax expense, depreciation and amortization in
computing such Net Income of Borrower, all as determined by Borrower in
accordance with GAAP.

     "FIRST MODIFICATION" means the First Modification of the Credit Facilities
Agreement as restated and amended, dated as of June 30, 1999.

     "NOTE(S)" means individually or collectively (as appropriate) the Facility
Note and the Term Loan Note, and any note or notes taken wholly or partially in
renewal or extension thereof or substitution or replacement therefor.

     "TERM LOAN" means a lending arrangement under which one or more Advances
may be made pursuant to SECTION 2.2, the aggregate amount of which shall not
exceed the Term Loan Commitment (viz. $600,000), and the repayment terms of
which are set forth in the Term Loan Note and this Agreement and all
amendments, modifications, increases, decreases, renewals and/or extensions of
any one or more of the foregoing.

     "TERM LOAN COMMITMENT" means the aggregate principal amount of Advances
that Lender will disburse (viz., $600,000) under the Term Loan.

     "TERM LOAN NOTE" means that certain promissory note, dated as of June 30,
1999, in the original principal amount of $600,000.00, duly executed and
delivered by Borrower to Lender (in the form of EXHIBIT B hereto), and any note
or notes taken wholly or partially in renewal or extension thereof or
substitution or replacement therefor.

     "TERM LOAN RATE" means a fluctuating per annum rate of interest equal to
the sum of (i) the Prime Rate; plus (ii) 100 Basis Points, calculated on the
basis of the actual number of days elapsed over a year of 360 days.

4.3  Addition of Section 2.2.

Add new Section 2.2 to the Restated Loan Agreement to read as follows:

     2.2  Term Loan.

          (a)  Advances. Subject to the terms and conditions of this Agreement,
Lender agrees to advance money to or on behalf of Borrower, as Borrower shall
request from time to time, provided: (i) on the date upon which the
disbursement of an Advance is to be made, all applicable conditions precedent
have been satisfied, and Lender shall be in possession of or be satisfied as to
the terms or matters described in SECTION 4 of this Agreement (as well as
satisfaction of other conditions specified elsewhere herein or in the Loan
Documents which are applicable to such Advance); (ii) each such request is made
prior to the June 30, 2000; (iii) the purpose for which an advance is requested
is the purchase of furniture for Borrower's facilities; (iv) (A) at the time of
such request, Borrower provides to Lender copies of invoices or other
documentation reasonably acceptable to Lender with regard to such furniture,
and (B) the Advance requested shall not exceed eighty percent (80%) of the
total cost of such furniture as evidenced by said invoices or other

                                      -4-
<PAGE>   7
documentation; and (iv) (A) immediately upon disbursement of the Advance, the
aggregate amount of all Advances disbursed under the Term Loan does not exceed
the Term Loan Commitment, and (B) such Advance would not cause a violation of
any of the financial convenants set forth in SECTION 9.7.

     (b)  Maturity. The Term Loan Note and all Advances made pursuant to, and
all Obligations of Borrower pertaining to, the Term Loan shall become fully due
and payable on the Term Loan Maturity Date.

     (c)  Principal and Interest Payments. Absent a Default, beginning on the
fifth day of the month following the first Advance disbursed pursuant to the
Term Loan, but no earlier than August 5, 1999, and on the fifth day of each
calendar month thereafter to and including June 5, 2004, Borrower shall pay to
Lender payments of principal and interest in amounts calculated in accordance
with SECTION 2.1(d) so as to fully amortize each individual Advance disbursed
pursuant to the Term Loan over a period of forty-eight (48) months that
commences with fifth day of the month following the disbursement of the Advance
and ends the earlier of the fifth day of the forty-eighth month following
disbursement of the Advance or June 30, 2004. On the Term Loan Maturity Date,
Borrower shall pay to Lender the amount necessary to pay in full any remaining
principal and interest, together with any unpaid Lender's Expenses due Lender.

     (d)  Calculation of Monthly Payments. The unrepaid balance of each Advance
disbursed pursuant to the Term Loan will accrue interest from its respective
Funding Date to the date when all of that Advance has been repaid in full, at
the Term Loan Rate (for purpose of this Section, the "NOTE RATE"). However, for
purposes of calculating Borrower's monthly payments of principal and interest
due with respect to each individual Advance, Lender will establish a "PAY RATE"
for each individual Advance. Prior to the Term Loan Maturity Date, for
each Advance Lender will determine the Prime Rate effective on the last day of
the month within which the Advance was first disbursed (the "INITIAL RATE DATE"
for that Advance), and on each annual anniversary of the Initial Rate Date for
the Advance (each a "CHANGE DATE"). The Pay Rate for an Advance for the first
twelve months following its disbursement shall equal the sum of the Prime Rate
effective on the Initial Rate Date for that Advance plus one hundred (100)
Basis Points. For the twelve month period following each Change Date, the Pay
Rate for an Advance shall become the sum of the Prime Rate effective on that
Change Date plus one hundred (100) Basis Points. The amount of the monthly
payments (principal and interest), payable with respect to a given Advance
following a Change Date may vary from that paid previously, and even that which
has actually accrued at the Note Rate. This variance, if any, results from
changes in the Pay Rate and the extent to which the Pay Rate matches the Note
Rate. For each Advance, promptly after its Initial Rate Date, Lender will
determine the amount of monthly payment that will be sufficient to fully
amortize the balance of the subject Advance over a forty eight (48) month term,
assuming the balance thereof is bearing interest at its initial Pay Rate. The
result of this calculation will determine the amount of the monthly payments to
be made with respect to the subject Advance until the next

                                      -5-
<PAGE>   8
         Change Date. With respect to each Advance, on its first Change Date and
         on each of its Change Dates thereafter, the Pay Rate for the Advance
         will be adjusted to equal the Note Rate then existent on the applicable
         Change Date. Lender will then determine for the subject Advance the
         amount of the monthly payments that will be needed to amortize the
         remaining balance of the Advance over the term remaining in the
         original forty-eight (48) month amortization schedule at the new Pay
         Rate for that Advance. The result of these calculations will establish
         the respective amounts of Borrower's monthly payments for the
         respective Advances until their next Change Dates or until the Term
         Loan Maturity Date, whichever first occurs. Each newly calculated
         monthly payment shall be due and payable beginning with the first
         monthly payment date occurring after the Change Date giving rise to the
         recalculation, and shall continue thereafter until the amount of the
         monthly payment changes again. Lender will provide Borrower with notice
         of each change in the Pay Rates and the amounts of the monthly payments
         calculated therefrom prior to the dates that newly changed monthly
         payments are due.

     4.4 Additions and Substitutions to the Financial and Other Reporting
Section of the Restated Loan Agreement.

     Substitute the following for the currently existing provision of SECTION
9.7(c):

         Debt Service Coverage Ratio shall not be less than 1.25 to 1.00
         measured on a Fiscal Quarterly basis.

     4.5 Amendment of the Restated Loan Agreement Generally. All currently
existing provisions in the Restated Loan Agreement shall be deemed amended so
that provisions referencing and applying to any or more of the Restated Loan
Documents shall hereafter be read to also reference and apply, unless the
context requires otherwise, to corresponding instruments and documents that are
part of the Loan Documents, but are not Restated Loan Documents.

5.   REAFFIRMATIONS AND ACKNOWLEDGMENTS.

     5.1 Reaffirmations and Certifications. Borrower reaffirms and/or certifies
to Lender: (i) the accuracy in all material respects, as of the date hereof, of
all of the respective representations and warranties made by Borrower in the
Restated Loan Documents; (ii) as modified above, Borrower is in compliance in
all material respects with the covenants, agreements and conditions of the
Restated Loan Agreement; (iii) to the best of Borrower's knowledge, no Default
or Potential Default has occurred or is existing (or, if a Default or Potential
Default exists, a description of such Default or Potential Default and the
action being taken or proposed to be taken with respect thereto) has been given
to Lender; (iv) to the best of Borrower's knowledge, there exists no event or
occurrence including any litigation or proceeding affecting Borrower, which has
caused or would cause any Material Adverse Effect on (a) the business, assets,
financial conditions, results of operations, or cash flow of Borrower, taken as
a whole, in each case from that represented to exist in the financial
statements that have been furnished to Lender, or (b) the current or
prospective ability of Borrower to perform any of its payment or other material
obligations under the Restated Loan Agreement and each other Restated Loan
Document; and (v) all action necessary to be taken

                                      -6-
<PAGE>   9
by Borrower's Board of Directors has been taken to authorize and approve this
First Modification Agreement.

     5.2 No Waiver. By entering into this First Modification Agreement, Lender
does not waive any existing Default or any Default hereafter occurring, or
become obligated to waive any condition or obligation in any agreement between
or among the parties hereto.

     5.3 Miscellaneous. Borrower agrees: (a) to provide Lender with all other
documents reasonably required by Lender to give effect to this First
Modification Agreement; (b) this First Modification Agreement is not intended
for and shall not be construed for the benefit of any party not a signatory
hereto; (c) this First Modification Agreement shall be binding upon, and inure
to the benefit of the parties hereto and their respective successors and
assigns; (d) this First Modification Agreement constitutes the entire agreement
(including all representations and promises made) among the parties with
respect to the subject matter hereof and no modification or waiver shall be
effective unless in writing and signed by the party to be charged; and (e) time
is of the essence hereof.

DATED as of the day first above written.

IMPERIAL BANK,                             INTEGRATED INFORMATION SYSTEMS, INC.,
a California banking corporation           an Arizona corporation
By: /s/ R. Mark Chambers                   By: /s/ James A. Garvey
    ----------------------------------         ---------------------------------
Its     Vice President                     Its     CEO & President
    ----------------------------------         ---------------------------------

                                      -7-

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