2
EXHIBIT 4.5
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION ("BLUE SKY LAWS"), AND CANNOT BE RESOLD UNLESS THEY ARE REGISTERED
UNDER THE ACT AND ANY APPLICABLE BLUE SKY LAWS, UNLESS AN EXEMPTION IS
AVAILABLE. THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.
INTEGRATED INFORMATION SYSTEMS, INC.
WARRANT TO PURCHASE 8,335 SHARES OF COMMON STOCK
Dated: December 31, 2002
This certifies that, for value received, Xxxxx X. Xxxxxx, Xx. ("Xxxxxx"),
or his registered assigns, are entitled to purchase from Integrated Information
Systems, Inc., a Delaware corporation (the "Company"), having its principal
office at 0000 Xxxx 00xx Xxxxxx Xxxxx, Xxxxxxx 00000, Eight Thousand Three
Hundred Thirty Five (8,335) fully paid and non-assessable shares of the $0.001
par value common stock of the Company (the "Common Stock"), subject to the terms
set forth herein. This Warrant shall be exercisable, as provided in Section 2,
at an exercise price equal to $5.00 per share, subject to adjustment as provided
elsewhere herein (the "Warrant Price"). The holder(s) of this Warrant, whether
the initial holder of this Warrant and/or a registered assign, shall be referred
to herein as the "Warrantholder."
1. CONSIDERATION. Pursuant to a Limited Continuing Guaranty (the
"Xxxxxx Guaranty"), Xxxxxx has personally guaranteed up to $1,000,000 of the
Company's indebtedness to AnchorBank, fsb ("Anchor") under a promissory note
dated as of January 25, 2002, as modified, and under a Business Manager
Agreement. This Warrant is issued in partial consideration of the Xxxxxx
Guarantee.
2. EXERCISE. The purchase rights represented by this Warrant may be
exercised by the Warrantholder or its duly authorized attorney or
representative, in whole or in part (but not as to less than 1,000 shares at any
one time (unless there are less than 1,000 shares represented by this Warrant at
the time of exercise, in which case the Warrant shall be exercisable for the
entire remaining shares, and not as to any fractional share of Common Stock), at
any time and from time to time during the period commencing on the date of this
Warrant (the "Commencement Date") and expiring at 5:00 p.m., local Arizona time,
on the later of (i) one year after the Xxxxxx Guaranty expires or is otherwise
cancelled or (ii) five years from the date hereof (the "Expiration Date'), upon
presentation of this Warrant at the principal office of the Company, with the
purchase form attached hereto duly completed and signed, and upon payment to the
Company in cash or by certified check or bank draft of an amount equal to the
number of shares being so purchased multiplied by the Warrant Price; provided,
however, that the Company shall provide Xxxxxx written notice at least 30 days
prior to the Expiration Date of Xxxxxx'x rights to exercise said Warrant, said
notice being a condition precedent to the termination of said rights. The
Company agrees that the Warrantholder will be deemed the record owner of such
shares as of the close of business on the date on which the Warrant shall have
been presented and payment shall have been made for such shares as aforesaid.
Certificates for the shares of Common Stock so purchased shall be delivered to
the Warrantholder within a reasonable time, not exceeding 20 days, after the
exercise in full of the rights represented by this Warrant.
3. EXERCISE IN PART. If the Warrant is exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, deliver a new Warrant
evidencing the rights of the Warrantholder to purchase the balance of the shares
of Common Stock which the Warrantholder is entitled to purchase hereunder.
4 EXCHANGE. Subject to the provisions of Section 8, this Warrant is
exchangeable at the option of the Warrantholder at the principal office of the
Company for other Warrants of different denominations entitling the
Warrantholder to purchase the same aggregate number of shares of Common Stock as
are purchasable hereunder. In either case, any alterations shall be made upon
presentation, at the principal office of the Company, of the Warrant(s),
together with a written notice signed by the Warrantholder specifying the names
and denominations in which any new Warrants are to be issued and the payment of
any transfer tax due in connection therewith.
5. ADJUSTMENT.
A. NUMBER OF SHARES. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, the number of shares of Common Stock purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Warrantholder
shall be entitled to receive the kind and number of shares of Common Stock or
other securities of the Company which the Warrantholder would have owned or have
been entitled to receive at the happening of any of the events described above,
had such Warrant been exercised immediately prior to the happening of such event
or any record date with respect thereto.
B. WARRANT PRICE. Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted, as herein provided,
the Warrant Price shall be adjusted by multiplying such Warrant Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of shares of Common Stock purchasable upon the exercise of this
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares of Common Stock so purchasable immediately thereafter.
C. EFFECTIVE DATE OF ADJUSTMENT. An adjustment made pursuant to
this Section 5 shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
D. TREASURY STOCK. For the purpose of any computation under this
Section 5, the number of shares of Common Stock deemed outstanding at any given
time does not include shares owned or held by or for the account of the Company.
E. CONTINUING ADJUSTMENTS. In the event that at any time, as a
result of an adjustment made pursuant to Section 5.a above, the Warrantholder
shall become entitled to purchase any shares of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable upon
exercise of this Warrant and the Warrant Price with respect to such shares shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
purchasable upon exercise of this Warrant, and the balance of the provisions of
this Warrant shall apply on like terms to any such other shares.
F. FRACTIONAL SHARES. In the event of any adjustment, no
fractional shares of Common Stock shall be issued in connection with the
exercise of any Warrants, but the Company shall, in lieu of such fractional
shares, make such cash payment therefor on the basis of the current market price
on the day immediately prior to exercise.
G. MERGER, SALE. In case of any change in the Common Stock
through merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure of the Company or in
the case of a sale or other transfer of its property, assets, and business
substantially as an entirety to another person or entity, appropriate adjustment
shall be made so that the Warrantholder shall have the right thereafter to
receive upon the exercise of this Warrant the amount of shares of Common Stock
or other securities which such holder would have been entitled to receive if
immediately prior to such event, such holder had held the number of shares of
Common Stock which were then purchasable upon the exercise of this Warrant.
Appropriate adjustment shall be made in the application of the provisions of
this Warrant (including the provisions relating to adjustment of the Warrant
Price) so that the provisions set forth herein shall thereafter be applicable,
as nearly as reasonable, to any shares of stock or other securities thereafter
deliverable upon the exercise of this Warrant.
6. COVENANTS OF THE COMPANY. The Company covenants and agrees that:
A. RESERVE OF COMMON STOCK. During the period within which the
rights represented by the Warrant may be exercised, the Company will at all
times reserve and keep available, free from preemptive rights out of the
aggregate of its authorized but unissued Common Stock, for the purpose of
enabling it to satisfy any obligation to issue shares of Common Stock upon the
exercise of this Warrant, the number of shares of Common Stock deliverable upon
the exercise of this Warrant. If at any time the number of shares of authorized
Common Stock shall not be sufficient to effect the exercise of this Warrant, the
Company will take such corporate action as may be necessary to increase its
authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purpose. The Company shall have analogous obligations with
respect to any other securities or properties issuable upon exercise of this
Warrant;
B. VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE SHARES. All
Common Stock that may be issued upon exercise of the rights represented by this
Warrant will, upon issuance, be validly issued, fully paid, nonassessable, and
free from all taxes, liens, and charges with respect to the issue thereof;
C. TAXES. All original issue taxes payable with respect to the
issuance of shares upon the exercise of the rights represented by this Warrant
will be borne by the Company but in no event will the Company be responsible or
liable for income taxes or transfer taxes upon the transfer of any Warrant; and
D. NOTICES. The Company will give notice to the Warrantholder of
(i) any tender offer that is being made for shares of the Company's Common Stock
or (ii) any capital reorganization of the Company, reclassification of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, the sale, lease or transfer of all or substantially
all of the property or assets of the Company to another corporation or the
voluntary or involuntary dissolution, liquidation or winding up of the Company
(all such events in (i) and (ii) above are referred to as "Events"). The notice
shall be delivered no later than five business days after the day the Company
becomes aware of the Event and shall describe the Event, the date it is to take
place and when the holders of Common Stock will be entitled to exchange their
shares for securities or other properties deliverable upon such Event.
7. NO VOTING RIGHTS. Until exercised, this Warrant shall not entitle
the Warrantholder to any voting rights or other rights as a stockholder of the
Company.
8. TRANSFER.
A. ISSUANCE OF WARRANT. If this Warrant is transferred, in whole
or in part, upon surrender of this Warrant to the Company, the Company shall
deliver to each transferee a Warrant evidencing the rights of such transferee to
purchase the number of shares of Common Stock that such transferee is entitled
to purchase pursuant to such transfer.
B. RESTRICTION. This Warrant and the Common Stock issuable upon
the exercise hereof may not be sold, transferred, pledged or hypothecated unless
the Company shall have been supplied with evidence reasonably satisfactory to it
that such transfer is not in violation of the Securities Act of 1933, as amended
(the "Act") and any applicable state laws. Subject to the satisfaction of the
aforesaid condition, this Warrant shall be transferable by the Warrantholder.
C. LEGEND. The Company may place a legend on this Warrant or any
replacement Warrant and on each certificate representing securities issuable
upon exercise of this Warrant as to which the Company has not been supplied
evidence that a subsequent transfer of such security would not be in violation
of the Act and any applicable state laws.
9. SUBSEQUENT ISSUANCE OF WARRANT(S). If this Warrant (including,
without limitation, upon transfer, exchange, division or partial exercise of
this Warrant) is lost, stolen, mutilated or destroyed, the Company shall, on
such terms as the Company may reasonably impose, including a requirement that
the Warrantholder obtain a bond, issue a new Warrant of like denomination,
tenor, and date. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone. Any Warrant
issued pursuant to the provisions of this Section 9, or upon transfer, exchange,
division or partial exercise of this Warrant, shall be substantially in the form
hereof and shall be duly executed on behalf of the Company by an executive
officer.
10. CANCELLATION. Upon surrender of this Warrant for transfer or
exchange or upon the exercise hereof, this Warrant shall be canceled by the
Company, shall not be reissued by the Company, and, except as provided in
Sections 2 and 3 in case of partial exercise, in Section 4 in case of an
exchange or in Section 8.a in case of a transfer, no Warrant shall be issued in
lieu hereof. Any new Warrant certificate shall be issued promptly but no later
than seven days after receipt of the old warrant certificate; provided, however,
that the obligation of the Company to transfer the Warrant or issue the shares
of Common Stock upon the exercise of this Warrant shall be subject at all times
to compliance with Sections 8.b and 8.c.
11. SUCCESSORS AND ASSIGNS. This Warrant shall inure to the benefit of
and be binding upon the Warrantholder, the Company, and their respective
successors and assigns.
12. NOTICES. All notices required hereunder shall be in writing and
shall be deemed received when delivered personally, one business day after
delivery to a nationally recognized commercial overnight courier service, or
three business days after mailing when mailed by certified or registered mail to
the Company or the Warrantholder at the address set forth on the first page of
this Warrant, or at such other address of which the Company or Warrantholder has
been advised by notice hereunder.
13. GOVERNING LAW. The validity, interpretation, and performance of
this Warrant and of the terms and provisions hereof shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to the principles of conflicts of laws.
14. MODIFICATION. This Warrant may not be modified, amended, altered
or supplemented without the approval of a majority in interest of the holders of
the Warrants and except upon the execution and delivery of a written agreement
executed by the Company and the Warrantholder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
effective as of December 31, 2002.
INTEGRATED INFORMATION SYSTEMS, INC.,
A DELAWARE CORPORATION
BY: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Its: Chief Financial Officer
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, ______________________ hereby sells, assigns and
transfers to ____________________________ the within Warrant, together with all
rights, title, and interest therein, and does hereby irrevocably constitute and
appoint _______________________ as the undersigned's attorney to transfer such
Warrant on the register of the within-named Company, with full power of
substitution.
[NAME OF XXXXXX]
By:
Name:
Its:
Dated:
SIGNATURE GUARANTEED:
PURCHASE FORM
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby exercises the right to purchase shares of
Common Stock, evidenced by the within Warrant, according to the terms and
conditions thereof, and herewith makes payment (in cash or by certified check or
bank draft) of the purchase price in full. The undersigned requests that
certificate(s) for such shares shall be issued in the name set forth below.
[NAME OF XXXXXX]
By:
Name:
Its:
Dated:
Address:
Employer Identification No., Social Security
No. or other identifying number:
If the number of shares specified above shall not be all the shares
purchasable under the within warrant, the Warrantholder hereby requests that a
new Warrant for the unexercised portion shall be registered in the name set
forth below and delivered to the address set forth below.
Name:
Address:
Employer Identification No., Social Security
No. or other identifying number:
