-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VHvjArrsP4O7KmbxUrESGS4x+epe4LhXhrAGNnZBLEtYEgoEpWqDzc1JOTUceSnQ Uq8HJRaZnkyblTsdprtDdA== 0001014108-03-000107.txt : 20030815 0001014108-03-000107.hdr.sgml : 20030815 20030814182110 ACCESSION NUMBER: 0001014108-03-000107 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 20030813 FILED AS OF DATE: 20030815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOVATIVE SOFTWARE TECHNOLOGIES INC CENTRAL INDEX KEY: 0001084047 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 954691878 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27465 FILM NUMBER: 03849162 BUSINESS ADDRESS: STREET 1: 5072 NORTH 300 WEST CITY: PROVO STATE: UT ZIP: 84604 BUSINESS PHONE: 801-371-0755 MAIL ADDRESS: STREET 1: 5072 NORTH 300 WEST CITY: PROVO STATE: UT ZIP: 84604 10QSB/A 1 ist-form10qsba_574319v7.txt FORM 10-QSB/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB/A (Amendment No. 1) (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT Commission File Number: 000-1084047 INNOVATIVE SOFTWARE TECHNOLOGIES, INC. -------------------------------------- (Exact name of small business issuer as specified in its charter) California 95-4691878 - --------------------------------- --------------------------------- (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 5072 North 300 West ------------------- Provo, UT 84604 --------------- (Address of principal executive offices) (801) 371-0755 -------------- (Issuer's telephone number) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or such shorter period that the Registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days. Yes X No There were 52,897,186 shares of common stock, $0.001 par value, outstanding as of August 14, 2003. This amendment is being filed to include exhibits that were inadvertently omitted from the original filing on Form 10-QSB for the fiscal quarter ended June 30, 2003. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this amendment to the report to be signed on its behalf by the undersigned, thereunto duly authorized. Innovative Software Technologies, Inc. Date: August 14, 2003 /s/ Douglas S. Hackett ---------------------- Douglas S. Hackett President, Chief Executive Officer and Director /s/ Linda W. Kerecman ---------------------- Linda W. Kerecman Chief Financial Officer INDEX TO EXHIBITS ----------------- Exhibit Number Description - ------ ----------- 3.1 Amendment to the Articles of Incorporation of Innovative Software Technologies, Inc. 3.2 Articles of Incorporation of Innovative Software Technologies, Inc., as amended. 3.3 Certificate of Designation of the Series A Preferred Stock of Innovative Software Technologies, Inc. (incorporated by reference from Exhibit 2.2 to the Company's Current Report on Form 8-K/A filed March 14, 2002). 3.4 Certificate of Designation of the Series B Preferred Stock of Innovative Software Technologies, Inc. 3.5 By-laws of Innovative Software Technologies, Inc. (incorporated by reference from Exhibit 3(b) to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999). 4.1 Specimen Certificate of Common Stock (incorporated by reference from Exhibit 4(a) to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999). 4.2 Articles FOURTH and FIFTH of the Articles of Incorporation of Innovative Software Technologies, Inc., as amended (incorporated by reference from Exhibit 3.2 to this Quarterly Report on Form 10-QSB). 4.3 Certificate of Designation of the Series A Preferred Stock of Innovative Software Technologies, Inc. (incorporated by reference from Exhibit 2.2 to the Company's Current Report on Form 8-K/A filed March 14, 2002). 4.4 Certificate of Designation of the Series B Preferred Stock of Innovative Software Technologies, Inc. (incorporated by reference from Exhibit 3.4 to this Quarterly Report on Form 10-QSB). 4.5 Sections 3 - 17, 28, 39 - 46 and 51 - 53 of the By-laws of Innovative Software Technologies, Inc. (incorporated by reference from Exhibit 3(b) to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999). 4.6 Financing Agreement dated January 25, 2001 among Iwasaka Investments Limited, Shane Hackett and Hackett Media, Inc. Executive Compensation Plans and Arrangements: Exhibits 10.2, 10.3, 10.4, 10.5 and 10.6 to the Quarterly Report on Form 10-QSB for fiscal quarter ended June 30, 2003 10.1 Opportunity and Strategic Alliance Agreement dated September 1, 2002 by and between Energy Professional Marketing Group, Inc. and Education Success, Inc. 10.2 Employment Agreement dated April 15, 2001 between Innovative Software Technologies, Inc. and Douglas S. Hackett. 10.3 Employment Agreement dated December 31, 2001 between Energy Professional Marketing Group, Inc. and James R. Garn. 10.4 Amendment dated July 15, 2002 to the Employment Agreement between Energy Professional Marketing Group, Inc. and James R. Garn. 10.5 Employment Agreement dated December 31, 2001 between Energy Professional Marketing Group, Inc. and Ethan A. Willis. 10.6 Amendment dated July 15, 2002 to the Employment Agreement between Energy Professional Marketing Group, Inc. and Ethan A. Willis. 10.7 Indemnity Agreement dated August 17, 2001 between Innovative Software Technologies, Inc. and Douglas Shane Hackett. 10.8 Indemnity Agreement/Hold Harmless Agreement dated August 17, 2001 among Innovative Software Technologies, Inc. and Scott Mehaffey, Shawn M. Thomas, Margie Hackett and Douglas S. Hackett. 10.9 Indemnity Agreement dated August 17, 2001 between Innovative Software Technologies, Inc. and Margie Hackett. 10.10 Indemnity Agreement dated August 17, 2001 between Innovative Software Technologies, Inc. and Scott Mehaffey. 10.11 Indemnity Agreement dated August 17, 2001 between Innovative Software Technologies, Inc. and Margie Hackett. 10.12 Indemnity Agreement dated August 17, 2001 between Innovative Software Technologies, Inc. and Shawn M. Thomas. 10.13 Indemnity Agreement dated January 9, 2002 among Innovative Software Technologies, Inc. and Ethan Willis and Randy Garn. 10.14 Indemnity Agreement dated August 16, 2002 among Innovative Software Technologies, Inc. and Ethan Willis and Randy Garn. 10.15 Indemnity Agreement dated August 15, 2002 among Innovative Software Technologies, Inc. and Douglas Shane Hackett. 21 Subsidiaries of the Registrant. 31.1 Certification of Chief Executive Officer of Innovative Software Technologies, Inc. dated August 14, 2003. 31.2 Certification of Chief Financial Officer of Innovative Software Technologies, Inc. dated August 14, 2003. 32.1 Certification of Chief Executive Officer of Innovative Software Technologies, Inc. dated August 14, 2003, which is accompanying this Quarterly Report on Form 10-QSB for the quarter ended June 30, 2003 and is not treated as filed in reliance on Section 601(b)(32) of Regulation S-B. 32.2 Certification of Chief Financial Officer of Innovative Software Technologies, Inc. dated August 14, 2003, which is accompanying this Quarterly Report on Form 10-QSB for the quarter ended June 30, 2003 and is not treated as filed in reliance on Section 601(b)(32) of Regulation S-B. EX-3.1 3 ist-ex31_580761.txt AMENDMENT TO ARTICLES Exhibit 3.1 AMENDMENT TO ARTICLES OF INCORPORATION OF INNOVATIVE SOFTWARE TECHNOLOGIES, INC. On August 8, 2001, Innovative Software Technologies, Inc. filed a Certificate of Amendment of Articles of Incorporation with the California Secretary of State, certifying that Article FIFTH of the Articles of Incorporation was amended to read as follows: ARTICLE FIVE The total number of shares of stock which the corporation shall have the authority to issue 125,000,000 consisting of 100,000,000 shares of Common Stock, $0.001 par value share ("Common Stock"), and 25,000,00 shares of Preferred Stock, having no par value per share (the Preferred Stock). Dividends may be paid upon the Common Stock as and when declared by the Board of Directors of the Corporation out of any funds legally available therefore. The rights, preferences, privileges and restrictions granted to or imposed upon the Preferred Stock will later be determined by the board of directors. EX-3.2 4 ist-ex32_580273.txt ARTICLES OF INCORPORATION AS AMENDED Exhibit 3.2 ARTICLES OF INCORPORATION OF INNOVATIVE SOFTWARE TECHNOLOGIES, INC. FIRST: The name of the corporation (hereinafter referred to as "the corporation") is: INNOVATIVE SOFTWARE TECHNOLOGIES, INC. SECOND: The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. THIRD: The name and address in the State of California of this corporation's initial agent for service of process is: MARIO SAPO27306 N. Sara Street, #201 Canyon Country California 91351 FOURTH: The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. FIVE: The total number of shares of stock which the corporation shall have the authority to issue 125,000,000 consisting of 100,000,000 shares of Common Stock, $0.001 par value share ("Common Stock"), and 25,000,00 shares of Preferred Stock, having no par value per share (the Preferred Stock). Dividends may be paid upon the Common Stock as and when declared by the Board of Directors of the Corporation out of any funds legally available therefore. The rights, preferences, privileges and restrictions granted to or imposed upon the Preferred Stock will later be determined by the board of directors. EX-3.4 5 ist-ex34_579929.txt CERT OF DESIGNATION Exhibit 3.4 CERTIFICATE OF DESIGNATION, NUMBER, POWERS PREFERENCES AND RELATIVE, PARTICIPATING OPTIONAL, AND OTHER SPECIAL RIGHTS AND THE QUALIFICATIONS, LIMITATIONS, RESTRICTIONS, AND OTHER DISTINGUISHING CHARACTERISTICS OF SERIES B PREFERRED STOCK OF INNOVATIVE SOFTWARE TECHNOLOGIES, INC. It is hereby certified that: 1. The name of the corporation (hereinafter called the "Corporation") is Innovative Software Technologies, Inc. 2. The certificate of incorporation of the Corporation authorizes issuance of 25,000,000 shares of Preferred Stock with a par value to be determined by the Board of Directors and expressly vests in the Board of Directors of the Corporation the authority provided therein to issue any or all of said shares in one or more series and by resolution or resolutions, the designation, number, full or limited voting powers, or the denial of voting powers, preferences and relative participating, optional, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics of each series to be issued. 3. The Board of Directors of the Corporation, pursuant to the authority expressly vested in it as aforesaid, has adopted the following resolutions creating a Series B issue of Preferred Stock: RESOLVED, that Three million (3,000,000) shares of the Preferred Stock (stated value $1.00 per share) are authorized to be issued by this Corporation pursuant to its certificate of incorporation, and that there be and hereby is authorized and created a series of preferred stock, hereby designed as the Series B Preferred Stock, which shall have the voting powers, designations, preferences and relative participating, optional or other rights, if any, or the qualifications, limitations, or restrictions, set forth in such certificate of incorporation and in addition thereto, those following: (a) DESIGNATION. The Preferred Stock subject hereof shall be designated Series B Preferred Stock ("Series B Preferred"). No other shares of Preferred Stock shall be designated as Series B Preferred stock. (b) DIVIDENDS. The holders of the shares of Series B Preferred Stock shall be entitled to receive dividends at the rate of 4% per annum of the liquidation preference per share payable yearly in fully paid and non-assessable shares of the Corporation's common stock. The number of shares of common stock to be distributed, as a dividend will be calculated by dividing such payment by 95% of the Average Market Price on the first five trading days after January 1 of each year. The term "Market Price" means, as of any date, the daily closing price on such date. Delivery of such shares of common stock shall be made not later than January 15 of each year. The closing price for each day shall be the last sales price or in case no such reported sales take place on such day, the average of the last reported bid and asked price, in either case, on the national securities exchange on which the shares of common stock are admitted to trading or listed, or if not listed or admitted to trading on such exchange, the representative closing bid price as reported by the NASDAQ National Market, or other similar organization if the NASDAQ National Market is no longer reporting such information, the OTC Bulletin Board, or if not so available, the fair market price as determined, in good faith, by the Board of Directors of the Company. No dividends may be declared or paid any other outstanding Corporation securities unless all dividends on the Series B Preferred and any other shares of Preferred Stock on a parity with the Series B Preferred have been declared and paid in full through the immediately preceding dividend date. The holders of the Series B Preferred at the close of business on January 1 of each year will be entitled to receive the dividend on the dividend payment date. (c) CONVERSION. The Series B Preferred shall, at the option of the holder thereof, at any time and from time to time, be convertible into that number of fully paid and non-assessable shares of the common stock of the Corporation, equal to the stated value of the shares of Series B Preferred Stock being converted plus accrued but unpaid dividends, divided by 95% of the Market Price (as that term is defined above) of the Corporation's common stock at the time of conversion. Subject to the provisions of (d) and (e), below, in no event shall the holders of the Series B Preferred Stock be entitled to receive more than 3,000,000 shares of common stock upon conversion of the Series B Preferred Stock. The conversion right of the holders of Series B Preferred Stock shall be exercised by the surrender of the certificates representing shares to be converted to the Corporation or its transfer agent for the Series B Preferred, accompanied by written notice electing conversion. Immediately prior to the close of business on the date the Corporation receives written notice of conversion, each converting holder of Series B Preferred shall be deemed to be the holder of record of common stock issuable upon conversion of such holder's Series B Preferred notwithstanding that the share register of the Corporation shall then be closed or that certificates representing such common stock shall not then be actually delivered to such person. When shares of Series B Preferred are converted, all accumulated and unpaid dividends (whether or not declared or currently payable) on the Series B Preferred so converted, to and not including the conversion date, shall be due and payable. The conversion price shall be subject to adjustment if any of the events described in the next paragraph of this paragraph (c) occurs. The adjustment will be accomplished from time to time as described in the following paragraph. (d) ADJUSTMENTS TO CONVERSION PRICE FOR STOCK DIVIDENDS AND FOR COMBINATIONS OR SUBDIVISIONS OF COMMON STOCK. In the 2 event that the Corporation at any time or from time to time after the date of the filing of this Certificate shall declare or pay, without consideration, any dividend on the common stock or in any right to acquire common stock for no consideration, or shall effect a subdivision of the outstanding shares of common stock into a greater number of shares of common stock (by stock split, reclassification or otherwise than by payment of a dividend in common stock or in any right to acquire common stock), or in the event the outstanding shares of common stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of common stock, then the Market Price, before such event used to calculate dividends and the conversion rate, shall be proportionately decreased or increased, as appropriate. (e) ADJUSTMENTS FOR RECLASSIFICATION AND REORGANIZATION. If the common stock issuable upon conversion of the Series B Preferred shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for in (d) above), the Market Price shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted so that the Series B Preferred shall be convertible into, in lieu of the number of shares of common stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of common stock that would have been subject to receipt by the holders upon conversion of the Series B Preferred immediately before that change. (f) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If at any time or from time to time after the date of this Certificate, there is a capital reorganization of the common stock (other than as subdivision, combination or reclassification of shares provided for in (d) and (e), above), as a part of such capital reorganization, provision shall be made so that the holders of the Series B Preferred shall thereafter be entitled to receive upon conversion of the Series B Preferred the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of common stock deliverable upon conversion would have been entitled on such capital reorganization. In any case, appropriate adjustment shall be made in the application of the provisions of (b), (c) and (f) with respect to the rights of the holders of Series B Preferred after the capital reorganization to the end that the provisions of (b), (c) and (f) (including adjustment of the Market Price then in effect and the number of shares issuable upon conversions of the Series B Preferred) shall be applicable after that event and be as nearly equivalent as practicable. (g) NO IMPAIRMENT. The Corporation will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith 3 assist in the carrying out all the provisions of this Certificate and in the taking of all such action as may be necessary or appropriate in order to protect the dividend and conversion rights of the holders of the Series B Preferred against impairment. (h) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each adjustment or readjustment of the Market Price pursuant to this Certificate, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series B Preferred a certificate executed by the Corporation's president or Chief Financial Officer setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series B Preferred, furnish or cause to be furnished to such holder a like certificate setting forth such adjustments and readjustments. (i) ISSUE TAXES. The Corporation shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of shares of common stock on conversion of Series B Preferred pursuant hereto; provided, however, that the Corporation shall no be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of common stock, solely for the purpose of effecting the conversion of the shares of the Series B Preferred, such number of its shares of common stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series B Preferred; and if at any time the number of authorized but unissued shares of common stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Preferred, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of common stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate. (k) FRACTIONAL SHARES. No fractional share shall be issued upon the conversion of any shares or shares of Series B Preferred. All shares of common stock (including fractions thereof) issuable upon conversion of more than one share of Series B Preferred by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of a fraction of a share of common stock, the Corporation shall, in lieu of issuing any fractional share, pay the holder otherwise entitled to such fraction a sum in cash equal to the Market Price of such fraction on the date of conversion. (l) REDEMPTION. The Series B Preferred may be redeemable by the Corporation at any time at the rate of $1.00 per share plus accrued and unpaid dividends. The 4 redemption price is payable in shares of the Corporation's common stock within 45 days after the delivery by the Corporation to each holder of Series B Preferred of a written redemption notice. If redeemed, each holder of redeemed Series B Preferred shall deliver to the Corporation the certificates evidencing the redeemed Series B Preferred. Upon receipt of the redemption notice, the holders of the Preferred Stock shall have 30 days to convert the Series B Preferred Stock into common stock at the conversion rate set forth in (c), above. (m) SINKING FUND. No provision shall be made for any sinking fund. (n) LIQUIDATION RIGHTS. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Series B Preferred shall be entitled to receive $1.00 per share before the holders of common shares and any other class or series of preferred stock (other than a class or series created after the date hereof which is entitled to share ratably with the Series B Preferred in the payment of dividends or shall, in the event the amounts payable thereon in liquidation are not paid in full, be entitled to share ratably with the Series B Preferred in any other distribution of assets, which class or series is hereinafter referred to as "Pari Passu Stock") receive any amount as a result of liquidation, dissolution or winding up of the Corporation. If the assets to be distributed among the holders of the Series B preferred and any Pari Passu Stock are insufficient to permit the Corporation to pay the full amount of the liquidation preference, the Corporation shall distribute its assets among the holders of the Series B Preferred and Pari Passu Stock ratably based on the respective amounts otherwise payable to them. The purchase or redemption by the Corporation of stock of any class, in any number permitted by law, shall not for the purpose of this paragraph be regarded as a liquidation, dissolution or winding up of the Corporation. The Corporation shall not create, authorize, or issue any shares of stock, which are superior in preference to dividends or liquidation proceeds to the Series B Preferred. (o) INVOLUNTARY LIQUIDATION. In the event of involuntary liquidation, the shares of this series shall be entitled to the same amounts as in the event of voluntary liquidation. (p) PREFERENCE TO DIVIDEND. No dividends shall be declared or paid on the common stock of the Corporation before all accumulated dividends on the Series B Preferred Stock have been paid. (q) OTHER RESTRICTIONS. There shall be no conditions or restrictions upon the creation of indebtedness of the Corporation, or any subsidiary or upon the creation of any other series of preferred stock with any other preferences. (r) VOTING. Each holder of shares of Series B Preferred shall be entitled to one vote per share of Series B Preferred (except as otherwise expressly provided herein or as required by law, voting together with the Common Stock as a single class) and shall be entitled to notice of any stockholders' meeting in accordance 5 with the Bylaws of the Corporation. If any of the events described in (d), (e), or (f) above occur, the number of votes to which the holders of the Series B Preferred are entitled shall be adjusted, as appropriate, to preserve their voting power. (s) STATED VALUE. The shares of Series B Preferred shall have a stated value of $1.00 per share. (t) OTHER PREFERENCES. The shares of the Series B Preferred shall no other preferences, rights, restrictions, or qualifications, except as otherwise provided by law or the certificate of incorporation of the Corporation. FURTHER RESOLVED, that the statements contained in the foregoing resolution creating and designating the said Series B Preferred Stock and fixing the number, powers, preferences and relative, optional, participating, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics thereof shall, upon the effective date of said series, be deemed to be included in and be a part of the certificate or incorporation of the Corporation. Signed on March 1, 2002 /s/ D. Shane Hackett /s/ Shawn M. Thomas President Secretary Douglas Shane Hackett Shawn Michael Thomas 6 EX-4.6 6 ist-ex46_575030.txt FINANCING AGREEMENT 1/25/01 Exhibit 4.6 FINANCING AGREEMENT THIS AGREEMENT, dated for reference January 25, 2001, is among Iwasaka Investments Limited of, 12th Floor, 11 Duddel Street, Central, Hong Kong (IIL), and Shane Hackett (the Principal) and Hackett Media, Inc. (H.M.I.). WHEREAS, IIL has agreed to organize up to a 2.5 million financing of H.M.I. through a company publicly traded, and the Shareholders of H.M.I. have agreed to exchange all of their shares in H.M.I. for shares in the new public company ("Parent"). FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are acknowledged, the parties agree to the following: INTERPRETATION 1. The definitions in the recital are part of this agreement 2. In this agreement: a. "Acquisition Agreement" means the acquisition attached as Exhibit A. b. "Acquisition shares" means 13,527,950 of the Parent shares as defined in the Acquisition Agreement. c. "Business Plan" means the business plan of the H.M.I., shareholders dated as of January 1, 2001. d. "Closing" means February 1, 2001, or later date in accordance with the terms of this agreement. e. "Escrow Agent" means 3rd party escrow for the H.M.I. shareholders shares f. "Financial Statements" means the management-prepared financial statements of H.M.I. dated December 31, 2000, prepared in accordance with accounting principles and practices generally accepted in the United States. g. "Financing" means 2.5 million dollars for the development of H.M.I. as described in the Business Plan and for the development of H.M.I. h. "Parent" means a company whose shares are quoted and publicly traded. i. "Principals' Shares" means the Principals entire interest in H.M.I. j. "Restricted Shares" means 5,000,000 common shares of the Parent owned by principals subject to the trading restrictions of Rule 144 and escrow. k. "Rule 144" means Rules 144 of the United States securities Act of 1933. l. "Term" means thirty six months from Closing. m. "$" means United States dollars. TERMS AND CONDITIONS OF THE FINANCING The Parent 3. I.I.L. will organize the Parent for the purpose of this agreement, and will ensure that the Parent has an authorized capital of at least 20,000,000 shares, has no liabilities or potential liabilities exceeding $5,000 dollars, and is in good standing in, and complies with the laws of its incorporation jurisdiction. 4. The Parent will have approx. 15.5 million shares outstanding when the reorganization is completed, not accounting for the finance shares. IIL will arrange to have the Restricted Shares transferred to the parties set out in Exhibit B of this Agreement. 5. The parent will change its name following the Closing to H.M.I. or other name adopted by Parent's Board of Directors. 6. The parent must apply to Standard and Poor's for a manual exemption as soon as possible if applicable. Advancing and Financing 7. I.I.L. will provide equity capital by arranging for subscriptions to the finance shares at a price of $.50 per share using only accredited investors. 8. I.I.L. will arrange for the Financing to be advanced to the Parent in the minimum increments set out in Table 1. The Parent will issue the appropriate number of Shares as each stage of the Financing is completed. 100,000 February 15, 2001 (Loan) can convert to common @.50 per share 150,000 March 30, 2001 (Loan) at lenders diccression Table No. 1 Table No. 2 100,000 April 30th 2001 1,500,000 per expansion 100,000 May 30th 2001 needs based on review of 100,000 June 30th 2001 H.M.I.'s performance and 100,000 July 30th 2001 on a best efforts basis 100,000 August 30th 2001 100,000 September 30th 2001 100,000 October 30th 2001 50,000 November 30th 2001 TOTAL 1,000,000 9. If the closing is delayed, then each date of forwarding capital in Table 1 is delayed by the same number of days, and the payment due on Closing is due three business days after the Closing. 10. The Company will give I.I.L. the right of refusal to provide an additional three million dollars of Financing at 1/3 of the prevailing market price for a term of two years. If more than that amount of financing is needed, the Company will give a 2 written notice of the terms and conditions of its requirements and it's proposed use of proceeds at least two months before it requires the financing I.I.L. must notify the Company in writing within two weeks of its receipt of the Company's notice whether it intends to exercise its right to provide the financing. This right of first refusal ends if I.I.L. refuses to provide a specific financing. 11. Should the forwarding of capital, as described in table 1, be delayed I.I.L. must notify H.M.I. in writing two weeks prior to the due date. If H.M.I. has not received the capital per schedule two weeks after due date, as described in table 1, it will be considered in accordance with this agreement a breech of the agreement and shall revoke I.I.L. first right of refusal. INVESTOR RELATIONS 12. I.I.L. will conduct the Parent's investor and public relations during the Term under a Consulting Agreement to be mutually agreed upon. 13. The Principals will make themselves available to appear on reasonable notice before investment groups in North America, Europe and Asia, will provide the information and material that the Financing Group requests during the Term. DIRECTORS AND OFFICERS OF THE PARENT 14. The Principal, namely Shane Hackett, will become a director of the parent, and will hold the offices indicated as of the Closing day. The principals will add the appropriate person(s) at the appropriate time(s) to the Board of Directors by mutual consent. 15. Until H.M.I. becomes profitable, principal's salaries shall not exceed $120,000 for Shane Hackett and $80,000 for all other officers for the first year, and will increase by no more than 10% of total H.M.I. gross revenues at the end of the first and second year. Hackett shall receive 3 years employment agreement attached. 16. As conditions precedent to the advancing of the Financing as set out in table 1 a. H.M.I. will deliver true copies of its charter documents to I.I.L. b. H.M.I. and Principal will sign the Acquisition Agreement and the Principals will deliver the Principals' Shares and I.I.L. Shares to the Escrow Agent, duly endorsed for transfer to the parent in accordance with the terms of this agreement and the Acquisition Agreement. c. H.M.I. will deliver the Restricted Shares and the Acquisition Shares to the Escrow Agent, duly endorsed for transfer to the Parent in accordance with terms of this agreement found under the heading "Share Transfer." d. The representations and warranties of the Principals must be true and correct in all material respects. 3 THE SHARE TRANSFER 17. As consideration for the Principals' making this agreement, I.I.L. will arrange for the Restricted Shares to be transferred to the order of the Principals, when the Principals' Shares are transferred to the Parent. The Principals will instruct the Escrow Agent in writing of the names of the transferees to receive the Restricted Shares. 18. The Escrow Agent will deliver the Principals 5, million Restricted Shares, owned by the principals, as indicated of which 2.5, million will be held in escrow per the following schedule: 2,500,000 shares released at closing for Principals; 1,000,000 shares released when H.M.I. reaches sales of 7 million; 1,000,000 shares released when H.M.I. reaches sale of 14 million; and 500,000 shares released when H.M.I. reaches sales of 21 million. 19. H.M.I. will make the corporate changes necessary to complete this agreement and the Acquisition Agreement, if the forms of the corporate organizations do not permit the transfers contemplated by this agreement and the Acquisition Agreement. POSITIVE COVENANTS 20. During the Term, the parent, H.M.I. will; a. Maintain their corporate existence, b. Conduct their business in a prudent, reasonable and ethical businesslike manner in accordance with good business principles and practices, prudently manage their cash resources, and keep proper books or account in accordance with generally accepted accounting principles and practices. c. Deliver to I.I.L. at the end of each month a written report describing any strategic or material modifications of the Business Plan, which I.I.L. agrees not to disclose to a third party without the prior authorization of H.M.I. d. Deliver to I.I.L. by the twentieth day of each month their consolidated financial statements for the preceding month, consistence of a balance sheet, statement of operations, statement of changes in shareholders' equity, statement of cash flow, and notes to the financial statement, all prepared in accordance with the accounting principles and practices generally accepted in the United States and 4 e. I.I.L. will be granted the privilege of hiring outside bookkeeping services if mutually agreed to by the board and will bear the cost of such services. f. Deliver to I.I.L. any other information, which I.I.L. reasonably requests. THE PRINCIPALS 21. In the capacity of officers and directors the Principals will, at all times use their best efforts during the currency of the agreement; a. devote their best efforts to the business of H.M.I. and the Parent as full time employees, b. ensure that all of H.M.I. assets and liabilities are limited to H.M.I. and that the parent has no liabilities or potential liabilities except those that relate to the Parent's own administration and the liabilities that the parent must assume under this agreement, and c. if the principals are directors of the parent, ensure that the parent does everything that it is rightfully and lawfully obligated to do under this agreement. 22. Neither H.M.I. nor Parent during the Term, without the written consent of I.I.L. will; a. authorize the issuance of or issue any of its shares or other securities except those authorized by this agreement, b. authorize any changes to the Parent's charter documents. c. Cause any of its assets to be encumbered in excess of $250,000 as required by corporate leases etc. d. Grant any options to directors, officers and employees that may be exercised during the Term without the written consent of I.I.L. REPRESENTATIONS AND WARRANTIES I.I.L. 23. I.I.L. represents and warrants that it has the experience and expertise required to negotiate and finalize the Financing and to perform the Consulting Agreement. 24. The principals represent and warrant that: a. Nothing in the Business Plan is proprietary to any other person, and the principal's expertise and services to either H.M.I. or the parent are not an infringement of intellectual property rights owned by any person or company. 5 b. The business Plan truly and accurately reflects the business of H.M.I. and the intention of the Principals. 25. The Principals represent and warrant that they own the Principals' Shares free of any claim by any person and have the right to transfer them as described in this agreement and have not granted rights to acquire additional interest in H.M.I. to any other person or company. I.I.L. will provide H.M.I. with a written monthly report on the progress of Company share issuance and purchases as it is relative to H.M.I. THE PRINCIPALS H.M.I. 26. H.M.I. represents and warrants that: a. It is a company formed and in good standing under the laws of Florida. b. The only persons with any interest or potential interest in H.M.I. are the Principals, and no person has a right to acquire an interest that is outstanding. c. It has the legal capacity and authority to make and perform this agreement. d. Will conduct no other business. e. No claims against it or any of its members are before any court or regulatory authority, or are pending or threatened, and it is not aware of any ground for any claim that might succeed. OTHER PROVISIONS 27. The Principals and H.M.I. acknowledge that this agreement was prepared for them, and that it may contain terms and conditions onerous to them. They expressly acknowledge they have had adequate time to thoroughly review this agreement, and to seek and obtain independent legal advice, and they represent that they have in fact sought and obtained independent legal advice and are fully satisfied with all the terms and conditions of this agreement. 28. The Parent will pay out of the proceeds of the Financing all-legal and other costs in connection with the making and performing of the Agreement. 29. This is the entire agreement among the parties and replaces any earlier understandings and agreements whatsoever, whether written or oral. 30. Time is of essence of this agreement. 6 31. This agreement is governed by the laws of California and must be litigated in the courts of California. 32. Any notice that must be given or delivered under this agreement must be in writing, and delivered by hand to the address, or transmitted by fax to the fax number given for the party on page 1. Further, any such notice is deem3ed to have been received when it is either delivered by hand or transmitted by fax, unless the delivery or transmission is made after 4:00 p.m. or on a non-business day where it is received, in which case it is deemed to have been delivered or transmitted on the next business day. Any payments of money must be delivered by hand, or wired as instructed in writing by the receiving party. Any delivery of anything, other than written notice or money, must be delivered by hand receiving party's address. 33. Neither the Principals nor H.M.I. may assign this agreement or any part thereof to another party. 34. Any amendment to this agreement must be in writing and signed by the parties. 35. This agreement ensures to the benefit of, and binds the parties and their respective successors, heirs and permitted assignees. 36. No failure or delay by I.I.L. in exercising any right under this agreement operates as a waiver of the right. Rights under this agreement are cumulative, and do not preclude I.I.L. from either relying on or enforcing any legal or equitable right or remedy. 37. If any provision of this agreement is illegal or unenforceable under any given law, the remaining provisions remain legal and fully enforceable. 38. This agreement may be signed on counterparts and delivered to the parties via fax, and the counterparts together are deemed to be one original document. 7 The Parties' signatures below are evidence of their agreement. /s/ M. Yussuf /s/ Shane Hackett Iwasaka Investments Hackett Media, Inc. Limited Shane Hackett Muhammad Yussuf 8 - -Exhibit `B' Lytec Systems Inc Suite 103, Beaumont House, Baystreet, Nassau, Bahamas Colt Holdings Limited DeCastro Street, Road Town Tortola, British Virgin Islands Bowater Trading Limited 32 Butterfield Square, Providenciales, Turks and Caicos Islands Blackstone Management Inc P.O. Box 1572, Georgetown, Capital Place, Grand Cayman, Cayman Islands Saxton Corp International Commercial Centre, Casemates Square, Gibralta Mahindra and Mahindra Limited 24 Raffles Place, 26-04 Clifford Centre, Singapore 048621 Aerodata Networks Ltd Happy World House, sir William Newton Street, Port Lewis, Republic of Mauritius Minoan Shipping Limited 84 Kolokotroni Street, 18535 Piraeus, Greece Khan Metals and Sundries Limited P.O. Box 12965, Kampala Uganda Far Horizon Enterprises Ltd. Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand Stanley Management Limited Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand Ripley Associates Limited Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand 9 Exhibit `B' Lytec Systems Inc 700,943 shares P.O. Box 339, 9121 Atlanta Avenue, Huntington Beach CA 92646 Suite 103, Beaumont House, Baystreet, Nassau, Bahamas Colt Holdings Limited 650,000 shares P.O. Box 320, 16787 Beach Blvd, Huntington Beach CA92647 DeCastro Street, Road Town Tortola, British Virgin Islands Bowater Trading Limited 725,000 shares 32 Butterfield Square, Providenciales, Turks and Caicos Islands Blackstone Management Inc 630,000 shares P.O. Box 1572, Georgetown, Capital Place, Grand Cayman, Cayman Islands Saxton Corp 678,000 shares International Commercial Centre, Casemates Square, Gibralta Mahindra and Mahindra Limited 700,000 shares 24 Raffles Place, 26-04 Clifford Centre, Singapore 048621 Aerodata Networks Ltd 680,000 shares Happy World House, sir William Newton Street, Port Lewis, Republic of Mauritius Minoan Shipping Limited 590,943 shares 84 Kolokotroni Street, 18535 Piraeus, Greece Khan Metals and Sundries Limited 595,000 shares P.O. Box 12965, Kampala Uganda Far Horizon Enterprises Ltd. 675,000 shares Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand Stanley Management Limited 720,000 shares Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand Ripley Associates Limited 501,886 shares Level 23, CP Tower, 313 Silom Road, Bangkok, 10500 Thailand 10 EX-10.1 7 ist-ex101_575033.txt OPP & STRATEGIC ALLIANCE AGMT 0/1/02 Exhibit 10.1 OPPORTUNITY AND STRATEGIC ALLIANCE AGREEMENT THIS AGREEMENT is made and entered into as of this 1st day of September, 2002, by and between Energy Professional Marketing Group, Inc., a Utah corporation ("EPMG"), a wholly-owned subsidiary of Innovative Software Technologies, Inc., with its principal place of business at 5072 North 300 West Provo, Utah 84604 and Education Success, Inc., a Utah corporation ("ESI"), with its principal place of business at 1354 South 1370 East, Provo, Utah 84606. RECITALS: A. EPMG and ESI are engaged in independent business enterprises, including the development and promotion of Internet marketing tools and services; and B. The parties each have and share an interest in entering into a strategic relationship whereby each might benefit from certain opportunities and agreements, for their mutual and respective profit and business development; and C. The parties desire to memorialize by this instrument and agreement the formation of such an alliance relating specifically to certain business opportunities in which ESI has acquired or holds certain rights and equities in which EPMG wishes to participate, and to set out the terms and conditions governing said relationship. D. The parties acknowledge that EPMG does not wish to be in the small sales Internet marketing business (sales under $100.00 per sale) and lead generation business. EPMG and ESI also acknowledge that there is common ownership between ESI and Innovative Software Technologies, Inc. and that this does not create a conflict of interest between the parties. E. The parties acknowledge that EPMG will pay out to ESI only on cash sales and that finance sales will belong to EPMG with no commissions being paid on these sales other than the cash portion of the sale. AGREEMENT: NOW, THEREFORE, in consideration of the mutual promises, covenants and undertakings of the parties hereto and for other good and valuable consideration, it is agreed as follows: 1. ESI is currently negotiating, and also anticipates obtaining certain rights, under services contracts and agreements with various companies. These contracts and agreements extend opportunity benefits to ESI to generate leads which then can be used to market additional products and services. 2. EPMG hereby agrees to purchase from ESI and ESI hereby agrees to transfer and convey to EPMG leads. 3. EPMG will make the cash payments required under paragraph 2(b) above in the respective amounts for leads provided, as follows: a. EPMG will generate sales from the leads given them by ESI. The gross sales generated will be adjusted for a reserve against future cancellations. This reserve will be 4%. The remaining monies will be split with 66% going to EPMG and 34% to ESI. b. EPMG will remit to ESI a weekly settlement on Friday for the previous week's sales. c. EPMG and ESI will equally pay any royalties associated with sales by EPMG. 4. All sales of products and services from all leads generated as a result of ESI's efforts will be processed through EPMG's merchant account. In such cases, ESI's and EPMG's respective obligations shall be calculated and satisfied between them, pro rata, based on the percentages of their respective sales and revenue under the separate principal contracts. EPMG shall furnish to ESI a calculation and accounting of such share division. ESI shall have the right to audit such calculations and accounting, directly or through an authorized representative, not more often than [quarterly] upon reasonable advance notice, during normal business hours. 5. The purpose and intent of the parties under this Agreement is to join and cooperate in the promotion and exploitation of certain business opportunities, including the parties' opportunities to sell and otherwise to market their respective services and products, as set forth herein. The parties intend only to divide between them marketing opportunities resulting from rights accruing under the contracts in which each, by this Agreement, shall participate. The parties understand and acknowledge that this Agreement does not extend to or anticipate a pro-rata division of actual income, or of the parties' respective costs and expenses. 6. The parties do not intend by this relationship to form a joint venture or partnership. Each is and shall remain, relative to each other and to all third parties, independent contractors, whose rights and relationships shall be governed exclusively by this Agreement. 7. The term of this Agreement is coextensive with the terms of each of the Principal Contracts, including any extensions thereof. 8. EPMG acknowledges that the rights obtained under this Agreement are rights derived from efforts by and business opportunities extended to ESI. EPMG covenants and agrees that it will not communicate, correspond, deal, or negotiate with any party to the Principal Contracts (or to attempt to do so or anything similar or equivalent) or to compete with ESI's rights or relationships with such parties or otherwise to circumvent this Agreement. 9. General Provisions. a. Indemnification. Each party agrees to indemnify the other, including any parent, subsidiaries or affiliates, together with officers, agents and employees of said entities, from and against any and all claims, liability, actions, causes of action, judgments or regulatory actions, along with associated costs and fees, arising 2 from, in connection with, or as a result of the products and services of the indemnifying party. Notwithstanding the foregoing, neither party shall be required to indemnify the other party from claims or actions arising solely from the other party's actions or the actions of the other party's agents or employees. b. Public Announcements and Promotional Materials. EPMG and ESI shall cooperate with each other either to issue a joint press release and/or to enable each party to issue and post to its web site an announcement concerning this Agreement, provided that each party must approve any such press announcement prior to its release. Any separate release shall be subject to must approve such press release prior to its release. c. Force Majeure. If either party is prevented from performing any portion of this Agreement (except the payment of money) by causes beyond its control, including labor disputes, civil commotion, war, governmental regulations or controls, casualty, inability to obtain materials or services or acts of God, such defaulting party will be excused from performance for the period of the delay and for a reasonable time thereafter. d. Dispute Resolution. The parties agree to attempt in good faith to resolve all disputes arising between them first through mediation (to be commenced within 48 hours from the receipt by a party of the notice described below) and, if mediation is not successful, through negotiated settlement or court action. Neither party shall file a lawsuit until the mediation has been completed, except that in the event that the actions of one party will cause or are causing the other immediate irreparable injury requiring temporary injunctive relief and the other party is unwilling to suspend its planned or existing activity to allow for expedited mediation, the aggrieved party may file suit and seek such temporary injunctive relief in a court with jurisdiction over the subject matter of the dispute. Dispute resolution under this section shall be triggered by one party's service upon the other of a written notice and request to mediate, identifying the subject matter of the dispute and the nature of the relief sought. Unless otherwise agreed in writing at the time of mediation, mediation shall be conducted through and under the mediation rules of the American Arbitration Association in the County of residence of the party against whom a mediation demand is directed. e. Limitation of Actions. Either party may bring no action arising or resulting from this Agreement, regardless of its form, more than two (2) years after termination of this Agreement. f. Jurisdiction. This Agreement will in all respects be governed by and construed in accordance with the laws of the State of Utah. Notwithstanding, any action against EPMG or ESI shall be subject to the exclusive jurisdiction of the federal or state courts in Utah. g. Attorneys' Fees. Each party agrees to pay the other's reasonable attorneys' fees and costs of litigation if the original party, for any cause whatsoever, brings suits 3 against the other party and the other party is finally adjudicated to be the prevailing party in such litigation. h. Waiver. No waiver of any right or remedy on one occasion by either party will be deemed a waiver of that right or remedy on any other occasion. i. Superior Agreement. This Agreement will not be supplemented or modified by any course of dealing or usage of trade. Variance from or addition to the terms and conditions of this Agreement in any written notification from either party will be of no effect, unless otherwise expressly provided for in this Agreement. This Agreement may be amended or modified only by a writing signed by each party. j. Assignment. This Agreement is not assignable by either party, in whole or in part, without the other party's prior written consent. Notwithstanding, neither party will unreasonably withhold consent to an assignment of this Agreement or any part of this Agreement to a parent, subsidiary or affiliate of the other party, provided that such entity is at least as capable as the assigning party of satisfying that party's responsibilities hereunder. Any attempted assignment without the required written consent will be null and void. k. Notice. Unless otherwise agreed to by the parties, all notices required under this Agreement will be deemed effective when received and made in writing by either (ii) registered mail, (ii) certified mail, return receipt requested, or (iii) overnight mail, addressed and sent to the address indicated on the Signature Page, to the attention of the person designated as the responsible representative or to that person's successor. l. Severability. If any term, provision, covenant or condition of this Agreement is held invalid or unenforceable for any reason, the remainder of the provisions will continue in full force and effect as if this Agreement had been executed with the invalid portion eliminated. The parties further agree to substitute for the invalid provision a valid provision that most closely approximates the intent and economic effect of the invalid provision. m. Independent Contractors. Each party acknowledges that the parties to this Agreement are independent contractors and that it will not, except as may otherwise be expressly allowed under this Agreement, represent itself as an agent or legal representative of the other. The parties do not intend, by this Agreement, to enter into any partnership or joint venture. n. Headings. The headings provided in this Agreement are for convenience only and will not be used in interpreting or construing this Agreement. o. Scope of Agreement. Each of the parties hereto acknowledges that it has read this Agreement, understands it and agrees to be bound by its terms. The parties further agree that this Agreement is the complete and exclusive statement of agreement regarding the subject matter and supersedes all proposals (oral or written), understandings, representations, conditions, warranties, covenants and 4 all other communications between the parties relating to the express subject matter hereof. This Agreement may be amended only by a writing that refers specifically to this Agreement and is signed by both parties. Dated as of the date first set forth above. Energy Professional Marketing Group, Inc. By: /s/ D. Shane Hackett Its: Director, Chairman 5072 North 300 West Provo, Utah 84604 Education Success, Inc. By: /s/ Ethan A. Willis Its: 1354 South 1370 East Provo, Utah 84606 5 EX-10.2 8 ist-ex102_580227.txt EMPLOYMENT AGREEMENT 4/15/01 Exhibit 10.2 EMPLOYMENT AGREEMENT Employment Agreement this 15th day of April, 2001 by and between Innovative Software Technologies, Inc., a California corporation ("Employer") and Douglas Shane Hackett ("Executive"). Employer employs the Executive and the Executive accepts employment, upon the terms, conditions and covenants as follows: 1. The terms employment shall be from April 15th, 2001 to April 15th, 2007. 2. Executive shall receive, for all services rendered, a salary of $120,000 per year, payable twice a month. Salary payments shall be subject to withholding and other applicable deductions. 3. Executive shall be entitled to receive a cash bonus, from a management Profit sharing pool that is equal to 15% of the Company's net earnings but before taxes as reflected in the Company's regularly prepared audited financial statements. All cash bonuses shall be paid to the Executive at such time as annual bonuses are paid to executive of the Company generally, but in no event later than 60 days after the end of each fiscal year. 4. Executive shall be entitled to participate, in accordance with the previsions thereof, in any health, disability and life insurance and other employee benefit plans and programs made available by Company to its executive management employees generally. Company shall pay for all health plans expenses in full for the Executive and his family. 5. During the term of the Executive's employment agreement under this Agreement, the Company shall pay the Executive a car allowance of $800 per month and an entertainment expense allowance of $500 per month. 6. Employer shall reimburse Executive for all reasonable expenses incurred in the performance of Executive's business, e.g. entertainment, travel, etc. Executive will be reimbursed upon submission of an itemized account of such expenditures with receipts where practicable. 7. The duties of Executive shall be management of Company as President. The Executive shall devote his full and entire time and attention to the Employer's business. 8. Executive shall have an office, facilities and services that are suitable to the position and appropriate for the performance of Executive's duties. 9. Executive shall be entitled to four weeks of paid vacation each year. 10. Notwithstanding any provision in this Employment Agreement to the contrary, if Executive is unable to perform or is absent from employment for a period of more than six months, Employer may terminate this Employment Agreement, without further cause, and all obligations of Employer hereunder shall terminate. 11. This Employment Agreement may, immediately and unilaterally, be terminated at any time "for cause" at any time during the term of this Agreement upon written notice to the Executive, but only after a determination to so terminate the Executive has been made by a decision approved from a unanimous vote of the Board of the Directors of the Company and the Parent company including the Executive at a meeting duly noticed and held with an opportunity for the Executive to be heard. Termination of the Executive's employment by the company shall constitute a termination "for cause" under this section if such termination is for one or more of the following cause: (a) conviction of fraud (b) repeated habitual drunkenness and (c) illegal drug addition. 12. In the event of a termination "for cause" pursuant to the provision of clauses (a) through (c) above, inclusive, the Executive shall be entitled to no payment or other benefits, and shall have no further rights under this Agreement. 13. During the period of employment, Executive shall not engage in any other business activity, directly or indirectly, regardless of whether it is for profit, gain or otherwise that is similar to the business activity of Employer. The Company acknowledges Executive's prior and current ownership and involvement in JCL Holdings, Inc. and List Mart of Florida, Inc., and shall not deem these activities to be competitive in nature. 14. During the course of employment, Executive shall become aware of certain methods, practices and procedures with which Employer conducts its business, including but not limited to: software development, lead and sales generation, product fulfillment, and marketing, all of which Employer and Executive agree are proprietary information and as such are trade secrets. 15. Executive will not at any time, either during his/her employment or thereafter divulge, furnish, or make available, either directly or indirectly, to any person, firm, corporation or other entity any proprietary information used by Employer. Executive agrees that all such matters and information shall be kept strictly and absolutely confidential. 16. Executive, upon the cessation of his/her employment, irrespective of the time, manner or reason of termination, will immediately surrender and deliver to Employer all lists, books, records, memoranda and data of every kind relating to all proprietary information and all property belonging to Employer. 17. Executive acknowledges that a breach of any of the provisions of this Agreement may result in continuing and irreparable damages to Employer for which there may be no adequate remedy at law and that Employer in addition to all other relief available to Employer shall be entitled to the issuance of an injunction restraining Executive from committing or continuing any breach of this Agreement. 18. In the event of the termination of employment, whether voluntary or involuntary, Executive agrees that Executive will not for a period of twenty-four months from the effective date of termination engage in a business activity similar to that of Employer in so much as the 2 Company continues to pay all salary, bonus, benefits and compensation components in this agreement. 19. Any controversy or claim arising out of, or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in the City of Kansas City, State of Missouri, in accordance with the then governing rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction. 20. Any notice required to be given shall be either: (i) personally delivered, or (ii) sent by U.S. Postal Service, postage pre-paid, Certified Mail, Return Receipt Requested to the Employer at the place of employment and to the Executive at the last residence address given to and on file with the Employer. 21. A waiver of a breach of any provision of this Employment Agreement shall not operate or be construed as a waiver of any subsequent breach. 22. The services of Executive are personal and unique and therefore Executive may not assign this Employment Agreement nor delegate the duties and obligations hereunder except in the normal course of business. 23. This Employment Agreement contains the entire understanding of the parties, except as may be set forth in writing signed by the party against whom enforcement may be sought, simultaneously with or subsequent to the execution of this Employment Agreement. INTENDING TO BE LEGALLY BOUND, the parties have executed this Employment Agreement as of the date first above written. -------------------------------------------- By: /s/ Shawn Thomas Innovative Software Technologies, Inc. /s/ D. Shane Hackett Douglas Shane Hackett 3 EX-10.3 9 ist-ex103_798641.txt EMPLOYMENT AGREEMENT 12/31/01 Exhibit 10.3 EMPLOYMENT AGREEMENT Employment Agreement this 31st day of December, 2001 by and between Energy Professional Marketing Group, a Utah corporation ("Employer") and Randy Garn ("Executive"). Employer employs the Executive and the Executive accepts employment, upon the terms, conditions and covenants as follows: 1. The term of employment shall be from January 1, 2002 to January 1, 2007. 2. Executive shall receive, for all services rendered, a salary of $100,000 per year, payable twice a month. Salary payments shall be subject to withholding and other applicable deductions. 3. Executive shall be entitled to receive annually, a cash bonus from a management Profit sharing pool that is equal to 7.5% of the Company's net earnings but before taxes as reflected in the Company's regularly prepared audited financial statements. All cash bonuses shall be paid to the Executive at such time as annual bonuses are paid to executive of the Company generally, but in event later than 60 days after the end of each quarter. 4. Executive shall be entitled to participate, in accordance with the previsions thereof, in any health, disability and life insurance and other employee benefit plans and programs made available by Company to its executive management employees generally. 5. During the term of the Executive's employment agreement under this Agreement, the Company shall pay the Executive a car allowance of $800 per month, an entertainment expense allowance of $500 per month. 6. Employer shall reimburse Executive for all reasonable expenses incurred in the performance of Executive's business, e.g. entertainment, travel, etc. Executive will be reimbursed upon submission of an itemized account of such expenditures with receipts where practicable. 7. The duties of Executive shall be management of Company as President. The Executive shall devote his full and entire time and attention to the Employer's business. 8. Executive shall have an office, facilities and services that are suitable to the position and appropriate for the performance of Executive's duties. 9. Executive shall be entitled to three weeks of paid vacation each year. 10. Notwithstanding any provision in this Employment Agreement to the contrary, if Executive is unable to perform or is absent from employment for a period of more than six months, Employer may terminate this Employment Agreement, without further cause, and all obligations of Employer hereunder shall terminate. 11. This Employment Agreement may, immediately and unilaterally, be terminated "for cause" at any time during the term of this Agreement upon written notice to the Executive, but only after a determination to so terminate the Executive has been made by a decision approved by the majority of the Board of the Directors of the Company and the Parent company other than the Executive at a meeting duly noticed and held with an opportunity for the Executive to be heard. Termination of the Executive's employment by the company shall constitute a termination "for cause" under this section if such termination is for one or more of the following cause: (a) intentional misconduct causing material damage to the Company; (b) any act of fraud, misappropriation, misfeasance, malfeasance or knowing breach of fiduciary duty; (c) conviction of a felony, or repeated habitual drunkenness or drug addiction (d) will refusal to perform the duties reasonably assigned to the Executive by the Board of Directors. 12. In the event of a termination "for cause" pursuant to the provision of clauses (a) through (d) above, inclusive, the Executive shall be entitled to no payment or other benefits, and shall have no further rights under this Agreement. 13. During the period of employment, Executive shall not engage in any other business activity, directly or indirectly, regardless of whether it is for profit, gain or otherwise that is similar to the business activity of Employer. 14. During the course of employment, Executive shall become aware of certain methods, practices and procedures with which Employer conducts its business, including but not limited to: software development, lead and sales generation, product fulfillment, and marketing, all of which Employer and Executive agree are proprietary information and as such are trade secrets. 15. Executive will not at any time, either during his/her employment or thereafter divulge, furnish, or make available, either directly or indirectly, to any person, firm, corporation or other entity any proprietary information used by Employer. Executive agrees that all such matters and information shall be kept strictly and absolutely confidential. 16. Executive, upon the cessation of his/her employment, irrespective of the time, manner or reason of termination, will immediately surrender and deliver to Employer all lists, books, records, memoranda and data of every kind relating to all proprietary information and all property belonging to Employer. 17. Executive acknowledges that a breach of any of the provisions of this Agreement may result in continuing and irreparable damages to Employer for which there may be no adequate remedy at law and that Employer in addition to all other relief available to Employer shall be entitled to the issuance of an injunction restraining Executive from committing or continuing any breach of this Agreement. 18. In the event of the termination of employment, whether voluntary or involuntary, Executive agrees that Executive will not for a period of twenty-four months from the effective date of termination engage in a business activity similar to that of Employer. 19. Any controversy or claim arising out of, or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in the City of Salt Lake City, 2 State of Utah, in accordance with the then governing rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction. 20. Any notice required to be given shall be either: (i) personally delivered, or (ii) sent by U.S. Postal Service, postage pre-paid, Certified Mail, Return Receipt Requested to the Employer at the place of employment and to the Executive at the last residence address given to and on file with the Employer. 21. A waiver of a breach of any provision of this Employment Agreement shall not operate or be construed as a waiver of any subsequent breach. 22. The services of Executive are personal and unique and therefore Executive may not assign this Employment Agreement nor delegate the duties and obligation hereunder except in the normal course of business. 23. This Employment Agreement contains the entire understanding of the parties, except as may be set forth in writing signed by the party against whom enforcement may be sought, simultaneously with or subsequent to the execution of this Employment Agreement. INTENDING TO BE LEGALLY BOUND, the parties have executed this Employment Agreement as of the date first above written. Energy Professional Marketing Group, Inc. Its: /s/ Ethan A. Willis Secretary /s/ James R. Garn Randy Garn 3 EX-10.4 10 ist-ex104_580243.txt 7/15/02 AMENDED EMPLOYMENT AGREEMENT Exhibit 10.4 AMENDMENT TO EMPLOYMENT AGREEMENT The employment agreement dated December 31, 2001 by and between Energy Professional Marketing Group, Inc. a Utah Corporation ("Employer") and James Randolph Garn ("Executive") is hereby amended as follows: 1. Executive shall receive, for all services rendered, a salary of $250,000 per year, payable twice a month. Salary payments shall be subject to withholding and other applicable deductions. This salary change is effective on July 15, 2002. 2. During the period of employment, Executive shall not engage in any other business activity, directly or indirectly, regardless off whether it is for profit, gain or otherwise that is similar to the business activity of Employer (unless authorized by the board of directors). This approval was given on September 16, 2002 with regards to a contract signed by EPMG and ESI (a company owned by Ethan Andrew Willis and James Randolph Garn). 3. Executive shall receive quarterly bonuses as additional Compensation which will be decided by the Companies Management Team. INTENDING TO BE LEGALLY BOUND, the parties have executed this Amendment to the Employment Agreement to be effective as of July 15, 2002. By: /s/ D. Shane Hackett Date: 10-22-02 Douglas Shane Hackett, Director Energy Professional Marketing Group, Inc. By: /s/ James R. Garn Date: 10-31-02 James Randolph Garn /s/ Ethan A. Willis 10-31-02 Ethan A. Willis CEO PMG EX-10.5 11 ist-ex105_580140.txt 12/31/02 EMPLOYMENT AGREE.-WILLIS Exhibit 10.5 EMPLOYMENT AGREEMENT Employment Agreement this 31st day of December, 2001 by and between Energy Professional Marketing Group, a Utah corporation ("Employer") and Ethan Willis ("Executive"). Employer employs the Executive and the Executive accepts employment, upon the terms, conditions and covenants as follows: 1. The term of employment shall be from January 1, 2002 to January 1, 2007. 2. Executive shall receive, for all services rendered, a salary of $100,000 per year, payable twice a month. Salary payments shall be subject to withholding and other applicable deductions. 3. Executive shall be entitled to receive annually, a cash bonus from a management Profit sharing pool that is equal to 7.5% of the Company's net earnings but before taxes as reflected in the Company's regularly prepared audited financial statements. All cash bonuses shall be paid to the Executive at such time as annual bonuses are paid to executive of the Company generally, but in event later than 60 days after the end of each quarter. 4. Executive shall be entitled to participate, in accordance with the previsions thereof, in any health, disability and life insurance and other employee benefit plans and programs made available by Company to its executive management employees generally. 5. During the term of the Executive's employment agreement under this Agreement, the Company shall pay the Executive a car allowance of $800 per month, an entertainment expense allowance of $500 per month. 6. Employer shall reimburse Executive for all reasonable expenses incurred in the performance of Executive's business, e.g. entertainment, travel, etc. Executive will be reimbursed upon submission of an itemized account of such expenditures with receipts where practicable. 7. The duties of Executive shall be management of Company as President. The Executive shall devote his full and entire time and attention to the Employer's business. 8. Executive shall have an office, facilities and services that are suitable to the position and appropriate for the performance of Executive's duties. 9. Executive shall be entitled to three weeks of paid vacation each year. 10. Notwithstanding any provision in this Employment Agreement to the contrary, if Executive is unable to perform or is absent from employment for a period of more than six months, Employer may terminate this Employment Agreement, without further cause, and all obligations of Employer hereunder shall terminate. 11. This Employment Agreement may, immediately and unilaterally, be terminated "for cause" at any time during the term of this Agreement upon written notice to the Executive, but only after a determination to so terminate the Executive has been made by a decision approved by the majority of the Board of the Directors of the Company and the Parent company other than the Executive at a meeting duly noticed and held with an opportunity for the Executive to be heard. Termination of the Executive's employment by the company shall constitute a termination "for cause" under this section if such termination is for one or more of the following cause: (a) intentional misconduct causing material damage to the Company; (b) any act of fraud, misappropriation, misfeasance, malfeasance or knowing breach of fiduciary duty; (c) conviction of a felony, or repeated habitual drunkenness or drug addiction (d) will refusal to perform the duties reasonably assigned to the Executive by the Board of Directors. 12. In the event of a termination "for cause" pursuant to the provision of clauses (a) through (d) above, inclusive, the Executive shall be entitled to no payment or other benefits, and shall have no further rights under this Agreement. 13. During the period of employment, Executive shall not engage in any other business activity, directly or indirectly, regardless of whether it is for profit, gain or otherwise that is similar to the business activity of Employer. 14. During the course of employment, Executive shall become aware of certain methods, practices and procedures with which Employer conducts its business, including but not limited to: software development, lead and sales generation, product fulfillment, and marketing, all of which Employer and Executive agree are proprietary information and as such are trade secrets. 15. Executive will not at any time, either during his/her employment or thereafter divulge, furnish, or make available, either directly or indirectly, to any person, firm, corporation or other entity any proprietary information used by Employer. Executive agrees that all such matters and information shall be kept strictly and absolutely confidential. 16. Executive, upon the cessation of his/her employment, irrespective of the time, manner or reason of termination, will immediately surrender and deliver to Employer all lists, books, records, memoranda and data of every kind relating to all proprietary information and all property belonging to Employer. 17. Executive acknowledges that a breach of any of the provisions of this Agreement may result in continuing and irreparable damages to Employer for which there may be no adequate remedy at law and that Employer in addition to all other relief available to Employer shall be entitled to the issuance of an injunction restraining Executive from committing or continuing any breach of this Agreement. 18. In the event of the termination of employment, whether voluntary or involuntary, Executive agrees that Executive will not for a period of twenty-four months from the effective date of termination engage in a business activity similar to that of Employer. 19. Any controversy or claim arising out of, or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in the City of Salt Lake City, 2 State of Utah, in accordance with the then governing rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction. 20. Any notice required to be given shall be either: (i) personally delivered, or (ii) sent by U.S. Postal Service, postage pre-paid, Certified Mail, Return Receipt Requested to the Employer at the place of employment and to the Executive at the last residence address given to and on file with the Employer. 21. A waiver of a breach of any provision of this Employment Agreement shall not operate or be construed as a waiver of any subsequent breach. 22. The services of Executive are personal and unique and therefore Executive may not assign this Employment Agreement nor delegate the duties and obligation hereunder except in the normal course of business. 23. This Employment Agreement contains the entire understanding of the parties, except as may be set forth in writing signed by the party against whom enforcement may be sought, simultaneously with or subsequent to the execution of this Employment Agreement. INTENDING TO BE LEGALLY BOUND, the parties have executed this Employment Agreement as of the date first above written. Energy Professional Marketing Group, Inc. Its: /s/ James R. Garn President /s/ Ethan A. Willis Ethan Willis 3 EX-10.6 12 ist-ex106_580222.txt AMENDED EMP. AGREEMENT 7/15/02-WILLIS Exhibit 10.6 AMENDMENT TO EMPLOYMENT AGREEMENT The employment agreement dated December 31, 2001 by and between Energy Professional Marketing Group, Inc. a Utah Corporation ("Employer") and Ethan Andrew Willis ("Executive") is hereby amended as follows: 1. Executive shall receive, for all services rendered, a salary of $250,000 per year, payable twice a month. Salary payments shall be subject to withholding and other applicable deductions. This salary change is effective on July 15, 2002. 2. During the period of employment, Executive shall not engage in any other business activity, directly or indirectly, regardless of whether it is for profit, gain or otherwise that is similar to the business activity of Employer (unless authorized by the board of directors). This approval was given on September 16, 2002 with regards to a contract signed by EPMG and ESI (a company owned by Ethan Andrew Willis and James Randolph Garn). 3. Executive shall receive quarterly bonuses as additional Compensation which will be decided by the Companies Management Team. INTENDING TO BE LEGALLY BOUND, the parties have executed this Amendment to the Employment Agreement to be effective as of July 15, 2002. By: /s/ D. Shane Hackett Date: 10-22-02 Douglas Shane Hackett, Director Energy Professional Marketing Group, Inc. By: /s/ Ethan A. Willis Date: 10-31-02 Ethan Andrew Willis /s/ James R. Garn 10-31-02 EX-10.7 13 ist-ex107_580254.txt INDEMNITIY AGREE. 8/17/01-HACKETT Exhibit 10.7 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Douglas Shane Hackett ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor. In addition the company will place 150,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy its obligation this stock will be sold to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By Douglas Shane Hackett It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas Accepted: D. Shane Hackett Douglas Shane Hackett EX-10.8 14 ist-ex108_580443.txt INDEM. AGREE. 8/17/01 MEHAFFEY, THOMAS ETC Exhibit 10.8 INDEMNITY AGREEMENT/HOLD HARMLESS AGREEMENT The undersigned does hereby irrevocably covenant, promise and agree to indemnify the corporate officers and directors: Scott Mehaffey, Shawn M. Thomas, Margie Hackett and Douglas S. Hackett and to hold them harmless from and against any all losses, claims, expense, suits, costs, demands, damage or liabilities, joint or several, of whatever kind or nature which they may sustain or to which they may become subject arising out of or relating in any way to Innovative Software Technologies, Inc. and its subsidiaries, including without limitation in each case attorneys' fees, costs and expenses actually incurred in defending against or enforcing any such losses, claims, expenses suits, damages or liabilities. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By: Innovative Software Technologies, Inc. Douglas Shane Hackett It's President EX-10.9 15 ist-ex109_580256.txt INDEMNITY AGREEMENT 8/17/01 M. HACKETT Exhibit 10.9 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Margie Hackett ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor. In addition the company will place 150,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy its obligation this stock will be sold to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By Douglas Shane Hackett It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas Accepted: /s/ Margie Hackett Margie Hackett EX-10.10 16 ist-ex1010_580261.txt INDENITY AGREE. 8/17/01 MEHAFFEY Exhibit 10.10 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Scott Mehaffey ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor. In addition the company will place 45,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy its obligation this stock will be sold to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By Douglas Shane Hackett It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas Accepted: /s/ Scott Mehaffey Scott Mehaffey EX-10.11 17 ist-ex1011_580264.txt INDEM. AGREEMENT 8/18/01 - M. HACKETT Exhibit 10.11 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Margie Hackett ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor and in her role as corporate officer and/or employee of the company. In addition the company will place 1,000,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy in full its indemnification obligation, the escrow agent will sell the amount of stock needed to cover the obligations. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By Douglas Shane Hackett It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas Accepted: /s/ Margie Hackett Margie Hackett EX-10.12 18 ist-1012_580258.txt INDEMNITY AGREEMENT DATE 8/17/2001 Exhibit 10.12 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Shawn M. Thomas ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor. In addition the company will place 45,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy its obligation this stock will be sold to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 17 day of August, 2001. /s/ D. Shane Hackett By Douglas Shane Hackett It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas Accepted: /s/ Shawn Thomas Shawn M. Thomas EX-10.13 19 ist-ex1013_580266.txt INDEN AGREE 1/9/02 WILLIS & GARN Exhibit 10.13 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Ethan Willis and Randy Garn ("indemnities") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for indemnitor. In addition the company will place 1,500,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon failure of the company to satisfy its obligation this stock will be sod to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 9th day of January, 2002. /s/ D. Shane Hackett By Douglas Shane Hackett Innovative Software Technologies, Inc. It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas EX-10.14 20 ist-ex1014_580252.txt INDEM. AGREE. 8/16/02 WILLIS & GARN Exhibit 10.14 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Ethan Willis and Randy Garn ("indemnities") to provide his/her personal guarantee to assist in financing for the undersigned company, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), bye and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relation to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for indemnitor. In addition the company will place an additional 3,000,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issues and outstanding in the hands of the escrow agent. Upon failure of the company to satisfy its obligation this stock will be sold to cover the obligations, which were guaranteed. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement ha been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 16th day of August, 2002. By: /s/ D. Shane Hackett Douglas Shane Hackett Innovative Software Technologies, Inc. It's President Attest: /s/ Shawn Thomas Secretary - Shawn Thomas EX-10.15 21 ist-ex1015_580262.txt INDEM. AGREE. 8/15/02 DOUGLAS HACKETT Exhibit 10.15 INDEMNITY AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, including but not limited to the agreement of Douglas Shane Hackett ("Indemnitee") to provide his/her personal guarantee to assist in financing for the undersigned company and under the performance of duties as a corporate officer, the undersigned, Innovative Software Technologies, Inc. ("Company" or "Indemnitor"), by and under the authority of its Board of Directors, hereby covenants and agrees to indemnify and hold Indemnitee harmless from and against any and all claim, demand, loss, cost, action or liability, including attorneys fees and costs incurred in defending against any such claim, demand or action, arising from, relating to or in any way resulting from obligations undertaken by Indemnitee as personal guarantor for Indemnitor and in his role as a corporate officer. In addition the company will place 1,000,000 shares of its common stock in the escrow account of Attorney Keith Collins to further indemnify the guarantor. This stock will be fully issued and outstanding in the hands of the escrow agent. Upon the failure of the company to satisfy in full its indemnification obligation, the escrow agent will sell the amount of stock needed to cover the obligations. By signing below, the undersigned, as an officer of Indemnitor, represents and warrants that this Indemnity Agreement has been authorized and approved by the Board of Directors of Indemnitor, by resolution duly and properly adopted, and that the undersigned has authority to execute this instrument on behalf of the Company. DATED this 15 day of August, 2002. /s/ Shawn M. Thomas By Shawn M. Thomas It's Director Accepted: /s/ D. Shane Hackett Douglas Shane Hackett EX-21 22 ist-ex21_582248.txt EXHIBIT 21 Exhibit 21 SUBSIDIARIES OF THE REGISTRANT Energy Professional Marketing Group, Inc., a Utah corporation, D/B/A Professional Marketing Group, Inc. EX-31.1 23 ist-ex311_582174.txt EXHIBIT 31.1 Exhibit 31.1 CHIEF FINANCIAL OFFICER CERTIFICATION I, Douglas S. Hackett, President, Chief Executive Officer and Director of Innovative Software Technologies, Inc., certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB/A of Innovative Software Technologies, Inc. (the "Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): b) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: August 14, 2003 /s/ Douglas S. Hackett ------------------------------- Douglas S. Hackett President, Chief Executive Officer and Director (Principal Executive Officer) EX-31.2 24 ist-ex312_582188.txt EXHIBIT 31.2 Exhibit 31.2 CHIEF FINANCIAL OFFICER CERTIFICATION I, Linda W. Kerecman, Chief Financial Officer of Innovative Software Technologies, Inc., certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB/A of Innovative Software Technologies, Inc. (the "Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: August 14, 2003 /s/ Linda W. Kerecman ------------------------------- Linda W. Kerecman Chief Financial Officer (Principal Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----