8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest reported):June 19, 2009

INNOVATIVE SOFTWARE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization) 000-27465 (Commission File Number) 26-1469061 (IRS Employer Identification No.)

1413 South Howard Ave., Suite 220

Tampa, FL 33606

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (813) 387- 3310

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.01   Completion of Disposition of Assets

On June 19, 2009, the registrant, Innovative Software Technologies, Inc., a Delaware corporation (the “Company”), sold all of its shares of capital stock of AcXess Inc., a Florida corporation (“AcXess”), to AcXess and to the following three senior executives of AcXess: Thomas J. Elowson, Helge Solberg, and Raymond Leitz (collectively, the “AcXess Managers”).  The sale was the result of a July 24, 2007 Stock Purchase Agreement (the “Initial Agreement”) that had been entered into by the Company, AcXess and the AcXess Managers and a June 19, 2009 Amendment to Stock Purchase Agreement (the “Amended Agreement”) that was signed and delivered on the date that the sale closed.

The sale also constituted a settlement of allegations by the AcXess Managers that the Company had breached the Initial Agreement by failing to close on the sale within a reasonable time after the July 24, 2007 execution and delivery of the Initial Agreement and the subsequently obtained shareholder approval.  The Initial Agreement was reported in and was Exhibit 4.1 to the Company’s Form 8-K Report, dated and filed with the U.S. Securities and Exchange Commission (the “SEC”) on July 30, 2007 and further reported (including a description of the AcXess business) in the Schedule 14CDefinitive Information Statement filed with the SEC on October 12, 2007 with respect to the Company’s shareholder approval of the transaction, as proposed prior to the changes made by the Amended Agreement.

As consideration for the sale of all the outstanding 4,500,000 shares of capital stock of AcXess held by the Company to AcXess and the AcXess Managers, the Company received the following:

(i)   all 4,477,292 shares of the Company’s common stock held by the AcXess Managers;

(ii)   the cancellation of options to purchase 5,978,349 shares of the Company’s common stock held by the AcXess Managers;

(iii)   a Secured Promissory Note (the “Note”) in the principal amount of $500,000, with a three year maturity date, an 8% interest rate, a prepayment discount schedule that allows for gradually decreasing discounts beginning with a maximum prepayment discount of $350,000 if $150,000 is paid within three months of the June 19, 2009 issue date, and a pledge of all of the assets of AcXess as security for the Note, as specified in a separate Security Agreement (Conformed copies of the Note and the Security Agreement are included herewith as Exhibits 4.1 and 4.2.); and

(iv)   a release from AcXess and the AcXess Managers (the “AcXess and the AcXess Managers Release”) of all claims they may have against the Company and its officers, directors, employees, shareholders, affiliates and affiliated companies and for all damages that relate to the Initial Agreement, the transactions contemplated thereby, and any matter relating to AcXess or its business, operations, assets or liabilities.

The above consideration represents a substantial change in the consideration provided in the Initial Agreement.  The Amended Agreement modified the Initial Agreement by (i) eliminating the retention of 984,457 shares of AcXess common stock that represented 21.9% of the 4,500,000 outstanding shares of such stock that the Company sold to AcXess and the AcXess Managers; (ii) substantially changing the Note from the Secured Promissory Note that was involved in the Initial Agreement (the “Initial Note”), including a reduction in the $1,000,000 principal amount of the Initial Note to $500,000, a reduction in the 10% annual interest rate of the Initial Note to 8%, an increase in the two-year maturity date of the Initial Note to a three-year maturity date for the Note, and the addition of a provision in the Note for a prepayment discount schedule (which could be as high as a $350,000 discount for prepayment of $150,000 of principal within three months of the June 19, 2009 issue date); and (iii) eliminating the License Agreement for the licenses from AcXess to the Company and confirming that all licenses (if any) and license agreements or other rights which may have at any time been granted by AcXess to the Company in or with respect to any inventions, patents, patent applications, trademarks, copyrights, know-how, trade secrets or other proprietary or intellectual property rights of AcXess were terminated, made null and void and of no further force or effect.

In view of the threatened litigation by the AcXess Managers and the continuing deterioration of the financial condition of AcXess and the increasing financial obligations of the Company with respect thereto, the Company agreed to the change in terms and conditions represented by theAmended Agreement upon the condition that the AcXess and the AcXess Managers Release be included within the Amended Agreement as a condition of the sale.  In addition, AcXess and the AcXess Managers also required that the Company provide a similar release of AcXess and its officers, directors, employees, shareholders, affiliates and affiliated companies and the AcXess Managers, within the Amended Agreement as a condition of the sale.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Number	Description
2.1	Amendment to Stock Purchase Agreement dated June 19, 2009.
2.2	Stock Purchase Agreement, dated July 24, 2007, is incorporated herein by reference to the copy thereof filed as Exhibit 4.1 to the Form 8-K dated July 30, 2007 and filed with the U.S. Securities and Exchange on July 30, 2007.
4.1	Promissory Note (as provided in Exhibit A to the above June 19, 2009 Amendment)
4.2	Security Agreement (as provided in Exhibit B to the above June 19, 2009 Amendment)

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
Date: June 25, 2009	By:	/s/ Robert V. Rudman
		Robert V. Rudman
		Chief Executive Officer

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EX-2.1

Exhibit 2.1

INNOVATIVE SOFTWARE TECHNOLOGIES, INC.

June 19, 2009

Thomas J. Elowson

Helge Solberg

Raymond Leitz

AcXess Inc.

3701 FAU Boulevard

Suite 210

Boca Raton, FL 33431

Re:           Amendment to Stock Purchase Agreement

Gentlemen:

Reference is hereby made to that certain Stock Purchase Agreement, dated July 24, 2007 (the “Purchase Agreement”), among Thomas J. Elowson, Helge Solberg, and Raymond Leitz (collectively, the “Buyers”); Innovative Software Technologies, Inc., a California corporation (the “Seller”); and AcXess Inc., a Florida corporation (the “Target”).  All capitalized terms appearing in this letter agreement and not otherwise defined in this letter agreement shall have the meanings ascribed thereto in the Purchase Agreement.

As you know, the Stock Purchase Agreement contemplated a transaction involving the purchase by Buyers of the Target Shares and the redemption by Target of the Redemption Shares (the “Transaction”).  As you also know, following the execution of the Stock Purchase Agreement, a dispute has developed as to whether the conditions to the closing of the Transaction have been satisfied.  Pursuant to our recent discussions, the purpose of this letter agreement is to memorialize our agreements regarding the amendment of the Transaction and the Purchase Agreement and the resolution of this dispute.

By executing this letter below, the Seller, Buyers and Target confirm their agreement to the following:

1.           The third (3rd) paragraph of the Purchase Agreement is hereby amended by deleting said paragraph in its entirety and replacing it with the following:

“This Agreement contemplates a transaction in which (i) the Buyers will purchase the Target Shares from Seller, and the Seller will sell the Target Shares to Buyers, (ii) Target will redeem from Seller, and Seller will sell back to Target, the Redemption Shares for a consideration consisting of the promissory note described in Subsection 2(b), so that upon the Closing the Buyers shall in the aggregate own 100% of all then authorized, issued and outstanding capital stock of all classes, and all other equity securities of the Target.”

2.           Section 1 of the Purchase Agreement is hereby amended by deleting the definition of “Target Share”.

3.           Section 2(a) of the Purchase Agreement is hereby amended by deleting said section in its entirety and replacing it with the following:

“On and subject to the terms and conditions of this Agreement, (i) the Buyers agree to purchase from Seller, and Seller agrees to sell to Buyers, all of the Target Shares, and (ii) Target agrees to redeem from Seller, and Seller will sell to Target, all of the Redemption Shares.  The “Target Shares” shall consist of 1,015,543 shares of the outstanding Common Stock, and the “Redemption Shares” shall consist of all remaining shares of Target standing in the name of Seller, including without limitation, 3,484,457 shares of Target’s Common Stock.  The Target Shares and Redemption Shares shall together constitute all of the authorized, issued and outstanding shares of Common Stock and other equity securities of the Target.”

4.           Section 2(b) of the Purchase Agreement is hereby amended by deleting said section in its entirety and replacing it with the following:

“The purchase price to be paid by Buyers for the Target Shares (the "Purchase Price") shall be an amount equal to $1,015,543, to be paid in the form of the delivery to Seller of all 4,477,292 shares of Seller common stock held by Buyers and the cancellation of 5,978,349 options to purchase shares of Seller common stock held by Buyers.  The purchase price to be paid by Target for the Redemption Shares shall be five hundred thousand ($500,000), to be paid by delivery to Seller of a promissory note in substantially the form of Exhibit A hereto in the principal amount of $500,000, which shall be secured by all of the assets of Target pursuant to a Security Agreement in substantially the form of Exhibit B hereto.”

5.           Section 3(a) of the Purchase Agreement is hereby amended in part to add the following thereto:

(i)           The following is hereby added to Subsection 3(a)(v):

"The Target Shares and the Redemption Shares together constitute 100% of all authorized, issued and outstanding shares of the capital stock of the Target and the Target has not issued nor are there any outstanding rights, options, warrants, notes or other instruments or securities convertible into any shares of the capital stock of the Target."

(ii)           The following is hereby added as new Subsection 3(a)(vi):

"Neither Seller nor Seller's undersigned officer Robert Rudman ("Rudman") nor, to Seller's or Rudman's knowledge after reasonable inquiry, any other person or entity acting or purporting to act on behalf of Seller or on behalf of Target (other than the Buyers) has entered into or caused to be entered into any agreement, obligation or legally binding instrument for, on behalf or in the name of Target or otherwise, and which could give rise to any contractual or other liability whether absolute, accrued, contingent or otherwise binding upon Target and to Seller and Rudman's knowledge there is no basis upon which any person or entity could assert such a claim or liability against Target arising from or incident to any act or omission of Seller or Rudman.  To Seller and Rudman's knowledge, no person or entity has asserted any claim against Target that has not been resolved.

6.           Section 6(a)(iv) of the Purchase Agreement is hereby amended by deleting said paragraph in its entirety and replacing it with the following:  “[Intentionally Left Blank]”.  In addition, Exhibit C is hereby deleted from the Purchase Agreement.

7.           Subsection 7(a) (Survival of Representations and Warranties) of the Purchase Agreement is amended in part as follows:  the first sentence of Subsection 7(a) is hereby deleted and the remainder of Subsection 7(a) is hereby amended to read as follows:

“All of the representations and warranties of the Parties contained in this Agreement including but not limited to the representations and warranties of the Seller contained in Section 3(a) shall survive the Closing (even if the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of closing) and continue in full force and effect forever thereafter, subject however to any applicable statutes of limitations."

8.           Exhibit A of the Purchase Agreement is hereby amended by deleting said exhibit in its entirety and replacing it with the form of promissory note attached as Exhibit A to this letter agreement.

9.           Exhibit C (License Agreement) of the Purchase Agreement is hereby deleted in its entirety.  The Parties acknowledge and agree that any and all licenses (if any) and license agreements or other rights which may have at any time been granted by AcXess Inc., to Innovative Software Technologies, Inc., in or with respect to any inventions, patents ,patent applications, trademarks, copyrights, know-how, trade secrets or other proprietary or intellectual property rights of AcXess Inc., are hereby terminated, made null and voice and of no further force or effect.

10.           The Closing of the Transaction shall be deemed to occur on the date of this letter (i.e. June 19, 2009) and Seller hereby acknowledges satisfaction of all conditions precedent to its obligation to immediately proceed with the Closing under the Purchase Agreement.  Upon execution of this letter by all of the Parties, counsel for Seller, Curt P. Creely of the law firm of Foley and Lardner LLP shall immediately redeliver to Buyers and Target that certain Promissory Note executed by Target and previously delivered by it to Mr. Creely in escrow on or about July ______, 2007, as well as all originals and copies of the Non-Exclusive License Agreement previously delivered to Target to Mr. Creely in escrow, and the Parties shall simultaneously herewith deliver to each other the various stock certificates, instruments and documents contemplated under Section 2(d) of the Purchase Agreement. The parties acknowledge however, that with respect to documents currently held by Mr. Creely in escrow, and which said escrow agent shall not have delivered to the respective parties at or before the Closing, the parties shall at the Closing execute mutually acceptable joint instructions to said escrow agent directing him, inter alia, to deliver all shares of common stock and other equity securities of the Target in his possession, to Target and the Buyers and to deliver all shares of common stock of Seller in his possession, to Seller, to deliver original and all copies of Target's $1,000,000 Promissory Note and corresponding Security Agreement to Target and to deliver the original and all copies of the Non-Exclusive License Agreement previously delivered to escrow agent by Target and Seller, to Target, and to otherwise disburse any other instruments or documents in his possession and held by him in escrow in accordance with the parties' mutual instructions.

11.           In consideration of Buyers’ and Target’s entering into this amendment to the Purchase Agreement, Seller on behalf of itself and its successors and assigns hereby knowingly and voluntarily waives, releases and forever discharges Buyers, Target and Target's officers, directors, employees, shareholders, affiliates and affiliated companies (collectively "Seller Released Parties") from any and all claims, demands, damages, lawsuits, obligations, promises, and causes of action of any kind whatsoever, both known and unknown, at law or in equity, that Seller may have had or has against all or any of the Seller Released Parties arising from or relating to the Purchase Agreement and the transactions contemplated thereby and any matter relating to Seller, Target, Buyers or any of their respective businesses, operations, assets or liabilities; provided, however, that nothing in this paragraph shall release any claims against a Buyer arising from any breach of this letter agreement or any breach of any post-Closing obligation of a Buyer under the Purchase Agreement (as amended hereby) that occurs after the date hereof.  Seller agrees that neither Seller nor or any person, organization, or other entity acting on Seller’s behalf will file a lawsuit or administrative proceeding seeking legal, equitable, administrative, or other relief asserting any claims or causes of action released by this paragraph.  If any such claim or cause of action is asserted, Seller agrees that it will indemnify and hold harmless each Seller Released Party from and against any and all losses, costs, damages, expenses, and attorneys’ fees incurred as a result of its attempt to assert such claims or cause of action.

12.           In consideration of the Seller’s entering into this amendment to the Purchase Agreement, Target and each Buyer (each a “Buyer Releasor”), on behalf of themselves and their heirs and assigns, each hereby knowingly and voluntarily waives, releases and forever discharges Seller and Seller’s officers, directors, employees, shareholders, affiliates, and affiliated companies (collectively, the “Buyer Released Parties ”) from any and all claims, demands, damages, lawsuits, obligations, promises, and causes of action of any kind whatsoever, both known and unknown, at law or in equity, that any Buyer Releasor may have had or has against the Buyer Released Parties arising from or relating to the Purchase Agreement and the transactions contemplated thereby and any matter relating to Target or its business, operations, assets, or liabilities; provided, however, that nothing in this paragraph shall release any claims against a Buyer Released Party arising from any breach of this letter agreement or any breach of any post-Closing obligation of Seller under the Purchase Agreement (as amended hereby) that occurs after the date hereof.  Each Buyer Releasor agrees that no Buyer Releasor nor or any person, organization, or other entity acting on a Buyer Releasor’s behalf will file a lawsuit or administrative proceeding seeking legal, equitable, administrative, or other relief asserting any claims or causes of action released by this paragraph.  If any such claim or cause of action is asserted, each Buyer Releasor agrees that he or it will indemnify and hold harmless each of the Buyer Released Parties from and against any and all losses, costs, damages, expenses, and attorneys’ fees incurred as a result of its attempt to assert such claims or cause of action.

13.           The provisions of Section 8 of the Purchase Agreement shall apply to this letter agreement just as though they were incorporated directly herein; provided, that Section 8(o) of the Purchase Agreement is hereby amended by replacing the word “Texas” therein with the word “Florida.”

14.           If and to the extent following the Closing, Seller, its successor or assigns discover any additional AcXess Inc., share certificates other than those certificates previously delivered to the aforesaid escrow agent, it shall promptly deliver those certificates to AcXess Inc., properly endorsed for transfer to AcXess Inc.

If you are in agreement with the terms and conditions of this letter, please sign below to indicate your assent.

Sincerely,

	Innovative Software Technologies, Inc.
By:	/s/ Robert V. Rudman
	Robert Rudman, its President and CEO.
	/s/ Robert V. Rudman
	Robert Rudman joining in his individual capacity for the purposes of Section 5 above

Acknowledged and Agreed this

June 19, 2009

AcXess Inc.

By: /s/ Thomas J. Elowson                            

      Thomas J. Elowson

      President

By: /s/ Thomas J. Elowson                            

      Thomas J. Elowson

By: /s/ Raymond Leitz                                    

      Raymond Leitz

By: /s/ Helge Solberg                                     

      Helge Solberg

EX-4.1

Exhibit 4.1

SECURED PROMISSORY NOTE

$500,000.00  Boca Raton, Florida

 June 19, 2009

FOR VALUE RECEIVED, ACXESS INC., a Florida corporation (the “Borrower”), hereby agrees to pay to INNOVATIVE SOFTWARE TECHNOLOGIES, INC. (the “Holder”), at 911 Ranch Road 620 North, Suite 204, Austin, Texas, 78734, or at such other place as the Holder may designate in writing from time to time, the principal sum of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00), together with interest on the principal balance of this obligation from time to time remaining unpaid, at the rate and at the times provided in this Note.  All payments required by this Note must be by legal tender of the United States of America.

1.           Interest.  The outstanding principal amount of this Note shall bear interest beginning on the date of this Note at a rate equal to eight percent (8%) per annum, calculated on the basis of a 360-day year for the actual number of days elapsed through the actual payment date.  Interest shall accrue and be paid at maturity with the principal balance.  Notwithstanding anything contained herein, from and after the occurrence and during the continuance of an Event of Default pursuant to Section 5 below, this Note shall bear interest on the due and unpaid principal amount at the rate (the “Default Rate”) equal to the lower of sixteen percent (16%) per annum or, if lower, the highest rate permitted by law

2.           Security.  This Note is secured by certain assets of Borrower pursuant to a Security Agreement of even date herewith between Borrower and Holder.

3.           Method of Repayment.  The total amount of this Note shall be paid in one payment three (3) years from the date of this Note (the “Maturity Date”).

4.           Prepayments.  This Note may be prepaid at Borrower’s option without the consent of the Holder, either in whole or in part, at any time and from time to time without premium or penalty.  Should Borrower prepay any portion of the principal amount of this Note, Borrower shall be entitled to a proportionate reduction in principal of up to Three Hundred and Fifty Thousand and 00/100 Dollars ($350,000.00), as reflected on the Discount Schedule attached hereto as Exhibit A.  Interest shall only accrue on the remaining discounted principal in the event of any prepayment.

5.           Events of Default.  For purposes of this Note, an “Event of Default” is:  (i) a failure to pay any portion of the principal amount or interest on this Note when due, (ii) admission by the Borrower of its inability to pay its debts generally as they become due or otherwise acknowledges its insolvency; (iii) the filing of a petition in bankruptcy by the Borrower or the execution by the Borrower of a general assignment for the benefit of creditors; (iv) the filing against the Borrower of a petition in bankruptcy or a petition for relief under the provisions of the federal bankruptcy code or another state or federal law for the relief of debtors and the continuation of such petition without dismissal for a period of ninety (90) days or more, (v) the Borrower’s ceasing to carry on business, (vi) the sale, transfer, or other disposition of all or substantially all of the assets of the Borrower or a merger, acquisition, consolidation or similar transaction which results in the Borrower’s stockholders immediately prior to such transaction holding less than fifty percent (50%) of the voting power of the surviving, continuing or purchasing entity; or (vii) a breach by Borrower of any covenant, condition, or obligation contained in the Stock Purchase Agreement of even date herewith between Borrower and Holder or the Licensing Agreement of even date herewith between Borrower and Holder.  If an Event of Default occurs, the Holder may declare all of the outstanding principal amount of this Note, including any interest due thereon, to be due and payable immediately.  The Borrower shall pay interest on such amount in cash at the Default Rate to the Holder if such amount is not paid within two (2) days of Holder’s request.  The remedies under this Note shall be cumulative.

6.           Waivers.  No delay on the part of the Holder in exercising any right or remedy hereunder shall operate as a waiver of such right or remedy.  No single or partial exercise of a right or remedy shall preclude other or further exercise of that or any other right or remedy.  The failure of the Holder to insist upon the strict performance of any term of this Note, or to exercise any right or remedy hereunder, shall not be construed as a waiver or relinquishment by the Holder for the future of that term, right or remedy.  No waiver of any right of the Holder hereunder shall be effective unless in writing executed by the Holder.

7.           Severability.  The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable.

8.           WAIVER OF JURY TRIAL.  THE BORROWER AND THE HOLDER ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY MAY BE WAIVED.  EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE.

9.           Binding Effect.  This Note shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.

10.         Governing Law and Venue.  This Note shall be governed by and construed in accordance with the laws of the State of Florida, without reference to principles of choice of law thereunder.  The venue for any judicial or arbitration proceedings arising out of this Note or the obligations hereunder shall be in the state courts of the State of Florida located in Palm Beach County, Florida.

11.         Compliance With Usury Laws.  As it is the intent of all parties to this transaction to abide by the interest limitations of any applicable usury law, it is expressly agreed, anything herein to the contrary notwithstanding, that the Holder shall not be allowed or entitled to collect any interest (or any sum which is considered interest by law) which is in excess of any legal rate applicable hereto.  Should any amount be collected hereunder which would cause the interest to exceed said lawful rate, such part of said amount in excess of the lawful rate shall automatically be credited to principal, or, if all principal amounts have been paid, shall be refunded to Borrower.  The provisions of this Note are hereby modified to the extent necessary to conform with the limitations and provisions of this paragraph.  This paragraph shall govern over all other provisions in any document or agreement now or hereafter existing.

12.          Documentary Stamp Tax Liability.  The Holder shall pay any and all documentary stamp tax and/or any other excise tax due and payable on this Note. The Holder shall further indemnify and save harmless Borrower from any documentary stamp tax or intangibles tax assessed by the State of Florida with respect to this Note, including, without limitation, any penalties and interest.

13.          Costs.  In the event that this Note is collected by law or through attorneys at law, or under advice therefrom, the Borrower hereby agrees to pay all costs of collection, including reasonable attorneys’ fees an costs, whether or not suit is brought, and whether incurred in connection with collection, trial, appeal, bankruptcy or other creditors’ proceedings or otherwise.

14.          Application of Payments.  All principal, interest and any other amounts due under this Note shall be payable in lawful money of the United States of America at the place or places above stated.  All payments shall be credited first to costs and expenses, if any, incurred by Holder in collecting any amounts due hereunder, second to any late payment charges and interest accrued at the Default Rate (as defined above), third to past due interest, fourth to principal and any other amounts due hereunder.

IN WITNESS WHEREOF, the Borrower has executed and delivered this Note effective as of the date stated above.

BORROWER:

ACXESS INC., a Florida corporation

By: /s/ Thomas J. Elowson                            

Print Name:Thomas J. Elowson                    

Title: President                                                

Exhibit A

Discount Schedule on Principal Amount of Note for Prepayments

Prepayments – Months 1 through 3
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		33.3	%	$	166,500.00	$	333,500.00
$	75,000.00		50	%	$	250,000.00	$	250,000.00
$	100,000.00		66.6	%	$	333,000.00	$	167,000.00
$	150,000.00		100	%	$	500,000.00	$	0.00

Prepayments – Months 4 through 6
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		25	%	$	125,000.00	$	375,000.00
$	100,000.00		50	%	$	250,000.00	$	250,000.00
$	150,000.00		75	%	$	375,000.00	$	125,000.00
$	200,000.00		100	%	$	500,000.00	$	0.00

Prepayments – Months 7 through 12
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		22.22	%	$	111,100.00	$	388,900.00
$	100,000.00		44.44	%	$	222,200.00	$	277,800.00
$	150,000.00		66.66	%	$	333,300.00	$	166,700.00
$	200,000.00		88.88	%	$	444,400.00	$	55,600.00
$	225,000.00		100	%	$	500,000.00	$	0.00

Prepayments – Months 13 through 18
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		20	%	$	100,000.00	$	400,000.00
$	100,000.00		40	%	$	200,000.00	$	300,000.00
$	150,000.00		60	%	$	300,000.00	$	200,000.00
$	200,000.00		80	%	$	400,000.00	$	100,000.00
$	250,000.00		100	%	$	500,000.00	$	0.00

Prepayments – Months 19 through 24
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		18.18	%	$	90,900.00	$	409,100.00
$	100,000.00		36.36	%	$	181,800.00	$	318,200.00
$	150,000.00		54.54	%	$	272,700.00	$	227,300.00
$	200,000.00		72.72	%	$	363,600.00	$	136,400.00
$	250,000.00		90.90	%	$	454,500.00	$	45,500.00
$	275,000.00		100	%	$	500,000.00	$	0.00

Prepayments – Months 25 through 30
Prepayment Amount		Percentage Discount			Resulting Note Discount		Remaining Principal
$	50,000.00		16.66	%	$	83,300.00	$	416,700.00
$	100,000.00		33.33	%	$	166,650.00	$	333,500.00
$	150,000.00		50	%	$	250,000.00	$	250,000.00
$	200,000.00		66.66	%	$	333,300.00	$	166,700.00
$	250,000.00		83.33	%	$	416,650.00	$	83,350.00
$	275,000.00		91.66	%	$	458,300.00	$	41,700.00
$	300,000.00		100	%	$	500,000.00	$	0.00

EX-4.2

Exhibit 4.2

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as of the 19th day of June, 2009, by and between AcXess, Inc., a Florida corporation ("AcXess"), and Innovative Software Technologies, Inc., a California corporation ("Secured Party").

Recitals

WHEREAS, Pursuant to that certain Stock Purchase Agreement dated July 24, 2007 among AcXess, Secured Party, Torn Elowson, Ray Leitz, and Helge Solberg (the "Stock Purchase Agreement"), AcXess has executed a Secured Promissory Note of even date herewith in favor of Secured Party in the principal amount of Five Hundred Thousand Dollars ($500,000) (the "Note").

WHEREAS, Secured Party has required, as a condition to entering into the transactions contemplated by the Stock Purchase Agreement, that AcXess grant Secured Party a first priority security interest in all of AcXess's assets and property, and to that end has required the execution and delivery of this Agreement by AcXess.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in the Note and herein, the parties hereto, intending to be legally bound, agree as follows:

1.Incorporation of Recitals. Purchase Agreement, and Note. The foregoing Recitals, the Note, and the Guarantee Agreement, and the terms and provisions thereof, are hereby incorporated herein in their entirety by this reference.

2.Definitions. The following terms shall have the meanings set forth below:

"Obligations" means each and every debt, liability, and obligation of every type and description, including without limitation any debt, liability, and obligation arising under or in connection with the Note and Stock Purchase Agreement, and the related documents entered into in connection therewith, which AcXess may now or at any time hereafter owe to Secured Party, whether such debt, liability, or obligation now exists or is hereafter created or incurred and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, independent, joint, several, or joint and several.

"Security Interest" has the meaning given in Section 3.

"Collateral" means all assets and personal and fixture property of any kind and nature whatsoever now owned or hereafter acquired by AcXess, whether tangible or intangible, including without limitation all of AcXess's right, title, and interest in and to the property and assets listed on Exhibit A, including all proceeds thereof and all increases, substitutions, replacements, additions, and accretions thereof.

3.Security Interest. To secure payment of the Obligations, AcXess hereby irrevocably pledges and assigns to, and grants Secured Party a first priority security interest (the "Security Interest"). with power of sale to the extent permitted by law, in the Collateral.

4.Representations and Warranties. AcXess represents and warrants as follows:

(a)Authority. AcXess has authority to enter into this Security Agreement and any person signing it on AcXess's behalf has been duly authorized to take such action.

(b)Financing Statements. Except for the financing statements in favor of Secured Party, and the financing statements in favor of Gulf Pointe Capital, LLC, at the time of granting the security interest described herein, no financing statement covering the Collateral or any portion thereof will be on file in any public office and AcXess agrees not to execute or authorize the filing of any such additional financing statement in favor of any person, entity or governmental agency (whether federal, state or local) other than Secured Party as long as any portion of the Obligations evidenced by the Note remain unpaid.

(c)Legal Name. AcXess's exact legal name is as set forth in the first paragraph of this Security Agreement. AcXess shall not change its legal name or its form of organization without thirty (30) days' prior written notice to Secured Party,

5.Covenants and Agreements. AcXess covenants and agrees as follows:

(a)Restrictions Future Agreements. AcXess agrees that until the Obligations shall have been satisfied in full, AcXess shall not, without Secured Party's prior written consent, assign, transfer or otherwise dispose of the Collateral, and AcXess further agrees that it will not take any action, or permit any action to be taken by others subject to its control, including licensees, or fail to take any action, which would affect the validity or enforcement of the rights transferred to Secured Party under this Agreement.

(b)Defense. AcXess shall at its own expense and using commercially reasonable efforts, protect and defend the Collateral against all claims or demands,

(c)Maintenance. AcXess shall at all times and at its own expense maintain and keep, or cause to be maintained and kept, the Collateral in good repair, working order, and condition; pay and discharge when due all taxes, license fees, levies and other charges upon it; and not permit it to be used in violation of any applicable law, regulation or policy of insurance,

(d)Secured Party's Right to Take Action. If AcXess fails to perform or observe any of its covenants or agreements set forth in this Section 5, or if AcXess notifies Secured Party that it intends to abandon any part of the Collateral, Secured Party may (but need not) perform or observe such covenant or agreement or take steps to prevent such intended abandonment on behalf and in the name, place and stead of AcXess (or, at Secured Party's option, in Secured Party's own name) and may (but need not) take any and all other actions which Secured Party may reasonably deem necessary to cure or correct such failure or prevent such intended abandonment.

(e)Costs and Expenses. Except to the extent that the effect of such payment would be to render any loan or forbearance of money usurious or otherwise illegal under any applicable law, AcXess shall pay Secured Party on demand the amount of all moneys expended and all costs and expenses (including reasonable attorneys' fees and disbursements) incurred by Secured Party in connection with or as a result of Secured Party's taking action under subsection 5(d) or exercising its rights under Section 7, together with interest thereon from the date expended or incurred by Secured Party,

(f)Power of Attorney. To facilitate Secured Party's taking action under subsection 5(d) and exercising its rights under Section 7, AcXess hereby irrevocably appoints (which appointment is coupled with an interest) Secured Party, or its representatives or agents, as the attorney-in-fact of AcXess with the right (but not the duty) from time to time to create, prepare, complete, execute, deliver, endorse, or file, in the name and on behalf of AcXess, any and all instruments, documents, applications, financing statements, and other agreements and writings required to be obtained, executed, delivered or endorsed by AcXess under this Section 5, or, reasonably necessary for Secured Party, after an Event of Default, to lawfully enforce or use the Collateral, or to sell, assign, transfer, pledge, encumber or otherwise transfer title in or dispose of the Collateral to any third party. AcXess hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. The power of attorney granted herein shall terminate upon the payment in full and performance of all Obligations,

6.Events of Default. Each of the following occurrences shall constitute an event of default under this Agreement (herein called "Event of Default"):

(a)an Event of Default, as defined in the Note, shall occur; or

(b)AcXess shall fail promptly to observe or perform any material covenant or agreement herein binding on it; or

(c)there is any levy, seizure, or attachment of all or any portion of the Collateral; or

(d)any of the representations or warranties contained in Section 4 shall prove to have been incorrect in any material respect when made.

7.Remedies. Upon the occurrence of an Event of Default and at any time thereafter, Secured Party may, at its option, take any or all of the following actions:

(a)exercise any or all remedies available under this Agreement, the Note, or the Guarantee Agreements; or

(b)sell, assign, transfer, pledge, encumber, or otherwise dispose of the Collateral; or

(c)incur expenses, including attorneys' fees at the regular hourly rates of Secured Party's counsel from time to time in effect, legal expenses and costs for the exercise of any right or power under this Security Agreement, which expenses are secured by this Security Agreement.

8.Miscellaneous. TIME IS OF THE ESSENCE in this Security Agreement. This Agreement can he waived, modified, amended, terminated or discharged, and the Security Interest can be released, only explicitly in a writing signed by Secured Party, A waiver signed by Secured Party shall be effective only in the specific instance and for the specific purpose given, Mere delay or failure to act shall not preclude the exercise or enforcement of any of Secured Party's rights or remedies. All rights and remedies of Secured Party shall be cumulative and may be exercised singularly or concurrently, at Secured Party's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other, Secured Party shall not be obligated to preserve any rights AcXess may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of the Collateral in any particular order of application. This Agreement shall be binding upon and inure to the benefit of AcXess and Secured Party and their respective participants, successors, and assigns and shall take effect when signed by AcXess and Secured Party, and AcXess waives notice of Secured Party's acceptance hereof, This Agreement shall be governed by the internal law of the State of Florida without regard to conflicts of law provisions. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation and payment of the Obligations,

9.Waiver of Jury Trial:  ACXESS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT ACXESS MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY, THIS PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY ENTERING INTO THIS AGREEMENT.

[SIGNATURES ON FOLLOWING PAGES]

IN WITNESS WHEREOF, the parties have duly executed and delivered this Security Agreement as of the date and year first written above.

SECURED PARTY: Innovative Software Technologies, Inc.
By:	/s/ Robert V. Rudman
Name:	Robert Rudman
Title:	Chief Executive Officer/President
ACXESS: AcXess, Inc.
By:	/s/ Thomas Elowson
Name:	Thomas J. Elowson
Title:	President

STATE OF Flordia )

COUNTY OF Palm Beach )

The foregoing instrument was acknowledged before me this 19th day of June, 2009, by Robert Rudman, a CEO/ President of Innovative Software Technologies, A Deleware Corporation.

/s/ Connie Jo Horsley                    

Notary Public

IN WITNESS WHEREOF, the parties have duly executed and delivered this Security Agreement as of the date and year first written above.

SECURED PARTY: Innovative Software Technologies, Inc.
By:	/s/ Robert V. Rudman
Name:	Robert Rudman
Title:	Chief Executive Officer/President
ACXESS: AcXess, Inc.
By:	/s/ Thomas Elowson
Name:	Thomas J. Elowson
Title:	President

STATE OF Flordia )

COUNTY OF Palm Beach )

The foregoing instrument was acknowledged before me this 19th day of June, 2009, by Robert Rudman, a CEO/ President of Innovative Software Technologies, A Deleware Corporation.

/s/ Connie Jo Horsley                    

Notary Public

EXHIBIT A

Collateral

(a)All accounts, consisting of every right to payment for goods or other property of any kind sold or leased or for services rendered or for any other transaction, whether or not the right to payment has been earned by performance, and including without limitation every account receivable, all purchase orders, all interest in goods the sale or lease of which gives rise to the right to payment (including returned or repossessed goods and unpaid seller's rights), and the rights pertaining to such goods, including the right to stoppage in transit, every right to payment under any contract, and every lien, guaranty, or security interest that secures a right to payment for any of the foregoing ("Accounts");

(b)All chattel paper, consisting of a writing or writings evidencing both a monetary obligation and a security interest in or lease of goods, together with any guarantees, letters of credit, and other security therefore ("Chattel Paper");

(c)Deposit Accounts, as that term is defined in the Revised Uniform Commercial Code, as in effect in the State of Florida (the "UCC");

(d)All inventory of whatever kind, as that term is used in the UCC ("Inventory"), including without limitation all goods held by the Company for sale or lease, goods furnished or to be furnished under a contract for service, and supplies, packaging, raw materials, goods in transit, work-in-process, and materials used or consumed or to be used or consumed in the Company's business, or in the processing, packaging, or shipping of same, all finished goods, and all property, the sale or lease of which has given rise to Accounts, Chattel Paper, or Instruments, and that has been returned to the Company or repossessed by the Company or stopped in transit, and all warranties and related claims, credits, setoffs, and other rights of recovery with respect to any of the foregoing;

(e)All equipment, including without limitation all equipment, machinery, and other property held for use in or purchased for the Company's business, together with all increases, parts, fittings, accessories, repair equipment, and special tools now or later affixed to, or used in connection with, that property, all transferable rights of the Company to the licenses and warranties (express and implied) received from the sellers and manufacturers of the foregoing property, all related claims, credits, setoffs, and other rights of recovery ("Equipment");

(f)All instruments, including without limitation every instrument of any kind, as that term is used in the UCC, and includes every promissory note, negotiable instrument, certificated security, or other writing that evidences a right to payment of money, that is not a lease or security agreement, and that is transferred in the ordinary course of business by delivery with any necessary assignment or endorsement ("Instruments");

(g)Investment Property, as that term is defined in the UCC ("Investment Property");

(h)All documents, including without limitation any paper that is treated in the regular course of business as adequate evidence that the person in possession of the paper is entitled to receive, hold, and dispose of the goods the paper covers, including warehouse receipts, bills of lading, certificates of title, and applications for certificates of title ("Documents");

(i)All general intangibles of any kind, as that term is used in the UCC ("General Intangibles"), and includes without limitation all intangible personal property other than Accounts, Documents, Instruments, and Chattel Paper, and includes without limitation money, contract rights, corporate or other business records, deposit accounts, inventions, designs, formulas, patents, patent applications, service marks, trademarks, trade names, trade secrets, engineering drawings, goodwill, rights to prepaid expenses, registrations, franchises, copyrights, licenses, customer lists, computer programs and other software, source code, tax refund claims, royalty, licensing and product rights, all claims under guarantees, security interests or other security held by or granted to Debtor to secure payment of any of the Accounts by an Account Debtor, all indemnification rights, and rights to retrieval from third parties of electronically processed and recorded data pertaining to any Collateral, things in action, items, checks, drafts, and orders in transit to or from Debtor, credits or deposits of Debtor (whether general or special) that are held by Secured Party;

(j)Supporting obligations, as that term is defined in the UCC ("Supporting Obligations"); and

(k)To the extent not listed above as original collateral, proceeds and products of the foregoing. Without in any way limiting the generality of the foregoing, the Collateral includes all intellectual property of the Company, including its Copyrights (as defined below), Patents (as defined below), and Trademarks (as defined below).

"Copyrights" means all types of protective rights granted (or applications therefor) for any work that constitutes copyrightable subject matter recognized under federal law and all comparable rights recognized in foreign jurisdictions or conventions or by treaty.

"Patents" means all types of exclusionary or protective rights granted (or applications therefor) for inventions, patents, patent applications, and all reissues and extensions thereof and all renewals, divisions, continuations and continuations-in-part thereof, recognized under federal law and all comparable rights recognized in foreign jurisdictions or conventions or by treaty.

"Trademarks" means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, interne domain names and other sources of business identifiers used in any country in the world, whether registered or unregistered, and the goodwill associated therewith, now existing or hereafter acquired, and (b) all registrations, recordings and renewals thereof, and all applications in connection therewith, issued by, filed in or otherwise recognized by a national, state, or foreign governmental authority or any foreign jurisdiction or convention or by treaty.