Exhibit
4.03
EXHIBIT C
WARRANT AGREEMENT
INNOVATIVE SOFTWARE TECHNOLOGIES, INC.
Warrant
No. Issuance
Date: June 17, 2009
THE SECURITES
REPRESENTED BY THIS AGREEMENT HAVE BEEN SOLD IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT” ),
AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY
NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO
DIATECT INTERNATIONAL CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT
AGREEMENT
THIS WARRANT AGREEMENT ( “this
Agreement” ) is dated this 17
th day of June 2009, by and between Innovative
Software Technologies, Inc., a Florida corporation (the
“Company” ), and The WEB Channel Network
LLC., (the “Warrant Holder” ).
W I T N E S
S E T H
WHEREAS, as part of the Agreement,
the Company agreed to issue to the Warrant Holder a warrant (the
“Warrant” ) to purchase an aggregate of
5,000,000 shares of the Company’s Common Stock, par value
$0.001 per share (the “Common Stock”
).
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1.
Incorporation of Recitals . The Recitals portion of
this Agreement is hereby incorporated by this reference as though
it were fully set forth and rewritten herein, and the affirmative
statements therein contained shall be deemed to be representations
of the Company and the Warrant Holder, which are hereby
confirmed.
2.
Grant of Warrant .
(a)
The Company hereby agrees that the
Warrant Holder, for value received, is entitled, subject to the
provisions of this Warrant, to purchase from the Company, in whole
or in part and at any time or from time to time, during the period
commencing on the date hereof and expiring at 5:00 p.m., EST, on
the Expiration Date (as defined below), June 17, 2012 fully paid
and non-assessable shares of Common Stock (as defined
below). The “Exercise Price”
for such shares shall be equal to $0.03 per share, subject to
adjustment as set forth in Section 4 below.
(b) The
term “Common Stock” means the common
stock, par value $0.001 per share, of the Company as constituted on
the date hereof, together with any other equity securities that may
be issued by the Company in substitution therefor. The
number of shares of Common Stock to be received upon the exercise
of this Warrant, and the Exercise Price, shall be adjusted from
time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as adjusted from
time to time, are hereinafter referred to as
“Shares.” The term
“Company” means and includes the Company
as well as (i) any successor corporation resulting from the
merger or consolidation of the Company with another corporation, or
(ii) any corporation to which the Company has transferred
its property or assets as an entirety or substantially as an
entirety.
3.1
Process and Consequences of Exercise .
(a) Subject
to the limitations set forth in Section 5, this Warrant may be
exercised in whole or in part at any time or from time to time
during the period commencing on the date hereof and expiring at
5:00 p.m. Florida time, on June 17, 2012 or, if such date is a day
on which banking institutions in Florida are authorized by law to
close, then on the next succeeding day that banking institutions in
Florida shall not be authorized to close.
(b) The
Holder may exercise this Warrant by presentation and surrender of
this Warrant to the Company at its principal office with the
Warrant Exercise Form attached as Exhibit A hereto
(the “Notice of Exercise” ), duly
executed by the Warrant Holder and accompanied by
payment (either in cash, wire transfer, or by certified or official
bank check, payable to the order of the Company) of an amount equal
to the Exercise Price multiplied by the number of Shares purchased
(the “Purchase Price”
). The Purchase Price shall be payable in
cash.
(c) If
this Warrant is exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the shares purchasable hereunder.
(d) Upon
receipt by the Company of this Warrant, together with the Purchase
Price, at its office in proper form for exercise, the Holder shall
be deemed to be the holder of record of the Shares to be issued
upon such exercise, not withstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such Shares shall not then be actually delivered to
the Holder.
3.2
Issuance of Certificates . As soon as
practicable after the exercise of the Warrant (in whole or in part)
in accordance with Section 3.1 hereof, the Company, at its expense,
shall cause to be issued in the name of and delivered to the
Warrant Holder (i) a certificate or certificates for the
number of fully-paid and non-assessable Shares to which the Warrant
Holder shall be entitled upon such exercise and (if applicable)
(ii) a new warrant agreement of like tenor to purchase all
of the Shares that may be purchased pursuant to the portion, if
any, of the Warrant not exercised by the Warrant
Holder. The Warrant Holder shall for all purposes be
deemed to have become the holder of record of such Shares on the
date on which the Notice of Exercise and payment of the Purchase
Price in accordance with Section 3.1 hereof were delivered and
made, respectively, irrespective of the date of delivery of such
certificate or certificates, except that if the date of such
delivery, notice and payment is a date when the stock transfer
books of the Company are closed, such person shall be deemed to
have become the holder of record of such Shares at the close of
business on the next succeeding date on which the stock transfer
books are open.
3.3
Market Price . The “Market
Price” of a share of Common Stock
means: the average of the daily volume weighted average
price of shares of Common Stock on the principal market on which
shares of the Common Stock are traded for the five (5) trading days
immediately preceding the date of the determination of the Market
Price. If shares of Common Stock are not traded on any
public market (e.g. NYSE, AMEX, NASDAQ, OTCBB or Pink Sheets), the
Market Price of the Common Stock shall be determined, in good
faith, by the Board of Directors of the Company.
4.1
Stock Splits, Stock Dividends and Combinations .
If the Company at any time subdivides the outstanding shares
of the Common Stock or issues a stock dividend (in Common Stock) on
the outstanding shares of the Common Stock, the Exercise Price in
effect immediately prior to such subdivision or the issuance of
such stock dividend shall be proportionately decreased, and the
number of Shares subject hereto shall be proportionately increased,
and if the Company at any time combines (by reverse stock split or
otherwise) the outstanding shares of Common Stock, the Exercise
Price in effect immediately prior to such combination shall be
proportionately increased, and the number of Shares subject hereto
shall be proportionately decreased, effective at the close of
business on the date of such subdivision, stock dividend or
combination, as the case may be.
4.2
Merger or Consolidation . In the case of any
consolidation of the Company with, or merger of the Company with or
into another entity (other than a consolidation or merger which
does not result in any reclassification or change of the
outstanding capital stock of the Company), the entity formed by
such consolidation or merger shall execute and deliver to the
Warrant Holder a supplemental warrant agreement providing that the
Warrant Holder of the Warrant then outstanding or to be outstanding
shall have the right thereafter (until the expiration of such
Warrant) to receive, upon exercise of such Warrant, the kind and
amount of shares of capital stock and other securities and property
receivable upon such consolidation or merger by a holder of the
nu