EXHIBIT 2.1
AGREEMENT
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THIS AGREEMENT (the "Agreement"), made and executed as of the 30th day
of May, 2003, by and between DISTRIBUTION MANAGEMENT SERVICES, INC., a Florida
corporation, located at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx
00000, (hereinafter referred to as "DISTRIBUTION" or "First Party"), and XXXXXX
XXXXX, SR. and XXXXXX XXXXX, JR., of 00000 X.X. 000xx Xxxxx, Xxxxxxxxxxx,
Xxxxxxx 00000, (hereinafter collectively referred to as "Second Parties or
"XXXXX").
W I T N E S S E T H:
RECITALS
WHEREAS, the First Party desires to purchase from the Second Parties
certain literary assets produced by the Second Parties (the "Assets") and the
Second Parties desire to sell the Assets to the First Party; and
WHEREAS, the Second Parties are desirous of exercising their skills and
expertise in connection with the production of these Assets on behalf of the
First Party; and
WHEREAS, to acquire the Assets and the expertise of the Second Parties
in the production of the Assets, DISTRIBUTION will issue shares of its
authorized restricted common stock, together with other consideration, to the
Second Parties, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, warranties, covenants and agreements made in this Agreement, the
receipt and sufficiency of which the parties acknowledge, the parties have
agreed as follows:
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ARTICLE I
DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Ancillary Agreements" shall mean the agreements if any, entered
into in connection with the transactions described herein.
1.2 "DISTRIBUTION Stock" shall mean the ($.001) par value shares of
restricted common stock of DISTRIBUTION issued to the Second Parties.
1.3 "Closing" shall mean the completion of the transaction described by
this Agreement, to be consummated on the Closing Date.
1.4 "Closing Date" shall mean the date at which this Agreement is
executed by all parties.
1.5 "Schedule" or Exhibit" unless otherwise indicated, shall mean a
Schedule or Exhibit attached to this Agreement and incorporated into this
Agreement by such reference.
1.6 "Financial Statements" shall mean the unaudited balance sheet and
income statement of DISTRIBUTION as of February 28, 2003.
1.7 "Knowledge" shall mean actual knowledge or such knowledge that a
reasonable person in such circumstances would have reason to know.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF DISTRIBUTION
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First Party represents and warrants to Second Parties that:
2.1 Corporate Organization. DISTRIBUTION is a Florida corporation,
organized on January 25, 1995, which files reports on a quarterly and annual
basis with the U.S. Securities and Exchange Commission ("SEC"). DISTRIBUTION's
common stock trades on the over-the-counter
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Electronic Bulletin Board under the symbol "DMGS". A copy of its Form 10-QSB for
the quarterly period ended February 28, 2003 filed with the SEC has previously
been provided to the Second Parties.
2.2 Authorization. DISTRIBUTION has all necessary power, capacity and
authority (corporate and otherwise) to enter into this Agreement and the other
agreements contemplated herein and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the consummation of
the transactions described herein have been duly authorized by all necessary
corporate action on the part of DISTRIBUTION.
2.3 Broker and Finders. No finder, broker agent or other intermediary
has acted on behalf of either party or is entitled to a commission or finder's
fee in connection with the negotiation or consummation of this Agreement.
2.4 Governmental Approvals and Filings. First Party is not required to
obtain any consent, approval or authorization of, or to make any declaration or
filing with, any governmental authority for the valid execution and delivery of
this Agreement or any Ancillary Agreements to which it may be a party, the
performance of its obligations hereunder and thereunder or the consummation of
the transaction described herein.
2.5 Taxes. There are no audits or investigations, local, state or
Federal, concerning or related to First Party which are pending or threatened,
nor are there any required taxes, fees, assessments, or governmental charges of
any type which are due and/or are unpaid.
2.6 Compliance with Law - Licenses. First Party conducts its business
in compliance, in all material respects, with all applicable laws, governmental
regulations and judicial and administrative decisions and no notice or warning
asserting the lack of such compliance has been
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received. All licenses or permits issued by any governmental authority which are
necessary for the operation of the business of First Party have been obtained
and are currently in full force and effect.
2.7 Properties. First Party has good title to all of its assets and
properties of every kind, nature and description, tangible or intangible,
wherever located, free and clear of all pledges, liens, security interests,
encumbrances and restrictions of any nature excepting such obligations as are
described in DISTRIBUTION'S filings with the SEC, none of which shall impair the
value of the Assets.
2.8 Litigation. There are no suits, claims, actions, proceedings,
administrative or judicial, or any governmental investigation pending, or to the
knowledge of First Party, threatened against First Party involving any property,
including without limitation, any claim proceeding, or litigation for the
purpose of challenging, enjoining or preventing the execution and delivery of
this Agreement to which First Party is a party, the performance of the
respective terms and conditions hereof or thereof or the consummation of the
respective transactions described herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX
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3.1 The Second Parties jointly and severally represent that they are
the owners of two (2) literary products (previously defined as the "Assets") as
follows:
a. An original story by XXXXXX XXXXX, SR., entitled "Whiskers", the
script dated September 19, 1993 which has been copyrighted.
b. An original story by XXXXXX XXXXX, SR., entitled "Sea Escape"
dated May 5, 1999 which has been copyrighted.
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3.2 Xxxxxx Xxxxx, Sr. agrees to use his expertise, skills and talents
to produce "Whiskers"as a motion picture. Scenes will be shot at locations in
the United States and the Bahamas or any such location as may be required or
directed by Xxxxxx Xxxxx, Sr.
3.3 Xxxxxx Xxxxx, Jr. agrees to use his expertise, skills and talents
to assist in the film production of "Whiskers."
3.4 It is represented by Second Parties that they have good and valid
title to the Assets and same are free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of any nature
whatsoever and to the best if their knowledge, that there are no impairments as
to the value of the Assets. The Second Parties further represent and warrant
that they have full authority to assign, transfer and convey all right, title
and interest in and to the Assets in accordance with the provisions of this
Agreement. Simultaneously with the execution of this Agreement, the said Second
Parties shall execute such documents as are necessary to appropriately convey,
transfer, and set over unto DISTRIBUTION all right, title and interest in and to
the Assets.
3.5 The Second Parties are the owners of various cameras, equipment,
underwater equipment, production facilities, and such other facilities and
properties (collectively the "Equipment") as will be necessary to produce and
prepare "Whiskers" for production, distribution and marketing. The Equipment
will be provided as set forth in a budget to be prepared by the Second Parties
and provided to DISTRIBUTION, without any additional consideration whatsoever to
be paid or given by DISTRIBUTION for the use of the Equipment. Ownership of the
Equipment shall, at all times, remain with XXXXX.
3.6 That the said Second Parties represent that they shall cause to be
produced "Whiskers" into an appropriate film production to be distributed and
marketed in selected market
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places. The budgeted sum for "Whiskers" is expected to be Three Million
($3,000,000.00) Dollars, or such amount as may be mutually determined by the
parties.
3.7 That the said Second Parties shall be in charge of marketing and
distribution of all products related to "Whiskers".
3.8 Subsequent to completion and distribution of "Whiskers" XXXXX shall
further develop, produce, market and distribute "Sea Escape", and/or such other
mutually acceptable properties, the cost of which shall be paid from the
operating revenues of DISTRIBUTION, if any.
ARTICLE IV
CONSIDERATION
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4.1 The Securities. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing,
x. XXXXX transfer to DISTRIBUTION all proprietary rights and
interests in the Assets, and all benefits arising therefrom or thereunder.
b. DISTRIBUTION shall cause to be issued to XXXXX certificates
for shares of DISTRIBUTION Stock in the aggregate amount of Five Hundred
Thousand (500,000) shares, of which Three Hundred Thousand (300,000) shares of
shall be issued to XXXXXX XXXXX, SR. and Two Hundred Thousand (200,000) shares
shall be issued to XXXXXX XXXXX, JR., free and clear of all liens, security
interests, encumbrances, pledges, charges, claims, voting trusts and
restrictions of any nature whatsoever, other than restrictions on
transferability arising under Federal and state securities laws.
4.2 Other Consideration. In addition to the DISTRIBUTION Stock to be
issued to the Second Parties, the Second Parties shall receive two (2%) percent
of the gross income which may
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result from the marketing and distribution of the Assets. DISTRIBUTION shall,
from time to time, but no less than quarterly, account to XXXXX for the gross
income received from the marketing and distribution of the Assets, if any.
DISTRIBUTION shall remit to XXXXX the said two (2%) percent promptly following
receipt thereof by DISTRIBUTION, but no less frequently than quarterly. XXXXX
understands, agrees and acknowledges that there is no guarantee or assurance
that there will be any income received from the marketing and/or distribution of
the Assets. XXXXX shall not be entitled to any compensation or consideration
received by DISTRIBUTION resulting from the sale of all or any part of the
Assets to a third party.
ARTICLE V
BOARD OF DIRECTORS
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5.1 At the Closing, Second Parties shall be appointed to the Board of
Directors of DISTRIBUTION.
ARTICLE VI
INDEMNIFICATION
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6.1 Indemnity. Each party agrees to hold harmless and indemnify the
other, its directors, officers, employees, representatives, agents, successors,
consultants and assigns from and against any claim, loss, damage, liability,
expense or cost of any kind or amount whatsoever (including, without limitation,
reasonable attorney's fees and expenses), which results from or arises out of
any breach of or default under any representation, warranty, covenant or
agreement made by either party in this Agreement, in any Schedule or Exhibit to
this Agreement, in any Ancillary Agreement or in any certificate or other
agreement or document furnished or to be furnished by or on behalf of either
party, in connection with the respective transactions described herein.
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ARTICLE VII
OTHER CONDITIONS
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7.1 Conditions. Notwithstanding anything to the contrary contained in
this Agreement, the following conditions have been met prior to Closing:
a. Each party has conducted a due diligence investigation with
regard to the transaction and each has entered into this Agreement with full
understanding of the facts and issues.
b. That the representations and warranties of each have been
and are true as of the date of the Closing and are certified as true.
c. That all documents, including this Agreement and all
Ancillary Agreements contemplated hereby are acceptable to each party.
d. That all Ancillary Agreements and other documents
contemplated hereunder have been executed by all persons or entities whose
execution of such documents is required.
ARTICLE VIII
MISCELLANEOUS
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8.1 Entire Agreement. This Agreement, the Ancillary Agreements, the
Schedules and Exhibits hereto and thereto, and all documents contemplated hereby
and thereby embody the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof and thereof, and supersede all prior
and contemporaneous agreements and understanding relative to said subject
matter.
8.2 Binding Effect; Assignment. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon the parties, their successors and permitted assigns. Neither this Agreement
nor any of the rights, interests or obligations hereunder
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shall be transferred or assigned (by operation of law or otherwise) by the
Second Parties hereto without the prior written consent of the FIRST Party.
8.3 No Third Party Beneficiaries. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon or give to any
person, firm, corporation or legal entity, other than the parties hereto, any
rights, remedies or other benefits under or by reason of this Agreement.
8.4 Applicable Law; Forum Selection. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of laws. The parties hereto
expressly submit themselves to, and agree that all actions arising out of this
Agreement shall occur solely in the venue and jurisdiction of the state and
federal courts encompassing Miami-Dade County, Florida.
8.5 Actions to Enforce Agreement. If any party hereto shall fail to
perform any covenant or condition hereof or shall otherwise be in material
breach of this Agreement, such party shall pay to the non-defaulting party their
reasonable attorneys' fees and costs incurred as a result of their efforts to
enforce this Agreement (whether or not litigation is commenced, at trial and
appellate levels).
8.6 Notices. Any and all notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand or five (5) days after deposited in the United
States mail, by registered or certified mail, return receipt requested, postage
prepaid, as follows:
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If to DISTRIBUTION: 00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx, Xxxxxxx 00000
If to XXXXX: 00000 XX 000xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
or such other address as any party may from time to time give written notice
of to the other parties.
8.7 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. If any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid by any court of competent
jurisdiction, then, in such event, this Agreement shall be construed as if such
invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, or section or sections had not been inserted.
8.8 No Waivers. The waiver by any party of a breach or violation of any
provision of this Agreement by any other party shall not operate nor be
construed as a waiver of any subsequent breach or violation, nor as a waiver by
any other party of such breach or violation, nor as a waiver by any other party
of any subsequent breach or violation. The waiver by any party to exercise any
right or remedy he may possess shall not operate nor be construed as a bar to
the exercise of such right or remedy party upon the occurrence of any subsequent
breach or violation, nor as a bar to the exercise of any right or remedy by any
other party.
8.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions hereof.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties in separate counterparts, each of which
shall be deemed to constitute an original and all of which shall be deemed to
constitute the one and the same instrument.
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8.11 Rule of Construction That Ambiguities Are to be Construed Against
the Drafter Not Applicable. The parties to the Agreement acknowledge that they
have each carefully read and reviewed the Agreement with their respective
counsel, and therefore agree the rule of construction that ambiguities shall be
construed against the drafter of the document shall not be applicable.
8.12. Further Assurances. The parties hereto, with reasonable
diligence, shall do all such things and provide all such reasonable assurance as
maybe required to consummate the transactions described herein and each party
hereto shall provide such further documents or instruments required by any other
party hereto as may be reasonably necessary or desirable to effect the purpose
of this Agreement and to carry out its provisions.
8.13. Remedies. Nothing contained in the Agreement is intended to or
shall be construed to limit the remedies which any party hereto may have against
the other parties hereto in the event of a default by such party with respect to
their obligations hereunder or in the event of a breach by such party of such
representation, warranty or agreement made in or pursuant to this Agreement, it
being intended that any and all remedies shall be cumulative and non-exclusive.
IN WITNESS WHEREOF the parties have set their hands and seals the day
and year first above written.
FIRST PARTY" "SECOND PARTIES"
DISTRIBUTION MANAGEMENT
SERVICES, INC.
A Florida corporation
By: /s/Xxxxxx Xxxxx, Sr.
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XXXXXX XXXXX, SR.
By:/s/ Xxx Xxxxxxxxxx By: /s/Xxxxxx Xxxxx, Jr.
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Xxx Xxxxxxxxxx, President XXXXXX XXXXX, JR.
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