EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT (the "Agreement"), made and executed as of the 22nd day
of September, 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"),
XXXXXX XXXXX, SR., XXXXXX XXXXX, JR. , and MAKO PRODUCTS, INC., of 00000 X.X.
000xx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000, (hereinafter collectively referred to
as "Second Parties or XXXXX").
WITNESSETH:
RECITALS
WHEREAS, the First Party desires to purchase from the Second Parties a
certain asset owned and created by the Second Parties (the "Asset") and the
Second Parties desire to sell the Asset to the First Party; and
WHEREAS, the Second Parties are desirous of exercising their skills and
expertise in connection with the manufacture, use, distribution, rental and sale
of said product on behalf of the First Party; and
WHEREAS, to acquire the Asset and the expertise of the Second Parties
in the manufacturing of the product 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 audited balance sheet and income
statement of DISTRIBUTION as of May 31, 2003.
1.7 "Knowledge" shall mean actual knowledge or such knowledge that a reasonable
person in such circumstances would have reason to know.
1.8 The "Asset" is sometimes described as "the Product" or "Mako Head".
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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 Electronic Bulletin Board under the
symbol "DMGS". A copy of its Form 10-KSB for the fiscal year ended May 31, 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.
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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 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 Asset.
2.8 Litigation. There is one suit filed by the First Party against the
former operator of the recycling center and to the knowledge of First Party
nothing 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.
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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 a certain mechanical device known as the "Mako Head".
3.2 It is represented by Second Parties that they have good and valid
title to the "Mako Head" and same is free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of any nature
whatsoever and to the best of their knowledge, that there are no impairments as
to the value of the Asset. 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 Asset 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 Asset.
3.3 That the said Second Parties represent that they shall cause to be
manufactured the "Mako Head" to be distributed and marketed in selected market
places.
3.4 That the said Second Parties shall be in charge of manufacturing,
marketing and distribution of all products related to the "Mako Head".
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:
a. The Second Parties shall transfer to DISTRIBUTION all
proprietary rights and interests, of every kind, nature and description, in one
hundred (100%) percent of the capital
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stock of "Mako Products, Inc.", together with all rights, interest and claims of
every kind, nature and description, in that certain product known as the "Mako
Head". The said Mako Products, Inc., shall be maintained as a wholly owned
subsidiary of DISTRIBUTION, because of the nature of the transactions between
Mako Products, Inc., and various other entities.
b. DISTRIBUTION shall cause to be issued to the Second Parties
certificates for shares of DISTRIBUTION Stock in the aggregate amount of Five
Hundred Fifty Thousand (550,000) shares, same shall be issued as follows:
(i) Two Hundred Thousand (200,000) Shares shall be issued to
each XXXXXX XXXXX, SR. and XXXXXX XXXXX, JR., in consideration of One Hundred
(100%) Percent of the shares of MAKO PRODUCTS, INC.
(ii) One Hundred Fifty Thousand (1 50,000) Shares to XXXXXX
XXXXX, SR., in consideration of the name "MAKO" as a product trademark.
Said shares shall be 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 as herein above set forth, Mako Products, Inc.,
shall pay over to the said Second Parties from its gross income derived from the
rental, sale, distribution, manufacturing or any income arising by virtue of the
"Mako Head", the following percentages:
a. XXX XXXXX shall receive five (5%) percent of such gross income
accruing to Mako Products, Inc.
b. XXXXX WATERFORD shall receive five (5%) percent of the gross
income
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accruing to Mako Products, Inc.
c. XXXXXX XXXXX, SR., shall receive ten (10%) percent of the gross
income accruing to Mako Products, Inc.
d. XXXXXX XXXXX, JR., shall receive ten (10%) percent of the gross
income accruing to Mako Products, Inc.
e. XXXXXX XXXXX, SR., shall receive twenty (20%) percent of any
gross income received for the use of the name "Mako".
f. In addition to all of the foregoing, XXXXXX XXXXX, SR., shall
receive Eighty Thousand ($80,000.00) Dollars from the gross income received by
Mako Products, Inc., within the first (1st) year of the operation. In the event
that sufficient income is not generated from that source, then DISTRIBUTION
shall make arrangements for compensation to XXXXXX XXXXX, SR., of that amount on
or before one (1) year from date of closing.
ARTICLE V
BOARD OF DIRECTORS
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5.1 All parties recognize that the Second Parties are members of the
Board of Directors of First Parties; nevertheless, the transaction has been as
an arms length transaction between the parties.
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,
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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.
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
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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 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)
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days after deposited in the United States mail, by registered or certified mail,
return receipt requested, postage prepaid, as follows:
To DISTRIBUTION: 00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx, Xxxxxxx 00000
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.
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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.
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 or 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.
DISTRIBUTION MANAGEMENT MAKO PRODUCTS, INC.
SERVICES, INC.
A Florida corporation By: /s/ Xxxxxx Xxxxx, Sr.
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Xxxxxx Xxxxx, Sr.
By: /s/ Xxx Xxxxxxxxxx
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Xxx Xxxxxxxxxx, President By: /s/ Xxxxxx Xxxxx, Jr.
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Xxxxxx Xxxxx, Jr.
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