Document:

EXHIBIT 10.3

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
February 12, 2004 by DISTRIBUTION MANAGEMENT SERVICES, INC., a Florida
corporation (the "Company"); CORNELL CAPITAL PARTNERS, LP, a Delaware limited
partnership (the "Investor"); and BUTLER GONZALEZ LLP (the "Escrow Agent").

                                   BACKGROUND

         WHEREAS, the Company and the Investor have entered into an Standby
Equity Distribution Agreement (the "Standby Equity Distribution Agreement")
dated as of the date hereof, pursuant to which the Investor will purchase the
Company's Common Stock, par value $0.001 per share (the "Common Stock"), at a
price per share equal to the Purchase Price, as that term is defined in the
Standby Equity Distribution Agreement, for an aggregate price of up to Five
Million Dollars ($5,000,000). The Standby Equity Distribution Agreement provides
that on each Advance Date the Investor, as that term is defined in the Standby
Equity Distribution Agreement, shall deposit the Advance pursuant to the Advance
Notice in a segregated escrow account to be held by Escrow Agent and the Company
shall deposit shares of the Company's Common Stock, which shall be purchased by
the Investor as set forth in the Standby Equity Distribution Agreement, with the
Escrow Agent, in order to effectuate a disbursement to the Company of the
Advance by the Escrow Agent and a disbursement to the Investor of the shares of
the Company's Common Stock by Escrow Agent at a closing to be held as set forth
in the Standby Equity Distribution Agreement (the "Closing").

         WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the
funds and the shares of the Company's Common Stock deposited with it in
accordance with the terms of this Agreement.

         WHEREAS, in order to establish the escrow of funds and shares to effect
the provisions of the Standby Equity Distribution Agreement, the parties hereto
have entered into this Agreement.

         NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:

              1. Definitions. The following terms shall have the following
meanings when used herein:

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              a. "Escrow Funds" shall mean the Advance funds deposited with the
Escrow Agent pursuant to this Agreement.

              b. "Joint Written Direction" shall mean a written direction
executed by the Investor and the Company directing Escrow Agent to disburse all
or a portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.

              c. "Common Stock Joint Written Direction" shall mean a written
direction executed by the Investor and the Company directing Investor's Counsel
to disburse all or a portion of the shares of the Company's Common Stock or to
refrain from taking any action pursuant to this Agreement.

         2. Appointment of and Acceptance by Escrow Agent.

              a. The Investor and the Company hereby appoint Escrow Agent to
serve as Escrow Agent hereunder. Escrow Agent hereby accepts such appointment
and, upon receipt by wire transfer of the Escrow Funds in accordance with
Section 3 below, agrees to hold, invest and disburse the Escrow Funds in
accordance with this Agreement.

              b. The Investor and the Company hereby appoint the Escrow Agent to
serve as the holder of the shares of the Company's Common Stock which shall be
purchased by the Investor. The Escrow Agent hereby accepts such appointment and,
upon receipt via D.W.A.C or the certificates representing of the shares of the
Company's Common Stock in accordance with Section 3 below, agrees to hold and
disburse the shares of the Company's Common Stock in accordance with this
Agreement.

              c. The Company hereby acknowledges that the Escrow Agent is
counsel to the Investor in connection with the transactions contemplated and
referenced herein. The Company agrees that in the event of any dispute arising
in connection with this Escrow Agreement or otherwise in connection with any
transaction or agreement contemplated and referenced herein, the Escrow Agent
shall be permitted to continue to represent the Investor and the Company will
not seek to disqualify such counsel.

         3. Creation of Escrow Account/Common Stock Account.

              a. On or prior to the date of this Agreement the Escrow Agent
shall establish an escrow account for the deposit of the Escrow Funds entitled
as follows: Distribution Management Services Inc/Cornell Capital Partners, LP.
The Investor will wire funds to the account of the Escrow Agent as follows:

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BANK:                    Wachovia, N.A. of New Jersey
ROUTING #:               031201467
ACCOUNT #:               2020000659170
NAME ON ACCOUNT:         Butler Gonzalez LLP as Escrow Agent
NAME ON SUB-ACCOUNT:     Distribution Management Services, Inc/Cornell Capital
                         Partners, LP Escrow account

              b. On or prior to the date of this Agreement the Escrow Agent
shall establish an account for the D.W.A.C. of the shares of Common Stock. The
Company will D.W.A.C. shares of the Company's Common Stock to the account of the
Escrow Agent as follows:

BROKERAGE FIRM:          Crown Financial Group
CLEARING HOUSE:          Fiserv
ACCOUNT #:               56797702
DTC #:                   0632
NAME ON ACCOUNT:         Butler Gonzalez LLP Escrow Account

         4. Deposits into the Escrow Account. The Investor agrees that it shall
promptly deliver all monies for the payment of the Common Stock to the Escrow
Agent for deposit in the Escrow Account.

         5. Disbursements from the Escrow Account.

              a. At such time as Escrow Agent has collected and deposited
instruments of payment in the total amount of the Advance and has received such
Common Stock via D.W.A.C from the Company which are to be issued to the Investor
pursuant to the Standby Equity Distribution Agreement, the Escrow Agent shall
notify the Company and the Investor. The Escrow Agent will continue to hold such
funds until the Investor and Company execute and deliver a Joint Written
Direction directing the Escrow Agent to disburse the Escrow Funds pursuant to
Joint Written Direction at which time the Escrow Agent shall wire the Escrow
Funds to the Company. In disbursing such funds, Escrow Agent is authorized to
rely upon such Joint Written Direction from Company and may accept any signatory
from the Company listed on the signature page to this Agreement and any
signature from the Investor that Escrow Agent already has on file. Simultaneous
with delivery of the executed Joint Written Direction to the Escrow Agent the
Investor and Company shall execute and deliver a Common Stock Joint Written
Direction to the Escrow Agent directing the Escrow Agent to release via D.W.A.C
to the Investor the shares of the Company's Common Stock. In releasing such
shares of Common Stock the Escrow Agent is authorized to rely upon such Common
Stock Joint Written Direction from Company and may accept any signatory from the
Company listed on the signature page to this Agreement and any signature from
the Escrow Agent has on file.

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<PAGE>

         In the event the Escrow Agent does not receive the amount of the
Advance from the Investor or the shares of Common Stock to be purchased by the
Investor from the Company, the Escrow Agent shall notify the Company and the
Investor. In the event that the Escrow Agent has not received the Common Stock
to be purchased by the Investor from the Company, in no event will the Escrow
Funds be released to the Company until such shares are received by the Escrow
Agreement. In the event the Escrow Agent has received the Common Stock purchased
by the Investor, such shares shall not be released to the Investor until the
Escrow Agent has received the Escrow Funds and a closing can take place pursuant
to the Terms of this Agreement.

         For purposes of this Agreement, the term "Common Stock certificates"
shall mean Common Stock certificates to be purchased pursuant to the respective
Advance Notice pursuant to the Standby Equity Distribution Agreement.

         6. Deposit of Funds. The Escrow Agent is hereby authorized to deposit
the wire transfer proceeds in the Escrow Account.

         7. Suspension of Performance: Disbursement Into Court.

              a. Escrow Agent. If at any time, there shall exist any dispute
between the Company and the Investor with respect to holding or disposition of
any portion of the Escrow Funds or the Common Stock or any other obligations of
Escrow Agent hereunder, or if at any time Escrow Agent is unable to determine,
to Escrow Agent's sole satisfaction, the proper disposition of any portion of
the Escrow Funds or Escrow Agent's proper actions with respect to its
obligations hereunder, or if the parties have not within thirty (30) days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 9
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

                   i. Suspend the performance of any of its obligations
(including without limitation any disbursement obligations) under this Escrow
Agreement until such dispute or uncertainty shall be resolved to the sole
satisfaction of Escrow Agent or until a successor Escrow Agent shall be
appointed (as the case may be); provided however, Escrow Agent shall continue to
invest the Escrow Funds in accordance with Section 8 hereof; and/or

                   ii. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue convenient
to Escrow Agent, for instructions with respect to such dispute or uncertainty,
and to the extent required by law, pay into such court, for holding and
disposition in accordance with the instructions of such court, all funds held by
it in the Escrow Funds, after deduction and payment to Escrow Agent of all fees
and expenses (including court costs and attorneys' fees) payable to, incurred
by, or expected to be incurred by Escrow Agent in connection with performance of
its duties and the exercise of its rights hereunder.

                   iii. Escrow Agent shall have no liability to the Company, the
Investor, or any person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the disbursement of funds held in the Escrow Funds or any delay in
with respect to any other action required or requested of Escrow Agent.

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         8. Investment of Escrow Funds. The Escrow Agent shall deposit the
Escrow Funds in a non-interest bearing money market account.

         If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent may retain the Escrow
Fund, or such portion thereof, as to which no Joint Written Direction has been
received, in a non-interest bearing money market account.

         9. Resignation and Removal of Escrow Agent. Escrow Agent may resign
from the performance of its duties hereunder at any time by giving thirty (30)
days' prior written notice to the parties or may be removed, with or without
cause, by the parties, acting jointly, by furnishing a Joint Written Direction
to Escrow Agent, at any time by the giving of ten (10) days' prior written
notice to Escrow Agent as provided herein below. Upon any such notice of
resignation or removal, the representatives of the Investor and the Company
identified in Sections 13a.(iv) and 13b.(iv), below, jointly shall appoint a
successor Escrow Agent hereunder, which shall be a commercial bank, trust
company or other financial institution with a combined capital and surplus in
excess of $10,000,000.00. Upon the acceptance in writing of any appointment of
Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Escrow Agent, and the retiring Escrow
Agent shall be discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for actions taken as
Escrow Agent hereunder prior to such succession. After any retiring Escrow
Agent's resignation or removal, the provisions of this Escrow Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent, after making copies of
such records as the retiring Escrow Agent deems advisable and after deduction
and payment to the retiring Escrow Agent of all fees and expenses (including
court costs and reasonable attorneys' fees) payable to, incurred by, or expected
to be incurred by the retiring Escrow Agent in connection with the performance
of its duties and the exercise of its rights hereunder.

         10. Liability of Escrow Agent.

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<PAGE>

              a. Escrow Agent shall have no liability or obligation with respect
to the Escrow Funds except for Escrow Agent's willful misconduct or gross
negligence. Escrow Agent's sole responsibility shall be for the safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms of
this Agreement. Escrow Agent shall have no implied duties or obligations and
shall not be charged with knowledge or notice or any fact or circumstance not
specifically set forth herein. Escrow Agent may rely upon any instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein, which Escrow Agent
shall in good faith believe to be genuine, to have been signed or presented by
the person or parties purporting to sign the same and conform to the provisions
of this Agreement. In no event shall Escrow Agent be liable for incidental,
indirect, special, and consequential or punitive damages. Escrow Agent shall not
be obligated to take any legal action or commence any proceeding in connection
with the Escrow Funds, any account in which Escrow Funds are deposited, this
Agreement or the Standby Equity Distribution Agreement, or to appear in,
prosecute or defend any such legal action or proceeding. Escrow Agent may
consult legal counsel selected by it in the event of any dispute or question as
to construction of any of the provisions hereof or of any other agreement or its
duties hereunder, or relating to any dispute involving any party hereto, and
shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instructions of such
counsel. The Company and the Investor jointly and severally shall promptly pay,
upon demand, the reasonable fees and expenses of any such counsel and Escrow
Agent is hereby authorized to pay such fees and expenses from funds held in
escrow.

              b. The Escrow Agent is hereby authorized, in its sole discretion,
to comply with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court's
jurisdiction in the matter. If any portion of the Escrow Funds is at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in any case any order judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree which it is advised by legal counsel selected by it, binding upon it,
without the need for appeal or other action; and if the Escrow Agent complies
with any such order, writ, judgment or decree, it shall not be liable to any of
the parties hereto or to any other person or entity by reason of such compliance
even though such order, writ judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.

         11. Indemnification of Escrow Agent. From and at all times after the
date of this Agreement, the parties jointly and severally, shall, to the fullest
extent permitted by law and to the extent provided herein, indemnify and hold
harmless Escrow Agent and each director, officer, employee, attorney, agent and
affiliate of Escrow Agent (collectively, the "Indemnified Parties") against any
and all actions, claims (whether or not valid), losses, damages, liabilities,
costs and expenses of any kind or nature whatsoever (including without
limitation reasonable attorney's fees, costs and expenses) incurred by or
asserted against any of the Indemnified Parties from and after the date hereof,
whether direct, indirect or consequential, as a result of or arising from or in
any way relating to any claim, demand, suit, action, or proceeding (including
any inquiry or investigation) by any person, including without limitation the
parties to this

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Agreement, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Agreement or any transaction contemplated herein, whether or not any such
Indemnified Party is a party to any such action or proceeding, suit or the
target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for liability
finally determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful misconduct
of such Indemnified Party. If any such action or claim shall be brought or
asserted against any Indemnified Party, such Indemnified Party shall promptly
notify the Company and the Investor hereunder in writing, and the and the
Company shall assume the defense thereof, including the employment of counsel
and the payment of all expenses. Such Indemnified Party shall, in its sole
discretion, have the right to employ separate counsel (who may be selected by
such Indemnified Party in its sole discretion) in any such action and to
participate and to participate in the defense thereof, and the fees and expenses
of such counsel shall be paid by such Indemnified Party, except that the
Investor and/or the Company shall be required to pay such fees and expense if
(a) the Investor or the Company agree to pay such fees and expenses, or (b) the
Investor and/or the Company shall fail to assume the defense of such action or
proceeding or shall fail, in the sole discretion of such Indemnified Party, to
employ counsel reasonably satisfactory to the Indemnified Party in any such
action or proceeding, (c) the Investor and the Company are the plaintiff in any
such action or proceeding or (d) the named or potential parties to any such
action or proceeding (including any potentially impleaded parties) include both
Indemnified Party the Company and/or the Investor and Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company or the Investor. The Investor and the Company shall be jointly and
severally liable to pay fees and expenses of counsel pursuant to the preceding
sentence, except that any obligation to pay under clause (a) shall apply only to
the party so agreeing. All such fees and expenses payable by the Company and/or
the Investor pursuant to the foregoing sentence shall be paid from time to time
as incurred, both in advance of and after the final disposition of such action
or claim. The obligations of the parties under this section shall survive any
termination of this Agreement, and resignation or removal of the Escrow Agent
shall be independent of any obligation of Escrow Agent.

         12. Expenses of Escrow Agent. Except as set forth in Section 11 the
Company shall reimburse Escrow Agent for all of its reasonable and documented
out-of-pocket expenses, including attorneys' fees, travel expenses, telephone
and facsimile transmission costs, postage (including express mail and overnight
delivery charges), copying charges and the like as outlined in Section 12.4 of
the Standby Equity Distribution Agreement dated the date hereof. All of the
compensation and reimbursement obligations set forth in this Section shall be
payable by the Company, upon demand by Escrow Agent. The obligations of the
Company under this Section shall survive any termination of this Agreement and
the resignation or removal of Escrow Agent.

         13. Warranties.

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<PAGE>

              a. The Investor makes the following representations and warranties
to the Escrow Agent and Investor's Counsel:

                   i. The Investor has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.

                   ii. This Agreement has been duly approved by all necessary
action of the Investor, including any necessary approval of the limited partner
of the Investor, has been executed by duly authorized officers of the Investor's
general partner, enforceable in accordance with its terms.

                   iii. The execution, delivery, and performance of the Investor
of this Agreement will not violate, conflict with, or cause a default under the
agreement of limited partnership of the Investor, any applicable law or
regulation, any court order or administrative ruling or degree to which the
Investor is a party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement.

                   iv. Mark A. Angelo has been duly appointed to act as the
representative of Investor hereunder and has full power and authority to
execute, deliver, and perform this Agreement, to execute and deliver any Joint
Written Direction, to amend, modify, or waive any provision of this Agreement,
and to take any and all other actions as the Investor's representative under
this Agreement, all without further consent or direction form, or notice to, the
Investor or any other party.

                   v. No party other than the parties hereto have, or shall
have, any lien, claim or security interest in the Escrow Funds or any part
thereof. No financing statement under the Uniform Commercial Code is on file in
any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

                   vi. All of the representations and warranties of the Investor
contained herein are true and complete as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

              b. The Company makes the following representations and warranties
to Escrow Agent and, the Investor:

                   i. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida, and has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder.

                   ii. This Agreement has been duly approved by all necessary
corporate action of the Company, including any necessary shareholder approval,
has been executed by duly authorized officers of the Company, enforceable in
accordance with its terms.

                   iii. The execution, delivery, and performance by the Company
of this Escrow Agreement is in accordance with the Standby Equity Distribution
Agreement and will not violate, conflict with, or cause a default under the
certificate of incorporation or bylaws

                                       8
<PAGE>

of the Company, any applicable law or regulation, any court order or
administrative ruling or decree to which the Company is a party or any of its
property is subject, or any agreement, contract, indenture, or other binding
arrangement.

                   iv. Leo Greenfield has been duly appointed to act as the
representative of the Company hereunder and has full power and authority to
execute, deliver, and perform this Agreement, to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this Agreement and
to take all other actions as the Company's Representative under this Agreement,
all without further consent or direction from, or notice to, the Company or any
other party.

                   v. No party other than the parties hereto shall have, any
lien, claim or security interest in the Escrow Funds or any part thereof. No
financing statement under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing (whether specifically
or generally) the Escrow Funds or any part thereof.

                   vi. All of the representations and warranties of the Company
contained herein are true and complete as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

         14. Consent to Jurisdiction and Venue. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the District of New Jersey shall have the sole and exclusive jurisdiction over
any such proceeding. If all such courts lack federal subject matter
jurisdiction, the parties agree that the Superior Court Division of New Jersey,
Chancery Division of Hudson County shall have sole and exclusive jurisdiction.
Any of these courts shall be proper venue for any such lawsuit or judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept the service of process to vest personal
jurisdiction over them in any of these courts.

         15. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mail, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
delivery to any overnight courier, or when transmitted by facsimile transmission
and addressed to the party to be notified as follows:

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If to Investor, to:                Cornell Capital Partners, LP
                                   101 Hudson Street - Suite 3606
                                   Jersey City, New Jersey 07302
                                   Attention: Mark Angelo
                                   Telephone: (201) 985-8266
                                   Facsimile: (201) 985-8266

If to Escrow Agent, to:            Butler Gonzalez LLP
                                   1416 Morris Avenue - Suite 207
                                   Union, New Jersey 07083
                                   Attention: David Gonzalez, Esq.
                                   Telephone: (908) 810-8588
                                   Facsimile: (908) 810-0973

If to Company, to:                 Distribution Management Services, Inc.
                                   11601 Biscayne Blvd. - Suite 201
                                   Miami, Florida 33181
                                   Attention: Leo Greenfield, President
                                   Telephone: (305) 893-9270
                                   Facsimile: (305) 893-6696

With a copy to:                    Michelle Kramish Kain, P.A.
                                   750 Southeast Third Avenue - Suite 100
                                   Ft. Lauderdale, Florida 33316 -1953
                                   Attention: Michelle Kramish Kain, Esq.
                                   Telephone: (954) 768-0678
                                   Facsimile: (954) 768-0158

         Or to such other address as each party may designate for itself by like
notice.

         16. Amendments or Waiver. This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties of the Escrow
Agent. No delay or omission by any party in exercising any right with respect
hereto shall operate as waiver. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.

         17. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

         18. Governing Law. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Florida without giving effect
to the conflict of laws principles thereof.

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         19. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the obligations and duties of the
Escrow Agent with respect to the Escrow Funds.

         20. Binding Effect. All of the terms of this Agreement, as amended from
time to time, shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Investor, the Company, or
the Escrow Agent.

         21. Execution of Counterparts. This Agreement and any Joint Written
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.

         22. Termination. Upon the first to occur of the termination of the
Standby Equity Distribution Agreement dated the date hereof or the disbursement
of all amounts in the Escrow Funds and Common Stock into court pursuant to
Section 7 hereof, this Agreement shall terminate and Escrow Agent shall have no
further obligation or liability whatsoever with respect to this Agreement or the
Escrow Funds or Common Stock.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.

                                   DISTRIBUTION MANAGEMENT SERVICES, INC.

                                   By: /s/
                                      ------------------------------------------
                                   Name:  Leo Greenfield
                                   Title: President

                                   CORNELL CAPITAL PARTNERS, LP

                                   By:    Yorkville Advisors, LLC
                                   Its:   General Partner

                                   By: /s/
                                      ------------------------------------------
                                   Name:  Mark A. Angelo
                                   Title: Portfolio Manager

                                   BUTLER GONZALEZ LLP

                                   By: /s/
                                      ----------------------------------------
                                   Name:  David Gonzalez, Esq.
                                   Title: Partner

                                       12EXHIBIT 10.4

THIS DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY,
THE "SECURITIES"), HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE
SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD UNLESS
THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION D OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE
AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE
EXCEPT IN COMPLIANCE WITH THE ACT.

                     DISTRIBUTION MANAGEMENT SERVICES, INC.

                            5% CONVERTIBLE DEBENTURE

                              DUE FEBRUARY 12, 2007

No. 001                             $190,000

         This Secured Debenture is issued by DISTRIBUTION MANAGEMENT SERVICES,
INC., a Florida corporation (the "Company"), to CORNELL CAPITAL PARTNERS, LP
(together with its permitted successors and assigns, the "Holder") pursuant to
exemptions from registration under the Securities Act of 1933, as amended.

                                       1
<PAGE>

         ARTICLE 1.1 PRINCIPAL AND INTEREST. For value received, on February 12,
2004, the Company hereby promises to pay to the order of the Holder in lawful
money of the United States of America and in immediately available funds the
principal sum of One Hundred Ninety Thousand Dollars (US $190,000), together
with interest on the unpaid principal of this Debenture at the rate of five
percent (5%) per year (computed on the basis of a 365-day year and the actual
days elapsed) from the date of this Debenture until paid. At the Company's
option, the entire principal amount and all accrued interest, not previously
paid or converted as set forth herein, shall be either (a) paid to the Holder on
the third (3rd) year anniversary from the date hereof or (b) converted in
accordance with Section 1.02 herein.

         ARTICLE 1.2 OPTIONAL CONVERSION. The Holder is entitled, from time to
time, at its option, until payment in full of this Debenture, to convert, and
sell on the same day, in an amount equal up to Fifty Thousand Dollars ($50,000)
of the principal amount of the Debenture, plus accrued interest, upon the first
to occur i) ninety (90) calendar days from the date hereof or ii) the date the
Registration Statement filed pursuant to the Registration Rights Agreement dated
the date hereof is declared effective by the SEC, into shares (the "Conversion
Shares") of the Company's common stock, par value $0.001 per share ("Common
Stock"), at the price per share (the "Conversion Price") equal to ninety seven
percent (97%) of the lowest Closing Bid Price of the Common Stock for the three
(3) trading days immediately preceding the Conversion Date (as defined herein).
As used herein, "Principal Market" shall mean The National Association of
Securities Dealers Inc.'s Over-The-Counter Bulletin Board, Nasdaq SmallCap
Market, or American Stock Exchange. If the Common Stock is not traded on a
Principal Market, the Closing Bid Price shall mean, the reported Closing Bid
Price for the Common Stock, as furnished by the National Association of
Securities Dealers, Inc., for the applicable periods. No fraction of shares or
scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole share. To
convert this Debenture, the Holder hereof shall deliver written notice thereof,
substantially in the form of Exhibit "A" to this Debenture, with appropriate
insertions (the "Conversion Notice"), to the Company at its address as set forth
herein. The date upon which the conversion shall be effective (the "Conversion
Date") shall be deemed to be the date set forth in the Conversion Notice.

         ARTICLE 1.3 RIGHT OF REDEMPTION. The Company at its option shall have
the right to redeem for cash, with three (3) business days advance written
notice (the "Redemption Notice"), a portion of or all of the outstanding
principal sum under this Debenture. The redemption price shall be equal to one
hundred twenty percent (120%) multiplied by the portion of the principal sum
being redeemed, plus any accrued and unpaid interest.

         ARTICLE 1.4 RESERVATION OF COMMON STOCK. The Company shall reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of this Debenture, such number of
shares of Common Stock as shall from time to time be sufficient to effect such
conversion, based upon the Conversion Price. If at any time the Company does not
have a sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders within sixty
(60) days of that time for the sole purpose of increasing the number of
authorized shares of Common Stock. Management shall recommend to the
shareholders of the Company to vote in favor of increasing the number of
authorized shares of Common Stock. Management shall also vote all of its shares
of Common Stock in favor of increasing the number of authorized shares of Common
Stock.

                                       2
<PAGE>

         ARTICLE 1.5 REGISTRATION RIGHTS. The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement, between the
Company and the Holder of even date herewith (the "Registration Rights
Agreement").

         ARTICLE 1.6 INTEREST PAYMENTS. The interest so payable will be paid at
the time of maturity or conversion to the person in whose name this Debenture is
registered. At the time such interest is payable, the Holder, in its sole
discretion, may elect to receive the interest in cash (via wire transfer or
certified funds) or in the form of Common Stock. In the event of default, as
described in Article III Section 3.01 hereunder, the Holder may elect that the
interest be paid in cash (via wire transfer or certified funds) or in the form
of Common Stock. If paid in the form of Common Stock, the amount of stock to be
issued will be calculated as follows: the value of the stock shall be the
Closing Bid Price on: (i) the date the interest payment is due; or (ii) if the
interest payment is not made when due, the business day immediately preceding
the date the interest payment is made. A number of shares of Common Stock with a
value equal to the amount of interest due shall be issued. No fractional shares
will be issued; therefore, in the event that the value of the Common Stock per
share does not equal the total interest due, the Company will pay the balance in
cash.

         ARTICLE 1.7 PAYING AGENT AND REGISTRAR. Initially, the Company will act
as paying agent and registrar. The Company may change any paying agent,
registrar, or Company-registrar by giving the Holder not less than ten (10)
business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.

                                   ARTICLE 2.

         ARTICLE 2.1 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may not be
amended without the written consent of the Holder. Notwithstanding the above,
without the consent of the Holder, the Debenture may be amended to cure any
ambiguity, defect or inconsistency, to provide for assumption of the Company
obligations to the Holder or to make any change that does not adversely affect
the rights of the Holder.

                                   ARTICLE 3.

         ARTICLE 3.1 EVENTS OF DEFAULT. An Event of Default is defined as
follows: (a) failure by the Company to pay amounts due hereunder within fifteen
(15) business days of the date of maturity of this Debenture, unless otherwise
converted; (b) failure by the Company to comply with the terms of the
Irrevocable Transfer Agent Instructions attached to the Standby Equity
Distribution Agreement of even date herewith entered into between the Company
and the Holder (the "Standby Equity Distribution Agreement"), within ten (10)
business days after receipt of written notice thereof; (c) failure by the
Company's transfer agent to issue Common Stock to the Holder within five (5)
business days of the Company's receipt of the attached Notice of Conversion from
Holder; (d) failure by the Company to comply with any of its other agreements in
the Debenture within ten (10) business days after receipt of written notice
thereof; (e) events of bankruptcy or insolvency; (f) a material breach by the
Company of its obligations under the Standby Equity Distribution Agreement or
the Registration Rights Agreement which is not cured by the Company within ten
(10) business days after receipt of written notice thereof.

                                       3
<PAGE>

         ARTICLE 3.2 FAILURE TO ISSUE UNRESTRICTED COMMON STOCK. As indicated in
Article III Section 3.01, a breach by the Company of its obligations under the
Investor Registration Rights Agreement shall be deemed an Event of Default,
which if not cured within ten (10) days, shall entitle the Holder to accelerate
full repayment of all debentures outstanding and accrued interest thereon. The
Company acknowledges that failure to honor a Notice of Conversion shall cause
irreparable harm to the Holder.

                                   ARTICLE 4.

         ARTICLE 4.1 RIGHTS AND TERMS OF CONVERSION. This Debenture may be
converted into shares of Common Stock at a price equal to the Conversion Price
as described in Section 1.02 above.

         ARTICLE 4.2 RE-ISSUANCE OF DEBENTURE. When the Holder elects to convert
a part of the Debenture, then the Company shall reissue a new Debenture in the
same form as this Debenture to reflect the new principal amount.

         ARTICLE 4.3 TERMINATION OF CONVERSION RIGHTS. The Holder's right to
convert the Debenture into the Common Stock in accordance with paragraph 1.02
and 4.01 shall terminate on the date that is the third (3rd) year anniversary
from the date hereof and all unpaid principal amounts of this Debenture, plus
accrued interest shall be, at the Company's sole option, (i) paid to the Holder
via wire transfer, to an account designated by the Holder of immediately
available funds, or (ii) automatically converted on that date in accordance with
the formula set forth in Section 1.02 hereof, and the appropriate shares of
Common Stock and amount of interest shall be issued to the Holder.
Notwithstanding the foregoing, in the event the Company elects payment pursuant
to subsection (i) herein and such amount is not received within five (5)
business days from the date this Debenture matures , the Holder may, at it sole
option, automatically convert on that date in accordance with the formula set
forth in Section 1.02 hereof.

                                   ARTICLE 5.

         ARTICLE 5.1 ANTI-DILUTION. In the event that the Company shall at any
time subdivide the outstanding shares of Common Stock, or shall issue a stock
dividend on the outstanding Common Stock, the Conversion Price in effect
immediately prior to such subdivision or the issuance of such dividend shall be
proportionately decreased, and in the event that the Company shall at any time
combine the outstanding shares of Common Stock, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of such subdivision, dividend or
combination as the case may be.

         ARTICLE 5.2 CONSENT OF HOLDER TO SELL CAPITAL STOCK. Except as set
forth in the Standby Equity Distribution Agreement dated the date hereof between
the Company and Cornell Capital Partners, LP. so long as any of the principal of
or interest on this Debenture remains unpaid and unconverted, the Company shall
not, without thirty (30) calendar days prior written notice to the Holder,
receipt of which is confirmed by the Holder, issue or sell (i) any Common Stock
or Preferred Stock without consideration or for a consideration per share less
than its fair market value determined immediately prior to its issuance, (ii)
issue or sell any Preferred Stock, warrant, option, right, contract, call, or
other security or instrument granting the holder thereof the right to acquire
Common Stock without consideration or for a consideration per share less than
such

                                       4
<PAGE>

Common Stock's fair market value determined immediately prior to its issuance,
(iii) enter into any security instrument granting the holder a security interest
in any and all assets of the Company or (iv) file any registration statement on
Form S-8.

                                   ARTICLE 6.

         ARTICLE 6.1 NOTICE. Notices regarding this Debenture shall be sent to
the parties at the following addresses, unless a party notifies the other
parties, in writing, of a change of address:

If to the Company, to:   Distribution Management Services, Inc.
                         11601 Biscayne Blvd. - Suite 201
                         Miami, Florida 33181
                         Attention: Leo Greenfield, President
                         Telephone: (305) 893-9270
                         Facsimile: (305) 893-6696

With a copy to:          Michelle Kramish Kain, P.A.
                         750 Southeast Third Avenue - Suite 100
                         Ft. Lauderdale, Florida  33316 -1953
                         Attention: Michelle Kramish Kain, Esq.
                         Telephone: (954) 768-0678
                         Facsimile: (954) 768-0158

If to the Holder:        Cornell Capital Partners, LP
                         101 Hudson Street, Suite 3606
                         Jersey City, New Jersey 07302
                         Telephone: (201) 985-8300
                         Facsimile: (201) 985-8266

With a copy to:          Butler Gonzalez LLP
                         1416 Morris Avenue - Suite 207
                         Union, New Jersey 07083
                         Attention: David Gonzalez, Esq.
                         Telephone: (908) 810-8588
                         Facsimile: (908) 810-0973

         ARTICLE 6.2 GOVERNING LAW. This Debenture shall be deemed to be made
under and shall be construed in accordance with the laws of the State of Florida
without giving effect to the principals of conflict of laws thereof. Each of the
parties consents to the jurisdiction of the U.S. District Court sitting in the
District of the State of New Jersey or the state courts of the State of New
Jersey sitting in Hudson County, New Jersey in connection with any dispute
arising under this Debenture and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens to
the bringing of any such proceeding in such jurisdictions.

         ARTICLE 6.3 SEVERABILITY. The invalidity of any of the provisions of
this Debenture shall not invalidate or otherwise affect any of the other
provisions of this Debenture, which shall remain in full force and effect.

                                       5
<PAGE>

         ARTICLE 6.4 ENTIRE AGREEMENT AND AMENDMENTS. This Debenture represents
the entire agreement between the parties hereto with respect to the subject
matter hereof and there are no representations, warranties or commitments,
except as set forth herein. This Debenture may be amended only by an instrument
in writing executed by the parties hereto.

         ARTICLE 6.5 COUNTERPARTS. This Debenture may be executed in multiple
counterparts, each of which shall be an original, but all of which shall be
deemed to constitute one instrument.

         IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.

                                    DISTRIBUTION MANAGEMENT SERVICES, INC.

                                    By:  /s/
                                        ----------------------------------------
                                    Name:  Leo Greenfield
                                    Title: President

                                       6
<PAGE>

                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

        (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)

TO:

         The undersigned hereby irrevocably elects to convert $ of the principal
amount of the above Debenture into Shares of Common Stock of DISTRIBUTION
MANAGEMENT SERVICES, INC., according to the conditions stated therein, as of the
Conversion Date written below.

CONVERSION DATE:

APPLICABLE CONVERSION PRICE:

AMOUNT TO BE CONVERTED:                     $

AMOUNT OF DEBENTURE UNCONVERTED:            $

CONVERSION PRICE PER SHARE:                 $

NUMBER OF SHARES OF COMMON STOCK TO BE
ISSUED:

PLEASE ISSUE THE SHARES OF COMMON STOCK
IN THE FOLLOWING NAME AND TO THE
FOLLOWING ADDRESS:

ISSUE TO:

ADDRESS:

AUTHORIZED SIGNATURE:

NAME:

TITLE:

PHONE NUMBER:

BROKER DTC PARTICIPANT CODE:

ACCOUNT NUMBER:

                                       7

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