11


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                              ACQUISITION AGREEMENT
                              ---------------------


            THIS ACQUISITION AGREEMENT wherein the participants are ALGORHYTHM
TECHNOLOGIES, INC. ("ALGOR") and ADS ADVERTISING CORP. ("ADS").

                             W I T N E S S E T H:
            WHEREAS,  ALGOR a) is a Nevada corporation in good standing which is
currently a publicly  traded SEC reporting  company,  traded on the OTC bulletin
board under the symbol ALGOR,  and b) ALGOR is a holding  company which includes
or will include in its holdings other corporate entities such as ADS, and c)
has  9,603,556 shares presently issued and outstanding; and

            WHEREAS,  ADS a) is a  Florida  corporation  in  good  standing  and
utilizes a fictitious name "The Smith Agency" and is in the business of creating
and providing  advertising and marketing  services to parties such as ALGOR, and
b) has 6,500 authorized shares, of which 6,500 shares have been issued; and

            WHEREAS,  the Board of Directors of ALGOR and the Board of Directors
of ADS deem it advisable that ALGOR acquire ADS as a wholly owned  subsidiary of
ALGOR with certain principals of ADS continuing on to head up operations for ADS
for a period of time, subject to employment agreements and other conditions; and

            WHEREAS, ADS shall perform certain services for ALGOR; and

            WHEREAS,  ALGOR has furnished or will furnish ADS with a copy of its
10-K  submission  for the year 1996 and  copies of its 10-Q  submission  for the
first quarter and the second quarter of 1997. These  submissions,  to the extent
required,  (i) are/shall be in  accordance  with the books and records of ALGOR;
(ii) do and shall fairly represent the financial  condition of ALGOR as of those
dates and the results of its operations as of and for the periods specified, all
prepared in accordance with generally accepted accounting principles;  and (iii)
do and  shall  contain  and  reflect,  in  accordance  with  generally  accepted
accounting principles consistently applied, reserves for all liabilities, losses
and costs in excess of  expected  receipts  and all  discounts  and  refunds for
services and products already  rendered or sold that are reasonably  anticipated
and based on  events or  circumstances  in  existence  or likely to occur in the
future  with  respect  to  any  of  the  contracts  or   commitments  of  ALGOR.
Specifically,  but not by way of limitation, if customary, the submissions shall












                                      12


<PAGE>


disclose,  in accordance with generally accepted accounting  principles,  all of
the  debts,  liabilities,  and  obligations  of any  nature  (whether  absolute,
accrued,  contingent or otherwise, and whether due or to become due) of ALGOR at
the Balance Sheet Date, and shall include appropriate reserves for all taxes and
other liabilities accrued or due at that date but not yet payable; and


            WHEREAS, ADS has furnished ALGOR with unaudited financial statements
of ADS for the years  1994,  1995 and 1996 and for the first nine months of 1997
and the related  statement  of income for the first nine  months of 1997.  These
financial  statements  (i) are and  shall be in  accordance  with the  books and
records of ADS; (ii) do and shall fairly  represent  the financial  condition of
ADS as of  those  dates  and the  results  of its  operations  as of and for the
periods specified, all prepared in accordance with generally accepted accounting
principles; (iii) do and shall contain and reflect, in accordance with generally
accepted  accounting   principles   consistently   applied,   reserves  for  all
liabilities,  losses and costs in excess of expected  receipts and all discounts
and  refunds  for  services  and  products  already  rendered  or sold  that are
reasonably  anticipated  and based on events or  circumstances  in  existence or
likely  to  occur  in the  future  with  respect  to any  of  the  contracts  or
commitments  of  ADS,  and  shall  be  warranted  as  true  and  correct  by the
hereinafter named principals of ADS. Specifically, but not by way of limitation,
the  Balance  Sheet  shall  disclose,  in  accordance  with  generally  accepted
accounting  principles,  all of the debts,  liabilities,  and obligations of any
nature (whether absolute,  accrued,  contingent or otherwise, and whether due or
to become due) of ADS at the Balance Sheet Date,  and shall include  appropriate
reserves for all taxes and other liabilities accrued or due at that date but not
yet payable; and

            WHEREAS, all required federal,  state and local tax returns of ALGOR
and ADS  have  been  accurately  prepared  and duly and  timely  filed,  and all
federal,  state and local taxes  required to be paid with respect to the periods
covered by the returns  have been paid  including,  but not limited to,  income,
employment,  property,  franchise  and  sales  tax.  ALGOR and ADS have not been
delinquent in the payment of any tax or assessment; and

            WHEREAS,  all named parties  represent unto the other that they have
authority to enter in to this Agreement; and













                                      13


<PAGE>



            WHEREAS,  neither  corporate  entity  is a party to any  pending  or
threatened  litigation  and/or  legal  action,  other  than  claims  by the  Ft.
Lauderdale  Police  Department  and a party named Paul  Parshall for  $25,000.00
against ALGOR, which claims are not in litigation; and

            WHEREAS,  neither party has  consulted  with a broker or a finder in
arranging the instant transaction.

            NOW,  THEREFORE,  based upon the statements made hereinabove and the
covenants  and  conditions  set  forth   hereinbelow,   the  parties  agree  and
acknowledge as follows:

            1.    All of the above statements are true and correct.

            2.    The parties shall cause the following to  simultaneously  with
the execution of this Agreement:

                  (a)   All of the  stockholders  of ADS shall  surrender  their
shares to the  Secretary of ADS,  resulting in there  being______  shares in the
treasury of ADS.

                  (b)   ALGOR shall  demonstrate that it has 2,300,000 shares of
restricted common stock available for issuance to ADS and/or as directed by ADS,
which shares shall be restricted.

                  (c)   ALGOR shall acquire all of the ADS authorized  shares in
exchange for such  2,300,000  shares of ALGOR stock to be vested as of execution
hereof, and ALGOR shall own 100% of the stock of ADS.

                  (d)   ALGOR will cause ADS, as a wholly  owned  subsidiary  of
ALGOR, to issue an employment  agreement for ANDY SMITH ("SMITH") for five years
at a base rate of $100,000.00  annually,  with yearly  increases of 10% to start
one year  from the  initial  date of  employment,  with such  agreement  to also
provide an acceptable  compensation  package; such employment agreement shall be
otherwise  in form as approved by SMITH and the other  directors.  Additionally,
ALGOR will also issue a total of 200,000 options (on a one time basis) of common
S-8  stock,  at par  value,  to SMITH,  within 5  working  days from the date of
execution of this  Agreement;  these  options will be for a period of two years.
Additionally,  SMITH is to continue to receive a company car  comparable  to the
1998 Volvo presently  leased,  telephone and health  insurance.  Further,  SMITH
shall be  President  of ADS and shall serve as a President  and as a Director on
the Board of ALGOR.











                                      14


<PAGE>




                  (e)   ALGOR will cause ADS, as a wholly  owned  subsidiary  of
ALGOR, to enter in to an employment  agreement with its principal,  CHARLIE ROBB
("ROBB"),  for three years at a base rate of  $60,000.00  annually,  with yearly
increases of 10% to start in the year 1999,  with such agreement to also provide
an acceptable stock incentive options package;  such employment  agreement shall
be otherwise in form as approved by the attorney for ALGOR.

                  (f)   ADS shall  rebate to ALGOR  fifty  percent  of any media
commissions as paid by the media in connection with advertising placed for ALGOR
and any of its subsidiaries and Telephonetics International, Inc. and any of its
subsidiaries.

            3.    The parties  recognize that all of the statements  made herein
by each party are made as  material  inducements  to the other  party to execute
this Agreement and perform obligations under this Agreement.

            4.    Pending  consummation  of all of the  obligations  under  this
Agreement,  ALGOR and ADS will carry on their business in substantially the same
manner as before and each will use its best  efforts to  maintain  its  business
organization  intact,  to retain its  present  employees,  and to  maintain  its
relationships with suppliers and other business contacts.  Except with the prior
consent in writing of ALGOR,  pending consummation of the obligations under this
Agreement, ADS shall not:

                  (a)   Declare, pay any dividend or make any other distribution
on its shares.

                  (b)   Create or issue any indebtedness for borrowed money.

                  (c)   Enter into any transaction  other than those involved in
carrying on its ordinary course of business.

            5.    Except as may be  expressly  waived in writing by ADS,  all of
the  obligations  of ADS under this  Agreement are subject to the  satisfaction,
prior to or on the  closing/completion of obligations,  of each of the following
conditions by ALGOR:

                  (a)   The  representations and warranties made by ALGOR to ADS
herein  and in any document delivered pursuant to this Agreement shall be deemed











                                      15


<PAGE>


to have been made again at the time of the  exchange  and shall then be true and
correct in all material  respects.  If ALGOR shall have  discovered any material
error,  misstatement or omission in those  representations  and warranties on or
before  closing,  it shall report that  discovery  immediately  to ADS and shall
either correct the error,  misstatement,  or omission or obtain a written waiver
from ADS. The parties agree to resolve any disputes  regarding  material  error,
misstatement or omission through arbitration following the Rules of the American
Arbitration  Association.  The results of such arbitration shall be binding upon
the parties.

                  (b)   ALGOR  shall  have   performed  and  complied  with  all
agreements  and  conditions  required  by this  Agreement  to be  performed  and
complied with by it prior to or at closing.

                  (c)   No  action or  proceeding  by any  governmental  body or
agency  shall have been  threatened,  asserted,  or  instituted  to  restrain or
prohibit the carrying out of the transactions contemplated by this Agreement.

                  (d)   All corporate and other  proceedings and action taken in
connection  with  the  transactions  contemplated  by  this  Agreement  and  all
certificates,   opinions,  agreements,   instruments,  and  documents  shall  be
satisfactory in form and substance to counsel for ADS.

            6.    Except as may be expressly  waived in writing by ALGOR, all of
the  obligations of ALGOR under this Agreement are subject to the  satisfaction,
prior to or on the  closing/completion of obligations,  of each of the following
conditions by ADS:

                  (a)   The  representations and warranties made by ADS to ALGOR
herein and in any document  delivered pursuant to this Agreement shall be deemed
to have been made again at the time of the  exchange  and shall then be true and
correct in all  material  respects.  If ADS shall have  discovered  any material
error,  misstatement or omission in those  representations  and warranties on or
before  closing,  it shall report that discovery  immediately to ALGOR and shall
either correct the error,  misstatement,  or omission or obtain a written waiver
from ALGOR.

                  (b)   ADS  shall  have   performed   and  complied   with  all
agreements  and  conditions  required  by this  Agreement  to be  performed  and
complied with by it prior to or at closing.














                                      16


<PAGE>


                  (c)   No  action or  proceeding  by any  governmental  body or
agency  shall have been  threatened,  asserted,  or  instituted  to  restrain or
prohibit the carrying out of the transactions contemplated by this Agreement.

                  (d)   All corporate and other  proceedings and action taken in
connection  with  the  transactions  contemplated  by  this  Agreement  and  all
certificates,   opinions,  agreements,   instruments,  and  documents  shall  be
satisfactory in form and substance to counsel for ALGOR.

                  (e)   ALGOR shall have received (and approved for its purposes
in completing the proposed  acquisition) that certain  documentation  previously
requested from ADS.

            Notwithstanding  anything stated to the contrary herein, the parties
understand  and  acknowledge  that a line of credit and  long-term  debt for ADS
exists at the time of this acquisition. It is the understanding and agreement of
ADS and ALGOR that the parties  shall  terminate and close ADS's lines of credit
no later than sixty (60) days after the closing of this  transaction.  After the
date of this  transaction,  all of the net profits and dividends of ADS shall be
applied first to the payment of the credit line and other  long-term  debt until
paid in full.  Further,  subject to ADS generating  sufficient profits to retire
this  debt,  ALGOR  and  its  representatives   shall  indemnify  SMITH  and  be
responsible  to and for all claims  related to the credit line account and other
long term debt after the date of this Agreement.

            7.    The ALGOR  stock  issued to ADS or as directed by ADS shall be
restricted.

            8.    The Bylaws of ALGOR, as existing on this date,  shall continue
in full force as the Bylaws of ALGOR  until  altered  amended  or  repealed,  as
provided  in  the  Bylaws  or  as  provided   by  law.   Appropriate   corporate
documentation  in the form of  minutes,  resolutions,  et al,  shall be executed
memorializing and authorizing the actions provided for herein.

            9.    All  statements  contained  in  any  memorandum,  certificate,
letter,  document,  or other instrument delivered by or on behalf of ADS, ALGOR,
or the stockholders identified in this Agreement shall be deemed representations
and  warranties  made  by the  respective  parties  to  each  other  under  this
Agreement. The covenants, representations, and warranties of the parties and the
stockholders shall survive for a period of three years after the Effective Date.
No  inspection,  examination  or audit  made on  behalf  of the  parties  or the
stockholders  shall act as a waiver of any representation or warranty made under
this Agreement.










                                      17


<PAGE>



            10.   ADS and ALGOR  shall  mutually  indemnify  and hold each other
harmless  against  and in  respect  of all  damages.  Damages,  as  used in this
paragraph,  shall  include  any claim,  action,  demand,  loss,  cost,  expense,
liability, penalty and other damage, including without limitation,  counsel fees
and other costs and expenses incurred in  investigating,  in attempting to avoid
damages or to oppose the imposition of damages,  or in enforcing this indemnity,
resulting  to  ALGOR  or ADS,  as the  case  may  be,  from  (i) any  inaccurate
representation  made by or on behalf of the  other or its  stockholder(s)  in or
pursuant to this  Agreement;  (ii) breach of any of the warranties made by or on
behalf of the other or the  stockholder(s),  in or pursuant  to this  Agreement;
(iii)  breach  or  default  in  the  performance  by  the  other  of  any of the
obligations  to be  performed  by it under  this  Agreement;  or (iv)  breach or
default in the performance by the stockholder(s) of any of the obligations to be
performed by them under any agreement delivered to them by the other pursuant to
this Agreement.  The defaulting entity shall reimburse the non-defaulting entity
on demand for any payment  made or for any loss  suffered by the  non-defaulting
entity at any time after execution hereof, based on the judgment of any court of
competent  jurisdiction  or pursuant to a bona fide  compromise or settlement of
claims,  demands,  or  actions,  in  respect  of any  damages  specified  by the
foregoing indemnity.  The defaulting entity shall satisfy its obligations to the
other by the payment of cash on demand.  The  defaulting  entity  shall have the
opportunity to defend any claim,  action,  or demand asserted  against the other
for which the other claims indemnity  provided that (i) the defense is conducted
by reputable counsel approved by the non-defaulting entity, which approval shall
not be unreasonably  withheld;  (ii) the defense is expressly assumed in writing
within ten days after written notice of the claim,  action or demand is given to
the  stockholder(s);  and  (iii)  counsel  for  the  non-defaulting  entity  may
participate at all times and in all proceedings  (formal and informal)  relating
to the defense,  compromise,  and settlement of the claim, action, or demand, at
the expense of the other. By their signatures hereinbelow,  SMITH guarantees the
obligations of ADS set forth in this paragraph 10.

            11.   This Agreement may be terminated and the actions  contemplated
herein  abandoned  at any  time  within  7 days  prior  to the  closing  of this
transaction based upon the following:

                  (a)   By  mutual  consent  of the Board of  Directors  of both
corporate entities.

                  (b)   At the  election  of the  Board of  Directors  of either
corporate entity if:









                                      18


<PAGE>



                        (1)   Any material  litigation  or  proceeding  shall be
instituted  or  threatened  against  the  other  corporate  entity or any of its
assets,  that, in the correct  opinion of such Board of  Directors,  renders the
instant transaction inadvisable or undesirable.

                        (2)   Any  legislation  shall be enacted that materially
renders the proposed transaction inadvisable or undesirable.

                        (3)   Between  the  date  of  this   Agreement  and  the
completion  of  obligations  provided for herein  there shall have been,  in the
opinion of the Board of Directors of either corporation,  any materially adverse
change in the  business  or  condition,  financial  or  otherwise,  of the other
corporate entity.

                        (4)   Counsel   for   either   corporation   shall  have
determined, prior to the completion of obligations herein, that (a) the exchange
of stock  provided for herein shall result in the  requirement of one or more of
the parties to this  transaction  to pay United States  federal  income tax as a
result of  ordinary  or capital  gain,  or (b) the  proposed  transaction  is in
violation of federal, state and local law.

                  (c)   At the  election of the Board of  Directors  of ALGOR if
without the prior consent in writing of ALGOR, ADS shall have:

                        (1)   Declared  or paid a cash  dividend  on its  common
stock or declared or paid any other dividend or made any other  distribution  on
its shares.

                        (2)   Created or issued any  indebtedness  for  borrowed
money.

                        (3)   Entered  into any  transaction  other  than  those
involved in carrying on its business in the usual  manner.  On or before , ALGOR
shall perform all due diligence,  and ADS shall perform all obligations referred
to herein and  required by each of them prior to  closing.  Within 7 days of the
date of  closing,  ALGOR  shall  advise ADS in writing at the  address set forth
herein of its intention to terminate this Agreement. In the event ALGOR does not
terminate this Agreement on the date of closing,  the stock which is the subject
of this  transaction  shall vest and the matter  shall be closed.  However,  the
representations and warranties made herein shall survive as indicated herein.

            The  cost of all due  diligence,  investigations  including  audits,
etc., as ordered by ALGOR, shall be borne exclusively by ALGOR.










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<PAGE>



            12.   Any notice or other communication  required or permitted under
this  Agreement  shall be properly  given when  deposited with the United States
Postal Service for transmittal by certified or registered mail, postage prepaid,
or when  deposited  with a public  telegraph  company for  transmittal,  charges
prepaid, addressed as follows:

                  (a)   In the  case of ADS,  to:  Andy  Smith,  President,  ADS
Advertising Corp., 5310 N.W. 33rd Avenue, Suite 212, Fort Lauderdale,  FL 33309,
or to such  other  person or  address  as ADS may from time to time  request  in
writing.

                  (b)   In  the  case  of  ALGOR,   to:  DAVID  BAWARSKY,   CEO,
Algorhythm Technologies, 4330 N.W. 207th Drive, Carol City, FL 33055, or to such
other person or address as ALGOR may from time to time request in writing.

            13.   Marks and Truppman,  P.A./Jeffrey N. Marks, Esq. (collectively
"Marks")  acts as local  counsel for ALGOR and has  prepared  this  Agreement in
accordance with instructions received from BAWARSKY individually and on the part
of ALGOR and SMITH individually and on the part of ADS, and, therefore,  for the
purposes of resolving  any  ambiguities,  if any, both ALGOR and ADS, as well as
their  principals,  BAWARSKY  and SMITH,  respectively,  shall be deemed to have
participated  in the  preparation of all terms and conditions in this Agreement.
Further,  ADS and SMITH are not relying on Marks as their counsel,  as they have
and will continue to consult with other  counsel.  The foregoing  provisos shall
also apply to any and all agreements,  documentation,  consents,  minutes,  etc.
contemplated by and/or referred to in this Agreement.

            14.   In the event of  litigation  arising out of a breach of any of
the terms and/or  conditions of this  Agreement,  the prevailing  party shall be
entitled to recover reasonable attorneys' fees and court costs, at all trial and
appellate levels, from the nonprevailing party.

            15.   This Agreement and the exhibits to this Agreement  contain the
entire   agreement   between  the  parties  with  respect  to  the  contemplated
transaction.  This Agreement may be executed in any number of counterparts,  all
of which taken together shall be deemed one original.














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            16.   The validity, interpretation and performance of this Agreement
shall be governed by,  construed and enforced in accordance with the laws of the
State of Florida, and exclusive venue shall be in Broward County, Florida.

            IN WITNESS  WHEREOF,  this  Agreement  was executed on the dates set
forth after signatures hereinbelow.


ALGORHYTHM TECHNOLOGIES, INC.              ADS ADVERTISING CORP. d/b/a THE
                                           SMITH AGENCY


By s/David Bawarsky                        By s/Andy Smith
  -------------------------                  ------------------------- 
  DAVID BAWARSKY, President                  ANDY SMITH, President


Dated: 10/30/97                            Dated: 10/30/97
      ----------                                 ---------- 































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