SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _________________
Commission file number 0-25276
ALGORHYTHM TECHNOLOGIES CORPORATION
-----------------------------------
Exact name of small business issuer as specified in its charter
<TABLE>
<CAPTION>
Nevada 88-0320364
- ------ ----------
<S> <C>
(State or other jurisdiction of incorporation) I.R.S. Employer Identification No.
</TABLE>
5310 NW 33rd Drive, Ft. Lauderdale, FL 33309
--------------------------------------------
(Address of principal executive offices and Zip code)
(954) 739-7005
--------------
(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
[ ] Yes [x] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by Court. Yes_____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: April 30, 1998: 12,465,240
shares of common stock
Transitional Small Business Disclosure Format (check one): Yes No x
<PAGE>
INDEX
Page
----
Part I
Condensed Balance Sheets 3
Statement of Operations 4
Statement of Cash Flows 5
Management's Discussion and Analysis or Plan of Operations 6
Part II
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
2
<PAGE>
Part 1. Financial Information
Algorythm Technologies Corporation
(f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
31-Mar
1998
----
(UNAUDITED)
ASSETS
<S> <C>
CURRENT ASSETS
CASH $ 450.00
ACCOUNTS RECEIVABLE $ 133,160.00
-------------------
TOTAL CURRENT ASSETS $ 133,610.00
PROPERTY, PLANT AND EQUIPMENT $ 105,808.00
LESS ALLOWANCES FOR DEPRECIATION $ (93,882.00)
$ 11,926.00
-------------------
OTHER ASSETS $ 400,052.00
-------------------
$ 545,588.00
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 488,753.00
ACCRUED EXPENSES $ 21,469.00
NOTES PAYABLE $ 131,409.00
-------------------
TOTAL CURRENT LIABILITIES $ 641,631.00
LONG TERM DEBT $ 16,667.00
STOCKHOLDERS' EQUITY
PREFERRED STOCK; 1,000,000 SHARES AUTHORIZED; $1 PAR VALUE; $ 37,683.00
COMMON STOCK; 25,000,000 SHARES AUTHORIZED; $.002 PAR VALUE;
967,397 SHARES ISSUED AND OUTSTANDING AT DECEMBER 31,1996
AND 12,999,556 SHARES ISSUED AND OUTSTANDING AT MARCH 31,1998 $ 25,999.00
ADDITIONAL PAID IN CAPITAL $ 1,371,694.00
ACCUMULATED DEFICIT $ (1,547,786.00)
-------------------
(112,410.00
-------------------
$ 545,588.00
===================
</TABLE>
NOTE: THE BALANCE SHEET AT DECEMBER 31,1997 IS NOT YET AVAILABLE AND UPON
COMPLETION THE INFORMATION WILL BE FILED BY AMENDMENT.
3
<PAGE>
Algorythm Technologies Corporation
(f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
31-Mar 31-Mar
------ ------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
REVENUES $ 310,696.00 $ - $ 310,696.00 $ -
COST OF SALES $ 176,618.00 $ - $ $176,618.00 $ -
-------------- ------------- ------------- -----------
GROSS PROFIT $ 134,078.00 $ - $ 134,078.00 $ -
COSTS AND EXPENSES
GENERAL AND ADMINISTRATIVE $ 116,674.00 $ 28,503.00 $ 116,674.00 $ 28,503.00
INTEREST $ 2,417.00 $ - $ 2,417.00 $ -
-------------- ------------- ------------- -----------
$ 119,091.00 $ 28,503.00 $ 119,091.00 $ 28,503.00
-------------- ------------- ------------- -----------
EARNINGS (LOSS) BEFORE TAXES $ 14,987.00 $ (28,503.00) $ 14,987.00 $(28,503.00)
INCOME TAXES $ 3,750.00 $ - $ 3,750.00 $ -
-------------- ------------- ------------- -----------
NET EARNINGS (LOSS) $ 11,237.00 $ (28,503.00) $ 11,237.00 $(28,503.00)
=============================== ============================
NET EARNINGS (LOSS) PER SHARE 0.0009 0.0009
WEIGHTED AVERAGE SHARES OUTSTANDING 12950889 12950889
</TABLE>
4
<PAGE>
Algorythm Technologies Corporation
(f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
31-Mar 31-Mar
1998 1997 1998 1997
(NOTE) (NOTE)
<S> <C> <C>
CASH FLOWS FROM OPERATIONS $ 10,486.00 $ 10,486.00
CASH FLOWS FROM INVESTING ACTIVITIES: $ - $ -
PURCHASES OF PROPERTY AND EQUIPMENT $ - $ -
------------ ------------
NET CASH PROVIDED BY INVESTING ACTIVITIES $ - $ -
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
RECEIPT OF PROCEEDS FROM STOCK SALES $ 9,600.00 $ 9,600.00
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 9,600.00 $ 9,600.00
------------ ------------
NET INCREASE (DECREASE) IN CASH $ (886.00) $ (886.00)
============ ============
</TABLE>
NOTE: THE PREVIOUS MANAGEMENT OF THE COMPANY FAILED TO FILE A CONDENSED
STATEMENT OF CASH FLOW ON THE QUARTERLY REPORT FORM 10-Q FOR THE PERIOD ENDED
MARCH 31, 1997, THEREFORE THE COMPARATIVE DATA FOR THAT PERIOD IS NOT AVAILABLE.
IT WILL BE FILED BY AMENDMENT.
5
<PAGE>
Item 2. Management Discussion and Analysis or Plan of Operations
Results of Operations
- ---------------------
During the three month period ended March 31, 1998 the Company had
revenues of $310,696 as against no revenues during the three month period ended
March 31, 1997. This was due to the operations of the Company's subsidiary, ADS
Advertising Corp. ("The Smith Agency"), which was acquired in November 1997.
During the three month period ended March 31, 1998 the Company had general and
administrative expenses of $116,674 as against $28,603 during the three month
period ended March 31, 1997. This was again due to the opertations of The Smith
Agency. That as a result the Company had net earnings of $11,237 for the three
month period ended March 31, 1998 as against a loss of $28,603 for the three
month period ended March 31, 1997.
Liquidity and Capital Resources
- -------------------------------
The Company had cash on hand of $450.00 and accounts receiveable,
attributable to The Smith Agency, of $133,160 at the end of the three month
period ended March 31, 1998. The Company at the end of the three month period
ended March 31, 1998 had accounts payable of $488,763, the increase of which and
notes payable of $131,409 attributable to The Smith Agency.
The Company, in order to meet its obligations will seek to raise
capital and/or attempt to increase the revenue of The Smith Agency. There is no
assurance that the Company will be successful in obtaining capital or increasing
the revenue of The Smith Agency. Subsequent to the period ended March 31, 1998,
the Company changed the name of its subsidiary QuikLab Multimedia Centers, Inc.
to Capital Network of America, Corp. which will be engaged in the business of
providing financial advisory services.
6
<PAGE>
Part II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
(c) 1. The Registrant sold the following non-registered shares of its
common stock in a private placement pursuant to Rule 506 of Regulation D and
Sec. 4(2) of the Securities Act of 1933, as amended (the "Act") at a price of
$.10 per share:
February 11, 1998 - 26,000 shares, $2,600.00;
February 18, 1998 - 20,000 shares, $2,000.00;
2. March 27, 1998, 50,000 shares of common stock for $5,000.00 ($.10
per share) pursuant to Sec. 4(2) of the Act.
3. On March 24, 1998 the Registrant issued 400,000 shares of its common
stock, pursuant to Sec. 4(2) of the Act, in payment of an outstanding loan of
$40,000 to the Registrant's subsidiary ADS Advertising Corp.
d/b/a The Smith Agency.
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
In April 1998 the Registrant's wholly owned subsidiary, QuikLab
Multimedia Centers, Inc., a Nevada Corporation,. changed its name to Capital
Network of America Corp., a Nevada corporation. ("the Subsidiary"). The
Subsidiary will be engaged in the business of providing financial advisory
services. The following individuals were appointed as officers and directors of
the Subsidiary: Kirk J. Girrbach, President, Assistant Secretary, Chairman of
the Board of Directors; Anthony J. Ard, Vice President, Secretary and director;
Douglas A. Stepelton, Vice President, Treasurer and a director; Andrew Smith,
director. The Subsidiary entered into five (5) year employment contracts with
Girrbach, Stepleton and Ard each of whom will receive a salary of $100,000 per
year with a 10% increase per year commencing January 1, 1999. No salary will be
paid until the Subsidiary obtains revenue (the unpaid salary will be accrued)
and the individuals have agreed to pay the expenses of the Subsidiary until
revenue is produced to pay the expenses, for a period of not more then one (1)
year. As provided in the contracts the Registrant issued 525,000 shares of its
common stock to Kirk Girrbach, 500,000 shares of its common stock to Douglas
Stepleton and 500,000 shares of its common stock to Anthony Ard upon the signing
of the employment contracts.
In March 1998 the Registrant issued the following shares of its common
stock: 80,162 shares to Kirk Girrbach; 24,783 shares to Douglas A. Stepleton;
and 38,556 shares to Gene Farmer. These shares represented
7
<PAGE>
the return of shares loaned to the Registrant on May 14, 1997 by these
individuals.
On April 21, 1998 Kirk J. Girrbach was appointed a director of the
Registrant.
In an agreement dated May 12, 1998, among David Bawarsky, the
Registrant's CEO, Secretary and director, and Telephonetics International Inc.
and Alan J. Kvares, Telephonetics and Kvares, in consideration of Bawarsky
severing his relationship , including his ownership interest, with
Telephonetics, agreed to transfer 5,675,889 shares owned by Telephonetics to
Bawarsky (this includes the 2,600,000 shares transferred by Bawarsky and the
2,075,889 shares transferred by Kvares respectively to Telephonetics in July
1997). Bawarsky through his relationship with Telephonetics had a beneficial
interest in these shares and was an indirect owner and shared dispositive and
voting rights of these shares. As a result of this agreement Bawarsky will have
direct ownership of these shares.
In regard to the issuance of 2,300,000 shares of common stock to Andrew
Smith in connection with the acquisition of ADS Advertising Corp. by the
Registrant on November 7, 1997, David Bawarsky has agreed to donate to the
Registrant 2,300,000 shares which are to be reissued by the Registrant to Andrew
Smith.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit 2.1 - Agreement and Plan of Meger Between DigiMedia
USA, Inc. and Nitros Franchise Corporation, dated May 14, 1997, incorporated by
reference to the Registrant's 10-QSB for the period ended June 30, 1997.
Exhibit 2.2 - Acquisition Agreement Between Algorhythm
Technologies Corporation and ADS Advertising Corporation, dated October 30,
1997, incorporated by reference to the Registrant's 10-QSB for the period ended
September 20, 1997.
Exhibit 3.1 - Registrant's Articles of Incorporation as
amended.
Exhibit 3.2 - Registrant's Bylaws.
Exhibit 10.1 - Employment agreement between ADS Advertising
Corporation and Andrew Smith, dated October 30, 1997, incorporated by reference
to the Registrant's 10-QSB for the period ended September 30, 1997.
Exhibit 10.2 - Employment agreement between Capital Network of
America, Corp. and Kirk J. Girrbach, dated April 13, 1998.
Exhibit 10.3 - Employment agreement between Capital Network of
America, Corp. and Douglas A. Stepelton, dated April 13, 1998.
Exhibit 10.4 - Employment agreement between Capital Network of
America, Corp. and Anthony J. Ard, dated April 13, 1998.
B. During the period ended March 31, 1998, the Registrant filed the
following 8Ks:
8K dated January 6, 1998: filing of the financial statements of ADS
Advertising Corporation d/b/a The Smith Agency, in connection with its merger
with the Registrant as of November 7, 1997.
8K dated January 26, 1998, 8KA dated February 9, 1998, and 8KA-1 dated
March 1, 1998 , reporting the change of independent accountants by the retaining
of M.A. Cabrera & Company P.A.
8
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ALGORHYTHM TECHNOLOGIES CORPORATION
-----------------------------------
Registrant
Date: May 20, 1998 s/DAVID BAWARSKY
-----------------------------------
DAVID BAWARSKY, CEO
Date: May 20, 1998 s/JASON SHERMAN
-----------------------------------
Jason Sherman, Treasurer
9
EXHIBIT 3.1
Articles of Incorporation
-------------------------
of
--
INTERNATIONAL TRAINING & EDUCATION CORP.
----------------------------------------
FIRST The name of the corporation is:
INTERNATIONAL TRAINING & EDUCATION CORP.
----------------------------------------
SECOND Its principle office in the state of Nevada is located at 251
Jeanell Dr. Suite 3, Carson City, NV 89703, that this corporation may
maintain an office, or offices, in such place within or without the
state of Nevada as may from time to time designated by the Board of
Directors, or by the by-laws of said corporation, and that this
corporation may conduct all corporation business of every kind and
nature, including the holding of all meetings of directors and
stockholders, outside the state of Nevada as well as within the state
of Nevada.
THIRD The objects for which this corporation is formed are: To
redomicile from the state of Utah into the state of Nevada and to
engage in any lawful activity, but not be limited to the following:
A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
B) May at any time exercise such rights, privileges and
powers, when not inconsistent with the purposes and objects for which
this corporation is organized.
C) Shall have power to have succession by its corporate name
for the period limited in its certificate or articles of incorporation,
and when no period is limited, perpetually, or until dissolved and its
affairs wound up according to law.
D) Shall have power to sue and be sued in any court of law or
equity.
E) Shall have power to make contracts.
F) Shall have power to hold, purchase and convey real and
personal estate and to mortgage or lease any such real and personal
estate with its franchises. The power to hold real and personal estate
shall include the power to take the same devise or bequest in the state
of Nevada, or any other state, territory or country.
G) Shall have power to appoint such officers and agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
H) Shall have power to make by-laws not inconsistent with the
constitution of the United States, or of the state of Nevada, for the
management, regulation and government of its affairs and property, the
transfer of its stock, the transaction of its business, and the calling
and holding of meetings of its stockholders.
I) Shall have power to wind up and dissolve itself, or be
wound up or dissolved.
J) Shall have power to adopt and use a common seal or stamp by
the corporation on any corporate documents is not necessary. The
corporation may use a seal or stamp, if it desires, but such nonuse
shall not in any way affect the legality of the document.
K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of
its corporate rights, privileges or franchises, or for any other lawful
purpose of its incorporation; to issue bonds, promissory notes, bills
of exchange, debentures, and other obligations and evidences of
indebtedness, payable upon the happening of a specified event or
events, whether secured by mortgage, pledge, or otherwise, or
unsecured, for money borrowed, or in payment of property purchased, or
acquired, or for any other lawful object.
L) Shall have power to guarantee, purchase, hold, sell,
assign, transfer, mortgage, pledge or otherwise dispose of the shares
of the capital stock of, or any bond, securities or evidences of the
indebtedness created by, and other corporation or corporations of the
state of Nevada, or any other state
10
<PAGE>
or government, and while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and
privileges of ownership, including the right to vote, if any.
M) Shall have power to purchase, hold, sell and transfer
shares of its own capital stock, and use therefore its capital, capital
surplus, surplus, or other property or fund.
N) Shall have power to conduct business, have one or more
offices, and hold, purchase, mortgage and convey real and personal
property in the state of Nevada, and in any of the several states,
territories, possessions and dependencies of the United States, the
District of Columbia, and any foreign countries.
O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in its
certificate or articles of incorporation, or any amendment thereof, or
necessary or incidental to the protection and benefit of the
corporation, and, in general, to carry on any lawful business necessary
or incidental to the attainment of the objects of the corporation, or
any amendment thereof.
P) Shall have the power to make donations for the public
welfare or for charitable, scientific or educational purposes.
Q) Shall have the power to enter into partnerships, general or
limited, or joint ventures, in connection with any lawful activities.
FOURTH That the voting common stock authorized may be issued by the
corporation is FIFTY MILLION (50,000,000) shares of stock with a
nominal or par value of .001 cents per share and THREE THOUSAND (3,000)
shares of convertible cumulative preferred stock with a nominal or par
value of .001 cents per share be authorized. Said shares may be issued
by the corporation from time to time for such considerations as may be
fixed from time to time by the Board of Directors.
FIFTH The governing body of the corporation shall be known as
directors, and the number of directors may from time to time be
increased or decreased in such manner as shall be provided by the
by-laws of this corporation, providing that the number of directors
shall be reduced to less than one (1). The name and post office address
of the first Board of Directors shall be one (1) in number and listed
as follows:
Name POST OFFICE ADDRESS
Michael D. Taylor 251 Jeanell Dr. Suite 3
Carson City, NV 89703
SIXTH The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay
the debts of the corporation.
SEVENTH The name and post office address of the incorporators signing
the Articles of Incorporation is as follows:
NAME ADDRESS
Michael D. Taylor 251 Jeanell Dr., Suite 3
Carson City, Nevada 89701
EIGHTH The resident agent for this corporation shall be:
CORPORATE ADVISORY SERVICE, INC.
The address of said agent, and the principle or statutory address of
this corporation in the state of Nevada is:
251 Jeanell Dr., Suite 3
Carson City, Nevada 89703
NINTH The corporation is to have perpetual existence.
11
<PAGE>
TENTH In furtherance and not in limitation of the powers conferred by
stature, the Board of Directors is expressly authorized:
Subject to the by-laws, if any, adopted by the stockholders,
to make, alter or amend the by-laws of the corporation.
To fix the amount to be reserved as working capital over and
above its capital stock paid in; to authorize and cause to be executed,
mortgages and liens upon the real and personal property of this
corporation.
By resolution passed by a majority of the whole Board, to
consist of one (1) or more committees, each committee to consist of one
or more directors of the corporation, which, to the extent provided in
the resolution, or in the by-laws of the corporation, shall have and
may exercise the powers of the Board of Directors in the management of
the business and affairs of the corporation. Such committee, or
committees, shall have such name, or names, as may be stated in the
by-laws of the corporation, or as may be determined from time to time
by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the
stockholders holding stock entitling them to exercise at least a
majority of the voting power given at a stockholder's meeting called
for the purpose, or when authorized by written consent of the holders
of at least a majority of the voting stock issued and outstanding, the
Board of Directors shall have power and authority at any meeting to
sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon
such terms and conditions as its Board of Directors deems expedient and
for the best interests of the Corporation.
ELEVENTH No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
corporation, whether now or hereafter authorized, or any bonds,
debentures or securities convertible into stock may be issued or
disposed of by the Board of Directors to such persons and on such terms
as it in its discretion it shall deem advisable.
TWELFTH No director or officer of the corporation shall be personally
liable to the corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act of
omission of any such director or officer; provided, however, that the
foregoing provision shall not eliminate or limit the liability of a
director or officer ( ) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of the law, or (ii) the
payment of dividends in violation of Section 78.300 of the Nevada
Revised Statutes. Any repeal or modification of this Article by the
stockholders of the corporation shall be prospective only, and shall
not adversely affect any limitation on the personal liability of a
director or officer of the corporation for acts or omissions prior to
such repeal or modification.
THIRTEENTH This corporation reserves the right to amend, alter, change,
in any manner now or hereafter prescribed by statute, or by the
Articles of Incorporation, and all rights conferred upon stockholders
herein are granted subject to this reservation.
12
<PAGE>
I, THE UNDERSIGNED, being the Incorporator Herein before named for the
purpose of forming a corporation pursuant to the General Corporation
Law of the State of Nevada, do make and file these Articles of
Incorporation, hereby declaring and certifying that the facts herein
are true, and accordingly have hereunto set my hand this 16th day of
June, 1994.
/s/
-----------------------------
Michael D. Taylor
STATE OF NEVADA }
} SS:
CARSON CITY }
On this 16th day of June, 1994, in Carson City, Nevada, before, me, the
undersigned, a Notary Public in and for Carson City, State of Nevada,
personally appeared:
Michael D. Taylor
Known to be the person whose name is subscribed to the foregoing
document and acknowledged to me that he executed the same.
/s/
------------------------------
Notary Public
Corporate Advisory Service, Inc. does hereby accept as Resident/Agent
for the previously named corporation.
Corporate Advisory Service, Inc.
/s/ 6/16/94
------------------------------ ---------------------
By Michael D. Taylor, President Date
13
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
INTERNATIONAL TRAINING & EDUCATION CORP.
We the undersigned President and Vice-President/Assistant Secretary of
International Training & Education Corp. do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened, held
on the 5th day of February 1996, adopted a resolution to amend the original
articles as follows:
Article FIRST is hereby amended to read as follows:
The name of the corporation is:
DigiMedia USA, Inc.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 6,897,814; that the
said change and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/
----------------------------------
President
/s/
----------------------------------
Assistant Secretary
State of Florida }
}
County of Broward }
On February 7, 1996, personally appeared before me a Notary Public,
Kirk J. Girrbach and Gene Farmer, who acknowledged that they executed the above
instrument.
/s/
---------------------------------
Notary Public
14
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
DigiMedia USA, Inc.
We the undersigned Vice President and Assistant Secretary of DigiMedia
USA, Inc. do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 15th day of February 1996, adopted a resolution to amend
the original articles as follows:
Article FOURTH is hereby amended to read as follows:
That the voting common stock authorized may be issued is SEVENTY-FIVE
MILLION (75,000,000) shares of stock with a nominal or par value of .000667
cents per share and FIVE THOUSAND (5,000) share of preferred stock with a
nominal or par value of .0006 per share shall be issued. Said shares may be
issued by the corporation from time to time for such considerations as may be
fixed by the Board of Directors.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 6,897,814; that the
said change and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/
----------------------------
Vice-President
/s/
----------------------------
Assistant Secretary
State of Florida }
}
County of Broward }
On February 17, 1996, personally appeared before me, a Notary Public,
Gene Farmer, who acknowledged that he executed the above instrument.
/s/
----------------------------
Notary Public
15
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Filed by:
DigiMedia USA, Inc.
-------------------
Name of Corporation
We the undersigned Kirk J. Girrbach and
- --------------------------------------------------------------------------------
President
Gene Farmer of Digimedia, USA, Inc.
- --------------------------------------------------------------------------------
Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 12th of May 1997 adopted a resolution to amend the
original articles as follows:
Article FOURTH is hereby amended to read as follows:
FOURTH That the voting common stock authorized may be issued by the
corporation is Ten Million, Seven Hundred Fourteen Thousand, Two Hundred
Eight-Five (10,714,285) shares of stock with nominal or par value of $.00467 and
no other class of stock shall be authorized. Said shares with nominal or par
value may be issued by the corporation from time to time for such consideration
as may be fixed from time to time by the Board of Directors.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 6,897,814; that the
said change(s) and amendment have been consented to and approved by a majority
vote of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/
----------------------------
President
/s/
----------------------------
Assistant Secretary
State of Florida }
}
County of Broward }
On May 12, 1997 personally appeared before me, a Notary Public, Kirk J.
Girrbach, Gene Farmer, who acknowledged that they executed the above instrument.
/s/
----------------------------
Notary Public
16
<PAGE>
ARTICLES OF MERGER
Between
Nitros Franchise Corp., ( a Nevada Corporation)
And
DigiMedia USA, Inc., (a Nevada Corporation)
Pursuant to Section 78.458 & Section 78.461 of Nevada Statutes, the undersigned
corporations adopt these Articles of Merger between Nitros Franchise
Corporation, (a Nevada Corporation) and DigiMedia USA, Inc. (a Nevada
Corporation), with DigiMedia USA, Inc. being the surviving corporation. The
surviving corporation shall, simultaneously with the filing of these Articles of
Merger, change its name from DigiMedia USA, Inc. to Nitros Franchise
Corporation. Sec. 92 A.19D 2(b). "To agree that it will promptly pay to the
dissenting owners of each domestic entity that is a party to the merger or
exchange the amount, if any, to which they are entitled under or created
pursuant to NRS 92A.300 to 92A,500, inclusive."
1. The Plan of Merger (a complete copy of which is held at the office of the
Resident Agency at Corporate Advisory Services, inc. 251 Jeanel, #3, Carson
City, Nevada 89703) has been adopted by the Board of Directors of both
constituent corporations.
2. The Plan of Merger was approved by unanimous consent of the stockholders of
Nitros Franchise Corp.
3. The Plan of Merger was approved by unanimous consent of the stockholders of
DigiMedia USA, Inc.
4. The Articles of Incorporation of the Surviving Corporation were not amended
in the Plan of Merger.
5. It is intended by the undersigned that the merger takes effect upon the
filing of these Articles of Merger with the Secretary of the State of Nevada.
Dated this 14th day of May 1997.
BY: /s/ BY: /s/
--------------------------- ---------------------------
Kirk Girrbach, President Kirk Girrbach, Secretary
DigiMedia USA, Inc. DigiMedia USA, Inc.
BY: /s/ BY: /s/
--------------------------- ---------------------------
David Bawarsky, President Jason Sherman, Secretary
Nitros Franchise Corporation Nitros Franchise Corporation
17
<PAGE>
STATE OF FLORIDA }
COUNTY OF BROWARD }
On May 14, 1997, personally known to me, a Notary Public, Kirk J.
Girrbach, as President and Secretary on behalf of DigiMedia USA, Inc., and David
Bawarsky, as President and Jason Sherman, as Secretary on behalf of Nitros
Franchise Corporation, who acknowledged that they executed the above instrument.
/s/
-------------------------------
Notary Public, State of Florida
My Commission Expires:
(stamp)
18
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Nitros Franchise Corporation
We the undersigned President and Secretary of Nitros Franchise
Corporation do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 30th day of May 1997, adopted a resolution to amend the
articles as follows:
Article FOURTH is hereby amended to read as follows:
That the voting common stock authorized that may be issued is
TWENTY-FIVE MILLION (25,000,000) shares of stock with a nominal or par value of
$.002 cents per share and no other class of stock shall be authorized. Said
shares with nominal or par value may be issued by the corporation from time to
time for such consideration as may be fixed from time to time by the Board of
Directors.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 2,150,889; that the
said change and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/
----------------------
President
/s/
----------------------
Secretary
State of Florida }
County of Broward }
On May 20, 1997, personally appeared before me, a Notary Public, David
Bawarsky, who acknowledged that he executed the above information.
/s/
- ---------------------------
Notary Public
RICHARD ZADANOFF
(stamp)
19
<PAGE>
CERTIFIED RESOLUTION OF CORPORATE BOARD
Nitros Franchise Corporation, a Nevada corporation, of 4330 NW 207th Drive,
Miami, Florida, 33055.
I, the undersigned, hereby certify that I am the CEO of Nitros Franchise
Corporation, a Nevada corporation, duly organized and existing under the laws of
the State of Nevada, that the following is a true copy of resolutions duly
adopted by the Board of Directors of said Corporation and that such resolutions
conform to the provisions of the bylaws of the Corporation, are not inconsistent
with its charter, and are in full force and effect and have not been amended or
rescinded.
1. RESOLVED, that the above corporation, effective July 24, 1997,
approved a corporate name change to Algorhythm Technologies Corporation.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Article of Incorporation is NINE MILLION SIX
HUNDRED THOUSAND (9,600,000), that the said change(s) and amendment have
been consented to and approved by a majority vote of the stockholders
holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
I further certify that the following are the names of the present
officers and directors of this corporation: David Bawarsky,
President/CEO/Director; Alan Kvares, Secretary/Director; Jason Sherman,
Vice President/Director; Parker Yates, Director; Richard Zadanoff,
Treasurer.
IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed
the seal of this Corporation, this 24 day of July, 1997.
/s/
-------------------------------
David Bawarsky, President/CEO
We hereby certify that we are directors of the Corporation and that
the foregoing is a correct copy of resolutions passed as therein set
forth and that the same are now in full force and effect.
/s/ /s/
------------------------------- ----------------------
David Bawarsky, Director Alan Kvares, Director
/s/ /s/
------------------------------- ----------------------
Jason Sherman, Director Parker Yates, Director
STATE OF FLORIDA
COUNTY OF DADE
BEFORE ME appeared the above Directors who are personally known to me
and who acknowledged that they signed the above instrument.
/s/
------------------------------
Notary Public State of Florida
RICHARD ZADANOFF
(STAMP)
20
EXHIBIT 3.2
INTERNATIONAL TRAINING & EDUCATION CORP.
BY-LAWS
ARTICLE 1 MEETINGS OF STOCKHOLDERS
- -----------------------------------
1. Stockholders' meetings shall be held in the office of the
Corporation, at Carson City, NV, or at such other place or places as the
Directors shall from time to time determine.
2. The annual meeting of the Stockholders of this Corporation
shall be held at 11 a.m., on the 17th day of June of each year beginning
in 1995, at which time there shall be elected by the Stockholders of the
Corporation a Board of Directors for the ensuing year, and the
Stockholders shall transact such other business as shall properly come
before them.
3. A notice setting out the time and place of such annual
meeting shall be mailed postage prepaid to each of the Stockholders of
record, at his address and as the same appears on the stock book of the
company, or if no such address appears, at his last known place of
business, at least ten (10) days prior to the annual meeting.
4. If a quorum is not present at the annual meeting, the
Stockholders present, in person or by proxy, may adjourn to such future
time as shall be agreed upon by them, and notice of such adjournment
shall be mailed, postage prepaid, to each Stockholder of record at least
ten (10) days before such date to which the meeting was adjourned; but if
a quorum is present, they may adjourn from day to day as they see fit,
and no notice of such adjournment need be given.
5. Special meetings of the Stockholders may be called at any
time by the President, by all of the Directors provided there are no more
than three, or if more than three, by any three Directors; or by the
holder of a majority share of the capital stock of the Corporation. The
Secretary shall send a notice of such called meeting to each Stockholder
of record at least ten (10) days before such meeting, and such notice
shall state the time and place of the meeting, and the object thereof. No
business shall be transacted at a special meeting except as stated in the
notice to the Stockholders, unless by unanimous consent of all the
Stockholders present, either in person or by proxy, all such stock being
represented at the meeting.
6. A majority of the stock issued and outstanding, either in
person or by proxy, shall constitute a quorum for the transaction of
business at any meeting of the Stockholders.
7. Each Stockholder shall be entitled to one vote for each share
of stock in his own name on the books of the company, whether represented
in person or by proxy.
8. All proxies shall be in writing and signed.
9. The following order of business shall be observed at all
meetings of the Stockholders so far as is practicable:
r) Call the roll;
s) Reading, correcting, and approving of the minutes of the
previous meeting;
t) Reports of Officers;
u) Reports of Committees;
v) Election of Directors;
w) Unfinished business; and
x) New business
21
<PAGE>
ARTICLE II STOCK
- -----------------
1. Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary of the Corporation.
2 All certificates shall be consecutively numbered; the name of the
person owning the shares represented thereby, with the number of shares and the
date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall
be surrendered by cancellation and new certificates issued to the purchased or
assignee.
ARTICLE III DIRECTORS
- ----------------------
1. A Board of Directors, consisting of at least one (1) person shall be
chosen annually by the Stockholders at their meeting to manage the affairs of
the company. The Directors' term of office shall be one year, and Directors may
be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation
or other causes shall be filled by the remaining Director or Directors choosing
a Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1 p.m.,
on the seventeenth day of June of each year beginning in 1995 at the office of
the company at Carson City, NV, or at such other time or place as the Board of
Directors shall by resolution appoint; special meetings may be called by the
president or any director giving ten (10) days notice to each director. Special
meetings may also be called by execution of the appropriate waiver of notice and
call when executed by a majority of the Directors of the company. A majority of
the Directors shall constitute a quorum.
4. The Directors have the general management and control of the
business and affairs of the company and shall exercise all the powers that may
be exercised or performed by the Corporation, under the statues, the Articles of
Incorporation, and the by-laws. Such management will be by equal vote of each
member of the Board of Directors with each board member having an equal vote.
5. A resolution, in writing, signed by all or a majority of the members
of the Board of Directors, shall constitute action by the Board of Directors to
effect therein expressed, with the same force and effect as though such
resolution has been passed at a duly convened meeting; and it shall be the duty
of the Secretary to record every such resolution in the Minute Book of the
Corporation under its proper date.
ARTICLE IV OFFICERS
- --------------------
1. The officers of this company shall consist of a President, one or
more Vice President(s), Secretary, Treasurer, Resident Agent, and such other
officers as shall, from time to time, be elected or appointed by the Board of
Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
Stockholders and shall have general charge and control over the affairs of the
Corporation subject to the Board of Directors. He shall sign or countersign all
certificates, contracts and other instruments of the Corporation as authorized
22
<PAGE>
by the Board of Directors and shall perform all such other duties as are
incident to his office or are required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President
during the absence or disability of the President and shall have such powers and
such duties as may be assigned to him from time to time by the Board of
Directors.
4. The SECRETARY shall issue notices for all meetings as required by
the by-laws, shall keep a record of the minutes of the proceedings of the
meetings of the Stockholders and Directors, shall have charge of the corporate
books, and shall make such reports and perform such other duties as are incident
to his office, or properly required of him by the Board of Directors. He shall
be responsible that the Corporation complies with Section 78.105 of the Nevada
Corporation laws and supplies to the Nevada Resident Agent or Registered Office
in Nevada, and maintain, any and all amendments or changes to the by-laws of the
Corporation. In compliance with Section 78.105, he will also supply to the
Nevada Resident Agent or registered office in Nevada, and maintain, a current
statement setting out the name of the custodian of the stock ledger or duplicate
stock ledger, and the present and complete post office address, including street
and number, if any, where such stock ledger or duplicate stock ledger specified
in the section is kept.
5. The TREASURER shall have the custody of all moneys and securities of
the Corporation and shall keep regular books of account. He shall disburse the
funds of the Corporation in payment of the just demands against the Corporation,
or as may be ordered by the Board of Directors, making proper vouchers for such
disbursements and shall render to the Board of Directors, from time to time, as
may be required of him, an account of all his transactions as Treasurer and of
the financial condition of the Corporation. He shall perform all duties incident
to his office or which are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the Corporation's
registered office in the state of Nevada, upon whom process against the
Corporation may be served and shall perform all duties required of him by
statute.
7. The salaries of all offices shall be fixed by the Board of Directors
and may be changed from time to time by a majority vote of the board.
8. Each officer shall serve for a term of one (1) year or until their
successors are chosen and qualified. Officers may be re-elected or appointed for
successive annual terms.
9. The Board of Directors may appoint such other officers and agents,
as it shall deem necessary or expedient, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
- ---------------------------------------------------
1. The Corporation shall indemnify any and all of its Directors and
Officers, and its former Directors and Officers, or any person who may have
served at the Corporations request as a Director or Officer of another
Corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by them in
connection with the defense of any action, suit or proceeding in which they, or
any of them, are made parties, or a party, by reason of being or having been
Director(s) or Officer(s) of the Corporation, or of such other Corporation,
except, in relation to matters as to which any such Director or Officer or
former Director or Officer or person shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
23
<PAGE>
Such indemnification shall not be deemed exclusive of any other rights to which
those indemnified may be entitled, under by-law, agreement, vote of Stockholders
or otherwise.
ARTICLE VI AMENDMENTS
- ---------------------
1. Any of these by-laws may be amended by a majority vote of the
Stockholders at any meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the by-laws or adopt additional
by-laws, but shall not alter or repeal any by-laws adopted by the Stockholders
of the company.
24
EXHIBIT 10.2
EMPLOYMENT CONTRACT FOR KIRK J. GIRRBACH
THIS AGREEMENT is made April 13, 1998, at the City of Fort Lauderdale, County of
Broward, State of Florida, between CAPITAL NETWORK OF AMERICA, CORP., a Nevada
Corporation, and wholly-owned subsidiary of Algorhythm Technologies, Corp.,
public Nevada Corporation, hereinafter "employer", and KIRK J. GIRRBACH,
hereinafter "employee":
Employer is engaged in the financial advisory services industry and maintains a
business in the City of Fort Lauderdale, County of Broward, State of Florida;
Employee is willing to be employed by employer, and employer is willing to
employ employee, on the terms, covenants, and conditions set forth in this
agreement;
WHEREAS it is the intent of employer to obtain an employee with integrity and
requisite qualifications to act in an executive management function with the
company, and it is the intent of employee to fulfill the intent of employer and
be compensated for such employment;
THEREFORE, in consideration of the mutual covenants and promises of the parties,
employer and employee covenant and agree as follows:
SECTION ONE: Employer does hire and employ employee as Chairman, President and
CEO of its entire company, and employee does accept and agree to such hiring and
employment. In consideration of the invaluable and sustaining contributions
during the inception, research and development of the company, Kirk J. Girrbach,
will, in perpetuity, possess the title of co-founder of the employer-company and
its subsequent holdings. This title is not related to continued employment or
any amount of stock holdings retained. Subject to the supervision and pursuant
to the orders, advice, and directions of employer, employee shall direct all
phases of said company, subject only to the final direction of employer, and
shall perform such other duties as are customarily performed by one holding such
position in other similar businesses or enterprises as that engaged in by
employer, and shall also additionally render such other and unrelated services
and duties as may be assigned to employee from time to time by employer.
SECTION TWO: Employee agrees to perform, at all times faithfully, industriously,
and to the best of his ability, experience, and talent, all of the duties that
may be required of and from him pursuant to the express and implicit terms of
this agreement, to the reasonable satisfaction of employer. Such duties shall be
rendered at employer's Fort Lauderdale place of business and at such other place
or places as employer shall in good faith require or as the interest, needs,
business, and opportunities of employer shall require or make advisable.
SECTION THREE: The term of this agreement shall be for a period of five (5)
years, commencing April 13, 1998, and terminating April 12, 2003, subject,
however, to prior termination as provided below. Should employer cancel this
employment contract, employee shall receive a lump sum liquidated amount of TWO
MILLION ($2,000,000) DOLLARS as severance pay from employer.
SECTION FOUR: When the Employer obtains revenue, employer shall pay employee and
employee agrees to accept from employer, for employee's services under this
agreement, compensation at the gross rate of ONE HUNDRED THOUSAND ($100,000)
DOLLARS per year for serving as Chairman, President and CEO. Said compensation
shall be paid on a weekly basis and shall be increased 10% per year effective
the first day of January, 1999, during the term of this contract. It is
expressly understood that employee's
25
<PAGE>
compensation under this agreement may be supplemented by additional stock option
plans from employer. In addition, employer agrees to establish an expense
account from which it will reimburse employee for any and all necessary,
customary, and usual expenses incurred by him on behalf of the employer pursuant
to employer's directions. Upon execution of this agreement, employee shall also
be issued FIVE HUNDRED TWENTY FIVE THOUSAND (525,000) SHARES OF RESTRICTED
COMMON STOCK OF ALGORHYTHM TECHNOLOGIES CORP., a public Nevada Corporation,
solely as a "signing incentive" for execution of this agreement. Further, when
employer has signed its third (3rd) contract with a client, employee shall be
issued an additional FIVE HUNDRED TWENTY FIVE THOUSAND (525,000) SHARES OF
RESTRICTED COMMON STOCK OF ALGORHYTHM TECHNOLOGIES, CORP., a public Nevada
Corporation.
SECTION FIVE: The expenses of the employer shall be equally borne by Douglas A.
Stepelton, Kirk J. Girrbach, and Anthony J. Ard, until such time as revenue is
produced by the employer to pay for same, not to exceed one (1) year. It is
understood and agreed that the following the ability of employer to cover
company expenses as well as salary payments to Douglas A. Stepelton, Kirk J.
Girrbach and Anthony J. Ard in accordance with respective employment agreements
with employer, net revenue of employer shall be distributed as follows:
one-third (1/3) toward any accrued salary of Douglas A. Stepelton, Kirk J.
Girrbach, and Anthony J. Ard; one-third (1/3) toward any accrued expenses of
employer payable to Douglas A. Stepelton, Kirk J. Girrbach and Anthony J. Ard;
and one-third (1/3) toward profits of the employer company.
SECTION SIX: Employer shall provide family health insurance as well as dental
insurance to employee with no contribution required from employee.
SECTION SEVEN: Employer shall provide a company vehicle (1997 Volvo), or the
financial equivalent at employee's option, to employee and provide all
maintenance, insurance, repair and fuel to said vehicle.
SECTION EIGHT: Employer shall provide three (3) weeks annual paid vacation and
one (1) weeks annual paid sick leave to employee. In addition to vacation and
sick days, the employee shall have the following designated holidays: New Year's
Day, Birthday of Martin Luther King, Jr.,Lincoln's Birthday, Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day and the following
Friday, and Christmas Day (Note: Should any of the above dates fall on Saturday
or Sunday, the following Monday shall be deemed as a holiday).
SECTION NINE: Employer shall compensate employee as a "Performance Incentive
Bonus" as follows:
Sliding Scale as follows:
Based upon Net Profit.
From 0 to $149,000 3.33%
From $150,000 to $299,000 5.00%
From $300,000 and over 6.66%
To be paid at the end of the fiscal year (1998).
For a period of 2 years to be reviewed at the end of term, but will not be less
than what was received in years one (1) and two (2).
Kirk J. Girrbach has choice of cash, common stock or any combination of the two.
SECTION TEN: Notwithstanding anything in this agreement to the contrary,
employer has the option to terminate this agreement in the event that during its
term employee shall become permanently disabled as the term permanently disabled
is defined below. Such option shall be exercised by employer giving notice to
employee by registered mail. The giving of such notice this agreement and the
term of this agreement come to an end on the last day of the month in which the
notice is mailed, with the same force and effect as is that day were originally
set forth as the termination date. For the purposes of the agreement, employee
26
<PAGE>
shall be deemed to have become permanently disabled if, during any year of the
term of this agreement, because of ill health, physical or mental disability, or
for other causes beyond his control, he shall have been continuously unable or
unwilling or have filed to perform his duties under this contract for thirty
(30) consecutive days, or if, during any ear of the term of this agreement, he
shall have been unable or unwilling or have failed to perform his duties for a
total period of sixty (60) days, either consecutive or not. For the purpose of
this agreement, the term "any year of the term of this agreement" is defined to
mean any period of twelve (12) calendar months commencing on the first day of
May and terminating on the last day of April of the following year during the
term of this agreement.
SECTION ELEVEN: Employee shall devote his time, attention, knowledge, and skill
to the business and interest of employer, and employer shall be entitled to all
of the benefits, emoluments, profits, or other issues arising from or incident
to any and all work, services, and advice of employee, and employee expressly
agrees that during the term of this agreement he will not be interested,
directly or indirectly, in any form, fashion, or manner, as partner, officer,
director, stockholder, advisor, employee, or in any other form or capacity, in
any other business similar to employer's business or any allied trade; provided
however, that nothing shall be deemed to prevent or limit the right of employee
to invest any of his funds in the capital stock or other securities of any
corporation whose stock or securities are publicly owned or are regularly traded
on any public exchange, nor shall anything be deemed to prevent employee from
investing or limit employee's right to invest his funds in real estate. Employer
expressly acknowledges that employee is a practicing attorney, and that employee
will be acting as such exclusive of his duties hereunder.
SECTION TWELVE: Employee further specifically agrees that he will not at any
time, in any manner, either directly or indirectly, communicate to any person,
form, or corporation any information of any kind concerning any matters
affecting or relating to the business of employer, including, without limiting
the generality of the foregoing, the names of any of its customers, the prices
it obtains or has obtained or at which its sells or has sold its products, or
any other information of, about, or concerning the business of employer, its
manner of operation, its plans, processes, or other date of any kind, nature, or
description without regard to whether any or all of the foregoing matters would
be deemed confidential, material, or important, the parties stipulating that as
between them, the matters are important, material and confidential and gravely
affect the effective and successful conduct of the business of the employer, and
its good-will, and that any breach of the terms of this paragraph is a material
breach of this agreement.
SECTION THIRTEEN: Anything contained in this agreement to the contrary
notwithstanding, it is understood and agreed that employee shall not have the
right to make any contract or commitments for or on behalf of employer without
the written consent of employer.
SECTION FOURTEEN: It is expressly understood that this agreement is between the
employee and Capital Network of America, Corp., a Nevada corporation. There is
no privity or liability of Algorhythm Technologies Corp. a public Nevada
corporation, under the terms of this agreement, with the sole exception of
honoring the issuance of restricted stock in accordance with this agreement.
SECTION FIFTEEN: The parties to this agreement shall hold harmless any Director,
officer, employee or agent of Algorhythm Technologies Corp. a public Nevada
corporation, for any and all liability whatsoever, who undertakes any action
pursuant to this agreement.
SECTION SIXTEEN: This written agreement contains the sole and entire agreement
between the parties and shall supersede any and all other agreements between the
parties. The parties acknowledge and agree that neither of them has made any
representation with respect to the subject matter of this agreement or any
representations inducing its execution and delivery except such representations
as are specifically set forth
27
<PAGE>
in this writing and the parties acknowledge that they have had the opportunity
to have legal counsel of their choice review this agreement prior to entering
into the same.
SECTION SEVENTEEN: It is agreed that no waiver or modification of this agreement
or of any covenant, condition, or limitation contained in it shall be valid
unless it is in writing and duly executed by the party to be charged with it,
and that no evidence of any waive or modification shall be offered or received
in evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this agreement, or the rights or obligations of any
party under it, unless such waiver or modification is in writing, duly executed
as above. The parties agree that the provisions of this paragraph may not be
waived except by a duly executed writing.
SECTION EIGHTEEN: The parties agree that it is their intention and covenant that
this agreement and performance under it and all suits relating to it be
construed in accordance with and under and pursuant to the laws of the State of
Florida, with venue in Broward County.
SECTION NINETEEN: This agreement shall be binding on and inure to the benefit of
the respective parties and their executors, administrators, heirs, personal
representatives, successors and assigns.
SECTION TWENTY: Severability. Should any portion of this agreement be found to
be unenforceable at law or in equity, the remaining provisions of this agreement
are to remain in full force and effect.
NOTICE REQUIREMENTS SENT TO: Kirk J. Kirrbach, 6550 N. Federal Highway, Suite
250, Fort Lauderdale, FL 33308.
EMPLOYER: EMPLOYEE:
CAPITAL NETWORK OF AMERICA, KIRK J. KIRRBACH
A Nevada Corporation
BY:/s/Douglas A. Stepelton /s/ Kirk J. Kirrbach
------------------------------------------ ---------------------
Douglas A. Stepelton Vice President, Kirk J. Kirrbach
and Director
WITNESSES:
/s/David Bawarsky /s/Andrew D. Smith
- -------------------------------------------- ---------------------
David Bawarsky Andrew D. Smith
28
EXHIBIT 10.3
EMPLOYMENT CONTRACT FOR DOUGLAS A. STEPELTON
THIS AGREEMENT is made April 13, 1998, at the City of Fort Lauderdale, County of
Broward, State of Florida, between CAPITAL NETWORK OF AMERICA, CORP., a Nevada
Corporation, and wholly-owned subsidiary of Algorhythm Technologies, Corp.,
public Nevada Corporation, hereinafter "employer", and DOUGLAS A. STEPELTON,
hereinafter "employee":
Employer is engaged in the financial advisory services industry and maintains a
business in the City of Fort Lauderdale, County of Broward, State of Florida;
Employee is willing to be employed by employer, and employer is willing to
employ employee, on the terms, covenants, and conditions set forth in this
agreement;
WHEREAS it is the intent of employer to obtain an employee with integrity and
requisite qualifications to act in an executive management function with the
company, and it is the intent of employee to fulfill the intent of employer and
be compensated for such employment;
THEREFORE, in consideration of the mutual covenants and promises of the parties,
employer and employee covenant and agree as follows:
SECTION ONE: Employer does hire and employ employee as Vice President and
Director of its entire company, and employee does accept and agree to such
hiring and employment. In consideration of the invaluable and sustaining
contributions during the inception, research and development of the company,
Douglas A. Stepelton, will, in perpetuity, possess the title of co-founder of
the employer-company and its subsequent holdings. This title is not related to
continued employment or any amount of stock holdings retained. Subject to the
supervision and pursuant to the orders, advice, and directions of employer,
employee shall direct all phases of said company, subject only to the final
direction of employer, and shall perform such other duties as are customarily
performed by one holding such position in other similar businesses or
enterprises as that engaged in by employer, and shall also additionally render
such other and unrelated services and duties as may be assigned to employee from
time to time by employer.
SECTION TWO: Employee agrees to perform, at all times faithfully, industriously,
and to the best of his ability, experience, and talent, all of the duties that
may be required of and from him pursuant to the express and implicit terms of
this agreement, to the reasonable satisfaction of employer. Such duties shall be
rendered at employer's Fort Lauderdale place of business and at such other place
or places as employer shall in good faith require or as the interest, needs,
business, and opportunities of employer shall require or make advisable.
SECTION THREE: The term of this agreement shall be for a period of five (5)
years, commencing April 13, 1998, and terminating April 12, 2003, subject,
however, to prior termination as provided below. Should employer cancel this
employment contract, employee shall receive a lump sum liquidated amount of TWO
MILLION ($2,000,000) DOLLARS as severance pay from employer.
SECTION FOUR: When the Employer obtains revenue, employer shall pay employee and
employee agrees to accept from employer, for employee's services under this
agreement, compensation at the gross rate of ONE HUNDRED THOUSAND ($100,000)
DOLLARS per year for serving as Vice President and Director. Said compensation
shall be paid on a weekly basis and shall be increased 10% per year effective
the first day of January, 1999, during the term of this contract. It is
expressly understood that employee's compensation
29
<PAGE>
under this agreement may be supplemented by additional stock option plans from
employer. In addition, employer agrees to establish an expense account from
which it will reimburse employee for any and all necessary, customary, and usual
expenses incurred by him on behalf of the employer pursuant to employer's
directions. Upon execution of this agreement, employee shall also be issued FIVE
HUNDRED THOUSAND (500,000) SHARES OF RESTRICTED COMMON STOCK OF ALGORHYTHM
TECHNOLOGIES CORP., a public Nevada Corporation, solely as a "signing incentive"
for execution of this agreement. Further, when employer has signed its third
(3rd) contract with a client, employee shall be issued an additional FIVE
HUNDRED THOUSAND (500,000) SHARES OF RESTRICTED COMMON STOCK OF ALGORHYTHM
TECHNOLOGIES, CORP., a public Nevada Corporation.
SECTION FIVE: The expenses of the employer shall be equally borne by Douglas A.
Stepelton, Kirk J. Girrbach, and Anthony J. Ard, until such time as revenue is
produced by the employer to pay for same, not to exceed one (1) year. It is
understood and agreed that the following the ability of employer to cover
company expenses as well as salary payments to Douglas A. Stepelton, Kirk J.
Girrbach and Anthony J. Ard in accordance with respective employment agreements
with employer, net revenue of employer shall be distributed as follows:
one-third (1/3) toward any accrued salary of Douglas A. Stepelton, Kirk J.
Girrbach, and Anthony J. Ard; one-third (1/3) toward any accrued expenses of
employer payable to Douglas A. Stepelton, Kirk J. Girrbach and Anthony J. Ard;
and one-third (1/3) toward profits of the employer company.
SECTION SIX: Employer shall provide family health insurance as well as dental
insurance to employee with no contribution required from employee.
SECTION SEVEN: Employer shall provide a company vehicle (1997 Volvo), or the
financial equivalent at employee's option, to employee and provide all
maintenance, insurance, repair and fuel to said vehicle.
SECTION EIGHT: Employer shall provide three (3) weeks annual paid vacation and
one (1) weeks annual paid sick leave to employee. In addition to vacation and
sick days, the employee shall have the following designated holidays: New Year's
Day, Birthday of Martin Luther King, Jr.,Lincoln's Birthday, Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day and the following
Friday, and Christmas Day (Note: Should any of the above dates fall on Saturday
or Sunday, the following Monday shall be deemed as a holiday).
SECTION NINE: Employer shall compensate employee as a "Performance Incentive
Bonus" as follows:
Sliding Scale as follows:
Based upon Net Profit.
From 0 to $149,000 3.33%
From $150,000 to $299,000 5.00%
From $300,000 and over 6.66%
To be paid at the end of the fiscal year (1998).
For a period of 2 years to be reviewed at the end of term, but will not be less
than what was received in years one (1) and two (2).
Doulas A. Stepelton has choice of cash, common stock or any combination of the
two.
SECTION TEN: Notwithstanding anything in this agreement to the contrary,
employer has the option to terminate this agreement in the event that during its
term employee shall become permanently disabled as the term permanently disabled
is defined below. Such option shall be exercised by employer giving notice to
employee by registered mail. The giving of such notice this agreement and the
term of this agreement come to an end on the last day of the month in which the
notice is mailed, with the same force and effect as is that day were originally
set forth as the termination date. For the purposes of the agreement, employee
shall be deemed to have become permanently disabled if, during any year of the
term of this agreement,
30
<PAGE>
because of ill health, physical or mental disability, or for other causes beyond
his control, he shall have been continuously unable or unwilling or have filed
to perform his duties under this contract for thirty (30) consecutive days, or
if, during any ear of the term of this agreement, he shall have been unable or
unwilling or have failed to perform his duties for a total period of sixty (60)
days, either consecutive or not. For the purpose of this agreement, the term
"any year of the term of this agreement" is defined to mean any period of twelve
(12) calendar months commencing on the first day of May and terminating on the
last day of April of the following year during the term of this agreement.
SECTION ELEVEN: Employee shall devote his time, attention, knowledge, and skill
to the business and interest of employer, and employer shall be entitled to all
of the benefits, emoluments, profits, or other issues arising from or incident
to any and all work, services, and advice of employee, and employee expressly
agrees that during the term of this agreement he will not be interested,
directly or indirectly, in any form, fashion, or manner, as partner, officer,
director, stockholder, advisor, employee, or in any other form or capacity, in
any other business similar to employer's business or any allied trade; provided
however, that nothing shall be deemed to prevent or limit the right of employee
to invest any of his funds in the capital stock or other securities of any
corporation whose stock or securities are publicly owned or are regularly traded
on any public exchange, nor shall anything be deemed to prevent employee from
investing or limit employee's right to invest his funds in real estate. Employer
expressly acknowledges that employee is involved in other business interests,
and that employee will be acting as such exclusive of his duties hereunder.
SECTION TWELVE: Employee further specifically agrees that he will not at any
time, in any manner, either directly or indirectly, communicate to any person,
form, or corporation any information of any kind concerning any matters
affecting or relating to the business of employer, including, without limiting
the generality of the foregoing, the names of any of its customers, the prices
it obtains or has obtained or at which its sells or has sold its products, or
any other information of, about, or concerning the business of employer, its
manner of operation, its plans, processes, or other date of any kind, nature, or
description without regard to whether any or all of the foregoing matters would
be deemed confidential, material, or important, the parties stipulating that as
between them, the matters are important, material and confidential and gravely
affect the effective and successful conduct of the business of the employer, and
its good-will, and that any breach of the terms of this paragraph is a material
breach of this agreement.
SECTION THIRTEEN: Anything contained in this agreement to the contrary
notwithstanding, it is understood and agreed that employee shall not have the
right to make any contract or commitments for or on behalf of employer without
the written consent of employer.
SECTION FOURTEEN: It is expressly understood that this agreement is between the
employee and Capital Network of America, Corp., a Nevada corporation. There is
no privity or liability of Algorhythm Technologies Corp. a public Nevada
corporation, under the terms of this agreement, with the sole exception of
honoring the issuance of restricted stock in accordance with this agreement.
SECTION FIFTEEN: The parties to this agreement shall hold harmless any Director,
officer, employee or agent of Algorhythm Technologies Corp. a public Nevada
corporation, for any and all liability whatsoever, who undertakes any action
pursuant to this agreement.
SECTION SIXTEEN: This written agreement contains the sole and entire agreement
between the parties and shall supersede any and all other agreements between the
parties. The parties acknowledge and agree that neither of them has made any
representation with respect to the subject matter of this agreement or any
representations inducing its execution and delivery except such representations
as are specifically set forth
31
<PAGE>
in this writing and the parties acknowledge that they have had the opportunity
to have legal counsel of their choice review this agreement prior to entering
into the same.
SECTION SEVENTEEN: It is agreed that no waiver or modification of this agreement
or of any covenant, condition, or limitation contained in it shall be valid
unless it is in writing and duly executed by the party to be charged with it,
and that no evidence of any waive or modification shall be offered or received
in evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this agreement, or the rights or obligations of any
party under it, unless such waiver or modification is in writing, duly executed
as above. The parties agree that the provisions of this paragraph may not be
waived except by a duly executed writing.
SECTION EIGHTEEN: The parties agree that it is their intention and covenant that
this agreement and performance under it and all suits relating to it be
construed in accordance with and under and pursuant to the laws of the State of
Florida, with venue in Broward County.
SECTION NINETEEN: This agreement shall be binding on and inure to the benefit of
the respective parties and their executors, administrators, heirs, personal
representatives, successors and assigns.
SECTION TWENTY: Severability. Should any portion of this agreement be found to
be unenforceable at law or in equity, the remaining provisions of this agreement
are to remain in full force and effect.
NOTICE REQUIREMENTS SENT TO: Douglas A. Stepelton, 6550 N. Federal Highway,
Suite 250, Fort Lauderdale, FL 33308.
EMPLOYER: EMPLOYEE:
CAPITAL NETWORK OF AMERICA, DOUGLAS A. STEPELTON
A Nevada Corporation
BY:/s/Kirk J. Girrbach /s/ Douglas A. Stepelton
------------------------------------ ------------------------------
Kirk J. Girrbach President, Douglas A. Stepelton
and Chairman
WITNESSES:
/s/David Bawarsky /s/Andrew D. Smith
- --------------------------------------- ------------------------------
David Bawarsky Andrew D. Smith
32
EXHIBIT 10.4
EMPLOYMENT CONTRACT FOR ANTHONY J. ARD
THIS AGREEMENT is made April 13, 1998, at the City of Fort Lauderdale, County of
Broward, State of Florida, between CAPITAL NETWORK OF AMERICA, CORP., a Nevada
Corporation, and wholly-owned subsidiary of Algorhythm Technologies, Corp.,
public Nevada Corporation, hereinafter "employer", and ANTHONY J. ARD,
hereinafter "employee":
Employer is engaged in the financial advisory services industry and maintains a
business in the City of Fort Lauderdale, County of Broward, State of Florida;
Employee is willing to be employed by employer, and employer is willing to
employ employee, on the terms, covenants, and conditions set forth in this
agreement;
WHEREAS it is the intent of employer to obtain an employee with integrity and
requisite qualifications to act in an executive management function with the
company, and it is the intent of employee to fulfill the intent of employer and
be compensated for such employment;
THEREFORE, in consideration of the mutual covenants and promises of the parties,
employer and employee covenant and agree as follows:
SECTION ONE: Employer does hire and employ employee as Vice President and
Director of its entire company, and employee does accept and agree to such
hiring and employment. In consideration of the invaluable and sustaining
contributions during the inception, research and development of the company,
Anthony J. Ard, will, in perpetuity, possess the title of co-founder of the
employer-company and its subsequent holdings. This title is not related to
continued employment or any amount of stock holdings retained. Subject to the
supervision and pursuant to the orders, advice, and directions of employer,
employee shall direct all phases of said company, subject only to the final
direction of employer, and shall perform such other duties as are customarily
performed by one holding such position in other similar businesses or
enterprises as that engaged in by employer, and shall also additionally render
such other and unrelated services and duties as may be assigned to employee from
time to time by employer.
SECTION TWO: Employee agrees to perform, at all times faithfully, industriously,
and to the best of his ability, experience, and talent, all of the duties that
may be required of and from him pursuant to the express and implicit terms of
this agreement, to the reasonable satisfaction of employer. Such duties shall be
rendered at employer's Fort Lauderdale place of business and at such other place
or places as employer shall in good faith require or as the interest, needs,
business, and opportunities of employer shall require or make advisable.
SECTION THREE: The term of this agreement shall be for a period of five (5)
years, commencing April 13, 1998, and terminating April 12, 2003, subject,
however, to prior termination as provided below. Should employer cancel this
employment contract, employee shall receive a lump sum liquidated amount of TWO
MILLION ($2,000,000) DOLLARS as severance pay from employer.
SECTION FOUR: When the Employer obtains revenue, employer shall pay employee and
employee agrees to accept from employer, for employee's services under this
agreement, compensation at the gross rate of ONE HUNDRED THOUSAND ($100,000)
DOLLARS per year for serving as Vice President and Director. Said compensation
shall be paid on a weekly basis and shall be increased 10% per year effective
the first day of January, 1999, during the term of this contract. It is
expressly understood that employee's compensation
33
<PAGE>
under this agreement may be supplemented by additional stock option plans from
employer. In addition, employer agrees to establish an expense account from
which it will reimburse employee for any and all necessary, customary, and usual
expenses incurred by him on behalf of the employer pursuant to employer's
directions. Upon execution of this agreement, employee shall also be issued FIVE
HUNDRED THOUSAND (500,000) SHARES OF RESTRICTED COMMON STOCK OF ALGORHYTHM
TECHNOLOGIES CORP., a public Nevada Corporation, solely as a "signing incentive"
for execution of this agreement. Further, when employer has signed its third
(3rd) contract with a client, employee shall be issued an additional FIVE
HUNDRED THOUSAND (500,000) SHARES OF RESTRICTED COMMON STOCK OF ALGORHYTHM
TECHNOLOGIES, CORP., a public Nevada Corporation.
SECTION FIVE: The expenses of the employer shall be equally borne by Douglas A.
Stepelton, Kirk J. Girrbach, and Anthony J. Ard, until such time as revenue is
produced by the employer to pay for same, not to exceed one (1) year. It is
understood and agreed that the following the ability of employer to cover
company expenses as well as salary payments to Douglas A. Stepelton, Kirk J.
Girrbach and Anthony J. Ard in accordance with respective employment agreements
with employer, net revenue of employer shall be distributed as follows:
one-third (1/3) toward any accrued salary of Douglas A. Stepelton, Kirk J.
Girrbach, and Anthony J. Ard; one-third (1/3) toward any accrued expenses of
employer payable to Douglas A. Stepelton, Kirk J. Girrbach and Anthony J. Ard;
and one-third (1/3) toward profits of the employer company.
SECTION SIX: Employer shall provide family health insurance as well as dental
insurance to employee with no contribution required from employee.
SECTION SEVEN: Employer shall provide a company vehicle (1997 Volvo), or the
financial equivalent at employee's option, to employee and provide all
maintenance, insurance, repair and fuel to said vehicle.
SECTION EIGHT: Employer shall provide three (3) weeks annual paid vacation and
one (1) weeks annual paid sick leave to employee. In addition to vacation and
sick days, the employee shall have the following designated holidays: New Year's
Day, Birthday of Martin Luther King, Jr.,Lincoln's Birthday, Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day and the following
Friday, and Christmas Day (Note: Should any of the above dates fall on Saturday
or Sunday, the following Monday shall be deemed as a holiday).
SECTION NINE: Employer shall compensate employee as a "Performance Incentive
Bonus" as follows:
Sliding Scale as follows:
Based upon Net Profit.
From 0 to $149,000 3.33%
From $150,000 to $299,000 5.00%
From $300,000 and over 6.66%
To be paid at the end of the fiscal year (1998).
For a period of 2 years to be reviewed at the end of term, but will not be less
than what was received in years one (1) and two (2).
Anthony J. Ard has choice of cash, common stock or any combination of the two.
SECTION TEN: Notwithstanding anything in this agreement to the contrary,
employer has the option to terminate this agreement in the event that during its
term employee shall become permanently disabled as the term permanently disabled
is defined below. Such option shall be exercised by employer giving notice to
employee by registered mail. The giving of such notice this agreement and the
term of this agreement come to an end on the last day of the month in which the
notice is mailed, with the same force and effect as is that day were originally
set forth as the termination date. For the purposes of the agreement, employee
shall be deemed to have become permanently disabled if, during any year of the
term of this agreement,
34
<PAGE>
because of ill health, physical or mental disability, or for other causes beyond
his control, he shall have been continuously unable or unwilling or have filed
to perform his duties under this contract for thirty (30) consecutive days, or
if, during any ear of the term of this agreement, he shall have been unable or
unwilling or have failed to perform his duties for a total period of sixty (60)
days, either consecutive or not. For the purpose of this agreement, the term
"any year of the term of this agreement" is defined to mean any period of twelve
(12) calendar months commencing on the first day of May and terminating on the
last day of April of the following year during the term of this agreement.
SECTION ELEVEN: Employee shall devote his time, attention, knowledge, and skill
to the business and interest of employer, and employer shall be entitled to all
of the benefits, emoluments, profits, or other issues arising from or incident
to any and all work, services, and advice of employee, and employee expressly
agrees that during the term of this agreement he will not be interested,
directly or indirectly, in any form, fashion, or manner, as partner, officer,
director, stockholder, advisor, employee, or in any other form or capacity, in
any other business similar to employer's business or any allied trade; provided
however, that nothing shall be deemed to prevent or limit the right of employee
to invest any of his funds in the capital stock or other securities of any
corporation whose stock or securities are publicly owned or are regularly traded
on any public exchange, nor shall anything be deemed to prevent employee from
investing or limit employee's right to invest his funds in real estate. Employer
expressly acknowledges that employee is a practicing physician, and that
employee will be acting as such exclusive of his duties hereunder.
SECTION TWELVE: Employee further specifically agrees that he will not at any
time, in any manner, either directly or indirectly, communicate to any person,
form, or corporation any information of any kind concerning any matters
affecting or relating to the business of employer, including, without limiting
the generality of the foregoing, the names of any of its customers, the prices
it obtains or has obtained or at which its sells or has sold its products, or
any other information of, about, or concerning the business of employer, its
manner of operation, its plans, processes, or other date of any kind, nature, or
description without regard to whether any or all of the foregoing matters would
be deemed confidential, material, or important, the parties stipulating that as
between them, the matters are important, material and confidential and gravely
affect the effective and successful conduct of the business of the employer, and
its good-will, and that any breach of the terms of this paragraph is a material
breach of this agreement.
SECTION THIRTEEN: Anything contained in this agreement to the contrary
notwithstanding, it is understood and agreed that employee shall not have the
right to make any contract or commitments for or on behalf of employer without
the written consent of employer.
SECTION FOURTEEN: It is expressly understood that this agreement is between the
employee and Capital Network of America, Corp., a Nevada corporation. There is
no privity or liability of Algorhythm Technologies Corp. a public Nevada
corporation, under the terms of this agreement, with the sole exception of
honoring the issuance of restricted stock in accordance with this agreement.
SECTION FIFTEEN: The parties to this agreement shall hold harmless any Director,
officer, employee or agent of Algorhythm Technologies Corp. a public Nevada
corporation, for any and all liability whatsoever, who undertakes any action
pursuant to this agreement.
SECTION SIXTEEN: This written agreement contains the sole and entire agreement
between the parties and shall supersede any and all other agreements between the
parties. The parties acknowledge and agree that neither of them has made any
representation with respect to the subject matter of this agreement or any
representations inducing its execution and delivery except such representations
as are specifically set forth in this writing and the parties acknowledge that
they have had the opportunity to have legal counsel of their choice review this
agreement prior to entering into the same.
35
<PAGE>
SECTION SEVENTEEN: It is agreed that no waiver or modification of this agreement
or of any covenant, condition, or limitation contained in it shall be valid
unless it is in writing and duly executed by the party to be charged with it,
and that no evidence of any waive or modification shall be offered or received
in evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this agreement, or the rights or obligations of any
party under it, unless such waiver or modification is in writing, duly executed
as above. The parties agree that the provisions of this paragraph may not be
waived except by a duly executed writing.
SECTION EIGHTEEN: The parties agree that it is their intention and covenant that
this agreement and performance under it and all suits relating to it be
construed in accordance with and under and pursuant to the laws of the State of
Florida, with venue in Broward County.
SECTION NINETEEN: This agreement shall be binding on and inure to the benefit of
the respective parties and their executors, administrators, heirs, personal
representatives, successors and assigns.
SECTION TWENTY: Severability. Should any portion of this agreement be found to
be unenforceable at law or in equity, the remaining provisions of this agreement
are to remain in full force and effect.
NOTICE REQUIREMENTS SENT TO: Anthony J. Ard, 6550 N. Federal Highway, Suite 250,
Fort Lauderdale, FL 33308.
EMPLOYER: EMPLOYEE:
CAPITAL NETWORK OF AMERICA, ANTHONY J. ARD
A Nevada Corporation
BY:/s/Kirk J. Girrbach /s/ Anthony J. Ard
------------------------------------ ------------------------
Kirk J. Girrbach President, Anthony J. Ard
and Chairman
WITNESSES:
/s/David Bawarsky /s/Andrew D. Smith
- --------------------------------------- -----------------------
David Bawarsky Andrew D. Smith
36
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 450
<SECURITIES> 0
<RECEIVABLES> 133,160
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 133,610
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 545,588
<CURRENT-LIABILITIES> 641,631
<BONDS> 0
0
37,683
<COMMON> 25,999
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 545,588
<SALES> 0
<TOTAL-REVENUES> 310,698
<CGS> 0
<TOTAL-COSTS> 176,618
<OTHER-EXPENSES> 116,674
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,417
<INCOME-PRETAX> 14,987
<INCOME-TAX> 3,750
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,237
<EPS-PRIMARY> .000
<EPS-DILUTED> .000
</TABLE>
