U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under section 13 or 15 (D) of the
Securities Exchange Act of 1934 for the fiscal year
ended December 31, 1999
[ ] Transition report under section 13 or
15 (d) of the Securities Exchange Act of
1934 for the transition period from _____
to _____
SWIFTYNET.COM, INC.
(Name of small business issuer in its charter)
Florida 65-078-3722
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
17521 Crawley Road, Odessa, Florida 33556
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 926-1603
Securities registered under
Section 12(b) of the Exchange Act: Name of exchange on which registered
None OTC
Bulletin Board
Securities registered under Section
12(g) of the Exchange Act:
Common stock, $.0001 par value
Class A Common Stock Warrants, $.01 par value
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 ___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
The issuer's revenue for the most recent fiscal year, ending December 31, 1999,
was $179,382.
The aggregate market value of the voting common equity held by non-affiliates
computed by reference to the price at which the common equity was sold, or the
average bid and asked price of such common equity, as of March 28, 2000, was
approximately $10,701,663.
The number of shares of the Company's common stock, par value $.0001 per share,
outstanding as of February 1, 2000, was 10,902,120. The number of the Company's
Class A Warrants, for the purchase of one share of common stock as of February
26, 2000, was 318,240.
Transitional Small Business Disclosure
Format (Check One)
Yes____ No X
<PAGE>
Part I
Item 1. Description of Business
The Company
SwiftyNet.com, Inc. is a Florida Corporation formed on September 23, 1997(the
"Company"). The Company is a successor to Steele Holdings, Inc., a Florida
Corporation formed on August 13, 1997. Rachel Steele was the sole shareholder of
and President of Steele Holdings. On January 20, 1998, the Company and Steele
Holdings, Inc., were reorganized with all the assets of Steele Holdings being
transferred into the Company. All 6,000 authorized shares of common stock were
exchanged on a one to one thousand basis for shares in the Company. After the
reorganization, all stock in the Company was owned by the Company's president,
Rachel Steele. Steele Holdings has conducted no other business, held no other
assets and was dissolved on October 16, 1998. On October 22, 1999, the Company
changed its name to SwiftyNet.com, Inc.
The Company was formed to develop, own and operate a chain of full-service car
washes and express oil change centers (the "Centers"). The Company believes
that a market niche exists for the combination of these two services at one
establishment. Accordingly, the Company believes that its full service
Centers will be designed to fill this niche by offering a car wash, oil change
and fluid check within a 15 to 20 minute period, all without an appointment.
The Company constructed its prototype Center in Palm Harbor Florida on real
property owned by the Company (hereinafter the "Prototype Center"). The
approximately one (1) acre site was purchased from Champion Hills by the
Company's predecessor for $312,500. The first Center was opened on January 18,
1999. At its Prototype Center, the Company currently has six part-time
employees.
On December 17, 1999, SwiftyNet,.com, Inc. purchased all of the outstanding
shares of Rankstreet.com, Inc. ("Rankstreet"), in exchange for 4,000,000 shares
of common stock. Rankstreet is developing a world wide web site to provide
comparative statistical analysis of Internet advertising. Rankstreet is a
Florida corporation that was formed on October 28, 1999. Its assets consist
primarily of the service contributions of its three shareholders and a $10,000
contract for software development. SwiftyNet.com issued 2,000,000 shares of
common stock to the three principal shareholders of Rankstreet (the
"Principals") at closing. Once the Rankstreet.com web site is fully functional
and available for customer usage, the Principals shall receive an additional
1,000,000 shares. One year from the date that the Rankstreet web site is
advertised for use by the general public, the Principals shall receive 1,000,000
more common shares. Pursuant to the purchase agreement, the Principals have an
option to purchase 51% of Rankstreets' outstanding shares 30 days following a
successful initial public offering of Rankstreets' securities for seventy-five
thousand dollars ($75,000).
When operational, Rankstreet will provide rankings of the number of hits on a
specific web site. The sites will be grouped by industry. The web site will also
act as a server for business to business advertising. The primary expenditures
for the development of the Rankstreet site were made prior to its acquisition by
the Company and are reflected in the financial statements and in Management's
Discussion and Analysis.
Industry Description and Outlook
The quick oil change industry is highly competitive, with many local, national
and regional chains. In addition, most automobile service centers also provide
oil change services, though not on an expedited basis. The carwash industry is
not as competitive, consisting mostly of local or regional establishments and
only a few national chains. There are relatively few carwash centers that also
provide oil changes on an expedited basis. The carwash industry experiences
seasonal fluxuation.
Currently, there is very little competition providing the same services as
Rankstreet plans to provide. The Company believes that it will face more
competition in the coming year. These factors will be affected by the continued
growth of the Internet, particularly in the business to business sector.
Business Strategy
The Company intends to continue to diversify. Over the next year it will focus
the majority of its efforts on the development and opening of the Rankstreet.com
web site. The site is anticipated to open on April 1st, 2000. It anticipates
that the success of the web site will depend upon the continued growth of the
Internet trend. The Company signed nondisclosure and noncompetition contracts
with all of Rankstreets developers, employees and consultants. No trademarks
have been filed. In the future, the Company intends to continue to look for
opportunities to purchase and develop new and innovative Internet and other
technologies and will continue to diversify its business.
In January of 2000, the Company entered into a private placement for the sale of
more than 5,000,000 units with each unit consisting of one common share and one
warrant, pursuant to Regulation D,506. The Company plans to use the proceeds
from the offering to further develop the Rankstreet site and for the potential
acquisition of other businesses.
1
<PAGE>
In December 1999, the Company entered into a new warrant agreement for the
warrants under the private placement. The exercise price for the warrants is
$7.25 with an exercise period of two years.
Government Regulation
The Company is subject to various local, state and federal laws regulating the
discharge of pollutants into the environment. The Company believes that its
operations are in compliance in all material respects with applicable
environmental laws and regulations. Compliance with these laws and regulations
is not expected to materially affect the Company's competitive position. Even if
the Company is able to enter into the Pennzoil indemnification program, there
can be no assurance that the Company will not incur material environmental
liability in connection with any of its properties. Regarding its wholly owned
subsidiary, the Company is subject to developing regulations involving the
Internet. The Company believes that it is currently in compliance with all state
and federal Internet regulation and will continue to monitor those regulations
as they develop.
Rankstreet.com, as an Internet company, is subject to some regulation in every
state, as well and federal regulation. The Company believes that the number of
regulations will continue to increase and that compliance will become more
expensive. Currently the Company believes that Rankstreet is in compliance with
all state and federal regulations.
Marketing
The Company has tracked customers and has found a trend of repeat customers.
Therefore, the Company periodically mails promotional materials to such
customers. The Company is using cooperative marketing in conjunction with other
local businesses in order to increase consumer awareness and attract new
customers. In addition, through its advertising consultant, David Gindley, the
Company has used direct mail marketing to area consumers.
On January 3, 2000, the Company entered into a consulting agreement with John
and Mildred Martinez for the design and construction of its web site. The
Company agreed to pay a fee of 40,000 restricted shares of common stock valued
at $.75 per share to the consultants. The web site for the Company was completed
in January.
On or around April 1, 2000, the Company's wholly owned subsidiary,
Rankstreet.com, Inc., will commence operations and open it web site ranking web
site. With the opening of this site Rankstreet will offer two million dollars in
free advertising on the site to the winner of a drawing. Rankstreet plans to
offer the contest across the U.S. subject to various state sweepstakes rules.
Item 2. Description of Property
The Prototype Center is located in Palm Harbor, Florida, on U.S. Highway 19. The
Prototype Center cost $1.2 million dollars. The subject property containing the
Prototype Center consists of approximately one (1) acre and previously received
approval from Pinellas County for site construction. A construction contract was
entered into between the Company and Brandon Construction Company for the
Prototype Center construction with the amount of $525,486 being paid to Brandon.
The Company and Rachel Steele, President of the Company, personally, entered
into a promissory note with People's Bank in the amount of $525,000 to cover the
construction of the carwash. The note has a maturity date of May 1, 2014 at a
rate of one (1%) percent in excess of the Prime Rate. Said note is secured by a
mortgage on the land owned in Pinellas County for the construction of the
Prototype Center.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the Company's security holders
during the 1999 year.
2
<PAGE>
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's common stock and warrants are traded on the Over-the-Counter
Bulletin Board. The Company's stock began trading on the Over-the-Counter market
on March 11, 1999. The high and low sales prices for each quarter since then are
as follows:
Common Stock
High Low
1st quarter 1999 5.17 5.13
2nd quarter 1999 4.44 4.35
3rd quarter 1999 3.47 2.88
Warrants
High Low
1st quarter 1999 1.11 1.11
2nd quarter 1999 .31 .31
3rd quarter 1999 .24 .24
The approximate number of holders of record of common stock is 37. The number of
warrant holders is 11. No dividends have been declared to date. The future
dividend policy will depend upon the Company's earnings, capital requirements,
financial condition and other factors considered relevant by the Company's Board
of Directors. None of the outstanding warrants have been exercised.
Special Note Regarding Forward Looking Statements
This annual report on Form 10-KSB of SwiftyNet.com, Inc. for the year ended
December 31, 1999 contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. To the extent that such statements are not
recitations of historical fact, such statements constitute forward-looking
statements which, by definition, involve risks and uncertainties. In particular,
statements under the Sections; Description of Business, Business Strategy and
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward-looking statements. Where, in any forward-looking
statement, SwiftyNet.com expresses an expectation or belief as to future results
or events, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ
materially from those anticipated, and include but are not limited to: general
economic, financial and business conditions; labor difficulties; commodity
prices for natural gas and crude oil; the effect of weather on crude oil and
natural gas demand and consumption; competition for customer in the carwash and
oil change industries; competition from other Internet companies; the costs of
exploration and development of petroleum reserves; popularity of the Internet;
exploration risks; political risks impacting exploration and development;
unanticipated environmental liabilities; changes in and compliance with
governmental regulations; changes in tax laws; and the costs and effects of
legal proceedings.
3
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with the
Financial Statements and the related Notes thereto included elsewhere in this
report. This report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in "Special
Note Regarding Forward-Looking Statements."
PLAN OF OPERATION
In January 1999 the Company began operating its car wash and quick lube shop
(the Center) in Florida. The Company expected revenues from the center to be
seasonal and that expectation held true in 1999. The seasonality is in part due
to a segment of the population that only resides in Florida for part of the
year. This population shift impacts both car wash and lube shop revenues. Other
seasonality issues relate to weather. In summer months when it typically rains
quite a bit, car wash revenues would typically decline. Revenues for the four
quarters in 1999 were $38,138, $47,069, $33,847 and $60,328, respectively. The
Company also has been advertising and doing promotions to increase sales, which
should provide momentum heading into 2000. The Company believes that customer
awareness from 1999 promotions and advertising will cause sales to increase in
2000, the second year of operations.
Additionally, the Company has worked to achieve more efficient operations at the
Center. Cost of revenues exceeded revenues for the first three quarters of 1999,
but by the fourth quarter revenues exceeded operational costs. The Company
anticipates that revenues will cover the Center operational costs in 2000, both
due to the anticipated increase in revenues described above, and due to the
minimization of operational costs.
The Company has funded a substantial portion of its 1999 expenses through
agreements that were paid for in 1998, or were paid for through the issuance of
stock. Additionally, the Company's president and operations manager have
contributed their salaries to the Company. Consequently, the operating
activities of the Company have only used approximately $282,000 in cash in 1999.
This will likely not continue at the same magnitude since the prepaid expenses
at the start of 1999 have been substantially used. However, many of the
Company's consultants have been agreeable to accepting stock for services, which
should continue. Lastly, the Company's president and operations manager are
expected to continue to contribute their salaries to the Company in 2000, if
necessary. Many of these general and administrative costs are consulting in
nature and relate to improving and expanding the Company's future activities.
The Company will have to raise additional funds in 2000, to cover its general
and administrative expenses and to fund the Company's expansion plans. Early in
2000, the Company entered into a Regulation D limited offering of its stock, to
raise a maximum of $5,000,000.
The Company's expansion plans include acquiring and developing unique Internet
companies, technologies and Web properties. In December 1999, the Company
acquired all the outstanding stock of Rankstreet.com, Inc. in a stock for stock
transaction that required no cash outflow. Rankstreet.com plans to launch its
all-in-one Web site that includes a directory, Web counter and business to
business Internet advertising agency. Revenues will be generated through the
sale of banner advertising, commissions earned from selling advertising for
participating web sites and consulting related to Internet marketing.
Rankstreet.com and its Web site are in the development stage. In connection with
the acquisition of Rankstreet.com, the Company entered into employment contracts
with two individuals. The base salary is to be determined by the Board of
Directors. Additionally, the contracts include a provision to pay a percentage
of pre-tax profits or revenues. There have been no revenues from Rankstreet.com
during 1999. The software development costs to launch the initial Rankstreet.com
Web site have been expended as of March 15, 2000 and was funded through
operations and stock sales in December, 1999.
The Company does not have any planned major purchase or sale of property and
equipment and does not anticipate any additional debt financing in 2000.
However, if the Company's plans related to acquiring Internet based businesses
is successful, the Company will consider selling the Center. Interest expense
should maintain level in 2000 compared to 1999. The Company also does not
anticipate any significant changes in the number of employees.
4
<PAGE>
Item 7. Financial Statements
INDEPENDENT AUDITORS' REPORT
Board of Directors
SwiftyNet.com, Inc.
Odessa, Florida:
We have audited the accompanying consolidated balance sheet of SwiftyNet.com,
Inc. as of December 31, 1999, and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for the years ended
December 31, 1999 and 1998. These consolidated financial statements are the
responsibility of the management of SwiftyNet.com, Inc. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SwiftyNet.com, Inc.
as of December 31, 1999, and the results of its operations and its cash flows
for the years ended December 31, 1999 and 1998, in conformity with generally
accepted accounting principles.
/s/Pender, Newkirk & Company
Certified Public Accountants
Tampa, Florida
March 10, 2000
5
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Current assets
Cash $ 37,625
Inventory 7,060
Prepaid expenses 45,004
--------------
Total current assets 89,689
--------------
Property and equipment, net 1,266,203
--------------
Other assets
Goodwill and software development cost, net 1,553,875
Deposits 32,600
Other assets 13,520
--------------
Total other assets 1,599,995
--------------
Total Assets $ 2,955,887
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 58,828
Payable to stockholders 24,665
Current maturities of long-term debt 59,983
---------------
Total current liabilities 143,476
---------------
Long-term debt, less current maturities 635,889
---------------
Commitments and contingencies (Notes 6 and 7)
Stockholders' equity
Common stock; $.0001 par value; 50,000,000
shares authorized; 10,907,120 shares
issued and outstanding 1,090
Paid-in capital 3,563,721
Accumulated deficit (1,388,289)
---------------
Total stockholders' equity 2,176,522
===============
Total Liabilities and Stockholders' Equity $ 2,955,887
The accompanying notes to financial statements
are an integral part of these statements.
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<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
-------- --------
Revenues $ 179,382 $ -
Expenses ------------ ------------
Cost of revenues 230,510 -
Selling, general and administrative 851,422 363,290
Depreciation and amortization 74,924 -
------------ ------------
Total expenses 1,156,856 363,290
------------ ------------
Other income (expense)
Interest income 3,460 10,892
Interest expense (63,220) -
Total other income (expense) ------------ ------------
(59,760) 10,892
------------ ------------
Net loss $ (1,037,234) $ (352,398)
------------ ------------
Net loss per common share $ (0.12) $ (.04)
------------ ------------
Weighted average common shares outstanding 8,699,531 8,209,478
============= ============
The accompanying notes to financial statements
are an integral part of these statements.
7
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Retained
Earnings Total
(Accumulated Stockholders'
Common Stock Paid-in Deficit) Equity
Shares Amount Capital
------ ------ ------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 6,000,000 $ 600 $ 385,777 $ 1,343 $ 387,720
Common stock issued 2,235,000 223 22,127 - 22,350
Common stock issued through Regulation D offering,
net of offering costs
of $28,166 159,120 16 966,318 - 966,334
Services donated by a stockholder - - 35,000 - 35,000
Net loss - - - (352,398) (352,398)
--------- ------- --------- ---------- ----------
Balance, December 31, 1998 8,394,120 839 1,409,222 (351,055) 1,059,006
Common stock sold 291,000 29 290,971 - 291,000
Common stock issued to consultants and
in satisfaction of obligation 272,000 27 324,473 - 324,500
Common stock reacquired and cancelled in settlement
of deposit receivable (50,000) (5) (209,995) - (210,000)
Services donated by stockholder - - 53,750 - 53,750
Common stock issued by shareholder in settlement of
Company obligations - - 133,000 - 133,000
Common stock issued for acquisition of
Rankstreet.com, Inc. (Note 2) 2,000,000 200 1,562,300 - 1,562,500
Net loss - - - (1,037,234) 1,037,234)
---------- -------- --------- ----------- ------------
Balance, December 31, 1999 10,907,120 $ 1,090 $ 3,563,721 $ (1,388,289) $ 2,176,522
========== ======= =========== ============= ===============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
8
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
Increase (Decrease) in Cash and Cash Equivalents
1999 1998
Operating activities ---- ----
Net loss $ (1,037,234) $ (352,398)
Adjustments to reconcile net loss ------------- -------------
to net cash used in operating
activities:
Contributed services 53,750 35,000
Stock issued to consultants 262,000 12,126
Stock issued by shareholder in
settlement of Company obligations 133,000 -
Depreciation and amortization 74,924 -
Increase in inventory (7,060) -
Decrease (increase) in prepaid expenses 257,552 (240,056)
Increase (decrease) in accounts payable (18,709) 34,957
Decrease in income taxes payable - (250)
------------- -------------
Total adjustments 755,457 (158,223)
------------- -------------
Net cash used in operating activities (281,777) (510,621)
------------- -------------
Investing activities
Acquisition of property and equipment (19,819) (1,133,010)
Increase in deposits and other assets (200) (243,153)
------------- -------------
Net cash used in investing activities (20,019) (1,376,163)
------------- -------------
Financing activities
Proceeds from issuance of notes payable 78,313 668,687
Payments on notes payable (116,897) (2,540)
Net proceeds from issuance of stock and
contribution of cash 250,000 969,058
Net advances from (to) a stockholder 57,319 (35,154)
------------- -----------
Net cash provided by financing activities 268,735 1,600,051
------------- -----------
Net decrease in cash and cash equivalent (33,061) (286,733)
Cash and cash equivalents, beginning of year 70,686 357,419
-------------- -----------
Cash and cash equivalents, end of year $ 37,625 $ 70,686
============== =============
The accompanying notes to financial statements
are an integral part of these statements.
9
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SWIFTYNET.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
Supplemental disclosures of noncash investing and financing activities
1999 1998
--------- ----------
Business acquired by issuing
2,000,000 shares of common stock $ 1,562,500 $ -
Settlement of deposit receivable
by reacquiring 50,000 shares of
common stock 210,000 -
Settlement of obligation to
issue 10,000 shares of common stock by
issuing the stock 62,500 -
Acquisition of prepaid asset
with obligation to issue 10,000
shares of common stock - 62,500
Settlement of obligation to issue
common stock by issuing the stock - 10,000
Settlement of debt by issuance of
41,000 shares of common stock 41,000 -
As of December 31, 1998, the Company reflected the construction of the
carwash facilities of $109,309 as a loan payable.
Cash flow information
1999 1998
--------- ------
Cash paid for interest $ 63,220 $ 12,800
Cash paid for income taxes - -
The accompanying notes to financial statements
are an integral part of these statements.
10
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Significant Accounting Policies:
The following is a summary of the more significant accounting policies and
practices of SwiftyNet.com, Inc. (the Company) which affect the accompanying
financial statements.
(a) Organization-Steele Holdings, Inc. was incorporated on August 13, 1997.
SwiftyNet.com, Inc. was incorporated on September 23, 1997. On January 20,
1998, these companies entered into a plan of reorganization whereby Steele
Holdings, Inc. transferred to SwiftyNet.com, Inc. all of its assets in
exchange for 6,000,000 shares of stock, which represented all of the stock
outstanding of SwiftyNet.com, Inc. These shares were immediately
distributed to the stockholder of Steele Holdings, Inc. in a complete
liquidation and cancellation of its stock. The accompanying financial
statements reflect this reorganization in a manner similar to a pooling of
interest and as though it occurred on August 13, 1997. As part of the
reorganization, 2,235,000 shares of stock were issued to three officers who
were considered to be founders. The Company valued these shares at $.01 per
share, an amount they determined to be a fair value based on the relevant
risks and uncertainties. The Company changed its name from Swifty Carwash &
Quik-Lube, Inc. to SwiftyNet.com, Inc. on October 20, 1999.
(b) Operations-The Company operates a carwash and oil change facility in
Florida that began operations in January 1999. On December 17, 1999, the
Company acquired Rankstreet.com, Inc. (Rankstreet), a development stage
enterprise. Rankstreet is developing Internet software to provide
historical and current statistical data on visits to other Internet web
sites.
(c) Basis of presentation-The financial statements include the Company and
its wholly owned subsidiary. All intercompany accounts and transactions
have been eliminated. Prior to January 1, 1999, the Company was considered
a development stage enterprise.
(d) Use of estimates-The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
(e) Cash and cash equivalents-For the purposes of reporting cash flows, the
Company considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents.
(f) Inventory-Inventory is stated at the lower of cost on market cost using
the first in, first out method. Inventory consists of wash chemicals, oil
and oil filters used in the Company's operations.
(g) Property and equipment-Property and equipment are recorded at cost.
Depreciation is calculated using the straight-line method over the useful
lives of the assets, ranging from 10 to 40 years. Maintenance and repairs
are charged to operations when incurred. Betterments and renewals are
capitalized. When property and equipment are sold or are otherwise disposed
of, the asset account and related accumulated depreciation account are
relieved and any gain or loss is reflected in the statement of operations.
11
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SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Significant Accounting Policies: (Continued)
(h) Capitalized interest-The Company capitalized interest as a component of
the cost of property and equipment constructed for its own use. In 1998,
total interest incurred was $12,794, of which none was charged to
operations.
(i) Loss per common share-Loss per share is based on the weighted average
number of common shares outstanding during each period in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share,
after giving effect to the recapitalization described in Note 1. In
computing diluted earnings per share, 2,000,000 shares to be issued
contingent on certain events in connection with the Rankstreet acquisition
and warrants exercisable into 318,240 shares were excluded because the
effects were antidilutive.
(j) Start-up costs-The initial costs incurred to organize the Company were
expensed when incurred.
(k) Advertising-Advertising costs are charged to operations when incurred.
Advertising expense was $13,561 for the year ended December 31, 1999.
(l) Deferred income taxes-Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to
differences between the financial statements carrying amounts of existing
assets and liabilities and their respective income tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized as income in the
period that included the enactment date.
(m) Reclassifications-Certain reclassifications have been made to 1998
financial information to conform to the 1999 presentation.
(n) Goodwill and software development cost-Goodwill and software
development cost are a result of the business acquisition described in
Note 2. The Company follows SOP 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. Costs incurred during the
application stage are capitalized, costs incurred during the preliminary
project stage and the post implementation/operational stage are expensed.
These assets are being amortized using the straight-line method over their
estimated useful life of five years. Accumulated amortization was $13,000
at December 31, 1999.
(2) Business Acquisition:
On December 17, 1999, the Company purchased all the outstanding stock of
Rankstreet.com, Inc., a development stage enterprise. The Company issued
2,000,000 shares of common stock. The 2,000,000 shares are subject to
cancellation if the Rankstreet.com web site is not functional and available
for interactive customer usage by November 17, 2000. In addition, the
Company will issue an additional 1,000,000 shares at which time the
Rankstreet.com web site is fully functional and available for interactive
customer usage. The Company will issue an additional 1,000,000 shares one
year from the date the Rankstreet.com web site is advertised for use by the
general public. These contingent shares will be recorded when the outcome
of the event is determinable beyond a reasonable doubt. As of December 31,
1999, the events that cause the additional shares to be issued had not
occurred.
12
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(2) Business Acquisition: (Continued)
In addition, the selling Rankstreet.com shareholders are each issued an option
to purchase as a group 51% of Rankstreet's outstanding common stock for $75,000
as of a date 30 days following a successful initial public offering of
Rankstreet.com, Inc. securities.
In the transaction, accounted for as a purchase, the Company recorded the above
acquisition at $1,562,500, the current market value attributed to the 2,000,000
share less a 50% discount because the shares are unregistered and are such a
significant block of stock for the Company. The $1,562,500 has been classified
as goodwill and software development costs and is being amortized over five
years, its estimated useful life. The Company recorded $13,000 of amortization
expense for 1999.
Rankstreet.com had no significant results of operations either prior or
subsequent to its acquisition.
The value of the additional 2,000,000 shares will be recorded when their
issuance is assured.
(3) Property and Equipment:
Property and equipment as of December 31, 1999, consist of:
Land $ 312,500
Buildings and improvements 662,358
Furniture and fixtures 16,244
Machinery and equipment 334,929
-----------
1,326,031
Less: accumulated depreciation 59,828
-----------
Property and equipment, net $ 1,266,203
===========
The Company began operations in 1999. Therefore, no depreciation
expense was recorded in 1998.
Substantially all of the Company's property and equipment are pledged as
collateral on loan agreements.
(4) Long-term Debt:
Long-term debt as of December 31, 1999, consists of the following:
Mortgage note payable to bank, interest
at 2.75% over 3 years treasury rate,
monthly payments of $5,017 including principal
and interest through May 2014,
personally guaranteed by the majority
stockholder, collateralized by real
estate, furniture, fixtures and equipment $ 512,576
Note payable to bank,
interest at 10%, $4,264 payable per month
through November 2003 including
interest, collateralized by equipment and
mortgage, personally guaranteed by the
majority stockholder 164,498
Note payable to finance company, interest
at 14.9%,payment of $522 per month
including interest through December 2003,
collateralized by equipment 18,798
----------
695,872
Less: Amounts currently due 59,983
----------
$ 635,889
==========
(4) Long-term Debt: (Continued)
13
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
The following is a schedule by year of the approximate principal payments
required on the above notes as of December 31, 1999:
Year Ending December 31, Amount
------------------------ -----------
2000 $ 59,983
===========
2001 $ 66,035
===========
2002 $ 72,718
===========
2003 $ 74,720
===========
2004 $ 27,403
===========
(5) Income Taxes:
No provision of income taxes has been recorded for 1999 or 1998 due to net
losses incurred.
Temporary differences giving rise to the deferred tax assets consist primarily
of the deferral and amortization of start-up costs for tax reporting purposes
and differences in lives and depreciation methods for property and equipment.
Management has established a valuation allowance equal to the amount of the
deferred tax assets due to the uncertainty of realization of the benefit of the
net operating losses against future taxable income. The components of deferred
tax assets at December 31, 1999, consist of the following:
Deferred tax assets:
Net Operating loss $ 235,000
Deferred start up costs 45,000
Valuation allowance (280,000)
Net deferred tax asset ---------------
$ -
==============
The Company has operating losses of approximately $944,000 which
can be used to offset future taxable income. These losses begin to
expire in the year 2018.
(6) Stock Offering:
During 1998, the Company sold 159,120 shares of common stock and 318,240 common
stock warrants through a private placement memorandum. Each warrant entitles the
holder to purchase one share of the Company's common stock at $7.25 per share at
any time after 30 days from their issue date through December 31, 2001. Prior to
their expiration, each warrant may be redeemable by the Company at a price of
$.01. As of December 31, 1999, no warrants have been redeemed.
14
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(7) Commitments and Related Party Transactions:
The President and Operations Manager performed services for the Company at no
cost. The Board of Directors valued these services at $53,750 and $35,000 at
1999 and 1998, respectively, and recorded this amount as an expense and an
increase in additional paid-in capital in the accompanying financial statements.
The Operations Manager has an employment contract through March 2001, with a
minimum salary of $25,000 per year.
In connection with the acquisition of Rankstreet.com, Inc. the Company entered
into employee agreements with two individuals for a period ending November 19,
2001. These agreements are automatically renewable for an additional two year
period unless canceled by written notice by either party. The terms of these
agreements call for the payment of a base salary to be determined by the Board
of Directors of Rankstreet.com, Inc. subject to a percentage of pre-tax profit
or revenue. The Board of Directors has not determined the amount of base pay. In
the event that the Company terminates these employees, the Company shall pay an
amount equal to 100% of the employee's base salary for the remainder of the
agreement or a period of two years, whichever is less.
During 1999, the Company issued 262,000 shares of common stock to certain
individuals for services, some of whom are current shareholders. The Company
recorded an expense of $262,000, the estimated value of the shares issued based
on other sales of stock during the year.
During 1999, the Company's majority shareholder transferred 133,000 shares of
common stock to certain individuals, some whom are current shareholders, for
services performed on behalf of the Company. The Company recorded a contribution
to capital and an expense of $133,000, the estimated value of the shares issued
based on other sales of stock during the year.
At December 31, 1998, a majority stockholder owed the Company $38,354. During
1999, this amount was repaid plus $2,921 representing interest at eight percent.
The stockholder then advanced the Company an additional $18,965. This amount is
unsecured and is due on demand with interest at eight percent.
On August 8, 1998, the Company entered into a consulting and contracting
agreement with a stockholder whereby the stockholder would explore, investigate,
and locate appropriate parcels of land and supplies of equipment on behalf of
the Company. In addition, the stockholder would provide certain construction
services to the Company. In exchange for these services, the Company would pay
the stockholder between three and five percent of the total costs of projects
which have been negotiated or performed by the stockholder. The Company paid the
stockholder $210,000 to be used on behalf of the Company in connection with this
agreement. In 1999, the stockholder returned 50,000 shares of common stock to
the Company in settlement of this deposit. These shares have been cancelled.
In November 1998, the Company entered into a consulting contract with a
stockholder. The contract calls for annual compensation of $72,500 for a period
of three years. During 1999, this contract was amended to allow the consultant
to provide services on an as needed basis for a negotiated amount rather than a
stated amount. No fees have been paid under this contract.
During 1998, subsequent to the Company's reorganization, the Company issued
2,235,000 shares of stock to directors and officers at $.01 per share.
The above related party agreements are not necessarily indicative of the
agreements that would have been entered into by independent parties.
15
<PAGE>
SWIFTYNET.COM, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(7) Commitments and Related Party Transactions: (Continued)
During 1998, the Company entered into an agreement for use of a private suite at
the Raymond James Stadium for the 1998 through 2003 football seasons. Included
in deposits at December 31, 1999 and 1998 is a $30,000 deposit in accordance
with the terms of this agreement; the Company incurred an expense of $31,120 and
$24,000 during 1999 and 1998, respectively. The Company is committed under this
agreement for an annual fee of $30,000 through 2003.
The Company entered into a three-year advertising promotion and publicity
agreement and recorded a prepaid expense of $270,400. Each year, the Company
reduces this prepaid asset in amounts equal to the greater of the actual costs
incurred under the agreement or an amount equal to the amortization of the
initial amount over the three year term using the straight line method. The
Company expensed $230,467 and $22,533 in 1999 and 1998, respectively.
(8) Segments:
The Company operates in two business segments. Currently, the only operating
segment is a carwash and quick lube establishment. Substantially all revenues
and expenses reported in the statement of operations for 1999 and 1998 relate to
this segment. All assets and liabilities reported on the balance sheet at
December 31, 1999 also relate to this segment except for $1,549,500 in goodwill
and software development cost, which relate to the Internet services segment.
The Company acquired a subsidiary in December 1999 (see Note 2) which is
developing Internet software. There are no substantial revenue or expenses of
the Internet operation in 1998 or 1999.
(9) Subsequent Event:
Subsequent to year end, the Company's Board of Directors consented to conduct a
private placement pursuant to Regulation D 506 of the Securities Act of 1933 for
the sale of 5,000,000 units. Each unit consists of one share of stock and one
warrant with a price of $1.00 per unit. The warrants carry an exercise price of
$7.25 for an exercise period of two years.
16
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company has not had any disagreement with its independent auditor on any
matter of accounting principles or practices or financial statement disclosure.
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act
The following is a brief description of the educational and business experience
of each director, executive officer and key employee of the Company:
Rachel L. Steele, age 31, is a Director as well as President and Secretary of
the Company. She has held these positions since the inception of the Company.
Ms. Steele is a graduate of the University of Southern Florida with a degree in
Business Administration. Since graduating from college in May of 1994, Ms.
Steele has spent the majority of her time managing her own investment portfolio.
In addition, Ms. Steele has from time to time provided certain financial
consulting services to individuals and corporations.
Raymond Lipsch, age 60, is a Director, Chief Executive Officer, Chief Financial
Officer and Treasurer of the Company. Mr. Lipsch has been CEO, Treasurer and
Director since inception of the Company. Mr. Lipsch was elected as CFO in the
first quarter of 1999. Mr. Lipsch attended Northwestern University in Illinois.
Mr. Lipsch has over 30 years of entrepreneurial and management experience,
specializing in the development of new companies, developing new divisions and
re-energizing troubled ones. Since 1992, Mr. Lipsch has been engaged in the
sales and marketing of insurance products, first as an independent agent, then
as a sales representative for American Express. Since May 1994, Mr. Lipsch has
been employed as a sales representative for Av-Med.
Donald C. Hughes, age 45, is a Director as well as a Vice President of the
Company. Mr. Hughes has held these positions since the inception of the Company.
Mr. Hughes graduated from the University of Florida in 1977 with a degree in
Building Construction. In 1985, Mr. Hughes formed his own construction company,
Donald C. Hughes General Contractor, Inc., which has been in operation for
thirteen years and which engages primarily in the development and construction
of single family residences and small commercial buildings.
Stanley D. Rabushka, age 65, has been employed by the Company as a business
advisor and consultant since operations began in September 1997. Mr. Rabushka
graduated from Washington University in 1956 and 1958 with degrees of Bachelor
of Science in Engineering Physics and Master of Arts in Mathematics. After a
career involving scientific and engineering work for Emerson Electric and the
United States Government, among others, Mr. Rabushka served for more than 15
years as Vice President and General Manager for Louis Cap Company, a leading
manufacturer of men's headwear. Mr. Rabushka earned his Juris Doctoris degree
from Saint Louis University in 1977 and has been a practicing attorney since
that time with offices in St. Louis, Missouri. Mr. Rabushka, however, will not
provide legal service for the Company, as the Company has retained other counsel
for that purpose.
David Weintraub, age 36, has been the Operations Manager for the Company since
April 1999. Mr. Weintraub has managed his own portfolio for the five years prior
to working for the Company.
Richard Kleinberg, age 50, is the sole Director and President of Rankstreet.com,
Inc. He has held these positions since the Company's inception in October 1999.
In 1971, Mr. Kleinberg graduated from Suny State University in Albany, New York
with a Bachelors of Science in Sociology. From May 1996 to April 1998, Mr.
Kleinberg was the Resource Director for Wolf Advisory/Arcus where he oversaw
corporate technology staffing for clients. From April 1998 to the present time,
he is President of Thunderland Corporation, a technology consulting and staffing
company. In that position he directs and administers the corporation.
Vladimir Rafalovich, age 38, is Vice President of Technology for Rankstreet.com,
Inc. He has held that position since October 1999. He graduated from the Russian
Academy of Science in 1990 with a PH.D. in Physics. From April 1999 to the
present, Mr. Rafalovich has worked for Cox Target Media as a software
development engineer. From February 1998 until April 1999, he worked in the same
position for Briggs Industries. Since December 1996 he has worked as a software
engineer for Briggs Industries and Sembler Company. Prior to that he was an
Instructor at Daniel Webster College. From February 1996 to December 1996, Mr.
Rafalovich worked as a programmer/analyst for DNS Worldwide.
No voting arrangements exist between the officers and directors. The above
persons were selected pursuant to provisions in Article IV of the Company's
By-Laws, all holding office for a period of one year or until their successors
are elected and qualified. None of the officers or directors of the Company have
been involved in legal proceedings during the past five years which are material
to an evaluation of the ability or integrity of any director, person nominated
to become a director, or executive officer of the issuer, including any state or
Federal criminal and bankruptcy proceedings.
17
<PAGE>
Beneficial Owner Reporting Compliance
Failure to File Form 5
Stanley and Arlene Rabushka
10% Shareholder February 2000
Item 10. Executive Compensation
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Securities All
Principal Annual Restricted Underlying Other
Position Compen Stock Options/ LTIP Compens-
Year Salary($) Bonus($) sation Awards($) SARs(#) Payouts($) sation($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rachel Steele
President, Secretary 0 0 0 0 0 0 0 0
Raymond Lipsch
CEO, CFO, Treasurer 0 0 0 0 0 0 0 0
Donald Hughes
Vice President 0 0 0 0 0 0 0 0
Richard Kleinberg
President (Rankstreet) 0 0 0 0 0 0 0 0
Vladimir Rafalovich 0 0 0 0 0 0 0 0
Vice President(Rankstreet)
</TABLE>
All of the Company's officers and director but Ms. Steele are engaged in other
enterprises on a full-time basis. Ms. Steele donated her salary ($36,000) to the
Company. No other officer or directors have been compensated for their services
in those capacities. At this time, the Company does not plan on paying its Board
of Directors in return for their services as Directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
None of the officers and directors have received a salary during the past twelve
months. There are no officer or director groups. As a group, the officers and
directors of the Company own 82% of the outstanding shares of common stock. As
of March, 1999 the stock ownership of the Officers and Directors and 10%
Shareholders was as follows.
Title Name and Amt and Percent
of Address Nature of of
Class of Beneficial Owner Beneficial Ownership Class
Common Rachel L. Steele 5,379,659 49%
Stock 17521 Crawley Road
Odessa, FL 33556
Common Stanley and Arlene 1,215,800 11%
Stock Rabushka
250 South Brentwood,
Suite 4-L
St. Louis, MO 63105
Common Raymond Lipsch 483,520 4%
Stock 9522 Michigan Avenue
Odessa, FL 33556
Common Donald Hughes 271,720 2%
Stock 3112 Harborview Avenue
Tampa, FL 33611
Common Richard Kleinberg 800,000 7%
Stock 614 Rollingwood Lane
Valrico, FL 33594
Common Vladimir Rafalovich 800,000 7%
Stock 3407 Williston Loop
Lank O'Lakes, FL 34639
Common
Stock Total 8,950,699 82%
Don Hughes and Raymond Lipsch also own the warrants in the following number and
with the following terms:
Class Amount Exercise Price Exercise Date
Donald Hughes Class A Common Stock 65,440 7.25 12/31/01
Raymond Lipsch Class A Common Stock 23,040 7.25 12/31/01
18
<PAGE>
Item 12. Certain Relationships and Related Transactions
The Company entered into an employment contract with David Weintraub on April 1,
1999. Mr. Weintraub will be employed by the Company as Operations Manager for a
salary of $25,000 per year. The term of employment is two years. In 1999, Mr.
Weintraub donated his salary for the year 1999 to the Company.
On December 13, 1999, Rankstreet entered into employment agreements with Richard
Kleinberg and Vladimir Rafalovich. They shall act as President and
Vice-President of Marketing for Rankstreet.com respectively. They will both be
compensated at a base salary to be determined by the Board of Directors and
based upon the profitability of the Rankstreet.com web site once that site
opens. The site is anticipated to open on April 1, 2000. No compensation other
than the share received during Rankstreet's acquisition has been paid. The term
of the contracts are two years and are automatically renewable unless cancelled
in writing by either party.
On July 20, 1999, the Company entered into a promissory note with Stanley
Rabushka, a greater than 10% shareholder for $25,000 at a rate of 1% over prime.
That note has been paid off by legal services performed by Mr. Rabushka for the
Company in early 2000. The Company also extended loans to Donald Hughes, its
Vice President and Director, and Raymond Lipsch, its Chief Executive Office,
Chief Financial Officer, Treasurer and Director as well as another shareholder
in the amount of $41,000. The terms of the promissory notes dated March 1, 1999
were for repayment in equal monthly installments at 7% interest per annum. The
debt was converted to shares of common stock and paid back to the shareholders
in May 1999.
On or around December 13, 1999, the Company entered into a consulting agreement
with Edgar Arvelo, a former principal of Rankstreet. Pursuant to that
agreement Mr. Arvelo will provide the Rankstreet with consulting services for
web site development in excess of 2000 hours per year for one year. The
agreement provides that all services have been compensated for under the
original Rankstreet acquisition when Mr. Arvelo was issued 400,000 shares of
the Company stock.
Don Hughes as president of Don Hughes General Contractor, Inc., who is also a
Director and Vice-President of the Company, entered into a contract with the
Company to provide consulting services in construction and real estate for which
a sum of $210,000 was deposited for his use. On or around November 30, 1999, Mr.
Hughes paid the Company for the amount deposited by returning 50,000 shares of
stock to the Company with each share being valued at $4.00 voiding any agreement
for consulting services.
Since the reorganization and through November 15 1998, Mr. Lipsch received
compensation for consulting services totaling $72,500 pursuant to his oral
agreement regarding consulting for the Company's private and public offerings
for a time not less then 250 hours per year. Mr. Lipsch's contract provided for
this same arrangement every calendar year expiring on November 15, 2001. On
April 1, 1999, the Company entered into a new agreement with Mr. Lipsch for
consulting services with the rate of compensation to be determined by the Board
of Directors. No compensation has been received under this agreement as of the
end of 1999.
In addition, the Company has entered into a six (6) year license agreement with
the Tampa Bay Buccaneers for a Luxury Suite. The agreement required a deposit of
$30,000 and then payments of $30,000 per year with half of that amount due on
September 1, and half due on December 1. The term of the agreement began in
1998.
Item 13. Exhibits and Reports on Form 8-K
Exhibits marked by asterisk(s) have not been included with this Annual Report on
Form 10-KSB, but instead have been incorporated by reference to other documents
filed by the Company with the Commission.
Exhibit Description Number
(2)Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession....................................
(3)Articles of Incorporation and By-Laws.....................................
*(a)Articles of Incorporation.............................................
**(b)By-Laws.............................................. ................
(c) Name Change Amendment................................................
(4)Instruments Defining the Rights of Security Holders
*(a)Subscription Agreement................................................
*(b)Warrant Agreement.....................................................
(c)Warranty Agreement 2000
(9)Voting Trust Agreements..................................................None
19
<PAGE>
(10)Material Contracts.......................................................
*(a)Equipment Purchase Contract..........................................
*(b)Construction Contract................................................
*(c)Architect Contract...................................................
*(d)Consulting Contract-Donald Hughes....................................
*(e)Employment Contract-Stanley Rabushka.................. ..............
*(f)Promissory Note - Swifty.............................................
*(g)Promissory Note - Steele ............................................
*(h)Consulting Contract-John Oster ......................................
*(i)Raymond Lipsch Contract .............................................
*(j)Land Purchase Contract...............................................
**(k) Stanley Rabushka Employment and Stock Agreement....... ............
**(l) Tampa Bay Buccaneers Agreement......................................
(m)Edgar Arvelo Consulting Contract.....................................
(n)Richard Kleinberg Employment Contract................................
(o)Vladimir Rafalovich..................................................
(p)Martinez Consulting Contract..........................................
(11)Statement re: computation of per share earnings......................Note 1
(13)Annual or quarterly reports: Form 10-Q..................................None
(16)Letter regarding Changes in Certifying Accountant.......................None
(18)Letter on change in accounting principles...............................None
(21)Subsidiaries of the Registrant..........................................None
(22)Published report regarding matters submitted to vote.... ...............None
(24)Power of Attorney.......................................................None
(27)Financial Data Schedule...................................................
(99)Additional Exhibits.....................................................None
* Previously filed with Form 10-SB on November 23, 1998.
** Previously filed with Form 10-SBA No. 1 on February 2, 1999.
Reports on Form 8-K
On or around December 21, 1999, the Company filed a report on form 8-K
regarding its purchase of Rankstreet.com, Inc. This form was amended on February
11, 2000
20
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SwiftyNet.com, Inc.
Date: March 28, 2000
By:/S/ Rachel Steele
-----------------------
Rachel Steele, President,
Secretary, Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date:March 28, 2000 By:/S/ Rachel Steele
-----------------------
Rachel Steele, President,
Secretary, Director
Date:March 28, 2000 By:/S/ Raymond Lipsch
-----------------------
Raymond Lipsch,
Chief Executive Officer,
Chief Financial Officer,
Treasurer, Director
Date:March 28, 2000 By:/S/ Donald Hughes
----------------------
Donald Hughes, Vice President,
Director
21
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SWIFTY CARWASH & QUIK-LUBE, INC.
TO: Department of State
Tallahassee, Florida 32304
Pursuant to the provisions in Section 607.1003 of the Florida Statutes, the
undersigned corporation hereby adopts the following Articles of Amendment to
its Articles of Incorporation pursuant to a meeting of the shareholders of the
Corporation duly called on October 20th, 1999:
1. The following amendment to the Articles of Incorporation of Swifty
Carwash & Quik-Lube, Inc. was adopted by holders of a majority of the
outstanding shares of the common stock of the corporation on October 20th, 1999,
in the manner prescribed by the Florida General Corporation Act:
ARTICLE I NAME
The name of the corporation shall be SwiftyNet.com, Inc. and its
principal office and mailing address shall be 17521 Crawley Road,
Odessa, Florida 33556
The amendment was adopted by the board of directors and a majority of the
shareholders of the corporation.
Dated: October 20th, 1999.
SWIFTY CARWASH & QUIK-LUBE, INC.
/S/ Rachel Steele
By: ______________________________________
President
Corporate Seal /S/ Rachel Steele
Attest: ___________________________________
Secretary
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
I HEREBY CERTIFY that on this day before me, an officer duly qualified to
take acknowledgments, personally appeared Rachel Steele, President of Swifty
Carwash & Quik-Lube, Inc., to me known to be the person described in and who
executed the foregoing Articles of Amendment.
WITNESS my hand and official seal in the County and State last aforesaid
this 20TH day of OCTOBER, A.D. 1999.
/S/ Calvin Larkins
_____________________________
Notary Public, State at Large
Printed Name:Calvin Larkins
(SEAL) My Commission Expires:
WARRANT RESOLUTION
Whereas, SwiftyNet.com, Inc. (the "Company") is making a private
placement of 5,000,000 Units, each Unit being comprised of one (1) share of the
Company's Common Stock, $.0001 par value (the "Common Stock") and one (1) Common
Share Purchase Warrant (the "Warrant") to purchase one (1) share of Common
Stock; and
Whereas, the Company desires to provide for the form and provisions of
the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitations of rights, and immunities of the Company and the
holders of the Warrants; and
Whereas, the Company desires to make the Warrants, when executed on
behalf of the Company, the valid, binding, and legal obligations of the Company.
Now, therefore, it is hereby resolved as follows:
ARTICLE 1
ISSUANCE OF WARRANTS
Section 1.01. Issuance of Warrants. The Company shall, in accordance
with applicable state and federal securities laws, issue and sell to private
investors one (1) Warrant for each share of the Company's common stock bought in
accordance with the terms of the subscription agreement in substantially the
form of Exhibit A annexed hereto evidencing the right of the holders thereof to
subscribe to a share of Common Stock.
Section 1.02. Execution and Delivery of Warrants. Each Warrant,
whenever executed, shall be dated on the date the Unit is purchased (the
"Warrant Date"), and shall be signed on behalf of the Company by the facsimile
signature of the President. The Company may adopt and use the facsimile
signature of any person who is President of the Company at the time such Warrant
is executed, or of any person now or hereafter holding such office,
notwithstanding the fact that at the time the Warrant was issued he or she had
ceased to be such officer of the Company. Prior to the delivery of any Warrant,
it shall be manually countersigned by the Warrant Agent (see Section 6.01). No
Warrant shall be valid unless so countersigned.
ARTICLE 2
DURATION AND EXERCISE OF WARRANTS
Section 2.01. Duration of Warrants. The Warrants entitle the registered
owner thereof to purchase one (1) Common Share at a price of $7.25 per share
until February 28, 2002. The Warrants will be detachable or separately
transferable from the Common Stock contained in the ninety (90) days following
the effective date of the Company's registration of the Units. Any Warrant not
so exercised shall become void, and all rights thereunder and under this
Resolution shall cease.
Section 2.02. Terms of Exercise. Each Warrant shall entitle the holder
thereof to purchase the number of Shares stated therein, as such Shares are
constituted on the date of purchase, at the subscription price ("Subscription
Price") of $1.00 per Share. The period during which the Warrants may be
exercised may be extended by the Company's board of directors.
Section 2.03. Exercise of Warrants. A Warrant may be exercised by
surrendering it, together with a subscription in the form annexed as Exhibit A,
duly executed, accompanied by the tender of funds for the applicable
Subscription Price. Warrants may be surrendered only at the office of the
Warrant Agent. The Warrants may be exercised from time to time and at any time
(prior to termination as provided herein), in whole or in part. As soon as
practicable after any Warrant has been so exercised, the Company shall issue and
deliver to, or upon the order of, the holder of such Warrant, in such name or
names as may be directed by him or her, a certificate or certificates for the
number of full Shares to which he or she is entitled. All Warrants so
surrendered shall be canceled by the Company. Warrants may only be exercised in
those states in which such exercise and the issuance of the Shares shall not
violate applicable securities laws. The Company shall not be required to issue
shares if such exercise is prohibited by applicable state securities law.
Section 2.04. Shares Issued upon Exercise of Warrants. All Shares
issued upon the exercise of Warrants shall be validly issued and outstanding.
<PAGE>
Section 2.05. Record Date of Shares. Each person in whose name any
certificate or certificates for shares issued upon the exercise of Warrants
shall be deemed to have become the holder of record of those Shares on the date
on which the Warrants were surrendered in connection with the subscription
therefor and payment of the Subscription Price was tendered. No surrender of
Warrants on any date when the transfer books of the Company are closed shall be
effective until the next succeeding date on which the transfer books are opened.
Each person holding any Shares received upon exercise of Warrants shall be
entitled to receive only dividends or distributions which are payable to holders
of record on or after the date on which such person shall be deemed to have
become the holder of record of such Shares.
Section 2.06. Call. Prior to the expiration of the Warrants, the
Company may redeem the Warrants in whole but not in at a price of $0.01 per
Warrant following thirty (30) days written notice by the Company. The Warrants
may be exercised any time prior to the expiration of the 30-day period. The
Company may redeem the Warrants thirty (30) days following mailing of written
notice to the Warrant holders of record ten days prior to the mailing of such
notice demanding tender of the Warrants for purchase by the Company ("Notice of
Call"). The Company's right to purchase the Warrants shall be void if the
Warrant holder so notified then exercises the Warrant within thirty (30)
calendar days following the date which the Notice of Call is mailed by U.S.
Mail. Following purchase by the Company pursuant to this Section 2.06, the
Warrants purchased shall become null and void. Warrants not tendered by Warrant
holders within thirty (30) days following the date of mailing Notice of Call
shall be null and void.
ARTICLE 3
ADJUSTMENT IN SHARES
Section 3.01. Adjustment in Shares. Wherever this agreement specifies a
number of shares or a subscription price per Share, the specified number of
Shares or the specified price shall be changed to reflect adjustments required
by this Article. If, prior to the expiration or exercise of the Warrants, there
shall be any change in the capital structure of the Company, the Shares covered
by the Warrants and the Subscription Price payable therefor shall be adjusted as
provided in this Article 3. As long as any Warrants remain outstanding, shares
to be issued upon the exercise of Warrants will be protected against dilution in
the event of one or more stock splits, readjustments or reclassifications.
Section 3.02. Split. If an increase has been effected in the number of
outstanding Shares of the Common Stock of the Company by reason of a split of
such Shares, the number of Shares which may thereafter be purchased shall be
increased by the number of Shares which could have been received by the
registered holder on such split had he or she been the owner of record only of
the number of Shares which have been warranted to him or her but not exercised
at the effective date of the split. In such event, the price per share under the
Warrants shall be proportionately reduced.
Section 3.03. Reverse Stock Split. If a decrease has been effected in
the number of outstanding Shares of the Common Stock of the Company by reason of
a reverse stock split, the number of Shares which may thereafter be purchased
shall be changed to the number of Shares which would have been owned by the
registered holder after said reverse stock split had he or she been the owner
only of the number of Shares which have been warranted to him or her but not
exercised at the effective date of the reverse stock split. In such event, the
price per share shall be increased by multiplying the price by a factor equal to
the number of Shares outstanding immediately prior to the reverse stock split
divided by the number of Shares outstanding immediately after the reverse stock
split, and before any issuance of new Shares or redemption and/or cancellation
of outstanding Shares.
Section 3.04. Stock Dividends. If a stock dividend is declared on the
common stock (the "Common Stock") of the Company, there shall be added to the
Shares underlying the Warrants the number of Shares ("total additional shares")
which would have been issuable to the registered holder had he or she been the
owner of record of the number of Shares which have been warranted to him or her
but not exercised at the stock dividend record date. Such additional Shares
resulting from such stock dividend shall be delivered without additional cost,
upon the exercise of each Warrant.
Section 3.05. Reorganizations and Reclassifications. If there is any
capital reorganization or reclassification of the Common Stock of the Company,
adequate provision shall be made by the Company so that there shall remain and
be substituted under this agreement, the Shares which would have been issuable
or payable in respect of or in exchange for the Shares then remaining under the
Warrants and not theretofore purchased and issued hereunder, as if the
registered holder had been the owner of such Shares on the applicable record
date. Any Shares so substituted under this Resolution shall be subject to
adjustment as provided in this Section in the same manner and to the same effect
as the Shares covered by this Resolution.
Section 3.06. Fractional Shares. The Company shall not be required to
issue fractional Shares upon the exercise of Warrants, nor shall the Company be
required to pay to the registered holders of any Warrant the cash value of, or
any other consideration for, any fractional interest.
<PAGE>
Section 3.07. Dividends. No registered holder of any Warrant shall,
upon the exercise thereof, be entitled to any dividends or distributions of any
type that may have accrued with respect to the Common Stock of the Company prior
to the date of his or her becoming the registered owner thereof other than as
specifically provided in this Article 3.
Section 3.08. Notice of Adjustments in Shares. Whenever the number of
Shares issuable upon exercise of any Warrant is adjusted pursuant to this
Article, the Company shall promptly file with the Transfer Agent for the Common
Stock and with the Warrant Agent a certificate executed by the Treasurer of the
Company setting forth in reasonable detail the facts requiring the change and
the nature thereof and specifying the effective date of such change. The Company
shall also mail to each registered holder of Warrants at the address registered
with the Company a notice setting forth each adjustment as made. Failure to file
such statement or to publish such notice, or any defect in such statement or
notice, shall not affect the legality or validity of the change or adjustment as
made.
Section 3.09. Liquidation of the Company. In the event of liquidation,
dissolution, or winding up of the Company, a notice thereof shall be filed by
the Company with the Transfer Agent for the Shares and with the Warrant Agent,
at least 30 days before the record date (which date shall be specified in such
notice) for determining holders of the Shares entitled to receive any
distribution upon such liquidation, dissolution, or winding up. Such notice
shall also specify the date on which the right to exercise Warrants shall
expire, as provided in Section 2.01. A copy of such notice shall be mailed to
each holder of Warrants at the address registered with the Company not more than
30 days nor less than 20 days before such record date. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of the
liquidation, dissolution, or winding up, or of any distribution in connection
therewith.
Section 3.10. Consolidation of Company. In case of any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of outstanding Shares of
the class or classes of Shares issuable upon exercise of the Warrants), or in
case of any sale or transfer to another corporation of the assets of the Company
as an entirety or substantially as an entirety, the holders of each Warrant then
outstanding shall have the right to exercise such Warrants only for a period of
twenty (20) days following mailing of written notice to Warrant holders of
record determined as of a date ten (10) days prior to such notice. Said notice
shall advise Warrant holders that such merger or consolidation has been approved
by the directors and shareholders of the Company and that the Warrants will
expire in a period of twenty (20) days from the date of such notice; thereafter
such Warrants shall be null and void.
Section 3.11. Form of Warrant. The form of Warrant need not be changed
because of any change in the Shares pursuant to this Article. However, the
Company may at any time in its sole discretion (which shall be conclusive)
change the form of Warrant, provided such change in form does not affect the
substance thereof except as permitted herein; and any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant
or otherwise, may be in the form as so changed.
ARTICLE 4
TRANSFER AND OWNERSHIP OF WARRANTS
Section 4.01. Negotiability and Ownership. Warrants issued hereunder
shall be transferable of record only by the Warrant Agent.
Section 4.02. Exchange of Warrant Certificates. On and after the
Warrant Date and so long as the Warrants may be exercised in accordance with
this Resolution, one or more Warrant Certificates may be surrendered at the
office of the Warrant Agent hereinafter referred to for exchange, and, upon
cancellation thereof, one or more new Warrant Certificates shall be issued as
requested by the registered holder of the canceled Warrant Certificate or
Certificates, for the same aggregate number of Warrants as were evidenced by the
Warrant Certificate or Certificates so canceled. The Company shall give notice
to the registered holders of the Warrants of any change in the address of, or in
the designation of, its Warrant Agent.
ARTICLE 5
Other Provisions Relating to Warrant holders
Section 5.01. Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized but unissued Common Stock, such
number of Shares thereof as shall from time to time be sufficient to permit the
exercise of all outstanding Warrants and the issuance of Shares as hereinabove
provided, and, if at any time the number of authorized but unissued Shares shall
not be sufficient for such purposes, the Company will take such corporate action
as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued Shares to such number of Shares as shall be sufficient for such
purpose. The Warrants, and the Shares issuable upon the exercise thereof, are
being registered under the Securities Act of 1933, as amended, so as to permit
the public offering and sale of Warrants and Shares in compliance with such Act.
The Company will take all action necessary to keep such registration current and
effective for such period after the issuance of the Warrants so as to permit a
public offering and sale of the Warrants and Shares by the registered owners
thereof, through the facilities of the over-the-counter market.
Section 5.02. No Rights as Stockholder Conferred. The Warrants shall
not entitle the registered holders thereof to any of the rights of a
stockholder of the Company.
Section 5.03. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. If any Warrant Certificate becomes lost, stolen, mutilated, or
destroyed, the Company may, on such terms as to indemnify or otherwise as it may
in its discretion impose, issue a new Warrant Certificate of like denomination,
tenor, and date as the Warrant Certificate so lost, stolen, mutilated, or
destroyed. Any such new Warrant Certificate shall constitute an original
contractual obligation of the Company.
Section 5.04. Enforcement of Warrant Rights. All rights of action are
vested in the respective registered holders of the Warrants; and any registered
holder of any Warrant may only in his or her own behalf and only for his or her
own benefit enforce, and may institute and maintain any suit, action, or
proceeding against the Company suitable to enforce, or otherwise in respect of,
his or her right to exercise his or her Warrant for the purchase of Shares in
the manner provided in the Warrant in this Resolution.
ARTICLE 6
MISCELLANEOUS PROVISIONS
Section 6.01. Warrant Agent. The Warrant Agent shall be Liberty Transfer
Co., 191 New York Avenue, Huntington, NY 11743, or such other warrant agent as
the Company shall appoint from time to time. The terms of agreement with the
Warrant Agent will at any and all times be in conformity with this Resolution.
Section 6.02. Applicable Law. The validity, interpretation, and performance
of this Resolution and of the Warrants shall be governed by the laws of the
State of Florida.
Section 6.03. Examination of Resolution. Certified copies of this
Resolution shall be available at all reasonable times at the office of the
Warrant Agent and at the office of the Transfer Agent for the Shares, for
examination by the holder of any Warrant. Any such holder may be required to
submit his or her Warrant for inspection before being entitled to make such
examination.
ARTICLE 7
EFFECTIVE DATE
Section 7.01. Date. This Warrant Resolution shall be effective
February 29, 2000.
CERTIFICATE OF SECRETARY
I, the undersigned, hereby certify that the foregoing is a true copy of
the Warrant Resolution adopted by the Board of Directors of SwiftyNet.com, Inc.
at a meeting of the said Board held on February 29, 2000, and entered upon the
regular minute book of the said corporation, and now in full force and effect,
and that the Board of directors of the corporation has, and at the time of the
adoption of the said resolutions had, full power and lawful authority to adopt
the said resolutions and to confer the powers thereby ranted to the officers
therein named, who have full power and lawful authority to exercise the same.
/S/ Rachel Steele
----------------------------
Secretary
[Corporate Seal]
CONSULTING AGREEMENT
DATE: December 32, 1999
PARTIES: EDGAR ARVELO (the "Consultant")
RANKSTREET.COM, INC.
a Florida corporation (the "Company")
AGREEMENTS:
SECTION 1. RETENTION OF CONSULTANT
1.1 Effective Date. Effective December 31, 1999 (the "Effective Date")
the Company shall retain the Consultant as an independent contractor consultant,
and the Consultant hereby accepts such consulting relationship, upon the terms
and conditions set forth in this Agreement.
1.2 Services. The Consultant agrees to serve the Company as a consultant
regarding web site development. The Consultant shall perform and discharge well
and faithfully for the Company such consulting services during the term of this
Agreement as may be assigned to the Consultant from time to time by the
President or Vice President for Operations of the Company or of SwiftyNet.com,
Inc.; provided, however, that no such services shall require the availability of
the Consultant in excess of 2000 hours per year.
SECTION 2. COMPENSATION
2.1 Consulting Fee and Expense Reimbursement. In full satisfaction for any
and all consulting services rendered by the Consultant for the Company under
this Agreement, the Company shall pay the Consultant a consulting fee of --
Swifty Stock previously issued --per hour payable monthly as earned. In addition
to such consulting fees, the Company agrees to reimburse the Consultant for the
Consultant's travel and reasonable living expenses away from the location of the
Consultant's principal office directly incurred by the Consultant at the
Company's request in performing consulting services for the Company. Such travel
and living expenses shall be reimbursed monthly, at the same time the consulting
fees are paid, so long as the Consultant provides the Company with invoices for
such expenses, and such supporting information or receipts as the Company
reasonably requests, prior to the date of payment.
N.A. 2.2 Additional Hours. The annual retainer payment for the Consultant's
services is based on anticipated use of Consultant's time in the amount of
______ hours per year. Should the Company utilize Consultant's services in
excess of ______ hours per year, Consultant shall be paid $________ per hour for
additional time spent.
2.3 Other Compensation and Fringe Benefits. The Consultant shall not
receive any other compensation from the Company or participate in or receive
benefits under any of the Company's employee fringe benefit programs or receive
any other fringe benefits from the Company on account of the consulting services
to be provided to the Company under this Agreement, including without limitation
health, disability, life insurance, retirement, pension, and profit sharing
benefits.
2.4 Time Records and Reports. The Consultant shall prepare accurate and
complete records of the Consultant's services for the Company under this
Agreement and agrees to submit records on a monthly basis to the Company, along
with such other documentation of the services performed under this Agreement as
reasonably requested by the Company.
SECTION 3. NATURE OF RELATIONSHIP; EXPENSES
3.1 Independent Contractor. It is agreed that the Consultant shall be
an independent contractor and shall not be the employee, servant, agent,
partner, or joint venturer of the Company, or any of its officers, directors, or
employees. The Consultant shall not have the right to or be entitled to any of
the employee benefits of the Company or its subsidiaries. The Consultant has no
authority to assume or create any obligation or liability, express or implied,
on the Company's behalf or in its name or to bind the Company in any manner
whatsoever.
3.2 Insurance and Taxes. The Consultant agrees to arrange for the
Consultant's own liability, disability, health, and workers' compensation
insurance, and that of the Consultant's employees, if any. The Consultant
further agrees to be responsible for the Consultant's own tax obligations
accruing as a result of payments for services rendered under this Agreement, as
well as for the tax withholding obligations with respect to the Consultant's
employees, if any. It is expressly understood and agreed by the Consultant that
should the Company for any reason incur tax liability or charges whatsoever as a
result of not making any withholdings from payments for services under this
Agreement, the Consultant will reimburse and indemnify the Company for the same.
<PAGE>
3.3 Equipment, Tools, Employees and Overhead. The Consultant shall
provide, at the Consultant's expense, all equipment and tools needed to provide
services under this Agreement, including the salaries of and benefits provided
to any employees of the Consultant. Except as otherwise provided in this
Agreement, the Consultant shall be responsible for all of the Consultant's
overhead costs and expenses.
SECTION 4. TERM
4.1 Initial Term; Renewal. Unless otherwise terminated pursuant to the
provisions of Section 4.2, the consulting relationship under this Agreement
shall commence on the Effective Date and continue in effect until November 19,
2001 (the "Initial Term") renewable automatically unless cancelled by written
notice by either partyi. Thereafter, the term of the consulting relationship
under this Agreement shall be extended for successive one-year periods subject
to either party's right to terminate the consulting relationship at the end of
the Initial Term or on any subsequent anniversary thereof by giving the other
party at least 10 days' written notice prior to the effective date of such
termination.
4.2 Early Termination. The consulting relationship under this Agreement
may be terminated prior to the end of the Initial Term or any renewal term by
the death of the Consultant, the disability of the Consultant resulting in the
inability of the Consultant to perform the consulting service, or by written
notice from the Company that, in the Company's sole determination: (a) the
Consultant has refused, failed, or is unable to render consulting services under
this Agreement; (b) the Consultant has breached any of the Consultant's other
obligations under this Agreement; or (c) the Consultant has engaged or is
engaging in conduct that in the Company's sole determination is detrimental to
the Company. If the consulting relationship is terminated for any of the reasons
set forth in the preceding sentence, the right of the Consultant to the
compensation set forth in Section 2 of this Agreement shall cease on the date of
such termination, and the Company shall have no further obligation to the
Consultant under any of the provisions of this Agreement.
4.3 Effect of Termination. Termination of the consulting relationship
shall not affect the provisions of Sections 5, 6, 7, and 8, which provisions
shall survive any termination in accordance with their terms.
SECTION 5. DISCLOSURE OF INFORMATION
The Consultant acknowledges that the Company's trade secrets, private
or secret processes as they exist from time to time, and information concerning
products, developments, manufacturing techniques, new product plans, equipment,
inventions, discoveries, patent applications, ideas, designs, engineering
drawings, sketches, renderings, other drawings, manufacturing and test data,
computer programs, progress reports, materials, costs, specifications,
processes, methods, research, procurement and sales activities and procedures,
promotion and pricing techniques, and credit and financial data concerning
customers of the Company and its subsidiaries, as well as information relating
to the management, operation, or planning of the Company and its subsidiaries
(the "Proprietary Information") are valuable, special, and unique assets of the
Company and its subsidiaries, access to and knowledge of which may be essential
to the performance of the Consultant's duties under this Agreement. In light of
the highly competitive nature of the industry in which the Company and its
subsidiaries conduct their businesses, the Consultant agrees that all
Proprietary Information obtained by the Consultant as a result of the
Consultant's relationship with the Company and its subsidiaries shall be
considered confidential. In recognition of this fact, the Consultant agrees that
the Consultant will not, during and after the Consulting Period, disclose any of
such Proprietary Information to any person or entity for any reason or purpose
whatsoever, and the Consultant will not make use of any Proprietary Information
for the Consultant's own purposes or for the benefit of any other person or
entity (except the Company and its subsidiaries) under any circumstances.
SECTION 6. NONCOMPETITION AGREEMENT
In order to further protect the confidentiality of the Proprietary
Information and in recognition of the highly competitive nature of the
industries in which the Company and its subsidiaries conduct their businesses,
and for the consideration set forth herein, the Consultant further agrees as
follows:
6.1 Restriction on Competition. During and for the period commencing on
the Effective Date and ending on the date on which the Consultant's consulting
relationship with the Company terminates, the Consultant will not directly or
indirectly engage in any Business Activities (hereinafter defined), other than
on behalf of the Company or its subsidiaries, whether such engagement is as an
officer, director, proprietor, employee, partner, investor (other than as a
holder of less than 1% of the outstanding capital stock of a publicly-traded
corporation), consultant, advisor, agent, or other participant, in any
geographic area in which the products or services of the Company or its
subsidiaries have been distributed or provided during the period of the
Consultant's consulting relationship with the Company. For purposes of this
Agreement, the term "Business Activities" shall mean any business in which the
Company is actively engaged as of the termination of this Agreement together
with all other activities engaged in by the Company or any of its subsidiaries
at any time during the Consultant's consulting relationship with the Company,
and activities in any way related to activities with respect to which the
Consultant renders consulting services under this Agreement.
6.2 Dealings with Customers of the Company. During and for the period
commencing on the Effective Date and ending on the date on which the
Consultant's consulting relationship with the Company terminates, the Consultant
will not directly or indirectly engage in any of the Business Activities (other
than on behalf of the Company or its subsidiaries) by supplying products or
providing services to any customer with whom the Company or its subsidiaries
have done any business during the consulting relationship with the Company,
whether as an officer, director, proprietor, employee, partner, investor (other
than as a holder of less than one percent (1%) of the outstanding capital stock
of a publicly traded corporation), consultant, advisor, agent, or other
participant.
6.3 Assistance to Others. During and for the period commencing on the
Effective Date and ending on the date on which the Consultant's consulting
relationship with the Company terminates, the Consultant will not directly or
indirectly assist others in engaging in any of the Business Activities in any
manner prohibited to the Consultant under this Agreement.
6.4 Company's Employees. During and for the period commencing on the
Effective Date and ending on the date on which the Consultant's consulting
relationship with the Company terminates, the Consultant will not directly or
indirectly induce employees of the Company or any of its subsidiaries or
affiliates to engage in any activity hereby prohibited to the Consultant or to
terminate their employment.
SECTION 7. INTERPRETATION
It is expressly understood and agreed that although the Consultant and
the Company consider the restrictions contained in Sections 5 and 6 of this
Agreement reasonable for the purpose of preserving the goodwill, proprietary
rights, and going concern value of the Company and its subsidiaries, if a final
judicial determination is made by a court having jurisdiction that the time or
territory or any other restriction contained in Sections 5 and 6 is an
unenforceable restriction on the activities of the Consultant, the provisions of
such restriction shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such other extent as such court may
judicially determine or indicate to be reasonable. Alternatively, if the court
referred to above finds that any restriction contained in Sections 5 and 6 or
any remedy provided in Section 9 of this Agreement is unenforceable, and such
restriction or remedy cannot be amended so as to make it enforceable, such
finding shall not affect the enforceability of any of the other restrictions
contained in this Agreement or the availability of any other remedy. The
provisions of Sections 5 and 6 shall in no respect limit or otherwise affect the
obligations of the Consultant under other agreements with the Company.
SECTION 8. DESIGNS, INVENTIONS, PATENTS AND COPYRIGHTS
8.1 Intellectual Property. The Consultant shall promptly disclose,
grant, and assign to the Company for its sole use and benefit any and all
designs, inventions, improvements, technical information, know-how and
technology, and suggestions relating in any way to the products of the Company
or its subsidiaries or capable of beneficial use by customers to whom products
or services of the Company or its subsidiaries are sold or provided, that the
Consultant may conceive, develop, or acquire during the Consultant's consulting
relationship with the Company or its subsidiaries (whether or not during usual
working hours), together with all copyrights, trademarks, design patents,
patents, and applications for copyrights, trademarks, design patents, patents,
divisions of pending patent applications, applications for reissue of patents
and specific assignments of such applications that may at any time be granted
for or upon any such designs, inventions, improvements, technical information,
know-how, or technology (the "Intellectual Property").
8.2 Assignments and Assistance. In connection with the rights of the
Company to the Intellectual Property, the Consultant shall promptly execute and
deliver such applications, assignments, descriptions, and other instruments as
may be necessary or proper in the opinion of the Company to vest in the Company
title to the Intellectual Property and to enable the Company to obtain and
maintain the entire right and title to the Intellectual Property throughout the
world. The Consultant shall also render to the Company, at the Company's
expense, such assistance as the Company may require in the prosecution of
applications for said patents or reissues thereof, in the prosecution or defense
of interferences which may be declared involving any of said applications or
patents, and in any litigation in which the Company or its subsidiaries may be
involved relating to the Intellectual Property.
8.3 Copyrights. The Consultant agrees to, and hereby grants to the
Company, title to all copyrightable material first designed, produced, or
composed in the course of or pursuant to the performance of work under this
Agreement, which material shall be deemed "works made for hire" under Title 17,
United States Code, Section 1.01 of the Copyright Act of 1976. The Consultant
hereby grants to the Company a royalty-free, nonexclusive, and irrevocable
license to reproduce, translate, publish, use, and dispose of, and to authorize
others so to do, any and all copyrighted or copyrightable material created by
the Consultant as a result of work performed under this Agreement but not first
produced or composed by the Consultant in the performance of this Agreement,
provided that the license granted by this paragraph shall be only to the extent
the Consultant now has, or prior to the completion of work under this Agreement
or under any later agreements with the Company or its subsidiaries relating to
similar work may acquire, the right to grant such licenses without the Company
becoming liable to pay compensation to others solely because of such grant.
8.4 Patent Compensation. In consideration for the prompt execution and
delivery of applications, assignments, descriptions, or other instruments in
connection with any patents or patent applications the Company agrees to pay to
Consultant $1,000 for each United States patent issued in the name of Consultant
during the Consulting Period or within two years after termination of the
Consulting Period; provided that the design, invention, improvement, know-how or
technology forming the basis of such issued United States patent was conceived
and reduced to practice during the Consulting Period.
SECTION 9. REMEDIES
The Consultant acknowledges and agrees that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5, 6, and
8 of this Agreement would be inadequate and, in recognition of this fact, in the
event of a breach or threatened breach by the Consultant of any of the
provisions of Sections 5, 6, and 8, the Consultant agrees that, in addition to
its remedy at law, at the Company's option, all rights of the Consultant under
this Agreement may be terminated, and the Company shall be entitled without
posting any bond to obtain, and the Consultant agrees not to oppose a request
for, equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction, or any other equitable remedy which
may then be available. The Consultant acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Sections 5 and 6, and consequently agrees
upon any such breach or threatened breach to the granting of injunctive relief
prohibiting the design, development, manufacture, marketing or sale of products
and providing of services of the kind designed, developed, manufactured,
marketed, sold or provided by the Company or its subsidiaries during the term of
the Consultant's consulting relationship with the Company. Nothing contained in
this Section 9 shall be construed as prohibiting the Company from pursuing, in
addition, any other remedies available to it for such breach or threatened
breach.
SECTION 10. MISCELLANEOUS PROVISIONS
10.1 Assignment. This Agreement shall not be assignable by either
party, except by the Company to any subsidiary or affiliate of the Company or to
any successor in interest to the Company's business.
10.2 Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the heirs, personal representatives, successors, and
assigns of the parties.
10.3 Notice. Any notice or other communication required or permitted to
be given under this Agreement shall be in writing and shall be mailed by
certified mail, return receipt requested, postage prepaid, addressed to the
parties at the following addresses:
As to Consultant: Edgar Arvelo
2901 N. Dale Mabry #324
Tampa, FL 33607
As to Company: Rankstreet.com, Inc.
220 E. Madison St. #1217
Tampa, FL 33602
All notices and other communications shall be deemed to be given at the
expiration of three (3) days after the date of mailing. The address of a party
to which notices or other communications shall be mailed may be changed from
time to time by giving written notice to the other party.
10.4 Litigation Expense. In the event of a default under this
Agreement, the defaulting party shall reimburse the nondefaulting party for all
costs and expenses reasonably incurred by the nondefaulting party in connection
with the default, including without limitation attorney's fees. Additionally, in
the event a suit or action is filed to enforce this Agreement or with respect to
this Agreement, the prevailing party or parties shall be reimbursed by the other
party for all costs and expenses incurred in connection with the suit or action,
including without limitation reasonable attorney's fees at the trial level and
on appeal.
10.5 Waiver. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
10.6 Applicable Law. This Agreement shall be governed by and shall be
construed in accordance with the laws of the state of Florida. Exclusive venue
for any action arising hereunder or in connection herewith shall lie in state
court in Alachua County, Florida.
10.7 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties pertaining to its subject matter, and it supersedes all
prior contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by all parties.
Company: Consultant:
RANKSTREET.COM, INC. /s/Edgar Arvelo
________________________________
EDGAR ARVELO
By: /s/ Richard Kleinberg
__________________________________
Title:President
_________________________________
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 13 day of
December, 1999, by and among RANKSTREET.COM, Inc., a Florida corporation with
its principal executive office at 220 E. Madison Street, Suite 1217, Tampa,
Florida 33602 ("Rankstreet"), and RICHARD KLEINBERG (the "Employee"), an
individual residing at 614 Rollingwood Lane, Valrico, FL 33594.
W I T N E S S E T H
WHEREAS, the Employee has been employed by the Employer for a period of
time in a senior executive capacity; and
WHEREAS, RANKSTREET wishes to assure itself of the services of the
Employee for a period provided in this Employment Agreement and the Employee is
willing to serve in the employ of RANKSTREET for said period, subject to and
upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Employment. a) RANKSTREET hereby employs the Employee subject to the
supervision and direction of the Chief Executive Officer of RANKSTREET, or such
person or persons who shall be designated by the Chief Executive Officer of
RANKSTREET, for the period (the "Employment Period") commencing on November 19,
1999, and ending on November 19, 200, and shall be automaticaly renewable for
two year terms, unless cancelled by written notice from either party. The
Employee shall initially be employed in the capacity of President and shall
remain employed during the Employment Period in said capacity for so long as
required by the Chief Executive Officer of RANKSTREET. The Employee hereby
accepts such employment, agrees to perform those services of a nature
concomitant with his positions and offices as shall from time to time be
assigned to him by or pursuant to authorization of the Chief Executive Officer
or the Board of Directors of RANKSTREET and agrees diligently and competently to
devote all of his business time, efforts, skill and attention to such services.
b) The Employee shall report to and be responsible to the
Chief Executive Officer.
c) The Employee's office shall be located at 220 E. Madison
Street, Suite 1217, Tampa, FL 33602 or in such other office as Employer and
Employee shall agree.
2. Compensation During the Employment Period. a) Employer shall pay to
the Employee, and the Employee shall accept from Employer, for his services
hereunder, a base salary, payable in accordance with Employer's payroll policy
as in effect from time to time. Such base salary shall initially be at a rate
per annum subject to a percentage of pre-tax profit and or revenue and subject
to such increases, if any, as shall reasonably be determined by the Board of
Directors of Rankstreet from time to time.
b) Employer may make available to the Employee, to the extent
he satisfies the eligibility requirements thereof and to the extent permitted by
law, any fringe benefit program in which employees are eligible to participate.
Fringe benefits include, but are not limited to, health insurance,
hospitalization and other plans and policies authorized now or in the future. In
addition to any other benefits provided to the Employee hereunder, Employer
shall provide the Employee with such other benefits and prerequisites as are
being provided to the Employee by Employer on the date hereof.
c) The Employee shall be entitled to receive additional
compensation, if any, whether in the form of bonus, other incentive compensation
or otherwise, as the Board of Directors of RANKSTREET may specify from time to
time.
d) Net profits shall be defined as gross profits from the
operation of Rankstreet's web site less costs, expenses, debts owed to
SwiftyNet.Com, Inc. and taxes.
3. Notice of Breach. Employer and Employee agree that, prior to the
termination of th employment of Employee hereunder by reason of any breach of
any provisions of this Employment Agreement, the injured party will give the
party in breach written notice specifying such breach and permitting the party
in breach to cure such breach within a period of thirty (30) days after receipt
of such notice.
<PAGE>
4. Disability and Death. a) If the Employee shall be unable
substantially to perform the duties required of him pursuant to his office and
the provisions of this Employment Agreement due to any disability preventing him
from performing such services for either a period of three (3) consecutive
months or for any six (6) months in a one (1) year period, Employer shall have
the right to terminate the Employee's employment hereunder on thirty (30) days'
written notice. Notwithstanding any such termination, the Employee shall be
entitled to receive any compensation accrued or accruable to the Employee at the
time of such termination pursuant to the provisions of Article 2 hereof.
b) The term "disability" shall mean the complete inability of
the Employee to perform his duties under this Employment Agreement due to
injury, illness or disease as determined by an independent physician mutually
acceptable to the Employer and the Employee.
c) In the event of the Employee's death during the Employment
Period, the Employee's legal representatives shall be entitled to receive his
salary at the rate provided in Article 2 to the last day of the Employer's
payroll accounting period in which his death shall occur.
5. Termination. a) Employer shall have just legal cause to terminate the
employment of the Employee under this Employment Agreement only upon a good
faith determination of the Chief Executive Officer of RANKSTREET that the
termination of such employment is necessary and in the best interests of the
Employer by reason of:
i) the conviction of the Employee of a felony
under state or federal law, or the equivalent under foreign law; unless in any
such case the Employee performed such act in good faith and in a manner the
Employee reasonably believed to be in or not opposed to Employer's best
interests, or
ii) the material and continued breach by the Employee
of his obligations under this Employment Agreement, after compliance with the
provisions of Article 3.
Notwithstanding the foregoing, no termination of the Employee's employment under
this Employment Agreement shall diminish or affect in any way the Employee's
rights to the payments provided for hereunder which have accrued or are
accruable to and including the date of such termination; provided that in the
event of termination for cause, Employee shall not be entitled to any
compensation for periods following the date of termination.
b) Employer shall have the right to terminate the employment
of the Employee under this Employment Agreement in its sole and absolute
discretion and without cause upon its payment to the Employee of an amount equal
to the sum of (i) one hundred percent (100%) of any compensation accrued or
accruable to the Employee at the time of such termination pursuant to the
provisions of Article 2.
6. Confidentiality. The Employee agrees, during and after the
Employment Period, to keep secret and confidential all information heretofore or
hereafter acquired by him concerning Employer's business and affairs and/or the
business and affairs of any of its subsidiaries as may be established from time
to time, and further agrees that he will at no time during the Employment Period
or thereafter disclose any such information to any person, firm or corporation,
other than to Employer, its directors, officers, employees, auditors and legal
advisors otherwise than in the regular course of Employer's business or that of
its subsidiaries as may be established from time to time, or use the same in any
manner other than in connection with Employer's business and affairs or the
business and affairs of any subsidiaries as may be established from time to
time, except (i) as may be required by law, (ii) in connection with the
Employee's enforcement of his rights under this Employment Agreement, (iii) as
to such information as may already have become publicly known other than through
the Employee in violation of this Article 6 and (iv) with Employer's consent.
7. Inventions. The Employee agrees for no additional consideration to
assign to Employer, immediately upon the execution of this Employment Agreement
and thereafter immediately upon making or acquiring them, as the case may be,
any and all inventions, patent rights, letters patent, copyrights, trademarks,
trade names, and applications therefor, in the United States and all other
countries, and any and all rights and interests in, to and under the same which
he may legally transfer, now possessed by him or acquired by him during the
period of his employment hereunder, relating in any way to the business and
activities of, or the equipment, devices, processes and formulas connected with,
Employer's business or any other business conducted by Employer and any
subsidiaries as may be established from time to time and agrees that, upon
request, the Employee will promptly make all disclosures, execute all
instruments and papers and perform all acts reasonably necessary or desired by
Employer to vest and confirm in it, its successors, assigns and nominees, fully
and completely, all rights created or contemplated by this Article 7 and which
may be necessary to enable Employer, its successors, assigns and nominees to
secure and enjoy the full benefits and advantages thereof.
<PAGE>
8. Noncompete. The Employee agrees, to the extent permitted by law,
that he shall not during the Employee's employment with Employer and until the
later of (a) three (3) years following the date of the termination of such
employment or (b) the completion of the payments provided for in clause (ii) of
paragraph (b) of Article 5 hereof, directly or indirectly, own, manage, operate,
join or control, or participate in the ownership, management, operation or
control of, or be a director or employee of, or a consultant to, or authorize
the use of his name by, or be connected in any manner with, any business, firm
or corporation, in any town, city, county or state of the United States of
America or of any country in the world, which manufactures, sells, leases or
distributes products competitive with any products of the Employer (or any
subsidiaries as may be established from time to time); provided, however, that
the provisions of this Article 8 shall not apply to investments by the Employee
in shares of stock traded on a national securities exchange or on the national
over-the-counter market which (a) shall have an aggregate market value, at the
time of acquisition, of less than Twenty Thousand Dollars ($20,000) and (b)
shall constitute less than three percent (3%) of the outstanding shares of such
stock.
9. Equitable Relief. The Employee acknowledges and agrees that, because
of the unique and extraordinary nature of his services, and breach or threatened
breach of the provisions of Articles 6, 7, or 8 will cause irreparable injury
and incalculable harm to Employer and that Employer shall, accordingly, be
entitled to injunctive or other equitable relief. The foregoing, however, shall
not be deemed to waive or to limit in any respect any other right or remedy
which Employer may have with respect to such breach.
10. Indemnification. Employer will indemnify the Employee (and his
legal representatives or other successors) to the fullest extent permitted by
the laws of the State of Florida and Employer's existing certificate of
incorporation and by-laws, and the Employee shall be entitled to the protection
of any insurance policies Employer may elect to maintain generally for the
benefit of its directors and officers, against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representatives in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being
or having been a director or officer of Employer and any subsidiaries as may be
established from time to time.
11. Notices. All notices hereunder shall be in writing and shall be
sent by registered or certified mail, return receipt requested. Any such notice
intended for Employer shall be addressed to it, attention of its Chairman of the
Board at its address hereinbefore set forth or at such other address of which
Employer shall have given notice to the Employee in the manner herein provided;
and if intended for the Employee, shall be addressed to him at his address
hereinbefore set forth or at such other address of which the Employee shall have
given notice to Employer in the manner herein provided.
12. Entire Agreement. This Employment Agreement constitutes the entire
understanding between the parties with respect to the matter referred to herein
and no waiver or modification to the terms hereof shall be valid unless in
writing signed by the party to be charged and only to the extent therein set
forth. All prior and contemporaneous agreements and understandings between the
parties with respect to the subject matter of this Employment Agreement are
superseded by this Employment Agreement.
13. Severability. If any provision in this Employment Agreement is
invalid, illegal and unenforceable, the balance of this Employment Agreement
shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
14. Waiver of Breach. A waiver by the Company or the Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
15. Non-Assignability. This Employment Agreement shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
administrators, executors, personal representatives, successors and assigns;
provided, however, that this Employment Agreement may not be assigned by any of
the parties hereto other than by and among Employer and any subsidiaries and/or
affiliates as may be established from time to time.
16. Law. This Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
17. Withholding. All payments hereunder shall be subject to withholding
and to such other deductions as shall at the time of such payment be required
pursuant to any income tax or other law, whether of the United States of any
other jurisdiction, and, in the case of payments to the executors or
administrators of the Employee's estate, the delivery to Employer of all
necessary tax waivers and other documents.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the date first above written.
RANKSTREET.COM, Inc.. EMPLOYEE
/S/ Richard Kleinberg /S/ Richard Kleinberg
By:_________________________________ _____________________________
President, CEO
Title:_______________________________
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 13 day of
December, 1999, by and among RANKSTREET.COM, Inc., a Florida corporation with
its principal executive office at 220 E. Madison Street, Suite 1217, Tampa,
Florida 33602 ("Rankstreet"), and VLADIMIR RAFALOVICH (the "Employee"), an
individual residing at 3407 Williston Loop, Land 0 Lakes, FL 34639.
W I T N E S S E T H
WHEREAS, the Employee has been employed by the Employer for a period of
time in a senior executive capacity; and
WHEREAS, RANKSTREET wishes to assure itself of the services of the
Employee for a period provided in this Employment Agreement and the Employee is
willing to serve in the employ of RANKSTREET for said period, subject to and
upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Employment. a) RANKSTREET hereby employs the Employee subject to the
supervision and direction of the Chief Executive Officer of RANKSTREET, or such
person or persons who shall be designated by the Chief Executive Officer of
RANKSTREET, for the period (the "Employment Period") commencing on Nobember 19,
1999, and ending on November 19, 2001, and shall be automaticaly renewable for
two year terms, unless cancelled by written notice from either party. The
Employee shall initially be employed in the capacity of VP of Operations and
shall remain employed during the Employment Period in said capacity for so long
as required by the Chief Executive Officer of RANKSTREET. The Employee hereby
accepts such employment, agrees to perform those services of a nature
concomitant with his positions and offices as shall from time to time be
assigned to him by or pursuant to authorization of the Chief Executive Officer
or the Board of Directors of RANKSTREET and agrees diligently and competently to
devote all of his business time, efforts, skill and attention to such services.
b) The Employee shall report to and be responsible to the
Chief Executive Officer.
c) The Employee's office shall be located at 220 E. Madison
Street, Suite 1217, Tampa, Florida 33602 or in such other office as Employer and
Employee shall agree.
2. Compensation During the Employment Period. a) Employer shall pay to
the Employee, and the Employee shall accept from Employer, for his services
hereunder, a base salary, payable in accordance with Employer's payroll policy
as in effect from time to time. Such base salary shall initially be at a rate
per annum subject to a percentage of pre-tax profit and or revenue and subject
to such increases, if any, as shall reasonably be determined by the Board of
Directors of Rankstreet from time to time.
b) Employer may make available to the Employee, to the extent
he satisfies the eligibility requirements thereof and to the extent permitted by
law, any fringe benefit program in which employees are eligible to participate.
Fringe benefits include, but are not limited to, health insurance,
hospitalization and other plans and policies authorized now or in the future. In
addition to any other benefits provided to the Employee hereunder, Employer
shall provide the Employee with such other benefits and prerequisites as are
being provided to the Employee by Employer on the date hereof.
c) The Employee shall be entitled to receive additional
compensation, if any, whether in the form of bonus, other incentive compensation
or otherwise, as the Board of Directors of RANKSTREET may specify from time to
time.
3. Notice of Breach. Employer and Employee agree that, prior to the
termination of th employment of Employee hereunder by reason of any breach of
any provisions of this Employment Agreement, the injured party will give the
party in breach written notice specifying such breach and permitting the party
in breach to cure such breach within a period of thirty (30) days after receipt
of such notice.
<PAGE>
4. Disability and Death. a) If the Employee shall be unable
substantially to perform the duties required of him pursuant to his office and
the provisions of this Employment Agreement due to any disability preventing him
from performing such services for either a period of three (3) consecutive
months or for any six (6) months in a one (1) year period, Employer shall have
the right to terminate the Employee's employment hereunder on thirty (30) days'
written notice. Notwithstanding any such termination, the Employee shall be
entitled to receive any compensation accrued or accruable to the Employee at the
time of such termination pursuant to the provisions of Article 2 hereof.
b) The term "disability" shall mean the complete inability of
the Employee to perform his duties under this Employment Agreement due to
injury, illness or disease as determined by an independent physician mutually
acceptable to the Employer and the Employee.
c) In the event of the Employee's death during the Employment
Period, the Employee's legal representatives shall be entitled to receive his
salary at the rate provided in Article 2 to the last day of the Employer's
payroll accounting period in which his death shall occur.
5. Termination. a) Employer shall have just legal cause to terminate the
employment of the Employee under this Employment Agreement only upon a good
faith determination of the Chief Executive Officer of RANKSTREET that the
termination of such employment is necessary and in the best interests of the
Employer by reason of:
i) the conviction of the Employee of a felony
under state or federal law, or the equivalent under foreign law; unless in any
such case the Employee performed such act in good faith and in a manner the
Employee reasonably believed to be in or not opposed to Employer's best
interests, or
ii) the material and continued breach by the Employee
of his obligations under this Employment Agreement, after compliance with the
provisions of Article 3.
Notwithstanding the foregoing, no termination of the Employee's employment under
this Employment Agreement shall diminish or affect in any way the Employee's
rights to the payments provided for hereunder which have accrued or are
accruable to and including the date of such termination; provided that in the
event of termination for cause, Employee shall not be entitled to any
compensation for periods following the date of termination.
b) Employer shall have the right to terminate the employment
of the Employee under this Employment Agreement in its sole and absolute
discretion and without cause upon its payment to the Employee of an amount equal
to the sum of (i) one hundred percent (100%) of any compensation accrued or
accruable to the Employee at the time of such termination pursuant to the
provisions of Article 2.
6. Confidentiality. The Employee agrees, during and after the
Employment Period, to keep secret and confidential all information heretofore or
hereafter acquired by him concerning Employer's business and affairs and/or the
business and affairs of any of its subsidiaries as may be established from time
to time, and further agrees that he will at no time during the Employment Period
or thereafter disclose any such information to any person, firm or corporation,
other than to Employer, its directors, officers, employees, auditors and legal
advisors otherwise than in the regular course of Employer's business or that of
its subsidiaries as may be established from time to time, or use the same in any
manner other than in connection with Employer's business and affairs or the
business and affairs of any subsidiaries as may be established from time to
time, except (i) as may be required by law, (ii) in connection with the
Employee's enforcement of his rights under this Employment Agreement, (iii) as
to such information as may already have become publicly known other than through
the Employee in violation of this Article 6 and (iv) with Employer's consent.
7. Inventions. The Employee agrees for no additional consideration to
assign to Employer, immediately upon the execution of this Employment Agreement
and thereafter immediately upon making or acquiring them, as the case may be,
any and all inventions, patent rights, letters patent, copyrights, trademarks,
trade names, and applications therefor, in the United States and all other
countries, and any and all rights and interests in, to and under the same which
he may legally transfer, now possessed by him or acquired by him during the
period of his employment hereunder, relating in any way to the business and
activities of, or the equipment, devices, processes and formulas connected with,
Employer's business or any other business conducted by Employer and any
subsidiaries as may be established from time to time and agrees that, upon
request, the Employee will promptly make all disclosures, execute all
instruments and papers and perform all acts reasonably necessary or desired by
Employer to vest and confirm in it, its successors, assigns and nominees, fully
and completely, all rights created or contemplated by this Article 7 and which
may be necessary to enable Employer, its successors, assigns and nominees to
secure and enjoy the full benefits and advantages thereof.
<PAGE>
8. Noncompete. The Employee agrees, to the extent permitted by law,
that he shall not during the Employee's employment with Employer and until the
later of (a) three (3) years following the date of the termination of such
employment or (b) the completion of the payments provided for in clause (ii) of
paragraph (b) of Article 5 hereof, directly or indirectly, own, manage, operate,
join or control, or participate in the ownership, management, operation or
control of, or be a director or employee of, or a consultant to, or authorize
the use of his name by, or be connected in any manner with, any business, firm
or corporation, in any town, city, county or state of the United States of
America or of any country in the world, which manufactures, sells, leases or
distributes products competitive with any products of the Employer (or any
subsidiaries as may be established from time to time); provided, however, that
the provisions of this Article 8 shall not apply to investments by the Employee
in shares of stock traded on a national securities exchange or on the national
over-the-counter market which (a) shall have an aggregate market value, at the
time of acquisition, of less than Twenty Thousand Dollars ($20,000) and (b)
shall constitute less than three percent (3%) of the outstanding shares of such
stock.
9. Equitable Relief. The Employee acknowledges and agrees that, because
of the unique and extraordinary nature of his services, and breach or threatened
breach of the provisions of Articles 6, 7, or 8 will cause irreparable injury
and incalculable harm to Employer and that Employer shall, accordingly, be
entitled to injunctive or other equitable relief. The foregoing, however, shall
not be deemed to waive or to limit in any respect any other right or remedy
which Employer may have with respect to such breach.
10. Indemnification. Employer will indemnify the Employee (and his
legal representatives or other successors) to the fullest extent permitted by
the laws of the State of Florida and Employer's existing certificate of
incorporation and by-laws, and the Employee shall be entitled to the protection
of any insurance policies Employer may elect to maintain generally for the
benefit of its directors and officers, against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representatives in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being
or having been a director or officer of Employer and any subsidiaries as may be
established from time to time.
11. Notices. All notices hereunder shall be in writing and shall be
sent by registered or certified mail, return receipt requested. Any such notice
intended for Employer shall be addressed to it, attention of its Chairman of the
Board at its address hereinbefore set forth or at such other address of which
Employer shall have given notice to the Employee in the manner herein provided;
and if intended for the Employee, shall be addressed to him at his address
hereinbefore set forth or at such other address of which the Employee shall have
given notice to Employer in the manner herein provided.
12. Entire Agreement. This Employment Agreement constitutes the entire
understanding between the parties with respect to the matter referred to herein
and no waiver or modification to the terms hereof shall be valid unless in
writing signed by the party to be charged and only to the extent therein set
forth. All prior and contemporaneous agreements and understandings between the
parties with respect to the subject matter of this Employment Agreement are
superseded by this Employment Agreement.
13. Severability. If any provision in this Employment Agreement is
invalid, illegal and unenforceable, the balance of this Employment Agreement
shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
14. Waiver of Breach. A waiver by the Company or the Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
15. Non-Assignability. This Employment Agreement shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
administrators, executors, personal representatives, successors and assigns;
provided, however, that this Employment Agreement may not be assigned by any of
the parties hereto other than by and among Employer and any subsidiaries and/or
affiliates as may be established from time to time.
16. Law. This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
17. Withholding. All payments hereunder shall be subject to withholding
and to such other deductions as shall at the time of such payment be required
pursuant to any income tax or other law, whether of the United States of any
other jurisdiction, and, in the case of payments to the executors or
administrators of the Employee's estate, the delivery to Employer of all
necessary tax waivers and other documents.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement as of the date first above written.
RANKSTREET.COM, Inc.. EMPLOYEE
/S/ Richard Kleinberg /S/ Vladimir Rafalovich
By:_________________________________ ____________________________
President, CEO
Title:_______________________________
CONSULTING AGREEMENT
DATE: January 3, 2000
PARTIES: John and Mildred Martinez (the "Consultant")
SwiftyNet.com, Inc.
a Florida corporation (the "Company")
AGREEMENTS:
SECTION 1. RETENTION OF CONSULTANT
1.1 Effective Date. Effective January 3, 2000 (the "Effective Date")
the Company shall retain the Consultant as an independent contractor consultant,
and the Consultant hereby accepts such consulting relationship, upon the terms
and conditions set forth in this Agreement.
1.2 Services. The Consultant agrees to serve the Company as a
consultant regarding the design and construction of its web sites. The
Consultant shall perform and discharge well and faithfully for the Company such
consulting services during the term of this Agreement as may be assigned to the
Consultant from time to time by the President or Operations Manager of the
Company. Design and construction shall be subject to the Company's reasonable
approval.
SECTION 2. COMPENSATION
2.1 Consulting Fee and Expense Reimbursement. In full satisfaction for
any and all consulting services rendered by the Consultant for the Company under
this Agreement, the Company shall pay the Consultant a consulting fee of 40,000
restricted shares at the reduced current market price of $.75/share.
2.2 Other Compensation and Fringe Benefits. The Consultant shall not
receive any other compensation from the Company or participate in or receive
benefits under any of the Company's employee fringe benefit programs or receive
any other fringe benefits from the Company on account of the consulting services
to be provided to the Company under this Agreement, including without limitation
health, disability, life insurance, retirement, pension, and profit sharing
benefits.
2.3 Time Records and Reports. The Consultant shall prepare accurate and
complete records of the Consultant's services for the Company under this
Agreement and agrees to submit records on a monthly basis to the Company, along
with such other documentation of the services performed under this Agreement as
reasonably requested by the Company.
<PAGE>
SECTION 3. NATURE OF RELATIONSHIP; EXPENSES
3.1 Independent Contractor. It is agreed that the Consultant shall be
an independent contractor and shall not be the employee, servant, agent,
partner, or joint venturer of the Company, or any of its officers, directors, or
employees. The Consultant shall not have the right to or be entitled to any of
the employee benefits of the Company or its subsidiaries. The Consultant has no
authority to assume or create any obligation or liability, express or implied,
on the Company's behalf or in its name or to bind the Company in any manner
whatsoever.
3.2 Insurance and Taxes. The Consultant agrees to arrange for the
Consultant's own liability, disability, health, and workers' compensation
insurance, and that of the Consultant's employees, if any. The Consultant
further agrees to be responsible for the Consultant's own tax obligations
accruing as a result of payments for services rendered under this Agreement, as
well as for the tax withholding obligations with respect to the Consultant's
employees, if any. It is expressly understood and agreed by the Consultant that
should the Company for any reason incur tax liability or charges whatsoever as a
result of not making any withholdings from payments for services under this
Agreement, the Consultant will reimburse and indemnify the Company for the same.
3.3 Equipment, Tools, Employees and Overhead. The Consultant shall
provide, at the Consultant's expense, all equipment and tools needed to provide
services under this Agreement, including the salaries of and benefits provided
to any employees of the Consultant. Except as otherwise provided in this
Agreement, the Consultant shall be responsible for all of the Consultant's
overhead costs and expenses.
SECTION 4. TERM
4.1 Initial Term; Renewal. Unless otherwise terminated pursuant to the
provisions of Section 4.2, the consulting relationship under this Agreement
shall commence on the Effective Date and continue in effect until the web sites
are completed to the Company's reasonable satisfaction (the "Initial Term").
4.2 Early Termination. The consulting relationship under this Agreement
may be terminated prior to the end of the Initial Term or any renewal term by
the death of the Consultant, the disability of the Consultant resulting in the
inability of the Consultant to perform the consulting service, or by written
notice from the Company that, in the Company's sole determination: (a) the
Consultant has refused, failed, or is unable to render consulting services under
this Agreement; (b) the Consultant has breached any of the Consultant's other
obligations under this Agreement; or (c) the Consultant has engaged or is
engaging in conduct that in the Company's sole determination is detrimental to
the Company. If the consulting relationship is terminated for any of the reasons
set forth in the preceding sentence, the right of the Consultant to the
compensation set forth in Section 2 of this Agreement shall cease on the date of
such termination, and the Company shall have no further obligation to the
Consultant under any of the provisions of this Agreement.
4.3 Effect of Termination. Termination of the consulting relationship
shall not affect the provisions of Sections 5, 6 and 7, which provisions shall
survive any termination in accordance with their terms.
<PAGE>
SECTION 5. DISCLOSURE OF INFORMATION
The Consultant acknowledges that the Company's trade secrets, private
or secret processes as they exist from time to time, and information concerning
products, developments, manufacturing techniques, new product plans, equipment,
inventions, discoveries, patent applications, ideas, designs, engineering
drawings, sketches, renderings, other drawings, manufacturing and test data,
computer programs, progress reports, materials, costs, specifications,
processes, methods, research, procurement and sales activities and procedures,
promotion and pricing techniques, and credit and financial data concerning
customers of the Company and its subsidiaries, as well as information relating
to the management, operation, or planning of the Company and its subsidiaries
(the "Proprietary Information") are valuable, special, and unique assets of the
Company and its subsidiaries, access to and knowledge of which may be essential
to the performance of the Consultant's duties under this Agreement. In light of
the highly competitive nature of the industry in which the Company and its
subsidiaries conduct their businesses, the Consultant agrees that all
Proprietary Information obtained by the Consultant as a result of the
Consultant's relationship with the Company and its subsidiaries shall be
considered confidential. In recognition of this fact, the Consultant agrees that
the Consultant will not, during and after the Consulting Period, disclose any of
such Proprietary Information to any person or entity for any reason or purpose
whatsoever, and the Consultant will not make use of any Proprietary Information
for the Consultant's own purposes or for the benefit of any other person or
entity (except the Company and its subsidiaries) under any circumstances.
SECTION 6. INTERPRETATION
It is expressly understood and agreed that although the Consultant and
the Company consider the restrictions contained in Section 5 of this Agreement
reasonable for the purpose of preserving the goodwill, proprietary rights, and
going concern value of the Company and its subsidiaries, if a final judicial
determination is made by a court having jurisdiction that the time or territory
or any other restriction contained in Section 5 is an unenforceable restriction
on the activities of the Consultant, the provisions of such restriction shall
not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable. Alternatively, if the court referred to
above finds that any restriction contained in Section 5 or any remedy provided
in Section 8 of this Agreement is unenforceable, and such restriction or remedy
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained in this Agreement
or the availability of any other remedy. The provisions of Section 5 shall in no
respect limit or otherwise affect the obligations of the Consultant under other
agreements with the Company.
SECTION 7. DESIGNS, INVENTIONS, PATENTS AND COPYRIGHTS
7.1 Intellectual Property. The Consultant shall promptly disclose,
grant, and assign to the Company for its sole use and benefit any and all
designs, inventions, improvements, technical information, know-how and
technology, and suggestions relating in any way to the products of the Company
or its subsidiaries or capable of beneficial use by customers to whom products
or services of the Company or its subsidiaries are sold or provided, that the
Consultant may conceive, develop, or acquire during the Consultant's consulting
relationship with the Company or its subsidiaries (whether or not during usual
working hours), together with all copyrights, trademarks, design patents,
patents, and applications for copyrights, trademarks, design patents, patents,
divisions of pending patent applications, applications for reissue of patents
and specific assignments of such applications that may at any time be granted
for or upon any such designs, inventions, improvements, technical information,
know-how, or technology (the "Intellectual Property").
7.2 Assignments and Assistance. In connection with the rights of the
Company to the Intellectual Property, the Consultant shall promptly execute and
deliver such applications, assignments, descriptions, and other instruments as
may be necessary or proper in the opinion of the Company to vest in the Company
title to the Intellectual Property and to enable the Company to obtain and
maintain the entire right and title to the Intellectual Property throughout the
world. The Consultant shall also render to the Company, at the Company's
expense, such assistance as the Company may require in the prosecution of
applications for said patents or reissues thereof, in the prosecution or defense
of interferences which may be declared involving any of said applications or
patents, and in any litigation in which the Company or its subsidiaries may be
involved relating to the Intellectual Property.
<PAGE>
7.3 Copyrights. The Consultant agrees to, and hereby grants to the
Company, title to all copyrightable material first designed, produced, or
composed in the course of or pursuant to the performance of work under this
Agreement, which material shall be deemed "works made for hire" under Title 17,
United States Code, Section 1.01 of the Copyright Act of 1976. The Consultant
hereby grants to the Company a royalty-free, nonexclusive, and irrevocable
license to reproduce, translate, publish, use, and dispose of, and to authorize
others so to do, any and all copyrighted or copyrightable material created by
the Consultant as a result of work performed under this Agreement but not first
produced or composed by the Consultant in the performance of this Agreement,
provided that the license granted by this paragraph shall be only to the extent
the Consultant now has, or prior to the completion of work under this Agreement
or under any later agreements with the Company or its subsidiaries relating to
similar work may acquire, the right to grant such licenses without the Company
becoming liable to pay compensation to others solely because of such grant.
SECTION 8. REMEDIES
The Consultant acknowledges and agrees that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5, 6 and
7 of this Agreement would be inadequate and, in recognition of this fact, in the
event of a breach or threatened breach by the Consultant of any of the
provisions of Sections 5, 6 and 7, the Consultant agrees that, in addition to
its remedy at law, at the Company's option, all rights of the Consultant under
this Agreement may be terminated, and the Company shall be entitled without
posting any bond to obtain, and the Consultant agrees not to oppose a request
for, equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction, or any other equitable remedy which
may then be available. The Consultant acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 5, 6 and 7 and consequently agrees
upon any such breach or threatened breach to the granting of injunctive relief
prohibiting the design, development, manufacture, marketing or sale of products
and providing of services of the kind designed, developed, manufactured,
marketed, sold or provided by the Company or its subsidiaries during the term of
the Consultant's consulting relationship with the Company. Nothing contained in
this Section 8 shall be construed as prohibiting the Company from pursuing, in
addition, any other remedies available to it for such breach or threatened
breach.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1 Assignment. This Agreement shall not be assignable by either party,
except by the Company to any subsidiary or affiliate of the Company or to any
successor in interest to the Company's business.
9.2 Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the heirs, personal representatives, successors, and
assigns of the parties.
9.3 Notice. Any notice or other communication required or permitted to
be given under this Agreement shall be in writing and shall be mailed by
certified mail, return receipt requested, postage prepaid, addressed to the
parties at the following addresses:
As to Consultant: John & Mildred Martinez
=========================
As to Company: SwiftyNet.com, Inc.
17521 Crawley Rd.
Odessa, FL 33556
All notices and other communications shall be deemed to be given at the
expiration of three (3) days after the date of mailing. The address of a party
to which notices or other communications shall be mailed may be changed from
time to time by giving written notice to the other party.
9.4 Litigation Expense. In the event of a default under this Agreement,
the defaulting party shall reimburse the nondefaulting party for all costs and
expenses reasonably incurred by the nondefaulting party in connection with the
default, including without limitation attorney's fees. Additionally, in the
event a suit or action is filed to enforce this Agreement or with respect to
this Agreement, the prevailing party or parties shall be reimbursed by the other
party for all costs and expenses incurred in connection with the suit or action,
including without limitation reasonable attorney's fees at the trial level and
on appeal.
9.5 Waiver. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
9.6 Applicable Law. This Agreement shall be governed by and shall be
construed in accordance with the laws of the state of Florida. Exclusive venue
for any action arising hereunder or in connection herewith shall lie in state
court in Alachua County, Florida.
9.7 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties pertaining to its subject matter, and it supersedes all
prior contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by all parties.
Company: Consultant:
/s/ Mildred Martinez
SWIFTYNET.COM, INC. __________________________________
Mildred Martinez
/s/ Rachel Steele /s/ John Martinez
By:__________________________________ __________________________________
Rachel Steele, President John Martinez
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Financial Statements for the 12 months ended December 31, 1999, and is
qualified in its entirety by reference to such form 10kSB for annual period
ended December 31, 1999.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-START> JAN-01-1999
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 37,625
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 7,060
<CURRENT-ASSETS> 89,689
<PP&E> 1,326,031
<DEPRECIATION> 59,828
<TOTAL-ASSETS> 2,955,887
<CURRENT-LIABILITIES> 143,476
<BONDS> 635,889
<COMMON> 1,090
0
0
<OTHER-SE> 2,175,432
<TOTAL-LIABILITY-AND-EQUITY> 2,955,887
<SALES> 179,382
<TOTAL-REVENUES> 179,382
<CGS> 0
<TOTAL-COSTS> 230,510
<OTHER-EXPENSES> 926,346
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,730
<INCOME-PRETAX> (1,037,234)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,037,234)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,037,237)
<EPS-BASIC> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
