-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BqI2tf+DkoZrCMXJzgj2KzL7NzXa70sHCCjfyrBKLNF2ZMdYxFY+6V2UM1+3z+oa Qv7J8ZyVGp//lvcaMEYU7A== 0000950170-99-001050.txt : 19991110 0000950170-99-001050.hdr.sgml : 19991110 ACCESSION NUMBER: 0000950170-99-001050 CONFORMED SUBMISSION TYPE: 10SB12G PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST FLORIDA COMMUNICATIONS INC CENTRAL INDEX KEY: 0001022746 STANDARD INDUSTRIAL CLASSIFICATION: IRS NUMBER: 650662159 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: SEC FILE NUMBER: 000-30290 FILM NUMBER: 99653343 BUSINESS ADDRESS: STREET 1: 2161 EAST COMMERCIAL BLVD 2ND FL CITY: FT LAUDERDALE STATE: FL ZIP: 33308 MAIL ADDRESS: STREET 1: 2161 EAST COMMERCIAL BLVD 2ND FL CITY: FT LAUDERDALE STATE: FL ZIP: 33308 10SB12B 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-SB GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS Under Section 12(b) or 12(g) of The Securities and Exchange Act of 1934 FIRST FLORIDA COMMUNICATIONS, INC. (Name of Small Business Issuer and Its Charter) Florida 65-0662159 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 2161 East Commercial Boulevard, 2nd Floor, Ft. Lauderdale, FL 33308 (Address of Principal Executive Offices / Zip Code) (954) 351-9070 (Issuer's Telephone Number) Securities to be registered under Section 12(b) of the Act: COMMON STOCK, PAR VALUE $.0001 OVER THE COUNTER BULLETIN BOARD (Title of each Class to be so Registered) Name of Each Exchange on which Each Class to be Registered FORWARD LOOKING STATEMENTS First Florida Communications, Inc. cautions readers that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 10-SB or that are otherwise made by or on behalf of the Company. For this purpose, any statements contained in the Form 10-SB that are not statements of historical fact may be deemed to be forward-looking statements. These statements include, without limitation, statements relating to the Company's growth and business strategies, regulatory matters affecting the Company, other plans and objectives of the Company, management for future operations and activities, expansion and growth of operations and other such matters. The words "believes," "expects," "intends," "strategy," "considers" or "anticipates" and similar expressions identify forward-looking statements. The Company does not undertake to update, revise or correct any of the forward-looking information. PART I Item 1. Description of the Business. First Florida Communications, Inc. (the "Company" or "FFCI") operates a multifaceted communications and marketing company which includes a wireless cable television company, American Wireless; a specialized mobile radio, paging and cellular company, Paradise Cellular and Paging; an advertising company, Summit Advertising Group; an interconnect and Internet company, LANSource; a media production company, MB Broadcasting; and a 24-hour shopping cable television channel, The Catalog Channel. The Company generates its revenues from: (1) subscribers on its wireless cable television system (averaging $30.00 per month per subscriber - currently 1,948 subscribers); subscribers on its specialized mobile radio system (averaging $18.00 per month per subscriber); subscribers on the paging systems as a reseller (averaging $5.00 per month per subscriber); (2) advertising clients buying radio and television time and media productions; and (3) service revenue for computer networking and business solutions. Background: The Company was founded in 1996 by Paul Richard Bell, Christina Bell and Paul Richard Bell, Jr. and an experienced team of engineering, technical, and marketing professionals to enter into the communications industry. The Company had acquired the rights to a group of 220 MHZ Specialized Mobile Radio licenses in 30 cities throughout the United States to provide two-way radio communications. FFCI has expanded its operations to include wireless cable television, paging and cellular retail stores, advertising, media production, and business communications and Internet operation solutions. In 1999, the Company plans on launching a 24-hour television shopping network "The Catalog Channel." 2 The communications industry is experiencing tremendous growth and change. The wireless cable television industry is now able to provide high speed Internet delivery to home and business over its MMDS licenses. The Company owns MMDS licenses in St. George, Utah, and Cedar City, Utah, and owns 55% of the MMDS license rights in Provo, Utah. The future will allow television, Internet and even telephony on the Company's MMDS Systems. The Company is well placed with its advertising and media production companies to enter into the television shopping industry with its new division "The Catalog Channel." The print-based catalog industry sells more than $100 billion worth of products each year to approximately 150 million consumers worldwide. Last year, in the United States, approximately 15,000 catalog merchants mailed more than 13.9 billion paper catalogs at a cost of 70 cents per delivered catalog. Over the past 35 years remote shopping offered by merchants has improved significantly, including the quality of the presentation, diversity of product selection, improvements in fraud prevention, quick delivery of product, personalization of product mix and customer service. In the last 10 years television shopping networks have become very important avenues for merchandise sales. In 1998, QVC had almost $2.4 billion in sales revenue and The Home Shopping Network did $1 billion in sales. Both networks were on cable television systems with approximately 70 million households each. FFCI's Catalog Channel will bring to the buying public a convergence of the print catalog, the cable television home shopping experience, and Internet e-commerce business. The Catalog Channel brings to consumers brand name catalogs with the ability to run specials from the catalog and to drive people to the Internet e-commerce site with more special prices built around brand name catalog identities that consumers know and trust. By combining the catalog industry's diverse product inventory, merchandising expertise, in-place fulfillment organizations and trusted consumers' relationships with Internet-based sales tools and developing brand identity, The Catalog Channel will deliver the first complete catalog shopping experience - PRINT, TELEVISION, and ON-LINE. Although FFCI is developing the catalog media productions, the necessary cable operators for the number of households, and alliances with the Internet e-commerce providers, The Catalog Channel's success hinges on the three interrelated nontechnical factors which include: (1) alliances with catalog merchant partners who provide the content, (2) branding the first complete convergence of the catalog shopping experience - print, television, and on-line, and (3) a reputation for quality customer service and a safe, user-friendly shopping environment. The Catalog Channel will be well-positioned for success in the convergence of print, television, and on-line for the catalog business. Divisions and Services: The Company's services are varied and are carried out through the diverse operating divisions within the Company. The divisions within the company are: 3 PARADISE CELLULAR AND PAGING: This is a retail entity consisting of three retail stores that sell pagers, cellular phones, does repair work, and is a reseller of paging and cellular air time. The company was acquired in 1998, and is anticipated to open nine more locations in 1999. This division has six full-time employees and is headed up by Richard Bell, Jr. SMR DIVISION: Provides two-way radio sales, services, and air time to commercial business. The division has the license rights to 50 220 MHZ 5-channel locations throughout the United States. At the present time, due to lack of a functioning portable radio for the commercial end user, only one 5-channel system in Miami, Florida has subscribers on line. The company does installation and repairs for the two-way radio business. It is anticipated that portable radios will be available in 1999 and the Specialized Mobile Radio ("SMR") Systems will become active sources of revenue for FFCI in the future. The division has three full-time professional technical employees. MB BROADCASTING: This media production and advertising company was acquired in 1998. They produce infomercials and a television news show for Southern Utah. The division has nine full-time employees who are media writers, graphic design artists, computer specialists and two full-time sales representatives. MB owns four television translators and brings two major television signals (Fox and NBC) into their marketplace. MB will provide the engineering, production and cable operator acquisition for The Catalog Channel. SUMMIT ADVERTISING GROUP: This division is going through a transition from a Direct Response Radio and Television lead generator for the financial community to a media production and full service advertising company. Summit has a database of financial lead inquiries of more than 50 thousand current names. Summit will acquire the catalog merchants and do some production work for The Catalog Channel. The company employs four full-time professionals including an Emmy-winning producer/director. Summit was acquired by FFCI in March 1999. LANSOURCE: This newly acquired company provides Internet and interconnect networking solutions for the business client. They develop, design, and implement commercial web pages, service and install business communications equipment, and sell and service business communications equipment. There are seven full-time computer-communication specialists. THE CATALOG CHANNEL: This division will be a 24-hour television shopping network featuring brand name catalogs combining the print catalog, television, and the Internet e-commerce shopper. The Catalog Channel is completing an agreement to lease a transponder on SatCom 3 which will cover North America, including Canada, the United States, and Mexico. It is anticipated that The Catalog Channel will have 20 million households on cable systems it will service within 12 months after its initial launch anticipated during the late summer or early fall of 1999. In a forward-looking statement, The Catalog Channel could be in Europe on cable stations during the year 2000. The Catalog has no employees at this time. The necessary work is being done by Summit and MB Broadcasting. 4 AMERICAN WIRELESS: A Southwestern Utah provider of wireless cable television. There are currently approximately 2,000 subscribers paying an average of $30.00 per month for service. The company sells and services the subscriber needs on this 140-channel system. They are completing a wireless cable system in Cedar City, Utah and have the ownership rights (55%) of wireless cable licenses in Provo, Utah. In the Spring of 1999, this division began a joint venture with communications giant Motorola to implement a high-speed wireless Internet delivery system on American Wireless' FCC licenses. The tests and implementation as of June 23, 1999, are underway in St. George, Utah. The ultimate success of this project has tremendous implications for FFCI. LANSource and MB Broadcasting are working with American Wireless on this project. The division has 12 full-time employees. Acquisitions of Other Companies and/or Product Lines: The Company is pursuing the acquisition of other companies, assets and/or product lines that either complement or expand its existing business. The Company may use cash or stock or a combination of stock and cash to affect any such acquisitions. The Company has had, and will continue to have, discussions from time to time with potential acquisition candidates. Customer Relationships: The Company is in the midst of tremendous opportunities for both the corporation and the clients it services. New portable radios soon forthcoming to the SMR Division on track, a new 24-hour shopping network converging print catalogs, television, and the Internet, and a growing wireless cable television network in the middle of a project with Motorola to deliver high-speed Internet services. The Company's management believes that the future is here and now and FFCI is part of it in communications, marketing, and the Internet. Government Regulation: The Company will be subject to applicable provisions of federal and state securities laws and to regulations specifically governing the communications industry. The operations of the Company will also be subject to regulations normally incident to business operations (e.g. occupational safety and health acts, workmen's compensation statutes, unemployment insurance legislation and income tax and social security related regulations). Although the Company will make every effort to comply with applicable regulations, it can provide no assurance of its ability to do so, nor can it predict the effect of these regulations on its proposed activities. Industry and Competition: The communications industry continues to evolve at a phenomenal rate. Internet - online consumer spending is projected to increase from $7.8 billion in 1998 to $108 billion in 2003. The primary drivers for this growth are the increase of households with Internet access and an even 5 greater acceptance of online shopping among consumers. The percentage of U.S. households that use the Internet has increased from 14% in 1995 to 41% in 1998. The consumer demand for more television channels seems to be boundless. Wireless cable can now provide hundreds of television channels for consumers to choose from in the "digital" age. And now the wireless cable operator can deliver not only television, but data, Internet and telephony services as well. The catalog industry has worldwide revenues of more than $100 billion and serves more than 150 million consumers. Approximately 17,000 catalog merchants mail almost 14 billion paper catalogs in the U.S. These merchants range in size from $500 million industry giants to "Mom and Pop" operations that create catalogs in their homes. In 1996, the U.S. catalog industry was evenly divided between business to business and consumer catalogs. This market tends to be highly skewed in favor of the top 200 to 300 firms, which control more than 80% of the market. The catalog industry has existed for many years. However, between the 1960s and 1995, a combination of demographics changes, technology improvements and government regulations caused a rapid growth in the number and quality of mail order catalogs. These factors include (1) more women working with less time to shop, (2) higher education among shoppers with greater willingness to buy at a distance, (3) computer databases, (4) credit card popularity, and (5) FTC regulations that removed fraudulent merchants. The industry continues to grow both in terms of consumer acceptance and in the markets that it reaches. Globalization has helped to create more than 9,000 catalog companies in the UK, France and Germany. Consumer direct marketing sales are forecasted to grow by 7.7% annually from 1998 to 2003 compared to US consumer sales that are forecasted to grow 5% annually. The Company faces competition in both the communications sectors (specialized mobile radio, paging, and wireless cable television and the Internet) and the Marketing Sectors (advertising, media production and the catalog channel). In each area, the Company's competitive position and the barriers to entry are different. Although there is no direct competitor that offers the combination of benefits that FFCI provides, there are speciality companies and vendors that do provide direct competition to each Company division. Communication services competition includes Nextel and the cellular industry versus FFCI's SMR systems. The fiber optic and wired cable television systems are director competitors to the Company's wireless cable operations. Marketing sector competition includes the current home shopping networks (i.e. QVC and Home Shopping Network), catalog aggregators (i.e. Catalog Site), non-specialty Internet e-commerce players, category killer commerce sites (i.e. Amazon.com) and product search engines and price comparison software. Employees: The Company currently employs 44 full-time professionals. 6 Item 2. Management's Discussion and Analysis or Plan of Operation The Company had revenue of $102,102 for the year ended December 31, 1998 as compared to $45,161 for the year ended December 31, 1997, an increase of $59,941 or 126%. Cost of sales were $96,662 for the 1998 period in comparison to $31,265 for the 1997 period, an increase of $65,397 or 209%. Operating Costs and Expenses were $791,731 for the year ended December 31, 1998 as compared to $225,933 for the year ended December 31, 1997, an increase of $565,798 or 250%. Net cash (used) in Operating Activities for the years ended December 31, 1998 and 1997 was ($483,441) and ($222) receptively. The change in cash from operating activities was $483,212. Net cash used in investing activities was ($4,986) and ($425) for the years ended December 31, 1998 and 1997 respectively, reflecting a change of ($4,561). This was a result of an acquisition of furniture and fixtures from Paradise International. The Company's financing activities included proceeds from acquisitions in exchange for common stock and stock warrant conversions. The Company's financing activities resulted in net cash provided from financing activities of $500,600 for the year ended December 31, 1998. Their were no financing activities in period ending 1997. The Company believes it will be able to fund its short term cash needs through funds from operations and additional capital raising efforts. Net income (loss) increased from a loss of ($212,037) for the year ended December 31, 1997, to a net loss of ($786,291) for the year ended December 31, 1998, a change of ($574,254) or 270%. The increases in losses from December 31, 1997 to December 31, 1998 was the introduction and additions of cellular phone, paging services, and acquisition of one group of nine Alliance partnership 220 MHZ licenses and a second acquisition of 41 220 licenses and equipment from a non-operating specialized mobile radio company. The Company's management believes there is tremendous opportunity in these new sites and licenses, as well as a good fit with the strategic direction of combining like business in the wireless industry. The effect of these additional sites and licenses will be reflected in 1999. At December 31, 1998, the Company had total assets of $4,204,594 and total liabilities of $416,447. The Company has working capital of $12,587 as of December 31, 1998, as compared to $414 as of December 31, 1997. The Company currently has had the following significant subsequent acquisition events in 1999: * In January 1999, the Company acquired all the stock of MB Broadcasting, Inc., for shares of common stock. MB Broadcasting is a Utah cable television and TV production company. 7 * In March 1999, the Company acquired the net assets of Summit Advertising for $100,000 in cash and shares of common stock. * In June 1999, the Company acquired LANSource, an Internet design and services company for shares of common stock. * In June 1999, the Company acquired approximately 90% of American Wireless, a wireless cable and wireless Internet service provider for shares of common stock. In conjunction with the four 1999 acquisitions and subsequent events, the Company has received funding from two private sources as follows: 1. $1.2 million as exercise of outstanding warrants, Venture Capital USA. 2. $900,000 as exercise of warrants by Global Asset Management. During the second quarter, 1999, the Company has also announced the following: * Formation of a new subsidiary, The Catalog Channel, which is set to launch on July 1, 1999, using elements and management talent from all the recently acquired companies and the Company. * The resignation of Paul Richard Bell, founder, as President and Chief Executive Officer and the appointment of Douglas Costa as President and Chief Executive Officer. The Company's management believes that with the recent capital infusions and the eminent launch The Cable Channel, the Company is positioned to greatly enhance its revenue growth and value during 1999. Year 2000 Issue: The Company's in-house accounting and analysis software are year 2000 compliant to the best of the Company's knowledge. The Company's client, wireless, SMR and customer billing software has recently been upgraded to be year 2000 compliant and to the best of the Company's knowledge none of its operating systems will be effected by the year 2000 problem. Item 3. Description of Property The Company's offices are located at 2161 East Commercial Boulevard, 2nd Floor, Ft. Lauderdale, Florida 33308. The lease is for a three year term, with approximately 29 months remaining with a rent expense of $3,300 per month. The Company also leases office and retail store 8 space under operating lease agreements. The future minimum rental obligations of the Company are as follows: 1999 $66,000 2000 $22,000 The Company also has certain tower rent obligations that were assumed as part of the acquisition of prior telecommunications tower rent liabilities. These tower rent leases are currently being renegotiated and revised to reflect the change of ownership and equipment on the sites. The Company is presently reserving $26,000 per month for these contingent obligations. PRINCIPAL STOCKHOLDERS The following table sets forth information concerning the beneficial owners of the Company's outstanding common stock as of June 24, 1999, with respect to the beneficial ownership of shares of Common Stock by (i) each person known by the Company to be the beneficial owner of more than five percent of the outstanding shares of Common Stock, (ii) each of the Company's directors, and (iii) all executive officers and directors as a group. Unless otherwise indicated below, all persons listed below have sole voting and investment power with respect to their shares of Common Stock except to the extent that authority is shared by spouses under applicable law.
NAME AND ADDRESS AMOUNT AND NATURE OF OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENTAGE OF CLASS - - ------------------- ------------------------ ------------------- Paul Richard Bell, Sr. 1,702,286 20.6% 2161 E. Commercial Blvd., 2nd Fl Ft. Lauderdale, FL 33308 Christina Bell Landers 1,000,000 12.1% 2161 E. Commercial Blvd., 2nd Fl Ft. Lauderdale, FL 33308 Wallace Brazzeal 225,600 2.7% 251 W. Hilton Dr. St. George, UT 84771 Brent Miner 224,894 2.7% 251 W. Hilton Dr. St. George, UT 84771 Mical Terry 164,357 2.0% 845 E. Skyline Dr. St. George, UT 84771
9
NAME AND ADDRESS AMOUNT AND NATURE OF OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENTAGE OF CLASS - - ------------------- ------------------------ ------------------- Douglas Costa 130,900 1.6% 2161 E. Commercial Blvd., 2nd Fl Ft. Lauderdale, FL 33308 All executive officers and directors 3,448,037 41.7% as a group (11 persons)
- - ----------------- (1) A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date of this Registration Statement upon the exercise of options or warrants. Each beneficial owner's percentage ownership is determined by assuming that options or warrants that are held by such person (but not those held by any other person) and which are exercisable within 60 days of the date of this Registration Statement have been exercised. Unless otherwise indicated, the Company believes that all persons named in the table have voting and investment power with respect to all shares of Common Stock beneficially owned by them. Item 5. Directors, Executive Officers, Promoters and Control Persons The directors and executive officers of the Company, and significant employees of the Company are as follows: NAME POSITION - - ---- -------- Douglas Costa, Esq. Chief Executive Officer and President Kent Whitesel Chief Financial Officer Paul Richard Bell, Sr. Chairman of the Board Christina Bell Landers Director Ray Carpenter Director Brent Miner Director and General Manager The Catalog Channel Ronald Stull Vice President/General Manager Paradise - SMR Mical Terry Vice President/General Manager American Wireless Wallace Brazzael Vice President/General Manager MBBroadcasting Jeff Carpenter Vice President/General Manager LANSOURCE Wayne Wiggins General Manager Summit Advertising All directors will serve until the next annual meeting of Shareholders, which is anticipated to occur in February, 2000. DOUGLAS COSTA, ESQ. has served as CEO and President since March 1999. He is a practicing attorney and an educator. He served as corporate attorney and as a member of the FFCI board of directors since 1998. His degrees are from the University of Florida and School of Law at Nova University. KENT WHITESEL has served as the CFO for the Company since October 1998. Prior to joining the Company, he was the CFO for a major shipping line with 17 subsidiaries. His background includes 10 controllership with a major NYSE firm and audit and accounting work with two public companies. He has an MBA (Finance) from the University of Southern California and a MA (Accounting) form the University of Redlands. PAUL RICHARD BELL has extensive background in advertising and marketing. He is one of the founders of the Company and has served as the CEO. He holds degrees from the University of Arkansas and was an assistant professor at Arkansas Tech University in the School of System Science. CHRISTINA BELL LANDERS is one of the Company's original founders. She formerly owned a collectible company and has diverse business interests. BRENT MINER's family had extensive radio and television properties through the western United States. He is a past president of the Utah Broadcasters Association and a well known news anchor and a writer, producer and director. He is one of the founders of MB Broadcasting. ROY CARPENTER Founder of TriStar Media and American Wireless. An engineer formerly with Ampex Corporation in the design of laser beam recorders. An instructor in Electrical Engineering for 17 years. RONALD STULL has been in charge of the SMR and Paradise Cellular and paging Divisions since August 1998. Prior to joining the Company, he was a manager in radio tower site business and two way radio sales. He is a communication engineer with various positions with Motorola in their two way radio and paging business. MICAL TERRY has served as President and Chief Operating Office with American Wireless since its inception in 1989. Prior to this, he was an engineer for the Dixie Escalante Electric Power Company and designed power systems for this electric utility company. His degree is from Southern Utah University. WALLACE BRAZZAEL has been in advertising and media production for over 30 years. He was a founder of St. George Magazine, Inkwell Advertising and MB Broadcasting. He is a nationally renowned artist and graphic designer, television director and producer. He has a degree from Brigham Young University. JEFF CARPENTER has extensive background in communication technology, business network solutions, and the Internet. He joined LAN Source in 1996 and was the CEO and President. Prior to this he was the manager of Information Services at Strata, Inc., a computer software developer. Mr. Carpenter holds an engineering degree from ITT. WAYNE WIGGINS has won Emmys for his work as a producer/director in the television industry. He brings more than 20 years of experience in media production and advertising. His career includes CBS television and numerous national and international productions and infomercials. Mr. Wiggins joined Summit Advertising in June 1999. 11 All directors hold office until the next annual meeting of stockholders and until their successors have been elected and qualified, subject to death, resignation or removal from office prior to such time. Item 6. Executive Compensation The following table sets forth the total remuneration to be paid to the executive officers of the Company.
ANNUAL COMPENSATION TABLE NAME AND OTHER ANNUAL PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION TOTAL - - ------------------ ---- ------ ----- ------------ ----- Douglas Costa 1999 $110,000 $-0- $ 4,200 $114,200 President & CEO Paul Richard Bell 1999 $-0- $-0- $38,000 $ 38,000 Chairman (deferred compensation) Kent Whitesel 1999 $90,000 $-0- $-0- $ 90,000
There is not at present any compensation paid to directors of the Company in their capacity as such. The Company does not at this time have a stock option plan or other incentive compensation plan. Item 7. Certain Relationships and Related Transactions Not Applicable Item 8. Description of Securities. General As of the date of this Registration Statement, the authorized capital stock of the Company consists of 20,000,000 shares of Common Stock, $.0001 par value, of which 8,251,749 shares are outstanding. The following description of the securities of the Company and certain provisions of the Company's Articles of Incorporation and By-Laws, each as amended, is a summary and is qualified in its entirety by the provisions of the Articles of Incorporation and By-Laws as currently in effect. 12 Common Stock Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders, including the election of directors. Accordingly, holders of a majority of the shares of Common Stock entitled to vote in any election of directors may elect all of the directors standing for election if they choose to do so. The Articles of Incorporation does not provide for cumulative voting for the election of directors. Holders of Common Stock will be entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available therefor, and will be entitled to receive, pro rata, all assets of the Company available for distribution to such holders upon liquidation. Holders of Common Stock have no preemptive, subscription or redemption rights. All outstanding shares of Common Stock are, and the shares offered hereby, upon issuance, will be, fully paid and non assessable. 13 PART II Item 1. Market Price of and Dividends On the Registrant's Common Equity and Other Shareholder Matters Market Price The Company's Common Stock has been quoted on the Over The Counter Bulletin Board since September 1997 under the symbol "FFCI". The following table set forth, the high and low bid prices for the Common Stock for the quarters indicated. The quotations represent bid between dealers and do not included retail mark-up, mark-down or commissions, and do not represent actual transactions. HIGH BID LOW BID -------- ------- Third Quarter 1998 9-1/8 4 Fourth Quarter 1998 9-1/8 2 First Quarter 1999 5-7/8 2 Second Quarter 1999 15-5/8 4-1/4 At the date of this Registration Statement there were 840 holders of record of 8,251,749 shares of Common Stock, including holders which maintain their ownership in "Street Name." Dividends The Company anticipates that for the foreseeable future, earnings will be retained for the development of is business. Accordingly, the Company does not anticipate paying dividends on the Common Stock in the foreseeable future. The payment of future dividends will be at the sole discretion of the Company's Board of Directors and will depend upon among other of the Company and general business conditions. Item 2. Legal Proceedings To the best of the Company's knowledge, there is no threatened or pending litigation. Item 3. Changes in the Disagreements with Accountants None 14 Item 4. Recent Sales of Unregistered Securities None. Item 5. Indemnification of Directors and Officers Chapter 607 of the Florida Statutes provides for the indemnification of officers and directors under certain circumstances against expenses incurred in successfully defending against a claim and authorizes Florida corporations to indemnify their officers and directors under certain circumstances against expenses and liabilities incurred in legal proceedings involving such persons because of their being or having been an officer or director. Section 607.0850 of the Florida Statutes permits a corporation, by so providing in its certificate of incorporation, to eliminate or limit director's liability to the corporation and its stockholders for monetary damages arising out of certain alleged breaches of their fiduciary duty. Section 607.0850 provides that no such limitation of liability may affect a director's liability with respect to any of the following: (i) breaches of the director's duty of loyalty to the corporation or its stockholders; (ii) acts or omissions not made in good faith or which involve intentional misconduct of knowing violations of law; (iii) liability for dividends paid or stock repurchased or redeemed in violation of the Florida General Corporation Law; or (iv) any transaction from which the director derived an improper personal benefit. Section 607 does not authorize any limitation on the ability of the corporation or its stockholders to obtain injunctive relief, specific performance or other equitable relief against directors. Article IX of the Company's Articles of Incorporation and the Company's By-laws provide that all persons who the Company is empowered to indemnify pursuant to the provisions of Section 607 of the Corporation laws of the State of Florida (or any similar provision or provisions of applicable law at the time in effect), shall be indemnified by the Company to the full extent permitted thereby. The foregoing right of indemnification is not deemed to be exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. Article IX of the Company's Articles of Incorporation provides that no director of the Company will be personally liable to the Company or its stockholders; (i) for any monetary damages for breaches of fiduciary duty of loyalty to the Company or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 607 of the Florida Statutes, or (iv) for any transaction from which the director derived an improper personal benefit. 15 PART III ITEM 2. INDEX TO EXHIBITS. EXHIBIT NO. DESCRIPTION OF DOCUMENT - - ----------- ----------------------- 3.1 Form of Amended and Restated Articles of Incorporation 3.2 By-Laws, as amended [3-6] 4.1 Form of Common Stock Certificate 4.2 Acquisition Agreements* 10.4 Employment Agreement* - - ------------ * To be filed by Amendment. 16 Signatures In accordance with Section 12 of the Securities and Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. First Florida Communications, Inc. Date: June 22, 1999 By: /S/ DOUGLAS COSTA ---------------------------------- Douglas Costa, President & CEO (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange act of 1934, this registration statement has been signed below by the followings persons on behalf of the registrant and in the capacities and on the dates indicated. Date: June 22, 1999 By: /S/ DOUGLAS COSTA --------------------------------- Douglas Costa, President & CEO (Principal Executive Officer) Date: June 22, 1999 By: /S/ PAUL RICHARD BELL --------------------------------- Paul Richard Bell, Sr., Chairman of the Board of Directors Date: June 22, 1999 By: /S/ PAUL RICHARD BELL --------------------------------- Paul Richard Bell, Jr., Director Date: June 22, 1999 By: /S/ KENT WHITESEL --------------------------------- Kent Whitesel, Chief Financial Officer and Director 17 FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) TABLE OF CONTENTS PAGE ---- Independent Auditor's Report 1 Financial Statements Balance Sheet 2 Statements of Operations and Accumulated Deficit 3 Statements of Changes in Shareholders' Equity 4 Statements of Cash Flows 5 Notes to Financial Statements 6 - 10 BAUM & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS 1515 UNIVERSITY DRIVE - SUITE 209 CORAL SPRINGS, FLORIDA 33071 (954) 752-1712 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of First Florida Communications, Inc. We have audited the accompanying balance sheets of First Florida Communications, Inc. (A Development Stage Company) as of December 31, 1998 and the related statements of income and accumulated deficit, stockholders equity and cash flows for the years ended December 31, 1998, and 1997 and cumulative totals for development stage operations from April 1, 1996 (date of inception) through December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Florida Communications, Inc. (A Development Stage Company) as of December 31, 1998 and the results of its operations and its cash flows for the years ended December 31, 1998 and 1997 and cumulative totals for development stage operations from April 1, 1996 (date of inception) through December 31, 1998 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 9 of the financial statements, the Company has suffered losses from operations has a nominal revenue stream, and has significant non-productive assets, which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. April 29, 1999 Coral Springs, Florida FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET DECEMBER 31, 1998 ASSETS Crent Assets: Cash and Cash Equivalents (Note 1) $ 12,587 Inventory (Note 1) 7,852 Total Current Assets 20,439 ----------- Fixed Assets: Property, Plant and Equipment (Notes 4 and 6) (Net of accumulated depreciation of $3,852) 2,736,596 ----------- Other Current Assets: Deposits 1,977 FCC Licenses (Note 7) (Net of accumulated amortization of $29,418) 1,445,582 ----------- Total Other Current Assets 1,447,559 ----------- Total Assets $ 4,204,594 =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable & Accrued Expenses $ 368,707 Advances from stockholder (Note 8) 47,740 ----------- Total Current Liabilities 416,447 ----------- Total Liabilities 416,447 ----------- Shareholders' Equity: Common Stock, $.0001 par value; 7,500,000 shares authorized; 4,313,610 shares issued and outstanding 431 Additional Paid in Capital 4,826,403 Accumulated Deficit in the Development Stage (1,038,687) ----------- Total Shareholders' Equity 3,788,147 ----------- Total Liabilities and Shareholders' Equity $ 4,204,594 =========== See Accompanying Notes to the Financial Statements - 2 - FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998 AND CUMULATIVE TOTALS FOR DEVELOPMENT STAGE OPERATIONS FROM APRIL 1, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1998
DEVELOPMENT STAGE YEAR ENDED YEAR ENDED APRIL 1, 1996 TO DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1998 ----------------- ----------------- ----------------- Revenues: Sales (Note 1) $ 45,161 $ 102,102 $ 147,263 Cost of Sales 31,265 96,662 127,927 ----------- ----------- ----------- Gross Profit 13,896 5,440 19,336 Operating Costs and Expenses: Selling, General & Administrative 225,933 791,731 1,058,023 ----------- ----------- ----------- Net (Loss) Before Provision For Income Taxes (212,037) (786,291) (1,038,687) Provision For Income Taxes (Note 3) - 0 - - 0 - - 0 - ----------- ----------- ----------- Net (Loss) (212,037) (786,291) (1,038,687) Accumulated Deficit - Beginning of Year (40,359) (252,396) -- ----------- ----------- ----------- Accumulated Deficit - End of Year $ (252,396) $(1,038,687) $(1,038,687) =========== =========== =========== Income (Loss) Per Common Share $ (2.70) $ (.62) $ (3.06) =========== =========== =========== Weighted Average Common share Outstanding 93,429 1,666,186 339,092 =========== =========== ===========
See Accompanying Notes to the Financial Statements -3- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998 AND CUMULATIVE TOTALS FOR DEVELOPMENT STAGE OPERATIONS FROM APRIL 1, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1998
DEFICIT ACCUMULATED COMMON STOCK ADDITIONAL DURING THE ----------------------------- PAID-IN DEVELOPMENT # SHARES AMOUNT CAPITAL STAGE --------- ----------- ----------- ------------ December 31, 1996 81,279 $ 8 $ 240,912 $ (40,359) Common Stock Issued for Services 18,225 2 91,124 -- Net (Loss) For the Year -- -- -- (212,037) --------- ----------- ----------- ----------- December 31, 1997 99,504 10 332,036 (252,396) Stock Retired (198,302) (20) 20 -- Stock Issued for Asset Acquisition (Note 4) 4,112,408 411 4,194,377 -- Stock Warrant Conversions (Note 5) 300,000 30 299,970 -- Net (Loss) For the Year -- -- -- (786,291) --------- ----------- ----------- ----------- December 31, 1998 4,313,610 $ 431 $ 4,826,403 $(1,038,687) ========= =========== =========== ===========
See Accompanying Notes to the Financial Statements -4- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998 AND CUMULATIVE TOTALS FOR DEVELOPMENT STAGE OPERATIONS FROM APRIL 1, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1998
YEAR ENDED YEAR ENDED DEVELOPMENT STAGE DECEMBER 31, DECEMBER 31, APRIL 1, 1996 TO 1997 1998 DECEMBER 31, 1998 ------------ ------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (212,037) $ (786,291) $ (1,038,687) Adjustments to Reconcile Net Income (Loss) to Cash Used In Operating Activities Depreciation - 0 - 3,852 3,852 Amortization - 0 - 29,418 29,418 Common Stock Issued For Services 91,124 - 0 - 91,124 Changes in Working Capital: Accounts Receivable 88,049 120,142 - 0 - Accounts Payable 11,893 131,187 146,030 Advances Payable 20,749 18,251 47,740 ----------- ----------- --------------- Net Cash Provided (Used) in Operating Activities (222) (483,441) (720,523) CASH FLOWS (USED) IN INVESTING ACTIVITIES: Acquisition of Fixtures & Equipment (425) (4,986) (8,411) ----------- ----------- --------------- Net Cash (Used) in Investing Activities (425) (4,986) (8,411) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds of stock issued -- -- 240,921 Proceeds from acquisitions in exchange for common stock -- 200,600 200,600 Stock Warrant Conversions -- 300,000 300,000 ----------- ----------- --------------- Net Cash Flows from Financing Activities - 0 - 500,600 741,521 ----------- ----------- --------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (647) 12,173 12,587 CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 1,061 414 - 0 - ----------- ----------- --------------- END OF YEAR $ 414 $ 12,587 $ 12,587 =========== =========== =============== CASH PAID FOR INTEREST EXPENSE $ - 0 - $ - 0 - $ - 0 - CASH PAID FOR INCOME TAX $ - 0 - $ - 0 - $ - 0 -
See Accompanying Notes to the Financial Statements -5- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS First Florida Communications, Inc., (the Company) was incorporated in the State of Florida on April 1, 1996 to acquire FCC licenses, broadcast rights, and provide services to sell equipment in the wireless communication industry. (The Company is still in the development stage). The majority of the company's assets are for the "220 Megahertz" specialized mobile radio and paging business. The accompanying financial statements reflect the application of certain significant accounting policies as described below and elsewhere in the accompanying financial statements and notes. A.) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results can differ from those estimates. B.) CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand, cash in banks, and any highly liquid investments with a maturity of three months or less at the time of purchase. The Company maintains cash and cash equivalent balances at several financial institutions which are insured by the Federal Deposit Insurance Corporation up to $100,000. At December 31, 1998 there is no concentration of credit risk from uninsured bank balances. C.) INVENTORIES Inventories (stated at the lower of cost of market) are primarily cellular telephones, beepers, ancillary products and communication parts. D.) DEPRECIATION Furniture, fixtures and leasehold improvements are carried at cost. Communications equipment, acquired for common stock, is carried at estimated fair market value. Depreciation of property is provided for based on estimated useful lives (generally 3 to 10 years) using straight line methods. -6- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E.) AMORTIZATION The FCC licenses are being amortized over a twenty-year period using the straight line method. F.) EARNINGS (LOSS) PER SHARE Primary earnings per common share are computed by dividing the net income (loss) by the weighted average number of shares of common stock and common stock equivalents outstanding during the year. The number of shares used for the fiscal years ended December 31, 1998 and 1997 were 1,666,186 and 93,429, respectively. Common stock equivalents were not used due to their delusive effects. NOTE 2 - INCOME TAXES In February 1992, the Financial Accounting Standards Board issued Statement of Financial Standards 109 of "Accounting for Income Taxes." Under FASB 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company has net operating losses (NOL's) of approximately $1,00,000 expiring in the years 2011 through 2013. Deferred tax benefit $ 318,000 Valuation allowance (318,000) ---------- Net Benefit $ - 0 - ========== Due to the uncertainty of utilizing the NOL and recognizing the deferred tax benefit an offsetting valuation allowance has been provided. NOTE 3 - LEASES The Company leases office and retail store space under operating lease agreements. The future minimum rental obligations of the Company are as follows: 1999: $ 66,000 2000: $ 22,000 The Company has renewal options on these leases at their discretion. -7- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 NOTE 3 - LEASES (CONTINUED) As part of the acquisition of communications equipment, the Company assumed approximately $206,000 of prior telecommunications tower rent liabilities. As of December 31, 1998, the Company had not signed or renewed any new tower rental agreements. Due to the arrearages of tower rents, the Company is at risk of seizure of their communications equipment located at numerous locations. A reserve for contingent liabilities related to the unpaid tower rents was accrued for $100,000 at December 31, 1998. The tower leases above are currently being renegotiated and revised to reflect the change of ownership of the equipment on the site. NOTE 4 - ACQUISITIONS In January 1998 and May 1998, the Company acquired "220 Megahertz" communication equipment and 41 FCC licenses, net of outstanding liabilities, from the Macmillan Bell Group, Inc. for the issuance of 3,735,526 restricted common shares. (Related party transaction). In October 1998, the Company acquired from Nine (9) separate partnerships (collectively referred to as "The Alliance") 220 Megahertz communications equipment and FCC licenses, net of liabilities, via the issuance of 333,132 common shares, at a valuation of $1,080,000. In October 1998, the Company acquired Paradise International Connection, Inc. as a wholly- owned subsidiary using the purchase method of accounting for 43,750 shares of common stock. NOTE 5 - CAPITAL TRANSACTIONS A.) On May 27, 1998, the Company issued 1,500,000 stock warrants which expire on May 27, 2000 for the right to, purchase common stock at $1.00 per share. No consideration was given for these warrants. As of December 31, 1998, the warrant holder paid on behalf of the Company $300,000 of operating expenses, thus received 300,000 shares of common stock. B.) On May 4, 1998, the Company declared a 1:20 reverse stock split. Accordingly, all share and per share data has been retroactively restated. -8- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 NOTE 6 - FIXED ASSETS Property, plant and equipment consists of: Communications equipment $2,710,000 Furniture and fixtures 30,448 ---------- 2,740,448 Accumulated depreciation 3,852 ---------- $2,736,596 NOTE 7 - FCC LICENSES The Company owns fifty (50) FCC licenses, in 47 cities for "220 Megahertz" communications activities, that are renewable annually. The $1,475,000 valuation of these licenses is being amortized over twenty years. As of December 31, 1998 $29,418 has been amortized. Possession to these licenses were acquired via various acquisitions as noted in Note 4 and the Company is currently transferring the licenses on the Federal Communications Commission's records into the name of the Company. NOTE 8 - RELATED PARTY TRANSACTIONS The Company acquired Federal Communication licenses and "220 Megahertz" communications equipment from the MacMillan Bell Group, Inc., (See Note 5). The sole stockholder of this corporation was a Director and former Chief Executive Officer of the First Florida Communications, Inc., and is the father of the principle shareholders of the Company. This related party has advanced the Company $26,542 as of December 31, 1998. These advances are unsecured, non-interest bearing and has no repayment scheduled. NOTE 9 - GOING CONCERN CONSIDERATIONS The Company has incurred losses from inception in excess of $1,000,000 and has never shown a profit. Due to the Company's nominal cash flow and lack of productive assets its ability to meet current obligations is in doubt. Additionally, the negative working capital at December 31, 1998 of $396,000 raises substantial doubt as to its ability to continue as a going concern. Management has advised us that a venture capital company has expressed an interest of infusing equity capital into the company and that new acquisitions will provide liquidity (Note 10) and needed cash flow. -9- FIRST FLORIDA COMMUNICATIONS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 NOTE 10 - SUBSEQUENT EVENTS In January 1999, the Company acquired all the stock of M. B. Broadcasting, Inc., for 350,000 shares of common stock valued at $10 per share for a purchase of $3,500,000. M. B. Broadcasting, Inc., is primarily a Saint George, Utah cable television station and T.V. production company. In March 1999, the Company acquired for $1,500,000 the net assets of Summit Advertising Group, a Fort Lauderdale, Florida advertising agency. The purchase price consideration was $100,000 in cash and 280,000 shares of restricted common stock,. -10- EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF DOCUMENT - - ----------- ----------------------- 3.1 Form of Amended and Restated Articles of Incorporation 3.2 By-Laws, as amended [3-6] 4.1 Form of Common Stock Certificate EX-3.1 2 EXHIBIT 3.1 Florida Department of State Katherine Harris Secretary of State February 17, 1999 RICHARD P. GREENE, P.A. 2455 E. SUNRISE BLVD., STE. 905 FT. LAUDERDALE, FL 33304 Re: Document Number P96000030104 The Articles of Amendment to the Articles of Incorporation of FIRST FLORIDA COMMUNICATIONS, INC., a Florida corporation, were file on December 21, 1998. Should you have any questions regarding this matter, please telephone (850) 487-6050, the Amendment Filing Section. Thelma Lewis Corporate Specialist Supervisor Division of Corporations Letter Number: 199A00000916 Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF FIRST FLORIDA COMMUNICATIONS, INC. The Articles of Incorporation of the above-named corporation (the "Corporation"), filed with the Department of State on the 1st day of April, 1996 and assigned Document Number P960000301104, are hereby amended pursuant to a written consent in lieu of meeting executed and approved by all of the Corporation's Directors on the 14 day of DECEMBER, 1998, as follows: ITEM 1 1. ARTICLE IV - CAPITAL STOCK is hereby amended to read as follows: ARTICLE IV CAPITAL STOCK This Corporation is authorized to issue 20,000,000 shares of $.0001 par value common stock. This Articles of Amendment to the Articles of Incorporation was adopted by the Directors on the 14 day of DECEMBER , 1998. Shareholder approval was not required. IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment to the Articles of Incorporation this 14 day of DECEMBER , 1998. By: /S/ PAUL RICHARD BELL ---------------------------- Paul Richard Bell, Director Florida Department of State Sandra B. Mortham Secretary of State May 21, 1998 CAPITOL CONNECTION, INC. TALLAHASSEE, FL SUBJECT: FIRST FLORIDA COMMUNICATIONS, INC. Ref. Number: P96000030104 We have received your document for FIRST FLORIDA COMMUNICATIONS, INC., and check(s) totaling $87.50. However, the enclosed document has not been filed and is being returned to you for the following reason(s): The document must have original signatures. Please return your document, along with a copy of this letter, within 60 days or your filing will be considered abandoned. If you have any questions concerning the filing of your document, please call (850) 487-6903. Cheryl Coulliette Document Specialist Letter Number: 298A00028617 RECEIVED 98 MAY 22 AM 10:51 DIVISION OF CORPORATIONS "Corrected" Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF FIRST FLORIDA COMMUNICATIONS, INC. 1. ARTICLE FIFTH of the Articles of Incorporation of the Corporation is hereby amended to read as follows: FIFTH: This Corporation is authorized to issue SEVEN MILLION FIVE HUNDRED THOUSAND (7,500,000) shares of Common Stock, having a par value of $.001 per share, which shall be designated "Common Stock". All issued and outstanding shares of Common Stock of the Corporation held by each holder of record on May 4, 1998, shall be automatically combined at a rate of one for twenty (1:20). This reverse stock split shall not affect the par value of the Common Stock or the authorized number of shares of Common Stock. No fractional share or scrip representing a fractional share shall be issued upon the Reverse Stock Split. Fractional shares of .5 of Common Stock, will be rounded up to the next highest share, and fractional interest of less than .5 of Common Stock will be reduced down to the next nearest share. Any stockholder whose aggregate stockholding is reduced to a fraction of one (1) share will receive one (1) share of New Common Stock. 2. The foregoing amendment was adopted on May 4, 1998 by the majority of the Shareholders of the Corporation. The number of votes cast for the amendment was sufficient for approval on May 4, 1998. IN WITNESS WHEREOF, the undersigned President has executed these Articles of Amendment of the 20 day of May, 1998. /S/ PAUL R. BELL ---------------------------------- Paul Richard Bell, Jr., President FLORIDA DEPARTMENT OF STATE Sandra B. Mortham Secretary of State April 5, 1996 RICHARD P. GREENE 2455 E. SUNRISE BLVD., STE. 905 FT. LAUDERDALE, FL 33304 The Articles of Incorporation for FIRST FLORIDA COMMUNICATIONS, INC. Were filed on April 1, 1996 and assigned document number P96000030104. Please refer to this number whenever corresponding with this office regarding the above corporation. PLEASE NOTE: COMPLIANCE WITH THE FOLLOWING PROCEDURES IS ESSENTIAL TO MAINTAINING YOUR CORPORATE STATUS. FAILURE TO DO SO MAY RESULT IN DISSOLUTION OF YOUR CORPORATION. A CORPORATION ANNUAL REPORT MUST BE FILED WITH THIS OFFICE BETWEEN JANUARY 1 AND MAY 1 OF EACH YEAR BEGINNING WITH THE CALENDAR YEAR FOLLOWING THE YEAR OF THE FILING DATE NOTED ABOVE AND EACH YEAR THEREAFTER. FAILURE TO FILE THE ANNUAL REPORT ON TIME MAY RESULT IN ADMINISTRATIVE DISSOLUTION OF YOUR CORPORATION. A FEDERAL EMPLOYER IDENTIFICATION (FEI) NUMBER MUST BE SHOWN ON THE ANNUAL REPORT FORM PRIOR TO ITS FILING WITH THIS OFFICE. CONTACT THE INTERNAL REVENUE SERVICE TO INSURE THAT YOU RECEIVE THE FEI NUMBER IN TIME TO FILE THE ANNUAL REPORT. TO OBTAIN A FEI NUMBER, CONTACT THE IRS AT 1-800-829-3676 AND REQUEST FORM SS-4. SHOULD YOUR CORPORATE MAILING ADDRESS CHANGE, YOU MUST NOTIFY THIS OFFICE IN WRITING, TO INSURE IMPORTANT MAILINGS SUCH AS THE ANNUAL REPORT NOTICES REACH YOU. Should you have any questions regarding corporations, please contact this office at the address given below. Sandy Ng, Document Specialist New Filings Section Letter Number: 996A00015767 Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314 ARTICLES OF INCORPORATION OF FIRST FLORIDA COMMUNICATIONS, INC. THE UNDERSIGNED, for the purpose of forming a corporation for profit pursuant to Chapter 607, Florida Statutes, does hereby adopt the following Articles of Incorporation: WITNESSETH: ARTICLES I NAME AND ADDRESS The name and address of the principal office and/or mailing address of the Corporation is as follows: FIRST FLORIDA COMMUNICATIONS, INC. 5625 SOUTH UNIVERSITY DRIVE DAVIE, FLORIDA 33328 ARTICLE II DURATION This Corporation shall have perpetual existence commencing on the date of the filing of these Articles of Incorporation with the Department of State of Florida. ARTICLE III PURPOSES This Corporation is organized for the purpose of transacting any and all lawful business. ARTICLES IV CAPITAL STOCK This Corporation is authorized to issue 7,500,000 shares of $.0001 par value common stock. Prepared by: Richard P. Greene, P.A. Richard P. Greene, Esquire 2455 East Sunrise Boulevard, Suite 905 Fort Lauderdale, Florida 33304 (954) 564-6616 Florida Bar Number: 504378 ARTICLE V QUORUM FOR STOCKHOLDERS MEETINGS Unless otherwise provided for in the Corporation's Bylaws, a majority of the shares entitled to vote, represented in person or by proxy, shall be required to constitute a quorum at a meeting of shareholders. ARTICLE VI INITIAL REGISTERED OFFICE AND REGISTERED AGENT The street address of the initial registered office of this Corporation is 2455 East Sunrise Boulevard, Suite 905, Fort Lauderdale, Florida 33304 and the name of the initial registered agent of this Corporation at such address is Richard P. Greene, P.A. ARTICLES VII INITIAL BOARD OF DIRECTORS This Corporation shall have one director initially. The number of directors may be either increased or diminished from time to time in the manner provided in the Bylaws, but shall never be less than one. The name and address of the initial Director of the Corporation is as follows: Paul Richard Bell, Jr. 5625 South University Drive Davie, Florida 33328 ARTICLE VIII INCORPORATORS The name and address of the Corporation's incorporator is: Richard P. Greene 2455 East Sunrise Boulevard, Suite 905 Fort Lauderdale, Florida 33304 ARTICLE IX INDEMNIFICATION The Corporation shall indemnify its officers, directors and authorized agents for all liabilities incurred directly, indirectly or incidentally to services performed for the Corporation, to the fullest extent permitted under Florida law existing now or hereinafter enacted. ARTICLE X LIMITATION ON SHAREHOLDER SUITS Shareholders shall not have a cause of action against the Company's officers, directors or agents as a result of any action taken, or as a result of their failure to take any action, unless deprivation of such right is deemed a nullity because, in the specific case, deprivation of a right of action would be impermissibly in conflict with the public policy of the State of Florida. The fact that this Article shall be inapplicable in certain circumstances shall not render it inapplicable in any other circumstances and the Courts of the State of Florida are hereby granted the specific authority to restructure this Article, on a case by case basis or generally, as required to most fully give legal effect to its intent. IN WITNESS WHEREOF, we have subscribed our names this _____ day of March, 1996. /S/ RICHARD P. GREENE --------------------------------------- Richard P. Greene, Incorporator 2455 East Sunrise Boulevard, Suite 905 Ft. Lauderdale, Florida 33304 I hereby am familiar with and accept the duties and responsibilities as registered agent for said corporation. RICHARD P. GREENE, P.A. By: /S/ RICHARD P. GREENE ---------------------------------- Richard P. Greene, Esq., President EX-3.2 3 Exhibit 3.2 BYLAWS OF FIRST FLORIDA COMMUNICATIONS, INC. ARTICLE I SHAREHOLDERS SECTION 1. ANNUAL MEETINGS (a) The annual meeting of the shareholders of the Corporation, shall be held at the principal office of the Corporation in the State of Florida or at such other place within or without the State of Florida as may be determined by the Board of Directors and as may be designated in the notice of such meeting. The meeting shall be held on the third Tuesday of February of each year or on such other day as the Board of Directors may specify. If said day is a legal holiday, the meeting shall be held on the next succeeding business day not a legal holiday. (b) Business to be transacted at such meeting shall be the election of directors to succeed those whose terms are expiring and such other business as may be properly brought before the meeting. (c) In the event that the annual meeting, by mistake or otherwise, shall not be called and held as herein provided, a special meeting may be called as provided for in Section 2 of this Article I in lieu of and for the purposes of and with the same effect as the annual meeting. SECTION 2. SPECIAL MEETINGS (a) A special meeting of the shareholders of the Corporation may be called for any purpose or purposes at any time by the President of the Corporation, by the Board of Directors or by the holders of not less than 10% of the outstanding capital stock of the Corporation entitled to vote at such meeting. (b) At any time, upon the written direction of any person or persons entitled to call a special meeting of the shareholders, it shall be the duty of the Secretary to send notice of such meeting pursuant to Section 4 of this Article I. It shall be the responsibility of the person or persons directing the Secretary to send notice of any special meeting of shareholders to deliver such direction and a proposed form of notice to the Secretary not less than 15 days prior to the proposed date of said meeting. (c) Special meetings of the shareholders of the Corporation shall be held at such place, within or without the State of Florida, on such date, and at such time as shall be specified in the notice of such special meeting. SECTION 3. ADJOURNMENT (a) When the annual meeting is convened, or when any special meeting is convened, the presiding officer may adjourn it for such period of time as may be reasonably necessary to reconvene the meeting at another place and time. (b) The presiding officer shall have the power to adjourn any meeting of the Shareholders for any proper purpose, including, but not limited to, lack of a quorum, securing a more adequate meeting place, electing officials to count and tabulate votes, reviewing any shareholder proposals or passing upon any challenge which may properly come before the meetings. (c) When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and any business may be transacted at the adjourned meeting that might have been transacted on the original date of the meeting. If, however, after the adjournment the Board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given in compliance with Section 4(a) of this Article I to each shareholder of record on the new record date entitled to vote at such meeting. SECTION 4. NOTICE OF MEETINGS, PURPOSE OF MEETING, WAIVER (a) Each shareholder of record entitled to vote at any meeting shall be given in person, or by first class mail, postage prepaid, written notice of such meeting which, in the case of a special meeting, shall set forth the purpose(s) for which the meeting is called, not less than 10 or more than 60 days before the date of such meeting. If mailed, such notice is to be sent to the shareholder's address as it appears on the stock transfer books of the Corporation, unless the shareholder shall be requested of the Secretary in writing at least 15 days prior to the distribution of any required notice that any notice intended for him or her be sent to some other address, in which case the notice may be sent to the address so designated. Notwithstanding any such request by a shareholder, notice sent to a shareholder's address as it appears on the stock transfer books of this Corporation as of the record date shall be deemed properly given. Any notice of a meeting sent by United States mail shall be deemed delivered when deposited with proper postage thereon with the United States Postal Service or in any mail receptacle under its control. (b) A shareholder waives notice of any meeting by attendance, either in person or by proxy, at such meeting or by waiving notice in writing either before, during or after such meeting. Attendance at a meeting for the express purpose of objecting that the meeting was not lawfully called or convened, however, will not constitute a waiver of notice by a shareholder who states at the beginning of the meeting, his or her objection that the meeting is not lawfully called or convened. (c) A waiver of notice signed by all shareholders entitled to vote at a meeting of shareholders may also be used for any other proper purpose including, but not limited to, designating any place within or without the State of Florida as the place for holding such a meeting. 2 (d) Neither the business to be transacted at, nor the purpose of, any regular or special meeting of shareholders need be specified in any written waiver of notice. SECTION 5. CLOSING OF TRANSFER BOOKS, RECORD DATE, SHAREHOLDERS' LIST (a) In order to determine the holders of record of the capital stock of the Corporation who are entitled to notice of meetings, to vote a meeting or adjournment thereof, or to receive payment of any dividend, or for any other purpose, the Board of Directors may fix a date not more than 60 days prior to the date set for any of the above-mentioned activities for such determination of shareholders. (b) If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least 10 days immediately preceding such meeting. (c) In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the date for any such determination of shareholders, such date in any case to be not more than 60 days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. (d) If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice or to vote at a meeting of shareholders, or to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. (e) When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date under this Section for the adjourned meeting. (f) The officer or agent having charge of the stock transfer books of the Corporation shall make, as of a date at least 10 days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address of each shareholder and the number and class and series, if any, of shares held by each shareholder. Such list shall be kept on file at the registered office of the Corporation, at the principal place of business of the Corporation or at the office of the transfer agent or registrar of the Corporation for a period of 10 days prior to such meeting and shall be available for inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of any meeting of shareholders and shall be subject to inspection by any shareholder at any time during the meeting. (g) The original stock transfer books shall be prima facie evidence as to the shareholders entitled to examine such list or stock transfer books or to vote any meeting of shareholders. 3 (h) If the requirements of Section 5(f) of this Article I have not been substantially complied with, then, on the demand of any shareholder in person or by proxy, the meeting shall be adjourned until such requirements are complied with. (i) If no demand pursuant to Section 5(h) of this Article I is made, failure to comply with the requirements of this Section shall not affect the validity of any action taken at such meeting. (j) Section 5(g) of this Article I shall be operative only at such time(s) as the Corporation shall have 6 or more shareholders. SECTION 6. QUORUM At any meeting of the shareholders of the Corporation, the presence, in person or by proxy, of shareholders owning a majority of the issued and outstanding shares of the capital stock of the Corporation entitled to vote thereat shall be necessary to constitute a quorum for the transaction of any business. If a quorum is present, the vote of a majority of the shares represented at such meeting and entitled to vote on the subject matter shall be the act of the shareholders. If there shall not be quorum at any meeting of the shareholders of the Corporation, then the holders of a majority of the shares of the capital stock of the Corporation who shall be present at such meeting, in person or by proxy, may adjourn such meeting from time to time until holders of all of the shares of the capital stock shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally scheduled. SECTION 7. PRESIDING OFFICER, ORDER OF BUSINESS (a) Meetings of the shareholders shall be presided over by the Chairman of the Board, or, if he or she is not present or there is no Chairman of the Board, by the President or, if he or she is not present, by the senior Vice President present or, if neither the Chairman of the Board, the President, nor a Vice President is present, the meeting shall be presided over by a chairman to be chosen by a plurality of the shareholders entitled to vote at the meeting who are present, in person or by proxy. The presiding officer of any meeting of the shareholders may delegate his or her duties and obligations as the presiding officer as he or she sees fit. (b) The Secretary of the Corporation, or, in his or her absence, an Assistant Secretary shall act as Secretary of every meeting of shareholders, but if neither the Secretary nor an Assistant Secretary is present, the presiding officer of the meeting shall choose any person present to act as secretary of the meeting. (c) The order of business shall be as follows: 1. Call of meeting to order. 2. Proof of notice of meeting. 4 3. Read minutes of last shareholders' meeting or a waiver thereof 4. Reports of officers. 5. Reports of committees. 6. Election of directors. 7. Regular and miscellaneous business. 8. Special matters. 9. Adjournment. (d) Notwithstanding the provisions of Section 7(c) of this Article I, the order and topics of business to be transacted at any meeting shall be determined by the presiding officer of the meeting in his or her sole discretion. In no event shall any variation in the order of business or additions and deletions from the order of business as specified in Section 7(c) of this Article I invalidate any actions properly taken at any meeting. SECTION 8. VOTING (a) Unless otherwise provided for in the Articles of Incorporation, each shareholder shall be entitled, at each meeting and upon each proposal to be voted upon, to one vote for each share of voting stock recorded in his name on the books of the Corporation on the record date fixed as provided for in Section 5 of this Article I. (b) The presiding officer at any meeting of the shareholders shall have the power to determine the method and means of voting when any matter is to be voted upon. The method and means of voting may include, but shall not be limited to, vote by ballot, vote by hand or vote by voice. No method of voting may be adopted, however, which fails to take account of any shareholder`s right to vote by proxy as provided for in Section 10 of this Article I. In no event may nay method of voting be adopted which would prejudice the outcome of the vote. SECTION 9. ACTION WITHOUT MEETING (a) Any action required to be taken at any annual or special meeting of shareholders of the Corporation, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of a majority of the Corporation's outstanding stock. (b) In the event that the action to which the shareholders consent is such as would have required the filing of a certificate under the Florida General Corporation Act is such action had been voted on by shareholders at a meeting thereof, the certificate filed under such other section shall state that written consent has been given in accordance with the provisions of Section 9 of this Article I. 5 (c) If shareholder action is taken by written consent in lieu of meeting signed by less than all of the Corporation's shareholders, then all non participating shareholders shall be provided with written notice of the action taken within 10 days after the date of the written instrument taking such action. (d) No action by written consent in lieu of meeting shall be valid if it is in contravention of applicable proxy or informational rules adopted pursuant to the Securities Exchange Act of 1934, as amended, including, without limitation, the requirements of Section 14 thereof. SECTION 10. PROXIES (a) Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting, or his or her duly authorized attorney-in-fact, may authorize another person or persons to act for him or her by proxy. (b) Every proxy must be signed by the shareholder or his or her attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided in this Section 10. (c) The authority of the holder of a proxy to act shall not be revoked by the incompetence or death of the shareholder who executed the proxy unless, before the authority is exercised, written notice of any adjudication of such incompetence or of such death is received by the corporate officer responsible for maintaining the list of shareholders. (d) Except when other provisions shall have been made by written agreement between the parties, the record holder of shares held as pledges or otherwise as security or which belong to another, shall issue to the pledgor or to such owner of such shares, upon demand therefor and payment of necessary expenses thereof, a proxy to vote or take other action thereon. (e) A proxy which states that it is irrevocable is irrevocable when it is held by any of the following or a nominee of any of the following: (i) a pledgee; (ii) a person who has purchased or agreed to purchase the shares: (iii) a creditor or creditors of the Corporation who extend or continue to extend credit to the Corporation in consideration of the proxy, if the proxy states that it was given in consideration of such extension or continuation of credit, the amount thereof, and the name of the person extending or continuing credit; (iv) a person who has contracted to perform services as an officer of the Corporation, if a proxy is required by the contract of employment, if the proxy states that it was given in consideration of such contract of employment and states the name of the employee and the period of employment contracted for; and (v) a person designated by or under an agreement as provided in Article XI hereof. (f) Notwithstanding a provision in a proxy stating that it is irrevocable, the proxy becomes revocable after the pledge is redeemed, the debt of the Corporation is paid, the period of 6 employment provided for in the contract of employment has terminated, or the agreement under Article XI hereof has terminated and, in a case provided for in Section 10(e) (iii) or Section 10(e) (iv) of this Article I, becomes revocable three years after the date of the proxy or at the end of the period, if any, specified therein, whichever period is less, unless the period of irrevocability of the proxy as provided in this Section 10. This Section 10(f) does not affect the duration of a proxy under Section 10(b) of this Article I. (g) A proxy may be revoked, notwithstanding a provision making it irrevocable, by a purchaser of shares without knowledge of the existence of the provisions unless the existence of the proxy and its irrevocability is noted conspicuously on the face or back of the certificate representing such shares. (h) If a proxy for the same shares confers authority upon two or more persons and does not otherwise provide, a majority of such persons present at the meeting, or if only one is present then that one, may exercise all the powers conferred by the proxy. if the proxy holders present at the meeting are equally divided as to the right and manner of voting in any particular case, the voting of such shares shall be prorated. (i) If a proxy expressly so provides, any proxy holder may appoint in writing a substitute to act in his or her place. (j) Notwithstanding anything in the Bylaws to the contrary, no proxy shall be valid if it was obtained in violation of any applicable requirements of Section 14 of the Securities Exchange Act of 1934, as amended, or the Rules and Regulations promulgated thereunder. SECTION 11. VOTING OF SHARES BY SHAREHOLDERS (a) Shares standing in the name of another corporation, domestic or foreign, may be voted by the officer, agent, or proxy designated by the bylaws of the corporate shareholder; or, in the absence of any applicable bylaw, by such person as the board of directors of the corporate shareholder may designate. Proof of such designation may be made by presentation of a certified copy of the bylaws or other instrument of the corporate shareholder. In the absence of any such designation, or in case of conflicting designation by the corporate shareholder, the chairman of the board, president, any vice president, secretary and treasurer of the corporate shareholder, in that order, shall be presumed to possess authority to vote such shares. (b) Shares held by an administrator, executor, guardian or conservator may be voted by him or her, either in person or by proxy, without a transfer of such shares into his or her name. Shares standing in the name of a trustee may be voted as shares held by him or her without a transfer of such shares into his name. (c) Shares standing in the name of a receiver may be voted by such receiver. Shares held by or under the control of a receiver but not standing in the name of such receiver, may be voted by 7 such receiver without the transfer thereof into his name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed. (d) A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee. (e) Shares of the capital stock of the Corporation belonging to the Corporation or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares. ARTICLE II DIRECTORS SECTION 1. BOARD OF DIRECTORS, EXERCISE OF CORPORATE POWERS (a) All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors except as may be otherwise provided in the Articles of Incorporation or in Shareholder's Agreement. If any such provision is made in the Articles of Incorporation or in Shareholder's Agreement, the powers and duties conferred or imposed upon the Board of Directors shall be exercised or performed to such extent and by such person or persons as shall be provided in the Articles of Incorporation or Shareholders' Agreement. (b) Directors need not be residents of this state or shareholders of the Corporation unless the Articles of Incorporation so require. (c) The Board of Directors shall have authority to fix the compensation of directors unless otherwise provided in the Articles of Incorporation. (d) A director shall perform his or her duties as a director, including his or her duties as a member of any committee of the Board upon which he may serve, in good faith, in a manner he or she reasonably believes to be in the best interests of the Corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. (e) In performing his or her duties, a director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by: (i) one or more officers or employees of the Corporation whom the director reasonably believes to be reliable and competent in the matters presented; (ii) legal counsel, public accountants or other persons as to matters which the director reasonably believes to be within such persons' professional or expert competence; or (iii) a committee of the Board upon which he or she does not serve, duly designated in accordance with a provision of the Articles of Incorporation 8 or these By-Laws, as to matters within its designated authority, which committee the director reasonably believes to merit confidence. (f) A director shall not be considered to be acting in good faith if he or she has knowledge concerning the matter in question that would cause such reliance described in Section 1(e) of this Article II to be unwarranted. (g) A person who performs his or her duties in compliance with Section 1 of this Article II shall have no liability by reason of being or having been a director of the Corporation. (h) A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he or she votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest. SECTION 2. NUMBER, ELECTION, CLASSIFICATION OF DIRECTORS, VACANCIES (a) The Board of Directors of this Corporation shall consist of not less than one director. The Board shall have authority, from time to time, to increase the number of directors or to decrease it to not less than one member, provided that no decrease in the number of directors shall deprive a serving director of the right to serve throughout the term of his or her election. (b) Each person named in the Articles of Incorporation as a member of the initial Board of Directors shall serve until his or her successor shall have been elected and qualified or until his or her earlier resignation, removal from office, or death. (c) At the first annual meeting of shareholders and at each annual meeting thereafter, the shareholders shall elect directors to hold office until the next succeeding annual meeting, except in case of the classification of director as permitted by the Florida General Corporation Act. Each Director shall hold office for the term for which he or she is elected and until his or her successor shall have been elected and qualified or until his or her earlier resignation, removal from office, or death. (d) The shareholders, by amendment to these Bylaws, may provide that the directors be divided into not more than four classes, as nearly equal in number as possible, whose terms of office shall respectively expire at different times, but no such term shall continue longer than four years, and at least one fourth of the directors shall be elected annually. If Directors are classified and the number of directors is thereafter changed, any increase or decrease in directorship shall be so apportioned among the classes as to make all classes as nearly equal in number as possible. (e) Any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors, may be filled only by the Board of Directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the shareholders. 9 SECTION 3. REMOVAL OF DIRECTORS At a meeting of shareholders called expressly for that purpose, directors may be removed in the manner provided in this Section 3. Any director or the entire Board of Directors may be removed, with or without cause, by the vote of the holders of two-thirds of the shares then entitled to vote at an election of directors. SECTION 4. DIRECTOR QUORUM AND VOTING (a) A majority of the directors fixed in the manner provided in these Bylaws shall constitute a quorum for the transaction of business. (b) A majority of the members of an Executive Committee or other committee shall constitute a quorum for the transaction of business at any meeting of such Executive Committee or other committee. (c) The act of a majority of the directors present at a Board meeting at which a quorum is present shall be the act of the Board of Directors. (d) The act of a majority of the members of an Executive Committee present at an Executive Committee meeting at which a quorum is present shall be the act of the Executive Committee. (e) The act of a majority of the members of any other committee present at a committee meeting at which a quorum is present shall be the act of the committee. (f) Directors may, if not contrary to applicable law, vote either in person or by proxy, provided that the proxy holder must be either another director, an officer or a shareholder of the Corporation; however, any director who elects to vote by proxy more than three times during any single fiscal year shall, unless otherwise determined by the Board of Directors, be automatically removed as a director. SECTION 5. DIRECTOR CONFLICTS OF INTEREST (a) No contract or other transaction between this Corporation and one or more of its director or any other corporation, firm, association or entity in which one or more of its directors are Directors or officers or are financially interested shall be either void or voidable because of such relationship or interest or because such director or directors are present at the meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction or because their votes are counted for such purpose, if: (i) The fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves or ratifies the contract or transaction by a vote 10 or consent sufficient for the purpose without counting the votes or consents of such interested directors; or (ii) The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent; or (iii) The contract or transaction is fair and reasonable as to the Corporation at the time it is authorized by the Board, a committee, or the shareholders. (b) Interested directors, whether or not voting, may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction. SECTION 6. EXECUTIVE AND OTHER COMMITTEES, DESIGNATION, AUTHORITY (a) The Board of Directors, by resolution adopted by the full Board of Directors, may designate from among its directors an Executive Committee and one or more other committees each of which, to the extent provided in such resolution or in the Articles of Incorporation or these Bylaws, shall have and may exercise all the authority of the Board of Directors, except that no such committee shall have the authority to : (i) approve or recommend to shareholders actions or proposals required by the Florida General Corporation Act to be approved by shareholders; (ii) designate candidates for the office of director for purposes of proxy solicitation or otherwise; (iii) fill vacancies on the Board of Directors or any committee thereof; (iv) amend these Bylaws; (v) authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the Board of Directors; or (vi) authorize or approve the issuance or sale of, or any contract to issue or sell, shares or designate the terms of a series of a class of shares, unless the Board of Directors, having acted regarding general authorization for the issuance or sale of shares, or any contract therefor, and, in the case of a series, the designation thereof has specified a general formula or method by resolution or by adoption of a stock option or other plan, authorized a committee to fix the terms upon which such shares may be issued or sold, including, without limitation, the price, the rate or manner of payment of dividends, provisions for redemption, sinking fund, conversion, and voting or preferential rights, and provisions for other features of a class of shares, or a series of a class of shares, with full power in such committee to adopt any final resolution setting forth all the terms of a series for filing with the Department of State under the Florida General Corporation Act. (b) The Board, by resolution adopted in accordance with Section 6(a) of this Article II, may designate one or more directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee. (c) Neither the designation of any such committee, the delegation thereto of authority, nor action by such committee pursuant to such authority shall alone constitute compliance by a member of the Board of Directors, not a member of the committee in question, with his responsibility 11 to act in good faith, in manner he reasonably believes to be in the best interests of the Corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. SECTION 7. PLACE, TIME, NOTICE AND CALL OF DIRECTORS' MEETING. (a) Meetings of the Board of Directors, regular or special, may be held either within or without the State of Florida. (b) A regular meeting of the Board of Directors of the Corporation shall be held for the election of officers of the Corporation and for the transaction of such other business as may come before such meeting as promptly as practicable after the annual meeting of the shareholders of this Corporation without the necessity of notice other than this Bylaw. Other regular meetings of the Board of Directors of the Corporation may be held at such places as the Board of Directors of the Corporation may from time to time resolve without notice other than such resolution. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board of Directors or a majority of the Directors of the Corporation, at such time and at such place as shall be specified in the call thereof. Notice of any special meeting of the Board of Directors must be given at least two days prior thereto, if by written notice delivered personally; or at least five days prior thereto, if mailed; or at least two days prior thereto, if by telegram; or at least two days prior thereto, if by telephone. If such notice is given by mail, such notice shall be deemed to have been delivered when deposited with the United States Postal Service addressed to the business address of such Director with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed delivered when the telegram is delivered to the telegraph company. If notice is given by telephone, such notice shall be deemed delivered when the call is completed. (c) Notice of a meeting of the Board of Directors need not be given to any Director who signs a waiver of notice either before or after the meeting. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a Director states, at the beginning of the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened. (d) Neither the business to be transacted at, nor the purpose of, any regular of special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. (e) A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the Directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other Directors. 12 (f) Members of the Board of Directors may participate in a meeting of such Board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. SECTION 8. ACTION BY DIRECTORS WITHOUT A MEETING (a) Any action required by the Florida General Corporation Act to be taken at a meeting of the Directors of the Corporation, or any action which may be taken at a meeting of the Directors or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken, signed by all of the Directors, or all of the members of the committee, as the case may be, and is filed in the minutes of the proceedings of the Board or of the committee. Such consent shall have the same effect as a unanimous vote. (b) If not contrary to applicable law, directors may take action as the Board of Directors or committees thereof through a written consent to action signed by a number of directors sufficient to have carried a vote of the Board of Directors or committee thereof with all members present and voting; provided, that all directors not joining in such written instrument shall be deemed for all purposes to have cast dissenting votes, and that all directors not parties to such instrument shall receive written notice of all action taken through such instrument within three days after such instrument shall have been subscribed by the requisite number of directors required for such action. SECTION 9. COMPENSATION The Directors and members of the Executive and any other committee of the Board of Directors shall be entitled to such reasonable compensation for their services and on such basis as shall be fixed from time to time by resolution of the Board of Directors. The Board of Directors and members of any committee of that Board of Directors shall be entitled to reimbursement for any reasonable expenses incurred in attending any Board or committee meeting. Any Director receiving compensation under this Section shall not be prevented from serving the Corporation in any other capacity and shall not be prohibited from receiving reasonable compensation for such other services. SECTION 10. RESIGNATION Any Director of the Corporation may resign at any time by providing the Board of Directors with written notice indicating the Director's intention to resign and the effective date thereof. 13 ARTICLE III OFFICERS SECTION 1. ELECTION, NUMBER, TERMS OF OFFICE (a) The officers of the Corporation shall consist of a Chairman of the Board, a Chief Executive officer, a President, a Chief Operating Officer, a Chief Financial Officer, one or more Vice-Presidents, a Secretary and a Treasurer, each of whom shall be elected by the Board of Directors at such time and in such manner as may be prescribed by these Bylaws. Such other officers and assistance officers and agents as may be deemed necessary may be elected or appointed by the Board of Directors. The officers of the Corporation shall be hereinafter collectively referred to as the "Officers." (b) All officers and agents, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as are provided in these Bylaws, or as may be determined by resolution of the Board of Directors not inconsistent with these Bylaws. (c) Any two or more offices may be held by the same person, except for the offices of President and Secretary. (d) A failure to elect a Chairman of the Board, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, a Vice President, a Secretary or a Treasurer shall not affect the existence of the Corporation. SECTION 2. REMOVAL An officer of the Corporation shall hold office until the election and qualification of his successor; however, any Officer of the Corporation may be removed from office by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer shall not of itself create any contract right to employment or compensation. SECTION 3. VACANCIES Any vacancy in any office from any cause may be filled for the unexpired portion of the term of such office by the Board of Directors. SECTION 4. POWERS AND DUTIES (a) The Chairman of the Board of Directors shall preside over meetings of the Board of Directors and the Shareholders. Unless a separate Chief Executive Officer is elected, the Chairman 14 shall exercise the powers hereafter granted to that office. Unless a Chairman of the Board is specifically elected, the President shall be deemed to be the Chairman of the Board. (b) The Chief Executive Officer shall be the principal officer of the Corporation to whom all other officers shall be subordinate. In the event no Chief Executive Officer is separately elected, such office shall be assumed by the Chairman of the Board, and if no such office has been filled, by the President. Except where by law the signature of the President is required or unless the Board of Directors shall rule otherwise, the Chief Executive Officer shall possess the same power as the President to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors. (c) The Chief Operating Officer of the Corporation shall be responsible for management of the day to day affairs of the Corporation, subject to compliance with the directions of the Board of Directors and of the Chief Executive Officer. He shall be responsible for the general day-to-day supervision of the business and affairs of the Corporation. He shall sign or countersign all certificates, contracts or other instruments of the Corporation as authorized by the Board of Directors. He may, but need not, be a member of the Board of Directors. (d) Unless otherwise provided by specific resolution of the Board of Directors, the President shall be the Chief Operating Officer of the Corporation. In the absence of a separately elected or available Chief Executive Officer or Chairman of the Board, the President shall be the Chief Executive Officer of the Corporation and shall preside at all meetings of the shareholders and the Board of Directors. He shall make reports to the Board of Directors. The Board of Directors will at all times retain the power to expressly delegate the duties of the President to any other Officer of the Corporation. (e) The Chief Financial Officer shall be responsible for coordinating all financial aspects of the Corporation's operations, including strategic financial planning, supervision of the Corporation's Treasurer, Comptroller and outside auditors. In the event an Audit Committee of the Board of Directors is designated and serving, he shall be responsible for keeping such committee fully and timely informed of all matters under its jurisdiction. In addition, the Chief Financial Officer shall be responsible for overseeing preparation and filing of all reports of the Corporation's activities required to be filed, either periodically or on a special basis with the United States Internal revenue Service and Securities and Exchange Commission and other federal and state governmental agencies. (f) The Vice President(s), if any, in the order designated by the Board of Directors, shall exercise the functions of the President in the event of the absence, disability, death, or refusal to act of the President. During the time that any Vice President is properly exercising the functions of the President, such Vice President shall have all the powers of and be subject to all restrictions upon the President. Each Vice President shall have such other duties as are assigned to him from time to time by the Board of Directors or by the President of the Corporation. 15 (g) The Secretary of the Corporation shall keep the minutes of the meetings of the shareholders of the Corporation, and, unless provided otherwise by the Chairman at any meeting of the Board of Directors, the Secretary shall keep the minutes of the meetings of the Board of Directors of the Corporation. The Secretary shall be the custodian of the minute books of the Corporation and such other books and records of the Corporation as the Board of Directors of the Corporation may direct. The Secretary of the Corporation shall have the general responsibility for maintaining the stock transfer books of the Corporation, or of supervising the maintenance of the stock transfer books of the Corporation by the transfer agent, if any, of the Corporation. The Secretary shall be the custodian of the corporate seal of the Corporation and shall affix the corporate seal of the Corporation on contracts and other instruments as the Board of Directors may direct. The Secretary shall perform such other duties as are assigned to him from time by the Board of Directors or the President of the Corporation. (h) The Treasurer of the Corporation shall be directly subordinate to the Chief Financial Officer. In the absence of a Chief Financial Officer, such office shall be filled by the Treasurer. The Treasurer shall have custody of all funds and securities owned by the Corporation. The Treasurer shall cause to be entered regularly in the proper books of account of the Corporation full and accurate accounts of the receipts and disbursements of the Corporation. The Treasurer of the Corporation shall render a statement of the cash, financial and other accounts of the Corporation whenever he is directed to render such a statement by the Board of Directors or by the President of the Corporation. The Treasurer shall at all reasonable times make available the Corporation's books and financial accounts to any Director of the Corporation during normal business hours. The Treasurer shall perform all other acts incident to the Office of Treasurer of the Corporation, and he shall have such other duties as are assigned to him from time to time by the Board of Directors or the President of the Corporation. (i) Other subordinate or assistant officers appointed by the Board of Directors or by the President, if such authority is delegated to him by the Board of Directors, shall exercise such powers and perform such duties as may be delegated to them by the Board of Directors, the Chief Executive Officer or by the President, as the case may be. (j) In case of the absence or disability of any Officer of the Corporation and of any person authorized to act in his place during such period of absence or disability, the Board of Directors may from time to time delegate the powers and duties of such Officer or any Director or any other person whom it may select. SECTION 5. SALARIES The salaries of all Officers of the Corporation shall, except as otherwise determined or required by an agreement entered into among all the shareholders of the Corporation, be fixed by the Board of Directors. No Officer shall be ineligible to receive such salary by reason of the fact that he is also a Director of the Corporation and receiving compensation therefor. 16 ARTICLE IV LOANS TO EMPLOYEES AND OFFICERS, GUARANTEE OF OBLIGATIONS OF EMPLOYEES AND OFFICERS This Corporation may lend money to, guarantee any obligation of, or otherwise assist any Officer or other employee of the Corporation or of a subsidiary, including any Officer or employee who is a Director of the Corporation or of a subsidiary, whenever, in the judgment of the Directors, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation. The loan, guarantee or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve including, without limitation, a pledge of shares of stock of the Corporation. Nothing in this Articles shall be deemed to deny, limit or restrict the powers of guarantee or warranty of this Corporation at common law or under any statute. ARTICLE V STOCK CERTIFICATES, VOTING TRUSTS, TRANSFERS SECTION 1. CERTIFICATES REPRESENTING SHARES (a) Every holder of shares of this Corporation shall be entitled to one or more certificates, representing all shares to which he is entitled and such certificates shall be signed by the Chairman, Chief Executive Officer, the President or a Vice President and the Secretary or an Assistant Secretary of the Corporation and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the Chairman, the Chief Executive Officer, the President or Vice President and the Secretary or Assistant Secretary may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar, other than the Corporation itself or an employee of the Corporation. In case any Officer who signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such Officer before such certificate is issued, it may be issued by the Corporation with the same effect as if it were executed by the appropriate Officer at the date of its issuance. (b) Every certificate representing shares issued by this Corporation shall, if shares are divided into one or more classes or series with differing rights, state that the Corporation will furnish to any shareholder upon request and without charge a full statement of: (i) the designations, preferences, limitations, and relative rights of the shares of each class or series authorized to be issued, and (ii) the variations in the relative rights and preferences between the shares of each such series, if the Corporation is authorized to issue any preferred or special class in series and so far as the same have been fixed and determined, and the authority of the Board of Directors to fix and determine, the relative rights and preferences of subsequent series. (c) Every certificate representing shares which are restricted as to sale, disposition or other transfer (including restrictions based on federal or state securities and other laws) shall state that such shares are restricted as to transfer and shall set forth or fairly summarize upon the certificate, 17 or shall state that the Corporation will furnish to any shareholder upon request and without charge a full statement of, such restrictions. (d) Each certificate representing shares shall state upon the face thereof: (i) the name of the Corporation; (ii) that the Corporation is organized under the laws of the State of Nevada; (iii) the name of the person or persons to whom issued; (iv) the number and class of shares, and the designation of the series, if any, which such certificate represents; and (v) the par value of each share represented by such certificate, or a statement that the shares are without par value. (e) No certificate shall be issued for any shares until they are fully paid for. SECTION 2. TRANSFER BOOKS The Corporation shall keep at its registered office or principal place of business or in the office of its transfer agent or registrar, a book (or books where more than one kind, class, or series of stock is outstanding) to be known as the Stock Book, containing the names, alphabetically arranged, addresses and Social Security numbers of every shareholder and the number of shares each kind, class or series of stock held of record. Where the Stock Book is kept in the office of the transfer agent, the Corporation shall keep at its office in the State of Florida copies of the stock lists prepared from said Stock Book and sent to it from time to time by said transfer agent. The Stock Book or stock lists shall show the current status of the ownership of shares of the Corporation provided that, if the transfer agent of the Corporation be located elsewhere, a reasonable time shall be allowed for transit or mail. SECTION 3. TRANSFER OF SHARES (a) The name(s) and address(es) of the person(s) to whom shares of stock of this Corporation are issued, shall be entered on the Stock Transfer Books of the Corporation, with the number of shares and date of issue. (b) Transfer of shares of the Corporation shall be made on the Stock Transfer Books of the Corporation by the Secretary or the transfer agent, subject to compliance with any restrictions specified on such certificate, only when the holder of record thereof or the legal representative of such holder of record or the attorney-in-fact of such holder of record, authorized by power of attorney duly executed and filed with the Secretary or transfer agent of the Corporation, shall surrender the Certificate representing such shares for cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced pursuant to Section 5 of this Article V. (c) The person or persons in whose names shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner of such shares for all purposes, except as otherwise provided pursuant to Sections 10 and 11 of Article I, or Section 4 of Article V. 18 (d) Shares of the Corporation capital stock shall be freely transferable without the required Board of Directors' consent, unless such consent requirement has been imposed pursuant to a binding written contract subscribed to by the holder or his or her predecessor in interest. SECTION 4. VOTING TRUSTS (a) Any number of shareholders of the Corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their shares, for a period not to exceed ten years, by: (i) entering into a written voting trust agreement specifying the terms and conditions of the voting trust; (ii) depositing a counterpart of the agreement with the Corporation at its registered office; and (iii) transferring their shares to such trustee or trustees for the purposes of this Agreement. Prior to the recording of the agreement, the shareholder concerned shall render the stock certificate(s) described therein to the Corporate Secretary who shall note on each certificate: "This Certificate is subject to the provisions of a voting trust agreement dated _________________, recorded in Minute Book _________________, of the Corporation. ------------------------- Secretary (b) Upon the transfer of such shares, voting trust certificates shall be issued by the trustee or trustees to the shareholders who transfer their shares in trust. Such trustee or trustees shall keep a record of the holders of voting trust certificates evidencing a beneficial interest in the voting trust, giving the names and addresses of all such holders and the number and class or the shares in respect of which the voting trust certificates held by each are issued, and shall deposit a copy of such record with the Corporation at its registered office. (c) The counterpart of the voting trust agreement and the copy of such record so deposited with the Corporation shall be subject to the same right of examination by a shareholder of the Corporation, in person or by agent or attorney, as are the books and records of the Corporation, and such counterpart and such copy of such record shall be subject to examination by any holder of record of voting trust certificates either in person or by agent or attorney, at any reasonable time for any proper purpose. (d) At any time before the expiration of a voting trust agreement as originally fixed or as extended one or more times under this Section 4(d), one or more holders of voting trust certificates may, by agreement in writing, extend the duration of such voting trust agreement, nominating the same or substitute trustees, for an additional period not exceeding 10 years. Such extension agreement shall not affect the rights or obligations or persons not parties to the agreement, and such persons shall be entitled to remove their shares from the trust and promptly to have their stock certificates reissued upon the expiration of the original term of the voting trust agreement. The 19 extension agreement shall in every respect comply with and be subject to all the provisions of this Section 4, applicable to the original voting trust agreement except that the 10 year maximum period of duration shall commence on the date of adoption of the extension agreement. (e) The trustees under the terms of the agreements entered into under the provisions of this Section 4, shall not acquire the legal title to the shares but shall be vested only with the legal right and title to the voting power which is incident to the ownership of the shares. (f) Notwithstanding generally applicable prohibitions against a corporation's voting of treasury stock, if the Corporation is the trustee under a voting trust, it shall have full authority to vote such shares in accordance with the terms of the voting trust agreement, even if such agreement vests absolute and unfettered voting discretion in the trustee and notwithstanding that the voting trust was created at the prompting or direction of the Corporation, its officers or directors. SECTION 5. LOST, DESTROYED, OR STOLEN CERTIFICATES No Certificate representing shares of stock in the Corporation shall be issued in place of any Certificate alleged to have been lost, destroyed, or stolen except on production of evidence, satisfactory to the Board of Directors, of such loss, destruction or theft, and, if the Board of Directors so requires, upon the furnishing of an indemnity bond in such amount (but not to exceed twice the fair market value of the shares represented by the Certificate) and with such terms and with such surety as the Board of Directors may, in its discretion, require. ARTICLE VI BOOKS AND RECORDS (a) The Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders, Board of Directors and committees of Directors. (b) Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. (c) Any person who shall have been a holder of record of shares, or the holder of record of voting trust certificates for, at least five percent of the outstanding shares of any class or series of the Corporation, upon written demand stating the purpose thereof, shall; subject to the qualifications contained in subsection (d) hereof, have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any purpose, its relevant books and records of account, minutes and records of shareholders and to make extracts therefrom. (d) No shareholder who within two years has sold or offered for sale any list of shareholders or of holders of voting trust certificates for shares of this Corporation or any other 20 corporation; has aided or abetted any person in procuring any list of shareholders or of holders of voting trust certificates for any such purpose; or has improperly used any information secured through any prior examination of the books and records of account, minutes, or record of shareholders or of holders of voting trust certificates for shares of the Corporation of any other corporation; shall be entitled to examine the documents and records of the Corporation as provided in Section (c) of this Article VI. No shareholder who does not act in good faith or for a proper purpose in making his demand shall be entitled to examine the documents and records of the Corporation as provided in Section (c) of this Article VI. (e) Unless modified by resolution of the Shareholders, this Corporation shall prepare not later than four months after the close of each fiscal year: (i) A balance sheet showing in reasonable detail the financial conditions of the Corporation as of the date of the close of its fiscal year. (ii) A Profit and Loss statement showing the results of its operation during its fiscal year. (f) Upon the written request of any shareholder or holder of voting trust certificates for shares of the Corporation, the Corporation shall mail to such shareholder or holder of voting trust certificates a copy of its most recent balance sheet and profit and loss statement. (g) Such balance sheets and profit and loss statements shall be filed and kept for at least five years in the registered office of the Corporation in the State of Florida and shall be subject to inspection during business hours by any shareholder or holder of voting trust certificates, in person or by agent. ARTICLE VII DIVIDENDS The Board of Directors of the Corporation may, from time to time, declare, and the Corporation may pay dividends on its own shares, except when the Corporation is insolvent or when the payment thereof would render the Corporation insolvent, subject to the following provisions: (a) Dividends in cash or property may be declared and paid, except as otherwise provided in this Article VII, only out of the unreserved and unrestricted earned surplus of the Corporation or out of capital surplus, however arising, but each dividend paid out of capital surplus shall be identified as a distribution of capital surplus, and the amount per share paid from such capital surplus shall be disclosed to the shareholders receiving the same concurrently with the distribution. (b) If the Corporation shall engage in the business of exploiting natural resources or other wasting assets and if the Articles of Incorporation so provide, dividends may be declared and paid 21 in cash out of depletion or similar reserves, but each such dividend shall be identified as distribution of such reserves and the amount per share paid from such reserves shall be disclosed to the shareholders receiving the same concurrently with the distribution thereof. (c) Dividends may be declared and paid in the Corporation's treasury shares. (d) Dividends may be declared and paid in the Corporation's authorized but unissued shares, out of any unreserved and unrestricted surplus of the Corporation, upon the following conditions: (i) If a dividend is payable in the Corporations' own shares having a par value, such shares shall be issued at not less than the par value thereof and there shall be transferred to stated capital at the time such dividend is paid an amount of surplus equal to the aggregate par value of the shares to be issued as a dividend. (ii) If a dividend is payable in the Corporations' own shares without par value, such shares shall be issued at a stated value fixed by the Board of Directors by resolution adopted at the time such dividend is declared, and there shall be transferred to stated capital at the time such dividend is paid an amount of surplus equal to the aggregate stated value so fixed and the amount per share so transferred to stated capital shall be disclosed to the shareholders receiving such dividend concurrently with the payment thereof. (e) No dividend payable in shares of any class shall be paid to the holders of shares of any other class unless the Articles of Incorporation so provide or such payment is authorized by the affirmative vote or the written consent of the holders of at least a majority of the outstanding shares of the class which the payment is to be made. (f) A split or division of the issued shares of any class into a greater number of shares of the same class without increasing the stated capital of the Corporation shall not be construed to be a stock dividend within the meaning of this Article VII. ARTICLE VIII SEAL The Board of Directors shall adopt a Corporate Seal which shall be circular in form and shall have inscribed thereon the name of the Corporation, the state of incorporation and the year of incorporation. 22 ARTICLE IX INDEMNIFICATION This Corporation may, in its discretion, indemnify any director, officer, employee, or agent in the following circumstances and in the following manner: (a) The Corporation may indemnify any person who was or is a part, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by, or in the right of, the Corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees at all trial and appellate levels), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding, including any appeal thereof, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonable believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) The Corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys' fees at all trial and appellate levels), actually and reasonable incurred by him in connection with the defense of settlement of such action or suit, including any appeal thereof, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the Corporation, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless, and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is rarely and reasonably entitled to indemnity for such expenses which such court shall deem proper. (c) To the extent that a Director, Officer, employee, or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Sections (a) or (b) of this Article IX, or in defense of any claim, issue, or matter therein, shall be 23 indemnified against expenses (including attorneys' fees at trial and appellate levels) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under Sections (a) or (b) of this Article IX, unless pursuant to a determination by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections (a) or (b) or this Article IX. Such determination shall initially be made by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit, or proceeding. If the Board of Directors shall, for any reason, decline to make such a determination, then such determination shall be made by the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such action, suit or proceeding; provided, however, that a determination made by the Board of Directors pursuant to this Section may be appealed to the shareholders by the party seeking indemnification or any party entitled to call a special meeting of the shareholders pursuant to Section 2 of Article I and, in such case, the determination made by the majority vote of a quorum consisting of shareholders who were not parties to such action, suit, or proceeding shall prevail over a contrary determination of the Board of Directors pursuant to this Section. (e) Expenses (including attorneys' fees at all trial and appellate levels) incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon a preliminary determination following one of the procedures set forth in this Article IX, that a Director, Officer, employee or agent met the applicable standard of conduct set forth in this Article IX, and upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this section. (f) The Corporation may make any other or further indemnification, except an indemnification against gross negligence or willful misconduct, under any agreement, vote of shareholders or disinterested Directors or otherwise, both as to action in the indemnified party's official capacity and as to action in another capacity while holding such office. (g) Indemnification as provided in this Article IX may continue as to a person who has ceased to be a director, officer, employee or agent and may inure to the benefit of the heirs, executors and administrators of such a person upon a proper determination initially made by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit, or proceeding. If the Board of Directors shall, for any reason, decline to make such a determination, then such determination may be made by the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such action, suit or proceeding; provided, however, that a determination made by the Board of Directors pursuant to this Section may be appealed to the shareholders by the party seeking indemnification or his representative or by any party entitled to call a special meeting of the shareholders pursuant to Section 2 or Article I and in such case, the determination made by the majority vote of quorum consisting of shareholders who were 24 not parties to such action, suit, or proceeding shall prevail over a contrary determination of the Board of Directors pursuant to this Section (g). (h) The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IX. (i) If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders or by an insurance carrier pursuant to insurance maintained by the Corporation, the Corporation shall, not later than the time of delivery to shareholders or written notice of the next annual meeting of shareholders unless such meeting is held within three months from the date of such payment, and, in any event, within 15 months from the date of such payment, deliver either personally or by mail to each shareholder of record at the time entitled to vote for the election of Directors a statement specifying the persons paid, the amount paid, and the nature and status at the time of such payment of the litigation of threatened litigation. (j) This Article IX shall be interpreted to permit indemnification to the fullest extent permitted by law. If any part of this Article shall be found to be invalid or ineffective in any action, suit of proceeding, the validity and effect of the remaining part thereof shall not be affected. The provisions of this Article IX shall be applicable to all actions, claims, suits, or proceedings made or commenced after the adoption hereof, whether arising from acts or omissions to act occurring before or after its adoption. ARTICLE X AMENDMENT OF BYLAWS The Board of Directors shall have the power to amend, alter, or repeal these Bylaws, and to adopt new Bylaws. ARTICLE XI FISCAL YEAR The Fiscal Year of this Corporation shall be determined by the Board of Directors. 25 ARTICLE XII MEDICAL REIMBURSEMENT SECTION 1. BENEFITS The Corporation may, subject to approval of the Board of Directors reimburse all employees for expenses incurred by themselves and their dependents, as defined in Section 152 of the Internal Revenue Code of 1954, as amended (the "IRC"), for medical care, as defined in IRC Section 213(e) or any successor section thereto, subject to the conditions and limitations hereinafter set forth. It is the intention of the Corporation that the benefits payable to employees hereunder will be excluded from their gross income pursuant IRC Section 105 or any successor section thereto. SECTION 2. EMPLOYEES DEFINED The term "employees" as used in this medical expense plan is hereby defined to include all individuals employed by the corporation except the following: (a) Employees who have not completed three months of service as is provided in IRC Section 105(h)(3) (b)(i), or any successor section thereto; (b) Employees who have not attained the age of 25 years; (c) Employees who are part-time or seasonal as is defined in IRC Section 105(h)(3)(B)(iii) or any successor section thereto; (d) Employees who are included in a unit of employees covered by an agreement between employee representatives and one or more employers found to be a collective bargaining agreement; where accident and health benefits were the subject of good faith bargaining between such employee representatives and such employer(s) as is defined in IRC Section 105(h)(3)(B)(iv) or any successor section thereto; (e) Employees who are nonresident aliens and who receive no earned income from the employer which constitutes income from sources within the United States as is further defined in IRC Section 105(h)(5)(B)(v) or any successor section thereto. SECTION 3. LIMITATIONS (a) The Corporation will reimburse any employee no more than $5,000.00 in any fiscal year for medical care expenses; (b) Reimbursement or payment provided under this plan will be made by the Corporation only in the event and to the extent that such reimbursement or payment is not provided under any 26 insurance policy(ies), whether owned by the Corporation or the employee, or under any other health and accident or wage continuation plan; (c) In the event that there is such an insurance policy or plan in effect providing for reimbursement in whole or in part, then to the extent of the coverage under such policy or plan, the Corporation will be relieved of any and all liability hereunder. SECTION 4. SUBMISSION OF PROOF Any employee applying for reimbursement under this plan will submit to the Corporation, at least quarterly, all bills for medical care, including premium notices for accident or health insurance, for verification by the Corporation prior to payment. Failure to comply herewith, may at the discretion of the Board of Directors, terminate such employee's right to said reimbursement. SECTION 5. DISCONTINUATION This plan will be subject to termination at any time by vote of the Board of Directors; provided, however, that medical care expenses incurred prior to such termination will be reimbursed or paid in accordance with the terms of this plan. SECTION 6. DETERMINATION The Chief Executive Officer will determine all questions arising from the administration and interpretation of the Plan except where reimbursement is claimed by the President. In such case determination will be made by the Board of Directors. * * * The Undersigned, being the duly elected and acting secretary of the Corporation, hereby certifies that the foregoing constitute the validly adopted and true Bylaws of the Corporation, as of the date set forth below. FIRST FLORIDA COMMUNICATIONS, INC. Dated: _________________ _____________________________ Secretary (Corporate Seal) 27 EX-4.1 4 EXHIBIT 4.1 [STOCK CERTIFICATE] NUMBER PAR VALUE $.0001 SHARES - - ------------- -------------- - - ------------- FIRST FLORIDA -------------- COMMUNICATIONS, INC. INCORPORATED UNDER THE LAW OF THE STATE OF FLORIDA COMMON STOCK CUSIP 32026P 20 6 SEE REVERSE FOR CERTAIN DEFINITIONS THIS CERTIFIES THAT Is the owner of Fully Paid and Non-Assessable Shares of Common Stock of First Florida Communications, Inc., transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Date [SEAL] ------------------ --------------- President Director ================================================================================ Countersigned: Florida Atlantic Stock Transfer, Inc. 7130 Nob Hill Road Tamarac, FL 33321 Transfer agent The following abbreviation, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to the applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ......Custodian......... (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors JT TEN - as joint tenants with right Act ......................... of survivorship and not as (State) tenants in common Additional abbreviations may also be used though not in the above list. For value received, ____________________________, hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _________________________________________ _________________________________________ ________________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ________________________________________________________________________________ Attorney to transfer the said stock on the books *** -----END PRIVACY-ENHANCED MESSAGE-----