KANAKARIS COMMUNICATIONS INC, PRE 14A, 2000-04-20

KANAKARIS COMMUNICATIONS INC
PRE 14A, 2000-04-20
COMPUTER PERIPHERAL EQUIPMENT, NEC

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement

[ ] Confidential, For Use Of The Commission Only
(As Permitted By Rule 14a-6(E)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

KANAKARIS COMMUNICATIONS, INC.
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(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------

(5) Total fee paid:
------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------

(3) Filing Party:
------------------------------------------------------------------------

(4) Date Filed:
------------------------------------------------------------------------

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<PAGE>

KANAKARIS COMMUNICATIONS, INC.
3303 HARBOR BLVD., F-3
COSTA MESA, CA 92626

May ___, 2000

To Our Stockholders:

You are cordially invited to attend the Special Meeting of Stockholders
of Kanakaris Communications, Inc. which will be held at ____ __.m. local time on
May 24, 2000, at _______________________________________________, California
92____ (the "Special Meeting"). All holders of record of our outstanding common
stock and preferred stock as of April 14, 2000 are entitled to vote at the
Special Meeting.

Enclosed is a copy of the Notice of Special Meeting of Stockholders,
proxy statement and proxy card. Stockholders will have an opportunity to ask
questions at the Special Meeting.

We hope you will be able to attend the Special Meeting. Whether or not
you expect to attend, it is important you complete, sign, date and return the
proxy card in the enclosed envelope in order to make certain that your shares
will be represented at the Special Meeting.

Sincerely,

/S/ ALEX KANAKARIS

Alex F. Kanakaris
Chief Executive Officer

<PAGE>

KANAKARIS COMMUNICATIONS, INC.
3303 HARBOR BLVD., F-3
COSTA MESA, CA 92626

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000

NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders of
Kanakaris Communications, Inc., a Nevada corporation, will be held at ____ __.m.
local time on May 24, 2000, at _______________________________________________,
California 92____ (the "Special Meeting"), for the following purposes:

1. To consider and vote upon a proposal to approve an amendment to our
Articles of Incorporation to change our name to "Kanakaris Wireless";

2. To consider and vote upon a proposal to approve an amendment to our
Articles of Incorporation to remove the provision that sets the authorized
number of directors;

3. To consider and vote upon a proposal to approve an amendment to our
Certificate of Designation of Class A Convertible Preferred Stock that would
increase the voting rights of the Class A Convertible Preferred Stock from three
non-cumulative votes per share, voting together with our common stock on all
matters on which the holders of our common stock are entitled to vote, to twenty
non-cumulative votes per share on such matters;

4. To consider and vote upon a proposal to approve Amended and Restated
Articles of Incorporation that amend, restate and replace our current Articles
of Incorporation and effect the principal changes in Proposals 1 through 3 above
and various additional changes recommended by the Board of Directors; and

5. To consider and vote upon a proposal to approve Amended and Restated
Bylaws that modernize and conform our Bylaws to current Nevada law and provide
that the acquisition of controlling interest provisions of the Nevada
Corporations Code shall not apply in connection with the change in voting rights
described in Proposal 3.

Our Board of Directors has fixed the close of business on April 14,
2000, as the record date for the determination of stockholders entitled to
notice of and to vote at the Special Meeting and all adjourned meetings thereof.

By Order of the Board of Directors

/S/ ALEX KANAKARIS

Alex F. Kanakaris, President

Dated: May ___, 2000

PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY
REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.

<PAGE>

KANAKARIS COMMUNICATIONS, INC.
3303 HARBOR BLVD., F-3
COSTA MESA, CA 92626

PROXY STATEMENT

SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000
---------------------

THIS PROXY MATERIAL IS FIRST BEING MAILED TO STOCKHOLDERS
ON OR ABOUT MAY ___, 2000
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VOTING AND PROXY

This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Kanakaris Communications,
Inc., a Nevada corporation, for use at the Special Meeting of Stockholders to be
held at ____ __.m. local time on May 24, 2000, at
_____________________________________________, California 92____ (the "Special
Meeting"), and at any adjournments thereof. When such proxy is properly executed
and returned, the shares it represents will be voted in accordance with any
directions noted thereon. If no specification is indicated, the shares will be
voted "for" the approval of the proposals listed thereon. Any stockholder giving
a proxy has the power to revoke it at any time before it is voted by written
notice to the our Secretary or by issuance of a subsequent proxy.

At the close of business on April 14, 2000, the record date for
determining stockholders entitled to notice of and to vote at the Special
Meeting, we had issued and outstanding 31,090,775 shares of common stock, $.001
par value per share ("Common Stock"), and 1,000,000 shares of Class A
Convertible Preferred Stock, $.01 par value per share ("Preferred Stock"). Each
share of Common Stock entitles the holder of record thereof to one vote on any
matter coming before the Special Meeting, and each share of Preferred Stock
entitles the holder of record thereof to three non-cumulative votes on any
matter coming before the Special Meeting, with the Common Stock and Preferred
Stock voting together as a single class. With respect to the approval of certain
changes in the Preferred Stock, including the proposed increase in the voting
rights of the Preferred Stock, the vote of the holders of a majority of the
Preferred Stock, voting as a separate class, is also required. Only stockholders
of record at the close of business on April 14, 2000 are entitled to notice of
and to vote at the Special Meeting or at any adjournments thereof.

Under Nevada law and our Bylaws, a majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum at a meeting
of stockholders. Generally, if a quorum is present, the affirmative vote of a
majority of the shares represented and entitled to vote on any matter will
constitute the act of the stockholders, provided the number of shares voting in
favor of any proposal equals at least a majority of the quorum. Although
abstentions and "broker non-votes" are not counted either "for" or "against" any
proposals, if the number of abstentions or "broker non-votes" results in the
votes "for" a proposal not equaling at least a majority of the quorum required
for the meeting, the proposal will not be approved. This will be the case even
though the number of votes "for" the proposal exceeds the votes "against" the
proposal.

<PAGE>

We will pay the expenses of soliciting proxies for the Special Meeting,
including the cost of preparing, assembling and mailing the proxy solicitation
materials. Proxies may be solicited personally, or by mail or by telephone, by
our directors, officers and regular employees who will not be additionally
compensated therefor. It is anticipated that this proxy statement and
accompanying proxy cards will be mailed on or about the mailing date set forth
above to all stockholders entitled to vote at the Special Meeting.

The following table sets forth information as of April 14, 2000 with
respect to the beneficial ownership of our capital stock by each person known to
us to own beneficially more than five percent, in the aggregate, of the
outstanding shares of our Common Stock, each of our directors and executive
officers, and all of our executive officers and directors as group. The
following calculations of the percentages of outstanding shares are based on
31,090,775 shares of Common Stock outstanding as of April 14, 2000 (which
excludes an aggregate of 9,894,128 shares of Common Stock issuable into escrow
as security for performance of certain of our obligations pursuant to two
private placements of debentures and warrants).

Beneficial ownership shown below is determined in accordance with the
rules of the Securities and Exchange Commission, which generally require
inclusion of shares over which a person has voting or investment power. Share
ownership in each case includes shares issuable upon exercise of outstanding
options and warrants or conversion of outstanding shares of Class A Convertible
Preferred Stock or debentures and interest payable thereon that are convertible
within sixty days of April 14, 2000, as described in the footnotes below.
Percentage of ownership is calculated pursuant to Securities and Exchange
Commission Rule 13d-3(d)(i).

AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
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NAME AND ADDRESS OF BENEFICIAL OWNER(1) TITLE OF CLASS NUMBER PERCENT
- --------------------------------------- -------------- ------ -------
<S> <C> <C> <C>
Alex F. Kanakaris.................................. Common 5,015,147(2) 14.67%
Class A Convertible
Preferred 1,000,000 100.00%

Bank Insinger de Beaufort
Herengtecht 551
1017 BW Amsterdam
Netherlands........................................ Common 4,728,998(3) 13.26%

David Valenti
519 Idaho Avenue
Santa Monica, CA 90403............................. Common 2,497,280(4) 7.96%

Branch Lotspeich................................... Common 2,474,976(5) 7.66%

AJW Partners, LLC
155 First Street, Suite B
Mineloa, NY 11501.................................. Common 1,941,430(6) 5.92%

New Millenium Capital Partners, II LLC
155 First Street, Suite B
Mineola, NY 11501.................................. Common 1,941,430(6) 5.92%

John Robert McKay.................................. Common 1,000,000(7) 3.18%

David T. Shomaker.................................. Common 90,000(8) *

Dr. Steven A. Newman............................... Common -- --

Patrick McKenna.................................... Common -- --

All directors and executive officers
as a group (6 persons)(9).......................... Common 8,580,123 24.01%
Class A Convertible
Preferred 1,000,000 100.00%
</TABLE>

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<PAGE>

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* Less than 1%.
(1) Unless otherwise indicated, the address of each person in this table is
c/o Kanakaris Communications, Inc., 3303 Harbor Boulevard, Suite F-3,
Costa Mesa, California 92626. Messrs. Kanakaris, Lotspeich and McKay
are directors and executive officers of our company. Mr. Shomaker is
Acting Chief Financial Officer of our company.
(2) Consists of 1,915,147 shares of common stock issued and outstanding,
1,000,000 shares of common stock issuable upon conversion of Class A
Convertible Preferred Stock and 2,100,000 shares of common stock
issuable upon exercise of options.
(3) Represents 159,922 shares of common stock issued and outstanding,
3,969,076 shares of common stock issuable upon conversion of debentures
and as payment of interest thereon and 600,000 shares of common stock
issuable upon exercise of warrants. Because the number of shares of
common stock issuable upon conversion of the debentures and as payment
of interest thereon is dependent in part upon the market price of the
common stock prior to a conversion and is subject to certain conversion
limitations, the actual number of shares of common stock that will then
be issued in respect of such conversions or interest payments cannot be
determined at this time. The conversion limitations have been
disregarded for purposes of the table.
(4) Consists of 2,197,280 shares of common stock issued and outstanding and
300,000 shares of common stock issuable upon exercise of options.
(5) Consists of 1,274,976 shares of common stock issued and outstanding and
1,200,000 shares of common stock issuable upon exercise of options.
(6) Represents 261,404 shares of common stock issued and outstanding,
1,417,526 shares of common stock issuable upon conversion of debentures
and as payment of interest thereon and 262,500 shares of common stock
issuable upon exercise of warrants. Because the number of shares of
common stock issuable upon conversion of the debentures and as payment
of interest thereon is dependent in part upon the market price of the
common stock prior to a conversion and is subject to certain conversion
limitations, the actual number of shares of common stock that will then
be issued in respect of such conversions or interest payments cannot be
determined at this time. The conversion limitations have been
disregarded for purposes of the table.
(7) Consists of 655,000 shares of common stock issued and outstanding and
345,000 shares of common stock issuable upon exercise of options.
(8) Includes 60,000 shares held by Haynie & Company, a certified public
accounting corporation that provides our company with certain
accounting services and of which Mr. Shomaker is a minority
shareholder. Mr. Shomaker disclaims beneficial ownership of the 60,000
shares held by Haynie & Company.
(9) Consists of 3,935,123 shares of common stock issued and outstanding,
1,000,000 shares of common stock issuable upon conversion of Class A
Convertible Preferred Stock and 3,645,000 shares of common stock
issuable upon exercise of options.

The matters to be considered and acted upon at the Special Meeting are
referred to in the preceding notice and are more fully discussed below.

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<PAGE>

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PROPOSALS 1 THROUGH 4

APPROVAL OF AMENDMENTS TO ARTICLES AND
AMENDMENT AND RESTATEMENT OF ARTICLES

Our Board of Directors has approved the amendment and restatement of
our Articles of Incorporation in the form attached hereto as EXHIBIT A (the
"Restated Articles") and recommended that our stockholders consider and adopt
the Restated Articles at the Special Meeting. Our current Articles of
Incorporation (the "Current Articles"), initially were adopted in November 1991.
Since that time, the Current Articles as well as applicable corporate law
provisions have been amended numerous times.

Proposals 1 through 4 are primarily intended to change our name, to
eliminate the provision relating to the number of authorized directors, to
increase the voting power of the Preferred Stock in order to discourage or
render unsolicited takeover attempts more difficult, and to modernize the
Current Articles generally by taking advantage of the most recent provisions of
the Nevada Corporations Code and by deleting provisions of the Current Articles
that are unnecessary, ineffective or otherwise inappropriate as a result of
revisions to applicable law. If Proposals 1 through 4 are approved, the Restated
Articles will become effective upon filing of the Restated Articles with the
Secretary of State of the State of Nevada.

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PROPOSAL 1

APPROVAL OF ARTICLES AMENDMENT TO CHANGE OUR NAME

Our Board of Directors has approved and is recommending to our
stockholders for their approval an amendment to the Current Articles changing
our name to "Kanakaris Wireless." This new name has been selected primarily
because our management believes there are current or potential business
opportunities pertaining to the expansion of wireless Internet connectivity in
many areas, including in the areas of personal digital assistants, mobile
computers, cellular phones, cars and consumer household appliances, that we may
pursue in our quest to become a leader in the delivery of direct over the
Internet content, including streaming movies and electronic books. In addition,
wireless Internet connectivity also refers to the manner in which the World Wide
Web is delivered to hardware devices, such as through satellite delivery.
Wireless Internet connectivity is of a high bandwidth nature, which enhances the
quality of delivery of our electronic content. Consequently, the Board of
Directors feels it is appropriate to change our name to "Kanakaris Wireless."

The Board of Directors recommends a vote FOR Proposal 1.

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<PAGE>

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PROPOSAL 2

APPROVAL OF ARTICLES AMENDMENT TO REMOVE PROVISION
SETTING AUTHORIZED NUMBER OF DIRECTORS

The Board of Directors has approved and is recommending to our
stockholders for their approval an amendment to the Current Articles which
removes the provision that sets a range for our authorized number of directors.
Under Nevada law, a corporation must have at least one director, and may but
need not provide in its articles of incorporation or in its bylaws for a fixed
number of directors or a variable number of directors within a fixed minimum and
maximum, and for the manner in which the number of directors may be increased or
decreased.

Currently, there are five members on our Board of Directors. Article
FIFTH of the Current Articles provides for an authorized range of not less than
two nor more than five directors. The Board of Directors recommends removing
this provision in order to enhance our flexibility to appoint additional
directors from time to time who have skills and experience that will assist us
in carrying out our business plan and achieving its goals. Removing the
authorized range from the Current Articles will help avoid the need for us to
incur the expense and invest the time needed for future proxy solicitations to
increase the number of authorized directors as suitable candidates may arise
from time to time. In addition, this amendment could assist us in attracting
additional qualified directors who might not otherwise be able to begin serving
as directors without waiting for stockholder approval of an increase in the size
of the Board of Directors.

The Board of Directors recommends a vote FOR Proposal 2.

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PROPOSAL 3

APPROVAL OF CERTIFICATE OF DESIGNATION AMENDMENT TO
INCREASE THE VOTING RIGHTS OF THE PREFERRED STOCK

The Board of Directors, with Alex Kanakaris abstaining, has approved
and is recommending to our stockholders for their approval an amendment to the
Certificate of Designation of Class A Convertible Preferred Stock (the
"Certificate of Designation") to increase the voting rights of the Class A
Convertible Preferred Stock, which stock is referred to in this proxy statement
as "Preferred Stock."

The Certificate of Designation authorizes the issuance of 1,000,000
shares of Preferred Stock, all of which shares are issued and outstanding and
are owned by Alex Kanakaris, our Chairman of the Board, President and Chief
Executive Officer. Currently, Section 8 of the Certificate of Designation
provides that each share of Preferred Stock has three non-cumulative votes,
voting together with the Common Stock as a single class on all matters presented
to the stockholders for action. In addition, Section 8 of the Certificate of
Designation provides that the Preferred Stock has the right to vote separately
on certain other matters, which include, among others, the amendment of any of
the preferences or rights of the Preferred Stock.

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<PAGE>

The Board of Directors recommends increasing the voting rights of the
Preferred Stock from three non-cumulative votes per share to twenty
non-cumulative votes per share. The primary reason for this recommendation is to
help ensure that the business and the creative leadership and vision of Alex
Kanakaris, our Chairman of the Board, President and Chief Executive Officer, can
continue in the future.

Approval of the proposed increase in voting rights could be deemed to
have a potential anti-takeover effect. If adopted, the proposed amendment would
increase the voting power in the hands of Mr. Kanakaris, one of our directors
and officers. Mr. Kanakaris is a part of and may be viewed as friendly to
incumbent management and may, therefore, under certain circumstances be expected
to make investment and voting decisions in response to a hostile takeover
attempt that may serve to discourage or render more difficult the accomplishment
of such attempt. The Board of Directors is, however, unaware of any present
threat of any hostile takeovers involving our company.

Because Mr. Kanakaris is the only holder of Preferred Stock, Mr.
Kanakaris could benefit from the adoption of the proposed increase in voting
rights by substantially increasing his voting control as one of our
stockholders. Accordingly, as a member of the Board of Directors, Mr. Kanakaris
may be viewed as having a conflict of interest in approving, and recommending
that the stockholders approve, the proposed increase in voting rights. In
addition, our other members of the Board of Directors may have a conflict of
interest in recommending approval of this proposal to our stockholders because
Mr. Kanakaris is a part of and may be viewed as friendly to the other incumbent
members of the Board of Directors.

The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock and Preferred Stock, voting together as a single class,
and the affirmative vote of the holders of a majority of the outstanding
Preferred Stock, voting as a separate class, are needed for the approval of this
proposal. Abstentions and broker non-votes will have the same effect as a vote
against the proposal.

The Board of Directors recommends a vote FOR Proposal 3.

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PROPOSAL 4

APPROVAL OF AMENDED AND RESTATED ARTICLES TO
EFFECT PROPOSALS 1 THROUGH 3 AND TO
MODERNIZE AND CONFORM TO CURRENT NEVADA LAW

The Board of Directors adopted all of the foregoing amendments as part
of a complete restatement of the Current Articles. From time to time, we are
required to deliver copies of our Current Articles to governmental and private
entities in connection with our business activities. The Current Articles are
comprised of five separate documents. By deleting unnecessary provisions, the
proposed Restated Articles will update the Current Articles to be consistent
with current Nevada law as well as eliminate the number of separate documents
that are now required.

As noted above, the Nevada Corporations Code has been revised in
certain respects since our initial articles were filed in 1991. As a result of
these revisions, many of the provisions of the Current Articles are unnecessary
or otherwise inappropriate under current law. For example, the Current Articles
have a broad purpose statement which states that we may engage in any lawful
activity or practice, despite the provision in the Nevada Corporations Code that
subject to any limitations contained in a corporation's articles of
incorporation, every corporation generally has broad powers to, among other
things, carry on any lawful business necessary or incidental to the attainment
of the objects of the corporation, whether or not the business is similar in
nature to the objects set forth in its articles. Accordingly, the purpose clause
is no longer necessary. The proposed Restated Articles incorporate a number of
these types of changes, including among others the following:

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<PAGE>

Article FIRST: Name of Our Company. Our name is proposed to be changed
to Kanakaris Wireless in connection with the approval by the stockholders of
Proposal 1.

Article SECOND: Name and Address of Registered Agent. This provision is
not required by the Nevada Corporations Code to be included in the Restated
Articles and has been deleted.

Article THIRD: Corporate Purpose. As discussed above, this provision is
not required by the Nevada Corporations Code and has been deleted.

Article FOURTH: Authorized Capital Stock (New Article SECOND). This
provision has been revised to incorporate the terms of the Certificate of
Designation that are relevant and/or required to be included in a Certificate of
Designation or the Restated Articles. Such terms also have been revised to
reflect the increase in voting rights of the Preferred Stock that is proposed
under Proposal 3.

Article FIFTH: Number and Style of Members of Governing Board. This
provision has been deleted, as the style of the members is no longer required
under the Nevada Corporations Code and the authorized range of number of
directors is proposed to be deleted pursuant to Proposal 4.

Article SIXTH: Non-Assessment of Capital Stock (New Article THIRD).
This provision, which provides that no stock issued as fully paid up shall ever
be assessable or assessed, and the articles of incorporation shall not be
amended in this particular, has been retained.

Article EIGHTH: Name and Address of Incorporators. This provision is
not required by the Nevada Corporations Code to be included in the Restated
Articles and has been deleted.

Article NINTH: Duration of Existence. This provision is not required by
the Nevada Corporations Code and has been deleted.

Article TENTH: Stockholder Liability. This provision is duplicative of
provisions in the Nevada Corporations Code and thus has been deleted.

Article ELEVENTH: Powers of the Board of Directors. This provision is
duplicative of provisions in the Nevada Corporations Code and thus has been
deleted.

In addition to the foregoing provisions, the Restated Articles include
the provisions listed below, which are intended to update the Current Articles
to be consistent with the current Nevada Corporations Code.

INDEMNIFICATION OF DIRECTORS AND OFFICERS (New Article FOURTH). Section
78.751 of the Nevada Corporations Code provides that we may include in our
articles of incorporation, bylaws or agreements, provisions expanding rights to
indemnification beyond that otherwise provided by the Nevada Corporations Code.
The Nevada Corporations Code provides a detailed statutory framework covering
indemnification of directors, officers or agents of a corporation who have been
or are threatened to be made parties to any legal proceeding by reason of their
service to a corporation ("indemnified parties"). Under Nevada law,
indemnification must be made to indemnified parties who have been successful "on
the merits or otherwise" with respect to the defense of any such proceeding, but
Nevada law does not require indemnification in any other circumstances. We may
not, however, indemnify persons who acted in a manner that they did not believe
in good faith to be in or not opposed to our best interests or, with respect to
any criminal proceeding, that they had reasonable cause to believe was unlawful.
The Nevada Corporations Code permits a corporation to advance expenses incurred
in defending such a proceeding if the indemnified party undertakes to repay such
sums in the event it is later determined that he or she should not have been
indemnified.

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<PAGE>

The Board of Directors believes it is appropriate to provide mandatory
indemnification to its officers and directors in response to the increasing
hazard of unfounded litigation directed against directors and officers and its
related expense and our potential liability, and in order to continue to attract
and retain qualified directors and officers in light of these circumstances.
Because the directors may have a beneficial financial interest in recommending
that the stockholders adopt new Article FOURTH, they may be deemed to have a
conflict of interest in recommending this proposal to the stockholders. At
present, there is no pending litigation or proceeding involving any of our
directors or officers for which indemnification would be required or permitted.
Management is not aware of any threatened litigation or proceeding that could
result in a claim for indemnification by any director or officer.

LIMITATION OF LIABILITY OF DIRECTORS (New Article FIFTH). The Nevada
Corporations Code permits a Nevada corporation to include in its articles of
incorporation a provision that limits or eliminates, with certain exceptions, a
director's personal liability for monetary damages resulting from a breach of
his or her fiduciary duty of care to a corporation. Article FIFTH of the
proposed Restated Articles eliminates, to the maximum extent permitted by the
Nevada Corporations Code, a director's liability to us and our stockholders for
monetary damages for breach of his or her fiduciary duty of care or other duty
as a director by reason of any act or omission occurring after Article FIFTH
becomes effective. Article FIFTH does not, however, eliminate or limit a
director's liability for (i) any act or omission involving intentional
misconduct, fraud or a knowing violation of law, or (ii) the payment of unlawful
distributions to stockholders. Furthermore, it does not limit liability for
claims against a director arising out of his or her role as an officer or in any
other capacity, nor does it affect the director's responsibilities under the
federal securities laws or any other law. Because our directors may have a
beneficial financial interest in this proposal, they may be deemed to have a
conflict of interest in recommending it to the stockholders.

The Board of Directors believes that the diligence exercised by
directors arises primarily from their desire to act in our company's best
interests and not from fear of monetary damage awards. The Board of Directors
also believes, however, that effective corporate governance is hindered by the
threat of personal liability for business judgments made in good faith by
directors and the threat of lawsuits seeking to establish liability for good
faith business judgments. Consequently, the Board of Directors believes that the
elimination of liability provided by Article FIFTH will not affect the level of
scrutiny and care exercised by our directors, but will instead serve our best
interests by enhancing our ability to attract and retain qualified non-employee
directors. The measures limiting the liability of directors are not being
proposed in response to any specific resignation, threat of resignation or
refusal to serve by any present or potential member of the Board of Directors.
We intend to continue to provide liability insurance for our directors and
officers, to the extent such insurance is available to us on satisfactory terms,
regardless of whether the stockholders approve this proposal. Article FIFTH will
effectively eliminate a potential cause of action against one of our directors
for damages for an alleged violation of the director's fiduciary duty to us.
Management is not aware of any presently pending or threatened lawsuits to which
Article FIFTH would apply if it were currently in effect.

The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock and Preferred Stock, voting together as a single class,
is needed for the approval of this proposal. In addition, the affirmative vote
of the holders of a majority of the outstanding shares of Preferred Stock,
voting as a separate class, is needed for the approval of this proposal.
Abstentions and broker non-votes will have the same effect as a vote against the
proposal.

If Proposal 4 is not approved, the Current Articles as heretofore
amended, will be retained and modified to the extent required to implement any
of the foregoing proposals submitted to stockholders that are adopted.

The Board of Directors recommends a vote FOR Proposal 4.

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<PAGE>

--------------------

PROPOSAL 5

APPROVAL OF AMENDED AND RESTATED BYLAWS TO
MODERNIZE AND CONFORM TO CURRENT NEVADA LAW AND
PROVIDE FOR NON-APPLICABILITY OF NEVADA
"ACQUISITION OF CONTROLLING INTEREST" STATUTES

The Board of Directors adopted the proposed Amended and Restated Bylaws
attached hereto as EXHIBIT C (the "Restated Bylaws") as part of an amendment and
complete restatement of our current Bylaws (the "Current Bylaws"). By deleting
ineffective and unnecessary provisions and adding some additional provisions
that the Board of Directors deems desirable and in our company's best interests,
the proposed Restated Bylaws will update the Current Bylaws to be consistent
with current Nevada law.

As noted above, the Nevada Corporations Code has been revised in
certain respects since the Current Bylaws were adopted. As a result of these
revisions, certain of the provisions of the Current Bylaws are unnecessary,
ineffective or otherwise inappropriate under current law. For example, the
Current Bylaws set the number of directors at five members and allow the Board
of Directors to revise that number within a range of one to fifteen. However,
the Current Bylaws would allow the Board of Directors to change the range
through an amendment to the Current Bylaws. Accordingly, a provision in the
Bylaws setting a range of one to fifteen is not necessary. The proposed Restated
Bylaws incorporate a number of these types of changes, as well as certain
substantive changes, including the following:

Article Two, Section 2.2. Annual Meetings (New Article II, Section 2).
The date of the annual meeting of the stockholders has been changed from being
fixed to being subject to determination by the Board of Directors.

Article Two, Section 2.6. Quorum (New Article II, Section 5). A
provision has been added such that if a quorum is lacking and a meeting is
adjourned for more than forty-five (45) days or, if after adjournment, a new
record date is fixed for the adjourned meeting, notice must be given to each
stockholder of record entitled to vote at the meeting. This provision will
provide stockholders with greater protection as it will require notice of
meetings that are to be reconvened, which may potentially boost stockholder
awareness and attendance at such meeting.

Article Two, Section 2.7. Voting (New Article II, Section 6). This
provision has been changed to add a sentence allowing for the continuance of
business at a duly called or held meeting at which a quorum is present despite
the withdrawal of enough stockholders to leave less than a quorum. This change
allows the majority stockholders to exercise their will despite the threat that
a few stockholders may depart from the meeting, thereby leaving less than a
quorum.

New Article II, Section 8. Conduct of Meetings. This new section vests
with the Board of Directors, subject to Nevada law and our articles of
incorporation, power to promulgate rules and procedures for the orderly conduct
of stockholders' meetings. In the event no rules or procedures are promulgated,
the Board of Directors will designate a chairman to govern the meeting; and in
the absence of any such designation, our President will preside over the
meeting.

Article Two, Section 2.9. Proxy (New Article II, Section 9). Provisions
have been added to conform to Nevada law. The Nevada Corporations Code
establishes certain limitations on the validity of proxies, which limitations
are described in Article II, Section 9 of the Restated Bylaws. In addition,
provisions were added to provide that proxies are not valid upon the happening
of certain events. These provisions are protective of stockholders because they
prevent the exercise of the voting rights of such stockholders when the
stockholder probably does not desire such exercise.

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New Article II, Section 11. Inspectors of Election. A new section has
been added to provide the Board of Directors or the Chairman of the Board with
the power to appoint inspectors of election to exercise various administrative
powers in connection with voting of the shares represented at the meeting. This
will aid in the conduct of the meeting in an orderly fashion.

New Article II, Section 12. Action at Meetings of Stockholders. This
new section describes in detail the type of notice required for the transaction
of business at a stockholders' meeting and the amount of advance notice
required.

Article Three, Section 3.2. Number of Directors (New Article III,
Section 1). This section has been changed to provide our Board of Directors with
greater flexibility when determining the number of members of its Board of
Directors. The number of directors has been fixed at five, subject to resolution
by the Board of Directors increasing or decreasing the number of directors. The
new provisions will allow for both added flexibility and an increase in the
number of directors without the necessity of a costly and time consuming
undertaking to secure stockholder approval.

New Article III, Section 10. Telephonic Meetings. This section has been
added to expressly authorize telephonic meetings of the Board of Directors as is
currently permitted by Nevada law. This section expressly allows the Board of
Directors to meet as necessary without the cumbersome requirement of physical
presence at a meeting.

New Article IV, Section 5. Resignation. This section has been added to
clarify, subject to any contractual arrangement, the ability of officers to
resign at any time.

Article Four, Section 4.1. Place (New Article II, Section 1). The
undesignated place of meetings has been changed from our registered office in
Nevada to our offices in California. This eliminates the possibility that a
meeting might be required to be held in Nevada even though our primary
operations are in California.

Article Four, Section 4.4. Special Meetings (New Article IV, Section
4). This section has been changed slightly to clarify the steps required and
permitted so that notice of a special meeting can properly be rendered. Certain
forms of notice, such as facsimile transmission, have been added.

Article Four, Section 4.5. Notice (New Article III, Section 12). This
section has been changed to require notice, in the case of adjournment of any
meeting for more than twenty-four (24) hours, to be provided to directors not
present at the time of adjournment, and in the case of adjournment for less than
twenty-four (24) hours, notice shall be given to absent directors unless the
date, time and place is fixed at the meeting adjourned. This provides more clear
guidance as to when notice is required and provides protection of directors'
rights to notice of meetings.

Article Four, Section 4.7. Quorum (New Article III, Section 8). This
section has been changed to include a provision to the effect that a meeting at
which quorum is initially present shall not continue to transact business in the
absence of a quorum. This provision clarifies what is the logical result of
determinations being made by a majority of the directors. Once a majority is
lost, that is, there is no longer a quorum, the remaining directors no longer
have the requisite power to transact business.

Article Five, Section 5.3. Written Consent (New Article IV, Section 9).
This section has been deleted as its substance has already been provided for in
new Article IV, Section 9.

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Article Six, Section 6.1. Compensation (New Article III, Section 15).
This section has been changed for purposes of clarity and simplicity. The
language has been changed to simply allow for director compensation as
determined in the discretion of the Board of Directors.

New Article VII. General Provisions. This article provides for the
exercise of power over our subsidiaries and provides an interpretive provision
stating that the Bylaws should be read in light of Chapter 78 of the Nevada
Revised Statutes.

New Article VIII. Amendments. This article provides the manner in which
the Bylaws may be amended by the stockholders and by the Board of Directors.

Article Nine, Section 9.5. Voting Shareholder (New Article V, Sections
5 and 7). This section has been changed to clarify that only stockholder
meetings require notice not more than 60 nor less than ten days prior to a
meeting. The provisions relating to the record date for dividends are now
covered by new Article V, Section 7.

New Article IX. "Acquisition of Controlling Interest" Provisions of the
Nevada General Corporation Law Shall Not Apply. Sections 78.378 to 78.3793,
inclusive, of the Nevada Corporations Code generally restrict the acquiror of a
controlling interest in a Nevada corporation from exercising the voting rights
that accompany the control shares unless stockholder approval is obtained or
unless the corporation's articles of incorporation or bylaws provide that these
sections do not apply. New Article IX provides that these sections of the Nevada
Corporations Code do not apply to the acquisition of a controlling interest by
Alex Kanakaris pursuant to the increase in voting rights of the Preferred Stock
from three non-cumulative votes per share to twenty non-cumulative votes per
share as described in Proposal 3. If Proposal 3 is approved, the adoption of
this provision will enable Mr. Kanakaris to exercise the increased voting rights
of the Preferred Stock without regard to the acquisition of controlling interest
sections of the Nevada Corporations Code.

Article Ten. General Provisions (New Article III, Section 3). These
sections have been deleted since the matters covered in such sections are
already provided for in the general grant of power to the Board of Directors in
new Article III, Section 3.

Article Eleven. Indemnification (New Article VI). This Article has been
replaced by new Article VI which provides in more detail the manner in which we
must indemnify certain of our directors, officers and other agents.

The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock and Preferred Stock, voting together as a single class,
will be deemed approval of this proposal. Abstentions and broker non-votes will
have the same effect as a vote against the proposal.

The Board of Directors recommends a vote FOR Proposal 5.

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STOCKHOLDER PROPOSALS

Pursuant to Rule 14a-8 of the Securities and Exchange Commission,
proposals by stockholders which are intended for inclusion in our proxy
statement and proxy and to be presented at our next annual meeting must be
received by us by _______________, 200__ in order to be considered for inclusion
in our proxy materials. Such proposals shall be addressed to our Secretary and
may be included in next year's proxy materials if they comply with certain rules
and regulations of the Securities and Exchange Commission governing stockholder
proposals. For all other proposals by stockholders to be timely, a stockholder's
notice must be delivered to, or mailed and received at, our principal executive
offices not later than _______________, 200__. If a stockholder fails to so
notify us of any such proposal prior to such date, our management will be
allowed to use its discretionary voting authority with respect to proxies held
by management when the proposal is raised at the annual meeting (without any
discussion of the matter in our proxy statement).

--------------------

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

We are an Internet-based provider of online delivery of films and
books. Our Internet web site, www.KKRS.Net, is the portal to all of the
proprietary content and web sites of our company. Our films are accessible by
Internet users at access rates from 56K to broadband. We have over 250 on-demand
movies available with full-screen scalability and television quality. We have
over 300 books online available. The books feature re-sizable type, the ability
to turn pages without scrolling and the ability to search by word or phrase. In
addition, currently we offer other content at www.KKRS.Net, including co-branded
auctions, classified ads and personal ads.

In addition to our Internet and e-commerce businesses, we design,
manufacture and install ergonomic data control console systems for high-end
computer command centers used by governmental agencies and Fortune 500 and other
companies. Our customers include NASA, the Federal Bureau of Investigation, the
United States Navy, Bank of America, Mitsubishi and many others.

Our company is a Nevada corporation that was incorporated on November
1, 1991 and is the sole shareholder of Kanakaris InternetWorks, Inc. Kanakaris
InternetWorks, Inc. is the sole shareholder of Desience Corporation. Our common
stock is currently traded on the OTC Bulletin Board under the ticker symbol
"KKRS."

To date, substantially all of our revenues have been derived through
sales of our data control console systems. Our current business strategy
includes expansion of our data control console business and a significant
emphasis upon developing and expanding our Internet and e-commerce businesses.
In that regard, we anticipate deriving revenue from, among other sources:

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o rental and sales of online, downloaded and print books and other
written materials;
o movie subscription and pay-per-view fees;
o classified and personal ad advertising fees;
o fees based on the value of items auctioned through our Internet
Lifestyle Network; and
o sales of downloadable music.

We expect to continue to place significant emphasis upon the further
development and expansion of our Internet and e-commerce businesses. We expect
to increase our sales and marketing expenses in the near term. We intend to
increase our marketing efforts substantially in order to develop awareness and
brand loyalty for our Internet-based products and services and to generate
revenues from those who visit our Internet sites. These marketing efforts will
require a considerable effort on our part.

We also intend to continue to invest in the development of new products
and services, complete the development of our products and services currently
under development and expand our network.

We have incurred significant losses since our inception. As of December
31, 1999, we had an accumulated deficit of $10,080,424. We expect to incur
substantial operating losses for the foreseeable future. Our results of
operations have been and may continue to be subject to significant fluctuations.
The results for a particular period may vary due to a number of factors, many of
which are beyond our control, including:

o the timing and nature of revenues from our Internet and e-commerce
businesses and data control console product sales that are
recognized during any particular quarter;
o the impact of price competition on our average prices for our
products and services;
o market acceptance of new product or service introductions by us or
our competitors;
o the timing of expenditures in anticipation of future sales;
o product returns;
o the financial health of our customers;
o the overall state of the Internet and e-commerce industries and the
data control console industries; and
o economic conditions generally.

Any of these factors could cause operating results to vary
significantly from prior periods and period-to-period. As a result, we believe
that period-to-period comparisons of our results of operations are not
necessarily meaningful and should not be relied upon as any indication of future
performance. Fluctuations in our operating results could cause the price of our
common stock to fluctuate substantially.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998

Net sales decreased $133,667 or 58.8%, from $227,255 for the three
months ended December 31, 1998 to $93,588 for the three months ended December
31, 1999. This decrease in total sales was primarily due to a decrease in sales
of our OPCON Module System which the Company believes to be a result of normal
fluctuations in the timing of orders for the Company's products. The portion of
net sales derived from our e-commerce businesses decreased $24,828 or 98.9%,
from $25,106 for the three months ended September 30, 1998 to $278 for the three
months ended December 31, 1999 due to a shift in our focus from establishing web
sites to providing downloadable content. The portion of net sales derived from
the sales of our data control console systems decreased $108,839 or 53.8%, from
$202,149 for the three months ended December 31, 1998 to $93,310 for the three
months ended December 31, 1999.

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Gross profit decreased $76,509 or 74.8%, from $102,267 for the year
ended December 31, 1998 to $25,758 for the three months ended December 31, 1999.
The decrease in gross profit and corresponding decrease in gross margin from
45.0% to 27.5% was primarily due to the purchase of intangible movie rights for
use on our web sites.

Total operating expenses increased $1,561,516 from $182,847 for the
three months ended December 31, 1998 to $1,744,363 for the three months ended
September 30, 1999. This increase in total operating expenses was primarily due
to a significant increase in our consulting fees from $11,000 for the three
months ended December 31, 1998 to $1,065,480 for the three months ended December
31, 1999 and an increase in marketing and investment costs and professional fees
from $25,201 for the three months ended December 31, 1998 to $427,888 for the
three months ended December 31, 1999.

FISCAL YEARS ENDED SEPTEMBER 30, 1999 AND 1998

Net sales increased $48,853 or 5.3%, from $919,905 for the year ended
September 30, 1998 to $968,758 for the year ended September 30, 1999. This
slight increase in total sales was primarily due to an increase in sales of our
OPCON Module System. The portion of net sales derived from our e-commerce
businesses decreased $58,621 or 65.3%, from $89,783 for the year ended September
30, 1998 to $31,162 for the year ended September 30, 1999 primarily due to a
shift in our focus from establishing web sites to providing downloadable
content. The portion of net sales derived from the sales of our data control
console systems increased $107,474 or 13.0%, from $830,122 for the year ended
September 30, 1998 to $937,596 for the year ended September 30, 1999.

Gross profit decreased $131,505 or 30.0%, from $438,556 for the year
ended September 30, 1998 to $307,051 for the year ended September 30, 1999. The
decrease in gross profit and corresponding decrease in gross margin from 47.7%
to 31.7% was primarily due to the purchase of intangible movie and book rights
for use on our web sites. During the fourth quarter of the year ended September
30, 1999, we generated net sales of $196,591. Because our cost of sales was
$204,455 during that period, we incurred a negative gross profit of $7,864. This
negative gross profit was primarily due to a significant increase in web hosting
and design costs relating to our NetBooks.com and NetMovieMania.com web sites
without a commensurate increase in our net sales.

Total operating expenses decreased $830,180, or 18.4%, from $4,503,430
for the year ended September 30, 1998 to $3,673,250 for the year ended September
30, 1999. This decrease in total operating expenses was primarily due to a
significant decrease in our consulting fees from $3,241,466 for the year ended
September 30, 1998 to $1,339,287 for the year ended September 30, 1999. This
decrease in consulting fees was primarily due to the use of stock for payment of
these costs at a lower stock value.

Other expense was $175,661 for the year ended September 30, 1999, as
compared with other income of $8,475 for the year ended September 30, 1998. The
resultant other expense was primarily due to an increase in interest and
financing expense from $0 for the year ended September 30, 1998 to $208,641 for
the year ended September 30, 1999.

Total net loss decreased $514,539 or 12.7%, from $4,056,399 for the
year ended September 30, 1998 to $3,541,860 for the year ended September 30,
1999. For the year ended September 30, 1998, our e-commerce businesses
experienced a net loss of $4,004,486 as compared with a net loss of $3,692,570
for the year ended September 30, 1999. For the year ended September 30, 1998,
our data control console business experienced a net loss of $51,913 as compared
with a net profit of $150,710 for the year ended September 30, 1999. During the
fourth quarter of the year ended September 30, 1999, we incurred a net loss of
$1,376,387 primarily due to an increase in marketing costs related to promoting
our company and its products and services, an increase in interest expense
related to our newly issued debentures, an increase in professional fees related
to the preparation of this prospectus and an increase in consulting fees.

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<PAGE>

YEAR ENDED SEPTEMBER 30, 1998 AND PERIOD FROM FEBRUARY 25, 1997 (INCEPTION) TO
SEPTEMBER 30, 1997

Net sales were $919,905 and $8,475 for the year ended September 30,
1998 and the period from inception to September 30, 1997, respectively. This
significant increase in net sales was due to the acquisition of Desience
Corporation during fiscal 1998 and the inclusion of Desience Corporation's net
sales in fiscal 1998.

Gross profit increased $430,081 from $8,475 for the period from
inception to September 30, 1997 to $438,556 for the year ended September 30,
1998. This increase was due to the acquisition of Desience Corporation during
fiscal 1998 and the inclusion of Desience Corporation's net sales for fiscal
1998.

Total operating expenses increased $3,723,939 from $779,491 to
$4,503,430 partially due to the acquisition of Desience Corporation during
fiscal 1998 and the inclusion of Desience Corporation's operating expenses for
fiscal 1998. During fiscal 1998, our consulting fees were $3,241,466 as compared
with $453,841 for the period from inception to September 30, 1997. This increase
in consulting fees was due to recording the stock issued for consulting services
as an expense using the fair value of the stock as of the date of issue, which
value was significantly higher in 1998 than in 1997.

LIQUIDITY AND CAPITAL RESOURCES

From February 25, 1997 through December 31, 1999, we funded our
operations primarily from equity investments through private placements of our
securities, including our convertible debentures, proceeds from our line of
credit and revenue generated from our operations.

As of December 31, 1999, we had a negative working capital of
$1,696,627 and an accumulated deficit of $10,080,424. As of that date, we had
$141,572 in cash and cash equivalents and $46,428 in accounts receivable. We
also had obligations under our debentures in the amount of $957,500.

Cash used in our operating activities totaled $506,079 for the three
months ended December 31, 1999 as compared to $40,908 for the three months ended
December 31, 1998. Cash provided by our investing activities totaled $52,088 for
the three months ended December 31, 1999 as compared to no cash provided by our
investing activities for the three months ended December 31, 1998.

Cash provided by our financing activities was $440,500 for the three
months ended December 31, 1999. $337,500 of that amount was raised through the
issuance of our debentures. Cash provided by our financing activities was
$57,125 for the three months ended December 31, 1998.

On February 25, 1999, we obtained a $5,000,000 revolving line of credit
from Alliance Equities. On April 7, 1999, this line of credit was increased to
$7,000,000. The February 25, 1999 agreement memorializing our arrangement with
Alliance Equities provides that a definitive agreement is to be negotiated
within seven days of that date. Prior to December 10, 1999, the parties had not
finalized a definitive agreement and had operated under the February 25, 1999
agreement as amended by the April 7, 1999 amendment. On December 10, 1999, the
parties executed a definitive agreement relating to the revolving line of
credit. The agreement provides that our company may draw up to $500,000 per
month on the line of credit, up to a maximum aggregate borrowing of $7,000,000.
Interest accrues at the rate of 10% per annum, with unpaid principal and accrued
interest due at maturity on December 10, 2001, unless the line of credit is
terminated earlier by mutual agreement of the parties upon 30 days' prior
written notice, is prepaid by us or is converted into shares of our common stock
by us, by the lender or automatically upon the happening of certain events.

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At any time or times prior to maturity, our company may convert any
portion of the unpaid principal balance into shares of our common stock, or the
lender may convert up to 50% of the unpaid principal balance, at a conversion
price equal to the average market price for our common stock for the 30 days
prior to the conversion. The unpaid principal balance of the line of credit is
automatically convertible into shares of our common stock if we fail to pay the
unpaid principal and interest due at maturity, at a conversion price equal to
the average market price for our common stock for the 30 days prior to the
conversion. Alternatively, the unpaid principal balance of the line of credit is
automatically convertible into shares of our common stock if we close a
financing in which the aggregate gross proceeds received by us equal or exceed
$7,000,000, in which case a total of 50% of the entire original line of credit
amount (which is the aggregate of amounts previously converted at that time plus
non-converted amounts equaling a maximum of 50% of the entire original line of
credit amount) will be converted at a conversion price equal to the average
market price of our common stock as exists thirty days prior to such automatic
conversion.

In January 2000, our convertible debentures that were outstanding as of
December 31, 1999 were converted into an aggregate of 1,783,334 shares of our
common stock. In addition, during February 2000 we issued $1,000,000 of our 10%
Convertible Subordinated Debentures due February 1, 2001. The net proceeds of
that offering, after the payment of finder's fees and before the payment of
other related expenses, was $870,000.

We believe that current and future available capital resources,
revenues generated from operations, and other existing sources of liquidity,
including our revolving line of credit with Alliance Equities, will be adequate
to meet our anticipated working capital and capital expenditure requirements for
at least the next 12 months. If, however, our capital requirements or cash flow
vary materially from our current projections or if unforseen circumstances
occur, we may require additional financing sooner than we anticipate. Failure to
raise necessary capital could restrict our growth, limit our development of new
products and services or hinder our ability to compete.

--------------------

CHANGE IN INDEPENDENT ACCOUNTANTS

In May 1998, our company engaged Weinberg & Company, P.A. as the
independent certified public accountants for our company and its subsidiaries.
Prior thereto, Tanner + Co. served as the independent certified public
accountant for our company's subsidiaries. The change in accountants from Tanner
& Co. to Weinberg & Company, P.A. was effective for the audit of the financial
statements for the year ended September 30, 1997, was unanimously approved by
our Board of Directors and was not due to any disagreements between our company
or its subsidiaries and Tanner + Co. on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures. We do
not anticipate that our accountants will be present at the Special Meeting.

--------------------

WHERE YOU CAN FIND MORE INFORMATION

We are subject to reporting requirements of Section 13 of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder and have filed various reports and statements with the Securities and
Exchange Commission, Washington, D.C. 20549. Such reports and statements may be
inspected without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and at Citicorp Center, 50 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of these documents may be obtained from the
Commission at its principal office in Washington, D.C. upon the payment of the
charges prescribed by the Commission.

The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission. The Commission's address on the World Wide
Web is http://www.sec.gov.

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EXHIBIT A

RESTATED ARTICLES OF INCORPORATION
OF
KANAKARIS COMMUNICATIONS, INC.

To the Secretary of State
State of Nevada

Pursuant to the provisions of Nevada Revised Statutes, Title 7, Chapter
78, the undersigned officers of the Corporation hereinafter named, which is a
corporation for profit organized under the laws of the State of Nevada, do
hereby certify that the following is the entire text of the Articles of
Incorporation of the Corporation as heretofore amended and as hereby restated:

[INDICATE APPROVAL OF BOARD AND APPROVAL OF COMMON STOCK AND CLASS A PREFERRED?]

FIRST: The name of the Corporation is Kanakaris Wireless.

SECOND:

SECTION 1. AUTHORIZED SHARES. The total number of shares which the
Corporation shall have authority to issue is one hundred five million
(105,000,000) shares of capital stock, of which one hundred million
(100,000,000) shares shall be designated common stock, par value of $.001 per
share ("Common Stock"), one million (1,000,000) shares shall be designated Class
A Convertible Preferred Stock, par value of $.01 per share ("Class A
Preferred"), and four million (4,000,000) shares shall be designated Preferred
Stock, par value of $.01 per share.

SECTION 2. CLASS A CONVERTIBLE PREFERRED STOCK. Shares of Class A
Preferred shall have the following voting and other powers, preferences and
relative, participating, optional or other rights and the following
qualifications, limitations and restrictions:

2.1 RANK. All shares of Class A Preferred shall rank prior to
all shares of the Corporation's Common Stock, now or hereafter issued, both as
to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.

2.2 DIVIDENDS. The holders of Class A Preferred are entitled
to receive, in any fiscal year, if, when and as declared by the Corporation's
Board of Directors, out of any assets at the time legally available therefor,
dividends in cash, before any dividend is paid on Common Stock. Dividends may be
declared and paid on Common Stock in any fiscal year only if dividends shall
have been paid to or declared and set apart on all Class A Preferred. The right
to dividends on Class A Preferred shall not be cumulative, and no right shall
accrue to holders of Class A Preferred by reason of the fact that dividends on
that stock are not declared in any prior year, nor shall any undeclared or
unpaid dividend bear or accrue interest.

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2.3 LIQUIDATION RIGHTS. In the event of any liquidation,
dissolution or winding up of the Corporation, holders of Class A Preferred are
entitled to receive $.10 in cash per share plus accumulated and unpaid dividends
out of assets available for distribution to stockholders, prior to any
distribution to holders of Common Stock or any other stock ranking junior to the
Class A Preferred. If, upon any liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Class A Preferred (and with
respect to any other Preferred Stock ranking on a parity with the Class A
Preferred in any such distribution) are not paid in full, the holders of the
Class A Preferred (and of such other Preferred Stock) will share ratably in any
such distribution of assets in proportion to the full preferential amounts to
which such shares are entitled. After payment of the full amount of the
liquidating distribution to which they are entitled, the holders of shares of
Class A Preferred will not be entitled to any further participation in any
distribution of assets by the Corporation.

A consolidation or merger of the Corporation with or into any
other corporation or a sale of all or any part of the assets of the Corporation
(which shall not in fact result in the liquidation of the Corporation and the
distribution of assets to stockholders) shall not be deemed to be a liquidation,
dissolution or winding up of the Corporation.

2.4 REDEMPTION. The Class A Preferred may be redeemed by the
Corporation at any time upon thirty (30) days' written notice at a redemption
price of $.50 per share. Holders of Class A Preferred shall have the right to
convert their shares of Class A Preferred into Common Stock during this thirty
(30)-day period. The redemption price shall be payable together with accumulated
and unpaid dividends to the date fixed for redemption. If full cumulative
dividends on the Class A Preferred through the most recent dividend payment date
have not been paid, the Class A Preferred may not be redeemed in part unless
approved by the holders of a majority of shares of Class A Preferred then
outstanding, and the Corporation may not purchase or acquire any share of Class
A Preferred other than pursuant to a purchase or exchange offer made on the same
terms to all holders of Class A Preferred. If less than all of the outstanding
shares of Class A Preferred are to be redeemed, the Corporation will select
those to be redeemed by lot or a by a substantially equivalent method.

The shares of Class A Preferred are not subject to any sinking
fund or any other similar provision.

The redemption by the Corporation of all or any part of the
Class A Preferred is subject to the availability of cash. Moreover, shares of
capital stock shall not be redeemed when the capital of the Corporation is
impaired or when the redemption would cause any impairment of capital.

2.5 CONVERSION RIGHTS. Holders of the Class A Preferred will
have the right, at their option, to convert such shares into shares of Common
Stock at any time at the conversion rate then in effect; provided that, if any
of the Class A Preferred is redeemed, the conversion rights pertaining thereto
will terminate on the third business day preceding the redemption date.

Each share of Class A Preferred will be initially convertible
into one (1) share of Common Stock. No fractional share or scrip representing a
fractional share will be issued upon conversion of the Class A Preferred. Cash
will be paid in lieu of fractional shares.

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<PAGE>

The conversion rate will be appropriately adjusted if the
Company (a) pays a dividend or makes a distribution on its shares of Common
Stock (but not the Class A Preferred) which is paid or made in shares of Common
Stock, (b) subdivides or reclassifies its outstanding shares of Common Stock,
(c) combines its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, (d) issues shares of Common Stock, or issues rights or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock),
at a price per share less than the conversion price in effect immediately prior
to the issuance thereof, or (e) distributes to all holders of its Common Stock
evidences of its indebtedness or assets (excluding any dividend paid in cash out
of legally available funds) subject to the limitation that adjustments by reason
of any of the foregoing need not be made until they result in a cumulative
change in the conversion rate of at least five percent (5%). The conversion rate
will not be adjusted upon the conversion of shares of Class A Preferred or
presently outstanding stock options or warrants. For the purpose of making the
above adjustments, the market price of a share of Common Stock shall be the
average of the closing bid and asked prices for the Common Stock on the
Over-The-Counter market.

In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
surviving corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, or in case of any statutory exchange of securities with another
corporation, there will be no adjustment of the conversion price, but each
holder of shares of Class A Preferred then outstanding will have the right
thereafter to convert such shares into the kind and amount of securities, cash
or other property which he would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale or
conveyance had such shares been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance. In
the case of a cash merger of the Company into another corporation or any other
cash transaction of the type mentioned above, the effect of these provisions
would be that the conversion features of the Class A Preferred would thereafter
be limited to converting the Class A Preferred at the conversion price in effect
at such time into the same amount of cash per share that such holder would have
received had such holder converted the Class A Preferred into Common Stock
immediately prior to the effective date of such cash merger or transaction.
Depending upon the terms of such cash merger or transaction, the aggregate
amount of cash so received in conversion could be more or less than the
liquidation preference of the Class A Preferred.

Class A Preferred may be converted upon surrender of the stock
certificate at least three (3) days prior to the redemption date at the offices
of the Corporation with the form of "Election to Convert" on the reverse side of
the stock certificate completed and executed as indicated. Shares of Common
Stock issued upon conversion will be fully paid and non-assessable.

2.6 VOTING RIGHTS. Each share of Class A Preferred shall have
twenty non-cumulative votes. Shares of Common Stock and Class A Preferred vote
as a single class on all matters presented to the stockholders for action.
Without the affirmative vote of the holders of a majority of the Class A
Preferred then outstanding, voting as a separate class, the Corporation may not
(i) amend, alter or repeal any of the preferences or rights of the Class A
Preferred, (ii) authorize any reclassification of the Class A Preferred, (iii)
increase the authorized number of shares of Class A Preferred or (iv) create any
class or series of shares ranking prior to the Class A Preferred as to dividends
or upon liquidation.

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<PAGE>

2.7 STATUS OF ACQUIRED SHARES. Shares of Class A Preferred
redeemed by the Company or received upon conversion or otherwise acquired by the
Company will be restored to the status of authorized but unissued shares of
Preferred Stock, without designation as to class, and may thereafter be issued,
but not as shares of Class A Preferred.

2.8 PREEMPTIVE RIGHTS. The Class A Preferred is not entitled
to any preemptive or subscription rights in respect of any securities of the
Company.

SECTION 3. PREFERRED STOCK. Shares of Preferred Stock may be issued
from time to time in one or more classes or series as the Board of Directors, by
resolution or resolutions, may from time to time determine, each of said classes
or series to be distinctively designated. The voting powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, if any, of each such class
or series may differ from those of any and all other classes or series of
Preferred Stock at any time outstanding, and the Board of Directors is hereby
expressly granted authority, subject to any limitations contained in any class
or series of Preferred Stock at any time outstanding, to fix or alter, by
resolution or resolutions, the designation, number, voting powers, preferences
and relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions thereof, of each such class or
series, including, but without limiting the generality of the foregoing, the
following:

(i) The distinctive designation of, and the number of shares
of Preferred Stock that shall constitute, such class or series, which number
(except as otherwise provided by the Board of Directors in the resolution
establishing such class or series) may be increased or decreased (but not below
the number of shares of such class or series then outstanding) from time to time
by like action of the Board of Directors;

(ii) The rights in respect of dividends, if any, of such class
or series of Preferred Stock, the extent of the preference or relation, if any,
of such dividends to the dividends payable on any other class or classes or any
other series of the same or other class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or noncumulative;

(iii) The right, if any, of the holders of such class or
series of Preferred Stock to convert the same into, or exchange the same for,
shares of any other class or classes or of any other series of the same or any
other class or classes of capital stock of the Corporation and the terms and
conditions of such conversion or exchange;

(iv) Whether or not shares of such class or series of
Preferred Stock shall be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and conditions on which,
shares of such class or series of Preferred Stock may be redeemed;

-20-
<PAGE>

(v) The rights, if any, of the holders of such class or series
of Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation or in the event of any merger or consolidation of
or sale of assets by the Corporation;

(vi) The terms of any sinking fund or redemption or purchase
account, if any, to be provided for shares of such class or series of Preferred
Stock;

(vii) The voting powers, if any, of the holders of any class
or series of Preferred Stock generally or with respect to any particular matter,
which may be less than, equal to or greater than one vote per share, and which
may, without limiting the generality of the foregoing, include the right, voting
as a class or series by itself or together with the holders of any other class
or classes or series of the same or other class or classes of Preferred Stock or
all classes or series of Preferred Stock, to elect one or more directors of the
Corporation (which, without limiting the generality of the foregoing, may
include a specified number or portion of the then-existing number of authorized
directorships of the Corporation, or a specified number or portion of
directorships in addition to the then-existing number of authorized
directorships of the Corporation) generally or under such specific circumstances
and on such conditions, as shall be provided in the resolution or resolutions of
the Board of Directors adopted pursuant hereto; and

(viii) Such other powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, as the Board of Directors shall determine.

THIRD: The capital stock of the Corporation, after the amount of the
subscription price has been paid in money, property or services, as the
directors shall determine, shall not be subject to assessment to pay the debts
of the Corporation, nor for any other purpose, and no stock issued as fully paid
up shall ever be assessable or assessed, and the articles of incorporation shall
not be amended in this particular.

FOURTH: The Corporation shall, to the fullest extent permitted by
Nevada Revised Statutes section 78.751, as the same may be amended, supplemented
or replaced from time to time, indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Pursuant to said section 78.751, the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
Corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
Corporation.

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<PAGE>

FIFTH: A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the Nevada Revised Statutes as the
same exist or may hereafter be amended. Any amendment, modification or repeal of
the foregoing sentence by the stockholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation in
respect of any act or omission occurring prior to the time of such amendment,
modification or repeal.

IN WITNESS WHEREOF, the undersigned officers have hereunto subscribed
our names this _____ day of May, 2000.

-------------------------------
Alex F. Kanakaris, President

-------------------------------
Branch L. Lotspeich, Secretary

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<PAGE>

ACKNOWLEDGMENT

STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )

On May ___, 2000, before me, _____________________, a Notary Public,
personally appeared _____________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

-------------------------------
Notary's Signature

STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )

On May , 2000, before me, ___________________________, a Notary Public,
personally appeared _____________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

-------------------------------
Notary's Signature

-23-

<PAGE>

EXHIBIT B

AMENDED AND RESTATED BYLAWS
OF
KANAKARIS COMMUNICATIONS, INC.

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE. The registered office of the corporation
in the State of Nevada shall be designated by the Board of Directors in
accordance with applicable law.

SECTION 2. OTHER OFFICES. The corporation may also have offices in such
other places, both within and without the State of Nevada, as the Board of
Directors may from time to time determine or the business of the corporation may
require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 1. PLACE OF ANNUAL MEETINGS. Annual meetings of the
stockholders shall be held at the office of the corporation in the City of Costa
Mesa, State of California or at such other place, within or without the State of
California, as shall be designated by the Board of Directors.

SECTION 2. DATE OF ANNUAL MEETINGS; ELECTION OF DIRECTORS. Annual
meetings of the stockholders shall be held at such time and date as the Board of
Directors shall determine. At each such annual meeting, the stockholders of the
corporation shall elect a Board of Directors by plurality vote and transact such
other business as may properly be brought before the meeting in accordance with
Section 12 of this Article II.

SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute, by the Articles
of Incorporation or by these Bylaws, may be called by the President and shall be
called by the President and Secretary at the request in writing of a majority of
the Board of Directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting and shall contain the information required in
notices of meetings as described in Section 4 of this Article II.

SECTION 4. NOTICES OF MEETINGS. Notices of meetings of the stockholders
shall be in writing and signed by the President, a Vice President, the
Secretary, an Assistant Secretary, or by such other person or persons as the
directors shall designate. Such notice shall state the purpose or purposes for
which the meeting is called and the time when, and the place where, it is to be
held. A copy of such notice shall be either delivered personally or shall be
mailed, postage prepaid, to each stockholder of record entitled to vote at such
meeting not less than ten (10) nor more than sixty (60) days before such
meeting. If mailed, it shall be directed to the stockholder at his address as it
appears upon the records of the corporation, and upon such mailing of any such

<PAGE>

notice, the service thereof shall be complete, and the time of the notice shall
begin to run from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership shall
constitute delivery of such notice to such corporation, association or
partnership. Notice delivered or mailed to a stockholder in accordance with the
provisions of these Bylaws and the provisions, if any, of the Articles of
Incorporation is sufficient, and in the event of the transfer of such
stockholder's stock after such delivery or mailing and before the holding of the
meeting, it is not necessary to deliver or mail notice of the meeting to the
transferee.

SECTION 5. QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by the statutes of Nevada
or by the Articles of Incorporation. Regardless of whether or not a quorum is
present or represented at any annual or special meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present in
person or represented by proxy, provided that when any stockholders' meeting is
adjourned for more than forty-five (45) days, or if after adjournment a new
record date is fixed for the adjourned meeting, notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the meeting. At
such adjourned meeting at which a quorum shall be present or represented by
proxy, any business may be transacted which might have been transacted at the
meeting as originally noticed.

SECTION 6. VOTE REQUIRED. When a quorum is present or represented at
any meeting, the holders of a majority of the stock present in person or
represented by proxy and voting shall decide any question brought before such
meeting, unless the question is one upon which, by express provision of the
statutes of Nevada, the Articles of Incorporation or these Bylaws, a different
vote is required, in which case such express provision shall govern and control
the decision of such question. The stockholders present at a duly called or held
meeting at which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.

SECTION 7. SHARE VOTING. Unless the Articles of Incorporation or the
statutes of Nevada provide otherwise, each stockholder of record of the
corporation shall be entitled at each meeting of stockholders to one vote for
each share of stock standing in his name on the books of the corporation. Upon
the demand of any stockholder, the vote for directors and the vote upon any
question before the meeting shall be by ballot.

SECTION 8. CONDUCT OF MEETINGS. Subject to the requirements of the
statutes of Nevada, and the express provisions of the Articles of Incorporation
and these Bylaws, all annual and special meetings of stockholders shall be
conducted in accordance with such rules and procedures as the Board of Directors
may determine and, as to matters not governed by such rules and procedures, as
the chairman of such meeting shall determine. The chairman of any annual or
special meeting of stockholders shall be designated by the Board of Directors
and, in the absence of any such designation, shall be the President of the
corporation.
<PAGE>

SECTION 9. PROXIES. At any meeting of the stockholders, any stockholder
may be represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No such
proxy shall be valid after the expiration of six (6) months from the date of its
execution, unless coupled with an interest, or unless the person executing it
specifies therein the length of time for which it is to continue in force, which
in no case shall exceed seven (7) years from the date of its execution. Subject
to the above, any proxy duly executed is not revoked and continues in full force
and effect until (i) an instrument revoking it or duly executed proxy bearing a
later date is filed with the Secretary of the corporation or, (ii) the person
executing the proxy attends such meeting and votes the shares subject to the
proxy, or (iii) written notice of the death or incapacity of the maker of such
proxy is received by the corporation before the vote pursuant thereto is
counted. No proxy or power of attorney shall be used to vote at a meeting of the
stockholders unless it shall have been filed with the secretary of the meeting
when required by the inspectors of election.

SECTION 10. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by
the corporation's Articles of Incorporation or by applicable law, any action
required or permitted to be taken at any annual or special meeting of the
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation's Secretary. Prompt notice of the
taking of the corporation action without a meeting by less than unanimous
written consent shall, to the extent required by law, be given to those
stockholders who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the
record date for such meeting had been the date that written consents signed by a
sufficient number of holders to take the action were delivered to the
corporation.

The Board of Directors may fix a record date for the determination of
stockholders entitled to consent to corporate action in writing without a
meeting, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which date
shall not be more than ten (10) days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If no record date
is set, the record date shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Secretary of the corporation.

SECTION 11. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint inspectors of election to act
at such meeting and any adjournment thereof. If inspectors of election are not
so appointed, or if any persons so appointed fail to appear or refuse to act,
then, unless other persons are appointed by the Board of Directors prior to the
meeting, the chairman of any such meeting shall appoint inspectors of election
(or persons to replace those who fail to appear or refuse to act) at the
meeting. The number of inspectors shall not exceed three.

<PAGE>

The duties of such inspectors shall include: (a) determining the number
of shares outstanding and the voting power of each, the shares represented at
the meeting, the existence of a quorum, and the authenticity, validity and
effect of proxies; (b) receiving votes, ballots or consents; (c) hearing and
determining all challenges and questions in any way arising in connection with
the right to vote; (d) counting and tabulating all votes or consents and
determining the result; and (e) taking such other action as may be proper to
conduct the election or vote with fairness to all stockholders. In the
determination of the validity and effect of proxies, the dates contained on the
forms of proxy shall presumptively determine the order of execution of the
proxies, regardless of the postmark dates on the envelopes in which they are
mailed. The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical.
If there are three inspectors of election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima facie
evidence of the facts stated therein.

SECTION 12. ACTION AT MEETINGS OF STOCKHOLDERS. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (b) otherwise properly brought
before the annual meeting by or at the direction of the Board of Directors or
(c) otherwise properly brought before the annual meeting by any stockholder of
the corporation (i) who is a stockholder of record on the date of the giving of
the notice provided for in this Section 12 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this Section 12.

In addition to any other applicable requirements, for business properly
to be brought before an annual meeting by a stockholder, such stockholder must
have given timely notice thereof in proper written form to the Chairman of the
Board, if any, the President, or the Secretary of the corporation.

To be timely, a stockholder's notice which includes a proposal for the
company's annual meeting must be received at the principal executive offices of
the corporation not less than one hundred twenty (120) days before the date of
the company's proxy statement released to shareholders in connection with the
previous year's annual meeting; provided, however, that in the event the company
did not hold an annual meeting the previous year or if the date of this year's
annual meeting has been changed by more than thirty (30) days from the date of
the previous year's meeting, then the deadline is a reasonable time before the
company begins to print and mail its proxy materials. For a stockholder's notice
which includes a proposal for a meeting of stockholders other than a regularly
scheduled annual meeting, the deadline is a reasonable time before the company
begins to print and mail its proxy materials. Notwithstanding any of the
provisions contained herein, any notice which includes a proposal which seeks
action by the corporation's stockholders at any meeting shall comply with the
guidelines established by Regulation 14A of the Securities Exchange Act of 1934,
as amended, to the extent such regulation is then applicable to the corporation.

To be in proper written form, a stockholder's notice must set forth as
to each matter such stockholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)

<PAGE>

the name and record address of such stockholder, (iii) the class or series and
number of shares of capital stock of the corporation which are owned
beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.

No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 12; provided, however, that, once business
has been brought properly before the annual meeting in accordance with such
procedures, nothing in this Section 12 shall be deemed to preclude discussion by
any stockholder of any such business. If the chairman of an annual meeting
determines that business was not brought properly before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not brought properly before the meeting and such
business shall not be transacted.

Whenever all parties entitled to vote at any meeting consent either by
a writing on the records of the meeting or filed with the Secretary, or by
presence at such meeting and oral consent entered on the minutes, or by taking
part in the deliberations at such meeting without objection, the doings of such
meetings shall be as valid as if had at a meeting regularly called and noticed,
and at such meeting any business may be transacted which is not excepted from
the written consent or to the consideration of which no objection for want of
notice is made at the time, and if any meeting be irregular for want of notice
or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect therein waived by a writing signed by all
parties having the right to vote at such meeting; and such consent or approval
of stockholders may be by proxy or attorney, but all such proxies and powers of
attorney must be in writing.

Whenever any notice whatever is required to be given under the
provisions of Nevada law, of the Articles of Incorporation or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.

ARTICLE III

DIRECTORS

SECTION 1. NUMBER OF DIRECTORS. The exact number of directors that
shall constitute the authorized number of members of the Board shall be five
(5), all of whom shall be at least 18 years of age. The authorized number of
directors may from time to time be increased or decreased by resolution of the
directors of the corporation amending this section of the Bylaws in compliance
with Article VIII, Section 2 of these Bylaws. No reduction of the authorized
number of directors shall have the effect of removing any director prior to the
expiration of his term of office. Except as provided in Section 2 of this
Article III, each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.

<PAGE>

SECTION 2. VACANCIES. Vacancies, including those caused by (i) the
death, removal, or resignation of directors, (ii) the failure of stockholders to
elect directors at any annual meeting and (iii) an increase in the number of
directors, may be filled by a majority of the remaining directors though less
than a quorum. The Board shall have power to fill such vacancy or vacancies to
take effect when such resignation or resignations shall become effective, each
director so appointed to hold office during the remainder of the term of office
of the resigning director or directors. The holders of two-thirds of the
outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the directors by vote at a meeting
called for such purpose or by a written statement filed with the Secretary or,
in his absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the vacancies
on the Board of Directors resulting therefrom shall be filled only by the
stockholders. The stockholders may elect a director at any time to fill any
vacancy or vacancies not filled by the directors. If the Board of Directors
accepts the resignation of a director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective.

SECTION 3. AUTHORITY. The business of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
Board of Directors or a committee thereof.

SECTION 4. MEETINGS. The Board of Directors of the corporation may hold
meetings, both regular and special, at such place, either within or without the
State of Nevada, which has been designated by resolution of the Board of
Directors. In the absence of such designation, meetings shall be held at the
offices of the corporation in the State of California.

SECTION 5. FIRST MEETING. The first meeting of the newly elected Board
of Directors shall be held immediately following the annual meeting of the
stockholders, and no notice of such meeting to the newly elected directors shall
be necessary in order legally to constitute a meeting, provided a quorum shall
be present. In the event such meeting is not so held, the meeting may be held at
such time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors.

SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and place as shall from time to time be
determined by the Board.

SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or any Vice President
and shall be called by the President or Secretary at the written request of two
directors. Written notice of the time and place of special meetings shall be
given to each director (a) personally or by facsimile, in each case at least
twenty-four (24) hours prior to the holding of the meeting, or (b) by mail,
charges prepaid, addressed to him at his address as it is shown upon the records
of the corporation (or, if it is not so shown on such records and is not readily
ascertainable, at the place at which the meetings of the directors are regularly
held) at least seventy-two (72) hours prior to the holding of the meeting.
Notice by mail shall be deemed to have been given at the time a written notice
is deposited in the United States mail, postage prepaid. Any other written
notice shall be deemed to have been given at the time it is personally delivered
to the recipient or twenty-four hours (24) after it is delivered to a common
carrier for overnight delivery to the recipient. Any notice, waiver of notice or
consent to holding a meeting shall state the time, date and place of the meeting
but need not specify the purpose of the meeting.

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Whenever all parties entitled to vote at any meeting consent either by
a writing on the records of the meeting or filed with the secretary, or by
presence at such meeting and oral consent entered on the minutes, or by taking
part in the deliberations at such meeting without objection, the doings of such
meetings shall be as valid as if had at a meeting regularly called and noticed,
and at such meeting any business may be transacted which is not excepted from
the written consent or to the consideration of which no objection for want of
notice is made at the time, and if any meeting be irregular for want of notice
or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect therein waived by a writing signed by all
parties having the right to vote at such meeting; and such consent or approval
of stockholders may be by proxy or attorney, but all such proxies and powers of
attorney must be in writing.

SECTION 8. QUORUM. Presence in person of a majority of the Board of
Directors, at a meeting duly assembled, shall be necessary to constitute a
quorum for the transaction of business, and the act of a majority of the
directors present and voting at any meeting at which a quorum is then present,
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by the statutes of Nevada or by the Articles of
Incorporation. A meeting at which a quorum is initially present shall not
continue to transact business in the absence of a quorum. Any action of a
majority, although not at a regularly called meeting, and the record thereof, if
assented to in writing by all of the other members of the Board of Directors,
shall be as valid and effective in all respects as if passed by the Board of
Directors in a regular meeting.

SECTION 9. WAIVER. The transactions of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

SECTION 10. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by
the Articles of Incorporation or by these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or a committee
thereof may be taken without a meeting if a written consent thereto is signed by
all members of the Board. Such written consent shall be filed with the minutes
of proceedings of the Board of Directors.

SECTION 11. TELEPHONIC MEETINGS. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, members of the Board of Directors or
of any committee designated by the Board of Directors may participate in a
meeting of the Board or committee by means of a conference telephone network or
a similar communications method by which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to the
preceding sentence constitutes presence in person at such meeting.

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SECTION 12. ADJOURNMENT. A majority of the directors present at any
meeting, whether or not a quorum is present, may adjourn any directors' meeting
to another time, date and place. If any meeting is adjourned for more than
twenty-four (24) hours, notice of any adjournment to another time, date and
place shall be given, prior to the time of the adjourned meeting, to the
directors who were not present at the time of adjournment. If any meeting is
adjourned for less than twenty-four (24) hours, notice of any adjournment shall
be given to absent directors, prior to the time of the adjourned meeting, unless
the time, date and place is fixed at the meeting adjourned.

SECTION 13. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees of the Board of Directors. Such committee or committees shall include
at least one member of the Board of Directors, shall have such name or names,
shall have such duties and shall exercise such powers as may be determined from
time to time by the Board of Directors. The members of any such committee
present at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be an act of the committee.

SECTION 14. COMMITTEE MINUTES. The committees shall keep regular
minutes of their proceedings and report the same to the Board of Directors.

SECTION 15. COMPENSATION OF DIRECTORS. The directors shall receive such
compensation for their services as directors, and such additional compensation
for their services as members of any committees of the Board of Directors, as
may be authorized by the Board of Directors.

ARTICLE IV

OFFICERS

SECTION 1. PRINCIPAL OFFICERS. The officers of the corporation shall be
elected by the Board of Directors after its first meeting after each annual
meeting of stockholders and shall be a President, a Secretary and a Treasurer.
At that time, the Board of Directors shall also choose a Chairman of the Board
who shall be a director. A resident agent for the corporation in the State of
Nevada shall be designated by the Board of Directors. Any person may hold more
than one office.

SECTION 2. OTHER OFFICERS. The Board of Directors may also elect a Vice
Chairman of the Board, one or more Vice Presidents, Assistant Secretaries and
Assistant Treasurers, and such other officers and agents, as it shall deem
necessary who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors.

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SECTION 3. QUALIFICATION AND REMOVAL. The officers of the corporation
mentioned in Section 1 of this Article IV shall hold office until their
successors are duly elected and qualified. Any such officer and any other
officer elected by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors.

SECTION 4. SALARIES. The salaries and compensation of all officers of
the corporation shall be fixed by the Board of Directors.

SECTION 5. RESIGNATION. Any officer may resign at any time by giving
written notice to the corporation, without prejudice, however, to the rights, if
any, of the corporation under any contract to which such officer is a party. Any
such resignation shall take effect at the date of the receipt of such notice or
at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.

SECTION 6. CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at meetings of the stockholders and the Board of Directors, and shall
see that all orders and resolutions of the Board of Directors are carried into
effect.

SECTION 7. VICE CHAIRMAN. The Vice Chairman shall, in the absence or
disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board and shall perform such other duties as the
Board of Directors may from time to time prescribe.

SECTION 8. PRESIDENT. The President shall be the chief executive
officer of the corporation and shall have active management of the business of
the corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution thereof
shall be expressly designated by the Board of Directors to some other officer or
agent of the corporation.

SECTION 9. VICE PRESIDENT. The Vice Presidents shall act under the
direction of the President and in the absence or disability of the President
shall perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the President or the
Board of Directors may from time to time prescribe. The Board of Directors may
designate one or more Executive Vice Presidents or may otherwise specify the
order of seniority of the Vice Presidents. The duties and powers of the
President shall descend to the Vice Presidents in such specified order of
seniority.

SECTION 10. SECRETARY. The Secretary shall act under the direction of
the President. Subject to the direction of the President, he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing committees
when required. Except as otherwise provided by statute, he shall give, or cause
to be given, notice of all meetings of the stockholders and special meetings of
the Board of Directors, and shall perform such other duties as may be prescribed
by the President or the Board of Directors.

SECTION 11. ASSISTANT SECRETARIES. The Assistant Secretaries shall act
under the direction of the President. In order of their seniority, unless
otherwise determined by the President or the Board of Directors, they shall, in
the absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.

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SECTION 12. TREASURER. The Treasurer shall act under the direction of
the President. Subject to the direction of the President, he shall have custody
of the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation. If required by the Board of Directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.

SECTION 13. ASSISTANT TREASURER. The Assistant Treasurers in the order
of their seniority, unless otherwise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. They shall perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.

ARTICLE V

STOCK AND STOCKHOLDERS

SECTION 1. ISSUANCE. Every stockholder shall be entitled to have a
certificate signed by the President or a Vice President and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the corporation. If
the corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the certificate shall contain a statement
setting forth the office or agency of the corporation from which stockholders
may obtain a copy of a statement or summary of the designations, preferences and
relative or other special rights of the various classes of stock or series
thereof and the qualifications, limitations or restrictions of such rights. The
corporation shall furnish to its stockholders, upon request and without charge,
a copy of such statement or summary.

SECTION 2. FACSIMILE SIGNATURES. Whenever any certificate is
countersigned or otherwise authenticated by a transfer agent or transfer clerk,
and by a registrar, then a facsimile of the signatures of the officers of the
corporation may be printed or lithographed upon such certificate in lieu of the
actual signatures. In case any officer or officers who shall have signed, or
whose facsimile signature or signatures shall have been used on, any such
certificate or certificates shall cease to be such officer or officers of the
corporation, before such certificates shall have been delivered by the
corporation, such certificates may nevertheless be issued as though the person
or persons who signed such certificates, had not ceased to be an officer of the
corporation.

<PAGE>

SECTION 3. LOST CERTIFICATES. The Board of Directors may direct a new
stock certificate to be issued in place of any certificate alleged to have been
lost or destroyed, and may require the making of an affidavit of that fact by
the person claiming the stock certificate to be lost or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent, require the owner of the lost or
destroyed certificate to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.

SECTION 4. TRANSFER OF STOCK. Subject to applicable federal and state
securities laws, upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate, cancel the old certificate
and record the transaction upon its books.

SECTION 5. RECORD DATE. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action (other than to express consent to corporate action in
writing without a meeting), the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date: (a) in
the case of determination of stockholders entitled to vote at any meeting of
stockholders or adjournment thereof, shall, unless otherwise required by law,
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting and (b) in the case of any other action (other than to express consent
to corporate action in writing without a meeting), shall not be more than sixty
(60) days prior to such other action.

SECTION 6. REGISTERED STOCK. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner and shall not be bound
to recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the statutes of Nevada.

SECTION 7. DIVIDENDS. In the event a dividend is declared, the stock
transfer books will not be closed but a record date will be fixed by the Board
of Directors, and only stockholders of record on that date shall be entitled to
the dividend.

ARTICLE VI

INDEMNIFICATION

SECTION 1. INDEMNITY OF DIRECTORS, OFFICERS AND AGENTS. The corporation
shall, to the fullest extent permitted by Nevada Revised Statutes section
78.751, as the same may be amended, supplemented or superseded from time to
time, indemnify any and all persons whom it shall have power to indemnify under
said section from and against any and all of the expenses, liabilities or other

<PAGE>

matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Pursuant to said section 78.751,
the expenses of officers and directors incurred in defending a civil or criminal
action, suit or proceeding must be paid by the corporation as they are incurred
and in advance of the final disposition of the action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined by a court of competent jurisdiction
that he is not entitled to be indemnified by the corporation.

SECTION 2. ENFORCEMENT. Any director or officer may enforce his or her
rights to indemnification or advance payments for expenses in a suit brought
against the corporation if his or her request for indemnification or advance
payments for expenses is wholly or partially refused by the corporation or if
there is no determination with respect to such request within sixty (60) days
from receipt by the corporation of a written notice from the director or officer
for such a determination. If a director or officer is successful in establishing
in a suit his or her entitlement to receive or recover an advancement of
expenses or a right to indemnification, in whole or in part, he or she shall
also be indemnified by the corporation for costs and expenses incurred in such
suit. It shall be a defense to any such suit (other than a suit brought to
enforce a claim for the advancement of expenses under Section 2 of this Article
VI where the required undertaking, if any, has been received by the corporation)
that the claimant has not met the standard of conduct set forth in the Nevada
General Corporation Law. Neither the failure of the corporation to have made a
determination prior to the commencement of such suit that indemnification of the
director or officer is proper in the circumstances because the director or
officer has met the applicable standard of conduct nor a determination by the
corporation that the director or officer has not met such applicable standard of
conduct shall be a defense to the suit or create a presumption that the director
or officer has not met the applicable standard of conduct. In a suit brought by
a director or officer to enforce a right under this Section 2 or by the
corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that a director or officer is not entitled to
be indemnified or is not entitled to an advancement of expenses under this
Section 2 or otherwise, shall be on the corporation.

SECTION 3. SETTLEMENT. The corporation shall not be obligated to
reimburse the amount of any settlement unless it has agreed to such settlement.
If any person shall unreasonably fail to enter into a settlement of any action,
suit or proceeding within the scope of Section 1 of this Article VI, offered or
assented to by the opposing party or parties and which is acceptable to the
corporation, then, notwithstanding any other provision of this Article VI, the
indemnification obligation of the corporation in connection with such action,
suit or proceeding shall be limited to the total of the amount at which
settlement could have been made and the expenses incurred by such person prior
to the time the settlement could reasonably have been effected.

<PAGE>

SECTION 4. PURCHASE OF INSURANCE. 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 VI.

SECTION 5. CONDITIONS. The corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification and
to the advancement of expenses to any employee or agent of the corporation or to
any director, officer, employee or agent of any of its subsidiaries to the
fullest extent of the provisions of this Article VI, subject to the imposition
of any conditions or limitations as the Board of Directors may deem necessary or
appropriate.

ARTICLE VII

GENERAL PROVISIONS

SECTION 1. EXERCISE OF RIGHTS. All rights incident to any and all
shares of another corporation or corporations standing in the name of this
corporation may be exercised by such officer, agent or proxyholder as the Board
of Directors may designate. In the absence of such designation, such rights may
be exercised by the Chairman of the Board or the President of this corporation,
or by any other person authorized to do so by the Chairman of the Board or the
President of this corporation. Except as provided below, shares of this
corporation owned by any subsidiary of this corporation shall not be entitled to
vote on any matter. Shares of this corporation held by this corporation in a
fiduciary capacity and shares of this corporation held in a fiduciary capacity
by any subsidiary of this corporation, shall not be entitled to vote on any
matter, except to the extent that the settlor or beneficial owner possesses and
exercises a right to vote or to give this corporation or such subsidiary binding
instructions as to how to vote such shares.

Solely for purposes of Section 1 of this Article VII, a "subsidiary" of
this corporation shall mean a corporation, shares of which possessing more than
fifty percent (50%) of the power to vote for the election of directors at the
time determination of such voting power is made, are owned directly, or
indirectly through one or more subsidiaries, by this corporation.

SECTION 2. INTERPRETATION. Unless the context of a section of these
Bylaws otherwise requires, the terms used in these Bylaws shall have the
meanings provided in, and these Bylaws shall be construed in accordance with the
Nevada statutes relating to private corporations, as found in Chapter 78 of the
Nevada Revised Statutes or any subsequent statute.

ARTICLE VIII

AMENDMENTS

SECTION 1. STOCKHOLDER AMENDMENTS. The Bylaws may be amended by a
majority vote of all the stock issued and outstanding and entitled to vote upon
such matter.

<PAGE>

SECTION 2. AMENDMENTS BY BOARD OF DIRECTORS. The Board of Directors by
unanimous written consent or by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the stockholders;
provided, however, that the stockholders by majority vote may from time to time
specify particular provisions of the Bylaws which shall not be amended by the
Board of Directors.

ARTICLE IX

"ACQUISITION OF CONTROLLING INTEREST" PROVISIONS OF THE NEVADA
GENERAL CORPORATION LAW SHALL NOT APPLY

The provisions of Sections 78.378 to 78.3793, inclusive, of the Nevada
Revised Statutes shall not apply to an acquisition of a controlling interest by
Alex Kanakaris pursuant to an increase in voting rights of the issued and
outstanding shares of Class A Convertible Preferred Stock of the corporation
from three non-cumulative votes per share to twenty (20) non-cumulative votes
per share.

I, THE UNDERSIGNED, being the Secretary of Kanakaris Communications,
Inc., DO HEREBY CERTIFY the foregoing to be the Bylaws of said corporation, as
adopted by the Board of Directors of the corporation on __________, 2000 and
approved at a special meeting of the stockholders of the corporation held on May
24, 2000.

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Branch L. Lotspeich, Secretary