LEGAL BROADCAST CORPORATION
SELL-BACK AGREEMENT
The parties to this agreement are THAON COMMUNICATIONS, INC. ("THAON"),
a Nevada corporation, trading on the OTCBB as XXXX, and the former shareholders
of Legal Broadcast Corporation, Inc., a Nevada corporation ("LBC"), who are
listed on Exhibit "A" to this Agreement, identified in this agreement as the
"LBC Shareholders".
Recitals:
Whereas, LBC was originally acquired by THAON in a tax-free stock
exchange of 2,000,000 shares of LBC common stock for 1,000,000 shares of THAON
convertible preferred series D stock, having a par value of $1.00 per share
("Series D Preferred"); and
Whereas, for valid business reasons, THAON desires to sell a majority
of its interest in LBC and the various holders of the Series D Preferred desire
to acquire that interest in LBC,
The parties to this agreement, in consideration of the terms and conditions set
forth below, agree:
1.0 SELL-BACK CONSIDERATION
1.1 THAON currently owns 2,000,000 shares of common stock in LBC, of
which it will sell a total of 1,700,000 to the LBC Shareholders, pari passu with
their holdings of Series D Preferred in THAON. THAON will retain a total of
300,000 shares of LBC common stock and therefore become a 15% holder of LBC
equity immediately after closing of this transaction.
1.2 The LBC Shareholders will, proportionate to their respective
holdings, tender, in the aggregate, 900,000 THAON Series D Preferred to THAON
for cancellation in exchange for the 1,700,000 LBC common to be transferred to
them. This will result in the LBC Shareholders retaining a total of 100,000
shares of Series D Preferred.
2.0 COORDINATION AND TIMING
2.1 This transaction must be approved by a majority-in-interest of the
THAON shareholders and by the THAON Board of Directors. The Board of Directors
has previously approved the terms and conditions of this agreement, subject to
shareholder approval and/or ratification of this Agreement, but a shareholder
vote must be secured. That vote may be obtained by a written consent of a
majority of the existing shareholders entitled to vote, which will necessitate a
Schedule 14C filing with the Securities and Exchange Commission, or by a proxy
vote of a majority of the shareholders, which would require a proxy statement
with the associated filings on Schedule 14A.
2.2 If the shareholder approval is to be obtained by consent, the
parties anticipate that the transaction will require approximately 30 days for
final approval. If the shareholder approval is to be obtained by solicitation of
proxies, the parties anticipate that final approval will require approximately
60 days.
2.3 Until such time as shareholder approval is finalized, LBC will be
operated by its existing board of directors and management as currently
constituted. If a majority-in-interest of the existing shareholders of THAON
execute a consent to the transaction, then the LBC Shareholders will tender
their Series D Preferred for exchange and cancellation and they may assume
control of LBC and operate LBC as if they were the majority owners thereof,
making changes to the board of directors and to management as they deem
suitable, even though this occurs prior to final approval obtained through the
Schedule 14C filing process.
2.4 This exchange need only be approved by an aggregate total of
501,000 shares of Series D Preferred as currently held by the LBC Shareholders,
and subsequent tender of at least that minimum number of Series D Preferred
according to the terms of this Agreement. Any tender of less than the 900,000
Series D Preferred shares contemplated will result in a proportionate reduction
in the 1,700,000 shares of LBC that are given in exchange.
3.0 ADDITIONAL EXCHANGE COMPENSATION
3.1 As additional compensation to THAON and its shareholders, LBC may,
at LBC's election, determine that THAON should distribute the 300,000 LBC shares
it then holds to THAON's shareholders in the form of a dividend. Subject to the
following conditions, LBC may choose to issue to THAON, for distribution along
with the dividend, warrants to purchase additional common stock of LBC.
3.1.1 LBC will pay all costs of the dividend distribution,
to include the charges imposed by THAON's transfer
agent, any filings with the Securities and Exchange
Commission enabling this transaction (such as X-0,
XX-0, Xxxx 00XX or other registration statements),
and attorneys and accountants' fees associated with
these filings.
3.1.2 THAON must, in its own Board of Directors'
discretion, meet the dividend financial solvency
requirements of Nevada state law, determining that
THAON is able to pay its debts as they become due
in the usual course of business or that, following
the distribution, THAON's total assets are more
than its total liabilities plus any amount that
would be needed if THAON were to be dissolved at
the time of the distribution to satisfy and
preferential rights of THAON shareholders. Once the
solvency test is met, and upon payment of costs by
LBC, THAON will distribute the LBC shares in
accordance with an effective registration statement
by LBC on Form S-1 or, if not eligible for Form S-1,
on Form SB-2 or Form 10.
3.2 The dividend to the then-existing THAON shareholder base will be
distributed pro rata to all common shareholders of THAON as of the ex-dividend
date to be set in the future. Fractional share issuances will be rounded up to 1
full share. This rounding requirement may call for the issuance of additional
LBC stock, by LBC, which it will issue in conformity with this condition.
4.0 MISCELLANEOUS
4.1 SUBSEQUENT EVENTS. THAON and the LBC Shareholders each agree
to notify the other party, if, subsequent to the date of this
Agreement, either party incurs obligations which could
compromise their efforts and obligations under this Agreement.
4.2 AMENDMENT. This Agreement may be amended or modified at
any time and in any manner only by an instrument in writing
executed by the parties hereto.
4.3 FURTHER ACTIONS AND ASSURANCES. At any time and from time to
time, each party agrees to take actions and to execute and
deliver documents as may be reasonably necessary to effectuate
the purposes of this Agreement.
4.4 WAIVER. Any failure of any party to this Agreement to comply
with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed. The failure of any party to this Agreement
to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such
provision or a waiver of the right of such party thereafter to
enforce each and every such provision. No waiver of any breach
of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
4.5 ASSIGNMENT. Neither this Agreement nor any right created by it
shall be assignable by the LBC Shareholders without the prior
written consent of THAON until after transfer of the LBC
shares to that particular shareholder.
4.6 NOTICES. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the United
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
company for transmittal, or when sent by facsimile
transmission, charges prepaid, provided the communication is
addressed:
In the case of The LBC Shareholders
Xxxxxxxxx & Associates
00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
In the case of THAON:
or to such other person or address designated by The LBC
Shareholders or THAON to receive notice.
4.7 HEADINGS. The section and subsection headings in this
agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
4.8 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
4.9 GOVERNING LAW. This Agreement was negotiated and is being
contracted for in the State of Nevada, and shall be governed
by the laws of the State of Nevada, notwithstanding any
conflict-of-law provision to the contrary. Should any aspect
of this agreement be subject to litigation or arbitration, the
prevailing party in such dispute will be entitled to, in
addition to all other damages, an award of its reasonable
attorneys and accountant's fees.
4.10 BINDING EFFECT. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors, and
assigns.
4.11 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the
parties relating to the subject matter of this Agreement. No
oral understandings, statements, promises, or inducements
contrary to the terms of this Agreement exist. No
representations, warranties, covenants, or conditions, express
or implied, other than as set forth herein, have been made by
any party.
4.12 SEVERABILITY. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in
full force and effect.
4.13 FACSIMILE COUNTERPARTS. A facsimile, telecopy, or other
reproduction of this Agreement may be executed by one or more
parties hereto and such executed copy may be delivered by
facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to execute
an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
4.14 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement and of each and every provision hereof.
4.15 REPRESENTATION. Both parties acknowledge that they have been
represented by counsel of their own choosing and that they
have received advice and guidance from their respective
counsel. Based upon this representation, neither party will be
construed to have been the drafting party for this Agreement,
and neither party will be adjudged unrepresented for purposes
of interpreting ambiguities in the Agreement.
4.16 FORCE MAJEURE. In the event either party hereto is unable to
fulfill the terms and conditions hereof as a result of
earthquake, typhoon, flood, fire, war and other unpredictable
and unpreventable force majeure, such party shall immediately
inform the other by cable and provide full details, supporting
certificates or request for postponement or for partial
fulfillment within fifteen days. Such supporting documents
shall be duly issued by the notarial authorities in the place
where the force majeure takes place. Both parties will study
and decide whether the contract should be terminated or
whether such party should be partially exempted from the
responsibilities or whether fulfillment should be postponed.
4.17 RESERVATION OF RIGHTS. The failure of any party at any time
hereafter to require strict performance by any other party of
any of the warranties representations, covenants, terms,
conditions and provisions specified in this agreement shall
not waive, affect or diminish any right of the party failing
to require strict performance to demand strict compliance and
performance therewith and with respect to any other
provisions, warranties, terms and conditions specified in this
agreement, and any waiver of any default not waive or affect
any other default, whether prior or subsequent thereto, and
whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions
and terms specified in this Agreement shall be deemed to have
been waived by any act or knowledge of any party, and any such
waiver shall be made only by an instrument in writing, singed
by the waiving party and directed to each non-waiving party
specifying such waiver. Each party reserves such party's
rights to insist upon strict compliance with the terms,
conditions and provisions of this Agreement at all times.
4.18 REMEDIES. The parties to this Agreement acknowledge and agree
that breach of any of the covenants of the Agreement may not
be compensable by payment of money damages and, therefore,
that the covenants of the parties set forth in this Agreement
may be enforced in equity by a decree requiring specific
performance. Without limiting the foregoing, if any dispute
arises concerning the sale or other disposition of any of the
stock that is the subject of this Agreement, the parties agree
that an injunction may be issued restraining the sale or other
disposition of such stock or rescinding any such sale or other
disposition, pending resolution of the controversy. These
remedies shall be cumulative and non-exclusive and shall be in
addition to any other rights and remedies the parties may have
under this Agreement.
4.19 PRELIMINARY FEES. Legal fees incurred for the drafting,
circulation and final documentation of this Agreement will
be paid by LBC (or the LBC Shareholders should the
transaction not be completed).
Wherefore, this Agreement is executed to be effective the 7th of
August, 2002.
THAON COMMUNICATIONS, INC.
By:/s/ Xxxx Xxxxxxx
----------------------------
Xxxx Xxxxxxx, President
-----------------------------
, Secretary
THE LBC SHAREHOLDERS
/s/ Xxxxx Mondo
--------------------------------
The Cardomon Group (220,000 shares of Series D)
/s/ Xxxx Mondo
--------------------------------
Xxxx Mondo (310,000 shares of Series D)
/s/ Xxxxx Mondo
--------------------------------
Xxxxx Mondo (310,000 shares of Series D)
/s/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx (90,000 s shares of Series D)
/s/ Xxx Xxxxxxx
--------------------------------
Xxx Xxxxxxx (10,000 shares of Series D)
/s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx (50,000 shares of Series D)
/s/ Xxxxx Mondo
-------------------------------
Xxxxx Mondo (10,000 shares of Series D)
EXHIBIT "A"
Shareholders of Series D Preferred Thaon Stock
|------------------------------|----------------------------|---------------------------|----------------------------|
| Shareholder | Shares of Series D Owned | Shares of LBC Common | Remaining Series D Owned|
| | Prior to Exchange | Stock to be Issued in | after Exchange |
| | | Exchange | |
|==============================|============================|===========================|============================|
|The Cardomon Group | 220,000 | 374,000 | 22,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxxx Mondo | 310,000 | 527,000 | 31,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxxxx Mondo | 310,000 | 527,000 | 31,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxxxx Xxxxxxx | 90,000 | 153,000 | 9,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxxx Xxxxxxx | 50,000 | 85,000 | 5,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxx Xxxxxxx | 10,000 | 17,000 | 1,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Xxxxx Mondo | 10,000 | 17,000 | 1,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
|Totals | 1,000,000 | 1,700,000 | 100,000 |
|------------------------------|----------------------------|---------------------------|----------------------------|
