PROPOSAL AND LETTER OF AGREEMENT
                        ---------------------------------

July 11, 2002

Mr. Adam Anthony, President
Thaon Communications Inc.
51 Zaca Lane, Suite 120
San Luis Obispo, CA  93401

Dear Adam:

Thank  you for  allowing  us the  opportunity  to  review  ways in which  Magnum
Financial  Group,  LLC ("Magnum")  can be of assistance to Thaon  Communications
Inc. ("Thaon" or the "Company").

We at Magnum  Financial Group have the experience  necessary to provide the high
level of advisory  services  necessary to give your Company its best opportunity
for  success,  regardless  of  the  avenue  chosen.  We  have  demonstrated  our
capabilities  in  preparing  client  companies  for the  fund  raising  process,
introducing  interested  parties to fund and/or facilitate  funding on behalf of
client companies, assisting client companies in preparation for life as publicly
traded entities,  orchestrating reverse mergers and initial public offerings for
client  companies,  advising on corporate  restructurings  and  providing  other
business and financial advisory services as outlined in this proposal and letter
of engagement.

I.       PRIMARY GOAL

Our goal at Magnum  Financial  is to use our best  efforts  to help the  Company
further  develop and  execute  its  business  plan by  assisting  the Company in
refining its business  strategy,  in  developing  its financing  objectives,  in
developing  appropriate business  relationships,  and in making effective use of
the capital markets to further the Company's objectives.


II.      ADVISORY SERVICES

This proposal and  engagement  for advisory  services  relates  specifically  to
assisting  Thaon in further  refining its strategy,  restructuring  its business
units and capital  structure,  identify  potential  merger  candidates and other
related advisory services.  All services hereunder are to be provided on a "best
efforts" basis.

Once the company has  completed its business and capital  restructuring,  Magnum
would also be pleased to provide  investor  relations  services  and/or  capital
raising services, as needed.  However,  neither of those activities are included
under this proposal.

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Thaon Communications Inc.
Proposal Agreement
Page 2

In assisting the Company Magnum will:

>>       Perform a review of the Company's  business and history so as to become
         familiar with the Company and its situation
>>       Analyze existing capital structure of the Company
>>       Develop strategies for restructuring capital and business units
>>       Assist in structuring restructuring events
>>       Advise as to timing of certain restructuring events
>>       Identify and introduce potential merger/acquisition candidates
>>       Assist in structuring acquisitions/mergers/divestitures, as needed
>>       Consult with Company on financing options and determine financing
         options and strategy for Company.
>>       Introduce Company to potential board members,  advisors,  strategic
         partners,  and business contacts,  as  might be needed.
>>       Provide  advice  and  recommendations  to Company  with  respect to
         varying  matters  relating to the  capital  markets  and other
         financially  related  business matters.

It is generally  understood and agreed that, at the conclusion of  restructuring
and funding  resulting from this agreement,  existing Thaon  shareholders  shall
retain a minimum of 10% of the total outstanding stock of the Company.

DELIVERABLES

>>       Chair a strategic planning session to occur on the earliest possible
         date following the signing of this Agreement.
>>       From decisions made in the strategic planning session, collaborate with
         management  to  draft  a  comprehensive   written  plan,   which,  upon
         execution,  would result in a new company  residing in the Thaon public
         entity and the  current  Thaon  media  business  residing  in a private
         entity and a definitive strategy to securing the financing necessary to
         achieve the objectives and goals contained within the plan.
>>       Deliver  a  written  risk   assessment  to  Thaon  board  of  directors
         identifying potential roadblocks to successful execution of plan.
>>       Introduce Thaon to any acquisition candidates that fit the following
         parameters
        o   Revenues of $2 million  per year or more in a business  sector
            which  would  be  considered   attractive  by  the  investment
            community through an existing and scalable line of business.
        o   Current financial performance equal to breakeven or profitable.
        o   An acceptable  balance sheet, as evaluated by Magnum and Thaon
            collectively with tolerable debt/equity ratio.
        o   Significant growth opportunities which will be enabled by virtue of
            becoming a public company.
>>       Draft proposed letter of intent  containing  conditions upon which an
         acquisition can be closed.
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Thaon Communications Inc.
Proposal Agreement
Page 3

>>       Deliver written  recommendation to Thaon board of directors  regarding
         timing and size of reverse  split(s).
>>       Deliver written  recommendation  to  management  for  dealing  with key
         insiders  which anticipates:
        o   Timing of conversion of preferred  stock to common
        o   Anticipates any  use  of  key  insider  shares  for  resolution  of
            conditions to  closing acquisition such as resolution of Talbot v.
            Thaon lawsuit
        o   Anticipates  any use of key insider shares as they may be used to
            determine  the final  disposition  of the  existing  media business.
>>       Take active involvement in resolving Olympic Town v. Thaon lawsuit on
         an as needed basis.


III.     COMPENSATION

CONSIDERATION TO MAGNUM

The following are the various  considerations to Magnum,  and/or Assigns,  which
correspond to the Services rendered as described in Section II above:

A.)      Monthly Cash Advisory Fee: Waived.
         --------------------------
B.)      Non-Cash Advisory Fee-Stock: The non-cash stock advisory fee under this
         ----------------------------
         Agreement shall be 8 million  (8,000,000) shares of common stock of the
         Company,  registered  and issued under form S-8. Both Magnum and Client
         agree that stock due under this  Agreement is a material  inducement to
         Magnum to enter into this Agreement, and is fully earned upon execution
         of this Agreement.
C.)      Non-Cash  Advisory  Fee-Warrant:  In  addition to the above  described
         -------------------------------
         fees,  Client shall also issue to Magnum,  and/or  Assigns,  a Warrant
         (the  "Warrant")  to purchase an amount of shares equal to Ten Percent
         (10%) of the total number of shares  outstanding  at completion of the
         restructuring  at an exercise price of one cent ($0.01) per share. The
         duration  of the  Warrant  shall be five  years (5) per years from the
         date of issue.  The  Warrant  shall  provide  for  cashless  exercise.
         Further, the Warrant shall carry piggyback  "registration rights" such
         that Thaon,  at the option of Magnum,  and or Assigns,  shall  include
         such underlying shares with any registration  statement filed with the
         Securities  and Exchange  Commission  at any time  subsequent  to this
         Agreement.  Both Magnum and Client agree that  warrants due under this
         Agreement  are a  material  inducement  to Magnum  to enter  into this
         Agreement,  and are fully  earned upon  execution  of this  Agreement.
         Granting of the Warrant  herein is  sufficient  for Magnum to exercise
         the Warrant, regardless of whether or not Client actually delivers the
         Warrant agreement to Magnum.

D.)      Non-Specified  Transaction.  During the course of its activities  under
         --------------------------
         this Agreement  Magnum may introduce to Thaon a party that  establishes
         some other business combination,  such as a joint venture, acquisition,
         distribution  arrangement,  or strategic  alliance.  In such instances,
         Thaon  recognizes  that Magnum is  entitled to a fee for  orchestrating
         such a business relationship, and both Parties recognize that it may be

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Thaon Communications Inc.
Proposal Agreement
Page 4


         difficult to value such an arrangement,  and therefore Thaon and Magnum
         agree to negotiate in good faith an appropriate  compensation structure
         for Magnum relating to that  transaction that is typical of the type of
         fees generally charged for such transactions.
E.)      Investor  Relations.  Thaon  agrees  that  should it be  successful  in
         -------------------
         completing its restructuring, it will engage Magnum to perform investor
         relations  at an initial  rate of four  thousand  dollars  ($4,000) per
         month, for a term of not less than twelve months.


IV.      TERM AND TERMINATION OF AGREEMENT

This Agreement  shall  continue in effect for six (06) months,  from the date of
execution  hereof,  and  will  continue  thereafter  on a  monthly  basis  until
cancelled.  The  Agreement  may be cancelled  anytime  after the first six month
period by either party by notifying the other party in writing. Notwithstanding,
the obligation by Thaon to pay Magnum the consideration outlined in Section IIID
will  continue  as stated  therein  beyond  the  expiration  of the term of this
Agreement.

Thaon may terminate this Agreement  immediately  without notice or demand if any
of the following should occur:

 i.) Magnum's material breach of this Agreement.

ii.) Any willful breach of duty or habitual neglect of duty by Magnum as related
to the performance of this Agreement.

iii.) The dissolution, insolvency, or bankruptcy of Magnum.

Magnum may terminate this Agreement  immediately without notice or demand if any
of the following should occur:

i.) Within thirty days of the Execution Date hereof,  the Company fails to remit
the compensation  instruments and an original of this signed Agreement to Magnum
as  stipulated  further  in  this  Agreement  (see  "Acceptance,   Execution,  &
Completion").

ii.) Within  thirty  (30) days of its due date,  Magnum is not in receipt of its
monthly  fee  or  reimbursed  for  expenses  billed.   Magnum,   for  additional
consideration,  may opt to grant a thirty- (30) day  extension to the Company to
remit payment.

iii.) Thaon's material breach of this Agreement.

iv.) The dissolution, insolvency, or bankruptcy of Thaon.


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Thaon Communications Inc.
Proposal Agreement
Page 5

V.       EXPENSES

Magnum, at its own expense, will cover the cost of telephone,  e-mail, facsmile,
postage  and other  sundries  related to the  Services  provided  herein.  Other
expenses such as travel, Fedex, entertainment, general printing, and other costs
will be the  responsibility  of Thaon,  however,  Magnum will not incur any such
costs without approval of Thaon.  Should Magnum pay any of these costs on behalf
of Thaon, Magnum will rebill Thaon for these direct expenses without markup, and
such invoices shall be due and payable upon receipt.

VI.      DILIGENT EFFORTS

Magnum agrees to make diligent  efforts in performing  the services  agreed upon
herein and  similarly,  Thaon agrees to make  diligent  efforts in assisting and
supporting Magnum in so rendering such services.

VII.     HOLD HARMLESS AND RELEASE OF LIABILITY

Thaon agrees to hold harmless  Magnum,  its managing  principals,  members,  and
employees and release the same from any and all liability,  loss, damages, costs
or expenses which Magnum may suffer,  incur or be required to pay arising out of
Thaon acts, including without limitation, negligence,  misrepresentation, or any
other action causing the initiation and pursuit of legal action brought  against
Magnum.

Magnum agrees to hold harmless Thaon, its directors,  officers,  employees,  and
shareholders  and release the same from any and all  liability,  loss,  damages,
costs or expenses  which  Thaon may suffer,  incur or be required to pay arising
out   of   Magnum's   acts,    including   without    limitation,    negligence,
misrepresentation,  or any other action  causing the  initiation  and pursuit of
legal action brought against Thaon.

VIII.    INDEPENDENT CONTRACT BETWEEN THE PARTIES

Nothing  in  this   Agreement  is  intended  to  constitute  a  joint   venture,
partnership, or formal business organization of any kind between the Parties nor
shall  it be  construed  to  establish  Magnum  as a  stockholder,  partner,  or
affiliate of Thaon or any other enterprises of Thaon. Similarly, nothing in this
Agreement is intended to be construed to establish  Thaon as a partner,  member,
or affiliate of Magnum or any other enterprises of Magnum.

Both  Magnum  and  Thaon  are  recognized  herein  strictly  as  an  independent
contractors to each other,  responsible for their own actions and the rights and
obligations of the Parties shall be only those expressly setforth herein.




IX.      ADDENDUM TO AGREEMENT
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Thaon Communications Inc.
Proposal Agreement
Page 6

This  Agreement  shall not be amended or  modified,  nor shall any waiver of any
right hereunder be effective unless setforth in writing, which addendum shall be
duly executed by the parties, attached hereto and incorporated thereafter.

X.       NOTICES

Any notice,  request or other  communication  required or permitted  between the
Parties  pursuant to this  Agreement  shall be in writing and shall be deemed to
have been duly given when mailed by United States  Registered or Certified Mail,
to the names and addresses below:

Thaon:            Mr. Adam Anthony
                  Thaon Communications Inc.
                  51 Zaca Lane, Suite 120
                  San Luis Obispo, CA  93401


Magnum:           Mr. Michael Manahan
                  MAGNUM  FINANCIAL  GROUP,  LLC
                  2523  West 7th  Street
                  Suite B Los Angeles, CA 90057


XI.      ARBITRATION

The parties shall submit any dispute  arising out of this  Agreement,  including
the  interpretation  of or the  enforcement  of rights  and  duties  under  this
Agreement,   to  final  and  binding  arbitration  pursuant  to  the  Commercial
Arbitration  Rules of the  American  Arbitration  Association,  in Los  Angeles,
California. At the request of any party, the arbitrators,  attorneys, parties to
the arbitration,  witnesses,  experts, court reporters, or other persons present
at the arbitration shall agree in writing to maintain the strict confidentiality
of the  arbitration  proceedings.  Arbitration  shall be  conducted by a single,
neutral arbitrator, or, at the election of any party, three neutral arbitrators,
appointed in accordance  with the Commercial  Arbitration  Rules of the American
Arbitration Association. The arbitrator(s) shall be attorneys in practice for at
least ten years, and experienced in the matter(s) being arbitrated.  In any such
arbitration,  California  Code of Civil  Procedure  Section  1283.05  (Right  to
Discovery;  Procedure and  Enforcement)  shall be  applicable.  The award of the
arbitrator(s) shall be enforceable according to the applicable provisions of the
California Code of Civil Procedure. The arbitrator(s) shall have the same powers
as those of a judge of the Superior Court of the State of  California,  shall be
bound by the statutes and case law of the State of California,  and shall render
a  decision  as would a judge of a  Superior  Court of the State of  California.
Notwithstanding  the foregoing,  either party shall have the right to petition a
court of competent  jurisdiction,  for (i) injunctive  relief or other equitable
remedies  against  the other for any  violation  or breach by such  party of its
obligations  hereunder pending a decision by the  arbitrator(s),  and (ii) for a
permanent  injunction.  If proper  notice of any  hearing  has been  given,  the
arbitrator(s) will have full power to proceed to take evidence or to perform any

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Thaon Communications Inc.
Proposal Agreement
Page 7

other acts  necessary  to  arbitrate  the matter in the absence of any party who
fails to appear. EACH PARTY HERETO WAIVES THE RIGHT TO A JURY TRIAL.


XII.     GENERAL CONDITIONS

This Agreement shall be deemed to be executed and delivered  within the State of
California and is to be construed,  interpreted  and applied in accordance  with
the laws of the State of California,  excluding that body of law relating to the
Conflicts of Law. This  Agreement  shall have venue in the courts of Los Angeles
County.  If  any  provision,  term,  or  condition  of  this  Agreement,  or any
application thereof,  shall be declared invalid or unenforceable by any court of
competent jurisdiction,  such invalid or unenforceable language shall not affect
the enforceability or effectiveness of the remainder of the Agreement.  As such,
the remainder of this  Agreement,  and any other  application of such provision,
term, or condition, shall survive and continue in full force and effect.

The failure of either  party to exercise any right,  power,  options or remedies
provided hereunder, or to insist upon strict compliance with the terms hereof by
the other,  shall not  constitute a waiver of the terms and  conditions  of this
Agreement with respect to any other or subsequent  breach thereof,  nor a waiver
by either party of its rights at any time thereafter to require exact and strict
compliance  with all  terms  hereof.  The  rights  and  remedies  hereunder  are
cumulative to any other rights or remedies that may granted by law.

In performance of its services, Magnum may, at its sole discretion,  utilize its
employees, sub-contractors,  affiliates,  related-parties,  associates and other
third parties.

The  undersigned  hereby  represent,  warrant and certify that they in fact have
full authority to enter into this specific  Agreement;  and furthermore agree to
provide each other proof of such authority should such proof be requested.

This is the complete  and final  Agreement  between the Parties  relative to the
subject matter hereof and all prior and  contemporaneous  statements,  both oral
and written are hereby superceded.

Respectfully submitted,

MAGNUM FINANCIAL GROUP, LLC



Michael S. Manahan
President

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Thaon Communications Inc.
Proposal Agreement
Page 8

IN ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND PROVISIONS HEREIN:

Thaon Communications, Inc.



BY:/a/ Adam Anthony                              DATE:
   ----------------------------                       -----------
      Adam Anthony, President