OMB APPROVAL
OMB Number: 3235-0145
Expires: August 31, 1999
Estimated average burden
hours per form .....14.90
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
ORION FINANCIAL LTD.
----------------------------------------
(Name of Issuer)
No Par Value Common Stock
----------------------------------------
(Title of Class of Securities)
68627L 10 3
----------------
(CUSIP Number)
Gerald C. Parker
101 Philippe Parkway, Suite 300, Safety Harbor, Florida 34695 (813) 669-0040
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 4, 1998
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
CUSIP No. 68627L 10 3
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Gerald C. Parker
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [ ]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF and 00
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U. S. Citizen
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 9,757,635.90 shares (includes 500,000 shares
BENEFICIALLY underlying presently exercisable option)
OWNED BY ----------------------------------------------------
EACH 8. SHARED VOTING POWER
REPORTING 4,548,786.80 shares
PERSON ----------------------------------------------------
WITH
9. SOLE DISPOSITIVE POWER
9,757,635.90 shares (includes 500,000 shares
underlying presently exercisable option)
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
4,548,786.80 shares
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,306,422.7 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.38%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
-------------------------------------------------------------------------
2
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the no par value common stock ("Common Stock")
of Orion Financial, Ltd. ("Issuer"). The Issuer's principal executive offices
are located at 80 North Hoyt Street, Lakewood, Colorado 80226.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Gerald C. Parker
(b) The business address of Mr. Parker is 101 Philippe Parkway, Suite
300, Safety Harbor, Florida 34695.
(c) The principal occupation of Mr. Parker is President of Invest-
ment Management of America, Inc. ("IMA"). The address of IMA is 101
Philippe Parkway, Suite 300, Safety Harbor, Florida 34695. Mr. Parker is
also a director of the Issuer.
(d) During the last five years, Mr. Parker has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, Mr. Parker has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Mr. Parker is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4 below, the 9,257,635.90 shares of Common
Stock issued to Gerald Parker were purchased by Mr. Parker for approximately
$12,400.23 out of his personal funds, the 4,548,786.80 shares of Common Stock
issued to IMA were purchased by IMA out of its corporate funds, and the option
to purchase 500,000 shares of Common stock was granted to Mr. Parker as an
incentive for becoming a director of the Issuer and pursuant to paragraph 6 of
the Binding Letter of Agreement as described in Item 4 below.
ITEM 4. PURPOSE OF TRANSACTION.
On May 4, 1998, the Issuer accepted a series of subscription agreements,
one of which was from IMA pursuant to a "Binding Letter of Agreement" among IMA
and the Issuer ("Agreement"). The Agreement required the Issuer to issue
4,548,786.80 shares of Common Stock to IMA, 9,257,635.90 shares of Common Stock
each to Andrew M. Badolato and Gerald C. Parker, who are affiliated with IMA,
- 3 -
<PAGE>
and both of whom own 50% of the common stock of IMA, 2,383,564 shares of Common
Stock to Christina A. Curry, and 341,159.20 shares of Common Stock each to C.
Keith Byington and David E. Thuermer, for $35,000, that was paid on a pro rata
basis out of personal funds from the individuals and out of corporate funds from
IMA. As a result of this transaction, IMA and Messrs. Badolato and Parker own
approximately 51.15% of the Issuer's outstanding Common Stock. Also, pursuant to
the Agreement, Mr. Badolato and Mr. Parker have been appointed to the Board of
Directors of the Issuer and Donald W. Diones resigned from the Board of
Directors of the Issuer. Further, at such time as the Issuer provides
disclosures to the Issuer's shareholders in accordance with Rule 14f-1 adopted
under the Securities Exchange Act of 1934, as amended, or holds a meeting of the
Issuer's shareholders, it is anticipated that Dean H. Boedeker will resign as a
director of the Issuer and that Roger R. Arthur, Richard E. Flanigan and Antonio
P. Gomes will become directors of the Issuer.
Also on May 4, 1998, the Issuer accepted a series of subscription
agreements, some of which were from several individuals residing in Kansas
("Kansas Group") who received a total of 1,000,000 shares of Common Stock in
exchange for certain assets that the Kansas Group received from a now defunct
corporation, Athletic Footwear, Inc. ("AFI"). Previous lenders to AFI also
received 162,780 shares of Common Stock in exchange for the cancellation of
certain loans in the amount of $47,700 that they had previously made to AFI. The
assets included intellectual property, patents, copyrights, trademarks, general
intangibles, all molds and lasts and any and all other intangible property of
AFI. Prior to the transaction, there were no material relationships between the
Kansas Group or the lenders and the Issuer or any of its affiliates, directors
or officers or any associates of its directors or officers. Terry A. Hunter, who
became the President of the Issuer, was the President of AFI. AFI's assets were
used by AFI to develop, design and produce a line of children's athletic and
casual shoes and will be used by the Issuer for the same purpose. The
acquisition prices were arrived at as a result of negotiations between the
parties.
In connection with the change in control of the Issuer and the acquisition
of the AFI assets mentioned above, the Issuer also entered into a Production and
Inventory Dating Agreement with Asia Pacific Industries Development Group
("APIDG") pursuant to which the Issuer issued to APIDG 4,548,787 shares of
Common Stock and an option to purchase 500,000 shares of Common Stock at an
exercise price of $0.30 per share in exchange for inventory financing. Pursuant
to the Production and Inventory Dating Agreement, the Issuer has agreed to order
all shoe products that it will sell in the United States, People's Republic of
China, Australia, Taiwan, Hong Kong, Thailand, Singapore, Indonesia, The
Philippines, Malaysia, Vietnam and Laos from factories designated by APIDG.
Pursuant to the terms of the Production and Inventory Dating Agreement, the
Issuer has agreed that during the term of such Agreement, it will provide one
seat on its Board of Directors to a person designated by APIDG.
As a result of the above transactions, Dean H. Boedeker and William J.
White, current directors of the Issuer, Donald W. Diones, a former director of
the Issuer, and Edward O. Byrne have exercised options for 400,000 shares of
Common Stock each at an exercise price of $0.03 per share.
In addition, in exchange for his prior services to the Issuer, Mr. Hunter
was entitled to receive 4,044,998 shares of Common Stock. Mr. Hunter directed
that 3,640,498.20 shares be issued in the name of the Eleos Charitable Trust,
the beneficiaries of which are Mr. Hunter's wife and children and of which Mr.
Hunter is the sole trustee. Also, in exchange for their prior services to the
Issuer, Roger R. Arthur, the Chief Executive Officer of the Issuer, received
1,754,167 shares of Common Stock and an option to purchase 500,000 shares of
Common Stock at an exercise price of $0.30 per share, Ronald W. Cameron, who it
is proposed will become the Vice President of Sales of the Issuer, received
302,385 shares of Common Stock, and Lloyd A. Frederickson, who it is proposed
will become the Vice President of Finance of the Issuer, received 251,083 shares
of Common Stock. Also, Dean H. Boedeker, William J. White, Gerald C. Parker,
Andrew M. Badolato, Richard E. Flanigan and Antonio P. Gomes each received
options to purchase 500,000 shares of Common Stock at an exercise price of $0.30
per share.
Other than as described above and other than the plans of the Issuer to
issue additional securities in one or more offerings, Gerald C. Parker does not
have any plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer;
(c) a sale or transfer of a material amount of assets of the Issuer;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number of term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
- 4 -
<PAGE>
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Schedule 13D, Gerald C. Parker beneficially
owns a total of 14,306,422.70 shares ("Shares") of Common Stock which
constitute approximately 31.38% of the outstanding Common Stock of the
Issuer.
(b) Gerald C. Parker has sole voting and dispositive power over
9,757,635.90 of the Shares, and shared voting and dispositive power over
4,548,786.80 of the Shares. Mr. Parker shares voting and dispositive power
over the 4,548,786.80 shares with Andrew M. Badolato and IMA. The identity
and background of Andrew M. Badolato, IMA and the officers, directors and
control persons of IMA are as follows:
(1) IDENTITY AND BACKGROUND.
(a) Andrew M. Badolato
(b) The business address of Mr. Badolato is 7069 South Tamiami
Trail, Sarasota, Florida 34231.
(c) The principal occupation of Mr. Badolato is Chairman and
Chief Executive Officer of IMA. The address of IMA is 101 Philippe
Parkway, Suite 300, Safety Harbor, Florida 34695. IMA also has a
satellite office located at 7069 Tamiami Trail, Sarasota, Florida
34231. Mr. Badolato is also a director of the Issuer.
(d) During the last five years, Mr. Badolato has not been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
- 5 -
<PAGE>
(e) During the last five years, Mr. Badolato has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mr. Badolato is a United States citizen.
(2-A) IDENTITY AND BACKGROUND of IMA.
(a) Investment Management of America, Inc. (IMA)
(b) The principal office and business address of IMA is 101
Philippe Parkway, Suite 300, Safety Harbor, Florida 34695. IMA also
has a satellite office located at 7069 South Tamiami Trail, Sarasota,
Florida 34231.
(c) The principal business of IMA is to identify and assist in
the development of businesses in their formative stages.
(d) During the last five years, IMA has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, IMA has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) IMA is a Delaware corporation.
(2-B) IDENTITY AND BACKGROUND of Officers, Directors and Control
Persons of IMA: The officers, directors and control persons of IMA are as
follows:
Andrew M. Badolato - Chairman, Chief Executive Officer,
Director and 50% Owner
Gerald C. Parker - President, Director and 50% Owner
William J. Madden - Chief Financial Officer
- 6 -
<PAGE>
Identity and background for Andrew M. Badolato is set forth in Item 2
above, identity and background for Gerald C. Parker is set forth in Item
5(b)(1) above, and identity and background for William J. Madden is as
follows:
(a) William J. Madden
(b) The business address of Mr. Madden is 7069 South Tamiami
Trail, Sarasota, Florida 34231.
(c) The principal occupation of Mr. Madden is Chief Financial
Officer of IMA. The address of IMA is 7069 South Tamiami Trail,
Sarasota, Florida 34231.
(d) During the last five years, Mr. Madden has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Madden has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mr. Madden is a United States citizen.
(c) As described in Item 3 above, other than the issuance of the
Shares to Gerald C. Parker and IMA on May 4, 1998, there were no
transactions in the Common Stock of the Issuer that were effected during
the past 60 days by Gerald C. Parker.
(d) No person other than Gerald C. Parker is known to have the right
to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, 9,757,635.90 of the Shares. In addition to Mr.
Parker, IMA, as the holder of 4,548,786.80 of the Shares, and Andrew M.
Badolato, as a 50% owner of IMA, have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of,
4,548,786.80 of the Shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
None.
- 7 -
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Agreement and Bill of Sale dated April 10, 1998.
Exhibit 2 - Assumption Agreement dated April 10, 1998.
Exhibit 3 - Production and Inventory Dating Agreement
dated April 10, 1998, as amended on April 30,
1998.
Exhibit 4 - Binding Letter of Agreement dated April 23,
1998, as amended on April 30, 1998.
- 8 -
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Gerald C. Parker
Date: June 3, 1998 ---------------------------------------
Gerald C. Parker
- 9 -
AGREEMENT AND BILL OF SALE
(Exhibit A)
This Agreement and Bill of Sale made as of this 30th day of April, l998, by and
between Orion Financial, Ltd. ("Orion") and B & L Enterprises, Inc. a Kansas
corporation, Colby Bowl, a Kansas partnership, B. Eugene Criss Trust No. 1,
Wayne A. Horlacher, Donald P. Kready, Joan R. Kready, Curtis Q. Stephens,
Jacqualine A. Stephens, Dorthy B. Stephens, Robert V. Van Camp, Marjorie Van
Camp, and 3 - H's Enterprises, a Kansas partnership (collectively referred to as
the "AFI" Guarantors"). In consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Sale of Assets. Effective upon the Closing of Escrow as defined in that
certain Escrow Agreement by and between Orion, Asia Pacific Industries
Development Group ("APIDG"), the AFI Guarantors, and others (the "Escrow
Agreement"), the AFI Guarantors hereby sell, assign, transfer and deliver
to Orion full title to all intellectual property, patents, copyrights,
trademarks, general intangibles (including the "Funtastix brand name), all
molds and lasts and any and all other intangible property in each case as
limited to that property and does not include any cash, inventory,
receivables or warehouse racks acquired from Athletic Footwear, Inc.
2. Warranties of AFI Guarantors. The AFI Guarantors jointly and severally
represent and warrant that title to the Transferred Assets shall be free
and clear of any claim or encumbrance of any kind or nature and agree to
defend the title transferred. This warranty does not extend to the value of
the assets being transferred or to the collectibility of any accounts
transferred and does not extend to any setoffs which account debtors may
have.
3. Number of Shares. If the Closing of Escrow takes place under the Escrow
Agreement, Orion shall issue to each of the Guarantors the number of shares
of common stock of Orion (the "Shares") set forth opposite his signature
line.
4. Warranties of Orion. Orion represents that the officer signing this
Agreement and Bill of Sale on its behalf has actual authority to do so.
5. Deposit with Escrow Agent. This Bill of Sale shall be deposited in escrow
pursuant to the Escrow Agreement. In the event the Close of Escrow does not
occur, this Bill of Sale shall be null and void, and any and all assets
delivered to the Escrow Agent shall be returned at the AFI Guarantors' sole
expense to the AFI Guarantors at Colby, Kansas or such other location as
may be designated by them.
1
<PAGE>
Orion Financial, Ltd. No. of Orion Shares
By:/s/ Dean Boedeker
--------------------------------
President
B & L Enterprises, Inc.
By:/s/ Bob Mader 200,000
--------------------------------
Bob Mader
B. Eugene Criss, Trust No. 1
By:/s/ B. Eugene Criss 200,000
--------------------------------
B. Eugene Criss, Trustee
3-H's Enterprises
By:/s/ R. Craig Hills 133,350
--------------------------------
R. Craig Hills, Partner
By:/s/ Donald P. Kready 133,350*
--------------------------------
Donald P. Kready
By:/s/ Joan R. Kready
--------------------------------
Joan R. Kready
Colby Bowl
By:/s/ Charles Schwanke 66,660
--------------------------------
Charles Schwanke
By:/s/ Curtis G. Stephens 66,660**
--------------------------------
Curtis G. Stephens
By:/s/ Jacqueline A. Stephens
--------------------------------
Jacqueline A. Stephens
By:/s/ Dorthy Stephens 66,660
--------------------------------
Dorthy Stephens
By:/s/ Robert V. Van Camp 66,660***
--------------------------------
Robert V. Van Camp
By:/s/ Marjorie A. Van Camp
--------------------------------
Marjorie A. Van Camp
By:/s/ Wayne Horlacher 66,660
--------------------------------
Wayne Horlacher
o
o * Issued to Donald P. Kready and Joan R Kready
o ** Issued to Curtis G. Stephens and Jacqueline A. Stephens
o *** Issued to Robert V. Van Camp and Marjorie A. Van Camp
2
ASSUMPTION AGREEMENT
Assumption Agreement dated as of April 10, 1998, among Orion Financial, Ltd.,
and those persons listed as creditors on the signature pages hereto (the
"Creditors").
1. Assumption. Orion agrees that upon the Closing of Escrow, as such term
is defined in an escrow Agreement dated as of April 10, 1998, among
Orion, Edward O. Byrne, Investment Management of America, Inc., Asia
Pacific Industries Development Group and others, (the "Closing") it
will make the payments of cash in the amount and at the times set
forth below promptly after the Closing to each Creditor who has signed
this Agreement.
2. Acceptance. Each Creditor agrees to accept such payment in full
satisfaction of any claims he may have against Athletic Footwear, Inc.
Orion Financial, Ltd.
By:/s/ Dean H. Boedeker
-------------------------------
Creditors
/s/ Phil Luccock
- ---------------------------------- $7,500 plus $2,622 interest upon closing.
Phil Luccock
/s/ Lloyd Fredrickson
- ---------------------------------- $8,500 upon closing.
Lloyd Fredrickson .
/s/ Bob Mader
- ---------------------------------- $295.83 per month for 24 months starting
Bob Mader in the 13th month.
/s/ Linda Mader
- ----------------------------------
Linda Mader
/s/ B. Eugene Criss
- ---------------------------------- $295.83 per month for 24 months starting
B. Eugene Criss in the 13th month.
/s/ Craig Hills
- ---------------------------------- $197.22 per month for 24 months starting
Craig Hills in the 13th month.
/s/ Don Kready
- ---------------------------------- $197.22 per month for 24 months starting
Don Kready in the 13th month.
/s/ Joan Kready
- ----------------------------------
Joan Kready
<PAGE>
/s/ Charles Schwanke
- ---------------------------------- $98.61 per month for 24 months starting
Charles Schwanke in the 13th month.
/s/ Vern Schwanke
- ----------------------------------
Vern Schwanke
/s/ Curt Stephens
- ---------------------------------- $806.94 per month for 24 months starting
Curt Stephens in the 13th month.
/s/ Jacqueline Stephens
- ----------------------------------
Jacqueline Stephens
/s/ Dorothy Stephens
- ---------------------------------- $98.61 per month for 24 months starting
Dorothy Stephens in the 13th month.
/s/ Robert Van Camp
- ---------------------------------- $98.61 per month for 24 months starting
Robert Van Camp in the 13th month.
/s/ Marjorie Van Camp
- ----------------------------------
Marjorie Van Camp
/s/ Wayne Horlacher
- ---------------------------------- $98.61 per month for 24 months starting
Wayne Horlacher in the 13th month.
PRODUCTION AND INVENTORY DATING AGREEMENT
Production and Inventory Dating Agreement dated as of April 10, 1998 among Orion
Financial, Ltd., a Colorado corporation ("Orion") and Asia Pacific Industries
Development Group ("APIDG").
Orion and APIDG are parties to an Escrow Agreement dated as of April 10, 1998
(the "Escrow Agreement"). Accordingly, the parties hereto hereby agree as
follows:
1. Effectiveness. This Agreement shall become effective upon the Closing
of Escrow as such term is defined in the Escrow Agreement. If the
Closing of Escrow does not take place by April 30, 1998, this
Agreement shall be null and void unless extended by mutual agreement.
2. APIDG Ownership Interest in OFL. As part of this Agreement, OFL will
issue to APIDG 4,548,787 shares of its common stock at the time of
Closing of Escrow which represents10% of OFL's outstanding stock.
APIDG will have the same classification of stock as all other
stockholders.
3. Ownership and Development.
a. As used herein the term "Products" shall mean any and all
products which are marketed using the name "Funtastix" and/or
using any Promotional Material described in Section 3 (b), or the
intellectual property listed on Schedule A hereto of any
Proprietary Property described in Section 6 (a) hereof and any
additional trademarks, trade names or patents to which Orion now
has or hereafter acquired rights to (collectively the
"Intellectual Property"). The parties recognize that Orion will
own all Intellectual Property.
b. Orion shall develop additional Products using the Intellectual
Property and material relating to the sales, marketing,
distribution, promotion of and advertising for the Products (the
"Promotional Material").
4. Ordering of Product.
a. As long as this Agreement is in effect, Orion shall order all the
Products (including shoes, clothing, toys, bags or other
accessory products) which it will sell in the United States,
Peoples Republic of China, Australia, Taiwan, Hong Kong,
Thailand, Singapore, Indonesia, the Philippines, Malaysia, Viet
Nam and Laos from factories designated by APIDG (a "Designated
Factory"), as long as the Products meet specifications and are
delivered in a timely manner and the price therefor is at least
as low as the price which Orion has obtained from three other
factories for Products of the same specifications. In the event
that one or more of such other prices are lower than quoted to
Orion, Orion shall be free to place the order with such factory.
b. Orion has projected that it will be able to use its best efforts
to order the following amount during the indicated time period of
shoes which are Products:
1998 58,000 pairs
1999 134,000 pairs
2000 372,000 pairs
2001 862,000 pairs
2002 1,780,000 pairs
5. Payment. Payment shall be made for all Products ordered hereunder by
Orion from Designated Factories as follows:
a. Beginning in June 1998 and for the first orders totaling a
combined maximum of $300,000 (the first order of $251,000
anticipated to be placed in June 1998 and the first $49,000 of
the order anticipated to be placed in December 1998) 10% of each
<PAGE>
order paid in cash upon placing the order and 90% to be paid by
irrevocable letter-of-credit with terms of 150 days dating from
shipment of shoes by APIDG through the Port of Hong Kong (FOB
Hong Kong) or such other port as is mutually agreed upon issued
at the time of placement of the orders totaling the first
$300,000.
b. After the first $300,000 of orders are placed under the
terms of 5 (a) above, each subsequent order placed in the first
24 months of this agreement shall be paid with 20% cash upon
placing the order and 80% to be paid by post-dated check issued
at the placement of each order due and payable at 150 days from
the date of shipment of the order by APIDG through the Port of
Hong Kong (FOB Hong Kong) or such other port as is mutually
agreed upon.
c. For all orders placed after the 24 months outlined in 5(a)
above and extending for the next 36 months (months 25 through 60)
each order shall be paid with 30% cash upon placing the order and
70% to be paid by post-dated check issued at the placement of
each order due and payable at 120 days from the date of shipment
of the order by APIDG through the Port of Hong Kong (FOB Hong
Kong) or such other port as is mutually agreed upon.
d. If Orion is successful at being placed on NASDAQ, the above
inventory dating and payment terms may be renegotiated.
a. OFL agrees to pay APIDG interest at the rate of ten percent
(10%) per annum payable on the final payment of each order
outlined in 5(a), 5(b), and 5(c) above as payment for the
interest incurred by APIDG in securing the extended inventory
dating terms on each order.
6. Trade Secrets.
a. Each party recognizes that Orion may provide it with certain
proprietary property and information including, but not limited
to, the following: patents, trademarks, copyrights, drawings,
blueprints, designs, molds, lasts, technologies, production
methods, materials, component costs, corporate financial data,
payroll data, and sales and marketing plans and programs
(collectively, the "Proprietary Property"). All such property,
information, documents, reports, and equipment, in whatever form,
shall remain the sole property of Orion and shall not be
disclosed by any party hereto to any other persons or parties
except with the express written permissions of Orion.
b. Prior to designating a factory as a Designated Factory, APIDG
will obtain from such factory an agreement in form and substance
satisfactory to Orion as to the protection of Proprietary
Property and Intellectual Property information and APIDG shall be
responsible for insuring that each such agreement is complied
with.
7. APIDG seat on Orion's Board of Directors. Orion agrees that during the
terms of this agreement, Orion will provide one seat on its Board of
Directors to APIDG.
8. Establishment of Join Venture Distribution Company for Southeast Asia.
Orion and APIDG agree that after the first order from Orion is placed
and the payment for that order is made, APIDG will establish a joint
venture company in Hong Kong and act as the sole agent of all the
Funtastix Products for China and Southeast Asia and develop the
markets there. APIDG agrees that Orion will own a minimum of 10% of
this new joint venture company.
9. Termination. This Agreement shall continue in effect for a period of
five years from the date of this Agreement unless otherwise extended
by both parties.
1. Cooperation. Each party will protect the other parties hereto. If a
party hereto causes injury to another party, it shall be responsible
for all legal consequences and damages to compensate the injured
party.
<PAGE>
2. Arbitration. Any dispute arising under this Agreement will be resolved
pursuant to arbitration in accordance with the rules of the American
Arbitration Association in San Francisco, California.
3. Applicable Law. This Aagreement shall be governed by the laws of the
State of Colorado.
Orion Financial, Ltd.
By: /s/ Dean H. Boedeker, President
--------------------------------------------------------
80 N. Hoyt St.
Denver, Colorado 80226
For and on behalf of
Asia Pacific Industries Development Group
By: /s/ Michael Ng, F.L.
--------------------------------------------------------
Address: 101, Shashujin, 4/F
--------------------------------------------------
Shenzhen, China
-----------------------------------------------------------
<PAGE>
AMENDMENT NUMBER ONE TO
PRODUCTION AND INVENTORY DATING AGREEMENT
This Amendment Number One to Production and Inventory Dating Agreement between
Orion Financial, Ltd., a Colorado corporation ("Orion") and Asia Pacific
Industries Development Group ("APIDG") is dated April 30, 1998.
Orion and APIDG hereby agree that the Production and Inventory Dating Agreement
dated April 10, 1998 ("Agreement") is amended by replacing Paragraph 1 of the
Agreement with the following:
1. Effectiveness. The Agreement shall become effective upon Closing of
Escrow as such term is defined in the Escrow Agreement. If the Closing of
Escrow does not take place by May 15, 1998, this Agreement shall be null
and void unless extended by mutual agreement.
ORION FINANCIAL, LTD.
By: /s/ Dean H. Boedeker
----------------------------------------
Its: President
ASIA PACIFIC INDUSTRIES DEVELOPMENT GROUP
By: /s/ Michael Ng, F.L.
-----------------------------------------
Its: President
-----------------------------------------
INVESTMENT MANAGEMENT
OF AMERICA, INC.
101 Philippe Parkway, Suite 300, Safety Harbor, Fl 34696
(813) 669-0040
BINDING LETTER OF AGREEMENT
This Letter of Agreement will confirm various discussions with Terry Hunter and
his management team (hereinafter Team) and Investment Management of America,
Inc. (hereinafter IMA), and Orion Financial, Ltd. (hereinafter OFL). The
objective of our discussions has been to outline IMA's intent and objective to
bring the "Funtastix" brand shoe back into existence by providing various levels
of funding, as required, to meet the cash flow obligations as reflected in the
pro forma provided by the Team. The agreement will be as follows:
1. OFL agrees to issue 26,129,941 shares of OFL to IMA and its related persons
in return for $35,000.
2. OFL will raise a minimum of eight hundred eighty-thousand dollars
($880,000) in the form of convertible debt ("Convertible Debt") or equity.
The Convertible Debt or equity will be dilutive in nature to all
stockholders at the time of a secondary offering. The convertible debt will
be sold at par, will have a term of ten (10) years and will bear interest
not to exceed 10% per annum with accumulated interest due on the due date
of the convertible note. The convertible debt will be required to be
converted at the time of any secondary offering with a conversion price
equal to the greater of $4.50 or a price equal to 75% of the public
offering price.
3. An agreement will be in effect between OFL and the Colby, Kansas investor
group and/or the nine AM bridge loan investors which would require the
issuance of 1,162,780 shares of stock.
4. Key OFL shareholders will agree to exercise their respective options which
total 2,400,000 shares.
5. All OFL stock owned by IMA, the six stock option shareholders of OFL, the
Team and Asia Pacific Industries Development Group (hereinafter APIDG) will
be restricted for (1) year from the date of closing.
6. Future options and stock incentive programs will be put in place for the
management team. In addition, a qualified Board of Directors will be formed
on an equitable basis. Any person serving on the new board of directors of
OFL will receive a 500,000 share after 10 for one split, 50,000 shares at
$3.00 per share option to purchase stock at $.30 per share exercisable as
any time up to the earlier of 5 years after the date of issuance or six
months after completion of a secondary offering.
Page (01)
<PAGE>
7. Upon closing, the number of shares of OFL will be as follows:
No. of Shs.
-----------
Orion Financial Currently Outstanding 4,641,522
Stock Options 2,400,000
Total 7,041,522
AFI Mgmt. 6,604,838
APIDG 4,548,787
IMA 26,129,941
Colby/Bridge Ln. 1,162,780
TOTAL 45,487,867
The parties agree that this contemplated transaction will be consummated no
later than May 15, 1998, the ("Closing Date"). The "Closing Date" may be
extended if both parties mutually agree.
A. Due Diligence. Prior to the closing of the transaction, The Team
and OFL will provide IMA all documentation relative to the
completion of the transaction in order to successfully complete
its Due Diligence, including, but not limited to:
a. Pertinent corporate documents - incorporation papers,
certificates, resolutions, etc. Of all companies and
subsidiaries.
b. Financial statements.
c. Stockholder lists and corporate records.
d. All past and pending litigation.
e. Make all necessary information and key personnel available
to assist in the development of a complete business plan for
IMA.
B. Responsibility. No Party shall be responsible for any of the
other's expenses in connection with the negotiations and due
diligence contemplated.
Page (02)
<PAGE>
C. Additional Terms. The transaction is subject to the following
additional terms and conditions.
(1) The approval and consent of the Board of Directors of OFL
and IMA shall have been obtained prior to the closing date.
(2) All necessary filings with, or approvals by state and
federal governmental agencies or regulatory bodies shall be
made by each party.
(3) As part of the closing, key employees of the Team agree to
enter into employment agreements, including but not limited
to compensation, benefits, bonus plans, etc. Employment
agreements will contain a non compete clause.
D. Exclusive. Prior to the closing and during the term of this
Letter of Agreement, neither the Team nor the directors and/or
shareholders of OFL will discuss or negotiate with any other
corporation, firm or person, or entertain or consider any
inquiries or proposals relating to the possible sale of a
material portion of its stock or their assets.
E. Announcements. Public announcements by a party herein concerning
the execution of this letter and the transactions contemplated
hereby shall be submitted for prior review and approval (such
approval not to be unreasonably withheld) by the other party.
F. Obligation of Good Faith. The Team, IMA and OFL shall proceed
forward and be obligated in good faith to negotiate the terms and
conditions of this transaction.
G. Notices. All notices, consents, requirements, approvals and
notices and other communications provided herein shall be in
writing, and shall be deemed given when delivered personally or
mailed by certified mail, postage prepaid.
Page (03)
<PAGE>
As to the Team:
M. Terry A. Hunter
226 W. Delaware Circle
Littleton, CO 80120
Phone: (303) 798-5512
Fax: (303) 794-7342 c/o Roger Arthur
As to IMA:
Mr. Gerald C. Parker
101 Philippe Parkway #300
Safety Harbor, Fla 34695
Phone: (813) 669-0040
Fax: (813) 725-9570
As to OFL:
ORION FINANCIAL, LTD.
Mr. Dean Boedeker, President & CEO
80 N. Hoyt St.
Denver, CO 80226
Phone: (303) 860-6382
Fax: (303) 860-6045
H. Acceptance. If the foregoing is acceptable to you, please
indicate your acceptance by signing and returning a copy of this
letter. It is mutually agreed that the law firm of Smith
McCullough, P.C. or Edward O. Byrne will prepare the closing
documents.
I. Letter of Agreement. No party shall bear any liability to the
other in the event of non-completion of said transaction by all
panties on or before May 15, 1998. If this transaction does not
occur, this letter of Agreement shall be null and void unless an
extension is mutually agreed upon prior to the aforementioned
date.
J. This binding Letter of Agreement is contingent upon consummation
of an agreement between OFL and APIDG satisfactory to IMA to
provide a minimum three million dollar ($3,000,000) inventory
financing to OFL with a minimum of 120 day dating.
Page (04)
<PAGE>
AGREED AND ACCEPTED;
INVESTMENT MANAGEMENT OF AMERICA, INC.
By /s/ Gerald C. Parker Attested: /s/ Gerald C. Parker
------------------------------- -----------------------------------
Gerald C. Parker, President
Date: April 23, 1998
The Team:
By /s/ Terry A. Hunter Attested: /s/ Terry A. Hunter
------------------------------- -----------------------------------
Terry A. Hunter, Individually
Date: April 23, 1998
AGREED AND ACCEPTED
ORION FINANCIAL, LTD.
By /s/ Dean Boedeker Attested: /s/ Dean H. Boedeker
------------------------------- -----------------------------------
Dean Boedeker, President
Date: April 23, 1998
AGREED AND ACCEPTED
Page (05)
<PAGE>
AMENDMENT NUMBER ONE TO BINDING LETTER OF AGREEMENT
THIS AMENDMENT NUMBER ONE TO BINDING LETTER OF AGREEMENT among Orion
Financial, Ltd. ("OFL"), Terry Hunter and Investment Management of America, Inc.
("IMA") is dated May 1, 1998.
OFL, Terry Hunter and IMA hereby agree that the Binding Letter of Agreement
dated April 23, 1998 ("Agreement") is amended by replacing paragraph 4 of the
Agreement with the following:
4. Key OFL shareholders, except for Thomas A. Breen, will
exercise their respective options for a total of 2,000,000 shares.
AGREED AND ACCEPTED:
Investment Management of America, Inc.
/s/ Gerald C. Parker
- --------------------------------------
Gerald C. Parker, President
Date: May 1, 1998
AGREED AND ACCEPTED:
/s/ Terry A. Hunter
- --------------------------------------
Terry A. Hunter, Individually
Date: May 1, 1998
AGREED AND ACCEPTED:
Orion Financial, Ltd.
/s/ Dean H. Boedeker
- --------------------------------------
Dean H. Boedeker, President
Date: May 1, 1998
