-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O3shJOYDiyC6mW7vY0qTfCWJ2Wv3h9WNgXfHhriSa/JP2zfh05mKFQIPQHlxStbW xHS5VCOlS3OUngPlFGh1CA== 0001021890-98-000119.txt : 19980605 0001021890-98-000119.hdr.sgml : 19980605 ACCESSION NUMBER: 0001021890-98-000119 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980604 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ORION FINANCIAL LTD CENTRAL INDEX KEY: 0000711210 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531] IRS NUMBER: 840858679 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-34590 FILM NUMBER: 98642386 BUSINESS ADDRESS: STREET 1: 80 NORTH HOYT ST CITY: DENVER STATE: CO ZIP: 80226 BUSINESS PHONE: 3032380937 MAIL ADDRESS: STREET 1: 80 NORTH HOYT STREET CITY: DENVER STATE: CO ZIP: 80226 FORMER COMPANY: FORMER CONFORMED NAME: ORION BROADCAST GROUP INC DATE OF NAME CHANGE: 19900130 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BADOLATO ANDREW M CENTRAL INDEX KEY: 0001062588 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 7069 S TAMIAMI TRAIL CITY: SARASOTA STATE: FL ZIP: 34231 BUSINESS PHONE: 8136690040 SC 13D 1 SCHEDULE 13D 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) Andrew M. Badolato 7069 South Tamiami Trail, Sarasota, Florida 34231 (941) 925-2500 -------------------------------------------------------------- (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 CUSIP No. 68627L 10 3 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Andrew M. Badolato ------------------------------------------------------------------------- 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 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) 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 Investment Management of America, Inc. ("IMA"). The 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. 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). (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. 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 Andrew M. Badolato were purchased by Mr. Badolato 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. Badolato 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 - 3 - each to Andrew M. Badolato and Gerald C. Parker, who are affiliated with IMA, 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. - 4 - 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, Andrew M. Badolato 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; (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; - 5 - (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, Andrew M. Badolato 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) Andrew M. Badolato 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. Badolato shares voting and dispositive power over the 4,548,786.80 shares with Gerald C. Parker and IMA. The identity and background of Gerald C. Parker, IMA and the officers, directors and control persons of IMA are as follows: (1) 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 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. - 6 - (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 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. - 7 - (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 Andrew M. Badolato 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 Andrew M. Badolato. (d) No person other than Andrew M. Badolato 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. Badolato, IMA, as the holder of 4,548,786.80 of the Shares, and Gerald C. Parker, 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. 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 - 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/ Andrew M. Badolato Date: May 27, 1998 --------------------------------------- Andrew M. Badolato - 9 - EX-1 2 AGREEMENT AND BILL OF SALE DATED APRIL 10, 1998 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 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 EX-2 3 ASSUMPTION AGREEMENT DATED APRIL 10, 1998 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 /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. EX-3 4 PRODUCTION AND INVENTORY DATING AGREEMENT 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 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. 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 ----------------------------------------------------------- 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 ----------------------------------------- EX-4 5 BINDING LETTER OF AGREEMENT 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) 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) 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) 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) 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) 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 -----END PRIVACY-ENHANCED MESSAGE-----