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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
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FUNDING AND SUBSCRIPTION AGREEMENT
TO PURCHASE COMMON STOCK
OF
ORION TECHNOLOGIES, INC.
(A NEVADA CORPORATION)
THIS FUNDING AND SUBSCRIPTION AGREEMENT ("Agreement") is made as of May
5, 2000, by and between OIF OPTIMUM INVESTMENT FINANCE AG, a Swiss Company
("OIF"), and ORION TECHNOLOGIES, INC, a Nevada corporation ("ORION").
WITNESSETH
WHEREAS, ORION desires to continue to expand its operations through the
development of its existing subsidiaries, as well as through the acquisition of
additional established companies within the telecommunications and electronic
commerce industries.
WHEREAS, XXXXX has offered to sell, and OIF desires to acquire, up to
1,000,000 shares (the "Shares") of ORION's common stock, par value $.001 (the
"Common Stock") at a purchase price of $4.50 per share, subject to adjustment as
set forth in this Agreement.
WHEREAS, ORION and OIF desire to document and implement their
understanding in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual undertakings herein and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
SECTION 1. Purchase and Sale of Shares. XXXXX hereby agrees to
sell to OIF and OIF hereby agrees to purchase the Shares, in the installments
and on the terms and conditions described herein. To effectuate the purchase of
Shares, OIF shall make available the applicable purchase price described in
Sections 2 and 3 below ("Purchase Price"), in an account designated by ORION.
Upon receipt of the Purchase Price, ORION will instruct its transfer agent to
issue and deliver a certificate representing the corresponding number of Shares
to OIF or its nominee.
SECTION 2. Quarterly Funding. OIF has committed to provide ORION
with the working capital and operating funds necessary for the continued
operations of ORION and its subsidiaries during the twelve month period
commencing on May 1, 2000. OIF hereby agrees to pay $US 750,000 ("Quarterly
Funding") to ORION on each of the following quarterly dates: May 15, 2000,
August 15, 2000, November 15, 2000, and February 15, 2001. Upon receipt of each
Quarterly Funding payment, ORION will instruct its transfer agent to issue
166,667 Shares of Common Stock, at a rate equal to the "Per Share Price" as
determined by Orion's Board of
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Directors. ORION's Board of Directors will determine the "Per Share Price" after
consultation with OIF, and consideration of such factors as the current price
and trading volume of the Common Stock on the OTC Bulletin Board, and the
availability of other sources of financing. Notwithstanding the immediately
preceding sentence to the contrary, in no event will the "Per Share Price" be
less than $US 4.00.
SECTION 3. Additional Funding. In addition to the Quarterly
Funding defined above, OIF agrees to provide additional funds ("Acquisition
Funding") necessary for the expansion of ORION's operations through those
acquisitions, mergers or strategic partnerships approved by ORION's Board of
Directors during the twelve month period commencing on May 1, 2000. As
consideration for such Acquisition Funding, ORION will provide OIF with Shares,
up to the total Shares purchasable under this Agreement, at a rate equal to the
"Per Share Price" determined by ORION's Board of Directors. OIF will not be
obligated to provide Acquisition Funding in excess of $1,500,000 in the
aggregate.
SECTION 4. OIF Representations and Warranties. OIF hereby
acknowledges, represents and warrants to, and agrees with, XXXXX as follows:
(a) Offshore Transaction; Offering Restrictions; Resale
Restrictions.
(i) OIF is not, and at the time the offer to
purchase the Shares was made to OIF was not, a "U.S. person"*/ as that
term is defined under Regulation S ("Regulation S") of the Securities
Act of 1933, as amended (the "Securities Act").
(ii) OIF is outside of the United States* as of
the date of the execution and delivery of this Subscription Agreement.
(iii) No resale of any of the Shares subscribed
for under this Agreement has been pre-arranged with a purchaser in the
United States.
(iv) OIF is not a Distributor* and is not
purchasing Common Stock with the intent of distributing the Shares on
behalf of ORION or a Distributor or any of their affiliates.
(v) OIF is purchasing the Shares for its own
account (and/or for the account of other non-U.S. Persons who are
outside of the United States) and not for the account or benefit of any
U.S. Person.
(vi) OIF hereby covenants and agrees to resell
any of the Shares only in accordance with the provisions of Regulation
S, pursuant to registration of the Shares under the Securities Act or
pursuant to an available exemption from registration under the
Securities Act.
(vii) The certificates representing the Shares
will bear a legend substantially as follows:
--------
* See Appendix A attached hereto for definitions of "U.S. person", "distributor"
and "United States" under Regulation S.
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THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION; HEDGING
TRANSACTIONS INVOLVING THE COMMON STOCK MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THE ISSUER WILL
REFUSE TO REGISTER ANY TRANSFER OF SUCH SECURITIES NOT MADE IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S AND MAY REQUIRE, AS
A CONDITION TO ANY REGISTRATION OF TRANSFER, AN OPINION OF
COUNSEL, A CERTIFICATE OR SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT THE TRANSFER HAS
BEEN MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE
SECURITIES ACT.
(viii) Prior to reselling any of the Shares during
the Restricted Period (as defined below), OIF will send a notice to the
potential purchaser that such potential purchaser may be subject to the
restrictions of Regulation S during the Restricted Period. For purposes
of this Subscription Agreement, the "Restricted Period" means a period
that commences on the later of the date upon which the Shares were
first offered to persons other than Distributors in reliance upon
Regulation S or the date of which the related Purchase Price is
received by XXXXX and expires one year thereafter.
(ix) Neither OIF nor any entity controlled by it
has a short position in the Common Stock nor will have a short position
in the Common Stock at any time prior to the expiration of the
Restricted Period.
(x) The purchase of the Shares by OIF is not a
transaction that is part of any plan or scheme to evade the
registration provisions of the Securities Act.
(b) OIF Awareness.
(i) OIF has the financial ability to bear the
economic risk of its investment in the Shares (including its possible
loss) and has no need for liquidity with respect to its investment in
the Shares.
(ii) OIF has such knowledge and experience in
financial and business matters so as to be capable of evaluating the
merits and risks of an investment in the Shares and has obtained, in
its judgment, sufficient information from ORION to evaluate the merits
and risks of an investment in the Shares.
(iii) OIF and each person for whose account it is
purchasing Shares is an "Accredited Investor" as that term is defined
in Rule 501(a) promulgated under Regulation D of the Securities Act,
which definition is set forth in Appendix A.
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(iv) The Shares are not being subscribed for by
OIF as a result of any material information about XXXXX's affairs that
has not been publicly disclosed.
(v) OIF has been provided an opportunity to
obtain any additional information concerning ORION and the Common
Stock, and all other information to the extent ORION possesses such
information or can acquire it without unreasonable effort or expense
and specifically acknowledges its awareness of the latest press
releases made by ORION and XXXXX's proxy statement for its 1999 annual
meeting of stockholders, a copy of which was provided to OIF.
(vi) OIF has been given the opportunity to ask
questions of, and receive answers from the Management of ORION, and has
been given the opportunity to obtain such additional information
necessary to verify the accuracy of the information which was otherwise
provided in order for it to evaluate the merits and risks of an
investment in the Shares to the extent ORION possesses such information
or can acquire it without unreasonable effort or expense.
(vii) OIF has determined that an investment in the
Shares is a suitable investment for it and that at its time it could
bear a complete loss of its investment.
(viii) In making its decision to purchase the
Shares herein subscribed for, OIF has relied solely upon independent
investigations made by it. OIF is not relying on ORION with respect to
tax and other economic considerations involved in its investment.
(ix) OIF further understands that ORION is under
no obligation to register the Shares on its behalf or to assist it in
complying with any exemption from such registration under the
Securities Act. OIF also understands that sales or transfers of the
Shares, or any part thereof, may be further restricted by provisions of
the applicable state securities laws.
(x) Pursuant to Paragraph 3.1(e) and Rule
903(c)(3)(iii)(B)(4) under the Securities Act, OIF acknowledges and
agrees that XXXXX has agreed for the benefit of all holders of the
Shares that it will refuse to register any transfer of the Shares not
made in accordance with the provisions of Regulation S.
(xi) OIF understands that XXXXX will not be
registered as an investment adviser under the Investment Advisers Act
of 1940, and ORION will not be registered as an investment company
under the Investment Company Act of 1940 or as a "dealer" under the
Securities Exchange Act of 1934, in reliance upon the availability of
exemptions from the registration provisions of such statutes.
(xii) OIF acknowledges that (i) ORION has no
significant financial and operating history; (ii) no federal or state
agency has passed upon the Shares or made any findings or determination
as to the fairness of its investment; (iii) an investment in ORION is
an illiquid investment and OIF must bear the economic risk of its
investment for an indefinite period of time; (iv) the management of
ORION may be indemnified against liabilities sustained by it by reason
of its serving as the management of ORION; (v) ORION has not yet
recorded revenues; (vi) ORION does not have publicly available current
financial
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information; and (vii) ORION does not now have the officers and
directors or other management necessary to ensure the success of ORION.
(xiii) OIF acknowledges that holders of the Shares
will have no right to participate in management of ORION or in the
conduct of its business. In addition, XXXXX may continue to offer
additional Shares for sale without the consent of the holders of the
Shares.
(xiv) OIF acknowledges that once signed, this
Agreement is irrevocable by OIF and constitutes a binding agreement
enforceable against OIF.
(c) Reliance. The representations, warranties,
agreements, undertakings and acknowledgments made by OIF in this Agreement are
made with the intent that they be relied upon by ORION and its management in
determining OIF's suitability as a purchaser of the Shares. In addition, OIF
undertakes to notify ORION immediately of any change in any representation,
warranty or other information relating to OIF set forth herein. XXXXX is
entitled to rely on the representations made by OIF now and after the Shares are
issued.
SECTION 5. Representations and Warranties of ORION. XXXXX hereby
acknowledges, represents and warrants to, and agrees with, XXX as follows:
(a) The Shares when purchased by OIF and upon receipt of
the Additional Capital for such Shares by ORION shall be validly issued, fully
paid and non-assessable.
(b) ORION is not a reporting issuer as defined by Rule
902 of Regulation S.
(c) Offshore Transaction.
(i) ORION has not offered the Shares to any
person in the United States or to any U.S. person as that term is
defined in Regulation S.
(ii) ORION has no reason to believe that the
purchase of any Shares has been prearranged with a purchaser in the
United States.
(d) In connection with the offering of the Shares, XXXXX
has not engaged in any "directed selling efforts" (as that term is defined in
Regulation S) nor has ORION conducted any general solicitation relating to the
offering of the Shares to persons residing within the United States or to U.S.
persons.
(e) Pursuant to Rule 903(c)(3)(iii)(B)(4) under the
Securities Act, XXXXX hereby agrees for the benefit of all holders of the Shares
that it will refuse to register any transfer of the Shares not made in
accordance with the provisions of Regulation S and this Subscription Agreement.
SECTION 6. Indemnity. OIF and XXXXX each hereby agrees to
indemnify and hold harmless the other and its respective officers, directors and
agents and each other person, if any, who controls or is controlled by any
thereof, within the meaning of Section 15 of the Securities Act, against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited
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to, any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation commenced or threatened or any
claim whatsoever) arising out of or based upon any false representation or
warranty or breach or failure by the indemnifying party herein or in any other
document furnished in connection with this transaction by the indemnifying party
to the other party or any of it officers, directors, agents or controlling
person.
SECTION 7. Miscellaneous.
(a) Modification. Neither this Agreement nor any
provision hereof shall be modified, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
(b) Notices. Any notice, demand or other communication
which any party hereto may be required, or may elect, to give to anyone
interested hereunder shall be sufficiently given if (a) delivered by a
recognized national courier service to such address as may be given herein or
(b) delivered personally at such address.
(c) Binding Effect. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns.
(d) Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes and prior subscription agreement signed by OIF, and there are no
representations, covenants or other agreements except as stated or referred to
herein.
(e) Assignability. This Agreement is not transferable or
assignable by either party.
(f) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada applicable to
contracts made and to be performed entirely within such state.
(g) Counterparts; Fax Execution. This Agreement may be
executed through the use of separate signature pages or in any number of
counterparts, and each of such counterparts shall, for all purposes, constitute
one agreement binding on all the parties, notwithstanding that all parties are
not signatories to the same counterpart. This Agreement may be signed by fax
delivery of a signed signature page to the other party and such fax execution
shall be valid in all respects.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below.
OIF Investment Finance AG Orion Technologies, Inc.
By: /s/ By: /s/
---------------------------- -------------------------
Xxxxx Xxxxxxxxxx A. Xxxxx Xxxxxxxx
Manager President
Date: Date:
--------------------------- -------------------------
Address for Notices: Address for Notices:
Rennweg 00 0000 Xxxxxxxx Xxxx
XX-0000 Xxxxxx Xxxxx 000
Xxxxxxxxxxx Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx Attention: X. Xxxxx Xxxxxxxx
Share Issuance/Delivery Instructions:
Register Shares in name of:
OIF Optimum Investment Finance AG (unless alternative issuance instructions are
separately provided by OIF Optimum Investment Finance AG with respect to any
client of OIF)
Deliver Share Certificate(s) to:
OIF Optimum Investment Finance AG
Rennweg 29
CH-8001 Zurich
Switzerland
Attention: Xxxxx Xxxxxxxxxx
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APPENDIX A
CERTAIN DEFINITIONS
A. "ACCREDITED INVESTOR" - Effective April 19, 1989, the
following are "Accredited Investors" within the meaning of Rule 501(a) of
Regulation D under the Securities Act of 1933 (the "Securities Act"):
1. An individual whose net worth, together with that of
its spouse, exceeds $1,000,000.
2. An individual who had individual income in excess of
$200,000 in each of the two most recent years or joint income with that
individual's spouse in excess of $300,000 in each of those years and who
reasonably expects to reach the same income level its year.
3. A bank as defined in Section 3(a)(2) of the
Securities Act, or a savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual capacity or fiduciary capacity.
4. A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
5. An insurance company as defined in Section 2(13) of
the Securities Act.
6. An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that Act.
7. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
8. An employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of 1974, if:
a. the decision to invest in the entity is made by a
plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, savings and loan
association, insurance company, or registered
investment adviser, or
b. the plan has total assets in excess of $5,000,000, or
c. the plan is a self-directed plan with investment
decisions made solely by persons who are Accredited
Investors.
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9. A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.
10. A charitable organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust or partnership, not formed with the specific purpose of acquiring
the securities, with total assets in excess of $5,000,000.
11. A trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the securities, whose purchase
is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the
Securities Act.
12. Any director, executive officer or general partner of
the issuer of the securities being offered or sold, or any director, executive
officer or general partner of a general partner of that issuer.
13. A plan established and maintained by a state, its
political subdivisions or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees with total assets in
excess of $5,000,000.
14. An entity in which all of the equity owners are
Accredited Investors.
B. "DISTRIBUTOR" means any underwriter, dealer or other person
who participates, pursuant to a contractual agreement, in the distribution of
the securities offered or sold in reliance on Regulation S of the Securities Act
of 1933, as amended.
C. "U.S. PERSON" means:
(i) Any natural person resident in the United
States;
(ii) Any partnership or corporation organized or
incorporated under the laws of the United
States;
(iii) Any estate of which any executor or
administrator is a U.S. person;
(iv) Any trust of which any trustee is a U.S.
person;
(v) Any agency or branch of a foreign entity
located in the United States;
(vi) Any non-discretionary account or similar
account (other than an estate or trust) held
by a dealer or other fiduciary organized,
incorporated or an individual resident in
the United States for the benefit or account
of a U.S. person;
(vii) Any discretionary account or similar account
(other than an estate or trust) held by a
dealer or other fiduciary organized,
incorporated or (if an individual) resident
in the United States; and
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(viii) Any partnership or corporation if: (a)
organized or incorporated under the laws of
any foreign jurisdiction; and (b) formed by
a U.S. person principally for the purpose of
investing in securities not registered under
the Act, unless it is organized or
incorporated, and owned, by Accredited
Investors (as defined in Rule 501(a)) who
are not natural persons, estates or trusts.
(ix) Any discretionary account or similar account
(other than an estate or trust) held for the
benefit or account of a non-U.S. person by a
dealer or other professional fiduciary
organized, incorporated, or (if an
individual) resident in the Untied States
shall not be deemed a "U.S. person."
(x) Any estate of which any professional
fiduciary acting as executor or
administrator is a U.S. person shall not be
deemed a U.S. person if:
(i) An executor or administrator of the
estate who is not a U.S. person has sole or
shared investment discretion with respect to
the assets of the estate; and
(ii) The estate is governed by foreign
law.
(xi) Any trust of which any professional
fiduciary acting as trustee is a U.S. person
shall not be deemed a U.S. person if a
trustee who is not a U.S. person has sole or
shared investment discretion with respect to
the trust assets, and no beneficiary of the
trust (and no settlor if the trust is
revocable) is a U.S. person.
(xii) An employee benefit plan established and
administered in accordance with the law of a
country other than the United States and
customary practice and documentation of such
country shall not be deemed a U.S. person.
(xiii). Any agency or branch of a U.S. person
located outside the United States shall not
be deemed a "U.S. person" if:
(iii) The agency or branch operates for
valid business reasons; and
(iv) The agency or branch is engaged in
the business of insurance or banking and is
subject to substantive insurance or banking
regulation, respectively, in the
jurisdiction where located.
(xiv) The International Monetary Fund, the
International Bank for Reconstruction and
Development, the Inter-American Development
Bank, the Asian Development Bank, the
African Development Bank, the United
Nations, and their agencies, affiliates and
pension
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plans, and any other similar international
organizations, their agencies, affiliates
and pension plans shall not be deemed "U.S.
persons."
D. "UNITED STATES" means the United States of America, its
territories and possessions, any state of the United States, and the District of
Columbia.
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