Date: June 24, 2009
Xushui District Dongfang Trading Limited
Company
Xushui District, Nanhe Shouying
North Village, China
Attention: Jianjun Li
Re: Orient Paper,
Inc.
To whom-it-may-concern :
This letter, once fully executed and
delivered, constitutes an agreement (the “Agreement”)
of Barron Partners, LP, Fernando Liu and Golden1177 LP
(collectively, the “Purchasers” and individually, the
“Purchaser”) to purchase from Xushui District Dongfang
Trading Limited Company ( “Seller”) an aggregate
2,000,000 shares of common stock in Orient Paper, Inc.
(“Company”) at $.375 per share for an aggregate
purchase price of $750,000 (Seven Hundred and Fifty Thousand U.S.
Dollars) (the “Purchase Price”) and the
Company.
WHEREAS, contemporaneous with the execution and delivery
of this Agreement, the parties hereto are executing and delivering
an Escrow Agreement, in the form attached hereto as Exhibit
“A” (the “ Escrow Agreement ”),
pursuant to which the parties shall establish an escrow account
(the “Escrow Account”) with Sichenzia Ross Friedman
Ference LLP (the “Escrow Agent”) and have agreed to
deposit the Purchase Price, as hereinafter defined, into such
Escrow Account.
The terms and conditions of this
Agreement are as follows:
|
1.
|
Sale of the Company’s
Common Stock Shares .
|
For a total consideration of
$750,000 (Seven Hundred and Fifty Thousand U.S. Dollars) (the
“Purchase Price”) Seller agrees to sell, and the
Purchasers agree to purchase: 2,000,000 shares of common stock of
the Orient Paper, Inc. (the “Shares”) at $.375per share
as follows:
|
|
a.
|
Following due execution of this
Agreement, Purchasers shall deliver or cause to be delivered the
Purchase Price to the Escrow Agent as follows:
|
Bank: Citibank
Address: 666 Fifth Avenue, New
York, NY
ABA No.: 021000089
SWIFT: CITIUS33
Account: Sichenzia Ross
Friedman Ference LLP Attorney Escrow Account for Orient Paper,
Inc.
Account No.:
92883436
Reference: Orient Paper,
Inc.
|
|
b.
|
If the Seller has not already done
so, following due execution of this Agreement, Seller shall deliver
the certificates representing the Shares, with all of the fees,
instructions and signatures required to transfer the Shares to the
Purchasers, to Sichenzia Ross Friedman Ference LLP, Orient Paper,
Inc.’s attorneys.
|
1
|
|
c.
|
The Escrow Agent shall notify the
Seller within 3 business days of the Escrow Agent’s receipt
of the Purchase Price; immediately after which, the Seller
will
|
|
|
i.
|
instruct the Company’s
transfer agent to cancel the Seller’s certificate
representing the Shares and reissue the Shares in the names of the
Purchasers and to the Purchasers as follows:
|
|
Purchaser’s Name and Tax
ID
|
Amount of Shares to be
Transferred
|
Mailing Address
|
|
Barron Partners LP
Tax ID 43-1981699
|
1,147,000
|
730 Fifth Avenue, 26th Floor New
York, NY 10019
|
|
Fernando Liu
|
13,000
|
Room 302, Unit 18, 299 HuXin Road,
MinHang District Shanghai 201101 China
|
|
Golden1177 LP
46-0521814
|
840,000
|
#500-1177 West Hastings Street,
Vancouver BC V6E 2K3 Canada
|
|
|
ii.
|
submit a Release Notice, as such
term is defined in the Escrow Agreement, to the Escrow Agent. In
particular, such Release Notice shall instruct Escrow Agent to wire
only $250,000 (Two Hundred and Fifty Thousand U.S. Dollars) of the
Purchase Price to the Seller, $70,000 (Seven Thousand U.S. Dollars)
to Sichenzia Ross Friedman Ference, LLP for past and current legal
fees with the remainder of the Purchase Price to be applied in
accordance with Section 2 hereto.
|
|
|
iii.
|
inform the Company of the receipt of
the Purchase Price, whereupon the Company shall immediately pay or
cause to be paid $500,000 or the Renminbi (Chinese currency)
equivalent of the same representing the remainder of the Purchase
Price to the Seller.
|
|
|
d.
|
The Closing of the transactions
contemplated by this Agreement shall be deemed to have occurred
upon the delivery of the certificates representing the Shares to
the Purchasers.
|
The Company and the parties each,
jointly and severally, agrees that the $500,000 (Five Hundred
Thousand U.S. Dollars) of Purchase Price held in the Escrow Account
shall be reserved and applied to pay:
|
|
i.
|
$70,000 to Sichenzia Ross Friedman
Ference LLP comprising $25,000 for past legal fees owed by the
Company, $20,000 for current legal fees incurred in this
transaction and $25,000 fees that will be incurred by the Company
for the listing of the Company on the NYSE Amex;
|
|
|
ii.
|
audit fees of the Big 10 accounting
firm to be appointed pursuant to Section 3iii below; and
|
|
|
iii.
|
investor relations fees.
|
The Company acknowledges that the
transaction contemplated herein is beneficial to the Company and as
a condition to and in consideration of the parties entering into
this transaction, the receipt,
2
sufficiency and validity of which
are hereby acknowledged by the Company, hereby undertakes to the
Seller and the Purchasers that it shall:
|
|
i.
|
execute the relevant instrument(s)
prior to Closing in order that the Company complies with The
Interim Regulation on Merger and Acquisition of Domestic
Enterprises by Foreign Investors , promulgated on August 8,
2006 and effective as of September 8, 2006;
|
|
|
ii.
|
make payment of $500,000 or the
Renminbi (Chinese currency) equivalent of the same
representing the remainder of the Purchase Price to the Seller in
accordance with Section 1c (iii) above;
|
|
|
iii.
|
appoint a Big 10 accounting firm as
its independent auditor within six (6) months of the date of
Closing;
|
|
|
iv.
|
provided the Company is eligible,
apply to list on the NYSE Amex within three (3) months of the
Closing;
|
|
|
v.
|
issue or cause to be issued to
Sichenzia Ross Friedman Ference LLP 60,000 shares of common stock
of the Company in part payment of its past legal fees;
|
|
|
vi.
|
not effect or enter into or be in
any agreement to effect any transaction involving a “Variable
Rate Transaction” or an “MFN Transaction” (each
as defined below) for a period of three (3) years from
Closing. The term “Variable Rate Transaction”
shall mean a transaction in which the Company issues or sells (i)
any debt or equity securities that are convertible into,
exchangeable or exercisable for, or include the right to receive
additional shares of common stock either (A) at a conversion,
exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of
common stock at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange
price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the
occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the common
stock. The term “MFN Transaction” shall mean a
transaction in which the Company issues or sells any securities in
a capital raising transaction or series of related transactions
which grants to an investor the right to receive additional shares
based upon future transactions of the Company on terms more
favorable than those granted to such investor in such
offering. Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.
|
|
|
vii.
|
not cause to be cancelled all
convertible debt in the Company on or prior to Closing and for a
period of three (3) years fr
|
|
