Document:

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.
 

 

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            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. 
 

 

	
            2.
 	
            Use of Purchase Price
 

 

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.
 

 

	
            3.
 	
            Company’s Undertaking
 

 

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, 

 

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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 from the Closing, the Company will not issue any convertible debt.
 

 

	
            4.
 	
            Seller’s Right of Recourse
 

 

Seller agrees that, provided Purchasers have fulfilled all their obligations in this Agreement, that its sole right of recourse for any failure by the Company to make payment as set forth above in Sections 1 c(iii) and 3(ii) shall be against the Company only and the Purchasers shall not be responsible or held liable for any breaches of the same.

 

	
            5.  
 	
            Purchasers, jointly and severally, represent and warrant to Seller as follows:
 

	
             
 	
            a.
 	
            Each of the Purchasers has the full power and authority to enter into this Agreement and to carry out its obligations hereunder.
 

	
             
 	
            b.
 	
            This Agreement has been duly executed and delivered by Purchasers and creates a legal, valid and binding obligation of Purchasers, enforceable against Purchasers in accordance with its terms.
 

	
             
 	
            c.
 	
            The Purchasers are buying the Shares solely for their respective own account, for investment and not with a view to resale in connection with a distribution thereof.   
 

	
             
 	
            d.
 	
            The Purchasers agree to hold harmless Seller from any losses Purchasers may sustain from any resale or disposition of the Shares.
 

	
             
 	
            e.
 	
            The execution and delivery of this Agreement and the consummation of the transactions contemplated herein will not conflict with or violate any law, regulation, court order, 
 

 

	
            PURCHASE AND SALE
 

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judgment or decree applicable to Purchasers or any agreement to which Purchasers are a party, or, in the case of any such law, regulation, court order, judgment, decree or agreement, by which the property of Purchasers is bound or affected. 

	
             
 	
            f.
 	
            The Purchasers are a either a 1) corporation, partnership or limited liability company that is a Qualified Institutional Buyer (QIB), acting for its own account or for the account of other QIBs, that in the aggregate owns and invests on a discretionary basis at least $100 Million in securities of issuers that are not its affiliates or 2) an "accredited investor" as that term is defined in Rule 501 promulgated under the Securities Act of 1933.
 

	
             
 	
            g.
 	
            Each of the Purchasers has a net worth and income such that the loss of his, her or its entire investment in the Shares will not adversely affect the Purchasers’ financial condition, business or lifestyle.
 

	
             
 	
            h.
 	
            The Purchasers have such knowledge, business and investment experience that Purchasers are fully capable of understanding the merits and risks associated with an investment in the Shares.
 

	
             
 	
            i.
 	
            The representations made in this Agreement by Purchasers are deemed to be remade as of the Closing.
 

	
             
 	
            j.
 	
            The Purchasers agree that they share not sell the Shares whilst they are in possession of material nonpublic information.
 

	
             
 	
            k.
 	
            The Purchasers understand that Seller is relying upon the truth and accuracy of, and the Purchasers’ compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the eligibility of the Purchasers to acquire the Shares and the Purchasers acknowledge that they are not relying on any representation or warranty by Seller except as expressly set forth in section 6.
 

 

 

	
            6.
 	
            Seller represents and warrants to the Purchasers as follows:
 

	
             
 	
            a.
 	
            Seller has the full power and authority to enter into this Agreement and to carry out its obligations hereunder.
 

	
             
 	
            b.
 	
            Seller is the beneficial and record owner of the Shares and has good and marketable (except for applicable securities law restrictions) title to the Shares, free and clear of all liens, claims, charges, security interests, and encumbrances of any kind or nature.  
 

	
             
 	
            c.
 	
            This Agreement has been duly executed and delivered by Seller and is the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms.
 

	
             
 	
            d.
 	
            The Seller releases and forgoes claim to any and all profits and gains on the Shares incurred after the Closing.  
 

	
             
 	
            e.
 	
            The execution and delivery of this Agreement and the consummation of the transactions contemplated herein will not conflict with or violate any law, regulation, court order, judgment or decree applicable to Seller or any agreement to which Seller is a party, or, in the case of any such law, regulation, court order, judgment, decree or agreement, by which the property of Seller is bound or affected. 
 

	
             
 	
            f.
 	
            The representations made in this Agreement by Seller are deemed to be remade as of the Closing.
 

	
             
 	
            g.
 	
            The Seller is not in possession of any material nonpublic information regarding the Company.
 

	
             
 	
            h.
 	
            The Seller understands that Purchasers are relying upon the truth and accuracy of, and the Seller’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Seller set forth herein and the Seller acknowledges that it is not relying on any representation or warranty by Purchasers except as expressly set forth in section 5.
 

 

	
            7.
 	
            Company represents and warrants as follows:
 

 

	
             
 	
            a.
 	
            Company has the full power and authority to enter into this Agreement and to carry out its obligations hereunder.
 

 

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            b.
 	
            This Agreement has been duly executed and delivered by Company and creates a legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms.
 

	
             
 	
            c.
 	
            The execution and delivery of this Agreement and the consummation of the transactions contemplated herein will not conflict with or violate any law, regulation, court order, judgment or decree applicable to Company or any agreement to which Company is a party, or, in the case of any such law, regulation, court order, judgment, decree or agreement, by which the property of Company is bound or affected. 
 

 

	
            8.   
 	
            Each of the Purchasers and Seller agrees as follows:
 

 

	
             
 	
            a.
 	
            Seller shall hold Purchasers harmless for any commission and/or fees agreed to be paid by Seller to any broker, finder or other person or entity acting or purporting to act in a similar capacity and Purchasers shall hold Seller harmless for any commission and/or fees agreed to be paid by Purchasers to any broker, finder or other person or entity acting or purporting to act in a similar capacity. 
 

	
             
 	
            b.
 	
            To furnish to the other such additional information regarding themselves and the Company as the other shall reasonably request prior to closing and which may be obtained without any unreasonable hardship or expense in connection with the consummation of the transactions contemplated in this Agreement.  
 

	
             
 	
            c.
 	
            To do all things reasonably necessary or convenient before or after the closing, and without further consideration, to consummate the transactions contemplated herein.
 

 

	
            9.
 	
            Indemnification by the Purchasers: Each of the Purchasers, jointly and severally, agrees to indemnify, defend and hold harmless Seller  against and in respect of any loss, damage, deficiency, cost or expense (including without limitation reasonable attorneys’ fees) resulting from any breach by such Purchasers of any of the representations, warranties, covenants or agreements of such Purchasers contained in this Agreement.
 

 

	
            10.
 	
            Indemnification by the Seller: Seller agrees to indemnify, defend and hold harmless the Purchasers against and in respect of any loss, damage, deficiency, cost or expense (including without limitation  reasonable attorneys’ fees) resulting from any breach by Seller of any of the representations, warranties, cove­nants or agreements of Seller contained in this Agreement.  
 

 

	
            11.
 	
            Jurisdiction and Venue; Choice of Law; Waiver of Jury Trial; Attorneys Fees: The sole and exclusive jurisdiction and venue for any action or proceeding arising from or relating to this Agreement shall be the federal and state courts located in the City and County of New York, State of New York, and all parties hereto consent to the jurisdiction of such courts.  This Agreement shall be deemed to have been executed and delivered within the State of New York, and any disputes arising from or relating to this Agreement shall be governed by the laws of the State of New York.  All parties hereto agree that they irrevocably waive their right to a trial by jury in any action or proceeding arising from or relating to this Agreement.  If any action or
proceeding is brought by any party arising from or relating to this Agreement or in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or appellate court if such party substantially prevails on all the issues in dispute. All questions as to the interpretation and effect of this Agreement shall be determined under the laws of the State of New York.
 

 

	
            12.
 	
            Survival: The representations and warranties contained herein shall survive the closing date for a period of one (1) year.
 

 

	
            13.
 	
            Notice: Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered 
 

 

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personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a Party.

 

	
            14.
 	
            Counterparts: This Agreement may be executed by facsimile or scanned document via email in two or more counterparts, each of which shall be deemed an original and together shall constitute one and the same Agreement.
 

 

	
            15.
 	
            Parties in Interest.  This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto, other than by operation of law. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. 
 

 

[Signature page follows]

 

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IN WITNESS WHEREOF, this Agreement is executed the day and year first above written.

 

SIGNATORY FOR THE PURCHASER 

 

The undersigned, as of this 24th day of June, 2009, executes and delivers this Agreement on behalf of Purchaser:

 

_/s/ Andrew Barron Worden______________

BY: Andrew Barron Worden

	
             
 	
            Title: Managing Partner
 

  Barron Partners, LP

 

PURCHASER ENTITY:

	
             
 	
            Name Shares should be registered to:  Barron Partners, LP
 

Address: 730 5th Avenue, 25th floor

City, State Zip: New York, NY 

No. of Shares: 1,147,000

Tax ID: 43-1981699

 

PURCHASER ENTITY:

 

_/s/ Fernando Liu________________________

BY: Fernando Liu

Address: Room 302, Unit 18, 299 HuXin Road, MinHang District Shanghai 201101 China

 

No. of Shares: 13,000

EIN: 

 

_/s/ Alex Lau____________________________

BY: Alex Lau

	
             
 	
            Title:
 

 

PURCHASER ENTITY:

	
             
 	
            Name Shares should be registered to:  Golden1177 LP
 

Address: #500-1177 West Hastings Street, Vancouver BC V6E 2K3 Canada

 

No. of Shares:  840,000

 

	
             
 	
            EIN:
 

SELLER:

 

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Agreed to and accepted as of this 24th day of June, 2009

 

BY: _/s/ Jianjun Li_________________

Xushui District Dongfang Trading Limited Company

 

Name : _Jianjun Li_______

Title: __Chairman and General Manager________

 

THE COMPANY:

 

Agreed to and accepted as of this 24th day of  June, 2009 

 

BY: __/s/ Zhenyong Liu___________________

Orient Paper Inc.

Name : _Zhenyong Liu_____________

Title: ___Chief Executive Officer_____

 

 

 

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Exhibit A

(Recital)

 

Form of Escrow Agreement

 

 

 

 

 

9ESCROW AGREEMENT

 

This Agreement, dated as of June 24, 2009 (this “Agreement”), is entered into by and among Orient Paper, Inc., a Nevada corporation (the “Company”), Xushui District Dongfang Trading Limited Company, a company incorporated under the laws of the People’s Republic of China  (“Seller”), Barron Partners, LP, Fernando Liu and Golden1177 LP (“Purchasers”) and Sichenzia Ross Friedman Ference LLP (the “Escrow Agent”).  The Company, the Seller and the Purchasers shall collectively be referred to as the “Escrowing Parties”. The principal address of each party hereto is set forth
on Exhibit A.

WITNESSETH:

WHEREAS, Purchasers, Seller and Company have entered into an agreement (the “Stock Purchase Agreement”) whereby Seller has agreed to sell and Purchasers have agreed to purchase an aggregate 2,000,000 shares of common stock in the Company for a total consideration of $750,000 (“Purchase Price”);

WHEREAS, Purchasers, Seller and Company desire to deposit the Purchase Price received by the Seller from the Purchasers in the sale transaction under the Stock Purchase Agreement (the “Escrowed Funds”) with the Escrow Agent, to be held and disbursed by the Escrow Agent pursuant to this Agreement and the Stock Purchase Agreement; and

WHEREAS, Escrow Agent is willing to hold the Escrowed Funds in escrow subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained and intending to be legally bound, the parties hereby agree as follows:

Unless otherwise defined, all terms used herein shall bear the same meaning as set forth in the Stock Purchase Agreement.

1.        Appointment of Escrow Agent.  The Company, each Purchaser and Seller hereby appoint Escrow Agent as escrow agent in accordance with the terms and conditions set forth herein and the Escrow Agent hereby accepts such appointment.

	
             
  	
            2.
 	
            Delivery of the Escrowed Funds.
 

a.  The Purchasers will deliver or cause to be delivered the Escrowed Funds 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. The Escrowed Funds shall be forwarded to the Escrow Agent by wire transfer, together with the written account of purchase (the “Purchase”) in the form attached hereto as Exhibit B (the “Purchaser Information”).  The Escrowed Funds to be wired shall be wired to the account set forth in Section 2(a) above and the Purchase shall be faxed or emailed to the Escrow Agent in accordance with the information provided on Exhibit A.

c.  Simultaneously with each deposit, each Purchaser shall provide the Escrow Agent with the Purchaser Information, including the name, address and taxpayer identification number of each Purchaser and of the aggregate principal amount of Securities purchased by the Purchaser.

 

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d. In the event a wire transfer is received by the Escrow Agent and the Escrow Agent has not received Purchaser Information, the Escrow Agent shall notify the Purchaser.  If the Escrow Agent does not receive the Purchaser Information by such Purchaser prior to close of business on the fifth (5th) business day (days other than a Saturday or Sunday or other day on which the Escrow Agent is not open for business in the State of New York) after notifying the Purchaser of receipt of said wire, the Escrow Agent shall return the funds to the Purchaser.

3.         Escrow Agent to Hold and Disburse Escrowed Funds.  The Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant to the terms of this Agreement, as follows:

a.  At such time that the Purchase Price is deposited and upon receipt of instructions from the Company in substantially the form of Exhibit C hereto, following the consummation of the sale transaction, the Escrow Agent shall release an aggregate of Seventy Thousand Dollars ($70,000) (the “Initial Disbursements”) of the Escrowed Funds in the manner specified in Exhibit C. In the event that the Purchase Price is not deposited, the Escrow Agent shall continue to hold the Escrowed Funds, pending receipt of instructions from the Company.

b.         Following the release of the Initial Disbursements, the balance of the Escrowed Funds shall remain in the Escrow Account and shall only be released by the Escrow Agent upon the Escrow Agent’s receipt of written notice from the Company, in the form of Exhibit D hereto for the payment of legal, auditing, and investor relations expenses incurred by the Company.

c.         In the event this Agreement, the Escrowed Funds, or the Escrow Agent becomes the subject of litigation, or if the Escrow Agent shall desire to do so for any other reason, each of the Company, the Seller, and the Purchasers authorizes the Escrow Agent, at its option, to deposit the Escrowed Funds with the clerk of the court in which the litigation is pending, or a court of competent jurisdiction if no litigation is pending, and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility with regard thereto. Each of the Company, the Seller, and the Purchasers further authorizes the Escrow Agent, if it receives conflicting claims to any of the Escrowed Funds, is threatened with litigation or if the Escrow Agent shall desire to do so for any other reason, to interplead all interested
parties in any court of competent jurisdiction and to deposit the Escrowed Funds with the clerk of that court and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility hereunder to the parties from which they were received.

	
             
  	
            4.
 	
            Exculpation and Indemnification of Escrow Agent.
 

a.  The Escrow Agent shall have no duties or responsibilities other than those expressly set forth herein.  The Escrow Agent shall have no duty to enforce any obligation of any person to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any person to perform any other act.  The Escrow Agent shall be under no liability to the other parties hereto or anyone else, by reason of any failure, on the part of any party hereto or any maker, guarantor, endorser or other signatory of a document or any other person, to perform such person’s obligations under any such document.  Except for amendments to this Agreement referenced below, and except for written instructions given to the Escrow Agent by the Company relating to the Escrowed Funds, the Escrow Agent shall not be obligated to recognize any
agreement between or among any of the Escrowing Parties, notwithstanding that references hereto may be made herein and whether or not it has knowledge thereof.

b. The  Escrow Agent shall not be liable to the Company, Seller or Purchasers or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report, or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained), which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The  Escrow Agent shall not be bound by any of the terms thereof, unless evidenced by written notice delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are a
ffected, unless it shall give its prior written consent thereto.

 

 

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c.  The Escrow Agent shall not be responsible for the sufficiency or accuracy of the form, or of the execution, validity, value or genuineness of, any document or property received, held or delivered to it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein; nor shall the Escrow Agent be responsible or liable to the Company, Seller or Purchasers or to anyone else in any respect on account of the identity, authority or rights, of the person executing or delivering or purporting to execute or deliver any document or property or this Agreement. The Escrow Agent shall have no responsibility with respect to the use or application of the Escrowed Funds pursuant to the provisions hereof.

d. The Escrow Agent shall have the right to assume, in the absence of written notice to the contrary from the proper person or persons, that a fact or an event, by reason of which an action would or might be taken by the Escrow Agent, does not exist or has not occurred, without incurring liability to the Company, Seller or Purchasers or to anyone else for any action taken or omitted to be taken or omitted, in good faith and in the exercise of its own best judgment, in reliance upon such assumption.

e.  To the extent that the Escrow Agent becomes liable for the payment of taxes, including withholding taxes, in respect of income derived from the investment of the Escrowed Funds, or any payment made hereunder, the Escrow Agent may pay such taxes; and the Escrow Agent may withhold from any payment of the Escrowed Funds such amount as the Escrow Agent estimates to be sufficient to provide for the payment of such taxes not yet paid, and may use the sum withheld for that purpose.  The Escrow Agent shall be indemnified and held harmless against any liability for taxes and for any penalties in respect of taxes, on such investment income or payments in the manner provided in Section 4(f).

f.  The Escrow Agent will be indemnified and held harmless by the Company from and against all expenses, including all counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or proceedings involving any claim, or in connection with any claim or demand, which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, except for claims relating to gross negligence by Escrow Agent or breach of this Agreement by the Escrow Agent, or the monies or other property held by it hereunder.  Promptly after the receipt of the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made against the Company, notify each of them thereof in writing, but the
failure by the Escrow Agent to give such notice shall not relieve any such party from any liability which the Company may have to the Escrow Agent hereunder.  Notwithstanding any obligation to make payments and deliveries hereunder, the Escrow Agent may retain and hold for such time as it deems necessary such amount of monies or property as it shall, from time to time, in its sole discretion, seem sufficient to indemnify itself for any such loss or expense and for any amounts due it under Section 7.

g. For purposes hereof, the term “expense or loss” shall include all amounts paid or payable to satisfy any claim, demand or liability, or in settlement of any claim, demand, action, suit or proceeding settled with the express written consent of the Escrow Agent, and all costs and expenses, including, but not limited to, counsel fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.

	
             
  	
            5.
 	
            Termination of Agreement and Resignation of Escrow Agent
 

a.  This Agreement shall terminate upon disbursement of all of the Escrowed Funds, provided that the rights of the Escrow Agent and the obligations of the Company, the Seller, and the Purchasers under Section 4 shall survive the termination hereof. 

b. The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving the Company at least five (5) business days written notice thereof (the “Notice Period”).  As soon as practicable after its resignation, the Escrow Agent shall, if it receives notice from the Escrowing Parties within the Notice Period, turn over to a successor escrow agent appointed by the Company all Escrowed Funds (less such amount as the Escrow Agent is entitled to retain pursuant to Section 7) upon presentation of the document appointing the new escrow agent and its acceptance thereof.  If no new agent is so appointed within the Notice

 

 

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Period, the Escrow Agent shall return the Escrowed Funds to the parties from which they were received without interest or deduction.

	
             
  	
            6.
 	
            Form of Payments by Escrow Agent
 

a.  Any payments of the Escrowed Funds by the Escrow Agent pursuant to the terms of this Agreement shall be made by wire transfer unless directed to be made by check by the Escrowing Parties.

b. All amounts referred to herein are expressed in United States Dollars and all payments by the Escrow Agent shall be made in such dollars.

	
             
  	
            7.
 	
            Compensation.  Escrow Agent shall be entitled to the following compensation from the Company:
 

a.  Fees:  The Escrowing Parties shall pay a processing fee of $500 to the Escrow Agent for each disbursement made subsequent to the Closing and the Initial Disbursements.

	
             
  	
            b.
 	
            Interest:  The Escrowed Funds shall be held in a non-interest bearing escrow account.
 

8.         Notices.  All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized standing), or
(iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 6:00 p.m.  in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party’s telecopier machine).  If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 8), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender).  All such notices, demands, consents, requests, instructions and other communications will be sent to addresses or facsimile numbers as applicable set forth on Exhibit A hereto.

9.         Further Assurances.         From time to time on and after the date hereof, the  Company, the Seller and each of the Purchasers, if applicable, shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do and cause to be done such further acts as the Escrow Agent shall reasonably request (it being understood that the Escrow Agent shall have no obligation to make any such request) to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

10.       Consent to Service of Process.  The Company, the Seller, and each Purchaser hereby irrevocably consents to the jurisdiction of the courts of the State of New York and of any Federal court located in such state in connection with any action, suit or proceedings arising out of or relating to this Agreement or any action taken or omitted hereunder, and waives personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail directed to it at the address listed on Exhibit A hereto.

	
             
  	
            11.
 	
            Miscellaneous.
 

a.  This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing such instrument to be drafted.  The terms “hereby,” “hereof,” “hereunder,” and any similar terms, as used in this Agreement, refer to the Escrow Agreement in its entirety and not only to the particular portion of this Agreement where the term is used.  The word “person” shall mean any natural person, partnership, corporation, government and any other form of business of legal entity.  All words or terms used in this 

 

 

4 

 

Agreement, regardless of the number or gender in which they were used, shall be deemed to include any other number and any other gender as the context may require.  This Agreement shall not be admissible in evidence to construe the provisions of any prior agreement.

b. This Agreement and the rights and obligations hereunder of the Company, the Seller and Purchasers may not be assigned.  This Agreement and the rights and obligations hereunder of the Escrow Agent may be assigned by the Escrow Agent, with the prior consent of the Escrowing Parties.  This Agreement shall be binding upon and inure to the benefit of each party’s respective successors, heirs and permitted assigns. No other person shall acquire or have any rights under or by virtue of this Agreement. This Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent, the Company, the Seller, and the Purchasers. This Agreement is intended to be for the sole benefit of the parties hereto and their respective successors, heirs and permitted assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person.

c.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Agreement shall survive the execution and delivery hereof and any investigations made by any party.  The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms thereof.

12.       Execution of Counterparts.            This Agreement may be executed in a number of counterparts, by facsimile, each of which shall be deemed to be an original as of those whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more of the counterparts hereof, individually or taken together, are signed by all the parties.

 

5 

 

[SIGNATURE PAGE TO ESCROW AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of date first written above.

 

ORIENT PAPER, INC.

By: /s/ Zhenyong Liu                                          

Name: Zhenyong Liu

Title: Chief Executive Officer

 

XUSHUI DISTRICT DONGFANG TRADING LIMITED COMPANY

By: /s/ Jianjun Li                                                  

Name: Jianjun Li

Title: Chairman and General Manager

 

SICHENZIA ROSS FRIEDMAN FERENCE LLP

By: /s/ Gregory Sichenzia                                  

Name: Gregory Sichenzia

Title: Partner

 

PURCHASERS

Barron Partners, LP

By: /s/ Andrew Worden                                   

Name:  Andrew Worden

Title: Managing Partner

 

By: /s/ Fernando Liu                                         

Name:  Fernando Liu

 

Golden1177 LP

By: /s/ Alex Lau                                                

 

 

6 

 

Name:  Alex Lau

Title: Director 

 

 

7 

 

EXHIBIT A

 

PARTIES TO AGREEMENT

 

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, New York 10001

Attention: Gregory Sichenzia, Esq.

Tel No.: (212) 212-9700

Fax No.: (212) 212-9725

Orient Paper, Inc.

Nansan Gongli, Nanhuan Road, Xushui County

Baoding City, Hebei Province, The People’s Republic of China 072550

Attention: Zhenyong Liu

Tel No.:(86) 312-860-5508

Fax No.: (86) 312-860-5530

 

Xushui Dongfang Trading Limited Company

Xushui District, Nanhe Shouying North Village, China 

Attention: Jianjun Li

Tel. No.: (86) 312-869-8210

Fax No.: (86) 312-869-8210

 

Purchasers

 

Name of Purchaser: Barron Partners LP

Address: 730 Fifth Avenue, 26th Floor New York, NY 10019

Attention: Andrew Worden

Tel: 212-359-0208 or 212-359-0204

Email: achain@barronpartners.com/rbaum@barronpartners.com

 

Name of Purchaser: Fernando Liu

Address: Room 302, Unit 18, 299 HuXin Road, MinHang District Shanghai 201101 China

Attention: Fernando Liu

Tel:  861-376-1347367

Email: fol@barronpartners.com

 

Name of Purchaser: Golden1177 LP

Address: #500-1177 West Hastings Street, Vancouver BC V6E 2K3 Canada

Attention: Alex Lau

Tel:  604-374-1070

Email: alau@goldenproperties.ca

 

8 

 

 

EXHIBIT B

PURCHASER INFORMATION

 

	
            Name of Purchaser
 	
             
 	
             
 
	
            Address of Purchaser
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            Amount of Securities Purchased (US$)
 	
             
 	
             
 
	
            Purchase Amount Submitted Herewith
 	
             
 	
             
 
	
            Taxpayer ID Number/
 Social Security Number
 	
             
 	
             
 

 

 

9 

 

EXHIBIT C

DISBURSEMENT REQUEST

 

Pursuant to that certain Escrow Agreement dated effective as of June 24, 2009, among Orient Paper, Inc.,  Xushui District Dongfang Trading Limited Company,  Barron Partners, LP, Fernando Liu and Golden1177 LP and Sichenzia Ross Friedman Ference LLP, as escrow agent, Barron Partners and the Company hereby request disbursement of funds in the amount and manner described below from account number 92883436, styled Sichenzia Ross Friedman Ference LLP Attorney Escrow Account.

 

	
             
 	
            Please disburse to:
 	
            ________________________________
 

	
             
 	
            Amount to disburse:
 	
            ________________________________
 

	
             
 	
            Form of distribution:
 	
            ________________________________
 

Payee:

	
             
 	
            Name:
 	
            ________________________________
 

	
             
 	
            Address:
 	
            ________________________________
 

	
             
 	
            City/State:
 	
            ________________________________
 

	
             
 	
            Zip:
 	
            ________________________________
 

	
             
 	
            Please disburse to:
 	
            ________________________________
 

	
             
 	
            Amount to disburse:
 	
            ________________________________
 

	
             
 	
            Form of distribution:
 	
            ________________________________
 

Payee:

	
             
 	
            Name:
 	
            ________________________________
 

	
             
 	
            Address:
 	
            ________________________________
 

	
             
 	
            City/State:
 	
            ________________________________
 

	
             
 	
            Zip:
 	
            ________________________________
 

 

ORIENT PAPER, INC.

	
            Date:  _________________________
 	
            By:  _________________________
 

Name:

Title:

 

10 

 

EXHIBIT D

DISBURSEMENT REQUEST

 

Pursuant to that certain Escrow Agreement dated effective as of June 24, 2009, among Orient Paper, Inc.,  Xushui District Dongfang Trading Limited Company,  Barron Partners, LP, Fernando Liu and Golden1177 LP and Sichenzia Ross Friedman Ference LLP, as escrow agent, Barron Partners and the Company hereby request disbursement of funds in the amount and manner described below from account number 92883436, styled Sichenzia Ross Friedman Ference LLP Attorney Escrow Account.

 

	
             
 	
            Please disburse to:
 	
            ________________________________
 

	
             
 	
            Amount to disburse:
 	
            ________________________________
 

	
             
 	
            Form of distribution:
 	
            ________________________________
 

Payee:

	
             
 	
            Name:
 	
            ________________________________
 

	
             
 	
            Address:
 	
            ________________________________
 

	
             
 	
            City/State:
 	
            ________________________________
 

	
             
 	
            Zip:
 	
            ________________________________
 

	
             
 	
            Please disburse to:
 	
            ________________________________
 

	
             
 	
            Amount to disburse:
 	
            ________________________________
 

	
             
 	
            Form of distribution:
 	
            ________________________________
 

Payee:

	
             
 	
            Name:
 	
            ________________________________
 

	
             
 	
            Address:
 	
            ________________________________
 

	
             
 	
            City/State:
 	
            ________________________________
 

	
             
 	
            Zip:
 	
            ________________________________
 

 

ORIENT PAPER, INC.

	
            Date:  _________________________
 	
            By:  _________________________
 

Name:

Title:

 

11

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