UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  April 9, 2010

ORIENT PAPER, INC.
(Exact Name of Registrant as Specified in Charter)

Nevada
 
001-34577
 
20-4158835
(State or Other Jurisdiction
 
(Commission File Number)
 
(IRS Employer
of Incorporation)
     
Identification No.)

Nansan Gongli, Nanhuan Road
Xushui County, Baoding City
Hebei Province, The People’s Republic of China 072550
(Address of Principal Executive Offices)

Registrant's telephone number, including area code:   011   - (86) 312-8605508
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



 
 
 

 


Item 1.01.          Entry into a Material Definitive Agreement.
 
Item 2.01           Completion of Acquisition or Disposition of Assets.
 
On April 9, 2010, Hebei Baoding Orient Paper Milling Company Limited, the operating entity of Orient Paper, Inc., a Nevada corporation (the “Company”), entered into a definitive equipment purchase agreement (“the Agreement”) with Henan Qinyang First Paper Machine Limited to purchase a corrugating medium paper production line with an annual production capacity of 360,000 tons for a purchase price of RMB 190.0 million (approximately $27.8 million).  With the signing of the Agreement, a deposit of RMB 38.0 million (approximately $5.6 million) has been applied toward the first installment of the total purchase price. The remainder of the payment will be made in additional installments in commensuration with the progress made on equipment installation in the next six months.  A copy of the Agreement is being filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference in its entirety.
 
Item 7.01.          Regulation FD Disclosure.

On April 12, 2010, the Company issued a press release announcing the acquisition described in Items 1.01 and 2.01 above.  A copy of the press release is being filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in its entirety.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Item 9.01           Financial Statements and Exhibits.
 
(d) Exhibits.
 
10.1
 
Purchase Agreement for Machineries and Equipment, dated April 9, 2010, by and Hebei Baoding Orient Paper Milling Company Limited and Henan Qinyang First Paper Machine Limited (translated).
     
99.1
 
Press release dated April 12, 2010, issued by Orient Paper, Inc.
     

 
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Date: April 12, 2010
   
 
ORIENT PAPER, INC.
     
 
By:  
/s/ Winston Yen
 
Winston Yen
 
Chief Financial Officer


 
 
Exhibit 10.1
 
 
Purchase Agreement
 
for Machineries and Equipments
 
[Unofficial Translation]

This Purchase Agreement (the “Agreement”) is executed on April 9, 2010, in Xushui County, Baoding City, Hebei Province, by and between Henan Qinyang First Paper Machine Limited (hereinafter referred to as “Party A”) and Hebei Baoding Orient Paper Milling Company Limited (hereinafter referred to as “Party B”). After friendly negotiation, both Parties agree on that Party B hereby purchase a series of Paper Machineries and Equipments (hereinafter referred to as “Equipments”) from Party A, and all terms and conditions as follows:

Item I, Product Name, Modal, Quantity, Amount, and Delivery Time and Quantity
 
Product Name
and
Modal
 
Trade Name
 
Measurement Unit
 
Quantity
5600# Long Mesh and
Multi-cylinder Paper Machine
“Qinyiji”
“沁一机”
 
By Set
One
5600# Winder Machine
“Qinyiji”
“沁一机”
 
By Set
One
（With 10 pieces of Winding Roll）
5600# Sizing Machine
“Qinyiji”
“沁一机”
 
By Set
One
5600# Rewinder Machine
 
By Set
 
One
Quantitative On-line
Moisture Analyzer
 
 
By Suit
One
Total purchase price: RMB190 Million Yuan
Total purchase price includes all expenses which will generate from Party A’s
installation, debugging and after-sales service.
 
Other provisions:
1. Party A shall submit basic structure of Equipments to Party B within 20 days after effectiveness of this Agreement;
Party A shall complete basic installation of these Equipments within 3 months after
effectiveness of this Agreement;
Party A shall complete all installation of these Equipments and delivery to Party B within 6 months.
 
2. Party A shall manufacture these Equipments according to structure and technical modulus which have been agreed by both Parties.

 
 
 
 
 
1
 
 
 
 
Item II, Quality Assurance Provisions
 
Party A hereby ensure that provided Equipments should be comply with relevant national standards for paper-making equipment, Party A also ensure that Equipments are original packed, qualified, brand-new products, and have never been used. The quality, specifications and performance of these Equipments are fully comply with requirements in this Agreement; Party A hereby guarantee that Equipments have good performance from the delivery time to its whole working life.
 
Party A hereby promises that repair period for complete appliance of the Equipments is for one year after installation, and repair period for Sizing components is for half one year after installation.

Item III, Place and Method for Delivery
 
Place of Delivery: Party A shall delivery the Equipments to the facility of Party B and bear all shipping expenses.
Method of Delivery: After delivery the Equipments to Party B, Party A should dispatch their technical specialists for installation and debugging. Completing delivery shall be deemed as after putting Equipments into use and after Party B’s acceptance, the acceptance date shall be the delivery date. Any damage or loss risks to Equipments shall be transferred to Party B from Party A after delivery date.

Item IV , Packaging Standard and Packaging Recycling
Packaging materials will not return to Party A.

Item V , Acceptance Method and Standard
 
After installation of all Equipments in this Agreement by Party A, Party B shall send technical specialist to check and accept such Equipments according to Exhibit 1 (5600/1200# stacked mesh and Multi-cylinder Paper Machine technical modulus) , Exhibit 2 (Full installation structure) and Exhibit 3 (Cast Iron Dryer Technical Standards QB2551-2008 for Paper Production). Qualified acceptance shall be considered as delivery completing.

Item VI , Supply of Mandatory Spare Parts, Accessories and Tools
 
Party A should provide hydraulic pump and tools which will be used in disassemble roller and mesh system.

Item VII, Payment Methods
 
Payment Methods is subject to Exhibit 4 after negotiation between both parties.
 
 
 
 
2
 
 

 
Item VIII , Deposit Provisions
 
Deposit of 20% of total purchase price ( equal to RMB38 Million Yuan) which was paid by Party B to Party A according to Letter of Intent for Purchase Machineries and Equipments signed on March 15, 2010 shall be considered as deposit for this Agreement.

Item IX, Default Liabilities
 
1. 
If Party A is unable to deliver any Equipments stated in Item I, Party A shall reimburse Party B with 50% of purchase price for these un-delivered Equipments as penalty; If adverse material effect is suffered from these un-delivered Equipments, Party A shall reimburse Party B with 50% of total purchase price of all Equipments as penalty; If actual damages made to Party B exceed reimbursement to Party B, then Party A shall reimburse actual damages to Party B.
 
2.  
In the case any Equipments delivered by Party A is inconsistent with its specifications stated in Item I, the purchase price for such Equipments shall be priced according to its actual quality upon acceptance by Party B. However, if Party B is unable to use such Equipments, Party A shall be responsible for replacement or repair, and bear all expensed occurred from repair, replacement or return of Equipments. If Party A is unable to repair or replace such Equipments, Party B will consider such actions as un-delivery and subject to liabilities stated above.
 
3.
 Party A shall reimburse penalty for any late delivery to Party B and bear all other damages made to Party B due to such late delivery. Penalty shall be 30% of total purchase price of all Equipments. Party A shall discuss any late delivery equipment before they can provide such Equipments with Party B. If Party B still agree to purchase these Equipments, then Party A shall deliver immediately according to ordered numbers; If Party B decide not to purchase such late delivery Equipments no longer, Party B shall notify Party A by 15 days in advance and terminate relevant terms in this Agreement.
 
4.
Any late payment from Party B shall subject to relevant provisions in the regulation of deferred payment from People’s Bank of China, and Party B shall reimburse 30% of late payment to Party A as penalty.

Item X , Miscellaneous
 
Any default payments or damage losses which should be reimburse to each party according to this Agreement shall be effected within 10 days, otherwise, such reimburse shall be settled as late payment. However, any reimburse can not be settled by withholding any equipment or deducting any purchase price as an offset.

Item XI , Solution of Dispute
 
Any dispute raising from any party shall be negotiated and resolved timely and any unresolved dispute can be submitted to the court in Party B’s local region for jurisdiction.

Item XII, Installation Provisions
 
Party A shall send technical specialist to Party B’s facility and promise to complete all installation for trial production within 6 months after signing of this Agreement, otherwise, Party A shall subject to default liabilities.

Item XIII , Effectiveness
 
This Agreement is executed in two copies, and each of them held by Party A and Party B. All Exhibits to this Agreement are equally authentic. This Agreement shall take effect after signed and sealed by both parties.

Exhibits to this Agreement includes:
Exhibit 1: 5600/1200# stacked mesh and Multi-cylinder Paper Machine technical modulus
Exhibit 2: Full installation structure
Exhibit 3: Cast Iron Dryer Technical Standards QB2551-2008 for Paper Production
Exhibit 4: Payment Methods
 
 
[Signature Page]
 
 
 

 
 
 
3
 
 

 
Party A’s information:
 
Company Name: Henan Qinyang First Paper Machine Limited
 
(Seal)
 
/s/ Chunjian Zhang
 
Company Address: Industrial Area in Gecun, Qinyang City
 
Legal Representative: Gongwen Zhang
 
Authorized Representative: Chunjian Zhang
 
Telephone: 0319-5936384
 
Opening Bank: Agricultural Bank of China, Gecun Branch in Qinyang City
 
Account Number: 16314101040001056
 
Post Code: 454586

Party B’s information:
 
Company Name: Hebei Baoding Orient Paper Milling Company Limited
 
(Seal)
 
/s/ Zhenyong Liu
 
Company Address: Wuji Village, Xushui County, Baoding City, Hebei Province
 
Legal Representative: Zhenyong Liu
 
Telephone/Fax: 0312-8605508/8698212
 
Opening Bank: Industry and Commercial Bank of China, Xushui Sub-Branch
 
Account Number: 0409016009245030421
 
Post Code: 072550




 
4
 







Exhibits 4:
Payment Methods

This Payment Methods is an integral part of the Purchase Agreement which is signed between Henan Qinyang First Paper Machine Limited (hereinafter referred to as “Party A”) and Hebei Baoding Orient Paper Milling Company Limited (hereinafter referred to as “Party B”) on April 9, 2010. For the 80% reminder payment of purchase price, both parties hereby agree with below payment schedule:
 
     First Batch: 10% of purchase price shall be paid to Party A after Basic Plat delivery;
   
     Second Batch: 20% of purchase price shall be paid to Party A after Mesh Components, Pressing Components and Fixture Components delivery;
 
     Third Batch: 10% of purchase price shall be paid to Party A after Drying Components and Fixture Components delivery;
 
     Fourth Batch: 10% of purchase price shall be paid to Party A after the first and second Cylinder Components delivery;
 
     Fifth Batch: No payment shall be paid to Party A after the third and fourth Cylinder Components delivery;
 
     Sixth Batch: No payment shall be paid to Party A after the fifth and sixth Cylinder Components delivery;
 
     Seventh Batch: 10% of purchase price shall be paid to Party A after Winder Machine, Rewinder Machine and Sizing Machine delivery;
 
     Eighth Batch: 15% of purchase price shall be paid to Party A after Drive Components delivery.

     The 5% reminder of purchase price as quality margin shall be paid off by Party B within 3 months after production.

Party A shall provide lawful VAT invoices to Party B. Each batch of delivery stated above shall be confirmed by Party B before effect payment.





[Signature Page]







 
5
 




Party A’s information:
 
Company Name: Henan Qinyang First Paper Machine Limited
 
(Seal)
 
/s/ Chunjian Zhang
 
Company Address: Industrial Area in Gecun, Qinyang City
 
Legal Representative: Gongwen Zhang
 
Authorized Representative: Chunjian Zhang
 
Telephone: 0319-5936384
 
Opening Bank: Agricultural Bank of China, Gecun Branch in Qinyang City
 
Account Number: 16314101040001056
 
Post Code: 454586

Party B’s information:
 
Company Name: Hebei Baoding Orient Paper Milling Company Limited
 
(Seal)
 
/s/ Zhenyong Liu
 
Company Address: Wuji Village, Xushui County, Baoding City, Hebei Province
 
Legal Representative: Zhenyong Liu
 
Telephone/Fax: 0312-8605508/8698212
 
Opening Bank: Industry and Commercial Bank of China, Xushui Sub-Branch
 
Account Number: 0409016009245030421
 
Post Code: 072550




 
 
 
6
Exhibit 99.1

 
Orient Paper Announces RMB 190 Million Acquisition of Corrugating Medium Paper Production Line
 
Adds 360,000 tons of annual corrugating medium paper production capacity

Press Release Source: Orient Paper, Inc. On Monday April 12, 2010, 8:00 am EDT
 
BAODING, China, April 12 /PRNewswire-Asia-FirstCall/ -- Orient Paper, Inc. (Amex: ONP.a - News ) ("Orient Paper" or the "Company"), a leading manufacturer and distributor of diversified paper products in Hebei, China, today announced that on April 9, 2010, the Company entered into a definitive equipment purchase agreement ("the Agreement") with Henan Qinyang First Paper Machine Limited ("Qinyang Paper Machine") to purchase a corrugating medium paper production line with an annual production capacity of 360,000 tons for RMB 190.0 million (approximately $27.8 million).
 
According to the Agreement, Qinyang Paper Machine will be responsible for complete installation of the new production line within the next six months. Orient Paper had signed a Letter of Intent with Qinyang Paper Machine on March 15, 2010 and made a refundable deposit of RMB 38.0 million (approximately $5.6 million), which is about 20% of the total purchase price. With the signing of the Agreement, the deposit has been applied toward the first installment of the total purchase price. The remainder of the payment will be made in additional installments in commensuration with the progress made on equipment installation. Orient Paper expects to begin trial production in the beginning of the fourth quarter of 2010. Upon successful completion of the trial production at the end of 2010, Orient Paper plans to begin large scale production of corrugating medium paper on its newly added production line and achieve a utilization rate of approximately 70% in fiscal year 2011.
 
"With the additional 360,000 tons of corrugating medium paper production capacity, we are set to expand our market share in northern China's rapidly growing paper industry," said Mr. Zhenyong Liu, Chairman and Chief Executive Officer. "The newly acquired production line will increase our total production capacity from the existing 280,000 tons to reach 640,000 tons by 2011. Corrugating medium paper production capacity is expected to increase over 200%. The continued progress and development of our regional economy and the domestic consumer and packaging industries have resulted in robust demand for corrugating medium paper products. We believe the additional capacity will enable us to better serve the growing demand for corrugating medium paper contributing to our future revenue growth and profitability."
 
About Orient Paper, Inc.
 
Orient Paper, Inc., through its wholly owned subsidiaries, Shengde Holdings, Inc., controls and operates Baoding Shengde Paper Co., Ltd. ("Baoding Shengde"), and Hebei Baoding Orient Paper Milling Co., Ltd ("HBOP"). Founded in 1996, HBOP is engaged in the production and distribution of products such as corrugating medium paper, offset printing paper, writing paper, and other paper and packaging-related products in China. The Company uses recycled paper as its primary raw material. Baoding Shengde, founded in June 2009 located in Baoding, is engaged in the production and distribution of digital photo paper. As one of the largest paper producers in Hebei Province, China, HBOP is strategically located in Baoding, a city in close proximity to Beijing where the majority of publishing houses are based. Orient Paper is led by an experienced management team committed to diversifying the Company's product offering and delivering tailored services to its customers. For more information, please visit http://www.orientalpapercorporation.com .
 
Safe Harbor Statement
 
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, anticipated revenues from the digital photo paper business segment; the actions and initiatives of current and potential competitors; the Company's ability to introduce new products; the Company's ability to implement the planned capacity expansion of corrugate medium paper; market acceptance of new products; general economic and business conditions; the ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
 
    For more information, please contact:

    CCG Investor Relations
    Athan Dounis, Account Manager
    Tel:   +1-646-213-1916
    Email: athan.dounis@ccgir.com

    Orient Paper, Inc.
    Winston Yen, CFO
    Tel:   +1-562-818-3817 (Los Angeles)
    Email: info@orientalpapercorporation.com