0001193805-15-001359.txt : 20150812 0001193805-15-001359.hdr.sgml : 20150812 20150812162102 ACCESSION NUMBER: 0001193805-15-001359 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20150812 DATE AS OF CHANGE: 20150812 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GULF RESOURCES, INC. CENTRAL INDEX KEY: 0000885462 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 133637458 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-51019 FILM NUMBER: 151047252 BUSINESS ADDRESS: STREET 1: 99 WENCHANG RD, CHEMING INDUSTRIAL PARK STREET 2: UNIT - HAOYUAN CHEMICAL COMPANY LIMITED CITY: SHOUGUANG CITY, SHANDONG STATE: F4 ZIP: 262714 BUSINESS PHONE: (310) 470-2886 MAIL ADDRESS: STREET 1: 99 WENCHANG RD, CHEMING INDUSTRIAL PARK STREET 2: UNIT - HAOYUAN CHEMICAL COMPANY LIMITED CITY: SHOUGUANG CITY, SHANDONG STATE: F4 ZIP: 262714 FORMER COMPANY: FORMER CONFORMED NAME: DIVERSIFAX INC DATE OF NAME CHANGE: 19940331 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Chen Weijie CENTRAL INDEX KEY: 0001636819 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: NORTH WEIGAO ROAD STREET 2: LUOCHENG SUB-DISTRICT OFFICE CITY: SHOUGUANG STATE: F4 ZIP: 262700 SC 13D 1 e613974_13d-weijie.htm Unassociated Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 13D
 
Under the Securities Exchange Act of 1934
 
Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
 
GULF RESOURCES, INC.
(Name of Issuer)
 
Common Stock, par value $0.0005 per share
(Title of Class of Securities)
 
40251W309
(CUSIP Number)
 
Chen Weijie
 
c/o Level 11,Vegetable Building, Industrial Park of the East City,
Shuoguang City, Shangdong Province, P.R. China
 
 
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
 
January 16, 2015
(Date of Event Which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
 
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
 
*
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 

 
 
CUSIP No.
40251W309
 
1.
NAME OF REPORTING PERSON:
 
Chen Weijie
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
           (a)     ¨
           (b)     x
3.
SEC USE ONLY 
     
 
4.
SOURCE OF FUNDS
 
PF
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e): ¨
 
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
 
People’s Republic of China
NUMBER OF
 SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
7.
SOLE VOTING POWER
 
6,068,011
8.
SHARED VOTING POWER
 
0
9.
SOLE DISPOSITIVE POWER
 
6,068,011
10.
SHARED DISPOSITIVE POWER
 
0
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
6,068,011
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
¨
 
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
13.2(1)
14.
TYPE OF REPORTING PERSON
 
IN
 
(1)          Percentage calculated based on 45,909,876 shares of common stock outstanding as of March 31, 2015, as set forth in the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2015 filed with the SEC on May 15, 2015. 
 
 
 

 
 
ITEM 1.   SECURITY AND ISSUER

This statement relates to the common stock, par value $0.0005 per share (the "Common Stock”), of Gulf Resources, Inc., a Delaware corporation (the “Company”), with its principal executive offices at Level 11,Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong Province, China 262714.
 
ITEM 2.    IDENTITY AND BACKGROUND
 
(a)-(c), (f) 
Mr. Chen Weijie (“Mr. Chen”) is a citizen of the People’s Republic of China. Mr. Chen resides at North Weigao Road, Luocheng Sub-district Office, Shouguang 262700, People’s Republic of China. Mr. Chen is an independent investor and otherwise unemployed.
  
(d)-(e) 
During the last five years, the Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
 
ITEM 3.    SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
 
The Reporting Person used his personal property or funds in acquiring the shares of Common Stock covered under this Schedule 13D as follows:
 
On January 12, 2015, the Company and Shouguang City Haoyuan Chemical Company Limited, a wholly owned subsidiary of the Company (“SCHC”), entered into an Equity Interest Transfer Agreement (the “First Equity Transfer Agreement”) with Shouguang City Rongyuan Chemical Co, Ltd. (“SCRC”) and its shareholders, including Chen Weijie, pursuant to which SCHC shall, upon closing, acquire SCRC and all rights, title and interest in and to all assets owned by SCRC. In consideration for SCRC, SCHC paid $66.2 million in cash and issued approximately 7.27 million shares of common stock of the Company at a price of $2.00 per share. As a result of the foregoing transaction, Chen Weijie, who owned 0.104% of SCRC, acquired 7,559 shares of the Common Stock.
 
              On January 16, Chen Weijie, Chen Weihua and Yuan Yihong entered into an Equity Interest Transfer Agreement (the “Second Equity Transfer Agreement”), pursuant to which Chen Weijie acquired 4,243,363 shares of the Common Stock from Chen Weihua and 1,817,089 shares of the Common Stock from Yuan Yihong for a total purchase price of $12,120,904 in cash. Chen Weijie used his personal funds in completing the foregoing transaction.
 
On February 4, 2015, the Company entered into a Lock-up Agreement with the four former equity owners of SCRC, including Mr. Chen, pursuant to which these shareholders agreed not to sell or transfer their shares for five years from the date of the stock certificates evidencing their shares.
 
References to the First Equity Transfer Agreement, the Second Transfer Agreement and the Lock-up Agreement in this Schedule 13D are qualified in their entirety by reference to the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Lock-up Agreement. A copy of the First Equity Transfer Agreement is incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on January 14, 2015 in its entirety, an English summary of the Second Equity Transfer Agreement is filed hereto as Exhibit 7.02 and incorporated herein by reference in its entirety, and a copy of the Lock-up Agreement is incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 5, 2015 in its entirety
 
ITEM 4.    PURPOSE OF TRANSACTION

The responses of the Reporting Person to Item 3 of this Schedule 13D are incorporated herein by reference.
 
Except as indicated above, the Reporting Persons have no plans or proposals which relate to or would result in any of the actions specified in paragraphs (a) through (j) of Item 4 of the Schedule 13D. The Reporting Persons may, at any time and from time to time, formulate other purposes, plans or proposals regarding the Company, or any other actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of Item 4 of the Schedule 13D.
 
 
 

 
 
ITEM 5.    INTEREST IN SECURITIES OF THE ISSUER

(a)-(b)
The following disclosure assumes that there are 45,909,876 shares of common stock outstanding as of March 31, 2015, as set forth in the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2015 filed with the SEC on May 15, 2015.
 
The responses of the Reporting Person from Rows (7) through (11) of the cover page of this statement are incorporated herein by reference.
 
Mr. Chen has sole voting and dispositive power over 6,068,011 shares of common stock of the Company, which represent approximately 13.2% of the Company’s total shares of common stock.
 
(c)
Except as set forth in Item 3 and 4 above, the Reporting Person has not effected any transactions in the Company’s common stock during the 60 days preceding the filing of this Schedule 13D.
 
(d)-(e)
Not applicable.
 
ITEM 6.
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
 
The descriptions of the principal terms of the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Lock-up Agreement under Item 4 are incorporated herein by reference in their entirety.
 
 To the best knowledge of the Reporting Person, except as provided herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any other person with respect to any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies, or a pledge or contingency, the occurrence of which would give another person voting power over the securities of the Company.
 
ITEM 7.    MATERIAL TO BE FILED AS EXHIBITS.
 
Exhibit 7.01
Equity Interest Transfer Agreement dated January 12, 2015 by and among Shouguang city Haoyuan Chemical Company Limited, Gulf Resources, Inc., Shouguang City Rongyuan Chemical Co., Ltd., Yuan Yihong, Chen Weihua, Chen Weijie and Liu Cuiping (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on January 14, 2015).
 
Exhibit 7.03
English summary of the Equity Interest Transfer Agreement dated January 16, 2015 by and among Yuan Yihong, Chen Weihua and Chen Weijie.
 
Exhibit 7.04
Lock-up Agreement dated February 4, 2015 by and among the Company and certain individuals (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 5, 2015).
 
 
 

 
 
SIGNATURE
 
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated: August 12, 2015
 
 
Chen Weijie
     
 
By: 
/s/ Chen Weijie
     
   
   

 
EX-7.01 2 e613974_ex7-01.htm Unassociated Document

EQUITY INTERESTS TRANSFER AGREEMENT

BETWEEN

SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED,

GULF RESOURCES, INC.

SHOUGUANG CITY RONGYUAN CHEMICAL CO, LTD.

YihongYuan

Weihua Chen

Weijie Chen

AND

Cuiping Liu

DATED AS OF

January 12, 2015
 
 
1

 
 
This EQUITY INTERESTS TRANSFER AGREEMENT (this "Agreement") is entered into as of January 12, 2015 (the "Effective Date") in Shouguang City, Shandong Province, by and between the following parties:

(1) SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED, a company validly existing under the laws of China ("SCHC" or the “Buyer”), a subsidiary of Gulf Resources, Inc..

(2) GULF RESOURCES, INC. (“GURE”), a public company listed on NASDAQ and the parent company of SCHC.

(3) SHOUGUANG CITY RONGYUAN CHEMICAL COMPANY LIMITED, a company validly existing under the laws of China ("SCRC" or the “Target Company”). SCRC was registered on June 2007. Its business address is as follows: the Second Livind District, Qinghe Oildfield factory, Yangkou Township, Shouguang City, Shandong Province, China. SCRC has registered capital, which is fully paid, in the amount of RMB250 million. SCRC is a leading company based in China that manufacturers products used for antibiotics for human and animals.

(4) YihongYuan, Weihua Chen, Weijie Chen and Cuiping Liu, four individual residents of China, who own the following percentages of the equity interests of SCRC (collectively, the “Sellers”):

Cuiping Liu owns 0.296% of the equity interests of SCRC;
Weijie Chen owns 0.104% of the equity interests of SCRC;
Weihua Chen owns 39.84% of the equity interests of SCRC; and
Yihong Yuan owns 59.76% of the equity interests of SCRC.

WHEREAS: the Sellers wish to sell, transfer and convey 100% equity interests of SCRC, and SCHC wishes to purchase and acquire the same from the Sellers based on the price, conditions and understandings set forth in this Agreement.

After the transfer of all of the Sellers’ shares, SCHC will own 100% equity interests of SCRC, and shall be entitled to all of its profit as well as possible operational risks and losses.
 
 
2

 

 
The transfer of 100% equity interests of SCRC has been approved by all SCRC shareholders and board members.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged based on China and U.S. relevant laws, the parties agree as follows:

1. CERTAIN DEFINITIONS

"Closing" of the transactions contemplated by this Agreement shall occur when the transfer under this Agreement is approved by regulatory authorities, andupdates have been made to the register of members, and it has been registered and filed with relevant industrial and commercial bureaus in China (the "Closing Date").

"Person" shall mean any individual, entity or governmental body.

2. TRANSFER OF THE EQUITY INTERESTS AND PAYMENTS

2.1 The Sellers agree that, upon the Closing, they will complete the equity interests transfer registrations and relevant filings with China industrial and commercial bureaus after they receive approvals from various regulatory agencies and make such recordings on SCRC’s stock ledger.

2.2 The parties understand and acknowledge that the total purchase price for SCRC is RMB495,000,000 (the "Purchase Price"). Upon the terms and subject to all of the conditions contained herein, SCHC shall pay the Sellers, the following:

(a) 75% of RMB405,900,000 (the “Cash Purchase Price”) shall be paid in full within 3 business days of the Effective Date of this Agreement; and the remaining 25% of the Cash Purchase Price shall be paid in full within 3 business days of the Closing Date of this Agreement.

(b) 7,268,011shares of GURE’s common stock, par value $0.0005 per share (the “Restricted Stock”), at a price of $2.00 per share, representing an amount equal to RMB89,100,000 (approximately USD14,536,022) in the aggregate shall be issued by GURE to each Seller’s designee listed on the Exhibit 1 of this Agreement within 30 days of the Effective Date of this Agreement;

(c) The number of shares of Restricted Stock is based off of GURE common stock price at $2.00 per share. Based on the average closing price of GURE’s common stock on NASDAQ for the last 10 trading days prior to the Effective Date, which is $1.157, this represents a premium of 73%. The exchange rate applied shall be $1.00 = RMB6.1296, which is the published average exchange rate of the People’s Bank of China on January 9, 2015.
 
 
3

 
 
The Sellers understand and agree that the GURE shall cause the restrictive legends set forth below, or substantially equivalent legends, to be placed upon any certificate(s) evidencing ownership of the Restricted Stock, together with any other legends that may be required by GURE or by applicable laws of the United States:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT.”

2.3 The parties understand and acknowledge that from the Effective Date until the Closing Date, all of SCRC’s income and rights shall belong to SCHC. SCRC shall not make any claim after the Closing Date. SCHC will not object to any board actions consistent with the terms of this Agreement which are made before the Closing Date.

2.4 Upon the Closing Date, Sellers shall  not have any rights, interests, or liabilities in SCRC.

2.5 All parties shall use their best efforts to complete the approval and registration procedures as soon as possible, including but not limited to, the modification registration at the industry and commercial bureau.

2.6 Any approvals or comments received by each party from the government, shall be promptly relayed to other parties by written notice.

3. REPRESENTATIONS AND WARRANTIES

3.1 The Sellers, jointly and severally, represent and warrant to SCHC the following:

(a) Authority.  Each Seller has the requisite power and authority to execute and deliver this Agreement and to perform his obligations hereunder, and to consummate the transactions hereby, and upon the execution and delivery of the instruments and documents specified herein. No further action will be required of the Sellers to vest legal title to and possession of SCRC in the name of SCHC, its successors and assigns, forever.
 
 
4

 
 
(b) Title to Assets. The Sellers have good and marketable title the shares held by each of them in SCRC which have not been pledged or guaranteed to others. The Sellers will be responsible for any and all the possible economic and legal liabilities as a result of a violation of this Section 3.1(b).

(c) Sellers guarantee that SCRC’s 2014 audited net income will not be less than RMB70 million, otherwise the Purchase Price shall be proportionally adjusted.

(d) Sellers shall assist SCHC after the Closing Date to ensure that the entire process is executed successfully, and shall work with SCHC to ensure that SCRC’s original suppliers and customers are transitioned properly within one year from the Closing Date. Otherwise, the Sellers shall be responsible for all the loss incurred by SCHC.

(f) Regulation S. None of the Sellers nor their designees are a "U.S. Person" as defined in Rule 902 of Regulation S promulgated under the Securities Act (the “Securities Act”).  At the time this transaction was originated, each of the Sellers and their designees were outside the United States.  Each of the Sellers or their designees are receiving the Restricted Stock solely for the their own accounts and not for the account or benefit of any U.S. Person.

3.2 Each of SCHC and the Sellers represent and warrant respectively to the other as follows:

(a) Each of SCHC and the Sellers warrants that they have taken all necessary actions for the execution and performance of this Agreement, and they have obtained all necessary approvals and/or authorizations to execute this Agreement.

(b) Except as otherwise disclosed, the performance of the transaction contemplated hereunder is not subject to the consent, approval or order of any governmental authorities or any other third parties, nor is it subject to any conditions precedent as registration with, qualification verification by or document delivery to any governmental authorities or any other third parties.
 
 
5

 

4. INDEMNIFICATION

4.1 If SCHC cannot obtain the equity interests of SCRC which the Sellers agree to sell under this Agreement due to the Sellers’ misrepresentation or concealing of the true situations of such equity interests, the Sellers shall return the full amount of the Purchase Price and pay to SCHC a compensation equal to the Purchase Price.

4.2 SCHC agrees to pay the Sellers overdue compensation for late payment at a rate of 0.05% per day of the overdue amount of the payment..

4.3 Taxes and Levy from Government Agency
All taxes and levy related to the transfer of SCRC equity interests shall be paid by the relevant party pursuant to relevant laws.

5. MISCELLANEOUS PROVISIONS.

5.1 Entire Agreement. This Agreement, along with the documents and agreements to be executed in connection herewith, constitutes the full understanding of the parties, a complete allocation of risks between them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, that may exist between the parties with respect thereto.

5.2 Modification. Any modification of this Agreement shall be made in written, and shall be effective upon the execution of all parties’ authorized representatives and the approval of the relevant authority.

5.3 Severability. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby.

5.4 Counterparts. This Agreement may be executed in eight (8) counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together will constitute an integral party of this Agreement. Each of the seven signing parties will hold one original copy of this Agreement and the eighth original copy will be used for government authority approval purpose.

5.11 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the laws of China.

5.12 Dispute Resolution. The Parties agree to negotiate in good faith to resolve any dispute between them regarding this Agreement. If the negotiations do not resolve the dispute to the reasonable satisfaction of all Parties within 2 months after the commencement of the negotiation, such dispute shall be referred to and finally settled by arbitration at Shandong Arbitration Committee in accordance with their rules. The arbitration ruling shall be final and binding to all parties.
 
[Signature page follows]
 
 
6

 

 

IN WITNESS HEREOF the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first hereinabove mentioned.


Buyer: SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

  /s/ Naihui Miao
Name: Naihui Miao
Title:  Director & Vice Manager


Sellers:

/s/ Cuiping Liu
Name:  Cuiping Liu

/s/ WeiJie Chen
Name: Weijie Chen

/s/ Weihua Chen
Name: Weihua Chen

/s/ Yihong Yuan
Name: Yihong Yuan


Target Company: SHOUGUANG CITY RONGYUAN CHEMICAL CO, LTD.

/s/ Cuiping Liu
Name: Cuiping Liu
Title: Authorized Representative


AGREED as of the date first above written:

GULF RESOURCES, INC.

/s/ Xiaobin Liu
Name: Xiao Bin Liu
Title:  CEO
 
 
7

 
 
Exhibit 1

Designee of the Seller
Number of Shares to Be Issued
Cuiping Liu
21,513(0.296%)
Weijie Chen
7,559(0.104%)
Weihua Chen
2,895,576(39.84%)
Yihong Yuan
4,343,363(59.76%)
 
Total: 7,268,011 (100%)
 
 
8

 
EX-7.03 3 e613974_ex7-03.htm Unassociated Document
 
Equity Interest Transfer Agreement
 
Party A:
Name: Weihua Chen
Name:     Yihong Yuan
(Collectively called party A below)

Party B:  Weijie Chen

Backgrounds:
1. Gulf resources, Inc. (hereinafter referred to as the "target company" or the "company") is established according to law and validly existing company.
 2. Party A is a citizen of the People's Republic of China, as the day of signing this agreement, party A holds shares of target company.
3. Party B is a citizen of the People's Republic of China, would like to buy a majority stake in the target company hold by party A.
4. Party A intends to sell to Party B, Party B intends to buy from Party the shares. The shares total amount of 6,060,452 of the company(hereinafter referred to as the "target shares").
Weihua Chen: 4,243,363
Yihong Yuan: 1,817,089
Both Party A and Party B according to the provisions of the "the people's Republic of China company law”, “the the people's Republic of China Contract Law" and other relevant laws and regulations, in line with the principle of equality and mutual benefit, through friendly consultation, Both Parties have reached the following agreement regarding the equity transfer matters, for both sides abide by:
 
 
 

 
 
Article I Definition
Except as otherwise provided in this agreement, the following words shall have the following meanings in the use of this agreement:
1.1 "this Agreement" means the share transfer agreement.
1.2  "target shares": 6060452 of the company’s shares held by Party A in accordance with the law.
1.3 "transfer of shares": the party A will transfer target shares to Party B in accordance with the law.
1.4 "the date of signing of this Agreement" shall mean the date of the signing of the present Agreement.

Article II the price of transfer of shares
2.1 the transfer of shares of the total price of $12,120,904.
2.2 the target share transfer for water right transfer, namely before the date of the signing of this agreement has not yet been allocated shares in the target corresponding profit of target company and any target shares derived rights (such as dividends, sending shares, etc.) and after the date of the signing of this Agreement arising from the shares of the target the target profit and target share any derivative rights were by Party B enjoys.

Article III Payment
 
3.1 on the date of the signing of this contract, Party B shall pay the party B an advance payment of $10,000; and three working days after the date of signing of the contract, Party B shall pay off all the transfer price of all shares.
3.2 after the signing of this agreement, such as non - as a result of receiving party eventually lead to complete the transfer of shares, Party A should be from both sides confirmed to complete the transfer of the shares of the three working days full to Party B returned to Party B to Party A to pay all the money.
 
 
 

 

 
Article IV Transferring of the target shares
Within three business days since Party A received the advance payment from Party B, Both parties shall be ready for the target share registration and transferring under the name of the procedures required for all of the files.
 
Article V The commitment and guarantee of transfer party A
5.1 Party A shall ensure that the shares of the above mentioned target are legally held by Party A, which shall enjoy complete independent rights and disposition of the shares, and the above mentioned target shares shall not be accompanied by any or any liabilities or other potential liabilities. Party A has the qualification of subject of legal transfer of the shares, and have the right to sign, fulfill this agreement of terms and the terms of the contract, ensure the execution and performance of this Agreement do not violate binding or influence the legal or contractual restrictions.
5.2 Party A guarantees that no legal documents signed with any third party are in conflict with the contents of this equity transfer agreement.
5.3 Party A guarantees since the date of the signing of the agreement, it will not sign any legal documents signed with any third party are in conflict with the contents of this equity transfer agreement, including the rights and obligations.
5.4 Party A shall obtain the approval of its internal decision-making body for the transfer of the target shares.
 
Article VI Commitment and guarantee of the transferee Party B
6.1 Party B warrants that it has the transferee qualification in accordance with the law & the provisions of transferee conditions required by Party A for the target shares held by Party A ,Party B ensures the execution and performance of this Agreement do not violate binding or influence the legal or contractual restrictions.
6.2 Party B shall ensure that there no legal documents signed with any third party was in conflict with the contents of this agreement.
6.3 Party B guarantees that the transfer price shall be paid to Party A in accordance with the contract on schedule and in full.
 
 
 

 
 
Article X Change and release of the agreements
10.1 for matters not covered in this agreement or change must be agreed mutually agreed amendments and additions to this agreement, and conclude a written supplemental agreement or an agreement to change, after signed by both parties in relation to this Agreement and the agreement to modify and / or supplemental agreement, changes to the agreement as part of the agreement, after the legal representative of party a representative or authorized signature stamp and signature of Party B has with this Agreement and has the same legal effect. Related to the approval of the relevant departments of the content, the date of approval from the relevant departments to take effect. This Agreement shall continue to be valid if the change of the agreement cannot be reached.
10.2 any party, in violation of the provisions of this agreement, observant party is entitled to a written notice to the defaulting party within a specified period of time to correct, if it fails to correct within the time limit, resulting in the non breaching party to continue to perform its obligations under this Agreement without the actual significance, the observant party is entitled to lift the contract.
10.3 When Party A and Party B agree to terminate this Agreement and shall conclude a written agreement.
 
Party A Signature:
Party B Signature:
   
By: /s/ Yuan Yihong
By: /s/ Chen Weijie
   
By: /s/ Chen Weihua
 

Date :  January 16,2015


EX-7.04 4 e613974_ex7-04.htm Unassociated Document
LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (this “Lock-Up Agreement”), dated as of February 4, 2015, by and among Gulf Resources, Inc., a Delaware corporation (the “Company”) and the undersigned shareholders (collectively, the “Shareholders”).
 
WHEREAS, the Shareholders are the registered holders of 7,268,011shares of the Company (the “Shares”).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree:

Section 1.                     (a)            In connection with the acquisition of Shouguang City Rongyuan Chemical that was made to assist the Company with its future operations, the Company issued the Shares to the Shareholders who are confident with respect to the Company’s future growth.  As such, the Shareholders agree not, directly or indirectly, offer, sell, contract to sell, pledge, encumber, tender, assign or grant any option or warrant to purchase or otherwise dispose of or offer to dispose of (collectively, “Transfer”) the Shares for a period commencing on the date the stock certificates evidencing the Shares are issued to the Shareholders and ending on the fifth (5th) anniversary of the date of such issuances (the “Lock-up Period”), inclusive, without the prior written consent of the Company.

(b)            If (i) the Company issues an earnings release or material news, or a material event relating to the Company occurs, during the last 17 days of the Lock-up Period, or (ii) prior to the expiration of the Lock-up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-up Period, the restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Company waives such extension.
 
(c)  For the purpose of effectuating this Lock-Up Agreement, the Shareholders hereby consent to the Company issuing a stop transfer instruction to its transfer agent in accordance with the terms of this Lock-Up Agreement. Any Transfer of Shares in violation of this Lock-Up Agreement by the Shareholders without the consent of the Company shall constitute a material breach of this Lock-Up Agreement.  The Shareholders acknowledge and agrees that the Shares may bear a legend regarding the restrictions set forth in this Section 1.

(d)           The Shareholders acknowledge that its breach or impending violation of any of the provisions of this Lock-Up Agreement may cause irreparable damage to the Company for which remedies at law would be inadequate. The Shareholders further acknowledge and agree that the provisions set forth herein are essential terms and conditions of the Lock-Up Agreement that the Company may seek to enforce in addition to any of its rights or remedies provided under any other agreement decree or order by any court of competent jurisdiction enjoining such impending or actual violation of any of such provisions. Such decree or order, to the extent appropriate, shall specifically enforce the full performance of any such provision by the Shareholders. This remedy shall be in addition to all other remedies available to the Company at law or equity.

Section 2.                      This Lock-Up Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, and upon the Shareholders and their heirs, executors, administrators, legatees and legal representatives.

Section 3.                      Should any part of this Lock-Up Agreement, for any reason whatsoever, be declared invalid, illegal, or incapable of being enforced in whole or in part, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in full force and effect as if this Lock-Up Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Lock-Up Agreement without including therein any portion which may for any reason be declared invalid.
 
 
 

 

 
Section 4.                      This Lock-Up Agreement shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed in such State without application of the principles of conflicts of laws of such State.

Section 5.                      This Lock-Up Agreement and all rights hereunder are personal to the parties and shall not be assignable, and any purported assignment in violation thereof shall be null and void.
 
Section 6.                      (a)           All notices, requests, demands and other communications to any party hereunder shall be in writing and shall be given to such party at its address or telecopier number set forth on the signature page hereto, or such other address or telecopier number as such party may hereinafter specify by notice to each other party hereto.
 
(b)           Each notice, request or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified herein and a confirmation of the telecopy being sent is received or, (ii) if given by certified mail, 72 hours after such communication is deposited in the mails with first class and certified postage prepaid, properly addressed or, (iii) if given by any other means, when delivered at the address specified on the signature page hereto.

Section 7.                      The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Lock-Up Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or any condition of this Lock-Up Agreement on the part of either party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party.

[signature page follows]
 
 
 

 
 
IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement as of the day and year first written above.
 
 
COMPANY:
 
GULF RESOURCES, INC.
 
 
By:    _______________________________
Name:
Title:
 
Address:
 
 
Fascimile:
 
 
 

 
 
 
 
SHAREHOLDERS:
 
 
_______________________________
Name:
 
 
Address:
 
Facsimile:
 
_______________________________
Name:
 
 
Address:
 
Facsimile:
 
_______________________________
Name:
 
 
Address:
 
Facsimile:
 
_______________________________
Name:
 
 
Address:
 
Facsimile: