<SEC-DOCUMENT>0001193805-11-001237.txt : 20110706
<SEC-HEADER>0001193805-11-001237.hdr.sgml : 20110706
<ACCEPTANCE-DATETIME>20110705194252
ACCESSION NUMBER:		0001193805-11-001237
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20110629
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110706
DATE AS OF CHANGE:		20110705

FILER:

	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:			1130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34499
		FILM NUMBER:		11951333

	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
</SEC-HEADER>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT REPORT</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No. 99, Wenchang Rd.,</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">_________________________________</div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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):</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective June 29, 2011, Mr. Yafei Ji resigned from his position as a director of Gulf Resources, Inc. (the &#8220;Company&#8221;).&#160;&#160;Mr. Yafei Ji was a member of the Compensation and Nominating and Corporate Governance Committees of the Board of Directors.&#160;&#160;There were no disagreements between Mr. Ji and the Company on any matter relating to the Company&#8217;s operations, policies or practices, which resulted in his resignation.&#160;&#160;A copy of Mr. Ji&#8217;s resignation letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June 30, 2011, the Company appointed Mr. Tengfei Zhang to serve as an independent director of the Company, and as Chairman of the Compensation Committee and a member of the Nominating and Corporate Governance Committee of the Board of Directors of the Company.&#160;&#160;The appointment of Mr. Tengfei Zhang was unanimously approved by the Company&#8217;s Board of Directors.&#160;&#160;Mr. Tengfei Zhang has no family relationships with any of the executive officers or directors of the Company.&#160;&#160;The have been no transactions in the past two years to which the Company or any of its subsidiaries was or is to be a party, in which Mr. Tengfei Zhang had, or will have, a direct or indirect material interest.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June 30, 2011, the Company and Mr. Tengfei Zhang entered into a director agreement (&#8220;Mr. Zhang&#8217;s Agreement&#8221;).&#160;&#160;A copy of Mr. Zhang&#8217;s Agreement is attached as Exhibit 10.1 and is incorporated herein by reference.&#160;&#160;Mr. Zhang&#8217;s Agreement provides that Mr. Zhang will receive no cash compensation for his service as a director of the Company, but will receive three annual grants of options to purchase 12,500 shares of the Company's common stock, at an exercise price equal to the closing&#160;&#160;price of the Company&#8217;s Common Stock on the NASDAQ Global Select Market on the dates prior to each respective grant date, contingent upon his continued service as a director of the Company.&#160;&#160;The option grants shall be on June 30, 2011, 2012, and 2013, respectively.&#160;</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr. Tengfei Zhang, age 44, currently serves as Chairman of the Board of Supervisors of Shenzhen Kaili Industrial Co., Ltd.&#160;&#160;He is a Certified Public Accountant of China.&#160;&#160;From July 2000 to December 2004 , Mr. Zhang was Supervisor of Shenzhen Kaili Industrial Co., Ltd. and Director of Finance of Changsha Kaili Real Estate Development Co., Ltd. From January to June 2000, he was Manager of Financial Department of Shenzhen Kaili Industrial Co., Ltd.&#160;&#160;Mr. Zhang graduated from Economics and Management Department of Hunan Business School with a collage degree in 1989.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Agreement between the Company and Mr. Tengfei Zhang, dated June 30, 2011.</font></div>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Resignation letter from Mr. Ji, dated June 29, 2011.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AGREEMENT</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THIS AGREEMENT (&#8220;Agreement&#8221;) is entered into and is effective as of June 30, 2011, by and between Gulf Resources, Inc, a Delaware corporation (&#8220;GUFR&#8221;) and Mr. Tengfei Zhang, an individual resident in Beijing, P.R. China. (&#8220;Mr. Zhang&#8221;).</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preliminary Statement</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>GUFR desires to retain Mr. Zhang, and Mr. Zhang is willing to serve, as a member of the Board of Directors of GUFR on the terms and subject to the conditions set forth in this Agreement.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, GUFR and Mr. Zhang hereby agree as follows:</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Appointment</font>.&#160;&#160;The Board of Directors of GUFR has elected Mr. Zhang, and Mr. Zhang has agreed to serve, as a member of the Board of Directors of GUFR, effective as of the date of this Agreement.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Compensation</font>.&#160;&#160;For the duties and services to be performed by him under this Agreement, GUFR will pay to Mr. Zhang, and Mr. Zhang agrees to accept, the compensation described below in this Section 2.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a.&#160;&#160;&#160;&#160;&#160;&#160;Equity Component.&#160;&#160;On the date of this Agreement, GUFR will grant Mr. Zhang options to purchase 12,500 shares of GUFR common stock, which may be exercised immediately. The exercise price of these options will be the closing sale price of GUFR common stock on the Nasdaq stock exchange on the date prior to the date of this Agreement. On June 30, 2012, GUFR will grant Mr. Zhang options to purchase 12,500 shares, which may be exercised immediately thereafter, with an exercise price of the closing sale price of GUFR common stock on the Nasdaq stock market on such date prior to the date of the grant, provided Mr. Zhang is still a director of or otherwise engaged by GUFR.&#160;&#160;On June 30, 2013, GUFR will grant options to purchase 12,500 shares, which may be exercised immediately thereafter, with an exercise price of the closing sale price of GUFR common stock on the Nasdaq stock market on the date prior to the date of such grant, provided Mr. Zhang is still a director of or otherwise engaged by GUFR. The options will be granted under GUFR&#8217;s stock option plan, and will be subject to the terms and conditions of that plan. Subject to the foregoing provisions and the terms and conditions set forth in the plan, the options may be exercised until three years from the date of the grant of such options, except as otherwise provided in the plan.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b.&#160;&#160;&#160;&#160;&#160;&#160;Committees.&#160;&#160;The Board of Directors has appointed Mr. Zhang, and Mr. Zhang has agreed to serve as, Chairman of the Compensation Committee and a member of the Nominating and Corporate Governance Committee.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Expenses</font>.&#160;&#160;GUFR will reimburse Mr. Zhang for reasonable expenses incurred by him in furtherance of his performance of duties hereunder, provided that such expenses are substantiated in accordance with GUFR policies applicable to members of its Board of Directors.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Term and Termination</font>.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a.&#160;&#160;&#160;&#160;&#160;&#160;General. The term of this Agreement will commence as of the date the Board of Directors appoints Mr. Zhang a director of GUFR and will remain in effect as long as Mr. Zhang continues to serve as a non-employee director of GUFR. GUFR has no obligation to cause the nomination or recommend the election of Mr. Zhang to the Board for any period of time in the future. Upon the termination of Mr. Zhang&#8217;s tenure as a member of the Board, GUFR will promptly pay to Mr. Zhang, or to his estate if his service is terminated upon his death, all fees accrued for services rendered as a member of the Board and committees thereof and expense reimbursements due as of the date of termination.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Indemnification</font>. GUFR Shall indemnify Mr. Zhang, as a director of GUFR, to the maximum extent permitted under applicable law against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise, or as fines and penalties, and counsel fees, reasonably incurred by Mr. Zhang in connection with the defense or disposition of any civil, criminal, administrative or investigative action, suit or other proceeding, whether civil or criminal, in which he may be involved or with which he may be threatened, while an officer or director of GUFR. Expenses (including attorney&#8217;s fees) incurred by Mr. Zhang in defending any such action, suit or other proceeding shall be paid by GUFR in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of him to repay such amount if it shall be ultimately determined that he is not entitled to be indemnified by GUFR. The right of indemnification provided herein shall not be exclusive of or affect any other rights to which Mr. Zhang may be entitled. The provisions hereof shall survive expiration or termination of this Agreement for any reason whatsoever. In the event of any conflict between the provisions hereof and the indemnification provisions contained in GUFR&#8217;s articles of incorporation or bylaws, or in any agreement between GUFR and Mr. Zhang, the terms of such articles, bylaws or agreement shall govern.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Liability Insurance</font>. In furtherance of its agreement to indemnify Mr. Zhang as provided in section 5 hereof, GUFR will maintain in effect at all times while Mr. Zhang continues to serve as a member of the Board liability insurance provided by a recognized carrier covering members of its Board.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Non-Exclusive</font>. Nothing in this Agreement will prevent Mr. Zhang (1) from serving as an employee, officer or director of any other company, provided that such performance is consistent with Mr. Zhang&#8217;s duty of loyalty to GUFR, (2) from serving on voluntary, community service committees and boards, and (3) from owning shares representing less than 5% of the outstanding equity securities of a company that is a competitor of GUFR. Mr. Zhang will comply with and be bound by GUFR&#8217;s policies, procedures and practices applicable to members of its Board of Directors from time to time in effect during the term of this Agreement.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Conflicts</font>. Mr. Zhang represents that his performance of this Agreement will not conflict with or breach any other agreement to which he is a party or may be bound. Mr. Zhang has not, and will not during the term of this Agreement, enter into any oral or written agreement in conflict with any of the provisions of this Agreement. Mr. Zhang represents and warrants that he is not bound by any agreements which prohibit or restrict him from: (a) competing with, or in any way participating in a business that competes with, any former employer or business of any former employer to the extent that Mr. Zhang&#8217;s performance of his duties under this Agreement would be deemed to constitute such competition; (b) soliciting personnel of a former employer or business to leave such former employer&#8217;s employment or to leave such business; or (c) soliciting customers, suppliers, financing sources or other entities having a substantial relationship with a former employer or business.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Representations and Warranties of GUFR</font>. GUFR has filed all reports required to be filed by it under the Securities Act and the Securities Exchange Act of 1934, as amended (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exchange Act</font>&#8221;), including pursuant to Section 13(a) or 15(d) thereof, since July 24, 2009 (the foregoing materials being collectively referred to herein as the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">SEC Reports</font>&#8221;) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Securities and Exchange Commission (the &#8220;Commission&#8221;) promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of GUFR included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">GAAP</font>&#8221;), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of GUFR and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Notices</font>. All notices or other communications which are required or permitted hereunder will be in writing and sufficient if delivered personally or sent by air courier of first class certified or registered mail, return receipt requested and postage prepaid, addressed as follows:</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">If to Mr. Zhang, to:&#160;&#160;&#160;</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">8<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> Floor, Building A, Furong Tower</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2027 Jiabin Road, Luohu District, Shenzhen</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">People&#8217;s Republic of China</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">29 June&#160;&#160;&#160;&#160;, 2011</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To: Mr. Yang Ming</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;It has been an honor to server on the Gulf Resources Board of Directors over the last two years during which the Company has made great progress.</font></div>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

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