Asset Purchase Agreement (2007)Full Document 

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                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                 SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

                                       AND

                                  Jiancai Wang

                                   DATED AS OF

                               October 25th, 2007

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INDEX OF SCHEDULES AND 

Schedules:

1. Shouguang City Renjia Area Asset Checklist

2. Leased Property Description

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This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of October
25th, 2007 (the "Effective Date") and comes into effect on the same day by and
between the following two Parties:

(1) SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED, a company validly existing
under the laws of China ("SCHC"), a subsidiary of Gulf Resources, Inc.("GUFR");
and

(2) Jiancai Wang, ("WANG"), an individual resident of China who owns private
land located in the Shouguang City Renjia Area.

WHEREAS: WANG wishes to sell, transfer and convey certain assets to SCHC, and
SCHC wishes to purchase and acquire the same from WANG.

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, SCHC, and WANG, both have reached an AGREEMENT reciprocally
as follows:


                                       1


1. CERTAIN DEFINITIONS

"Ordinary Course of Business" shall mean an action taken by WANG if such action
is taken in normal operation, consistent with past practices.

"Closing" The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at SCHC's offices, on October 25, 2007 (the "Closing
Date") or as soon thereafter as is practicable.

"GUFR" shall mean Gulf Resources, Inc., a Delaware corporation and parent of
SCHC.

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

"Pre-Closing Period" shall mean the period commencing as of the date of the
Agreement and ending on the Closing Date.

2. TRANSFER OF THE ASSETS

2.1 WANG agrees that, upon the Closing, he will sell, transfer and deliver unto
SCHC, its successors and assigns forever, by duly executed deed(s), bills of
sale, assignment(s) or other instrument(s) of conveyance, for the consideration
hereinafter provided, all right, title and interest in and to all assets listed
and described on Schedule 1 attached hereto and incorporated herein by reference
(the "Purchased Assets"). In addition to the Purchased Assets, WANG agrees at
Closing to convey to SCHC all rights to the Lease (the "Lease") whereby Wang
leases the leased property described in Schedule 2 attached hereto (the "Leased
Property") and to execute and deliver such instruments of transfer and
conveyance to effect the transfer of the Lease from WANG to SCHC.

2.2 As full consideration for the sale, assignment, transfer and delivery of the
Purchased Assets and the Leased Property to SCHC, and upon the terms and subject
to all of the conditions contained herein, SCHC shall pay to WANG the sum of
$6,399,147 (the "Purchase Price") of which $2,519,664 (the "Initial Payment")
shall be paid to Wang at the Closing and $3,879,483 shall be paid in cash or
readily available funds within 5 days after the Closing.

2.3 As a result of Agreement, the Purchased Assets including, without
limitation, annual estimated bromine production capacity of 3,700 tons,
buildings, equipment, wells, pipelines, and power circuits will be owned by
SCHC. SCHC is not assuming and shall not be liable for any and all debts,
obligations and liabilities of WANG relating to the Purchased Assets and the
Leased Property.

2.4 WANG covenants that the $1,106,519 lease payment due under the 50-year land
lease for the Leased Property has been paid. Any economic losses or legal
disputes relating to the ownership of the Leased Property, whether arising prior
to or after the transfer of ownership of the Leased Property from WANG to SCHC,

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