AGREEMENT
AGREEMENT
THIS
AGREEMENT ("Agreement") is entered into and is effective as of October 24, 2007,
by and between Gulf Resources, Inc, a Delaware corporation ("GUFR") and Xxxxxxx
Xxxxxxx, an individual resident in the State of New York
("Xxxxxxx").
Preliminary
Statement
GUFR
desires to retain Xxxxxxx, and Xxxxxxx 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.
NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
below, GUFR and Xxxxxxx hereby agree as follows:
1. Appointment. The
Board of Directors of GUFR has elected Xxxxxxx, and Xxxxxxx has agreed to serve,
as a member of the Board of Directors of GUFR, effective as of the date of this
Agreement.
2. Compensation. For the
duties and services to be performed by him under this Agreement, GUFR will pay
to Xxxxxxx, and Xxxxxxx agrees to accept, the compensation described below in
this Section 2.
a.
Directors’ Fees. GUFR will pay Xxxxxxx a director's fee of $32,500
per annum, payable in equal monthly installments. This fee represents a retainer
for services rendered as a member of its Board of Directors, and is in addition
to any fees to which Xxxxxxx may be entitled under guidelines and rules
established by GUFR from time to time for compensating non-employee directors
for serving on, and attending meetings of, committees of its Board of Directors
and the boards of directors of its subsidiaries.
b. Equity
Component. In addition to the cash fee(s) described in subsection (a), on the
date of this Agreement, GUFR will xxxxx Xxxxxxx options to purchase 25,000
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 OTC Bulletin Board on the date of this Agreement. On October 24,
2008, GUFR will xxxxx Xxxxxxx options to purchase 25,000 shares, which may be
exercised immediately thereafter, with an exercise price of the closing sale
price of GUFR common stock on the OTC Bulletin Board on such date of grant,
provided Xxxxxxx is still a director of or otherwise engaged by
GUFR. On October 24, 2009, GUFR will grant options to purchase 25,000
shares, which may be exercised immediately thereafter, with an exercise price of
the closing sale price of GUFR common stock on the OTC Bulletin Board on the
date if such grant, provided Xxxxxxx is still a director of or otherwise engaged
by GUFR. The options will be granted under GUFR’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.
c. Audit
Committee. The Board of Directors has appointed Xxxxxxx, and
Xxxxxxx has agreed to serve as, a member of the Audit Committee.
3. Expenses. GUFR will
reimburse Xxxxxxx 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.
4. Term and
Termination.
a.
General. The term of this Agreement will commence as of the date the Board of
Directors appoints Xxxxxxx a director of GUFR and will remain in effect as long
as Xxxxxxx continues to serve as a non-employee director of GUFR. GUFR has no
obligation to cause the nomination or recommend the election of Xxxxxxx to the
Board for any period of time in the future. Upon the termination
of Khaleel's tenure as a member of the Board, GUFR will promptly pay
to Xxxxxxx, 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.
5. Indemnification. GUFR
shall indemnify Xxxxxxx, 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 Xxxxxxx 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's fees)
incurred by Xxxxxxx 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 Xxxxxxx 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's articles of incorporation or bylaws, or in any agreement
between GUFR and Xxxxxxx, the terms of such articles, bylaws or
agreement shall govern.
6. Liability Insurance.
In furtherance of its agreement to indemnify Xxxxxxx as provided in section 5
hereof, GUFR will maintain in effect at all times while Xxxxxxx continues to
serve as a member of the Board liability insurance provided by a recognized
carrier covering members of its Board.
7. Non-Exclusive.
Nothing in this Agreement will prevent Xxxxxxx (1) from serving as an
employee, officer or director of any other company, provided that such
performance is consistent with Khaleel'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. Xxxxxxx will comply
with and be bound by GUFR'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.
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8. Conflicts. Xxxxxxx 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. Xxxxxxx 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. Xxxxxxx 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 Khaleel'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'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.
9. Representations and
Warranties of GUFR. 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 “Exchange
Act”), including pursuant to Section 13(a) or 15(d) thereof, since
January 1, 2007 (the foregoing materials being collectively referred to herein
as the “SEC
Reports”) 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 “Commission”) 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 (“GAAP”), 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.
There is no claim, action, suit,
proceeding, arbitration, reparation, investigation or hearing, pending or
threatened, before any court or governmental, administrative or other competent
authority or private arbitration tribunal, which could have an adverse effect on
the business of GUFR; nor are there any facts known to GUFR which could
reasonably be expected to give rise to a claim, action, suit, proceeding,
arbitration, investigation or hearing, which could have an adverse effect upon
the business of GUFR.
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10. Governing Law; Mediation
& Arbitration. This Agreement will be governed by, and construed in
accordance with the laws of the State of New York, without regard to
choice-of-law principles, as if made and to be performed solely in New
York.
11. Notices. 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 or first
class certified or registered mail, return receipt requested and postage
prepaid, addressed as follows:
If
to Xxxxxxx,
to: 000
Xxxxxxxxx Xxxxx
Xxx Xxxx,
X.X. 00000
If to
GUFR,
to: 0000
Xxxxxx xx Xxxxxxxx Xxxxx# 0000
Xxx Xxxx,
XX 00000
Attention:
Xxxxx Xxxxxx
With a
copy
to: Xxxxx
& Xxx Xxxxxx
0 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. XxXxxx, Esq.
or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.
12. Entire Agreement.
This Agreement constitutes the sole agreement of the parties and supersedes all
oral negotiations and prior writings, including any and all prior agreements
between Xxxxxxx and GUFR, with respect to the subject matter
hereof.
13. Advice of Counsel.
EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL
COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF
THE DRAFTING OR PREPARATION HEREOF.
14. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
15. Amendments. No
modification, waiver, amendment, discharge or change of this Agreement shall be
valid unless the same is in writing and signed by the party against which the
enforcement of said modification, waiver, amendment, discharge or change is
sought.
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16. Severability. If any
portion of any provision of this Agreement, or the application of such provision
or any portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision or portion of such
provisions of this Agreement or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
effected thereby.
[signature
page appears on the following page]
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[Signature
page to Agreement of October 24, 2007 by and between Gulf Resources, Inc. and
Xxxxxxx Xxxxxxx]
The
parties, by signing below, agree to the terms and conditions set forth in this
Agreement.
| GULF RESOURCES, INC. | |||
|
|
By:
|
/s/ Xxxx Xxxx | |
| Name: Xxxx Xxxx | |||
| Title: Chairman and Chief Executive Officer | |||
| /s/ Xxxxxxx Xxxxxxx | |||
| Xxxxxxx Xxxxxxx | |||
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