SHENGKAI
INNOVATIONS, INC.

    No. 27,
Wang Gang Road,

    Jin Nan
(Shuang Gang) Economic and

    Technology
Development Area

    Tianjin,
People’s Republic of China 300350  

     


    Ms. Guo
Chuanye

    
      
        
          
            	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                    November
      24, 2010

                  


          

        

      

    

     


    Re:        Shengkai Innovations, Inc.
Trade Secrets

    


    Dear Ms.
Guo Chuanye:

    


    As you
may be aware, Shengkai Innovations, Inc. (the “Company”) is conducting a stock
offering.  In connection with that stock offering, the Company is
documenting certain assets used by the Company, including the “recipe” to the
unique method for creating structural ceramic valves referred to in that certain
Preliminary Prospectus Supplement of the Company dated November 18, 2010 (the
“Company Product Recipe”).  This Company Product Recipe is of
strategic importance to the Company and is commercially sensitive information,
the disclosure or unauthorized use of which could materially impact the Company
in a negative manner.

     

    We know
that you have agreed to treat the Company Product Recipe as confidential and
proprietary information, and have not disclosed or discussed this information
with anyone, other than your son and his wife, both of whom are officers of the
Company.  We ask that you formalize that agreement to treat the
Company Product Recipe as confidential information in accordance with the
provisions of this letter agreement and to take or abstain from taking certain
other actions hereinafter set forth.

     

    You agree
that the Company Product Recipe will be kept confidential (and not disclosed in
any manner to any other person or entity) by you from the date hereof; provided,
however, that the Company Product Recipe may be disclosed by you to the extent
required by subpoena or by an order of a court, or a governmental or
administrative body.  In the event of any such subpoena or order, you
agree to use your best efforts to notify the Company of any such required
disclosure as early as practicable, and to cooperate with the efforts of the
Company (at the Company’s expense) to avoid the necessity of such disclosure or
to obtain a protective order.

     

    You also
agree to inform the Company upon becoming aware that Company Product Recipe has
been disclosed, and to use your best efforts at the Company’s request and
expense to limit the scope of any such disclosure.
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Upon the
request of the Company at any time, you agree to destroy any written or
electronic records, notes or other materials containing the Company Product
Recipe, and that you will not retain any copy thereof. Notwithstanding the
destruction of such materials, you will continue to be bound by your obligations
of confidentiality and other obligations hereunder.

    


    The
provisions of this letter agreement shall remain in full force and effect with
respect to the Company Product Recipe until the date such Company Product Recipe
ceases to be treated as confidential and proprietary information by the
Company.

     

    Please confirm that the foregoing is in
accordance with your understanding by signing and returning to the Company the
enclosed copy of this letter, which shall become a binding agreement upon our
receipt.

    


    
      
        
          
            
              	 
      	
                      Sincerely,

                    
	 
      	 
      
	 
      	
                      Shengkai
      Innovations, Inc.

                    
	 
      	 
      
	 
      	
                      By:  

                    	
                      /s/ Wang Chen

                    
	 
      	
                      Name:
      Wang Chen

                    
	 
      	
                      Title:  Chief
      Executive
Officer

                    


            

          

        

      

    

    


    
      	
              Accepted
      and agreed as of

            	 
      
	
              the
      date first written above:

            	 
      
	 
      	 
      	 
      
	
              By:  

            	
              /s/ Guo Chuanye

            	 
      
	
              Name:
      Guo Chuanye