WANG
CHEN CONFIDENTIALITY AND RIGHTS AGREEMENT

     

    THIS AGREEMENT (“Agreement”) is made by
and between Shengkai Innovations, Inc. (“Company”) and Wang Chen
(“Wang”).

     

    
      	
               
      

            	
              1.

            	
              Definitions.

            


    

     

    a.           “Company”
means the Company and any corporation or other business enterprise directly or
indirectly controlling, controlled by or under common control with Shengkai
Innovations, Inc., whether before or after the execution of this
Agreement.

     

    b.           “Customer”
means customers, clients, licensors, licensees, agents, consultants, suppliers
and contractors of the Company.

     

    c.           “Confidential
Information” means all information, whether or not reduced to writing, possessed
by the Company, or relating to the business of the Company or its Customers, or
any actual or demonstrably anticipated research and development of the Company
or its Customers, which is not generally known in the trade, including, but not
limited to, trade secrets, proprietary information, know-how, formulae, recipes,
methods, processes, mixtures, customer lists, computer programs and software,
and including Inventions (as hereinafter defined), and information conceived,
originated or developed by Wang during any period of employment with the
Company, whether alone or with others.  For the avoidance of doubt,
and further to and not in limitation of the foregoing, 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, is
Confidential Information of the Company, and the Company owns all rights, title
and interest in and to this recipe, and any and all modifications, additions or
improvements in or related thereto.

     

    d.           “Inventions”
means all discoveries, inventions, improvements, innovations, ideas, concepts
and other developments, including, but not limited to, methods, recipes,
processes, computer programs and software, relating to the business of the
Company, or any actual or demonstrably anticipated research or development of
the Company, made or conceived by Wang in whole or in part during any period of
employment with the Company, whether alone or with others, and whether or not
patentable or reduced to practice.

     

    2.           Consideration.  This
Agreement is entered in consideration of the employment of Wang by the Company,
who currently serves as of the date hereof as the Chief Executive Officer and
Chairman of the Board of Directors of the Company.

     

    3.           Confidentiality.  Wang
agrees to maintain the confidentiality of all Confidential Information, both
during and subsequent to any periods of employment with the Company, and Wang
will not, without express written authorization by the Company, directly or
indirectly reveal or cause to be revealed any such Confidential Information to
any person other than to Company employees who are authorized to receive such
Confidential Information in order to perform their duties for the Company, nor
will Wang use any such Confidential Information to the detriment of the Company
or its Customers, or other than in the course of Wang’s employment with the
Company.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    4.           Return of Confidential
Material.  In the event that Wang’s employment with the Company
is terminated for any reason whatsoever, Wang agrees promptly to deliver to the
Company all Confidential Information Wang possess, and Wang will not take or
keep any Confidential Information, whether in its original form or as copies,
upon and following the termination of Wang’s employment.

     

    5.           Return of
Documents.  All memoranda, notes, notebooks, reports, drawings,
photographs, plans, papers, recordings, tapes, computer discs or other forms of
records, made or compiled by, or made available to, the Wang during the course
of Wang’s employment, and any abstracts thereof, whether or not they contain
Confidential Information, are and shall be the property of the Company and shall
be immediately delivered by Wang to the Company at its request or upon
termination of Wang’s employment.

     

    
      	
               
      

            	
              6.

            	
              Rights In and To
      Inventions.

            


    

     

    a.           Wang
hereby assigns and transfers to the Company without further consideration Wang’s
entire right, title and interest in and to all Inventions.

     

    b.           Wang
shall disclose any Invention promptly and fully in writing to Wang’s immediate
supervisor at the Company, with a copy to the President of the Company, to
enable the Company to determine whether the Invention is subject to this
Agreement, regardless of whether Wang believes the Invention belongs to
him.  To the extent that such an Invention may belong to the Wang, the
Company shall protect such disclosures to the same extent that it protects its
own similar proprietary information.  The Company, however, shall have
no such obligations to the extent such an Invention is owned by the
Company.

     

    c.           Wang
will, at the Company’s request, promptly execute a written assignment of title
to the Company for any Invention required to be assigned by this Agreement, and
will preserve any such Invention as Confidential Information of the
Company.

     

    d.           Wang
shall, upon request by the Company, assist the Company or its designee (at
Company’s expense) in every reasonable way during and at any time after Wang’s
employment to patent and defend the Company’s or its designee’s title to any
Inventions in any and all countries, which patents shall be and remain the sole
and exclusive property of the Company or its nominee.

     

    
      	
               
      

            	
              7.

            	
              Other
      Rights.

            


    

     

    a.           It
is understood and agreed that any photographs, illustrations, writings, designs,
software, code or other material eligible for copyright protection, created by
Wang during Wang’s employment by the Company, whether created solely by Wang or
with others, and whether created on or off the Company’s premises, for the
Company and/or submitted to the Company, shall be works-made-for-hire within the
meaning of the United States Copyright Act.  In the event any such
materials are determined not to be a work-made-for-hire, or any other issue
arises affecting the Company’s right and title in and to such materials, Wang
hereby transfers and assigns to the Company, without further consideration,
Wang’s entire right, title and interest in and to all such
materials.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    b.           Wang
will, at the Company’s request, promptly execute a written assignment of title
to the Company for any such materials required to be assigned by this Agreement,
and will preserve any such materials as Confidential Information of the
Company.

     

    c.           Wang
acknowledges and agrees that the Company may modify, crop, retouch, edit, revise
or otherwise alter such materials, and that publication, sale, distribution,
and/or usage of any such material is at the Company’s sole
discretion.

     

    8.           Wang’s Name and
Likeness.  Wang acknowledges and agrees that the Company may
use Wang’s name and likeness in its publications, and in connection with the
business of Company, including but not limited to, the promotion, advertisement,
marketing and sale of Company’s products and services.

     

    9.           Extension of Obligations and
Agreement to Previous and Future Employment.  Wang understands
and agrees that the provisions of this Agreement extend to all previous and
future periods of Wang’s employment by the Company, and this Agreement shall
continue to be in full force and effect without re-execution in the event Wang
transfers between different employers within the Company, whether or not there
are periods between such transfers during which the Wang is not employed by any
employer within the Company.

     

    10.      
  Trade Secrets and
Confidential Information of Others.  Wang represents and
warrants that Wang’s performance of all the terms of this Agreement, and as an
employee of the Company, does not and shall not breach any agreement with any
other party, including but not limited to, agreements regarding non-competition
or to keep in confidence proprietary or confidential information of another
party, and that Wang shall not disclose to the Company, or induce the Company to
use, any proprietary or confidential information belonging to any other party
including but not limited to a previous employer.

     

    11.         Non-limitation of
Rights.  This Agreement shall not be construed to limit in any
way any “shop rights” or other common law or contractual right of the Company by
virtue of its relationship with the Wang.

     

    12.         Modification.  This
Agreement may only be modified or terminated by an instrument in writing, signed
by the Wang and the Company; provided, however, that Company may from time to
time publish and adopt supplementary policies with respect to the subject matter
of this Agreement, and Wang agrees that such supplemental policies shall be
binding upon Wang.

     

    13.         Remedies.  Wang and
Company acknowledge and stipulate that the covenants and agreements contained in
this Agreement are of a special nature, and that any breach, violation or
evasion by Wang of the terms of this Agreement will result in immediate and
irreparable injury and harm to the Company, and will cause damage to the Company
in amounts difficult to ascertain.  Accordingly, the Company shall be
entitled to the remedies of injunction and specific performance, or either of
such remedies, as well as to all other legal or equitable remedies to which the
Company may be entitled, including, without limitation, termination of the
employment of Wang.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    14.         Entire
Agreement.  Wang hereby acknowledges receipt of a signed
counterpart of this Agreement, and acknowledges that it is Wang’s entire
Agreement with the Company with respect to the subject matter hereof, thereby
superseding any previous oral or written understanding or agreements with the
Company or any officer or representative of the Company.  Nothing in
this Agreement shall be deemed to be a contract of employment for a definite
period of time, or to limit the right of the Company to terminate the employment
of the Wang, with or without cause.

     

    15.         Severability.  In
the event that any paragraph or provision of this Agreement shall be held to be
illegal or unenforceable, such paragraph or provisions shall be severed or
otherwise modified as may best preserve the intention of the parties hereto, and
the Agreement as so modified shall remain in full force and effect.

     

    16.         Successors and
Assigns.  This Agreement shall be binding upon Wang’s heirs,
executors, administrators and other legal representatives, and is for the
benefit of the Company, it successors and assigns.

     

    17.         Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of New
York without regard to its choice of law provisions.

     

    IN WITNESS WHEREOF, the parties hereby
set their hands as of this 24th day of
November, 2010.

     

    
      	 
      	 
      	
              Shengkai
      Innovations, Inc

            
	 
      	 
      	 
      	 
      
	
              /s/
      Wang Chen

            	 
      	
              By: 

            	
              /s/
      Ming He

            
	
              Wang
      Chen

            	 
      	 
      	 
      
	
              Address:

               

            	 
      	
              Address:

               

              No.
      27, Wang Gang Road,

              Jin
      Nan (Shuang Gang) Economic and 
Technology Development
      Area,

              Tianjin,
      People’s Republic of China 300350