Attorney Opinion Letter

NO.(2009)HIGHTAC-OL213

DATE: 25, AUGUST, 2009

Client: ZHEJIANG ******* GROUP CO., LTD.

NINGBO ******* IMPORT AND EXPORT CORPORATION

ADDRESS:****** Town, Beilun District, Ningbo City, Zhejiang, P.R.China, 315000

RE: Trade Secret Protection

TO: ALL OVERSEAS CUSTOMERS OF  ZHEJIANG ******* GROUP CO.,LTD.  AND   NINGBO ******* IMPORT AND EXPORT CORPORATION

Dear all,

Upon the authorization from ZHEJIANG ******* GROUP CO., LTD. and NINGBO ******* IMPORT AND EXPORT CORPORATION (hereinafter called as “*******” or “******* COMPANY”), and for the purpose maintaining good cooperation relationship between your company and ******* as well as safeguarding the legitimate interests of both companies, I, WU Huilin, attorney at law, appointed by High &Tactic Law Firm of Zhejiang, a law firm registered in  P. R. China with business location at 11/F,North Wing,Yinzhou Shanghui Building, No.1299 Yinxian Road（East）,Yinzhou District, Ningbo, 315100 P.R.China, am writing this letter regards that **** (Chinese Name:：******，******), *******’s foreign trade salesman, stole *******’s trade secret and violates the relevant law of P.R.China. This opinion letter is made with our hope that your company could pay close attention to ******* incident.

In year of 2006 ******* joined in ******* COMPANY and during these years he was handling the foreign trade business affairs with *******’s overseas clients including your company. At date of 10, August, 2009 he submitted his resignation suddenly on excuse of his private affairs and then left company without any permission and finishing transfer formalities. Under the background that ******* attaches great importance to the protection of own trade secret all of time, before ******* leaving company, ******* COMPANY accidentally found that ******* stole *******’s trade top secrets and had set up a new company in Shanghai with same business scope as *******’s however half a year ago he just signed a Confidentiality and Competitory Work Limit agreement with *******.

In view of *******’s doings abovementioned ******* is being suspected of violating Article 219 of the Criminal Code of PRC, Article 10 of Anti-Unfair Competition Law and other relevant regulations refer to protection of trade secrets, after notification to ******* headquarters, ******* report this case to the Ningbo Police Authority and applied for the full monitoring measures to *******’s email, QQ, MSN, SKYPE, YAHOO MESSENGER and his communication tools including mobile and fixed phones. Through large amount of evidences and proofs obtained by Ningbo Police Authority the facts thereof are to be confirmed as below,

1.      Refer to the documents acquired from Shanghai relevant authority by police, ******* had set up SHANGHAI ×××(BIBO) IMPORT AND EXPORT CO. with another partner Shi Jie during his service term in *******. As described in its business license, the business scope of this company covers WIRE,CABLE ,AAC ,AAAC and ACSR which are same as *******. ******* is registered as legal representative of this new company with registered capital of 1 million RMB. It is quite simple to reason that in future business ******* will use the same or similar name of SHANGHAI ×××× CABLE GROUP CO.,LTD, a famous Chinese cable manufacturer , by homophony in pronunciation even though his new company have nothing to do with SHANGHAI ×××  GROUP CO.,LTD.

2.      Refer to the copied records from *******’s work computer, his communication tools of  internet, his email, it is confirmed that ******* stole huge amount of the trade secrets from ZHEJIANG ******* GROUP CO.,LTD. AND NINGBO ******* IMPORT AND EXPORT CORPORATION including their clients information, technical data, and products quotation as top business secret and information in *******.

3.      Refer to the information from suppliers and factories, ******* has made many deals in secret in form of handing the ******* clients orders to suppliers and factories under table for personal gain. What he had done break basic business ethics and law.

Whereas the facts aforesaid, I, as attorney at law with the authorization from *******, hereby make a statement in following points,

1.      ******* has signed a Confidentiality and Competitory Work Limit agreement with *******, and this agreement is still valid and in effect. In accordance with relevant provision and stipulations in this agreement and law regulations, even if he leaves *******, ******* is now still obliged to keep the trade secrets and not be allowed to do business and trading with *******’s overseas clients in area of WIRE and CABLE, and his business is not allowed to cover the area of WIRE,CABLE ,AAC ,AAAC and ACSR, etc.

2.      *******’s behavior is suspected of violating the Article 219 of the Criminal Code of PRC and will be constituted as the crime of violation of trade secrets. After *******’s application *******’s communication is under the monitor by police for proofs collecting. As his young age and ignorance in law, after giving more consideration for *******’s future living, ******* just asked police authority to suspend the arrest action to him and observe *******’s attitude and performance afterwards and prepare to give him a opportunity to correct his false doings.

3.      Meanwhile ******* has broke the provision of Anti-Unfair Competition Law （Article 10）and regulations on protection of trade secrets issued by State Industry and Commerce Authority, therefore ******* will be face the administrative penalty and civil claims.

4.      ******* all of time pays high attention to keep good cooperation with your company, and focuses on clients’ maintenance and protection of own trade secret. It is intolerant for ******* to employee’s such illegal acts as theft of orders and clients information to grab personal gains without honesty and credibility. ******* sincerely hopes that your company would understand *******’s firm position of fighting against theft of trade secrets and the legal action in current and future. In future there could be possible   *******’s client who could do business in area of WIRE,CABLE ,AAC ,AAAC and ACSR with Erci and his company aforesaid due to clients’ being innocent and unware of Chinese law and legal practice, or due to *******’s decoy, deception, enchantment or his slander against *******.

WHEREAS, hereby I will make a friendly announcement on behalf of ******* COMPANY, the future possible legal action initiated by ******* against ******* including criminal, administrative, civil legal actions will cause following results such as the goods shipped and delivered by ******* and his company are to be seized by China customs and his company bank accounts are to be frozen by China court. In order to avoid the unnecessary business losses and damage to reputation of all *******’s clients including your company, ******* COMPANY sincerely hope that all of clients could be aware of the nature of *******’s behaviors and reject to have any business relationship with ******* and his company.

5.      Finally I appreciate your company’s strong support to ******* ‘s development all the time and hope for your company’s full understanding on *******’s whole position and friendly points. And ******* will be committed to the best products and services for clients just the same as in past.

NOTE:  Currently “******* case” is sill on the course of investigations by police authority and please keep all content of this lawyer letter in secret against external nature persons and legal entities. Thanks a lot for your patience on reading this letter.

    With Best Regards,

    HIGH &TACTIC LAW FIRM OF ZHEJIANG

 WU Huilin,  attorney at law/L.L.M

    25, August,2009