L. A. SILKS Inc.

L. A. SILKS Inc.

1215 Lake Avenue/Pasadena CA 0000

FAX: (000) 456-7890 TEL: (000) 456-7800

January 6. 0000

Mr. Gui Fen

445 Erlong Road

Shenzhen Urban Development Bureau

Shenzhen, Canton

China

Dear Fen,

I hope that you had a pleasant time as you celebrated New Year’s Day. I take this opportunity to wish you a prosperous and successful year full of fulfillment.

During our talks, we have come to realize that the mode of doing businesses in China and the States is very different. I therefore take this opportunity to sincerely thank you for all the time and effort that you have taken to correspond with us. As a company, we are sincerely looking forward to opening up our business in Shenzhen and we are grateful for the assistance you have accorded us. We have never done business in any part of China and we realize that there are so many things that we need to do. Some of the business practices such as housing the factory workers are new to us. L. A. silks wants to conduct business in the proper way, where both the company and the community will benefit. Could you please send me all the necessary requirements regarding the living and working conditions of the workers? I would also be grateful if you directed me to an agency where I can get a good plant manager who will be responsible for handling all the employees. The manager should be a person who is familiar with the local language and the business skills required to run the business.

I plan to visit Shenzhen in two weeks time and I hope that everything that I have requested in this letter and other previous letters will be ready.

Sincerely,

George Liscomb, Vice President

Overseas Operations

L. A. SILKS Inc

1215 Lake Avenue/Pasadena CA 0000

FAX: (000) 456-7890 TEL: (000) 456-7800

TO: Helen Martin, CEO

FROM: George Liscomb, Vice President Overseas Operations

DATE: January 10, 0000

SUBJECT: Recommendations for the Shenzhen factory

I have reached the following conclusions after working on this project since it first began. The current operations are costing a lot of money because we lack sufficient skilled labor. There are also many stringent rules that the company has to follow while operating in America. This is in addition to the high costs of operations and the expenses incurred in the purchase of raw materials. It is with this in mind that I therefore make the following recommendations.

The company should go ahead and open up a factory in Shenzhen. The area has a ready supply of skilled labor and there is availability of raw materials. The company should employ a plant manager who is familiar with business operations in Shenzhen, and who has worked under a similar capacity. He or she will be in a better position to handle the workers. The company should continue working with Mr. Gui Fen since we have already established a working relationship with him The company should be willing to invest in Shenzhen and should be ready to incur all the initial expenses The company should be ready to integrate its business culture with that of the Chinese. It should be ready and willing to work with the local community

L. A. SILKS Inc.

1215 Lake Avenue/Pasadena CA 0000

FAX: (000) 456-7890 TEL: (000) 456-7800

February 5. 0000

Mr. Gui Fen

445 Erlong Road

Shenzhen Urban Development Bureau

Shenzhen, Canton

China

Dear Fen,

First, I hope that you had a pleasant spring festival and that all is well with you. I write this letter to inform you that we have decided to proceed with the plans of opening up a factory in Shenzhen. We realize that there is a lot of work to be done and it will take some time before we are operational and start making profits. We hope that you will not get tired of corresponding with us and that our business relationship will continue. You have been of great help to us and we are sincerely grateful for this.

In order for us to work effectively, we will need to work together with the local community and for we will require your help to do this. We need a plant manager who will be responsible for employee welfare. He or she should have worked in a similar position and will be familiar with the business. I hope that you can direct us to a credible agency where we can get the employees we need. Though the company will transfer some of the professionals from our offices in L. A. we will need a financial advisor from Shenzhen who will advice us concerning various fees that the company will have to pay to the authorities.

I hope that our working relationship will continue even after we have established our business. I look forward to see you in one month.

Sincerely,

George Liscomb, Vice President

Overseas Operations