Unassociated Document


    Design
and Development Engagement Agreement

    


    
      
        	
                Party
      A:

              	
                Zhejiang
      Yongxin Digital Technology Co., Ltd.

              
	
                Party
      B:

              	
                Shenzhen
      Kangdewei Electronics Co.,
Ltd.

              


      

    

    


    After
reaching consensus through consultation and pursuant to the “PRC Contract Law,”
the two parties hereto have entered into this Agreement whereby Party A engages
Party B to design and develop a “LOTOUR” branded electronic
product:

    


    
      	
              1. 

            	
              The
      design and development projects:

            


    

    (1)           Party
A engages Party B to design and develop a “LOTOUR” branded electronic
product.

    


    
      	
              2. 

            	
              The
      inspection and acceptance method for the design and development of the
      product:

            


    

    
      (1)           Party B
will design a electronic book product in consideration of the features of
similar products popular in the market and according to Party A’s special
requirements and, during the course of design, must frequently communicate with
Party A and modify relevant technical specifications;

    

    
      (2)           Party B
must provide no less than 5 design prototypes from which Party A is to make an
initial selection; the selected prototype will be the final technical design
type to be produced and no less than 5 samples must be provided to Party A for
selection and inspection;

    

    
      (3)           The
samples and final design type must be inspected and approved by Party A and
obtain relevant state standard certification;

    

    
      (4)           After the
product designed by Party B is confirmed, Party B must conduct a pilot
production and provide, without compensation, 100 sets of electronic book
products to Party A for Party A to inspect and test market;

    

    
      (5)           Party B
must provide, without compensation, one set of production mold for this product
and one set of production procedures manual;

    

    


    
      	
              3. 

            	
              Payment
      method:

            


    

    (1)           The
total design and development fee for this engagement is RMB 3,160,000.00, and
Party A shall issue to the Party B additional 1.6 million shares of CHCG.OB
stock as payment for this engagement, using CHCG.OB stock price of $.30 per
share as the pricing basis; Party B entrusts LIAN Yong to act as the
beneficiary, hold such shares on its behalf and deliver all future investment
proceeds to be received from such shares (including cash dividend, bonus or
other form of distribution of proceeds) to Party B.

    
      (2)           Payment
time: after the execution of this Agreement, Party A must make payment in one
lump sum upon delivery of the 100 sets of sample products by Party
B.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                4.

              	
                Specified
      time period for the design and development
  engagement:

              


      

      
        	
                 
      

              	
                (1)           The
      total term of this Engagement Agreement: 6 months in total, from January
      20, 2011 to July 19, 2011.  Of this total term, 3-month period
      is for product design, during which time Party B must provide the design
      prototypes, design diagrams and samples to Party A for inspection and
      selection; 3-month period is for product molding and pilot production,
      during which time Party B must issue production mold, draft production
      procedures manual and conduct pilot production, and provide samples to
      Party A.

              


      

      
        	
                 
      

              	
                (2)           Party
      B must complete the design and development work within the time period
      specified herein; however, if there is delay for any reason on Party A’s
      part, such time period for design and development must be extended
      accordingly.

              


      

      


      
        	
                5.

              	
                Provisions
      on intellectual property and production
mold:

              


      

      
        	
                 
      

              	
                (1)           Party
      B is entitled to the ownership right to the product it designed and
      completed; after Party A makes and settles payment of all the fees to
      Party B for the engagement of design and development, Party B shall
      automatically transfer the design diagrams of the product it designed and
      developed and the exclusive patent to Party A for Party A to
      possess.

              


      

      
        	
                 
      

              	
                (2)           Party
      A shall not be entitled to any right to the product before paying off all
      the balances and if Party A, prior to paying off all the balances, uses
      without authorization or modifies the product designed by Party B, thus
      committing infringement, Party B shall have the right to pursue its legal
      liabilities in accordance with the relevant laws and
    statutes;

              


      

      
        	
                 
      

              	
                (3)           The
      intellectual property right to the designs which have not been adopted by
      Party A shall remain with Party B.

              


      

      
        	
                 
      

              	
                (4)           The
      ownership right to the production mold of the product under the engagement
      shall belong to Party A.

              


      

      


      
        	
                6.

              	
                Rights
      and obligations of both parties:

              


      

      
        	
                6.1

              	
                Party
      A’s obligations:

              


      

      
        	
                 
      

              	
                (1)           Party
      A must make payment for the relevant fees in accordance with the
      provisions herein;

              


      

      
        	
                 
      

              	
                (2)           Party
      A has the obligation to provide relevant documents to Party
    B;

              


      

      
        	
                 
      

              	
                (3)           Party
      A must keep technological and commercial secrets
    confidential.

              


      

      
        	
                6.2

              	
                Party
      A’s rights:

              


      

      
        	
                 
      

              	
                (1)           Before
      Party B provides initial design prototype, Party A has the right to make
      recommendations and suggestions to Party B’s design so that the product
      designed by Party B is more consistent with the spirit of Party A’s
      corporate culture;

              


      

      
        	
                 
      

              	
                (2)           After
      Party B provides initial design prototype and during the design process
      specified according to the format of the prototype selected by Party A
      under the engagement, Party A has the right to make suggestions for
      modification with regard to the product designed by Party
    B;

              


      

      
        	
                 
      

              	
                (3)           During
      the pilot production after the design cutoff, Party A may make suggestions
      for minor modification to the product designed by Party
  B.

              


      

      
        	
                6.3

              	
                Party
      B’s obligations:

              


      

      
        	
                 
      

              	
                (1)           Party
      B must design the product according to Party A’s
    requirements;

              


      

      
        	
                 
      

              	
                (2)           Party
      B must deliver the design and develop the product on schedule in
      accordance with the provisions
herein;

              


      

      
        	
                 
      

              	
                (3)           Party
      B must keep technological and commercial secrets
    confidential.

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	
                6.4

              	
                Party
      B’s rights:

              


      

      
        	
                 
      

              	
                (1)           Party
      B has the right to demand Party A to provide relevant documents as
      reference to Party B’s design;

              


      

      
        	
                 
      

              	
                (2)           Party
      B has the right to demand Party A to make payment for the corresponding
      fees in accordance with the provisions
herein;

              


      

      
        	
                 
      

              	
                (3)           Party
      B has the right to demand Party A not to use the product it designed and
      developed before Party A pays off all the relevant
  fees.

              


      

      


      
        	
                7.

              	
                Liability
      for breach

              


      

      
        	
                 
      

              	
                (1)           If
      Party A unilaterally terminate this Agreement after Party B has begun the
      design and development for the product but before the completion of the
      initial product prototypes, Party A shall have no right to demand refund
      of the pre-paid fees; if Party A unilaterally terminate this Agreement
      after Party B has completed the initial product prototypes, Party A must
      pay the design fees in full.

              


      

      
        	
                 
      

              	
                (2)           If
      Party B terminates this Agreement in advance without any legitimate
      reason, Party B must return all the fees received from Party
      A.

              


      

      
        	
                 
      

              	
                (3)           If
      any irresistible force renders it impossible for either Party A or Party B
      to perform this Agreement, the two parties must resolve the situation
      through consultation.

              


      

      
        	
                 
      

              	
                (4)           If
      either Party A or Party B is in breach of this Agreement, the party in
      breach must pay damages to the other party in the amount of 10% of the
      contract value.  Any dispute arising from this Agreement must be
      settled by the two parties through consultation.  If such
      consultation fails, the dispute may be submitted to legal proceedings at
      the people’s court.

              


      

      


      
        	
                8.

              	
                Provisions
      regarding the production in batches of the
  product

              


      

      
        	
                 
      

              	
                (1)           Party
      B must consult with Party A in determining the production price for the
      product to be produced in batches (excluding the production of free
      samples);

              


      

      
        	
                 
      

              	
                (2)           The
      quantity of the product to be produced by Party B must be based on Party
      A’s orders and Party B shall not produce or market the product without
      authorization; otherwise Party A shall have the right to recall the
      production right, production mold and the relevant diagrams and documents
      and contract the production to a third
party.

              


      

      
        	
                 
      

              	
                (3)           The
      quality of the product under this engagement must comply with the relevant
      state regulations.

              


      

      


      
        	
                9.

              	
                Effectuation
      of this Agreement

              


      

      
        	
                 
      

              	
                (1)           This
      Agreement must be signed and imprinted with seals by both Party A and
      Party B and the final date of execution by both parties is the effective
      date for this Agreement;

              


      

      
        	
                 
      

              	
                (2)           This
      Agreement is in duplicates, with one copy to each
  party;

              


      

      
        	
                 
      

              	
                (3)           Other
      matters not covered herein must be settled by the two parties through
      consultation.

              


      

       

    

    
      
        
          
            
              
                	
                        Party
      A:

                      	
                        /seal/
      Zhejiang Yongxin Digital Technology Co., Ltd.

                      
	
                        Signature
      of Party A’s representative: /s/ Zhenggang Wang

                      
	
                        Date:
      January 20, 2011

                      
	 
      	 
      
	
                        Party
      B:

                      	
                        /seal/
      Shenzhen Kangdewei Electronics Co., Ltd.

                      
	
                        Signature
      of Party A’s representative: /s/ Yong LianYong Lian

                      
	
                        Date:
      January 20,
2011