TERMS OF SERVICE

3.1 PROJECT INITIATION

All OEM/ODM projects commence upon execution of a written project agreement or confirmed purchase order specifying technical requirements, customization scope, timelines, tooling costs, and minimum order quantities (MOQ). Verbal agreements or informal communications do not constitute binding commitments.

3.2 DESIGN APPROVAL

The Customer is responsible for reviewing and approving all design specifications, prototypes, and pre-production samples before mass production commences. Written approval (email confirmation accepted) constitutes authorization to proceed. The Company shall not be liable for defects or non-conformities arising from Customer-approved designs.

Prototype development fees are non-refundable unless the Company fails to meet agreed specifications. Tooling costs are borne by the Customer unless otherwise negotiated and documented in writing.

3.3 SPECIFICATION CHANGES

Any changes to agreed specifications after production commencement may result in additional costs, extended lead times, and revised pricing. Change requests must be submitted in writing. The Company will provide a written assessment of the impact within five (5) business days. Changes that require new tooling or significant re-engineering may be declined at the Company's discretion.

3.4 PRIVATE LABEL & BRANDING

Customers engaging private label services represent and warrant that they hold all necessary rights to the trademarks, logos, and brand identifiers submitted for application to Products. The Company shall not be liable for any intellectual property infringement arising from Customer-provided branding materials. The Customer indemnifies the Company against all claims, damages, and costs arising from such infringement.

3.5 EXCLUSIVITY

Territorial or product exclusivity arrangements are only valid when explicitly stated in a separate signed exclusivity agreement. General purchase orders or standard OEM/ODM agreements do not confer exclusivity rights. Exclusivity agreements are subject to minimum annual purchase commitments and performance reviews.

4.1 ORDER PLACEMENT

Purchase orders must be submitted in writing via email, official purchase order form, or signed sales contract. Orders are binding upon the Company's written confirmation. The Company reserves the right to reject or modify orders that cannot be fulfilled within the requested specifications, timeline, or quantity.

4.2 MINIMUM ORDER QUANTITIES

Minimum order quantities (MOQ) vary by product model, customization level, and configuration (CKD/SKD/complete unit). MOQ requirements are communicated during the quotation stage. Orders below MOQ may be accepted at the Company's discretion, subject to a small-order surcharge.

4.3 PRICING

All prices are quoted in US Dollars (USD) unless otherwise agreed. Quoted prices are valid for thirty (30) days from the date of quotation unless otherwise stated. Prices are subject to change based on raw material costs, currency fluctuations, and component supply conditions. Price changes after order confirmation require mutual written agreement.

Prices are quoted EXW (Ex Works, Yongkang, Zhejiang) unless alternative Incoterms are specified. Additional costs including freight, insurance, import duties, and local taxes are the Customer's responsibility unless explicitly included in the quotation.

4.4 PAYMENT SCHEDULE

Payment terms may be modified for long-term partners with established credit history, subject to credit assessment and written agreement. The Company reserves the right to suspend production or withhold shipment for overdue payments.

4.5 ACCEPTED PAYMENT METHODS

The Company accepts payment via Telegraphic Transfer (T/T), Letter of Credit (L/C) from approved banks, and other methods as mutually agreed. All bank charges and transfer fees are the Customer's responsibility. Payments must be made in the currency specified in the invoice.

4.6 LATE PAYMENT

Overdue payments are subject to interest at a rate of 1.5% per month (or the maximum rate permitted by applicable law, whichever is lower) from the due date until full payment is received. The Company may suspend all services, withhold shipments, and terminate pending orders for accounts with outstanding balances exceeding thirty (30) days past due.

4.7 ORDER CANCELLATION

Orders cancelled after production commencement are subject to cancellation fees covering materials procured, labor incurred, and overhead costs to date. Deposits are non-refundable for cancellations made after production begins. Cancellations before production commencement must be submitted in writing and are subject to a 10% administrative fee on the deposit amount.

5.1 LEAD TIMES

Standard production lead times range from 30 to 60 days from deposit receipt and design confirmation, depending on product complexity, customization requirements, and current production schedules. Lead times for OEM/ODM projects with tooling development may extend to 90-120 days. Quoted lead times are estimates and may be affected by force majeure events, supply chain disruptions, or regulatory delays.

5.2 INCOTERMS & RISK TRANSFER

Unless otherwise agreed, all shipments are made on EXW (Ex Works) terms in accordance with Incoterms 2020. Risk of loss or damage transfers to the Customer upon the Company making the goods available at the factory premises. Alternative Incoterms (FOB, CIF, etc.) may be arranged upon request and will be specified in the confirmed quotation.

5.3 EXPORT DOCUMENTATION

The Company provides standard export documentation including commercial invoice, packing list, bill of lading, and certificate of origin. Additional certifications (CE, EPA, CARB, etc.) required for specific markets are the Customer's responsibility to specify at the order stage. The Company will assist in obtaining available certifications at the Customer's cost.

5.4 CUSTOMS & IMPORT DUTIES

All import duties, tariffs, taxes, and customs clearance costs in the destination country are solely the Customer's responsibility. The Company provides accurate and compliant export documentation but cannot guarantee customs clearance in the Customer's jurisdiction. The Customer is responsible for compliance with all import regulations applicable in their country.

5.5 DELIVERY DELAYS

The Company will notify the Customer promptly of any anticipated delays. Delays caused by force majeure events (including but not limited to natural disasters, government actions, pandemics, port congestion, or raw material shortages) shall not constitute a breach of contract. The Company's liability for delivery delays is limited to the actual production costs incurred.

6.1 QUALITY STANDARDS

All Products are manufactured in accordance with the Company's internal quality standards and applicable industry specifications. The Company employs full in-house manufacturing control, with 30% of core components (including suspension and drivetrain components) designed and produced internally to ensure quality consistency.

6.2 PRE-SHIPMENT INSPECTION

All Products undergo comprehensive pre-shipment inspection including structural integrity testing, powertrain verification, and operational road testing. Inspection reports are available upon request. Customers may arrange third-party inspection at their own cost with advance notice of at least seven (7) business days.

6.3 WARRANTY TERMS

The Company provides a limited warranty on all ATV products against manufacturing defects in materials and workmanship for a period of twelve (12) months from the date of shipment, subject to the following conditions:

• --Warranty applies only to defects arising from manufacturing processes, not from normal wear, misuse, modification, or improper maintenance.
• --Warranty claims must be submitted with photographic evidence, detailed defect description, and relevant order documentation within the warranty period.
• --Remedy options include replacement of defective parts, repair guidance, or credit toward future orders, at the Company's discretion.
• --Warranty does not cover consumable items (filters, belts, brake pads, tires) or damage caused by accident, racing use, or unauthorized modifications.
• --Engines and powertrains sourced from third-party manufacturers (Zongshen, Loncin, Yinxiang) are subject to those manufacturers' warranty terms.

6.4 CLAIMS PROCEDURE

Warranty claims must be submitted to the Company's after-sales support team within the warranty period. The Company commits to acknowledging all warranty claims within twenty-four (24) hours and providing a resolution plan within five (5) business days of receiving complete documentation. Replacement parts are dispatched from the Company's inventory of 800+ spare part SKUs.

6.5 ACCEPTANCE & REJECTION

The Customer must inspect all Products within fourteen (14) days of receipt and notify the Company in writing of any visible defects, shortages, or non-conformities. Failure to provide written notice within this period constitutes acceptance of the Products as delivered. Hidden defects discovered after this period remain subject to the warranty provisions above.

7.1 MANUFACTURER LIABILITY

The Company's liability for product defects is limited to defects arising directly from the Company's manufacturing processes, materials, or workmanship. The Company's total liability for any single claim shall not exceed the invoice value of the specific Products giving rise to the claim.

7.2 CUSTOMER RESPONSIBILITY

As a B2B customer distributing or reselling Products in your market, you assume full responsibility for:

• --Ensuring Products comply with all applicable safety standards, certifications, and regulations in the destination market (including but not limited to CE, EPA, CARB, and local homologation requirements).
• --Providing adequate user instructions, safety warnings, and documentation to end users in the local language.
• --Maintaining appropriate product liability insurance coverage for your distribution territory.
• --Implementing proper assembly, pre-delivery inspection, and safety checks for CKD/SKD units before sale to end users.

7.3 LIMITATION OF LIABILITY

To the maximum extent permitted by applicable law, the Company shall not be liable for any indirect, incidental, consequential, special, or punitive damages, including but not limited to loss of profits, loss of business, loss of data, or loss of goodwill, arising from or in connection with any Products or services provided, even if the Company has been advised of the possibility of such damages.

7.4 INDEMNIFICATION

The Customer agrees to indemnify, defend, and hold harmless the Company, its directors, officers, employees, and agents from and against any claims, damages, losses, costs, and expenses (including reasonable legal fees) arising from: (a) the Customer's use, distribution, or resale of Products; (b) Customer's failure to comply with applicable regulations; (c) modifications made to Products by the Customer or end users; or (d) Customer-provided designs or specifications that infringe third-party rights.

7.5 FORCE MAJEURE

Neither party shall be liable for delays or failures in performance resulting from causes beyond their reasonable control, including natural disasters, acts of government, war, terrorism, pandemics, labor disputes, raw material shortages, or infrastructure failures. The affected party must notify the other party in writing within five (5) business days of the force majeure event.

8.1 COMPANY IP OWNERSHIP

All intellectual property owned by the Company, including but not limited to patents (20+ registered patents), trade secrets, proprietary manufacturing processes, designs, technical drawings, software, and the SHORMAR MOTO brand and trademarks, remain the exclusive property of Shormar Moto. No license to Company IP is granted by these Terms except as expressly stated.

8.2 CUSTOMER IP

Intellectual property provided by the Customer (including trademarks, logos, design specifications, and brand assets) remains the Customer's exclusive property. The Customer grants the Company a limited, non-exclusive license to use such IP solely for the purpose of fulfilling the Customer's orders. The Company shall not use Customer IP for any other purpose without express written consent.

8.3 JOINTLY DEVELOPED IP

Where new intellectual property is developed jointly during OEM/ODM collaboration, ownership and licensing rights shall be determined by a separate written IP agreement executed prior to project commencement. In the absence of such an agreement, all jointly developed IP shall be owned by the Company, with the Customer receiving a non-exclusive license for commercial use of the resulting Products.

8.4 NO REVERSE ENGINEERING

The Customer shall not, and shall not permit any third party to, reverse engineer, disassemble, decompile, or otherwise attempt to derive the source designs, manufacturing processes, or proprietary technology embodied in any Products supplied by the Company. This restriction applies to all Products regardless of customization level.

8.5 IP INFRINGEMENT CLAIMS

If the Customer becomes aware of any actual or suspected infringement of the Company's intellectual property, the Customer shall promptly notify the Company in writing. The Customer shall not take any legal action regarding Company IP without prior written consent. The Company reserves all rights to enforce its intellectual property against infringers.

9.1 CONFIDENTIAL INFORMATION

Each party ("Receiving Party") agrees to maintain in strict confidence all non-public information disclosed by the other party ("Disclosing Party") in connection with these Terms, including but not limited to pricing, technical specifications, manufacturing processes, business strategies, customer lists, and OEM/ODM project details ("Confidential Information").

9.2 OBLIGATIONS

The Receiving Party shall: (a) use Confidential Information only for the purposes of fulfilling obligations under these Terms; (b) not disclose Confidential Information to any third party without prior written consent; (c) protect Confidential Information with the same degree of care used to protect its own confidential information, but no less than reasonable care; and (d) limit access to Confidential Information to employees and contractors with a need-to-know basis.

9.3 DURATION

Confidentiality obligations survive the termination of any business relationship for a period of five (5) years. Trade secrets and proprietary manufacturing processes are protected indefinitely.

9.4 EXCLUSIONS

Confidentiality obligations do not apply to information that: (a) is or becomes publicly available through no fault of the Receiving Party; (b) was rightfully known to the Receiving Party before disclosure; (c) is independently developed without reference to Confidential Information; or (d) is required to be disclosed by law or court order, provided the Disclosing Party is given reasonable advance notice.

10.1 EXPORT COMPLIANCE

The Customer is solely responsible for compliance with all export control laws and regulations applicable in their jurisdiction. The Customer warrants that Products will not be resold, transferred, or used in violation of any applicable export control regulations, trade sanctions, or embargoes. The Customer shall provide accurate end-use and end-user information as required by applicable law.

10.2 MARKET CERTIFICATIONS

The Customer is responsible for obtaining all certifications, homologations, and regulatory approvals required to legally sell and operate Products in their target markets. The Company will provide available technical documentation and testing support, but does not guarantee that Products meet specific market requirements unless explicitly stated in the purchase agreement.

10.3 ANTI-CORRUPTION

Both parties agree to comply with all applicable anti-corruption and anti-bribery laws, including the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. Neither party shall offer, pay, or accept any bribe, kickback, or improper payment in connection with any transaction under these Terms.

10.4 ENVIRONMENTAL COMPLIANCE

The Customer acknowledges responsibility for ensuring that Products comply with applicable environmental regulations in their market, including emissions standards and end-of-life disposal requirements. The Company will provide available documentation on engine specifications and emission configurations to support the Customer's compliance efforts.

11.1 TERMINATION FOR CAUSE

Either party may terminate any ongoing agreement immediately upon written notice if the other party: (a) materially breaches these Terms and fails to cure such breach within thirty (30) days of written notice; (b) becomes insolvent, files for bankruptcy, or ceases business operations; (c) engages in fraudulent, illegal, or unethical conduct; or (d) repeatedly fails to meet payment obligations.

11.2 TERMINATION FOR CONVENIENCE

Either party may terminate a framework or long-term supply agreement with sixty (60) days' written notice, provided all outstanding orders, payments, and obligations are fulfilled. Individual purchase orders cannot be terminated for convenience once production has commenced.

11.3 EFFECTS OF TERMINATION

Upon termination: (a) all outstanding payment obligations become immediately due; (b) the Company may retain deposits and prepayments to cover costs incurred; (c) each party shall return or destroy the other party's Confidential Information; (d) provisions relating to IP, confidentiality, liability, and governing law survive termination.

12.1 GOVERNING LAW

These Terms and any disputes arising from or in connection with them shall be governed by and construed in accordance with the laws of the People's Republic of China. The United Nations Convention on Contracts for the International Sale of Goods (CISG) shall apply to international transactions unless expressly excluded in the purchase agreement.

12.2 DISPUTE RESOLUTION

The parties agree to resolve disputes through the following escalation process:

12.3 LANGUAGE

These Terms are provided in English. In the event of any inconsistency between English and Chinese versions, the English version shall prevail for international B2B transactions unless otherwise agreed in writing.

12.4 SEVERABILITY

If any provision of these Terms is found to be unenforceable or invalid under applicable law, that provision shall be modified to the minimum extent necessary to make it enforceable, or severed if modification is not possible. The remaining provisions shall continue in full force and effect.

12.5 ENTIRE AGREEMENT

These Terms, together with any applicable purchase orders, project agreements, and non-disclosure agreements, constitute the entire agreement between the parties regarding its subject matter and supersede all prior negotiations, representations, and understandings. Amendments must be in writing and signed by authorized representatives of both parties.