GUANGZHOU XINYOU ANIMATION

TECHNOLOGY CO., LTD.

Cross-Border Procurement Guide

Terms & Conditions, Guarantees and Insurance

August 2026

Document No.: XY-COM-2025-001 | Revision 1.0

This section outlines the end-to-end procurement lifecycle for commercial amusement and entertainment equipment supplied by Guangzhou Xinyou Animation Technology Co., Ltd. (hereinafter referred to as "Xinyou" or "Seller"). Each stage defines the timeline, deliverables, and responsibilities of both parties to ensure a transparent, efficient, and risk-managed transaction.

Stage 1 — Inquiry & Consultation

1.1 Inquiry Submission

The Buyer shall submit a formal inquiry through one of the following channels: the Xinyou official website inquiry form, Alibaba International storefront, direct email to the sales department, or telephone/WhatsApp contact. The inquiry should include, at minimum, the following information:

• Product category and model(s) of interest (e.g., VR simulators, arcade machines, kiddie rides, redemption games, inflatable amusement equipment);
• Intended installation country and venue type (indoor entertainment center, outdoor amusement park, shopping mall, family entertainment center, etc.);
• Approximate quantity and any customization requirements;
• Target project timeline and budget range.

1.2 Initial Consultation

Upon receipt of the inquiry, Xinyou's dedicated sales consultant will:

1. Conduct a preliminary needs analysis within 24 business hours;
2. Provide a curated product recommendation report with technical specifications, dimensional drawings, and high-resolution product imagery;
3. Share Xinyou's company profile, including manufacturing capabilities, certification portfolio, and selected project case studies from comparable markets;
4. Arrange a video conference (via Zoom, Teams, or WeChat) for in-depth technical discussion if required.

1.3 Product Information Package

Xinyou will deliver a comprehensive Product Information Package containing:

• Detailed product specification sheets (dimensions, weight, power requirements, player capacity, game content);
• Compliance certificates applicable to the Buyer's destination market;
• Reference project portfolio with photographs and video documentation;
• Preliminary pricing guidance (subject to final quotation).

Stage 2 — Venue Assessment & Solution Design

2.1 Venue Data Collection

The Buyer shall provide the following venue information to enable Xinyou's design team to prepare a tailored solution:

• Architectural floor plans (auto CAD format preferred; PDF or JPEG acceptable);
• Ceiling height, column positions, fire exit locations, and structural load-bearing capacity;
• Electrical supply specifications (voltage, phase, frequency, amperage available);
• Local building codes, fire safety regulations, and amusement equipment licensing requirements;
• High-resolution photographs and/or drone footage of the venue (for outdoor installations).

2.2 Solution Design

Xinyou's in-house design team, with extensive experience in entertainment venue planning, will deliver:

• Equipment Placement Plan — Optimized layout maximizing player flow, revenue-generating density, and safety compliance;
• 3D Rendered Visualizations — Photorealistic renderings of the proposed venue configuration to assist the Buyer in stakeholder presentations and investor approvals;
• Infrastructure Requirements Report — Detailed electrical, networking, HVAC, and structural requirements for each equipment unit;
• Investment & ROI Analysis (available upon request) — Revenue projection model based on industry-standard utilization rates, ticket pricing benchmarks, and operating cost estimates for the Buyer's market.

2.3 Design Review & Revision

The Buyer is entitled to up to two (2) rounds of design revisions at no additional cost. Additional revision rounds shall be quoted separately. Xinyou will incorporate feedback within 3–5 business days per revision cycle.

Stage 3 — Quotation & Contract

3.1 Proforma Invoice

Xinyou will issue a formal Proforma Invoice (PI) containing the following elements:

• Seller and Buyer full legal names, addresses, and contact details;
• Detailed product description including model numbers, specifications, quantities, and unit prices;
• Total contract value with itemized pricing (equipment, accessories, spare parts, shipping, insurance if applicable);
• Trade terms (FOB Guangzhou, CIF destination port, EXW, CFR, etc.) per Incoterms® 2020;
• Payment terms and schedule (see Part 2, Article 2);
• Estimated production lead time;
• Quotation validity period (typically 30 calendar days from date of issue);
• HS codes for customs classification purposes;
• Country of origin: People's Republic of China.

3.2 Sales Contract

Upon mutual agreement of the quotation terms, Xinyou will prepare a comprehensive Sales Contract governing the transaction. The contract shall include:

• All terms referenced in the Proforma Invoice;
• Technical Specification Annex detailing equipment parameters, materials, and performance standards;
• Quality inspection and acceptance criteria;
• Warranty terms and after-sales service commitments;
• Intellectual property provisions (if OEM/ODM services are engaged);
• Force majeure, dispute resolution, and governing law clauses (see Part 2).

The Sales Contract shall be issued in English. Upon request, a bilingual version (English and the Buyer's language) may be prepared, with the English version prevailing in the event of any discrepancy.

3.3 Contract Execution

Both parties shall execute the Sales Contract by affixing authorized signatures and company seals. Electronic signatures and scanned copies transmitted via email shall be deemed valid and binding. The original hard-copy contracts shall be exchanged by international courier within 10 business days of electronic execution.

Stage 4 — Production & Quality Control

4.1 Production Planning

Upon confirmation of the Sales Contract and receipt of the advance payment (deposit), Xinyou shall:

1. Assign a dedicated Production Project Manager to oversee the order;
2. Issue a detailed Production Schedule with key milestones (material procurement, fabrication, assembly, testing, packaging);
3. Confirm the estimated completion date and shipping readiness date.

Standard production lead times are as follows:

*Note: Lead times commence upon receipt of advance payment and confirmation of all technical specifications. Customized orders requiring new mold development may require additional time, which will be communicated prior to contract execution.*

4.2 Three-Tier Quality Control System

Xinyou implements a rigorous three-tier quality control framework throughout the production process:

Tier 1 — Incoming Quality Control (IQC):

All raw materials, electronic components, and sub-assemblies are inspected upon arrival at the facility. Incoming materials are verified against approved specifications, supplier certificates, and sample benchmarks. Non-conforming materials are rejected and returned to the supplier.

Tier 2 — In-Process Quality Control (IPQC):

During production, quality inspectors conduct scheduled checks at critical manufacturing stages, including:

• Structural welding and frame assembly integrity;
• Electrical wiring and circuit board assembly verification;
• Software installation and firmware flashing validation;
• Surface treatment and painting quality inspection.

Tier 3 — Final Quality Control (FQC) / Pre-Shipment Inspection (PSI):

Upon completion of assembly, each unit undergoes comprehensive final inspection and testing:

• Functional testing of all interactive components, displays, sound systems, and motion platforms;
• 72-hour continuous aging/burn-in test under simulated operating conditions;
• Safety mechanism verification (emergency stops, overload protection, insulation resistance);
• Dimensional accuracy and cosmetic inspection;
• Packaging integrity check.

A detailed Final Inspection Report, including test data, photographs, and video recordings, will be provided to the Buyer prior to shipment.

4.3 Buyer Inspection Rights

The Buyer reserves the right to:

1. Remote Inspection — Request real-time video inspection of production progress and final testing via video call;
2. On-Site Inspection — Visit the Xinyou manufacturing facility (or engage a third-party inspection agency such as SGS, Bureau Veritas, or TÜV Rheinland) to conduct pre-shipment inspection at the Buyer's expense. Xinyou will provide full cooperation and access to the production area with 5 business days' advance notice from the Buyer;
3. Third-Party Inspection — Xinyou will cooperate with any internationally recognized inspection agency nominated by the Buyer. The inspection fee shall be borne by the Buyer unless otherwise agreed.

Stage 5 — Certification & Compliance Documentation

5.1 Certification Portfolio

Xinyou's products are certified and/or compliant with the following international standards:

5.2 Documentation Package

For each shipment, Xinyou will prepare and deliver the following documentation:

• Commercial Invoice — three (3) originals plus three (3) copies;
• Packing List — detailing carton markings, net/gross weight, dimensions, and HS codes;
• Bill of Lading (ocean freight) or Air Waybill (air freight);
• Certificate of Origin — issued by CCPIT or as required by the Buyer;
• CE Declaration of Conformity and relevant test reports;
• FCC, CSA, RoHS certificates (as applicable to the destination market);
• Insurance Policy/Certificate (under CIF terms);
• Fumigation Certificate (for wood packaging materials, ISPM 15 compliant);
• Product Manuals — operation manual, maintenance guide, and troubleshooting guide in English (additional languages available upon request at extra cost).

5.3 Destination Country Compliance Advisory

Xinyou shall provide advisory guidance on the regulatory requirements of the Buyer's destination country based on its experience exporting to 50+ markets. However, the Buyer bears the ultimate responsibility for confirming compliance with all local import regulations, licensing requirements, amusement ride safety codes, and operational permits. Xinyou shall not be liable for delays or costs arising from the Buyer's failure to obtain necessary import approvals.

Stage 6 — Payment & Trade Terms

6.1 Accepted Payment Methods

6.2 Standard Payment Schedule (T/T)

*Alternative payment schedules (e.g., 30% deposit, 40% mid-production, 30% pre-shipment) may be negotiated for large-volume orders exceeding USD 200,000, subject to Xinyou's credit assessment.*

6.3 Currency

All prices and payments shall be denominated in US Dollars (USD) unless otherwise agreed in writing. Exchange rate fluctuation risk shall be borne by the Buyer.

6.4 Late Payment

Payments received after the due dates specified in the Sales Contract shall incur a late payment surcharge of 0.05% per calendar day of the overdue amount, up to a maximum of 5% of the total contract value. Xinyou reserves the right to suspend production or delay shipment in the event of overdue payments exceeding 15 calendar days.

6.5 Bank Details

Xinyou's official bank account details will be provided in the Proforma Invoice. All payments must be made to Xinyou's corporate account. Under no circumstances shall payments be made to personal accounts or third-party entities. Any changes to bank details will be communicated via official company letterhead with authorized signature.

Stage 7 — Packaging & Shipping

7.1 Export Packaging Standards

All products are packed according to international export standards to withstand long-distance ocean freight and multiple handling operations:

• Inner Protection: Bubble wrap, EPE foam, and stretch film to protect surfaces and sensitive components;
• Structural Protection: Heavy-duty corrugated cardboard cartons with reinforced corners for individual units;
• Fragile Components: Wooden crates or plywood cases for VR headsets, displays, motion platforms, and other precision equipment;
• Palletization: Goods are secured on fumigated and ISPM 15-compliant wooden pallets or plastic pallets (upon request);
• Container Loading: Professional loading plans optimize container space utilization; loading is documented with photographs at each stage.

7.2 Shipping Methods & Transit Times

Estimated Transit Times from Guangzhou/Nansha Port:

*Note: Transit times are estimates and subject to carrier schedules, weather conditions, port congestion, and other factors beyond Xinyou's control.*

7.3 Container Options

7.4 Shipping Documentation

Xinyou will provide the following shipping documents within 3 business days after vessel departure:

• Original Bill of Lading (3 originals + 3 copies) or Telex Release;
• Commercial Invoice and Packing List;
• Certificate of Origin;
• Insurance Policy (CIF terms only);
• Fumigation Certificate (if applicable);
• Container loading photographs and seal numbers.

Stage 8 — Customs Clearance & Delivery

8.1 Export Clearance (Seller's Responsibility)

Xinyou shall handle all export customs clearance procedures in China, including:

• Customs declaration with accurate HS codes and declared values;
• Export inspection (if required by Chinese customs);
• Payment of all origin-side port charges, terminal handling charges, and documentation fees;
• Coordination with the freight forwarder for container gate-in and vessel booking.

8.2 Import Clearance (Buyer's Responsibility)

The Buyer is solely responsible for:

• Engaging a licensed customs broker or freight forwarding agent at the port of destination;
• Payment of all import duties, value-added tax (VAT), goods and services tax (GST), and any other applicable tariffs or levies imposed by the destination country;
• Compliance with all local import regulations, including but not limited to safety standards, licensing, and registration of amusement equipment;
• Arranging cargo pickup from the port or terminal within the free demurrage period to avoid storage charges.

8.3 Assistance with Customs Inquiries

In the event that destination customs authorities raise inquiries regarding product classification, valuation, or origin, Xinyou shall provide timely assistance including:

• Revised or supplementary documentation as required;
• Technical product descriptions for classification purposes;
• Communication with the Buyer's customs broker to facilitate clearance.

Xinyou shall not be liable for delays, penalties, or additional costs arising from the Buyer's failure to comply with import regulations or from changes in destination country tariff policies after the contract date.

Stage 9 — Installation & Commissioning

9.1 Installation Options

9.2 Site Readiness Requirements

Prior to equipment arrival, the Buyer must ensure the following site conditions are met (detailed requirements will be provided in the Infrastructure Requirements Report):

• Electrical supply installed and tested (correct voltage, phase, frequency, and amperage per equipment specifications);
• Adequate flooring — level, clean, and capable of bearing equipment weight;
• Sufficient ceiling height and clearance for overhead components;
• Climate control (temperature and humidity within operating range specified in the product manual);
• Network connectivity (for networked/online-enabled equipment);
• Appropriate fire safety systems in place.

9.3 Commissioning

Following physical installation, the following commissioning activities will be conducted:

• Power-on self-test and system initialization;
• Calibration of all sensors, displays, motion platforms, and interactive elements;
• Software configuration and game content loading;
• End-to-end functional testing simulating normal operating conditions;
• Safety system verification (emergency stops, overload cut-offs, protective barriers);
• Performance benchmarking against factory test results.

A Commissioning Report will be issued upon successful completion, signed by both parties' representatives.

Stage 10 — Training & Operation Support

10.1 Training Program

Xinyou offers the following training modules:

Module A — Equipment Operation (for venue operators):

• Equipment startup, shutdown, and daily operating procedures;
• Game selection, configuration, and difficulty adjustment;
• Coin/token/card system operation and revenue collection;
• Customer service best practices and player safety management;
• Basic troubleshooting for common operational issues.

Module B — Technical Maintenance (for maintenance technicians):

• Preventive maintenance schedule and procedures;
• Component inspection and replacement guidelines;
• Software update and backup procedures;
• Electrical system diagnostics;
• Spare parts identification and ordering process.

Module C — Business Operations (for management):

• Revenue optimization strategies and game mix planning;
• Utilization rate analysis and peak-hour management;
• Seasonal marketing and promotional campaign planning;
• Data analytics and reporting (for networked equipment).

10.2 Training Delivery

10.3 Ongoing Operation Support

• Operation Manual & Video Library — Continuously updated and accessible through Xinyou's online support portal;
• Quarterly Operation Strategy Updates — Xinyou shares market insights, trending game content, and revenue optimization recommendations;
• New Game Content Updates — Available for download or USB delivery; pricing varies by content package;
• Lifetime Technical Hotline — Bilingual (English/Chinese) technical support available via phone, email, WhatsApp, and WeChat.

Stage 11 — After-Sales Service

11.1 Service Request Process

1. Issue Reporting — The Buyer reports the issue via email, WhatsApp, or the Xinyou support portal, providing: equipment model and serial number, detailed description of the fault, photographs/video of the issue, error codes displayed (if any), and operating environment conditions.

2. Remote Diagnostics — Xinyou's technical support team acknowledges receipt within 2 business hours and begins remote diagnosis. For networked equipment, remote diagnostic access (with Buyer's authorization) enables rapid fault identification.

3. Resolution Delivery — Within 48 hours of issue confirmation, Xinyou provides one of the following:

• Software patch or configuration fix (delivered remotely);
• Step-by-step repair guidance for Buyer's on-site technician;
• Spare part dispatch via express courier (3–7 business days to most destinations);
• On-site engineer dispatch for complex issues (quoted separately).

4. Issue Closure — Upon resolution, Xinyou issues a Service Completion Report and the Buyer confirms the resolution.

11.2 Spare Parts Supply

• Xinyou maintains an extensive spare parts inventory for all products manufactured in the past 5+ years;
• Common spare parts are dispatched within 1–3 business days of order confirmation;
• Custom or specialized components have a lead time of 7–20 business days;
• A recommended spare parts list is provided with each equipment delivery for the Buyer's reference;
• Spare parts pricing is provided in a separate Spare Parts Price List, valid for 12 months and subject to annual revision.

11.3 Extended Service Plans

For Buyers seeking enhanced service coverage, Xinyou offers optional Extended Service Plans:

*Extended Service Plans are quoted separately and subject to Xinyou's terms and conditions.*

These Terms and Conditions (hereinafter "Terms") govern all sales of products and services by Guangzhou Xinyou Animation Technology Co., Ltd. ("Seller," "Xinyou") to any buyer, distributor, or end-user ("Buyer"). By placing an order, the Buyer acknowledges acceptance of these Terms in their entirety.

Article 1 — General Provisions

1.1 These Terms and Conditions apply to all orders placed with and accepted by Xinyou for the supply of amusement equipment, entertainment machines, spare parts, accessories, and related services (collectively, the "Products" and/or "Services").

1.2 These Terms constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, representations, warranties, and agreements, whether written or oral.

1.3 Any deviation from or amendment to these Terms shall be valid only if made in writing and signed by authorized representatives of both parties.

1.4 The Buyer's purchase order, if different from these Terms, shall not override these Terms unless expressly accepted in writing by Xinyou. In the event of conflict, these Terms shall prevail.

1.5 Xinyou reserves the right to modify these Terms at any time. Modified Terms shall apply to orders placed after the date of modification. Orders already confirmed shall remain governed by the Terms in effect at the time of order confirmation.

1.6 If any provision of these Terms is found to be invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the enforceability of the remaining provisions, which shall continue in full force and effect.

Article 2 — Pricing & Payment Terms

2.1 Pricing Basis. All prices are quoted in US Dollars (USD) and are based on the trade terms specified in the Proforma Invoice (e.g., FOB Guangzhou, CIF destination port). Prices are valid for the period stated in the quotation (typically 30 calendar days) and are subject to revision thereafter.

2.2 Price Adjustments. Xinyou reserves the right to adjust prices in the event of significant changes in raw material costs (exceeding 10%), exchange rate fluctuations (exceeding 5%), or government-imposed tariff/export duty changes occurring after the quotation date but before order confirmation. Such adjustments shall be communicated to the Buyer with supporting documentation.

2.3 Payment Methods. Xinyou accepts the following payment methods:

2.4 Payment Currency. All payments shall be made in USD unless otherwise agreed in writing. The Buyer bears all bank charges incurred at the Buyer's end. Xinyou shall bear charges at its end.

2.5 Payment Due Dates. Payment milestones are as follows:

2.6 Late Payment Penalty. Overdue payments shall accrue interest at the rate of 0.05% per calendar day on the outstanding amount, calculated from the original due date up to and including the date of actual payment, capped at 5% of the total contract value.

2.7 Right to Suspend. Xinyou reserves the right to suspend production, withhold shipment, or delay delivery if any payment installment is overdue by more than 15 calendar days. Such suspension shall not constitute a breach of contract by Xinyou, and any resulting delays shall be treated as Buyer-caused delays.

2.8 Set-Off. The Buyer shall not be entitled to set off, deduct, or withhold any amounts from payments due to Xinyou, except as expressly agreed in writing.

Article 3 — Order Confirmation & Cancellation

3.1 Order Confirmation. An order shall be deemed confirmed only upon Xinyou's written acceptance (via email or signed Sales Contract) and receipt of the advance payment. Prior to these conditions being met, no binding obligation exists on Xinyou's part.

3.2 Order Cancellation by Buyer. The Buyer may cancel a confirmed order subject to the following conditions:

3.3 The cancellation fee is intended to cover Xinyou's costs incurred to date, including but not limited to raw materials procurement, labor, custom tooling, and administrative overhead. The cancellation fee shall be deducted from any advance payment refund due to the Buyer.

3.4 Customized and OEM Orders. Orders involving custom design, branding, non-standard specifications, or OEM/ODM requirements are non-cancellable once production has commenced, as the Products are manufactured to the Buyer's unique specifications and cannot be resold to third parties.

3.5 Order Cancellation by Seller. Xinyou reserves the right to cancel or refuse any order in the following circumstances:

• The Buyer fails to make the advance payment within the specified timeframe;
• The Buyer's intended use of the Products violates applicable laws or regulations;
• Xinyou determines, in its reasonable judgment, that fulfilling the order poses a material risk to its business interests;
• Force majeure events prevent performance (see Article 15).

3.6 In the event of cancellation by Xinyou (other than due to Buyer's breach), Xinyou shall refund all payments received, less documented out-of-pocket expenses, within 30 calendar days.

Article 4 — Production Lead Time & Delays

4.1 Standard Lead Times. Production lead times are estimated based on the product category and order complexity, as detailed in Part 1, Stage 4. Lead times commence upon receipt of the advance payment and final confirmation of all technical specifications.

4.2 Buyer-Caused Delays. Any delay attributable to the Buyer, including but not limited to late payment, delayed specification confirmation, delayed design approval, or failure to provide required information, shall result in a corresponding extension of the delivery timeline. Xinyou shall notify the Buyer in writing of the revised delivery date.

4.3 Seller-Caused Delays. In the event that Xinyou fails to deliver the Products within the agreed delivery period (excluding Buyer-caused delays and force majeure), the following shall apply:

4.4 The remedies set forth in Article 4.3 represent the Buyer's sole and exclusive remedies for delivery delays and Xinyou's sole liability in this regard.

4.5 Partial Shipments. Xinyou reserves the right to make partial shipments if production is completed in batches. Each partial shipment shall be treated as a separate delivery for the purposes of payment milestones and documentation.

Article 5 — Quality Standards & Inspection

5.1 Quality Management System. Xinyou designs, manufactures, and services its Products under an ISO 9001:2015 certified Quality Management System. All production processes are subject to the three-tier quality control framework described in Part 1, Stage 4.

5.2 Product Specifications. Products shall conform to the technical specifications, dimensional drawings, and performance parameters set forth in the Sales Contract and/or Technical Specification Annex. Minor variations (within ±2% for non-critical dimensions and ±5% for weight) shall not constitute a defect.

5.3 Inspection Rights. The Buyer has the right to inspect the Products as follows:

1. During Production — The Buyer may visit the facility or engage a third-party inspector during production with 5 business days' written notice;
2. Pre-Shipment Inspection (PSI) — The Buyer may conduct or commission a PSI prior to packaging. Xinyou shall provide access and cooperation. The Buyer must notify Xinyou of the inspection date at least 5 business days in advance;
3. Post-Delivery Inspection — The Buyer shall inspect the Products within 7 calendar days of receipt (the "Inspection Period"). Failure to raise any written objection within the Inspection Period shall constitute deemed acceptance.

5.4 Inspection Costs. Inspection costs during production and pre-shipment shall be borne by the Buyer, unless otherwise agreed. Post-delivery inspection costs shall be borne by the Buyer unless a quality defect is confirmed, in which case Xinyou shall reimburse reasonable inspection costs directly related to the confirmed defect.

5.5 Non-Conforming Products. In the event that Products are found to be non-conforming with the agreed specifications (and the Buyer has raised a timely objection within the Inspection Period), Xinyou shall, at its sole discretion:

1. Repair the non-conforming Products at Xinyou's expense;
2. Replace the non-conforming Products at Xinyou's expense (including shipping costs for replacement units); or
3. Issue a price reduction proportionate to the non-conformity.

5.6 Xinyou shall not be liable for non-conformity arising from:

• The Buyer's modification or alteration of the Products after delivery;
• Normal wear and tear;
• Improper installation, operation, or maintenance contrary to Xinyou's instructions;
• Use of non-Xinyou spare parts or components;
• Force majeure events.

Article 6 — Acceptance & Rejection

6.1 Inspection Period. The Buyer shall inspect all Products within seven (7) calendar days from the date of delivery (or, for CIF/CFR terms, from the date of arrival at the port of destination). This period is referred to as the "Inspection Period."

6.2 Acceptance. Products shall be deemed accepted by the Buyer if:

• The Buyer provides written confirmation of acceptance within the Inspection Period; or
• The Buyer fails to provide written notice of rejection specifying the nature and extent of the non-conformity within the Inspection Period; or
• The Buyer puts the Products into commercial operation (whichever occurs first).

6.3 Rejection Notice. If the Buyer elects to reject any Products, the Buyer must provide Xinyou with a written Rejection Notice within the Inspection Period, containing:

• A detailed description of the alleged non-conformity;
• Photographic and/or video evidence of the defect;
• The specific contract clause or specification that the Product allegedly fails to meet;
• The Buyer's proposed remedy (replacement, repair, or refund).

6.4 Rejection Process. Upon receipt of a valid Rejection Notice:

1. Xinyou shall acknowledge receipt within 3 business days;
2. Xinyou may request additional information or independent third-party inspection;
3. If the rejection is deemed valid, Xinyou shall implement the appropriate remedy within a reasonable timeframe (see Article 5.5);
4. If the rejection is deemed invalid, Xinyou shall provide a written explanation with supporting evidence.

6.5 Returned Goods. Rejected Products shall not be returned to Xinyou unless Xinyou specifically requests return in writing. If return is required, all return shipping costs, customs duties, and handling charges shall be borne by:

• The Buyer, if the rejection is deemed unfounded;
• Xinyou, if the rejection is confirmed as valid.

6.6 Partial Acceptance. Acceptance of any portion of the Products shall not constitute acceptance of the remaining Products. Each delivery shall be treated independently for the purposes of acceptance.

Article 7 — Shipping & Risk Transfer

7.1 Incoterms® 2020. All trade terms shall be interpreted in accordance with Incoterms® 2020 as published by the International Chamber of Commerce (ICC). The specific trade term applicable to each transaction shall be stated in the Proforma Invoice and Sales Contract.

7.2 Risk Transfer. The transfer of risk shall occur as follows:

7.3 Title Transfer. Title (ownership) of the Products shall pass to the Buyer upon Xinyou's receipt of full payment of the contract price. Until full payment is received, Xinyou retains title to the Products, and the Buyer shall store the Products (if delivered) in a manner that clearly identifies them as Xinyou's property.

7.4 Insurance.

• Under CIF terms, Xinyou shall procure marine cargo insurance covering 110% of the invoice value against All Risks (Institute Cargo Clauses A) and War Risk (Institute War Clauses — Cargo), with the insurance policy endorsed in the Buyer's favor.
• Under FOB, CFR, EXW, or other terms, insurance is the Buyer's responsibility. Xinyou strongly recommends that the Buyer arrange adequate insurance coverage. Xinyou shall not be liable for any loss or damage to goods in transit where insurance is the Buyer's responsibility.

7.5 Shipping Marks. Standard shipping marks shall be applied by Xinyou unless the Buyer provides specific shipping mark instructions in writing at least 10 business days prior to the scheduled shipping date.

7.6 Delivery Delay in Transit. Xinyou shall not be liable for delays in transit caused by carrier delays, port congestion, customs holds, weather, strikes, or other events beyond Xinyou's reasonable control. Under CIF and CFR terms, Xinyou's delivery obligation is fulfilled upon loading of goods on board the vessel at the port of shipment.

Article 8 — Warranty Policy

8.1 Warranty Period. Xinyou provides the following warranty coverage from the date of the Bill of Lading (for ocean freight) or Air Waybill (for air freight):

8.2 Warranty Coverage. During the warranty period, Xinyou warrants that the Products shall be free from defects in materials and workmanship under normal use and service. In the event of a valid warranty claim, Xinyou shall, at its sole discretion:

1. Provide replacement parts free of charge (shipping costs borne by the Buyer for FOB/EXW terms, by Xinyou for CIF terms on the initial delivery only);
2. Provide remote technical guidance for repair; or
3. Dispatch an on-site engineer if the issue cannot be resolved remotely (travel costs to be negotiated on a case-by-case basis).

8.3 Warranty Exclusions. The warranty does not cover defects or damage resulting from:

• Normal wear and tear;
• Improper installation, operation, or maintenance not in accordance with Xinyou's manuals;
• Unauthorized modification, repair, or alteration by the Buyer or third parties;
• Use of non-Xinyou spare parts or incompatible accessories;
• Accident, misuse, abuse, negligence, or improper handling;
• Operation outside the specified environmental conditions (temperature, humidity, voltage);
• Acts of God, force majeure, or events beyond Xinyou's control;
• Cosmetic damage that does not affect the Product's functionality;
• Software issues arising from third-party software or modifications made by the Buyer.

8.4 Warranty Claim Procedure. To make a warranty claim, the Buyer must:

1. Notify Xinyou in writing within 7 calendar days of discovering the defect;
2. Provide the equipment serial number, purchase date, and a detailed description of the defect;
3. Submit photographic/video evidence of the defect;
4. Allow Xinyou a reasonable opportunity to inspect and diagnose the issue remotely or on-site.

8.5 Xinyou's obligations under this warranty are limited to repair or replacement as described above and do not extend to any consequential, incidental, or indirect damages, including but not limited to loss of revenue, loss of profits, business interruption, or loss of goodwill.

Article 9 — After-Sales Service

9.1 Service Commitment. Xinyou is committed to providing responsive and effective after-sales support throughout the operational life of the Products.

9.2 Response Time. Xinyou guarantees the following response times:

9.3 Service Channels. After-sales support is available through:

• Email: aftersales@xinyouanimation.com
• WhatsApp: Available on product documentation
• WeChat: Available on product documentation
• Phone: Bilingual support (English/Chinese), Monday to Saturday, 09:00–21:00 Beijing Time (GMT+8)
• Online Support Portal: Accessible via Xinyou's official website

9.4 Service Availability. Standard after-sales support operates on a 7 days × 12 hours basis (09:00–21:00 Beijing Time, Monday through Sunday, excluding Chinese public holidays). Emergency support for critical issues (complete system failure affecting revenue operations) is available on a best-effort basis outside standard hours.

9.5 Out-of-Warranty Service. After the expiration of the warranty period, Xinyou continues to provide:

• Technical support and troubleshooting guidance (free of charge for the first 12 months post-warranty; thereafter at a nominal hourly rate);
• Spare parts supply at Xinyou's then-current pricing (for a minimum of 5 years from the date of the last production batch of the relevant model);
• On-site repair services (at the Buyer's cost, including travel, accommodation, and labor charges);
• Software updates and content upgrades (at then-current pricing).

9.6 Xinyou's after-sales service obligations are limited to the commitments described in this Article and do not include any obligation to compensate the Buyer for lost revenue, business interruption, or consequential damages arising from equipment downtime.

Article 10 — Returns & Exchange

10.1 Return Eligibility. Products may be returned or exchanged only under the following conditions:

• The Products are found to be materially non-conforming with the agreed specifications (as determined through the process described in Article 6);
• The Products have not been installed, modified, or put into commercial use;
• The Products are returned in their original packaging in substantially the same condition as delivered;
• A return request is submitted in writing within 30 calendar days of delivery.

10.2 Return Process.

1. The Buyer submits a written Return Request to Xinyou's after-sales department;
2. Xinyou reviews the request and issues a Return Merchandise Authorization (RMA) number within 5 business days if the return is approved;
3. The Buyer ships the Products back to Xinyou's designated facility at the Buyer's expense (unless the return is due to Xinyou's confirmed defect, in which case Xinyou bears return shipping costs);
4. Upon receipt and inspection of the returned Products, Xinyou shall issue a replacement or refund within 15 business days.

10.3 Restocking Fee. Returns not caused by Xinyou's defect shall be subject to a restocking fee of 15% of the returned Products' value to cover handling, repackaging, and administrative costs.

10.4 Non-Returnable Items. The following items are non-returnable:

• Custom-manufactured or OEM/ODM Products made to the Buyer's specifications;
• Consumable parts and accessories;
• Products that have been installed, modified, or used commercially;
• Software licenses and digital content (once activated or downloaded);
• Products shipped more than 30 calendar days prior to the return request.

10.5 Exchange. Product exchanges (replacement of one model for another) are subject to mutual agreement and may incur price differences, restocking fees, and additional shipping costs. Exchange requests must follow the same process as returns.

Article 11 — Intellectual Property

11.1 Ownership. All intellectual property rights in and to the Products, including but not limited to patents, trademarks, copyrights, trade secrets, industrial designs, software, firmware, game content, and technical documentation, are and shall remain the exclusive property of Xinyou or its licensors.

11.2 License Grant. Upon full payment, Xinyou grants the Buyer a non-exclusive, non-transferable, perpetual license to use the software and game content embedded in the Products solely for the Buyer's own commercial operation of the Products. This license does not include the right to copy, modify, reverse-engineer, sublicense, or distribute the software or content.

11.3 Restrictions. The Buyer shall not:

• Reverse-engineer, decompile, or disassemble any software or firmware embedded in the Products;
• Copy, reproduce, or distribute game content, artwork, or multimedia assets;
• Use Xinyou's trademarks, logos, or brand name without prior written consent;
• Manufacture or commission the manufacture of products based on Xinyou's designs or technology;
• Remove or alter any proprietary notices, labels, or markings on the Products.

11.4 OEM/ODM Provisions. Where Xinyou manufactures Products bearing the Buyer's brand (OEM) or develops Products to the Buyer's design specifications (ODM):

• All underlying intellectual property developed by Xinyou in the course of the project (including tooling, molds, software modifications, and design improvements) shall remain Xinyou's property unless expressly transferred in writing;
• The Buyer's brand assets (logos, trademarks, design elements) provided to Xinyou shall remain the Buyer's property;
• Xinyou shall not use the Buyer's brand assets for any purpose other than fulfilling the specific order without the Buyer's written consent.

11.5 Infringement Indemnification. Xinyou warrants that, to the best of its knowledge, the Products (in their standard configuration) do not infringe any third-party intellectual property rights in the People's Republic of China. Xinyou shall not be liable for infringement claims arising from:

• Customizations or modifications made at the Buyer's request;
• The Buyer's use of the Products in combination with third-party products or systems;
• The Buyer's use of the Products in jurisdictions where such use would constitute infringement.

Article 12 — OEM/ODM Customization Terms

12.1 Scope. This Article applies to orders where the Buyer requests customization of Products, including but not limited to: branding (logos, color schemes, artwork), software localization (language, currency, payment systems), hardware modifications (voltage adaptation, structural modifications, component substitution), and bespoke design development.

12.2 Customization Agreement. All customization requests shall be documented in a separate Customization Specification Annex attached to the Sales Contract. The Annex shall specify:

• Detailed description of the requested customization;
• Technical feasibility assessment and any limitations;
• Additional costs and revised pricing;
• Revised production lead time;
• Mock-up samples or design proofs (if applicable);
• Acceptance criteria for the customized Product.

12.3 Sample Approval. For significant customization (involving new molds, tooling, or software development), Xinyou shall produce a pre-production sample or prototype for the Buyer's approval. The Buyer shall:

1. Review and approve or reject the sample within 10 business days of receipt;
2. Provide specific written feedback if rejecting the sample;
3. Xinyou shall incorporate one (1) round of sample revisions at no additional cost; subsequent revisions shall be charged at Xinyou's then-current rates.

12.4 Tooling and Mold Costs. Any custom tooling, molds, or fixtures developed for the Buyer's order shall be:

• Charged to the Buyer as a one-time cost (quoted separately);
• Owned by Xinyou unless the Buyer pays a separate tooling ownership fee;
• Stored and maintained by Xinyou for the Buyer's exclusive use during the agreed production period;
• Not transferable to third parties without Xinyou's written consent.

12.5 Minimum Order Quantity (MOQ). Customized Products may be subject to higher MOQ requirements than standard Products, as specified in the Customization Specification Annex.

12.6 Lead Time. Customization typically adds 15–45 business days to the standard production lead time, depending on the scope and complexity of the modifications.

Article 13 — Confidentiality

13.1 Definition. "Confidential Information" means any and all non-public information disclosed by one party (the "Disclosing Party") to the other party (the "Receiving Party"), whether orally, in writing, or electronically, including but not limited to:

• Product designs, technical specifications, and engineering drawings;
• Pricing, cost structures, and commercial terms;
• Manufacturing processes, methods, and know-how;
• Software source code, algorithms, and firmware;
• Customer lists, business strategies, and marketing plans;
• Financial information and business forecasts.

13.2 Obligations. The Receiving Party shall:

1. Hold all Confidential Information in strict confidence;
2. Not disclose Confidential Information to any third party without the prior written consent of the Disclosing Party;
3. Use Confidential Information solely for the purpose of performing its obligations under the Sales Contract;
4. Restrict access to Confidential Information to employees and agents who have a need to know and are bound by confidentiality obligations no less restrictive than those contained herein;
5. Protect Confidential Information with at least the same degree of care used to protect its own confidential information, but in no event less than reasonable care.

13.3 Exclusions. The obligations of confidentiality shall not apply to information that:

1. Is or becomes publicly available through no fault of the Receiving Party;
2. Was already known to the Receiving Party prior to disclosure;
3. Is independently developed by the Receiving Party without reference to the Confidential Information;
4. Is required to be disclosed by law, regulation, or court order, provided the Receiving Party gives prompt written notice to the Disclosing Party to allow the Disclosing Party to seek a protective order.

13.4 Duration. The confidentiality obligations shall survive the termination or expiration of the Sales Contract for a period of five (5) years from the date of termination/expiration.

13.5 Breach. In the event of a breach of this Article, the non-breaching party shall be entitled to seek injunctive relief and/or monetary damages. The parties acknowledge that a breach of confidentiality may cause irreparable harm for which monetary damages alone would be inadequate.

Article 14 — Limitation of Liability

14.1 General Limitation. To the maximum extent permitted by applicable law, Xinyou's total aggregate liability to the Buyer for any and all claims arising out of or in connection with the Sales Contract, whether in contract, tort, negligence, or otherwise, shall not exceed the total contract value of the specific order giving rise to the claim.

14.2 Exclusion of Consequential Damages. In no event shall Xinyou be liable for any indirect, incidental, special, consequential, or punitive damages, including but not limited to:

• Loss of revenue, profits, or business opportunities;
• Loss of data or business interruption;
• Loss of goodwill or reputation;
• Costs of procuring substitute goods or services;
• Downtime costs or loss of use;
• Claims by end-users or third parties against the Buyer.

This exclusion applies regardless of whether such damages were foreseeable or whether Xinyou was advised of the possibility of such damages.

14.3 The limitations set forth in this Article shall apply even if the essential purpose of any limited remedy fails.

14.4 Nothing in this Article shall limit liability for:

• Fraud, willful misconduct, or gross negligence;
• Death or personal injury caused by Xinyou's negligence;
• Breach of Article 13 (Confidentiality);
• Infringement of third-party intellectual property rights (to the extent covered by Article 11.5).

Article 15 — Force Majeure

15.1 Definition. "Force Majeure Event" means any event beyond the reasonable control of the affected party, including but not limited to:

• Natural disasters (earthquakes, floods, typhoons, epidemics, pandemics);
• Acts of war, terrorism, civil unrest, or government sanctions;
• Government actions, regulations, or orders (including export/import bans, quarantine restrictions);
• Strikes, labor disputes, or industrial actions (except those involving the affected party's own employees);
• Fire, explosion, or equipment failure at the affected party's premises (unless caused by negligence);
• Failure of utilities, transportation networks, or telecommunications systems;
• Shortage of raw materials or components not reasonably foreseeable or preventable;
• Port congestion, carrier cancellations, or container shortages.

15.2 Notification. The party affected by a Force Majeure Event shall:

1. Notify the other party in writing within 7 calendar days of the occurrence or discovery of the event;
2. Provide a description of the event, its expected duration, and its impact on the affected party's ability to perform;
3. Use commercially reasonable efforts to mitigate the impact and resume performance as soon as practicable.

15.3 Consequences. Upon the occurrence of a Force Majeure Event:

1. The affected party's performance obligations shall be suspended for the duration of the event and any reasonable recovery period;
2. The affected party shall not be liable for any delay or failure to perform caused by the event;
3. The non-affected party shall not be entitled to claim damages for the delay or non-performance;
4. If the Force Majeure Event continues for more than 90 calendar days, either party may terminate the affected portion of the Sales Contract by written notice, subject to equitable settlement of payments and costs incurred to date.

15.4 Force Majeure shall not excuse the Buyer's obligation to make payments due under the Sales Contract, except to the extent that payment is actually prevented by government-imposed foreign exchange controls or banking restrictions.

Article 16 — Dispute Resolution

16.1 Amicable Settlement. In the event of any dispute, controversy, or claim arising out of or in connection with the Sales Contract (a "Dispute"), the parties shall first attempt to resolve the Dispute through good-faith negotiations between senior management of both parties. Such negotiations shall commence within 15 business days of either party's written notice of the Dispute and shall continue for a period of 30 calendar days (the "Negotiation Period").

16.2 Mediation. If the Dispute is not resolved through negotiation within the Negotiation Period, the parties may agree to submit the Dispute to mediation under the auspices of the China Council for the Promotion of International Trade (CCPIT) Mediation Center.

16.3 Arbitration. If the Dispute is not resolved through negotiation or mediation within 60 calendar days of the initial notice, the Dispute shall be referred to and finally resolved by arbitration administered by the Guangzhou Arbitration Commission (GZAC) in accordance with its arbitration rules in effect at the time of the submission of the notice of arbitration. The number of arbitrators shall be three (3). The place of arbitration shall be Guangzhou, People's Republic of China. The language of arbitration shall be English (with Chinese translations as necessary). The arbitral award shall be final and binding upon both parties.

16.4 Interim Relief. Nothing in this Article shall prevent either party from seeking interim or conservatory measures (including injunctive relief) from a court of competent jurisdiction to protect its intellectual property rights or to preserve evidence.

16.5 Continuation of Performance. Unless the Sales Contract is terminated, both parties shall continue to perform their respective obligations during the pendency of any Dispute.

16.6 Each party shall bear its own legal costs and expenses in connection with any dispute resolution proceedings. The costs of arbitration shall be allocated by the arbitral tribunal in accordance with GZAC rules.

Article 17 — Governing Law

17.1 These Terms and the Sales Contract shall be governed by and construed in accordance with the laws of the People's Republic of China, excluding its conflict-of-law principles.

17.2 The United Nations Convention on Contracts for the International Sale of Goods (CISG) shall not apply to the Sales Contract.

17.3 In matters not expressly covered by these Terms, the parties shall be guided by the International Chamber of Commerce (ICC) Uniform Customs and Practice for Documentary Credits (UCP 600, latest edition) for letter of credit transactions, and by Incoterms® 2020 for trade term interpretations.

This part sets forth the guarantees provided by Xinyou to the Buyer and the insurance arrangements applicable to international shipments.

Section 1 — Product Quality Guarantee

1.1 Quality Commitment. Xinyou guarantees that all Products manufactured and supplied under these Terms shall meet the quality standards specified in the Sales Contract and the applicable international certifications (CE, CSA, FCC, RoHS, ISO 9001).

1.2 Aging Test Protocol. Every unit undergoes a mandatory 72-hour continuous aging (burn-in) test under simulated operating conditions prior to shipment. This test is designed to identify and eliminate early-life failures (infant mortality) and ensure long-term operational reliability. Key parameters of the aging test include:

1.3 ISO 9001 Full-Chain Traceability. Xinyou's ISO 9001:2015 Quality Management System ensures complete traceability of every Product from raw material procurement through to final delivery. Each unit is assigned a unique serial number linked to its complete production history, including:

• Raw material batch records and supplier certifications;
• In-process inspection records at each manufacturing stage;
• Assembly and testing logs;
• Final inspection and aging test results;
• Packaging and shipping records.

1.4 Quality Guarantee Remedy. In the event that any Product is found to have a quality defect attributable to Xinyou's manufacturing process or materials (as confirmed through the inspection and acceptance process described in Articles 5 and 6), Xinyou shall provide the remedy specified in Article 5.5 at no additional cost to the Buyer.

1.5 Xinyou's quality guarantee is limited to the terms and conditions set forth in these Terms and does not extend to defects caused by factors listed in Article 5.6 or Article 8.3.

Section 2 — Compliance Guarantee

2.1 Certification Commitment. Xinyou guarantees that all Products supplied under the Sales Contract shall comply with the international certifications and standards specified in the contract, and that the corresponding documentation shall be provided as part of the shipment documentation package.

2.2 Destination Market Compliance. Xinyou guarantees that, based on the Buyer's disclosure of the destination country at the inquiry stage, the Products supplied shall meet the applicable regulatory and safety standards of that country. Xinyou maintains a compliance database covering the major regulatory frameworks of its 50+ export markets and provides pre-shipment compliance advisory services.

2.3 Compliance Documentation. All certification documents provided by Xinyou shall be genuine, valid, and issued by accredited testing laboratories and certification bodies. Xinyou shall promptly provide updated or replacement certificates if any certification is renewed, revised, or reissued during the warranty period.

2.4 Compliance Limitation. Xinyou's compliance guarantee is subject to:

• The Buyer providing accurate and complete information regarding the destination country's regulatory requirements;
• The Products being used in accordance with Xinyou's instructions and within the intended application scope;
• The Products not being modified or altered after delivery in a manner that affects their compliance status.

Xinyou shall not be liable for compliance failures arising from:

• Regulatory changes in the destination country occurring after the contract date;
• The Buyer's failure to obtain local operational permits or licenses;
• Modifications made by the Buyer or third parties after delivery.

Section 3 — Delivery Guarantee

3.1 On-Time Delivery Commitment. Xinyou commits to delivering the Products within the production lead time and shipping schedule agreed in the Sales Contract, subject to the exceptions set forth herein.

3.2 Delay Compensation. In the event of a Seller-caused delivery delay exceeding the agreed delivery date (excluding Buyer-caused delays and force majeure), Xinyou shall provide the remedies described in Article 4.3 of Part 2.

3.3 Extended Delay — Full Refund Option. If the delivery delay attributable to Xinyou exceeds thirty (30) business days beyond the agreed delivery date (excluding Buyer-caused delays and force majeure), the Buyer shall have the right to:

1. Cancel the order and receive a full refund of all payments made to Xinyou, including the advance payment and any interim payments; or
2. Accept delivery with a discount as specified in Article 4.3.

3.4 Refund Process. If the Buyer elects to cancel under this Section:

• The Buyer shall provide written notice of cancellation to Xinyou;
• Xinyou shall process the full refund within 30 calendar days of receiving the cancellation notice;
• The refund shall be made to the original payment source (bank account);
• The Buyer shall bear the cost of returning any Products already delivered (if applicable).

3.5 Delivery Guarantee Exclusions. This delivery guarantee does not apply to delays caused by:

• Buyer-caused delays (late payment, late specification confirmation, design changes);
• Force Majeure Events (as defined in Article 15);
• Carrier delays, port congestion, or customs delays occurring after goods have been dispatched;
• Raw material shortages that were not reasonably foreseeable at the time of contract execution;
• Government-imposed export restrictions or embargoes.

Section 4 — After-Sales Guarantee

4.1 Bilingual Support. Xinyou guarantees 7 days × 12 hours bilingual (English/Chinese) technical support availability via phone, email, WhatsApp, and WeChat during the standard service hours (09:00–21:00 Beijing Time, GMT+8).

4.2 Response Time Guarantee. Xinyou guarantees the following after-sales response times:

4.3 Spare Parts Availability Guarantee. Xinyou guarantees the availability of spare parts for a minimum of five (5) years from the date of the last production batch of each Product model. This includes:

• All mechanical components and structural parts;
• Electronic control boards and circuit assemblies;
• Display panels and touchscreen assemblies;
• Motors, compressors, and drive systems;
• Sensors, switches, and interactive components.

4.4 Long-Term Support Commitment. Beyond the 5-year spare parts guarantee, Xinyou commits to making commercially reasonable efforts to source or manufacture compatible spare parts for discontinued models, subject to availability and at the Buyer's cost.

4.5 Software & Content Updates. During the warranty period, Xinyou shall provide:

• Critical bug fixes and security patches free of charge;
• Minor feature updates and performance improvements free of charge;
• Major new game content releases at discounted pricing for existing customers.

Section 5 — Shipping Insurance

5.1 CIF Terms — Seller-Procured Insurance. When the agreed trade term is CIF (Cost, Insurance and Freight), Xinyou shall procure marine cargo insurance on the Buyer's behalf with the following minimum coverage:

5.2 FOB/CFR/EXW Terms — Buyer's Insurance. When the agreed trade term is FOB, CFR, EXW, or any term where insurance is the Buyer's responsibility, Xinyou strongly recommends that the Buyer arrange marine cargo insurance independently. Xinyou shall:

• Provide all necessary documentation to facilitate insurance procurement;
• Cooperate with the Buyer's insurance company in the event of a claim;
• Provide photographs and documentation of the packaging and loading process for insurance purposes.

5.3 Claims Process for Transit Damage. In the event that Products are damaged during transit:

Step 1 — Notification:

The Buyer must notify Xinyou and the insurance company (or the Buyer's own insurer for non-CIF shipments) within 48 hours of discovering the damage. The Buyer must also notify the carrier and/or port authorities in writing and request a joint survey.

Step 2 — Documentation:

The Buyer shall preserve all evidence of damage, including:

• Original packaging materials (do not discard);
• Photographs of the external packaging condition, internal packaging, and damaged Products;
• Video documentation of the unpacking process (recommended);
• The carrier's damage report or surveyor's report;
• Original Bill of Lading, insurance policy, and commercial invoice.

Step 3 — Survey:

An independent marine surveyor shall inspect the damaged cargo. Both the Buyer and the insurance company should participate in or authorize the survey. Xinyou shall cooperate with the survey process and provide any necessary technical information.

Step 4 — Claim Settlement:

• Under CIF terms, the insurance claim is settled between the Buyer and the insurance company. Xinyou shall facilitate the process but is not a party to the insurance contract.
• Under FOB/CFR/EXW terms, the claim is settled between the Buyer and the Buyer's own insurer.
• If the damage is determined to be caused by Xinyou's inadequate packaging, Xinyou shall bear the cost of the damaged goods (after deduction of any insurance recovery) and arrange replacement at Xinyou's expense.

5.4 Packaging-Related Liability. If transit damage is determined (through the survey process) to be caused by inadequate packaging on Xinyou's part (i.e., packaging not meeting the export standards described in Part 1, Stage 7), Xinyou shall:

• Replace the damaged Products at Xinyou's expense;
• Bear all related shipping and customs costs for the replacement;
• Not seek recovery from the Buyer or the insurance company for packaging-related damages.

Section 6 — Payment Security

6.1 Letter of Credit (L/C). For Buyers preferring bank-mediated payment security, Xinyou accepts irrevocable, confirmed Letters of Credit at sight, subject to the following conditions:

The L/C mechanism provides security to both parties: the Buyer is assured that payment will only be made upon presentation of compliant shipping documents, and Xinyou is assured of payment upon fulfilling its shipment obligations.

6.2 T/T Installment Structure. The standard T/T payment structure (30% deposit + 70% before shipment) is designed to minimize risk for both parties:

• The 30% deposit demonstrates the Buyer's commitment and covers Xinyou's initial material procurement costs;
• The 70% balance is payable only after the Buyer has confirmed satisfactory completion of the pre-shipment inspection, ensuring quality acceptance before final payment.

6.3 Alibaba Trade Assurance. For orders placed through Alibaba International, the Buyer may opt for Alibaba Trade Assurance, which provides:

• Payment protection through Alibaba's escrow service;
• Quality assurance with dispute resolution support;
• On-time shipment guarantee with compensation for delays;
• Refund protection in the event of contract breaches.

*Note: Alibaba Trade Assurance service fees, if any, shall be borne by the Buyer unless otherwise agreed.*

6.4 Bank Verification. For the Buyer's security, Xinyou's bank account details can be independently verified through:

• Xinyou's bank directly (contact information available upon request);
• Alibaba's verified supplier profile;
• Third-party verification services (e.g., Dun & Bradstreet).

6.5 Xinyou will never request payment to personal accounts, accounts in different countries, or accounts different from those specified in the Proforma Invoice. Any such request should be treated as fraudulent.

Section 7 — Operational Support Guarantee

7.1 Free Training. Xinyou guarantees one (1) to three (3) days of free professional training for the Buyer's designated personnel, covering equipment operation, basic maintenance, and troubleshooting, as detailed in Part 1, Stage 10. The training format (remote, on-site, or at Xinyou's facility) shall be determined based on the order value and mutual agreement.

7.2 Lifetime Technical Support. Xinyou provides lifetime technical support for all Products supplied, including:

• Telephone and online troubleshooting guidance;
• Software update notifications and installation support;
• Maintenance schedule reminders and best practice recommendations;
• Consultation on venue expansion, equipment upgrades, and technology refresh cycles.

7.3 Quarterly Operation Strategy Updates. Xinyou commits to providing quarterly operational insight reports to all active customers, containing:

• Industry trend analysis and emerging entertainment technology developments;
• Revenue optimization strategies based on aggregated data from Xinyou's global customer base (anonymized);
• Seasonal marketing recommendations and promotional campaign ideas;
• New game content announcements and early-access opportunities;
• Regulatory updates affecting amusement equipment operations in key markets.

7.4 Priority Access to New Products. Existing customers receive:

• Early notification of new product launches (30 days before public announcement);
• Exclusive early-bird pricing on new products (discount rates communicated individually);
• Priority production scheduling for repeat orders;
• Invitation to Xinyou's annual customer appreciation events and product showcase exhibitions.

7.5 Operational Support Limitations. The operational support guarantees described in this Section are provided as value-added services and do not create any obligation on Xinyou's part to ensure the Buyer's commercial success. Xinyou's operational recommendations are advisory in nature and based on general industry experience; they do not constitute guarantees of specific revenue outcomes. The Buyer retains sole responsibility for all business decisions related to the operation of the Products.

APPENDICES

Appendix A — Glossary of Key Terms

Appendix B — Contact Information

Appendix C — Document Control

© 2025 Guangzhou Xinyou Animation Technology Co., Ltd. All rights reserved.

This document is the proprietary information of Guangzhou Xinyou Animation Technology Co., Ltd. Reproduction, distribution, or transmission of this document, in whole or in part, without the prior written consent of Xinyou is strictly prohibited. The information contained herein is provided for the intended recipient's use only and is subject to the confidentiality obligations set forth in Article 13 of Part 2.

*Disclaimer: The information contained in this document is provided for general business reference purposes. While every effort has been made to ensure accuracy, Xinyou reserves the right to modify product specifications, terms, and pricing without prior notice. In the event of any discrepancy between this document and a duly executed Sales Contract, the terms of the Sales Contract shall prevail.*