· Article 2.
These Conditions apply to persons related to the auction of Shanghai Jinghua Art Auction Co., Ltd. (hereinafter referred to as ※Jinghua§). The Bidders, Buyers and the Sellers must read carefully and abide by the following detailed Conditions.

· Article 3.
Jinghua shall have the right to interpret and handle any issues not clarified in this document or any disputes arising from the performance of the document in accordance with the relevant Laws and in light of the usual professional practice.
All disputes that can not be solved through negotiation shall be submitted to the courts in China for final settlement.

The Stipulations for the Sellers

· Article 4.
The Seller must show his valid identification card when he intends to entrust Jinghua to sell his article by auction and the Seller must enter into an ※Auction Agreement§ with Jinghua.

· Article 5.
The Seller must have gone through the entry procedures in accordance with the law on exit and entry administration of People＊s Republic of China if he intends to trust Jinghua to auction his Lot brought into China from abroad. The Seller must hold the customs seal if the relevant provisions of Chinese government forbid the export of the Lot.

· Article 6.
The Seller shall provide a warrant in written form to Jinghua and to the Buyer that he is and will be able to transfer proper and marketable title to the Lot free from all liens and encumbrances. He shall be legally responsible for all disputes caused by the proprietary right of the Lot from the day when he trusts Jinghua to sell his Lot, and the Seller shall compensate Jinghua and the Buyer for their financial losses.

· Article 7.
The Seller must inform Jinghua in written form the origin and the faults of the Lot and hold legal liability if his statement is false.

· Article 8.
Unless Jinghua and the Seller agree otherwise in writing, all the Lots shall be offered subject to a Reserve as agreed in writing between the Seller and Jinghua through negotiation.
Once a Reserve has been agreed, it may be changed only with the consent of both Jinghua and the Seller.

· Article 9.
Unless otherwise instructed by the Seller, Jinghua shall automatically take care of all Lots and bear the risk after the Lot is delivered to Jinghua. The validity of risk responsibility lasts till the Lot passes to the ※buyer§ of the Lot following the sale of the Lot, or till the Lot is returned to the Seller following the failure of the sale. The buyer or the Seller must bear the risk of damage or loss of the Lot from the stipulated date in case of the breach of a contract.
As the insurance charge, The Seller agrees to pay 1% of the hammer price if the Lot is sold or 1% of the Reserve if the Lot is unsold.

· Article 10.
Except otherwise, once the Seller and Jinghua has reached an agreement, the Seller shall pay 10 percent of the Hammer Price as commission, and other related expenses. If a Lot fails to sell, the Seller shall pay 2 percent of the Reserve as service charges and other related expenses.

· Article 11.
The other expenses the Seller shall bear include costs of catalogue illustration, storage(include risk responsibility), wax seal, packaging, transportation and any restoration of the Lot instructed in advance by the Seller, framing, mounting etc where applicable.

· Article 12.
If the Buyer has paid the Purchase Price in full to Jinghua and there is no dispute whatever, Jinghua shall pay the proceeds of sale to the Seller after deducting commission and other expenses within14 days.

· Article 13.
The Seller may withdraw a Lot at any time prior to the auction, but once the catalogue or any other publications including the Lot has been printed, a charge of 20 percent of the Reserve of the Lot and other related expenses shall become payable. In case the catalogue or any other publications has not been printed, the Seller has to pay 10 percent of the Reserve and other related Expenses. The Seller must bear all the financial losses caused by the withdrawal of the Lot.

· Article 14.
If a Lot fails to sell, the Seller must collect the unsold Lot after paying 2% of the Reserve as service charges, the full amount of insurance and the expense of illustration within 60 days after the date of the related auction.
When the period expires, Jinghua shall have the right to sell the Lot again at the price he thinks fit, and to deduct from the sale proceeds the commission and other expenses, then the rest shall be due to the Seller. The Seller shall bear the extra costs of transportation, storage, insurance and other expenses incurred, and bear the risk of damage or loss.

· Article 15.
The Seller should neither bid in the auction nor should he consign an agent to bid on behalf of him.

· Article 16.
If the Seller should pay any tax that applies, the Seller is responsible to pay such tax as required by the relevant law.

· Article 17.
Jinghua will make payment to the Seller in RMB.

The Main Stipulations for the Bidders and Buyers

·Article 18.
A person shall not be considered a formal bidder unless he or she has completed and signed a Registration Form with his valid official identification card or passport, paid guaranty money and received the number paddle(the amount of the guaranty money is regulated and announced by Jinghua before each auction session).

·Article 19.
Each bidder shall be deemed to act as a principal unless a principal has consigned an agent on behalf of him with a warranty of authority. The agent should complete the confirmation procedure of consignment the procedure of registration and pay the guaranty price before the related auction session.The telephone bidder shall give Jinghua his proof of creditworthiness and follow the procedure of telephone bids including confirmation, registration and the payment of 20% of the bid price as guaranty money three days in advance of the auction. If the guaranty money is paid by check, Jinghua shall receive the full amount of the guaranty money one day in advance of the auction. After the auction, those who fail in bidding may get back their guaranty money at once. The guaranty money of the Buyer shall be offset as a part of the total price.

·Article 20.
The Bidder shall inspect the condition of the Lots he intends to buy prior to the sale. The bidder has the right to know the flaw of the Lot, and consult the relevant data.
The Bidder should be legally responsible for his bid, his bidding shall imply that the bidder accept the present condition of the Lot including flaws of the Lot.

·Article 21.
A Bidder raise his paddle in auction shall imply that the Bidder agrees to an increased price, any bid lower than the increased price shall be refused, except the auctioneer of Jinghua shall adjust the price on the spot.

·Article 22.
The Bidder shall be responsible for his bid at any price, once the highest Bidder is acknowledged by the auctioneer or in other forms by Jinghua. He should sign a confirmation document for the deal on the spot and this can not be changed, or else he shall be legally responsible for his bid.

·Article 23.
After a Lot has been sold, the Buyer shall be required to pay immediatedly the full amount of the Purchase Price, the commission and other related expenses to Jinghua, then the Buyer can collect the property. In case the Buyer is unable to pay the full amount, he may pay not less than a 20 percent of the hammer price as deposit. The Buyer shall cover the balance in one lump sum and take away the Lot within 35 days from the date of sale. The deposit is not to be refunded to the Buyer if the Buyer fails to pay for the balance after the 35-day period expires.

·Article 24.
The Buyer must take away the Lot he bought within seven days after paying the price of the Lot, the commission and other related expenses. Otherwise the Buyer is liable to pay removal fees, storage and all other charges. He is liable for any damage or loss caused by delay.

·Article 25.
All payments shall be made in RMB. Foreign currencies shall be converted at the exchange rate declared by the Bank of China on the day of the auction or on the last working day prior to the auction day in case of holiday. The Buyer shall pay all bank charges incurred by Jinghua in converting such currency paid by the Buyer into RMB and undertake the profit or loss from the exchange clearing.

·Article 26.
The export of the bought Lot must comply with the Law on the Preservation of cultural relics and the Law on exit and entry administration of the People＊s Republic of China.

·Article 27.
If the Buyer fails to pay the hammer price and other relevant expenses on time, Jinghua shall be entitled to execute the following rights:
(a) To hold the Buyer responsible through legal action or nonjudicial means for breaking the contract and claim compensation for losses, ask the Buyer to pay the penalty for his breach of the contract and the litigation fee.
(b) To resell the Lot with the agreement of the Seller, if a resale should result in a lower price than the original ※hammer price§, Jinghua should be entitled to claim the balance from the Buyer together with any costs incurred in connection with the failure to make payment.

·Article 28.
The Buyer can ask Jinghua to set aside the sale and refund the full amount of the puchase price to the Buyer if the Buyer satisfies Jinghua with all of the following conditions:
(a) Within 14 days after the Buyer has paid the full amount of the purchase price, Jinghua receives a notice in writing from the Buyer that in his view the Lot concerned is a forgery appended with an authentication report by 3 state-level specialists of cultural-relics authentication;
(b) Jinghua accept the Buyer＊s objection after examination;
(c) Jinghua last sold the respective Lot at its auction. The Buyer has the proprietary and transfer right for the Lot unquestionable. Jinghua receives the Lot in the same condition as at the auction date.

·Article 29.
After Jinghua receives the full amount returned by the Seller, Jinghua would refund this to the Buyer. In no circumstances should Jinghua be required to pay the Buyer any more than the amount of the hammer price and the commission paid by the Buyer for the Lot concerned.

The Main Stipulations for Jinghua

· Article 30.
Jinghua shall ask the Seller to explain the origin and flaws of the Lot.Jinghua shall inform the flaws of the Lot explained by the seller to the Buyer.

·Article 31.
Jinghua shall have absolute discretion on whether a Lot is suitable for auction by Jinghua, the date and place of sale, the condition of sale, the manner in which such sale is conducted and the comment or description of any Lot.

·Article 32.
Jinghua shall have the right to withdraw or divide any Lot, to combine any two or more Lots.

·Article 33.
Any representations or statements given by Jinghua in the exhibition, publication, catalogue or in other forms as to the authorship, age, size, medium, mount, origin, authenticity, condition and estimated price are for reference of the prospective buyers only, Jinghua shall not bear responsibility for flaw if Jinghua has claimed that the authenticity or the quality of certain Lots can not be guaranteed.
The statements and illustrations in the catalogue are for guidance only. Some descriptions in the catalogue make reference to damage or restoration. Jinghua provides this information for guidance only, neither does the absence of such a reference imply that an item is free from defects or restoration, nor does a reference to a particular defect imply the absence of any others. Estimate of the selling price in the catalogue should not be relied on as a statement that this price is the Reserve, the price at which the Lot will sell or its value for any other purpose.
In case of discrepancy in color, light and shade between an illustration and the original caused by photographing or printing, the original shall prevail.

·Article 34.
If any loss or damage should occur to the property whilst the risk in it is borne by Jinghua, Jinghua shall not be liable to pay the Seller or the Buyer any more than the amount of the following:
1.100% of the Reserve, if the Lot is unsold; or
2. 100% of the hammer price , if the Lot is sold; or
3. the amount agreed upon by bipartite agreement if the Reserve is not available.
and less the Seller＊s (or the Buyer＊s) commission plus expense.
Jinghua shall not be responsible for the damages or loss caused by forces beyond control or other unforseen condition (as woodworm etc).

·Article 35.
According to the Law on Preservation of Cultural Relics of the People＊s Republic of China and other government regulations, if the Lot is not permitted to be exported, Jinghua shall give a clear indication with the mark ※ㄙ§ in the catalogue.

·Article 36.
Jinghua has the right to authenticate any Lot if necessary. Jinghua shall have the right to ask for the change or end of the Auction Agreement with the Seller if the conclusion of the authentication does not comply with what is stated in the Auction Agreement.

·Article 37.
Jinghua shall be obliged to keep confidences of both the Buyer and the Seller and to protect the rights and interests of the Buyer, the Seller and Jinghua itself from infringement in accordance with the laws of the People＊s Republic of China and this Conditions of Business.

Supplementary Stipulations

· Article 38. Definitions:
1. "the Seller" means the citizen, legal entity or other organization that trusts Jinghua to sell his article or his right of property.
2. "the Bidder" means the person who has gone through necessary procedure with the permission of Jinghua and has the right to bid in Jinghua＊s auction.
3. "the Buyer" means the bidder who makes the highest bid and succeeds in purchasing the lot in the auction held by Jinghua.
4. "Jinghua" means Shanghai Jinghua Art Auction Co., Ltd.
5. "Reserve" means the lowest selling price of the Lot proposed by the Seller, and then confirmed in writing by both Jinghua and the Seller through negotiation.
6. "Estimate" means the estimated selling price of each Lot. The Estimate is not the selling price for the Lot.
7. "Hammer price" means the price at which a Lot is knocked down by the auctioneer to the highest Bidder.
8. "Commission" means the commission payable to Jinghua by a Seller or a Buyer at the rate agreed on by both parties.
9. "Customs seal" means the strip of paper bearing an official seal attached by Chinese customs to the antiques brought into China from overseas. The seal can only be opened by the administration for cultural relics of People＊s Republic of China.

·Article 39.
In the event of conflict between the Chinese version and English version, the Chinese version shall prevail.

·Article 40.
This Condition of Business comes into effect from January 1st 2001. This Condition of Business is placed with records of the Shanghai Commercial Commission, Shanghai Auction Line Association and Shanghai cultural relics administration. If there are any stipulations contravening a law or government regulations, the law or the government regulations shall prevail.