conditions of business a. general conditions 1. the conditions of business set out below shall be governed by and interpreted and construed in accordance with macau laws, codes, and statutes, as well as the ordinance of macau chung shun in’l auctions co.ltd. (hereafter referred to as the auctioneer or the company). 2. the conditions of business apply to all parties involved in the sale, purchase or holding of property in the auctions of the company. therefore, the seller, the bidder and the buyer shall read them carefully before abiding by them. 3. should any unforeseen circumstances and questions arise which are not specifically mentioned in the conditions of business, the company has the interpretation right. 4. all parties involved in the auction agree that the macau courts are to have exclusive jurisdiction to settle any dispute that cannot be solved by negotiation in accordance with pertinent codes and statutes, and the ordinance of the company. b. the seller 5. the seller shall present his/her own valid identification, fill out the commitment form and sign the commitment contract in order to consign the auctioneer to sell his/her property. the seller will be severely bound for all obligations arising from the sale. 6. the seller shall warrant to the auctioneer and the buyer in writing that he/she is the true owner of the property, and that the property is free from any third party rights or claims or potential claims. 7. unless otherwise agreed or stipulated, the reserve shall be determined in writing by the seller upon communication to the auctioneer. without the written consent from one party, the other party shall not revise the reserve. 8. unless otherwise consigned, all the properties of the seller shall be deemed in care of the auctioneer who will bear the risk of loss or damage, from the start of their delivery to the auctioneer (see appendix 1: contract of storage and compensation). the risk of the auctioneer ends the stipulated day the buyer collects the purchased lot or the unsold lot is returned to the seller. the storage fee shall be paid to the auctioneer by the seller at the rate of 1% of the hammer price for sold lots and 1% of the reserve for unsold lots. 9. unless otherwise stipulated with the auctioneer, the seller is liable to pay the auctioneer commission at 3% of the hammer, plus other relevant expenses. for unsold lots, the seller shall pay all the agreed expenses less the storage fee. 10. the other relevant expenses include, but not limited to, catalogue, storage, custom duties, package, and transportation. such expenses may also cover those special services to the lot at the seller’s request, such as restoration, framing, mounting, and etc. 11. within 14 days upon the buyer’s full payment of the purchased lot to the auctioneer, the auctioneer shall send the seller the net sale proceeds (the hammer price less the seller’s commission and any other relevant expenses). however, the net sale proceeds will not be sent to the seller in the circumstances such as the buyer’s breach of contract or his/her dissent from the purchased lot. 12. if the property has been printed in the publications such as the catalogue but withdrawn by the seller before the sale, the seller shall pay the auctioneer a withdrawal fee at the rate of 20% of the reserve together with any other relevant expenses. if the property has not been printed in the publications such as the catalogue, the seller shall pay the auctioneer a withdrawal fee at the rate of 10% of the reserve together with any other relevant expenses. 13. for an unsold lot, the seller shall pay the auctioneer all relevant expenses covering catalogue, storage and etc., within 15 days upon sale, before he/she is allowed to collect the lot from the auctioneer. if the seller fails to collect the unsold lot within the said period, he/she can re-consign the lots and determine a second price in writing after communication to the auctioneer. if such re-consigned lots are sold, the auctioneer shall send the seller the net sale proceeds (the hammer price less the seller’s commission and any other relevant expenses). besides, the seller shall pay the auctioneer extra expenses incurred by transporting and keeping the unsold lots due to his/her delay of collection and bear the risk of loss or damage incurred by accidents. if the sale is rescinded as described in condition 23 of this conditions of business, the seller shall return to the auctioneer any net sale proceeds previously paid by the auctioneer to him/her within 15 days of receipt of the rescission notice. 14. all net sale proceeds shall be paid to the seller in mop. c. bidder and buyer 15. the bidder must complete a registration form, present his/her valid identification and submit a deposit to the auctioneer before obtaining a numbered bidding paddle. the sum of deposit shall be notified by the auctioneer in advance of each sale. 16. the bidder may consign an agent to act on his behalf. the agent, however, shall present a letter of proxy issued by the bidder and proceeds with all relevant bidding affairs on behalf of the bidder, including the acknowledgement of his/her consignment, registration and submitting a deposit before sale. if the bidder bids by telephone, he/she shall proceeds with telephone bidding procedures, such as the confirmation of telephone bids, registration and submitting a deposit (20% of the estimate of the targeted lots) before the sale. if the deposit is paid by checks, such checks should be cleared at least one day before the actual sale; otherwise the telephone bid is not accepted. if the bid succeeds, the deposit can be used for its payment; if the bid does not succeed, the bidder is entitled to collect his/her deposit immediately after the sale. 17. the bidder is entitled to inspect the lot before sale. he/she may also find out relevant information of the lot by himself/herself to get a specific knowledge of its conditions, such as faults and imperfections. once the bidder decides to bid for the lot, he/she is deemed totally accepting all the conditions of the lot, including faults and imperfections. 18. raising a numbered bidding paddle by the bidder marks his/her acceptance of the bidding increment. unless the auctioneer changes the increment at his/her own discretion, no bidder is allowed to place a bid lower than the bidding increment. 19. the bidder shall assume the responsibility of any of his/her own bids. the striking of the auctioneer’s hammer marks the acceptance of the highest bid at the hammer price by the bidder, who shall sign the contract of sale on the spot. otherwise, the bidder shall be deprived of bidding right and driven out of the saleroom, with no deposit refund. the company retains the right to bring proceedings to this bidder. 20. the buyer shall pay the hammer price and 3% commission, and other relevant expenses to the company . if the buyer wants to make multiple payments for the purchased lot, he/she should deposit at least 30% of the hammer price to the company on the spot, with the rest amount due within 21 days after sale. the deposit shall not be refunded if the buyer makes overdue payments; in this case, the deposit less the said commission and all relevant expenses, will be divided into halves for both the auctioneer and the seller. 21. the buyer shall collect the purchased lot within 7 days after he/her full payment, which includes the hammer price, the buyer’s commission, and other relevant expenses. any results from the buyer’s overdue payment, including the loss or damage of the purchased lot, as well as the extra expenses for its transportation and storage, shall be borne by the buyer. 22. the sale is conducted in mop. foreign currencies shall be converted according to the bank-of-china exchange rate of the day of the sale. if the day of the sale is a statutory holiday or weekend, the exchange rate shall be sought the day before the sale. in that case, the loss and the bank’s commission incurred by the conversion shall be borne by the buyer himself/herself. 23. the buyer is entitled to rescind his/her purchase and ask for refund of his/her payment only when he/she meets the following conditions: a. within 14 days after the collection of the lot, the buyer submits to the auctioneer a suspicion in writing that the lot is a counterfeit, together with the written opinions from three specialists in the field who are members of national authentication commission of cultural heritage; b. the buyer’s suspicion is confirmed and accepted by the auctioneer after its thorough inspection of the lot; c. the returned lot is confirmed the same property in the original sale by auctioneer; the buyer is the unquestionable owner of this lot; and the lot is kept the same condition as its being sold. 24. the refund to the buyer shall be made after the seller refunds in full to the auctioneer. the maximum refund by the auctioneer to the buyer consists of the hammer price and the buyer’s commission. d. the auctioneer 25. the auctioneer will not make any judgment on and appraisal of the lot, including its provenance that the seller provides, and its faults and imperfections. therefore, the auctioneer bears no liability of the said provenance and conditions of the lot, except for those with the auctioneer’s written authentication. 26. the auctioneer is entitled to have absolute discretion in the following items, including whether the lot fits the sale, the sale time and venue, conditions of sale, how the sale conducted, and his/her statement of the lot. 27. the auctioneer has the right at his/her absolute discretion to withdraw or combine any two or more lots at sale. 28. the oral or written description of the lot by the auctioneer concerning the artist, period, sizes, material, mounting, provenance, authenticity, conditions, and estimates, in any of its pre-sale exhibitions, publications (such as catalogue) and statements, shall be only taken for reference by the bidder. the statements made by the auctioneer in advance of the sale do not constitute a warranty of authenticity or quality of the lot; therefore, the auctioneer will has no liability for the faults and imperfections of the lot. references in the catalogue entry are for guidance only. the absence of such a reference does not imply that an item is free from defects or restoration, nor does a reference to particular defects imply the absence of any others. estimates should not be relied on as a statement that this is the reserve, or the price at which the item will sell or its value for any other purpose. the bidder shall understand that differences of color and appearance might exist between the catalogue images and the actual item because of photography and printing, and the final decision shall be made after the bidder’s personal inspection of the original item. 29. if any loss or damage should occur to the property whilst the risk in it is borne by the auctioneer, the auctioneer shall be liable to compensate the seller or the buyer for the loss or damage accordingly (see appendix 1), plus refunding deposit, waiving commission and any other relevant expenses. the auctioneer, however, will not be liable for loss or damage caused by force majeure or any other unforeseen accidents such as insect bites. 30. the auctioneer reserves the right to seek specialists’ opinion about authenticity of the lot. if the expert report doesn’t match the description recorded in the contract of sale, the auctioneer has the right to revise or cancel the contract. 31. the auctioneer has the right at his/her absolute and sole discretion to refuse any bidder who is deemed unsuitable for the sale to enter the saleroom. 32. the auctioneer has the liability to keep in strict privacy the information of the seller and the buyer, so that rights of neither party will be infringed. 33. the auctioneer as the agent of either the seller or the bidder, is liable to provide service for the said parties. however, the auctioneer is excluded from any liability incurred by the breach of contract or lawbreaking of the said parties. e. supplementary conditions 34. definition of certain terms used in the conditions of business a. “jurisdiction” means that, in accordance with the current laws, codes, and statutes in macao, courts of macao sar have the exclusive jurisdiction for any proceeding submitted by any of the parties mentioned in the conditions of business. b. “seller” refers to any citizen, or juridical person or organization who/which has consigned the auctioneer to sell his/her/its property. c. “bidder” refers to the person who obtains the bidding right after having proceeded with all necessary procedures requested by the company. d. “buyer” refers to the person who makes the highest bid accepted by the auctioneer. e. “auctioneer”or“company”refers to macau chung shun in’l auctions co.ltd. f. “reserve” is the confidential minimum price the seller determines in writing after communication to the auctioneer. g. “estimate” refers to a price given by the auctioneer just for the bidder’s reference, which shall not be deemed a set price and is subject to revision. h. “hammer price” means the highest price at which a lot is knocked down by the auctioneer to the bidder. i. “commission” means the commission payable to the company by a seller or a buyer at the agreed rates of the hammer price. 35. the conditions of business takes effect as of june 2005.