AUCTION RULES OF POLY INTERNATIONAL AUCTION CO., LTD.
Chapter I General Provisions

Article 1 Formulation of Rules

These Auction Rules are formulated in accordance with the Auction Law of the People’s Republic of China and other relevant laws and regulations with reference to general international practices.

Article 2 Definitions of Terms

The terms in the articles hereof are defined as follows:
(1) The “Company” refers to Poly International Auction Co., Ltd.;
(2) The “Bidder” means a natural person, legal person or any other organization that has full civil capacity according to the provisions of the laws of People’s Republic of China and has gone through the registration and necessary formalities in the auction hold by the Company to bid for the Lot. The Bidder shall satisfy all provisions of laws and regulations with respect to conditions of sale of the Lot or qualifications of the Bidder. In these Rules, the Bidder shall include any of its agents unless as otherwise specified herein or required in a particular context;
(3) The “Buyer” means the Bidder that acquires the Lot with the highest bid in the auction hold by the Company;
(4) The “Seller” means a natural person, legal person or any other organization that consigns the Lot within the scope of these Rules to the Company for auction. In these Rules, the Seller shall include any of its agents unless as otherwise specified herein or required in a particular context;
(5) The “Lot” means any item(s) consigned by the Seller to the Company for auction, especially the items numbered in any catalogue with descriptive materials;
(6) The “Auction Date” means the date on which auction will formally begin announced in the notice of the Company in a certain auction. In case of any discrepancy between the actual date of auction and the announced date, the actual date of auction shall apply;
(7) The “Sale Date” means the date on which the auctioneer confirms the sale of any Lot in the auction held by the Company by dropping his/her hammer or in any other manner of publicly confirming the purchase;
(8) The “Hammer Price” means the price at which the auctioneer decides to drop the hammer and sell the Lot to the Buyer;
(9) The “Proceeds of Sale” means the net amount paid to the Seller from the Hammer Price after deducting pro rata commission, all Expenses and other amounts payable to the Company by the Seller;
(10) The “Purchase Price” means the total amount payable by the Buyer for his/her/its purchase of the Lot, including Hammer Price, commission, other Expenses payable by the Buyer as well as all the expenses payable by the Buyer as a result of the failure to perform obligations;
(11) The “Expenses” means the Company’s expenses of insuring the Lot, making the catalogue of the Lot and other public materials, packaging, transportation and storage, and other expenses collected pursuant to relevant laws, regulations or the provisions hereof;
(12) The “Reserve” means the lowest selling price of the Lot put forward by the Seller and confirmed in writing after consultation with the Company;
(13) The “Reference Price” means the estimated price of the Lot provided in the catalogue of the Lot or other descriptive materials instead of the actual sale price.

Article 3 Scope of Application of the Rules

The Company organizes auctions within the scope permitted by the laws and policies of the People’s Republic of China. Beijing Poly, the Seller, the Bidder, the Buyer and other parties concerned (including but not limited to the agents of the Seller, the Bidder and the Buyer) participating in the auction organized by the Company shall be deemed to completely accept the provisions of the articles hereof and be bound by these Rules. In the auction organized by the Company, they shall observe the provisions hereof, enjoy the rights provided herein and perform the obligations provided herein. The Bidder that attends an auction organized by the Company personally or authorizes an agent to bid on his/her/its behalf by raising the card, in writing, by phone or by any other means shall be deemed to have fully accepted these Rules. Any dispute among the parties to the auction organized by the Company shall be settled in accordance with these Rules.

Article 4 Guarantee for Flaws

The Company shall not bear the guarantee liability for the flaws in respect of the genuineness and/or quality of the Lot. Any description, explanation or opinion on the Lot shall be only for reference of the Bidder and/or his/her/its agent and shall by no means constitute a warranty or guarantee on the genuineness and/or quality of the Lot.
All the Lots are sold on an “as is” basis at the time of auction. Therefore, the Bidder and/or his/her/its agent shall carry out inspection of the original Lot personally or authorize an expert to conduct the same and shall be legally liable for his/her/its bid for a certain Lot. The Bidder that participates in the bidding at the auction organized by the Company shall be deemed to have conducted a comprehensive inspection and appraisal of the genuineness and quality of the Lot that the Bidder prepares to bid for and to be satisfied with such Lot’s status quo and value. The Bidder’s participation in the bidding shows his/her/its willingness to assume the risks that might be encountered as a result and his/her/its waiver of the right to raise objections to the genuineness and/or quality of the Lot.

Article 5 Special Notice

When the auctioneer confirms the Bidder’s bid by dropping his/her hammer or in any other manner of publicly confirming the purchase in the auction organized by the Company, the sales contract regarding the Lot shall legally enter into force and the Bidder shall be the Buyer of the Lot. Beijing Poly, the Seller and the Buyer shall acknowledge the sale and transaction of the Lot, enjoy the rights under laws and these Rules, and assume the obligations under laws and these Rules. Any party that fails to perform obligations shall bear the corresponding legal liability.
The Seller, the Bidder, the Buyer and other parties concerned participating in the auction organized by the Company shall carefully read and obey these Rules, and shall be liable for their act of participating in the auction organized by the Company and any loss or liability caused by failure to read these Rules carefully.
The Company may amend these Rules by posting an announcement at an auction site or making an announcement at an auction through an auctioneer.

Chapter II The Seller

Article 6 Consignment Procedure

When arranging for the consignment of the Seller’s Lot to the Company for auction:
(1) The Seller must hold a valid identity card if the Seller is a natural person and sign a consignment auction contract with the Company;
(2) A valid certificate of registration, the identity certificate of the legal representative or a legal authorization document is required if the Seller is a legal entity or any other organization, which shall sign a consignment auction contract with the Company;
(3) When the Seller signs a consignment auction contract with the Company, the Company shall be automatically authorized to make pictures, illustrations, catalogues, or other video images of the Lot.

Article 7 The Seller’s Agent

When arranging for the consignment of the Lot to the Company for auction, the Seller’s agent shall submit to the Company the relevant authorization certificates including:
(1) A valid identity certificate in the case of a natural person;
(2) A valid certificate of registration and the identity certificate of the legal representative in the case of a legal person or any other organization; and
(3) A power of attorney made according to the due procedure. The Company has the right to examine the aforesaid documents in a lawful manner.

Article 8 The Seller’s Warranties

The Seller hereby makes irrevocable warranties to the Company and the Buyer with respect to the Lot it consigns to the Company for auction as follows:
(1) The Seller has absolute ownership or legal right to dispose of the Lot. The auction of the Lot will not prejudice any legal interest (including copyright interest) of any third party, and will not violate the provisions of relevant laws and regulations;
(2) The Seller has, to the best of its knowledge, made full and complete disclosure and description to the Company with respect to the origin and any flaw of the Lot without any concealment or fabrication; and
(3) If the violation of the above warranties causes the actual owner of the Lot or any third party who claims to have right to bring any claim or action and causes the Company and/or the Buyer to suffer losses, the Seller shall compensate for all losses suffered by the Company and/or the Buyer as a result as well as all expenses and costs incurred as a result.

Article 9 Reserve

Unless as otherwise agreed upon by the Company and the Seller, all Lots are offered subject to a Reserve. The Reserve shall be determined by the Seller and the Company in writing through consultation, and no modification of the Reserve shall be made without the prior consent of the other party after it is determined by the two parties. Following the bidding failure of the Lot authorized by the Seller, the auctioneer shall have the right to sell such Lot at the Reserve after such auction and the Seller must pay commission to the auctioneer. In no circumstance shall the Company bear any liability for failure to sell the Lot at the Reserve at the auction held by the Company.

Article 10 The Company’s Discretion

The Company may decide the following matters at its absolute discretion:
(1) Explanation and/or appraisal of any aspect of any Lot through the catalogue of the Lot and/or news media and/or other carriers;
(2) Whether to adopt any expert’s opinion or not;
(3) The illustration of the Lot in the catalogue, the exhibition of the Lot and other forms of publicizing the Lot, the arrangement in the promotional activities as well as the standards of payable expenses;
(4) Suitability of a Lot for auction by the Company; and
(5) Such matters as the date of auction, the place of auction, the conditions of auction and the manner of auction.

Article 11 Lot Not Auctioned

After the Seller has signed the consignment auction contract with and delivered the Lot to the Company, if for any reason the Company believes that the Lot is not suitable for auction by the Company, the Seller shall collect the Lot within thirty days from the date when the Company’s notice is sent (fees for packaging and transportation shall be paid by the Seller). The consignment auction contract between the Seller and the Company will cease on the date when the Seller collects the Lot. If during the abovementioned period the Seller fails to collect the Lot, the consignment auction contract will automatically cease upon the expiration of such period. If within seven days after the ceasing of the consignment auction contract the Seller does not collect the Lot, the Company shall have the right to dispose of the Lot in a way the Company deems proper. The amount obtained from the disposal after deducting all the expenses incurred by the Company as a result, if any, shall be collected by the Seller.

Article 12 Suspension of Auction

The Company has the right to suspend the auction of any Lot at any time before the actual auction under any one of the following situations:
(1) The Company has an objection to the ownership or authenticity of the Lot;
(2) Any third party has an objection to the ownership or authenticity of the Lot and can provide relevant evidence materials about the basis of the objection, pays security pursuant to the Company’s provisions and is willing to take the corresponding responsibilities for the legal consequences and all losses caused by the suspension of auction;
(3) The Company has an objection to the explanation of the Seller or the accuracy of the Seller’s warranty mentioned in Article 8 hereof; or
(4) Any evidence proves the Seller has violated or is to violate any article of these Rules.

Article 13 The Seller’s Withdrawal of Lot

The Seller may withdraw the Lot at any time prior to the Auction Date by sending a written notice to the Company. In the case that the Lot has been listed in the catalogue or other public materials and they have begun to be printed at the time of the withdrawal of the Lot, the Seller shall pay an amount equal to 20% of the insurance amount of the Lot and other Expenses. In the case that the catalogue or other public materials have not been printed, the Seller shall as well pay an amount equal to 10% of the insurance amount of the Lot and other Expenses. Any dispute or claim arising out of the Seller’s withdrawal of the Lot shall be borne by the Seller and has nothing to do with the Company.

Article 14 Automatic Insurance

Unless as otherwise instructed by the Seller in writing, all Lots will be automatically covered under the insurance of the Company after the Seller enters into the consignment auction contract with the Company and delivers the Lots to the Company. The insurance amount shall be based on the Reserve agreed by the Seller and the Company in the consignment auction contract (if there is no Reserve, it shall be the agreed insurance amount of the Lot; if the Reserve is adjusted, it shall be the original Reserve of the Lot). The insurance amount is only applicable to insurance and claim for compensation, is not the Company’s warranty or guarantee for the value of the Lot, and does not mean that the Lot can be sold for an amount equal to the insurance amount through auction by the Company.

Article 15 Insurance Premium

If the Lot is sold, the insurance premium payable by the Seller shall be 1% of the Hammer Price unless as otherwise agreed by the Seller and the Company. If the Lot is not sold, the Seller shall as well pay the insurance premium at 1% of the Reserve.

Article 16 Insurance Period

If the Lot is sold in the auction, the insurance period shall terminate at the earlier of the seventh day after Sale Date (including the date) and the date when the Buyer collects the Lot. If the Lot is not sold in the auction, the insurance period shall terminate upon the expiry of seven days after the Company sends the notice on the collection of the Lot.

Article 17 Insurance by the Seller

In the event that the Seller notifies the Company in writing not to insure the Lot, it shall undertake all the risks and the following liabilities at any time (unless as otherwise ruled by the arbitration institution):
(1) To compensate for any claim or action brought by any other right holder against the Company with respect to the damage or destruction of the Lot;
(2) To compensate the Company and/or any other parties for all losses suffered and all expenses paid because of the damage or destruction of the Lot caused by any reason; and
(3) To notify the provisions on compensation hereunder to any insurer of the Lot.

Article 18 Insurance Disclaimer

The damage or destruction of the Lot caused by natural wear, inherent flaws, internal or potential defects, change of substance itself, self-combustion, self-heating, oxidation, corrosion, leakage, rat-bite, worm-bite, change in the atmosphere (climate or air temperature), change in humidity or temperature, or other gradual changes or caused by force majeure such as earthquake, tsunami, war, hostile action, armed conflict, terrorism, coup, strike and social riot, or nuclear radiation or radioactive pollution as well as the damage or destruction of book frames, glass, drawers, bottom pads, trestles, mountings, insert pages, scroll heads or other similar accessories caused by any reason are not within the scope of insurance indemnity.

Article 19 Insurance Indemnity

Any damage or destruction of the Lot caused by incidents or disasters covered by the insurance purchased by the Company for the Lot shall be handled in accordance with the laws and regulations of the People’s Republic of China on insurance. The Company shall pay insurance indemnities after deducting the Company’s expenses (other than commission) to the Seller after the Company obtains such indemnities from the insurance company.

Article 20 Bidding Prohibition

The Seller shall not bid for the Lot consigned to the Company by himself/herself/itself for auction, or authorize any other person to bid on his/her/its behalf. The Seller shall bear the corresponding legal liability and compensate for all losses caused to the Company if the Seller violates the provision of this article.

Article 21 Commission and Expenses

Unless as otherwise agreed upon by the Seller and the Company, the Seller shall authorize the Company to deduct 10% of the Hammer Price as commission and at the same time deduct other Expenses. Despite the fact that the Company is the Seller’s agent, the Seller agrees that the Company may collect commission and other Expenses from the Buyer in accordance with provisions in Article 47 of these Rules.

Article 22 Service Fee for Unsold Lot

In case the Lot is not sold because the bidding price is lower than the Reserve, the Seller shall authorize the Company to charge the Seller the service fee for unsuccessful auction and other Expenses. The standard of such service fee shall be 3% of the Reserve of such Lot.

Article 23 Payment of Proceeds of Sale

Where the Buyer effects full payment of the Purchase Price to the Company in accordance with the provisions in Article 48 hereof, the Company shall pay the Proceeds of Sale to the Seller thirty-five days after the Sale Date in RMB currency.

Article 24 Deferred Payment

Where the Company does not receive the full payment of the Purchase Price from the Buyer upon the expiry of the payment period under Article 48 hereof, the Company will pay the Proceeds of Sale to the Seller within seven working days after receipt of full payment of the Purchase Price from the Buyer.

Article 25 Taxes

The Seller shall pay taxes to the government for the Proceeds of Sale obtained. If the Company has the obligation to withhold and pay taxes according to the provisions of the relevant laws, the Company will follow the provisions of the laws. The Seller shall assist in handling all the formalities and bear the corresponding taxes and expenses.

Article 26 Assistance in Collection of Outstanding Payment

The Seller shall, at the time of its consignment of the Lot to the Company for auction, be deemed to have authorized the Company to demand the corresponding outstanding payment from the Buyer on behalf of the Seller. Where the Buyer fails to fully pay the Purchase Price within seven days after the Sale Date (including such date), the Company shall have the right to demand commission and other payable Expenses from the Buyer according to the provisions of Article 55 hereof. In addition, the Company shall as well have the right to take appropriate measures (including but not limited to resorting to legal proceedings) to assist the Seller in collecting such outstanding payment from the Buyer where it is deemed by the Company to be practicable.
The above provision does not exclude the Seller’s right to personally demand or authorize any third party to demand the outstanding payment from the Buyer and does not obligate Company to demand the corresponding outstanding payment from the Buyer on behalf of the Seller under any circumstance. This Company shall not bear the corresponding liability for the Seller because of the Buyer’s failure to pay the Purchase Price under any circumstance.

Article 27 The Company’s Discretion

The Company shall have the right to accept the Seller’s authorization (at the Seller’s expenses) and may determine the following matters as the case may be:
(1) To agree on special conditions of the payment of the Purchase Price;
(2) To remove, store and insure the sold Lot;
(3) To settle claims brought by the Buyer or the Seller in accordance with the relevant articles hereof; and
(4) To take other necessary measures to collect the outstanding payment owed by the Buyer to the Seller.

Article 28 Unsold Lot

In the event that the Lot is not sold, the Seller shall take back the Lot within one month upon receipt of the Company’s notice on collection (fees for packaging and transportation shall be paid by the Seller) and pay the Company the service fee for unsuccessful auction and other Expenses. The Company shall, upon expiration of such time limit, have the right to sell the Lot through public auction or other means of sale according to the conditions the Company deems appropriate. The Company shall as well have the right to pay to the Seller the remaining sum after deduction of the service fee for unsuccessful auction and other Expenses payable by the Seller in the first auction as well as all expenses for re-sale of the Lot by auction from the Proceeds of Sale.

Article 29 Risk Assumption

The Seller shall assume liability for all risks and expenses that occur after the time limit prescribed by these Rules if the Seller fails to take back the Lot not auctioned or the unsold Lot within such the time limit. The Seller shall assume liability for all risks and expenses of the Lot not auctioned or the unsold Lot at the earlier of the thirtieth day after the Company sends a notice on collection of the Lot to the Seller (including the notice date) and the time when the Seller collects the Lot in accordance with these Rules. Where the Seller requests Company to assist it in the return of the Lot within the time limit provided herein and the Company agrees, the Seller shall assume liability for all risks and expenses that occur after the Lot leaves the place designated by the Company. Unless the Seller specially gives an indication and pays insurance premium in advance, the Company has no obligation to insure the Lot after its departure from the place designated by the Company.
Where the Seller requests the Company to assist it in returning the Lot by means of post, express delivery or other third-party transportation, the Company shall be deemed to have returned the Lot and the Seller shall be deemed to have collected the Lot upon the Company’s delivery of the Lot to the post, express delivery and transportation entities, companies or their employees/branch offices.

Chapter III The Bidder and the Buyer

Article 30 Catalogue of Lot

The Company is to prepare a catalogue of the Lot to briefly introduce the conditions of the Lot with words and/or pictures to facilitate the Bidders and Seller to participate in the auction held by the Company. The words and Reference Price in the catalogue of the Lot, pictures, other images as well as public materials are only references for the Bidders and may be revised before auction. The Company provides no guarantee for the authenticity, value, tone, quality or flawlessness of the Lot.

Article 31 Uncertainty of Catalogue

In case that the tone, color, graduation and shape of the Lot shown in the catalogue and/or any other illustrations, images and public materials differ from those of the original Lot due to printing, photography or other technical reasons, the original Lot shall take precedence. Any introduction and appraisal of any Lot made by the Company and its employees or its agents in any way (including the certificate, catalogue, slide show and news media) are only opinions for reference and do not constitute any guarantee for the Lot. The Company and its employees or its agents shall undertake no liability for any inaccuracy or omission in the aforesaid introduction or appraisal.

Article 32 Bidders’ Inspection Responsibility

The Company shall not bear the guarantee liability for the flaws in respect of the genuineness and/or quality of the Lot. The Bidder and/or his/her/its agents shall have the responsibility to learn about the actual conditions of the Lot and shall be legally liable for his/her/its bid for a certain Lot. The Company strongly advises the Bidders to personally inspect the original Lot they intend to bid for before the Auction Date by authentication or other means. Bidders shall judge by themselves whether Lot complies with the descriptions in the Company’s catalogue of the Lot and other images and public materials, rather than relying on the catalogue, images and public materials to make decisions.

Article 33 Registration of Bidders

If the Bidder is a natural person, he/she shall fill and sign registration documents with an effective identity certificate before the Auction Date; if the Bidder is a legal person or any other organization, it shall fill and sign registration documents with a valid certificate of registration, the identity certificate of the legal representative or legal authorization certificates before the Auction Date, and collect a bidding number card. Otherwise, he/she/it shall not be deemed as an official Bidder.

Article 34 Guarantee Money

The Bidder shall pay guarantee money before collecting the bidding number card to participate in the Company’s auction. The specific amount of guarantee money will be announced by the Company before the Auction Date. The Company will refund all the aforesaid guarantee money with no interest to the Bidder within five working days after auction if the Bidder fails to acquire the Lot. In the event that the Bidder acquires the Lot, the guarantee money will be part of the Purchase Price. The remaining sum (if any) will be refunded at the time of the Bidder’s collection of the Lot.

Article 35 The Company’s Option

The Company has the right to forbid anyone from participating in the auction organized by the Company or entering the auction site, or taking pictures or shooting videos at the auction site at its discretion.

Article 36 Handling of Abnormal Events

If any abnormal event occurs at the auction site, the Company has the right to take emergency actions. If any dispute arises at the auction site, the Company has right to mediate and settle it.

Article 37 Confirmation of Buyer’s Identity

The Bidder must take good care of his/her/its bidding number card and be cautious not to lose it. The Bidder shall not lend his/her/its bidding number card to others, or the Bidder shall be assume all legal liability for others’ act of bidding for the Lot using his/her/its bidding number card.

Article 38 Authorized Bidding

The Bidder shall as a rule attend the auction personally; otherwise he/she/it may authorize the Company in writing to bid on his/her/its behalf. The Company shall have the right to decide whether to accept such authorization.

Article 39 Authorization Formalities

The Bidder authorizing the Company to bid shall handle the authorization formalities within the prescribed period (no later than twenty-four hours before the Auction Date), issue a written power of attorney for bidding to the Company, and pay guarantee money in accordance with the provisions of Article 34 hereof.

Article 40 Authorization Cancellation

If the Bidder authorizing the Company to bid needs to cancel the authorization, he/she/it shall notify the Company in writing no later than twenty-four hours before the Auction Date.

Article 41 Disclaimer of Authorized Bidding

Since authorized bidding is a free service rendered by the Company to the Bidder that cannot participate in the on-the-spot bidding in person under special circumstances, the Company and its employees shall not be liable for unsuccessful bidding or the negligence, fault or failure to bid on the Bidder’s behalf in the authorized bidding process.

Article 42 Principle of Early Authorization

In the event that two or more Bidders authorize the Company to bid for the same Lot with the same authorization price and succeed in the bidding, the Bidder whose power of attorney was first delivered to the Company shall be the Buyer of the Lot.

Article 43 Auctioneer’s Discretion

The auctioneer shall have the right to increase or decrease the bidding increment on behalf of the Company, refuse any bid, or restart the auction of the Lot if any dispute arises.

Article 44 Screen of Video Images and Screen of Foreign Exchange

At the auction, the Company might use a video projector or other screens for the convenience of Bidders. The contents shown by them are only for reference. The Company shall not be liable for any losses caused by possible errors in amounts, numbers of Lots, pictures of Lots or foreign exchange rates for reference shown on the screen.

Article 45 Successful Bid

The fact that the auctioneer confirms the highest bid of a Bidder by dropping his/her hammer or in any other manner of publicly confirming the purchase shall indicate the conclusion of a sales contract for the Lot between the Bidder and the Seller.

Article 46 Auction Minutes

Auction minutes shall be made at the auction organized by the Company and shall be signed by the auctioneer and the recorder. At the auction held by the Company, after the auctioneer confirms the highest bid by dropping his/her hammer or in any other manner of publicly confirming the purchase, the Buyer shall sign the written sales confirmation.

Article 47 Remuneration and Expenses

The Bidder will become the Buyer of the Lot after succeeding in bidding. The Buyer shall pay the Company remuneration equal to 15% of the Hammer Price and other Expenses. The Bidder acknowledges that the Company is entitled to collect commission and other costs from Seller in accordance with the provisions of Article 21 hereof.

Article 48 Time of Payment

After succeeding in bidding, the Buyer shall effect full payment of the Purchase Price on a lump-sum basis within seven days after the Sale Date (including such date) and collect the Lot (fees for packaging and transportation shall be paid by the Buyer). Otherwise, it shall bear the liability for breach of contract.

Article 49 Currency

All payments shall be made in the currency designated by the Company. In the event that the Buyer effects payment in a currency other than the designated one, the amount shall be converted at such exchange rate as agreed upon by the Buyer and the Company or at such exchange rate as announced by the People’s Bank of China one working day prior to the date of payment by the Buyer. The Buyer shall reimburse the Company for all bank charges, commission or other expenses for converting the currency in which the Buyer makes payment into RMB.

Article 50 Transfer of Ownership

The Buyer will acquire ownership of the Lot after effecting full payment of the Purchase Price.

Article 51 Transfer of Risks

After successful bidding, the Lot shall be at the Buyer’s risk at the earlier of the dates of occurrence of the following circumstances:
(1) The Buyer collects the Lot purchased;
(2) The Buyer fully pays to the Company the Purchase Price for the Lot; or
(3) Expiry of seven days after the Sale Date (including the date).

Article 52 Collection of the Lot

The Buyer must collect the purchased Lot at the place designated by the Company within seven days after the Sale Date (including the date). In case of failure to do so within such time limit, the Buyer shall be responsible for the risks of the damage or destruction of the Lot purchased and all expenses for transportation, storage and Expenses of the Lot incurred due to delay. Even if the Lot is still kept by the Company or other agents, the Company and its employees or its agents shall not be liable for the damage or destruction of the Lot caused by any reason.

Article 53 Packaging and Transportation

The Company shall have the right to decide whether to accept the Buyer’s request and provide packaging and processing service for the Buyer. Where the employees of the Company package and process the purchased Lot at the Buyer’s request, the said packaging and processing shall only be deemed as service rendered by the Company to the Buyer. Therefore, the Buyer shall be liable for any risk and loss arising as a result. In no circumstance shall the Company be liable for the damage or destruction of frames, glass, drawers, bottom pads, trestles, mountings, insert pages, scroll heads or other similar accessories caused by any reason.
Where the Buyer requests the Company to assist it in collecting the purchased Lot (the packaging, mailing and transportation expenses shall be paid by the Buyer) by means of post, express delivery or transportation, the Company shall be deemed to have delivered the Lot and the Buyer shall be deemed to have collected such Lot according to the normal procedure upon the Company’s delivery of the Lot to the post, express delivery and transportation entities, companies or their employees/branch offices. The risks arising from this process shall be borne by the Buyer. Unless as Buyer gives a clear indication and pays insurance premium, no insurance is provided in the process of mailing, express delivery or transportation generally.
The Company shall undertake no liability for any error, omission, damage or destruction caused by the packaging company and post, express delivery and transportation entities or companies designated by the Buyer or recommended by the Company to the Buyer.

Article 54 Exit of Lot

The Company will explain in the catalogue of Lots or at the auction site for those Lots prohibited to be exported from the People’s Republic of China according to the provisions of the Law of the People's Republic of China on the Protection of Cultural Relics and other laws and regulations. The Buyer shall handle exit formalities itself in accordance with the relevant provisions of the state for Lots permitted to be exported from the People’s Republic of China.

Article 55 Remedies for Non-Payment

Where the Buyer fails to make full payment within the period provided in Article 48 hereof, the Company shall have the right to adopt one or more of the following measures:
(1) If after acquiring the Lot the Buyer fails to pay the Purchase Price within the prescribed period, the guarantee money will not be refunded and the Buyer shall undertake the corresponding responsibilities according to the provisions of these Rules;
(2) If the Buyer still does not fully pay the Purchase Price within seven days after the Sale Date (including the date), the Company will charge interest at a rate of 0.3‰ per day on the amount not paid by the Buyer from the eighth day after the Sale Date until the date of full payment unless as otherwise agreed by the Buyer and the Company;
(3) To demand the Buyer to compensate the Company for all losses caused by the Buyer’s breach of contract, including the losses of interest caused by the Buyer’s deferred payment or refusal to make payment;
(4) If the Lot or any other Lot auctioned by the Company to the same Buyer and any other property or property right of the Buyer possessed by the Company for any reason are retained, the Buyer shall be responsible for all expenses and/or risks that occur during the retention period. In case the Buyer fails to perform all its relevant obligations within the period designated by the Company, the Company shall have the right to dispose of the retained property in accordance with the provisions of the relevant laws and regulations of the People’s Republic of China. Where the proceeds from the disposal of the retained property cannot cover the total amount payable by the Buyer to the Company, the Company is entitled to demand the balance otherwise;
(5) To cancel the sale of the Lot or any other Lot sold to the same Buyer at the same auction or any other auction, and reserve the right to demand compensation for the losses caused by such cancellation;
(6) The Company may auction the Lot again or sell it in other ways according to these Rules after obtaining the consent of the Seller. The original Buyer shall pay the remuneration/commission and other Expenses payable by the Buyer and Seller in the first auction as well as all expenses of auctioning the Lot again or selling it in other ways. In addition, the original Buyer shall make up the difference, if the price actually received by auctioning the Lot again or selling it in other ways is lower than the original Purchase Price.

Article 56 Remedies for Deferred Collection of Lot

In the event of the Buyer’s failure to collect the purchased Lot within the time limit stipulated in Article 48 hereof, the Company shall have the right to adopt one or more of the following measures:
(1) To store the Lot at the Company or any other place at the Buyer’s Expenses and/or risks. The Buyer shall not collect the Lot unless the full Purchase Price is paid (the Buyer shall pay the packaging and transportation expenses);
(2) To exercise a lien upon the Lot. In the case of the Buyer’s failure to collect the Lot after thirty days, the Company shall have the right to dispose of the Lot in accordance with Chinese laws and regulations as the case may be, and to use the proceeds from disposal to cover the storage fees, insurance premiums, transportation fees and the like advanced by the Company.

Chapter IV Miscellaneous

Article 57 Confidentiality

The Company shall be obligated to keep confidentiality for the Seller, the Bidder and the Buyer and protect the legitimate rights of the Seller, the Bidder, the Buyer as well as the Company according to these Rules and the laws of the People’s Republic of China.

Article 58 Authentication Right

The Company may authenticate the Lot if necessary. In case of any discrepancy between the authentication conclusion and the conditions of the Lot in the consignment auction contract, the Company shall have the right to request modification or rescission of the consignment auction contract.

Article 59 Copyright

The Company shall have the right to make pictures, illustrations, catalogues or other images of any item consigned by the Seller to the Company for auction at its own discretion, shall have the copyright of the pictures, illustrations, catalogue or other images mentioned above according to law, and shall have the right to use them according to the law.

Article 60 Exemption from Liability

Being an agent of the Seller, the Company shall assume no liability for any breach of contract by the Seller or the Buyer. In case of the breach of contract by the Seller or the Buyer, the Company shall have the right to decide to disclose the other party’s name and address to the Seller or the Buyer at its own discretion so that the damaged party may receive compensation for damages through legal proceedings. However, prior to the Company’s disclosure of such materials to the Seller or the Buyer, the Company shall take the reasonable steps to notify the party whose materials are to be disclosed.

Article 61 Notice

Both the Bidder and the Seller shall notify the Company of their valid and regular means of communication and contact. If there is any change, the Company shall be notified in writing immediately. All notices mentioned in these Rules only refer to written notices sent by post or transmitted by fax. A notice sent by post shall be deemed to have been sent by the Company on the date when the Company gives it to the post office and shall be deemed to have been received by the addressee according to the normal mail procedure at the same time. A notice sent by fax shall be deemed to be received by the addressee on the date when it is transmitted.

Article 62 Severability

The rights and obligations of the parties concerned participating in the auction organized by the Company shall be determined in accordance with the provisions hereof.
If any article or part of these Rules is found to be invalid, unlawful or unenforceable, other articles or parts of the Rules shall still be effective and must be observed and implemented by the parties concerned.
In case of discrepancy between these Rules and the current auction law and the relevant laws, these Rules shall prevail to the extent that the provisions herein do not violate the prohibitive provisions of the relevant laws. If there is no provision herein and there are provisions in current laws, the provisions of the relevant laws will apply; if there is no provision in these Rules and the relevant laws, international practices or domestic industrial practices shall apply.

Article 63 Settlement of Disputes

If any dispute arises from participation in the Company’s auction according to these Rules, all concerned parties may refer such dispute to the Beijing Arbitration Commission for arbitration. Such dispute shall be governed by the laws of the People’s Republic of China.

Article 64 Language

These Rules are written in Chinese, and the English version is only for reference. In case of any discrepancy between the Chinese version and English version, the Chinese version shall prevail.

Article 65 Date of Effectiveness

These Rules shall take effect as of April 1, 2011.

Article 66 Right of Interpretation

The right of interpretation of these Rules shall belong to Poly International Auction Co., Ltd.