JOINT VENTURE CONTRACT BETWEEN BEIJING GEHUA ART COMPANY AND SOTHEBY'S HONG KONG LIMITED FOR THE ESTABLISHMENT OF SOTHEBY'S (BEIJING) AUCTION CO., LTD. 3 September 2012 TABLE OF CONTENTS

The Parties hereby agree to establish the Joint Venture Company in accordance with relevant Chinese laws and regulations and the provisions of this Contract. Promptly following the formal signature of this Contract by the Parties, the Parties will jointly prepare and submit the application documents and materials to the government departments, and jointly collect the official approval or registration documents from the government departments, in connection with (i) the procedure for company name pre-verification, (ii) the application procedures for the Auction License and the approval of this Contract and the Articles of Association, (iii) the procedure for enterprise registration, and (iv) the procedures for post-establishment registrations (collectively, the “Government Application Procedures”).

The Parties shall use all reasonable endeavours to complete the Government Application Procedures as soon as reasonably practicable and to cooperate with each other in order to complete the Government Application Procedures, which cooperation shall include:

promptly providing each other (or each other's lawyers and/or outside counsel where appropriate) with any necessary information and documents reasonably required for the purpose of handling the Government Application Procedures;

promptly notifying each other (or each other's lawyers and/or outside counsel where appropriate), and providing copies (or in the case of non-written communications, details), of any communications from the Examination and Approval Authority, the Registration Authority or other government bodies with respect to the Government Application Procedures;

consulting, as practicable, with the other (or, where appropriate, each other's lawyers and/or outside counsel) before communicating with the Examination and Approval Authority, the Registration Authority or other

providing the other (or, where appropriate, the other's lawyers and/or outside counsel) with draft copies of all submissions and all other documents for the Government Application Procedures at such time as will allow the other a reasonable opportunity to provide comments on such submissions before they are submitted or sent to, taking into account, as appropriate, any such comments as are reasonable, and providing the other (or, where appropriate, the other's counsel and/or outside counsel) with copies of all such submissions in the form submitted or sent; and

regularly reviewing with each other (or, where appropriate, each other's lawyers and/or outside counsel) the progress of any investigations or reviews by the Examination and Approval Authority, the Registration Authority or other government bodies, and discussing the scope, timing and tactics of any such commitments with a view to completing the Government Application Procedures at the earliest reasonable opportunity.

The Joint Venture Company’s term of operations shall be ten (10) years, commencing upon the issuance of its Business License, and may be extended together with the Contract Term pursuant to Article 21.2 (Extension of the Contract Term).

The name of the Joint Venture Company shall be 苏富比༈北京༉拍卖有限公司 in Chinese and Sotheby's (Beijing) Auction Co., Ltd. in English. The Joint Venture shall use its English name in accordance with the laws and regulations of China.

For the avoidance of doubt, the Joint Venture Company's use of “Sotheby's” or the Sotheby's Trademark(s) as trade name in its company name or for its business

If at any time during the Contract Term, Party B ceases to Control the Joint Venture Company due to whatever reason, the Joint Venture Company, immediately upon written request from Party B, shall remove the word “Sotheby's” (English and Chinese) from its enterprise name and not replace it with any similar word or expression and shall simultaneously cease all uses of the Sotheby's Trademark(s), unless otherwise agreed to by the Parties in writing. Party A agrees not to continue the Joint Venture Company's business using the word “Sotheby's” (English and Chinese) or any similar words or expressions following the expiration or any earlier termination of this Contract and agree to cease all uses of the Sotheby's Trademark(s), unless otherwise agreed to by the Parties in writing, and this Article 3.2(3) shall survive the expiration or earlier termination of this Contract for any reason.

    Purpose of the Joint Venture Company

    Scope of Business of the Joint Venture Company

    Business Plan of the Joint Venture Company

The Parties agree that the Business Plan shall require the Joint Venture Company to carry on, in accordance with the laws and regulations of China, the auction business (including bonded auction) during its initial stage. The Board of Directors may determine, based on relevant market and operating conditions, by a resolution of the Board of Directors pursuant to Article 11.4(3) (Resolutions

Subject to compliance with the laws and regulations of China, the Joint Venture Company shall hold its auctions at any locations in the PRC with the consent of the Board of Directors.

    Total Investment and Registered Capital

    Contributions to Capital

The registered capital of the Joint Venture Company subscribed by Party A is Renminbi Two Million Yuan (RMB 2,000,000), representing a twenty percent (20%) share of the Joint Venture Company’s registered capital. Party A shall make its contribution to the registered capital of the Joint Venture Company in the form of Renminbi cash.

The registered capital of the Joint Venture Company subscribed by Party B is Renminbi Eight Million Yuan (RMB 8,000,000), representing an eighty percent (80%) share of the Joint Venture Company’s registered capital. Party B shall make its contribution to the registered capital of the Joint Venture Company in the form of Hong Kong dollar remittance.

    Payment of Registered Capital

Each Party shall pay to the Joint Venture Company all subscribed registered capitals in one lump sum within six (6) months from the date of issuance of the Business License.

If any Party fails to make its capital contribution when due, the non-breaching Party may demand by written notice to the other Party that the contribution be made within one (1) month from the date of receipt of such notice. If the contribution has not been made within this period, (i) the non-breaching Party shall have the right to require the breaching Party to transfer to the non-breaching

    Capital Verification

    Increase or Reduction of Registered Capital

    Loan Financing

    Encumbrances of Interest in Registered Capital

    No Assumption of Liabilities

    Party B's Transfer to Party A

The Parties agree that in any event other than those under Article 22.2 (Party B's Put Option), Party B shall have the right, which it may exercise at any time during the Contract Term in accordance with the laws and regulations of China, to request Party A to purchase all or part of the equity interest of the Joint Venture Company held by Party B for a purchase price calculated by the formula under Article 6.1(2).

The formula shall be as follows:

Party B may exercise its right under Article 6.1(1) in a single transaction or in two or more transactions.

Party A may either (i) accept Party B's request under Article 6.1(1), or (ii) decline Party B's request under Article 6.1(1), in which case the Joint Venture Company shall apply to, in accordance with the laws and regulations of China, the

    General Provisions relating Assignment of Ownership Interest

A Party (the selling Party) may transfer its equity interest in the Joint Venture Company (i) in accordance with Article 5.3(2)(i) (Payment of Registered Capital), or (ii) in accordance with Article 6.1(4)(i) (Party B's Transfer to Party A), or (iii) in accordance with Article 22.2 (Party B's Put Option), or (iv) as otherwise agreed with the prior written consent of the other Party, and in each case in accordance with the laws and regulations of China.

In case where Party A is the selling Party under Article 6.2(1), the laws and regulations of China on transfer of State-owned equity shall apply.

For any transfer of an equity interest under Article 6.2(1), each Party agrees to promptly take all actions and to sign all documents, and to cause its appointees on the Board of Directors promptly to take all actions and sign all documents, that are legally required to effect the transfer of equity interest. The transfer of equity interest shall be submitted to the Examination and Approval Authority for approval and, following receipt of such approval, the Joint Venture Company shall carry out procedures for the amendment of registration with the Registration Authority.

In accordance with the laws and regulations of China, the Parties agree that in the event of any changes to the Parties’ respective capital contribution in the Joint Venture Company, the Parties shall share the Joint Venture Company’s profits and bear the losses and risks arising from their investments in the Joint Venture Company, and corresponding adjustments shall be made to the number of

For the avoidance of doubt, if one Party transfers all its equity interest in the Joint Venture Company to the other Party, the relevant formalities shall be carried out according to the law.

    Change in Control

    Responsibilities of Party A

assist the Joint Venture Company in obtaining other approvals, licenses and rights required for the Joint Venture Company to undertake activities within its scope of business during its term of operations, including without limitation the Auction License;

assist the Joint Venture Company in purchasing, leasing or otherwise procuring office furniture and equipment, vehicles, products and other materials required for the Joint Venture Company’s operations from sources in China;

assist the Joint Venture Company in applying for licenses for the import of office furniture and equipment, vehicles, products and other materials required for the Joint Venture Company’s operations, and in carrying out all import and customs formalities in respect thereto;

assist the Joint Venture Company in recruiting skilled managers and technical personnel;

assist the Joint Venture Company in opening Renminbi and foreign currency bank accounts and in converting Renminbi into foreign currency for the Joint Venture Company to make outbound payments;

(in order to enable the Joint Venture Company to carry out its business operation in the Beijing Free Port) provide periodic reports (whenever there is any material change that can reasonably be expected to impact on, or relate to, the Joint Venture Company) to Party B on (i) the progress for it to obtain Third Party financing/investment to the Beijing Free Port, (ii) the status and time estimate for it to achieve the construction milestones of the Beijing Free Port, and (iii) any events or circumstances that can reasonably be expected to impact on its ability to obtain Third Party financing/investment to the Beijing Free Port or achieve the construction milestones of the Beijing Free Port; and

handle other matters entrusted by the Board of Directors.

    Responsibilities of Party B

assist the Joint Venture Company in purchasing, leasing or otherwise procuring office furniture and equipment, vehicles, products and other materials required for the Joint Venture Company’s operation from sources outside China;

assist Chinese employees of the Joint Venture Company and members of the Board of Directors who travel outside China for Joint Venture Company business in obtaining foreign country visas and invitation letters and certifications required for processing other necessary travel documents;

assist the Joint Venture Company in recruiting and training skilled managers and technical personnel; and

handle other matters entrusted by the Board of Directors.

    Mutual Representations and Warranties

such Party is duly organized, validly existing and in good standing under the laws of the place of its establishment or incorporation;

such Party has carried out all procedures and obtained all approvals required under the laws and regulations to which it is subject, and has the power under such laws and regulations, to enter into this Contract and to perform all of its obligations hereunder;

such Party has taken all internal actions necessary to authorize it to enter into and perform this Contract and its representative whose signature is affixed hereto is fully authorized to sign this Contract and to bind such Party thereby;

neither the signature of this Contract nor the performance of its obligations hereunder will conflict with or constitute a default under (a) any provision of the articles of association or by-laws of such Party, (b) any applicable law or regulation, (c) any authorization or approval of any government agency or body, or (d) any contract or agreement, to which such Party is a party or subject;

no lawsuit, arbitration, other legal or administrative proceeding, or governmental investigation is pending against such Party, or to the best of such Party’s knowledge is threatened by any Third Party, that would affect in any way its ability to enter into or perform this Contract; and

None of Party A, its Affiliates and the Joint Venture Company, or any its employees or representatives shall be the agent of Party B nor has or is conferred any authority to conclude any contract in China on behalf of Party B.

    Party A's Representations and Warranties

it is an enterprise owned by the whole People in the culture industry organized under the laws of China, and managed by Beijing Gehua Cultural Development Group with full authority;

it will undergo restructuring after the date hereof, as a result of which it will become a Sino-foreign equity joint venture Controlled by Beijing Gehua Cultural Development Group and owned directly by Beijing Gehua Cultural Development Group and an entity designated by Shun Tak Holdings Limited (Party B confirms that such restructuring will not result in a change in Control of Party A and Party B will not object to such restructuring);

it has obtained the right to develop and operate, as the sole developer and operator, the Beijing Free Port, including without limitation the sole right and control to decide which person may operate in the Beijing Free Port;

the Beijing Free Port has been authorized by the PRC Ministry of Culture as a “base for China's cultural trade with foreign parties”; and

the Beijing Free Port is in the early stage of development, and it is seeking Third Party financing/investment to the Beijing Free Port.

    Effect of Representations and Warranties

    Exclusivity Undertakings

Joint Venture Company will carry out its business operation in the Beijing Free Port and other locations pursuant to the relevant laws and regulations of China and this Contract. The Parties set out the exclusivity undertakings under this Article 9.4 pursuant to the Joint Venture Company's geographical operation areas and business scope.

Except with the prior written consent of Party B, Party A undertakes that from the Effective Date and as long as Party B holds an equity interest in the Joint Venture Company and for a period of four (4) months thereafter, it (or its Affiliate) shall not:

cooperate with other person or company (except the Joint Venture Company) to (x) carry on, or to be engaged, or to be concerned in, or (y) have common interests in, the bonded auction business or the non-bonded auction business, or

cooperate with any principal competitor of the Joint Venture Company to (x) carry on, or to be engaged, or to be concerned in, or (y) have common interests in, the commission sale business,

For the purpose of this Article 9.4, a principal competitor of the Joint Venture Company means:

any of Christie’s, Bonham’s, Phillip’s, Poly, Guardian, Council, Acker Merrill Condit, Zachys, ASC Wines, Heritage Auctions, and Antiquorum (or any other competitor agreed to by the Parties in writing);

any Affiliate or associated company of the foregoing; or

any person or entity conducting its business under any (or any part of) word, symbol, name, trade name, trade mark, or logo of the foregoing.

    Clarification on Exclusivity Undertakings

    Transactions in relation to the Joint Venture Company

    Restrictions regarding Name etc.

Except with the prior written consent of Party B, Party A shall not use, at any time for any business purpose, any of the following:

the word or symbol of the Sotheby's Trademark;

any other name, trade name, trade mark, logo or symbol of Party B (or its Affiliates); and

any other word, symbol, name, trade name, trade mark, or logo confusingly similar to any of the foregoing in such a way as to be capable of being, or likely to be, confused with those of Party B (or its Affiliates).

Except with the prior written consent of Party A, Party B shall not use, at any time for any business purpose, any of the following:

the word or symbol of "Gehua";

any other name, trade name, trade mark, logo or symbol of Party A (or its Affiliates); and

any other word, symbol, name, trade name, trade mark, or logo confusingly similar to any of the foregoing in such a way as to be capable of being, or likely to be, confused with those of Party A (or its Affiliates).

    Acknowledgment

Party B shall ensure that Sotheby's (a company duly established and existing under the laws of England and Wales) will grant to the Joint Venture Company the non-exclusive and royalty-based right to use the Sotheby's Trademark(s) pursuant to the terms and conditions of the Sotheby's Trademark License Contract to be entered into separately between Sotheby's and the Joint Venture Company.

The Sotheby's Trademark License Contract shall be filed to the Trademark Office of the State Administration for Industry and Commerce for recordal in accordance with the laws and regulations of China.

The Board of Directors shall be the highest authority of the Joint Venture Company and shall decide all matters of major importance to the Joint Venture Company. The date of issuance of the Business License shall be the date of establishment of the Board of Directors.

The Board of Directors shall comprise five (5) directors, one (1) of whom shall be appointed by Party A, and four (4) of whom shall be appointed by Party B.

Each director shall be appointed for a term of three (3) years, provided that the Party that has appointed a director may remove that director and appoint a replacement at any time. A director may serve consecutive terms if reappointed by the Party that originally appointed him. If a seat on the Board of Directors is vacated by the retirement, resignation, removal, disability or death of a director, the Party that originally appointed such director shall appoint a successor to serve out such director’s term.

Party B shall designate a director to serve as the Chairman of the Board of Directors. The Chairman of the Board of Directors is the legal representative of the Joint Venture Company, but shall not contractually or otherwise bind the Joint Venture Company without the prior written authorization of the Board of Directors. Whenever the Chairman of the Board of Directors is unable to perform his responsibilities for any reason, a director designated by the Chairman of the Board of Directors shall perform such responsibilities.

To appoint or remove a director (including the Chairman), a Party shall notify the other Party in writing. Appointments and removals of directors shall become

The first meeting of the Board of Directors shall be held within ninety (90) days from the date of issuance of the Business License. At the first meeting, the Board of Directors shall adopt resolutions concerning the following matters:

approval of the Business Plan;

appointment of the Management Personnel;

approval of the accounting system and procedures to be used by the Joint Venture Company;

approval of the basic management system and any other business systems of the Joint Venture Company which require the deliberation and adoption of a resolution;

opening bank accounts of the Joint Venture Company, and designate signing authority; and

other matters which the Board of Directors consider need to be deliberated at the first meeting of the Board of Directors.

After the first meeting, the Board of Directors shall hold at least one (1) regular meeting in each calendar year. Upon the written request of more than one-third

The Chairman of the Board of Directors shall give written notice, including the time and place of the meeting and the agenda, to each of the directors at least fifteen (15) days prior to any meeting of the Board of Directors. A Board of Directors meeting held without proper notice having been given to any director shall be invalid unless such director, either before or after the meeting, delivers a written waiver of notice to the Chairman. Meetings shall be held at the registered address of the Joint Venture Company or such other address in China or abroad as may be determined by the Chairman of the Board of Directors. The Chairman of the Board of Directors shall set the agenda for Board of Directors meetings and shall be responsible for convening and presiding over such meetings.

Each Party has the obligation to ensure that its appointees to the Board of Directors attend all meetings either in person or by proxy. More than two-thirds (2/3) of all the directors shall constitute a quorum for all meetings of the Board of Directors (such directors may be present in person or by proxy). If the director(s) appointed by a Party fail to attend a Board of Directors meeting convened in accordance with the provisions of this Contract and the Articles of Association, and does not appoint a proxy to represent him in attending the meeting, with the result that the directors attending the meeting do not constitute a quorum and therefore cannot adopt valid resolutions, then the other Party (the “Notice Server”) may serve written notice on the director(s) who failed to attend the meeting and on the Party that appointed such directors (the “Notice Recipient”), urging them to attend a Board of Directors meeting at the time and place stipulated in the notice. The above notice shall be sent by international courier service delivered letter for international communications or by registered post for domestic communications at least sixty (60) days prior to the date of the meeting. The notice shall state clearly that the Notice Recipient shall reply in writing within no less than forty-five (45) days after the sending of the notice as to whether its directors will attend the Board of Directors meeting. If the Notice Recipient

If a director is unable to attend Board of Directors meetings or to carry out his other duties as director, he may issue a proxy and entrust a representative to attend meetings or carry out his other duties on his behalf. The representative so entrusted shall have the same rights and powers as the director who entrusted him. One person may represent more than one director by proxy.

The Board of Directors shall cause complete and accurate minutes (in both Chinese and English) to be kept of all Board of Directors meetings. Draft minutes of meetings shall be distributed to all the directors within twenty (20) days after the date of the meeting. Any director who wishes to propose an amendment or addition shall submit the same in writing to the Chairman within twenty (20) days after receipt of the draft minutes. (No amendments or additions shall be proposed to written resolutions signed at a meeting.) The Chairman shall complete the final minutes and distribute them to each director and each Party not later than sixty (60) days after the meeting. The Joint Venture Company shall maintain a file of all Board of Directors meeting minutes and make the same freely available to the Parties and their authorized representatives.

So long as all of the meeting participants can communicate with one another, Board of Directors meetings may be held by means of conference telephone or similar communications equipment.

Each director shall have one (1) vote.

The adoption of resolutions concerning the following matters shall require the unanimous assent, at a duly convened meeting of the Board of Directors, of all the directors :

amendments to the Articles of Association;

increase or reduction of the registered capital of the Joint Venture Company;

suspension or dissolution of the Joint Venture Company; or

merger or division of the Joint Venture Company.

The adoption of all other resolutions shall require the assent of two-thirds (2/3) of the directors.

If the Board of Directors determines on the basis of a resolution adopted pursuant to Articles 11.4(2) (with respect to an increase in registered capital) or 11.4(3) (with respect to an external borrowing) that the Joint Venture Company requires additional funds and recommends that the Joint Venture Company raise such funds from either an increase in registered capital or an external borrowing, and a Party (the “Non-participating Party”) is unable or unwilling to participate in any such funding arrangement, then:

in the case of an increase in registered capital, the Party that is able and willing to participate in the funding arrangement shall be entitled to make any such increase unilaterally and the Parties’ respective shares of the registered capital of the Joint Venture Company shall be adjusted accordingly.

in the case of external borrowing, if a Party is unable to provide a guarantee on behalf of the Joint Venture Company in respect of such borrowing, then the other Party shall have the option to guarantee the entire amount of such borrowing.

Each Party hereby consents to any increase of registered capital and adjustment of the Parties’ respective shares of registered capital that meet the requirements of this Article 11.4(4) and further agrees to cause its appointees on the Board of Directors to consent to the same. Each Party

The Board of Directors may adopt any resolution without a meeting if such resolution is signed by all of the directors then holding office. Such written resolutions shall be filed with the minutes of Board of Directors meetings and shall have the same force and effect as a unanimous resolution adopted at a meeting of the Board of Directors.

The Parties shall jointly appoint one (1) supervisor as the supervisory authority of the Joint Venture Company.

No director or senior manager may concurrently work as a supervisor.

The supervisor shall be an individual of high integrity with appropriate experience as senior business managers, professionals, or other similar qualifications.

The appointment of the supervisor will be valid for three (3) years. The supervisor may serve successive terms upon reappointment by the Parties. The Parties have the right to change the supervisor at any time. If there is any vacancy due to retirement, resignation, removal or incapacity of the supervisor or any other reasons, the Parties shall appoint a successor to serve out the remaining term of

to examine the financial affairs of the Joint Venture Company;

to supervise the performance by the directors and senior managers of their respective duties and obligations, and to propose the removal of any directors and/or senior manager who has violated any provision of any law, regulation, this Contract or the Articles of Association;

to require any director or senior manager to rectify his/her misbehavior that has damaged the interests of the Joint Venture Company;

to investigate the illegal or illegitimate business activities of the Joint Venture Company, and to engage a professional firm to assist in internal audit or investigation or initiate legal actions or other proceedings with the prior written consent of both Party A and Party B and at the expense of the Joint Venture Company;

to attend, bring forth motions, make inquiries and provide suggestions at the meetings of the Board of Directors as non-voting attendees; and

to exercise other functions and powers as provided under the relevant laws and regulations.

The General Manager shall be in charge of the day-to-day operation and management of the Joint Venture Company and shall carry out all matters entrusted by the Board of Directors. The Chief Administration Office/Office Manager shall be in charge of the communication and coordination with the government authorities and Beijing Gehua Cultural Development Group and its Affiliates on behalf of the Joint Venture Company. The Accountants shall be in charge of the financial analysis and budget examination and the review of daily accounting and the supervision on the operation of financial system and shall provide assistance in accounting procedure and in the preparation of final accounting and draft financial statements. The Board of Directors shall determine the duties of the Chief Financial Officer and other Management Personnel.

The General Manager shall not concurrently serve as the general manager or deputy general manager of any other company or enterprise, nor shall any one serve as a director of or consultant to, or hold any interest in, any company or enterprise that competes with the Joint Venture Company.

The Chief Financial Officer of the Joint Venture Company shall be responsible for the financial management of the Joint Venture Company.

The Chief Financial Officer shall prepare the Joint Venture Company’s accounting system and procedures in accordance with the relevant laws and regulations of China, and submit the same to the Board of Directors for adoption. Among other requirements, the accounting system shall require the Chief Financial Officer to prepare accounting reports in accordance with international accounting principles and to provide such reports to each Party on a monthly basis. The accounting system and procedures shall be filed with the relevant local department of finance and the tax authorities for the record.

The Joint Venture Company shall adopt Renminbi as its bookkeeping base currency, but may also adopt Hong Kong dollar as a supplementary bookkeeping currency.

All accounting records, vouchers, books and statements of the Joint Venture Company must be made and kept in Chinese. All financial statements and reports of the Joint Venture Company shall be made and kept in Chinese and English.

Translations between foreign currency and Renminbi shall be made using the median rate for buying and selling for such currency announced by the People’s Bank of China on the date of actual receipt or payment by the Joint Venture Company.

The Joint Venture Company shall engage an internationally recognized independent accounting firm registered in China to audit its accounts and annual financial statements and to prepare an audit report as required by the applicable laws and regulations of China. Drafts of the audited financial statements and audit report shall be provided to each Party and to the Board of Directors for review and approval within two (2) months after the end of each fiscal year, and the final audit report shall be issued not later than four (4) months after the end of each fiscal year.

The audit firm engaged by the Joint Venture Company shall also prepare, at the Joint Venture Company’s expense and as a supplement to the statutory audit report, an audit report based on the International Accounting Standards.

A Party shall have the right to review and make copies of the Joint Venture Company's (i) Articles of Association, (ii) resolutions of the Board of Directors, (iii) decisions of the supervisor, (iv) monthly accounting reports prepared by the Chief Financial Officer under Article 16.1(2) (Accounting System), and (v) audited financial statements and audit reports prepared by the audit firm under Articles 16.3(1) and (2).

Unless the Chairman of the Board of Directors has reasonable basis to believe (which belief he shall explain in writing to the relevant Party) that a Party's (i) review of the Joint Venture Company's accounts or unaudited financial reports, or (ii) audit on the account of the Joint Venture Company, is for illegitimate reasons and may damage the lawful interests of the Joint Venture Company:

the Parties shall have full and equal access to the Joint Venture Company’s accounts;

the Joint Venture Company shall furnish to the Parties unaudited financial reports on a monthly basis so that they may continuously be informed about the Joint Venture Company’s financial performance; and

either Party at any time may appoint, at its own expense, an audit firm registered in China or abroad to audit the accounts of the Joint Venture Company and to prepare an audit report, and the Joint Venture Company shall permit such auditor to examine all of its accounting and financial records and other documents, provided that the auditor agrees to maintain the confidentiality of such documents and that the audit does not interfere with the normal operation of the Joint Venture Company.

With respect to any other document or information relating to the Joint Venture Company or its business that is not provided under Articles 16.3(1) through 16.3(4), the Joint Venture Company may refuse to provide such document or information to a requesting Party, if the Chairman of the Board of Director, at his sole discretion, decides that the requesting Party's access to such document or information is for illegitimate reasons and may damage the lawful interests of the Joint Venture Company.

Losses from previous years must be made up before any profits from the current year are distributed to the Parties. Profits retained by the Joint Venture Company in previous years may be distributed together with the profits of the current year.

After the Joint Venture Company has paid income taxes and made up any losses incurred in previous years, the Board of Directors shall determine the annual allocations to the Three Funds from the after-tax net profits, based on the requirements of relevant laws and regulations.

Within four (4) months after the end of each fiscal year, the Board of Directors, based on the Joint Venture Company’s operational needs, shall decide whether

The Joint Venture Company shall calculate in Renminbi (i.e., the standard bookkeeping currency) the profits available for distribution. Remittances of profits and other payments by the Joint Venture Company to Party B shall be made, as requested by Party B, in Hong Kong dollar to a foreign bank account designated by Party B, or in Renminbi to a foreign bank account (or a Special Account for Re-investment in Renminbi with a PRC bank) designated by Party B, in each case subject to compliance with the foreign exchange control regulations of China. If the Joint Venture Company has foreign exchange, Party B shall have a priority right, which it may exercise at its sole discretion, to the use of such foreign exchange to pay its share of profits, with translation from Renminbi into Hong Kong dollar at the median rate for buying and selling announced by the People’s Bank of China on the date on which payment is due. If the Joint Venture Company does not have sufficient foreign exchange funds to make a payment in full, it shall promptly comply with Party B’s request to either (i) convert the remaining Renminbi amount of the payment into Hong Kong dollar at a bank, at the selling rate for Hong Kong dollar announced by the People’s Bank of China on the date of conversion, and pay the Hong Kong dollar to a foreign bank account designated by Party B (any related exchange loss shall be borne by Party B), or (ii) pay the remaining Renminbi amount of the payment in Renminbi to a foreign bank account (or a Special Account for Re-investment in Renminbi with a PRC bank) designated by Party B, in each case subject to compliance with the foreign exchange control regulations of China. If the Joint Venture Company is unable to effect conversion, then upon notification by Party B, it must deposit the remaining Renminbi profits into a separate interest-bearing bank account opened in the name of the Joint Venture Company, and hold this Renminbi and the interest earned thereon in such account pending further notification from Party B. The Joint Venture Company shall promptly comply with Party B’s request concerning the disposition of the funds in this bank

The Joint Venture Company shall comply with the tax laws and regulations of China, and pay taxes according to the law.

In performing their obligations under this Contract, each Party shall take all necessary steps, and shall cause its Affiliates to take all necessary steps, to ensure that such Party and the Joint Venture Company comply with all laws and regulations of China and of any other jurisdiction that apply to the Parties or the Joint Venture Company with respect to implementation of this Contract.

Each Party and its Affiliates, when assisting the Joint Venture Company or acting on behalf of the Joint Venture Company, shall itself comply with, and shall cause its officers, directors, employees, and agents to comply with, the Anti-Corruption Laws and the Privacy Laws.

The Joint Venture Company shall require its officers, directors, employees, and agents to use only legitimate and ethical business practices and to comply fully with the Anti-Corruption Laws and the Privacy Laws in connection with activities conducted on behalf of or for the benefit of the Joint Venture Company, whether directly, through the use of representatives or otherwise, and shall not take any action that would subject the Joint Venture Company or either Party to penalties under such laws.

The Parties shall direct that Joint Venture Company will implement a program (as described in Schedule 1, the “Ethics and Compliance Policies and Procedures”) to monitor and to enforce compliance with the provisions of Article 19.1 (Compliance with Laws). Immediately following the execution of this Contract, the Joint Venture Company shall begin implementation of the Ethics and Compliance Policies and Procedures in accordance with the timetable set forth in Schedule 1.

The Joint Venture Company shall create the Ethics and Compliance Policies and Procedures described in Schedule 1 with the assistance of independent outside counsel with established expertise in the Anti-Corruption Laws, and maintain

Each Party hereby acknowledges that it is aware of and understands the prohibitions of the Anti-corruption Laws, and covenants that it will not cause the Joint Venture Company, either directly or indirectly, to engage in any activity, or authorize any person to engage on the Joint Venture Company’s behalf in any activity, that would constitute a violation of such laws or could otherwise result in liability for any Party under such laws.

Each Party represents and covenants that, in connection with the Joint Venture Company and the performance of its obligations under this Contract, it, and its owners, directors, employees and agents, have not, and will not give, pay, offer, promise, or authorize, directly or indirectly, any financial or other advantage that may be in breach of any Anti-corruption Laws.

Each Party agrees to certify compliance with the representations and covenants above in Articles 19.4(1) and 19.4(2) when requested to do by the other Party.

Each Party represents and covenants that none of the contracts, permits or licenses or other assets that it will contribute to the Joint Venture Company was procured by any means that are or would be in violation of the Anti-corruption Laws.

Each Party agrees that it shall not retain a sub-contractor, representative, or agent in connection with this Contract without the prior written approval of the other Party.

Prior to and during the Contract Term, each Party has disclosed or may disclose to the other Party confidential and proprietary information concerning their respective businesses, financial condition, proprietary technology, research and development and other confidential matters. Furthermore, during the Contract Term, the Parties may obtain such confidential and proprietary information concerning the Joint Venture Company (including without limitation any commercially sensitive, private or confidential information relating to the Joint Venture Company or its business, such as (i) the identity of its existing or anticipated suppliers, (ii) the identity of its existing or anticipated customers, and customer requirements, (iii) its existing or anticipated products, instructions and plans, (iv) its financial affairs, contractual arrangements, business or methods of business, (v) its forecasts, commercial plans, strategies and financial statements, records and information, (vi) software, applications, algorithms, designs, skills, methods, expertise, instruments, procedures, models, data, and any other related information, and (vii) any other commercial or technical information or trade secrets) and the Joint Venture Company may obtain such confidential and proprietary information concerning the Parties or their Affiliates. Each of the Parties and the Joint Venture Company receiving all such information as aforesaid (including written and unwritten information) (hereinafter referred to as “Confidential Information”) shall, during the Contract Term and thereafter:

The provisions of clause (1) above shall not apply to Confidential Information that:

If required by any Party, the Joint Venture Company shall execute a separate confidentiality agreement in respect of Confidential Information obtained by the Joint Venture Company from such Party (or its Affiliates) with provisions similar to those set out in this Chapter 20.

Each Party and the Joint Venture Company shall formulate rules and regulations to cause its directors, senior staff and other employees, also to comply with the confidentiality obligations set forth in this Chapter 20. All directors of the Joint Venture Company, and such managers and other employees as determined by the Board of Directors, shall be required to sign a confidentiality undertaking in a form approved by the Board of Directors.

The provisions of this Chapter 20 shall not apply to the disclosure of information (i) to any public or private lender or financing agency or institution, (ii) to any contractors or subcontractors that the Parties may engage with the prior written consent of the Joint Venture Company, (iii) to employees and consultants of the Parties, (iv) to any Third Party to which a Party contemplates the transfer of all or part of its share of the registered capital of the Joint Venture Company, or (v) to any Third Party that contemplates the direct or indirect acquisition of all or substantially all of the shares or assets of a shareholder of the Joint Venture Company or a transaction that would otherwise result in a change in Control of a shareholder of the Joint Venture Company; provided that in any such case only such information as such person or entity to whom disclosure is made shall have a legitimate business need to know shall be disclosed, and such person or entity

The provisions of this Chapter 20 shall not apply to the disclosure of information to any government, or any agency or department thereof, to the extent required by law or in response to a legitimate request for such information, provided that the Party being required or requested to make such disclosure shall immediately notify the other Party of such requirement and the terms thereof prior to such disclosure. The other Party shall have the right to petition to the agency or department concerned regarding such disclosure and to seek confidential treatment of any Confidential Information to be disclosed on such terms as such Party shall, in its sole discretion, determine.

For the avoidance of doubt, this Chapter 20 shall not prevent Party B from complying with the document-retention laws applicable to it, the requirements of relevant regulatory authorities to which Party B is subject, and Party B's record-retention policies (including but not limited to incorporation of client and transactional data from the auction business of the Joint Venture Company into Party B's database).

Without limiting the foregoing provisions of this Chapter 20, no Party shall make any public announcement or public disclosure with regard to the Joint Venture Company that includes Confidential Information without the prior written consent of the other Party as to the content and timing of such announcement or disclosure, which consent shall not be unreasonably withheld or delayed; provided that nothing in this clause (8) shall prevent a Party from making such an announcement or disclosure which is required in the good faith judgment of such Party by applicable law, regulation or stock exchange rule.

The provisions of this Chapter 20 shall remain binding upon any natural or legal person who has been a party to this Contract after such person, through an assignment of registered capital and corresponding contractual rights and obligations, ceases to be a party to this Contract. In addition, the rights and obligations under this Chapter 20 shall survive the expiration or earlier

Any of the following circumstances shall be a “Dissolution Event”:

the Contract Term expires;

the Joint Venture Company incurs losses in excess of Renminbi Twenty Million Yuan (RMB 20,000,000), ceases to carry on business, or becomes unable to pay its debts as they come due;

pursuant to Article 5.3(2)(ii) (Payment of Registered Capital);

a Party (the breaching Party) transfers all or any part of its share of the Joint Venture Company’s registered capital in violation of the provisions of this Contract;

a Party (the breaching Party) mortgage, pledge or otherwise encumber all or any part of its share of the Joint Venture Company’s registered capital in violation of the provisions of this Contract;

a Party (the breaching Party) breaches Articles 19.1 (Compliance with Laws) or 19.4 (Acknowledgement and Covenant); or one Party (the non-breaching Party) determines reasonably that the other Party (the breaching Party) has breached

a Party (the breaching Party) otherwise materially breaches this Contract or the Articles of Association, including without limitation the representations and warranties herein, and such breach is not cured within ninety (90) days of written notice to the breaching Party;

pursuant to Article 24.1(4) (Force Majeure);

the Joint Venture Company has been unable to attain its business goals and has no development prospects;

there are material discrepancies between the Joint Venture Company’s scope of business as stated on the Business License and as set forth in Article 4.2 (Scope of Business of the Joint Venture Company);

Party B ceases to Control the Joint Venture Company due to whatever reason;

there is a change in Control of a Party;

pursuant to Article 6.1(4)(ii) (Party B's Transfer to Party A);

any consent, authorization, registration, filing, license, permit, approval, agreement, authority or exemption, by or with a competent government authority (collectively, “Government Consent”) which is necessary for Party A to (i) be the sole developer and operator to develop and operate the Beijing Free Port, or (ii) perform its obligations under this Contract is revoked, not renewed or suspended, or any applicable conditions are not complied with in any material aspect, thereby negatively affecting Party A’s development and operation of the Beijing Free Port or performance of its obligations under this Contract;

the Auction License and the Business License are not issued within one hundred and twenty (120) days after the date hereof (or such other date as the Parties may agree in writing);

the competent PRC government authority revokes, does not renew, suspends, or revises in any material aspect, the bonded status of Tianzhu Free Trade Zone or the Beijing Free Port, thereby negatively affecting the Joint Venture Company’s ability to conduct its business;

any Government Consent which is necessary for the Joint Venture Company to conduct its business (including without limitation the Auction License, and the Business License) is revoked, not renewed or suspended, or any applicable conditions are not complied with in any material aspect, thereby negatively affecting the Joint Venture Company’s ability to conduct its business;

any Government Consent which is necessary for the Joint Venture Company to conduct its bonded business, according to the law and under the supervision by the competent bonded tax government authorities, at any location (including five-star hotels) selected by the Joint Venture Company outside Tianzhu Free Trade Zone and within the urban area of Beijing (including without limitation an exemption of the ATA Carnets) is not granted within sixty (60) days from the date of application by the Joint Venture Company (or such other date as the Parties may agree in writing), revoked, not renewed or suspended, or any applicable conditions are not complied with in any material aspect, thereby negatively affecting the Joint Venture Company’s ability to conduct its business; or

Sotheby's terminates the Sotheby's Trademark License Contract in accordance with its terms.

Within (30) days after occurrence of a Dissolution Event, (i) the Joint Venture Company shall apply to the Examination and Approval Authority to dissolve the Joint Venture Company in accordance with the laws and regulations of China, and the Parties shall execute a separate termination agreement to terminate this Contract, or (ii) the Parties shall carry on the equity transfer in accordance with Article 22.2 (Party B's Put Option). Each Party agrees to take all actions and to sign all documents, and to cause its appointees on the Board of Directors to take all actions and to sign all documents that are legally required to:

promptly remove the word “Sotheby's” (English and Chinese) from the Joint Venture Company's enterprise name, and promptly cease all uses of the Sotheby's Trademark(s) by the Joint Venture Company; and

(regardless of whether the foregoing item (a) has been completed or not) effect dissolution of the Joint Venture Company and termination of this Contract, and suspend the operation activities of the Joint Venture Company.

Upon execution of the termination agreement by the Parties:

the termination agreement shall be formed;

the termination agreement shall be binding as between the Parties; and

as between the Parties, all obligations and liabilities of a Party that arise out of or relate to, directly or indirectly, this Contract shall be released and discharged, except for (i) accrued rights and obligations as of the execution date of the termination agreement, (ii) rights and obligations in relation to provisions in this Contract that have been expressed to survive the termination of this Contract (including without limitation Article 3.2(3) (Name of the Joint Venture Company), Chapter 20 (Confidentiality), this Chapter 22 and Chapter 25 (Settlement of Dispute)), and (iii) rights and obligations arising from the termination agreement.

Except as otherwise provided in this Contract, the dissolution of the Joint Venture Company and the termination of this Contract due to breach of contract by a Party (the breaching Party) shall not prejudice the non-breaching Party’s right to claim damages for breach of contract.

If, at any time during the Contract Term, Party A is the breaching Party under Article 22.1, clause (1)(d)through clause (1)(g) (Dissolution), Party B, within thirty (30) days after occurrence of the relevant event, may give written notice to Party A, and may require, in accordance with the laws and regulations of China, Party A to promptly purchase all of Party B’s equity interest in the Joint Venture Company at the purchase price for Party B’s equity interest as set forth in Article 6.1(2) (Party B's Transfer to Party A).

Party A shall accept Party B's request under Article 22.2(1). For the avoidance of doubt, Party A shall not decline Party B's request under Article 22.2(1).

The liquidation committee shall be made up of five (5) members appointed by the Board of Directors, one (1) of whom shall be nominated by Party A, four (4) of whom shall be nominated by Party B.

Except for the matters that shall be decided by the liquidation committee unanimously pursuant to the laws and regulations of China then in effect, the adoption by the liquidation committee of all other decisions relating to the dissolution and liquidation of the Joint Venture Company shall require the assent of two-thirds (2/3) of the members of the liquidation committee.

If it is necessary to sell any of the Joint Venture Company’s assets, the liquidation committee shall use every effort to obtain the highest possible price for such assets and, subject to compliance with foreign exchange control regulations of China, to sell such assets for Hong Kong dollar or other freely convertible foreign currencies. Party A shall have a right of first refusal to purchase all machinery and equipment or other tangible property of the Joint Venture Company on the same terms and conditions offered by Party B or by a Third Party.

If it is necessary to appraise any of the assets to be liquidated, the liquidation committee shall appoint an internationally recognized independent accounting firm registered in China to handle this work.

The liquidation proceeds of the Joint Venture Company shall be distributed to the Parties in accordance with the ratio of their respective actual contributions to capital.

If any of the Joint Venture Company’s assets are distributed to the Parties in the form of cash, Party B shall have a priority right to the Joint Venture Company’s foreign exchange. If the Joint Venture Company does not have sufficient foreign exchange available to pay all of Party B’s share of remaining assets, the liquidation committee shall arrange for the conversion of Renminbi into foreign currency at a bank and for payment of such foreign currency to Party B in accordance with the foreign exchange control regulations of China. The liquidation committee shall arrange for the clearance of the PRC taxes on any distribution to Party B.

“Force Majeure” shall mean all events which were unforeseeable at the time this Contract was signed, the occurrence and consequences of which cannot be avoided or overcome, and which arise after the signature of this Contract and prevent total or partial performance by any Party. Such events shall include earthquakes, typhoons, flood, fire, war, failures of international or domestic transportation, epidemics, strikes and other events which are accepted as force majeure under the law of China or general international commercial practice. A Party’s lack of funds is not an event of Force Majeure.

If an event of Force Majeure occurs and affects the performance of a Party’s obligations under this Contract, such performance shall be suspended during the period of delay caused by the Force Majeure, and this shall not constitute a breach of contract.

The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish sufficient evidence of the occurrence and duration of such Force Majeure within thirty (30) days after the occurrence of the event of Force Majeure.

In the event of Force Majeure, the Parties shall immediately consult with each other in order to find an equitable solution and shall use all reasonable endeavors to minimize the consequences of such Force Majeure. If the occurrence or consequences of Force Majeure results in a major impairment to the functioning

For the purposes of this Chapter 25, a dispute (known as “Dispute” in this Chapter 25) means any dispute or difference between the Parties arising out of or in connection with this Contract including without limitation any question regarding its existence, validity or termination. Upon a Dispute arising, the Parties shall meet in good faith to attempt to resolve the Dispute. Each Party shall nominate a senior representative from time to time who shall be responsible for attending such meetings, and who shall have authority to settle any such Dispute.

If a Dispute is not resolved by means of the process set forth above, within ninety (90) days after one Party has given notice to the other Party of the existence of such Dispute, then such Dispute shall be referred to and finally resolved by arbitration administered by the London Court of International Arbitration under the Rules of Arbitration of the London Court of International Arbitration (the “LCIA Rules”), which rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be three (3). Each Party shall have the right to nominate one (1) arbitrator, in the case of the Claimant pursuant to article 1.1(e) of the LCIA Rules and in the case of the Respondent pursuant to article 2.1(d) of the LCIA Rules. The panel shall be appointed by the LCIA Court pursuant to article 5 of the LCIA Rules. Each arbitrator shall be legally qualified and practising either in PRC law or in English law and shall

To the extent that there is any discrepancy between the provisions of this Article 25.1 and the LCIA Rules, the LCIA Rules shall take priority.

Notwithstanding the generality of the foregoing, either Party shall be free to seek preliminary and permanent injunctive relief, and other relevant civil, administrative or criminal enforcement measures as a result of any claimed violation of intellectual property rights, confidentiality obligations, or exclusivity obligations in any appropriate jurisdiction.

Floor 16, Building A, Gehua Tower, Qinglong Hutong, Dongcheng District, Beijing

5th Floor, One Pacific Place, 88 Queensway, Hong Kong

Tone from the top - the program will manifest senior management's commitment to compliance and vest responsibility for the program in a senior officer of the Joint Venture Company, who will assign, as necessary, responsibility for implementation to other officials throughout the Joint Venture Company.

Controls - in addition to policies, the program will contain targeted controls addressing high-risk activities.

Training - the Joint Venture Company will adopt a risk-based approach to training employees on the policies and procedures in the compliance program.

Monitoring and audit - the Joint Venture Company will monitor the efficacy of the compliance program. Compliance with the policies and procedures will be mandatory and subject to audit at reasonable intervals consistent with the risk profile of the Joint Venture Company, which will be subject to the oversight of the Compliance Committee. No provision of the Ethics and Compliance Policies and Procedures may be waived or modified without the approval of the Compliance Committee.

Remedial and disciplinary mechanisms - the Program will include provisions for the Joint Venture Company to take appropriate remedial and disciplinary measures at the Joint Venture Company's sole discretion, as necessary to uphold standards and procedures of the Program.

Tone from the top - the program will manifest senior management’s commitment to compliance and vest responsibility for the program in a senior officer of the Joint Venture Company, who will assign, as necessary, responsibility for implementation to other officials throughout the Joint Venture Company.

Controls - in addition to policies, the program will contain targeted controls addressing high-risk activities.

Training - the Joint Venture Company will adopt a risk-based approach to training employees on the policies and procedures in the compliance program.

Monitoring and audit - the Joint Venture Company will monitor the efficacy of the compliance program. Compliance with the policies and procedures will be mandatory and subject to audit at reasonable intervals consistent with the risk profile of the Joint Venture Company, which will be subject to the oversight of the Compliance Committee. No provision of the Ethics and Compliance Policies and Procedures may be waived or modified without the approval of the Compliance Committee.

Remedial and disciplinary mechanisms - the Program will include provisions for the Joint Venture Company to take appropriate remedial and disciplinary measures at the Joint Venture Company’s sole discretion, as necessary to uphold standards and procedures of the Program.