Securities and Exchange Commission v. Fujinaga et al

Filing 420

ORDER Granting 419 Stipulation Authorizing the Sale of Personal Property at Auction. Signed by Judge James C. Mahan on 5/4/17. (Copies have been distributed pursuant to the NEF - ADR)

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Michael F. Lynch, Esq.
Nevada Bar No. 8555
LYNCH LAW PRACTICE, PLLC
3613 S. Eastern Ave.
Las Vegas, Nevada 89169
702.684.6000
702.543.3279 (fax)
[e-mail]
Attorney for the Receiver
Robb Evans & Associates LLC

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.

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STIPULATION AND ORDER
AUTHORIZING THE SALE OF
PERSONAL PROPERTY AT
AUCTION

EDWIN YOSHIHIRO FUJINAGA; and
MRI INTERNATIONAL, INC.,

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Case No.: 2:13-cv-01658-JCM-CWH

Defendants,
and
CSA SERVICE CENTER, LLC;
THE FACTORING COMPANY;
JUNE FUJINAGA; and
THE YUNJU TRUST,
Relief Defendants.

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This Stipulation and Order Authorizing the Sale of Personal Property at Auction (the

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“Stipulation and Order”) is made by and between Robb Evans & Associates LLC as the Receiver

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(the “Receiver”) on the one hand, and defendants Edwin Fujinaga (“Fujinaga”), MRI International,

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Inc. (“MRI”), and their affiliated entities, including The Factoring Company (collectively, the

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“Defendants”, and together with the Receiver, the “Parties”) on the other hand, each by and

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through their counsel.

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RECITALS
A.

WHEREAS, on January 27, 2015, the Clerk of Court entered judgment against the

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Defendants (ECF No. 189) (“Judgment”) pursuant to the Court’s order granting summary

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judgment in favor of plaintiff Securities and Exchange Commission (the “SEC”).

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B.

WHEREAS, on February 23, 2015, the Court issued its Order Appointing an

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Equitable Receiver (ECF No. 194) (“Appointment Order”) pursuant to which the Receiver was

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appointed as receiver for various commercial properties and their rents and profits (defined in the

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appointment order as the “Properties”) as more fully set forth in the appointment order.

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C.

WHEREAS, on February 25, 2015, the Court issued its Rule 54(b) Certification

(ECF No. 195) pursuant to which the judgment was made the final judgment as to the Defendants.

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D.

WHEREAS, the Receiver’s duties and responsibilities were enlarged by that certain

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Order Appointing a Full Equitable Receiver to Assume Control over the Defendants’ Assets and

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Enforce the Final Judgment entered on May 15, 2015 (the “Order Appointing Receiver”) (ECF

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No. 226). The Order Appointing Receiver supersedes the previous order, and directs the Receiver

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to take and retain immediate possession, custody, and control of all assets owned or controlled,

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directly or indirectly, by any of the Defendants in this case, including but not limited to assets of

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The Factoring Company, a Relief Defendant herein. Id.

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E.

WHEREAS, The Factoring Company, relief defendant herein, is also known as The

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Factoring Company X III, Inc., the title holder of record to the personal property described as

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follows.

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F.

WHEREAS, (a) Relief Defendant The Factoring Company and (b) The Factoring

Company X III, Inc., a Nevada corporation; are one and the same.

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G.

WHEREAS, this Stipulation and Order relates to the Receiver’s proposed sale of

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personal property at auction, which property is a Bugatti EB110, title to which is held in the name

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of The Factoring Company X III, Inc. The Bugatti EB110 is currently in the possession, custody,

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or control of the Receiver, and described1 as follows:

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Year

Make

Model

Vehicle Identification Number

Color

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1993

Bugatti

EB110

ZA9AB01E0PCD39034

Blue

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H.

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sportscar.

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I.

WHEREAS, the Bugatti EB110 is a rare, exotic, collectable, and valuable Italian

WHEREAS, the Parties agree that Receiver should sell the Bugatti EB110 because,

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The Bugatti is more fully identified and described in that certain Nevada Certificate of Title,
attached hereto as Exhibit “1”.
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among other reasons, the estate gains no prospective material benefit from its possession or control

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of the Bugatti EB110, and because by selling it, the estate can obviate its ongoing risk of damage

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or theft, as well as other costs, expenses, and insurance relating to the Bugatti EB110.

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J.

WHEREAS, the Receiver has determined, based upon the nature of the Bugatti

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EB110, and the time and costs that would be incurred in connection with other methods of

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liquidation, that it is in the best interests of the receivership estate and its creditors for the Receiver

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to engage an auctioneer to liquidate the Bugatti EB110.

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K.

WHEREAS, Bonhams is a well-recognized auctioneer of this type of personal

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property, has already examined the Bugatti EB110, and has advised that a well-advertised auction

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is appropriate for this sale and provides an opportunity to maximize the return to the estate in a

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timely fashion. Bonhams has recommended to the Receiver that the 10th annual Greenwich

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Concours D’Elegance Auction, which will be held on June 4, 2017, would be a favorable forum

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to auction the Bugatti EB110, because another Bugatti has already been entered in the same

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auction, and that Bonhams can generate additional interest by having the rare opportunity to have

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two Bugattis in the same auction, which interest would heighten its exposure to likely qualified

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buyers.

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L.

WHEREAS, Bonhams estimates the Bugatti EB110 will sell for $500,000 --

$700,000, and that a minimum reserve price of $450,000 is appropriate.
M.

WHEREAS, Bonhams has also agreed to waive the standard entry fee of $1,500.00

and will cover the transportation fee of $2,700.00.
N.

WHEREAS, a true and correct copy of Bonhams’ proposed consignment

agreement (the “Consignment Agreement”), is attached hereto as Exhibit “2”.
O.

WHEREAS, the Parties agree that Bonhams is an appropriate and well qualified

auction house appropriate to handle the auction of the Bugatti EB110.
P.

WHEREAS, the Parties agree that Bonhams’ proposed compensation, in an amount

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equal to 10% of the hammer price (seller’s commission) and together with the standard buyer’s

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premium in effect for the subject auction, is customary, fair, and appropriate, and commonly used

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and accepted in the industry.
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Q.

WHEREAS, the Parties agree, considering the rarity and variable collectable value

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of the Bugatti EB110, that it would be unhelpful, unnecessary and inefficient to expend the estate’s

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assets in hiring three appraisers. To the extent Section 2001(b) may apply to this sale, the Parties

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request the Court exercise its discretion under Section 2004 to modify the sale procedures for this

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personalty set forth in Section 2001(b).

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R.

WHEREAS, the Receiver confirms that it has presented the terms of this proposed

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sale to counsel for plaintiff SEC and counsel for the class of Japanese investors,2 and said counsel

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have both advised the Receiver that they have no objection to the sale of the Bugatti EB110 as

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provided for herein.

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S.

terms have been previously approved by this Court. (See e.g., ECF Nos. 274, 328, 372).

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Similar requests by the Receiver to sell personal property via auction under similar

NOW THEREFORE, the Parties hereby request, stipulate and agree that the following
Order be entered by this Court:

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ORDER

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:

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1.

The recitals set forth hereinabove are adopted as findings of fact and part of this

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2.

This Stipulation is approved in its entirety;

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3.

It is in the best interests of the estate and its creditors to, and that the Receiver is

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order;

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authorized to, engage Bonhams to sell the Bugatti EB110 by auction at the 10th annual Greenwich

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Concours D’Elegance Auction to be held on June 4, 2017, upon the terms and conditions

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referenced herein and in the attachments hereto;

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4.

The Receiver is authorized to execute all documents and instruments necessary or

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convenient to commission for auction, and to complete, implement, effectuate, and close the sale

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of the Bugatti EB110, free and clear of any liens and/or encumbrances, including, but not limited

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to:

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The class of Japanese investors are the members of the plaintiff class in the action styled
Takiguchi et al. v. MRI International, Inc. et al., currently pending in the United States District
Court for the District of Nevada as Case No. 2:16-cv-01183-HDM-NJK.
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a.

consistent with, the Consignment Agreement attached hereto;

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executing a consignment agreement with Bonhains tiiat is. or that Is materially

b.

executing a Bill of Sale conveying all ownership interests in the Bugatti EBI 10 free

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and clear of all liens and/or encumbrances to a successful bidder lor a hammer price

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of not less than $450,000. if any, at the auction; and

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c.

executing the Nevada Certificate of Title, a copy of which is attached hereto, as

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The Pactoring Company XIII, Inc., solely in the Receiver's capacity as receiver for

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The Factoring Company, Relief Defendant herein;

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5.

The Receiver is authorized to permit and/or cause to be paid from tiie proceeds of

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sale all ordinary and customary closing costs, all commissions,costs, and expenses due from seller

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under in the Consignment Agreement from the proceeds of sale; and

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6.

The Receiver has complied with all applicable statutory and legal authorities,

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including the provisions of 28 U.S.C §§ 2001

seq., required to approve the Receiver's sale of

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the Bugatti EBI 10 under the terms and conditions set foilh in this Stipulation and Order.

LYNCH LAW i^Cj;iCE,j^LC

JORDyN& WHITE/CO)
({AcUaufl 'r>

Michael F. Lynch

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William T..lordciU^ SBN 10162)
bi 11j0rdcn@jorclpi^idwhite.com
966 South May^trcct

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Nevada Bar No. 8555
3613 S. Eastern Avc.

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Las Vegas, NV 89169

Mcadvillc, PA 16335

702.684.6000

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Telephone: [phone]

702.543.3279(fax)

Facsimile: 814-724-1774

Michael(@LynchLawPractice.com
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Attorney for the Receiver
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Robb Evans & Associates LLC

LAW OFFICE OF HAYES & WELSH
Larson Welsh. NV Bar No. 12517

![e-mail]
199 N. Arroyo Grande Blvd., Stc. 200
Henderson, NV 89074

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Telephone: [phone]
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Facsimile: 702-434-3739

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Attorneys for Defendants Edwin Yoshihiro
Fujinaga; MRI International, Inc.; CSA
Service Center LLC and The Factoring Co.

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IT IS SO ORDERED.

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DATED:

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May 4, 2017
The Honorable James C. Mahan
UNITED STATES DISTRICT COURT JUDGE

Exhibit 1

Exhibit 1

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CERTIFICATE OF TITLE
YEAR

VIN

ZA9AB01EOPCD39034

DATE ISSUED

1993

MAKE

EBllO

FUEL TYPE

ODOMETER MILES

02/01/2007
VEHICLE COLOR

MODEL

BUGA

SALES TAX PD

TITLE NUMBER

VEHICLE BODY

P2D
EMPTY WT

NV00157627
GROSS WT

GVWR

G
ODOMETER BRAND

BRANDS

EXEMPT

OWN ER(S) NAME AND ADDRESS

THE FACTORING COMPANY X III INC
5330 S DURANGO DR
LAS VEGAS NV 89113

Ll ENH OLDER(S) NAME AND ADDRESS

, Ll ENHOLDER(S) RELEASE - INTER EST IN THE VEHICLE DESCRIBED ON TH IS TITLE IS HEREBY RELEASED:

SIGNATURE OF AUTHORIZED AGENT

DATE

PRINTED NAME OR COMPANY STAMP

,

FEDERAL AND STATE LAW REQUIRES THAT YOU STATE THE MILEAGE IN CONNECTION WITH THE TRANSFER OF OWNERSHIP. FAILURE TO
COMPLETE OR PROVIDING A FALSE STATEMENT MAY RESULT IN FINES AND/OR IMPRISONMENT.
The undersigned hereby cerlilies the vehicle described in this title has been transferred to the following buyer(s) :

o
Printed Full Legal Name of Buyer

Nevada Driver's License Number or Identification Number

Printed Full Legal Name of Buyer

0

AND
OR

Nevada Driver's License Number or Identification Number

Address
City
State
Zip Code
I certify to the best of my knowledge the odometer reading is the actual mileage of the vehicle unless one of the following statements Is checked.
NO
0
The mileage stated Is In excess 01 Its mechanical limits.
TENTHS
0
The odometer reading Is not the actual mileage. WARNING : ODOMETER DISCREPANCY.
-=-O-=D-=-O""'M-=ET =R'"""R=E=-A'"'D'"IN'""'G=------ -L-=..::.:.:..:..:.:.::.--l
=E
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0
Exempt - Model year over 9 years old.

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Signature of Seller(s)/AgenUOealership
I am aware of the above odometer certification made by the seller/agent. 0

Signature of Buyer
ACCORDING TO THE RECORDS OF TH E DEPARTMENT OF MOTOR
VEHICLES, TH E PERSON NAMED HEREON IS TH E OWN ER OF THE
VEHICLE DESCRIB ED ABOVE, SU BJECT TO liEN AS SHOWN.
AD·2 (Aev. 1106)

Printed Name of Seller(s)/AgenUOealership
Dealer's License Number _ _ _ __

Date of Sale _ _ __

Printed Fu ll Legal Name of Buyer
CONTROL NO.

03874528
(THIS IS NOT A TITLE NO.)

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FEDERAL AND STATE LAW REQUIRES THAT YOU STATE THE MILEAGE IN CONNECTION WITH TH E TRANSFER OF OWN ERSHIP.
FAILURE TO COMPLETE OR PROV IDING A FALSE STATEMENT MAY RESULT IN FIN ES AND/OR IMPRISONMENT.
The undersigned hereby certifies the vehicle described in this title has been transferred to the following buyer(s):

Printed Full Legal Name of Buyer

Nevada Driver's License Number or Identification Number

Printed Fu ll Legal Name of Buyer

0
0

AND
OR

Nevada Driver's License Number or Identification Number

I-

Z
w
:2:::;
Zz
S20
(fJa:

Address

State

City

Zip Code

I certify to the best of my knowledge the odometer reading is the actual mileage of the vehicle unless one of the following statements is checked.

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1
ODOMETER READING

!nO

NO
TENTHS

IB
0

The mileage stated is in excess of its mechanical limits.

The odometer reading is not the actual mileage. WARNING - ODOMETER DISCREPANCY
Exempt- Model year over 9 yrs. old.

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Signature of Seller(s)/AgenUDealership
I am aware of th e above odometer certification made by the seller/agent.

Printed Name of Seller(s)/AgenUDealership
Dealer's License Number
Date of Sale

0

Signature of Buyer

~

Printed Full Legal Name of Buyer

FEDERAL AND STATE LAW REQU IRES THAT YOU STATE THE MILEAGE IN CONNECTION WITH TH E TRANSFER OF OWN ERSHIP.
FAILURE TO COMPLETE OR PROVIDiNG A FALSE STATEMENT MAY RESULT IN FIN ES AND/OR IMPRISONMENT.
The undersigned hereby certi fi es the vehicle described in this title has been transferred to the following buyer(s):

0
0

AND
OR

Printed Full Legal Name of Buyer

Nevada Driver's License Number or Identification Number

I-

Printed' Full Legal Name of Buyer

Nevada Driver's License Number or Identification Number

:2

Address

i1i~

I certify to the best of my knowledge the odometer reading is the actual mileage of the vehicle unless one of the following statements is checked .
The mileage stated is in excess of its mechanical limits.
NO
The odometer re ading is not the actual mileage. WARN ING - ODOMETER DISCREPANCY
TENTHS
1
Exempt - Model year over 9 yrs. old.
0
ODOMETER READING

Z
w
z:::;
S2z
(fJO
(fJa:

a:«
ow
zo
0
()
w
(fJ

City

State

Zip Code

IB

Signature of Seller(s)/AgenUDealership
I am aware of the above odometer certification made by the seller/agent.

Printed Name of Seller( s)/AgenUDealership
Dealer's License Number
Date of Sale

0

Signature of Buyer

~

Printed Full Legal Name of Buyer

FEDERAL AND STATE LAW REQU IRES THAT YOU STATE THE MIL EA.E IN CONNECTION WITH THE TRANSFER OF OWNERSHIP.
FAILURE TO COMPLETE OR PROVIDING A FALSE STATEMENT MAY RESULT IN FIN ES AND/OR IMPR ISONMENT.
The undersigned hereby certifies the vehicle described in this titl e has been transferred to the following buyer(s):

Printed Full Legal Name of Buyer
I-

z
w
:2>,
Z....J
(.'Jz
-0
~a:
«w
w....J
a:«
w
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a:

Nevada Driver's License Number or Identification Number

Printed Full Legal Name of Buyer
Address

City

Zip Code

State

I certify to th e best of my knowledge the odometer reading is the actu al mileage of the vehicle unless one of the following statements is checked.
The mileage stated is in excess of its mechanical limits.
N0
' 1 0
The odometer reading is not th e actual mileage. WARN ING - ODOMETER DISCREPANCY
0
1 TENTHS
Exempi - Model year over 9 yrs. old.
0
ODOMETER READING

Signature of Seller(s)/AgenUDealership
I am aware of th e above odometer certification made by th e seller/agent.

Printed Name of Seller(s)/AgenUDealership
Dealer's License Number
Date of Sale

0

Signature of Buyer

Printed Full Legal Name of Buyer
LIENHOLD ER TO BE RECORDED
FE IN

Z

w

:J

AND
OR

Nevada Driver's License Number or Identification Number

I

I-

0
0

Printed Fu ll Legal Name of Lienholder
(if no lienholder write "NONE")
Address
Street

C ity

State

ALTERATION OR ERASURE VOIDS THIS TITLE

Zip Code

Exhibit 2

Exhibit 2

Bonhams
220 San Bruno Avenue, San Francisco, CA 94103

MOTORCAR CONSIGNMENT AGREEMENT
Sale Date
6/4/2017 Sale Venue

Tel [phone] - Fax [phone]

Sale No.

Bonded Pursuant to California Civil Section 1812.600

Closing Date for Entries

Name

Details:
Owner
Telephone (Mobile)

Address

Date of Manufacture

Make of Vehicle

1993
License No.

Executor

Are you a Dealer

Y /

N

If Yes:
Dealer #
State

Telephone (Home)
Telephone (Business)
Fax
Email
Model or Type

Bugatti

Greenwich Auction

24143 Schedule No.
4/4/2017 Client No.
Agent

Sales Tax #
Type of Body

EB 110

Chassis No.

Engine No.

ZA9AB01E0PCD39034
Cubic Capacity

No. of Cylinders

Name of Coachbuilder

Is engine original?
Yes
Transmission: Manual/Manual with Overdrive/Automatic
Left/Right Hand Drive

No. of Seats

Body Color

Interior Color & Material

Blue
Original Coachwork? Yes
Has Vehicle Been Restored

No

Grey

No
Date of Restoration

Bills Available: List

Odometer Reading

Actual

15,588 KM
Not Actual
Certificate of Title Available

Lien Info:
Yes
No

If yes, amount of lien
$

Lienholder/Bank

Special Instructions
*A non-refundable consignment (entry) fee of $1500 $0 will be zero.
*Sellers' Commission is a standard 10% of hammer price.
*Bonhams to professionally photograph at no additional charge
*Bonhams will undertake, with a budget ceiling of $1,500, the care and consideration to remove various blemishes required to display
the vehicle in the right light
*Bonhams will arrange transport circa $2,700 will be waived. Bonhams to pay.
This Consignment Agreement consists of the information contained on this page and the "Seller's Conditions"
attached hereto, as amended by any Special Instructions printed above.
1. I request that Bonhams & Butterfields Auctioneers Corp. (hereafter,
"you" or “Bonhams & Butterfields”) offer for sale by auction at the sale
venue stated above (the "Sale") the vehicle described above.
2. I acknowledge and agree that I have read the Seller's Conditions
attached hereto and that they constitute a part of this Consignment
Agreement.
3. I will arrange/request you to arrange for the delivery of the vehicle to
the Sale venue stated above, at my own expense.
4. I may withdraw the vehicle from the Sale with your consent and agree
to pay you withdrawal charges as outlined under paragraph 13 of the
attached Seller’s Conditions.
5. I agree to pay you a non-refundable Consignment Fee of US$1,500 at
the time this Consignment Agreement is made, which fee will not be
credited against the Seller’s Commission.
6. If the vehicle is sold, I agree to pay you a Seller’s Commission equal to
10% of the Hammer Price.

Seller

7. If the vehicle is not sold at the auction, I will arrange for its removal
immediately after the conclusion of the Sale at my own expense unless
alternative prior arrangements have been made and confirmed in writing.
8. I agree that should the vehicle not sell at the auction, you will have the
sole and exclusive right for up to 14 days following the auction to sell the
vehicle by private sale for any amount equal to or in excess of the Reserve
Price less the Seller's Commission.
9. You may withdraw any vehicle from the Sale for any reason including if
on examination you are not satisfied that the description given by me
accords with the actual condition of the vehicle, and I agree that your
decision will be final.
10. I declare that I have full legal authority to make this Consignment
Agreement and to sell the vehicle on the terms and conditions stated
herein and that the vehicle is free from any lien or encumbrance.

Date

Reserve Price

Estimate

TBD per Mark Osborne
Bonhams

$500,000 - 700,000
Date

SELLER’S CONDITIONS – U.S.
Motoring Consignments
This Consignment Agreement, consisting
of these Seller’s Conditions and the
attached Entry Form, including any
Special Instructions stated thereon
(which are incorporated by reference
herein) and any additional Schedule A
property listing(s) attached thereto (such
documents, collectively, comprising the
“Agreement”) is made by and between
Bonhams & Butterfields Auctioneers
Corp., a Delaware corporation
(“Bonhams”) and the Seller identified on
the Entry Form as of the date last written
thereon.
1. Definitions
In this Agreement, the following words
and expressions shall (unless the context
otherwise requires) have the following
meanings:
1.1 "Auctioneer" means the
representative of Bonhams conducting
the auction.
1.2 "Bonhams" means Bonhams &
Butterfields Auctioneers Corporation.
1.3 "Buyer" means the person to whom
the Lot is knocked down by the
Auctioneer or otherwise acknowledged
as the Buyer by Bonhams.
1.4 "Catalogue" includes any advertisement, brochure, price list and other
publication referring to the Lot or the
Sale.
1.5 "Expenses" in relation to the Sale of
a Lot means Bonhams’ out of pocket
costs for photographs, illustration,
special advertising, packing, storage,
duties, freight and any other such costs
incurred by Bonhams in connection with
a Lot.
1.6 "Hammer Price" means the
successful bid price in U.S. dollars at
which a Lot is knocked down by the
Auctioneer to the Buyer of the Lot.
1.7 "Lot" means the property identified
on the Entry Form of this Agreement and
in any attachment to this Agreement.
1.8 "Buyer’s Premium" shall have the
meaning given in the Conditions of Sale
in effect for the subject auction.
1.9 "Purchase Price" means the sum of
the Hammer Price, the Buyer's Premium,
and any sales, use or other tax due to
any governmental authority as a result of
the Sale of the Lot hereunder, plus any
Expenses payable by a Buyer.
1.10 "Reserve Price" means the
confidential minimum price, if any, that
has been agreed to in writing between
Bonhams and the Seller below which the
Lot will not be sold, except as set forth
herein.

1.11 "the Sale" means the Bonhams
auction sale in respect of which a Lot is
consigned for sale.
1.12 "Seller's Sale Proceeds" means the
net amount due to the Seller being the
Purchase Price less the Seller's
Commission, the Buyer's Premium, any
Expenses payable by Seller, and any
sales, use or other tax due to any
governmental authority as a result of the
Sale of the Lot payable by Seller under
this Agreement.
1.13 "Seller" means the party other than
Bonhams identified hereinabove and/or
on the Entry Form.
1.14 "Seller's Commission" shall have
the meaning given in paragraph 11.2
below.
1.15 "Settlement Date" shall have the
meaning given in paragraph 14.1 below.
2. Consignment
With respect to each Lot, Seller hereby
consigns to Bonhams the Lot, which
Bonhams, as Seller's exclusive agent,
agrees to offer for sale at public auction
(unless otherwise agreed), subject to the
provisions set forth herein and Bonhams’
Conditions of Sale in effect at the time of
the Sale. In the event of any conflict
between the Conditions of Sale and this
Agreement, the terms of this Agreement
shall control.
3. Transportation and Storage
Unless otherwise mutually agreed in
writing, Seller agrees to pay any and all
costs and expenses of transport and
delivery of the Lot to the designated Sale
location; Seller agrees to pay any
applicable customs duties and customs
user fees owing on the Lot; and delivery
of the Lot into the possession of
Bonhams or its authorized agent shall be
deemed to take place when the Lot has
been delivered to the saleroom at the
designated location of the Sale (or other
designated delivery location) and all
mechanical parts of the Lot are turned
off and in a stationary position.
4. Currency Converter
Solely for the convenience of bidders, a
currency converter may be provided at
Bonhams sales. The rates quoted for
conversion of other currencies to U.S.
dollars (or the currency in which the
relevant sale is conducted) are estimates
only and should not be relied upon by a
bidder and neither Bonhams nor its
agents shall be responsible for any errors
or omissions in the currency converter.

5. Bonhams’ Discretion
Bonhams shall have absolute professional
discretion to set the time, manner and
place (at the Sale Venue specified
elsewhere in this Agreement) at which
the Sale of the Lot is conducted,
including the Conditions of Sale then in
effect with respect to bidders. Bonhams
shall have the discretion to cancel the
auction subject of this Agreement or to
change the date of that auction,
provided that such new Sale Date must
be within 30 days of the Sale Date stated
on the Entry Form unless otherwise
mutually agreed. Bonhams shall have
absolute professional discretion with
regard to the advertising, marketing and
previewing of the Lot, and the
description and illustration of the Lot in
any Catalogue and the order in which
the Lot appears in any Catalogue and in
the auction. Bonhams shall have the
right, but not the obligation, to seek the
view of any expert concerning the Lot
either before or after the auction, to
refuse any bid on the Lot and to refuse
entry to any person at the auction, and
to divide the Lot for sale at the auction
or to combine the Lot with other lots for
sale at the auction. In the event of a
dispute regarding bids or other
irregularity at the auction, Bonhams
reserves the right to place the Lot up for
sale more than one time at the same
auction.
6. Risk of Loss or Injury
Unless otherwise mutually agreed in
writing, Bonhams shall not be liable for
any loss or damage to or caused by all or
any portion of the Lot unless such loss is
caused by the sole negligence or
intentional act of Bonhams, its agents or
employees.
7. Insurance
Unless otherwise mutually agreed in
writing, Seller, at no expense to
Bonhams, shall cause each Lot to be and
remain insured through the earlier to
occur of the time of its sale or its release
into Seller’s custody, against theft, loss
and damage, including from the time
Bonhams takes delivery of the Lot until
the Lot ceases to be in Bonhams' care,
custody and control, for an amount no
less than:
(a) the Hammer Price (if the Lot has been
sold); or
(b) the Reserve Price (if a reserve has
been agreed in accordance with
paragraph 12); or
(c) where there is no Reserve Price, the
average pre-sale estimate (as defined in
paragraph 8 below); and

1

Seller expressly acknowledges that
Bonhams shall be under no obligation to
carry any insurance policy against risk of
any loss, theft or damage to the Lot at
any time and assumes no liability for any
loss or theft of or damage to any Lot.
8. Bonhams' Estimates and
Descriptions.
8.1 Bonhams makes no warranty or
representation as to the anticipated or
likely selling price (at auction or
otherwise) of the Lot. Any written or oral
estimate (whether or not printed in any
Catalogue) given by Bonhams, its officers,
employees or agents as to the estimated
selling price of the Lot is a statement of
opinion only, and may be revised from
time to time in Bonhams' sole discretion
and may not be relied upon as an
indication of the actual selling price for
the Lot. Bonhams shall not be liable for
the failure of any Lot to be sold at price
below such estimate or expected price or
to reach the Reserve Price, if any.
8.2 Bonhams shall not be liable to Seller
for any error, or misstatement in, or
omission from the description of a Lot in
any Catalogue. Bonhams shall have no
duty to the Seller to investigate the
accuracy of the description of any Lot
provided by or on behalf of the Seller.
8.3 Bonhams is entitled to alter the
description of any Lot by posting a
saleroom notice, or by announcement, at
any time prior to the offer of the Lot at
the Sale.
9. Seller's Representations and
Warranties
9.1 Seller represents and warrants that:
(a) Seller has full right, title and authority
to make and enter into this Agreement,
and that the Lot is now and will be upon
sale free and clear of all liens, claims and
encumbrances, that the Seller has good
and marketable title and right to
possession to the Lot and that the same
will pass to Buyer upon completion of
the Sale. Seller has or will promptly
upon execution of this Agreement
provide Bonhams with current, clear,
transferable title documents for the Lot,
assignable without further action by
Seller, for Bonhams to hold as agent until
completion of the sale of the Lot; if the
Lot is not titled, Seller shall provide its Bill
of Sale for the Lot and such other
documentation as shall reasonably be
requested.
(b) Seller has complied with all laws
relating to the export or import of the
Lot prior to the Sale.
(c) Seller has provided Bonhams with all
written material in Seller's possession or

control and has notified Bonhams in
writing of all of Seller's knowledge
concerning the authenticity, provenance,
origin, age, condition, quality and any
material alterations to the Lot as well as
any facts or opinions expressed by third
parties in relation to the Lot.
(d) There are no restrictions, legal or
otherwise, affecting Bonhams' right to
photograph, reproduce photographs of,
exhibit or describe the Lot. Seller hereby
grants to Bonhams the right to illustrate
and photograph the Lot and to use
Seller's name in connection with the Lot.
Bonhams shall own the copyright on all
such illustrations, photographs and
written descriptions of the Lot produced
by Bonhams, and Seller shall have no
right, title or interest therein.
9.2 Seller agrees that the foregoing
representations and warranties are for
the benefit of both Bonhams and the
Buyer of the Lot, that Bonhams may rely
on their accuracy and completeness, and
that such representations and warranties
shall survive completion of the
consignment and any sale of the Lot.
9.3 Seller agrees to notify Bonhams
promptly in writing of any events or
circumstances that may cause the
foregoing representations and warranties
to be inaccurate or breached in any way.
10. Indemnification
Seller shall indemnify, hold harmless and
defend Bonhams, its directors, officers,
agents and employees, from and against
any and all losses, damages, liabilities,
claims, and all fees, costs and expenses
of any kind related thereto (including,
without limitation, reasonable attorneys'
fees) arising out of, based upon or
resulting from any and all claims of
ownership or right to possession of the
Lot or sale proceeds, any breach or
alleged breach of any representation or
warranty made by Seller under this
Agreement, or any active or passive
negligence by Seller, its agents,
representatives, or employees with
respect to the Lot consigned hereunder.
11. Consignment Fee, Seller's
Commission, and Buyer's Premium
11.1 Unless otherwise mutually agreed in
the Special Instructions or otherwise in
writing, Seller shall pay Bonhams a nonrefundable Consignment (entry) Fee of
$1500.00 for each Lot consigned
hereunder upon signing of this
Agreement.
11.2 Unless otherwise mutually agreed in
the Special Instructions or otherwise in
writing, Bonhams shall deduct and retain
from the proceeds of the sale of the Lot

a Seller's Commission in an amount
equal to ten percent (10%) of the
Hammer Price, together with any
Expenses payable by Seller hereunder.
11.3 Seller acknowledges Bonhams' right
to charge, collect and retain for its own
account the full Buyer's Premium upon
sale of the Lot.
11.4 Bonhams reserves the right in its
sole discretion to pay a fee out of its own
commissions to any third party
introducing property or clients to it.
12. Reserves
12.1 The Lot will be sold without reserve
unless a Reserve Price has been agreed
by Bonhams and the Seller, on the Entry
Form or otherwise in writing. Any Lot
being offered for sale subject to a
Reserve Price may be identified as such
prior to the Sale and will not be sold for
less than the Reserve Price at auction
except as otherwise provided herein. As
Seller’s agent, Bonhams may act to
protect the Reserve Price by bidding
through the Auctioneer.
12.2 Neither the Seller nor any agent of
the Seller (other than Bonhams) may bid
on the Lot, directly or indirectly. If any
such bid is nonetheless made, the
Auctioneer may knock down the Lot to
the Seller without observing any Reserve
Price and the Seller shall pay to Bonhams
the Buyer's Premium plus the Seller's
Commission and any Expenses payable
by Seller hereunder.
12.3 Any Reserve Price set in an amount
other than an applicable bidding
increment may be rounded down to the
next bidding increment. Bonhams may
sell any Lot below the Reserve Price if the
Seller's Sale Proceeds are made equal to
the amount which the Seller would have
received had the Lot been sold at the
Reserve Price. Any Reserve Price and any
printed presale estimates of the selling
price of the Lot shall not include the
Buyer's Premium or any taxes payable.
12.4 In no event shall Bonhams be liable
for any failure of any Lot to be sold at
any estimated or expected price or for
the failure of bidding on the Lot to reach
any Reserve Price.
13. Withdrawal
13.1 No Lot may be withdrawn from sale
after the effective date of this
Agreement without Bonhams' prior
consent. If Bonhams consents to such a
withdrawal, Bonhams shall be entitled to
charge a withdrawal fee equal to twenty
percent (20%) of the average of
Bonhams' latest high and low pre-sale
estimates or, where a Reserve Price has
been set, twenty percent (20%) of the

2

Reserve Price applicable to the Lot, plus
Expenses incurred by Bonhams with
respect to the Lot, plus any associated
costs provided for herein.
13.2 Bonhams reserves the right to
withdraw any Lot at any time prior to the
initiation of bidding on the Lot at
auction. In the event Bonhams
withdraws such Lot as a result of doubt
as to the accuracy of any of the Seller's
representations or warranties or actual or
alleged breach of any provision of this
Agreement by Seller, Seller shall be liable
to Bonhams for the full withdrawal fee
described in paragraph 13.1 as well as
any Expenses and associated costs.
13.3 If the Seller elects to withdraw the
Lot and Bonhams consents to such
withdrawal, the Seller shall arrange for
collection and removal of the Lot from
Bonhams’ custody at the Seller's own
expense within two (2) days after the
date of Bonhams' consent; provided,
however, that the Lot may not be
removed or released to Seller unless and
until any withdrawal fee, and any
Expenses or other costs reimbursable
hereunder, and any funds advanced to
Seller, have been paid or reimbursed in
full.
13.4 In addition, in connection with any
withdrawal, Seller shall reimburse to
Bonhams, on a full indemnity basis, any
and all legal or other investigative fees or
costs incurred by Bonhams in the
investigation or defense of any claim
concerning title to the Lot, the Seller's
right to sell the Lot or the accuracy of the
description of the Lot contained in the
Catalogue.
14. Settlement of Account
14.1 Bonhams, in its capacity as Trustee
of the Bonhams & Butterfields Consignor
Trust (the “Trust”), shall account for and
pay to the Seller the Seller's Sale
Proceeds not later than 21 days after the
date of the Sale (the "Settlement Date"),
provided that the Purchase Price has
been received in full by Bonhams, that
no claim has been made against the Lot
or its sale proceeds and that the Buyer
has not given notice of intent to rescind
the sale. Unless an alternate method of
payment shall have been agreed with the
Seller, payment hereunder shall be made
by sending to the Seller a check drawn
on the Trust’s bank account, by first class
mail. Payments shall be made in U.S.
dollars. As Trustee of the Trust, Bonhams
hereby accepts the foregoing instruction,
and Seller hereby agrees that any interest
paid on any sums deposited into any
account held by the Trustee shall be
retained by the Trustee to help defray its

cost of administering the Trust. If
payment is made to Seller other than by
check, a nominal bank wire transfer fee
may apply.
14.2 If the Purchase Price has not been
received in full by Bonhams by the
Settlement Date, Bonhams will pay the
Seller's Sales Proceeds promptly and in
any event within six (6) business days
after the date on which the full Purchase
Price is received by Bonhams in cleared
funds from the Buyer.
14.3 Bonhams shall have no obligations
to enforce payment by a Buyer. However, in the event the Purchase Price has
not been received by Bonhams by the
Settlement Date, Bonhams will notify the
Seller to discuss an appropriate course of
action. Bonhams may, in its absolute
discretion, assist the Seller in the recovery
of the Purchase Price; provided, however,
that Bonhams shall be under absolutely
no obligation to institute any proceeding
in its own name.
14.4 In the event no agreement is made
between Bonhams and Seller concerning
the collection of the Purchase Price
within seven (7) days following the giving
of the notice by Bonhams referred to in
paragraph 14.3, Bonhams may do any of
the following:
(a) Agree with the Buyer as to terms for
the payment of the Purchase Price;
(b) Remove, store and insure the Lot;
(c) Settle any claims and/or proceedings
by or against the Buyer on such terms as
Bonhams shall in its absolute discretion
deem appropriate;
(d) Take such steps as Bonhams shall, in
its absolute discretion, consider necessary
and appropriate to collect the Purchase
Price from the Buyer;
(e) Rescind the Sale and refund any
monies paid by the Buyer;
(f) Offer the Lot for resale, by auction or
private sale, with or without reserve;
(g) Engage an attorney to pursue any of
the courses of action referred to in
subparagraphs (a) through (f) above.
Seller hereby grants to Bonhams a full
power of attorney coupled with an
interest in the Lot to pursue said courses
of action in the Seller's name, and Seller
will render to Bonhams any and all
assistance as Bonhams may reasonably
require to enable Bonhams to take any
of such courses of action.
14.5 Bonhams shall be entitled to set off
any fees or costs it incurs as a result of it
engaging in any of the courses of action
set forth hereinabove as an Expense
together with the Buyer's Premium and
the Seller's Commission on the Lot. In
the event that the money collected by
Bonhams as a result of engaging in any

such course of action is insufficient to
cover such Expenses, Buyer's Premium
and Seller's Commission, the net shortfall
shall be payable by the Seller to Bonhams
on demand.
14.6 Upon Bonhams’ giving of the notice
to Seller per Paragraph 14.3 above that
the Purchase Price has not been received
by the Settlement Date, Seller shall be
entitled to instruct Bonhams to rescind
the sale and request redelivery of the Lot
by giving timely notice of such election
to Bonhams, provided that Buyer has
made prior payment to Bonhams of the
Buyer's Premium plus the Seller's
Commission and any Expenses payable
by Seller hereunder.
15.Unsold Lots
15.1 If a Lot does not sell at auction,
Bonhams shall have the sole and
exclusive right, but not the obligation, to
sell the Lot for a period equal to fourteen
(14) days following the Sale at which the
Lot was offered, for any price equal to or
in excess of any Reserve Price less any
Seller's Commission, except as otherwise
agreed by the parties or permitted
hereunder. Bonhams may elect to sell
the Lot by private sale for less than the
full Reserve Price under this paragraph,
provided that Seller shall be paid an
amount no less than the net amount to
which Seller would have been entitled
had the lot sold at a price equal to the
Reserve Price.
15.2 Unless otherwise mutually agreed,
Seller shall remove the Lot from
Bonhams’ possession by close of business
on the day following the auction at
which the Lot was to be sold or enter
into a new consignment agreement with
Bonhams with respect to the Lot. In the
event of the Lot not being collected
within the agreed time frame, Bonhams
may, in Bonhams’ sole discretion, return
the Lot to Seller at Seller’s expense, or
transfer the Lot to a third party
warehouse, or sell the Lot at public
auction by Bonhams. In the event such
Lot is sold at public auction as aforesaid,
Seller shall be entitled to receive the sales
proceeds in accordance with paragraph
14. In the event of transfer of any
unsold Lot to a third party warehouse,
Seller shall bear all costs and risks thereof
and shall be liable to such warehouse for
the payment of storage charges in the
minimum amount of $20 per day or five
percent (5%) of the Reserve Price,
whichever is greater.
16. Notices
All notices and demands shall be given in
writing either by personal service or by

3

registered or certified mail return receipt
requested, or by overnight delivery,
postage and fees prepaid, when
delivered to the United States Post
Office, Federal Express, United Parcel
Service, DHL WorldWide Express, or
Airborne Express, as the case may be, or
by confirmed facsimile transmission.
Notice shall be considered given on the
date received by personal service or
transmitted by confirmed facsimile, or
the date appearing on the return receipt,
but if the receipt is not returned, within
three (3) days after being mailed. Notices
shall be addressed as shown in this
Agreement for each party, except that, if
any party gives notice of a change of
name or address, notices to that party
shall thereafter be given as shown in that
notice.
17. Assignment
The rights and obligations of the parties
under this Agreement may not be
assigned by either party (except in the
case of Bonhams to a Bonhams Group
corporate affiliate) without the prior
written consent of the other party.
18. Miscellaneous
18.1 Bonhams shall have the right to set
off from any monies due to Seller under
this Agreement any monies due to
Bonhams or any Bonhams Group
corporate affiliate from Seller.
18.2 This Agreement and the relationship
of the parties shall be governed by the
laws of the State of California and U.S.
Federal law (as applicable). Jurisdiction
for all dispute resolution shall be the
State of California, USA. Venue shall be
in New York City, New York or San
Francisco, California, as set forth in the
following paragraphs. The parties
expressly agree that the United Nations
Convention on Contracts for the
International Sale of Goods shall not
apply to this Agreement.
18.3 Bonhams maintains a bond on file
with the California Secretary of State.
18.4 This Agreement, as amended by
any Special Instructions stated on the
Entry Form or as otherwise mutually
agreed in writing, constitutes the entire
agreement between the parties
concerning their rights and obligations
with respect to the subject matter
hereof. Any agreements or
representations respecting the Lot or its
Sale not expressly set forth in this
Agreement shall have no effect, except
for a subsequent written modification
signed by the party to be charged.
18.5 The headings and captions used in
this Agreement are for convenience only

and shall not affect the meaning of this
Agreement.
18.6 No act or omission of Bonhams, its
employees or agents shall operate or be
deemed to operate as a waiver of any of
Bonhams' rights under this Agreement.
18.7 This Agreement shall be binding on
the parties, their heirs, distributees,
executors, legal representatives,
successors and assigns.
18.8 Time is of the essence of this
Agreement.
18.9 Resolution of any dispute hereunder
shall be by mediation or arbitration, the
terms for which shall be as set forth
below.
Mediation & Arbitration Procedures:
(a) Within thirty (30) days of written
notice that there is a dispute, the parties
or their authorized and empowered
representatives shall meet by telephone
and/or in person to mediate their
differences. If the parties agree, a
mutually acceptable mediator shall be
selected and the parties will equally share
such mediator’s fees. The mediator shall
be a retired judge or an attorney familiar
with commercial law and trained in or
qualified by experience in handling
mediations. Any communications made
during the mediation process shall not be
admissible in any subsequent arbitration,
mediation or judicial proceeding. All
proceedings and any resolutions thereof
shall be confidential, and the terms
governing arbitration set forth in
paragraph (c) below shall govern.
(b) If mediation does not resolve all
disputes between the parties, or in any
event no longer than sixty (60) days after
receipt of the written notice of dispute
referred to above, the parties shall
submit the dispute for binding arbitration
before a single neutral arbitrator. Such
arbitrator shall be a retired judge or an
attorney familiar with commercial law
and trained in or qualified by experience
in handling arbitrations. Such arbitrator
shall make all appropriate disclosures
required by law. The arbitrator shall be
drawn from a panel of a national
arbitration service agreed to by the
parties, and shall be selected as follows:
(i) If the national arbitration service has
specific rules or procedures, those rules
or procedures shall be followed; (ii) If the
national arbitration service does not have
rules or procedures for the selection of
an arbitrator, the arbitrator shall be an
individual jointly agreed to by the parties.
If the parties cannot agree on a national
arbitration service, the arbitration shall
be conducted by the American

Arbitration Association, and the
arbitrator shall be selected in accordance
with the Rules of the American
Arbitration Association. The arbitrator’s
award shall be in writing and shall set
forth findings of fact and legal
conclusions.
(c) Unless otherwise agreed by the
parties or provided by the published rules
of the national arbitration service:
(i) the arbitration shall occur within sixty
(60) days following the selection of the
arbitrator;
(ii) the arbitration shall be conducted in
the designated location, as follows: (A) in
any case in which the subject auction by
Bonhams took place or scheduled to take
place in the State of New York,
Connecticut, or Florida or the
Commonwealth of Pennsylvania or
Massachusetts, the arbitration shall take
place in New York City, New York; (B) in
all other cases, the arbitration shall take
place in the city of San Francisco,
California; and
(iii) discovery and the procedure for the
arbitration shall be as follows:
(A) All arbitration proceedings shall be
confidential;
(B) The parties shall submit written briefs
to the arbitrator no later than fifteen (15)
days before the arbitration commences;
(C) Discovery, if any, shall be limited as
follows: (I) Requests for no more than
ten (10) categories of documents, to be
provided to the requesting party within
fourteen (14) days of written request
therefor; (II) No more than two (2)
depositions per party, provided,
however, the deposition(s) are to be
completed within one (1) day; (III)
Compliance with the above shall be
enforced by the arbitrator in accordance
with California law;
(D) Each party shall have no longer than
eight (8) hours to present its position.
The entire hearing before the arbitrator
shall not take longer than three (3)
consecutive days;
(E) The award shall be made in writing
no more than thirty (30) days following
the end of the proceeding. Judgment
upon the award rendered by the
arbitrator may be entered by any court
having jurisdiction thereof.
To the fullest extent permitted by law,
and except as required by applicable
arbitration rules, each party shall bear its
own attorneys’ fees and costs in
connection with the proceedings and
shall share equally the fees and expenses
of the arbitrator.

4