Note:

The following is an English translation of the original Conditions of Sale in Japanese andis provided for reference purposes only. In the event of any discrepancy between theJapanese original and the English translation, the Japanese original shall prevail.

Any new changes or corrections to the material printed in this catalogue will beannounced on the day of the sale.
[TRANSLATION]
Conditions of Sale
(2023 Yearling Sales)

Chapter 1 General Provisions(Obligation to abide by Conditions)
Article 1

Any party registered to sell a horse at this sale (hereinafter ‘Seller’) and any party
registered to buy any number of horses at this sale (hereinafter ‘Buyer’) must
agree to abide by the conditions herein.

(Location of Sale)
Article 2

1. The Hidaka Horse Breeders Association (hereinafter the ‘Sale Holder’) will holdthis livestock auction sale (hereinafter the ‘Sale’) at 175-2 Kamimori, Shizunai,
Shinhidaka-cho, Hidaka-gun, Hokkaido.
2. The main office is situated at the following location; however, a temporary officewill be set up within the sales complex during the period of the Sale.
Main office: 2-1-1 Tsukiji, Urakawa-cho, Urakawa-gun, Hokkaido
Temporary Office: 175-2 Kamimori, Shizunai, Shinhidaka-cho, Hidaka-gun,
Hokkaido(Bloodstock to be Offered and Sold)
Article 3

The bloodstock to be offered and sold in the Sale will be Thoroughbred horses.

(Horses Offered in Sale)
Article 4

1. Horses offered in the Sale will be sold on an ‘as is’ basis with no warranties by theSale Holder or Seller, except for horses with the conditions stipulated in Article 24
Paragraph 3 herein, provided these conditions have not been declared inaccordance with the requirements of said Article.
2. Upon entering a yearling horse to be sold at the Sale, Seller may submit

radiographs of the horse’s limbs (the 28 or 36 views listed in <Appendix 1> ofthese Conditions) and a video of the horse’s upper airway endoscopy inaccordance with the Sale Holder’s guidelines. Seller shall be responsible for thecontent of these submitted materials.
3. Buyer or Buyer’s agent may, after following the procedures set forth by the Sale
Holder, view the limb radiographs and upper airway endoscopy videos submitted
to the Sale Holder in accordance with the previous paragraph of this article
through the following means and venues.
(1) For a sale conducted in a standard auction format, at a designated facility
within the sale premises.
(2) For a sale conducted in an electronic auction format as described in Article 10
herein, through a designated website.
(3) For a sale conducted in a combined format as described in Article 10 herein,
at a designated facility within the sale premises or through a designatedwebsite.
4. Seller shall be responsible in the event there is any error in the identification ofindividual horses.
5. Seller shall, at Seller’s own expense, have a microchip for identification meeting
the ISO’s standards implanted in each sale horse either by the time the material
described in Paragraph 2 of this Article is taken if such material is submitted forthe horse, or at least five days before the first day of the sale if such material is
not submitted.

(Date of Sale)
Article 5

The date of the Sale shall be discussed at the Hokkaido Sales Operating
Committee Meeting, approved by the Board of Directors of the Hidaka Horse
Breeders’ Association and thereafter submitted to the Hokkaido Prefecture
Governor for public announcement (per <Appendix 2>).
However, if necessary for unavoidable reasons, the sale may be canceled or its
dates changed by prior notification to the Hokkaido Prefecture Governor.

(Operating Hours of Sale)
Article 6

Operating hours of the Sale are from 6 a.m. to 8 p.m. However, if transactions
involving the horses on offer are not completed during such time, such time may
be extended.

(Keeping of Horses)
Article 7

1. Only horses that have been diagnosed as being free of the domestic animal

infectious diseases stipulated in Article 2 of the Domestic Animal Infectious
Disease Control Law can be kept on the sales premises.
2. Horses to be offered must be kept at a location designated by the Sale Holder.
3. In the event the Sale Holder determines that a horse with any disease other thanthose stipulated in Article 2 of the Domestic Animal Infectious Disease Control
Law or with any bad habit and thus may pose a threat to other horses should be
refused entry onto the premises or be isolated or have its movements restricted,
Seller of such horse must comply with the Sale Holder’s decision.
4. Seller must receive a number tag and place it on the horse to be offered andfollow the instructions of the sales attendants.

(Procedures for Veterinary Inspections)
Article 8

1. Any party involved in the transaction of a horse may request for the veterinarianposted within the sales premises on the day of the Sale to examine the horse forany illnesses.
2. In the event a party involved in the transaction of a horse wishes to request suchexamination as described in the previous paragraph, the party must submit therequest to the sales office.

(Liability for Horse Related Accidents on Sale Premises)
Article 9

The Sale Holder is not liable for any accidents related to or arising from horses inthe sales complex or related facilities during the time of the Sale or the period
before and after the Sale while horses are stabled on the sales premises.

Chapter 2 Method of Transaction and Procedures
Article 10

Transactions in this Sale will consist of the sale and purchase of livestock, which
will be conducted through a standard auction format, an electronic auction format
using an online website (hereinafter “Electronic Auction”) or a combination of boththe standard auction format and the electronic auction format using an online
website (hereinafter “Combined Auction”).
The actual format of the Sale will be determined by the Sale Holder for each sale.

(Method of Purchase and Sale)
Article 11

1. Horses will be offered in the order designated by the Sale Holder.
2. The auction shall be conducted in principle through increasing of bids. However,bids may be brought down at the discretion of the auctioneer. Bids shall beadvanced by one hundred thousand (100,000) yen or integer multiples thereof.

(Re-Sale)
Article 12

1. If there is no successful bidder for a horse, Seller may put the horse up for re-sale.
2. Any party wishing to put a horse up for re-sale in accordance with the previous
paragraph must immediately notify the sales office of such intention.
3. Re-sales will be conducted on the same day in the order determined by the Sale
Director.

(Seller Registration)
Article 13

1. Seller must be the owner of the horse to be offered.
2. The Seller must register with the sales office by filling out a Sales Application
Form designated by the Sale Holder specifying the name and address of Seller,
the breeding farm and consignor (actual keeper of the horse), the horse’s breed,
sex, color, date of birth and pedigree and submitting the completed form alongwith the Seller Registration Fee stipulated in Article 31 (1) of these Conditions ofSale.
3. If Seller is a Qualified Invoice Issuer, Seller shall submit their Qualified Invoice
Issuer registration number to the Sale Holder per the instructions specified
separately by the Sale Holder.
4. Unless otherwise provided for by the Sale Holder, Seller must, at the time ofregistration stipulated in paragraph 3 above, submit the Certificate of Foal
Registration issued by the Japan Association for International Racing and StudBook.
5. The Seller is responsible for any disputes that may occur between Seller,
breeding farm and consignor (actual keeper) of the horse to be offered, and theSale Holder shall not be held liable in this regard.
6. The Sale Holder has the right to refuse seller registration to any party as it deems
necessary in consideration of circumstances such as any breach of conditions bysaid party at past sales.
7. Seller must submit to the sales office before the beginning of the Sale documents
to declare any of the conditions stated in Article 18 of these Conditions of Saleand a preferred minimum sale price for the horse.
8. The Sale Holder may refuse to have a horse offered at the Sale in the event of thefollowing:(1) If it is discovered that Seller has submitted false information on the horse.
(2) When the Sale Holder has provided for late submission of the Certificate of
Foal Registration, and the certificate has not been submitted by five days
before the first day of the Sale.

(3) If it is discovered that there is any existing dispute with a third party regarding
information on the horse submitted by Seller including ownership of the horse.
(4) If it is deemed necessary by the Sale Holder for any other reason.

(Withdrawal of Horse)
Article 14

1. In the event that a horse for which a Sales Application Form has been submitted
must be withdrawn from the Sale due to unavoidable reasons such as illness or
accident, Seller must immediately notify the Sale Holder and submit any relevant
veterinary certificates. For the Selection Sale, the veterinary certificate must be
prepared by a veterinarian approved by the Sale Holder.
2. Upon receiving such notice as described in the previous paragraph, the Sale
Holder must on the day of the Sale, make known the number and name of thehorse and also the name of Seller through the following means.
(1) For a sale conducted in a standard auction format, by posting the information
within the sale premises.
(2) For a sale conducted as an Electronic Auction, by posting the information ona designated website.
(3) For a sale conducted as a Combined Auction, by posting the information
within the sale premises and on a designated website.
3. Further procedures concerning withdrawals are as described in <Appendix 7>.

（Selection of Sale Horses）
Article 15

1. For the Selection Sale, a selection committee set up by the Sale Holder may
select horses to be offered in the Sale.

(Buyer Registration)
Article 16

1. Any party wishing to purchase at this Sale must register as a Buyer by filling out
and submitting to the Sale Holder an Agreement of Buyer Participation, which will
include information such as Buyer’s address and name, by the following dates.
(1) For a sale conducted in a standard auction format, at least 5 days before theSale.
(2) For sales conducted as an Electronic Auction or Combined Auction, at least
10 days before the Sale.
2. In completing the process described in the previous paragraph, if the Buyer
wishes to authorize an agent to make purchases on his/her behalf, the Buyer shalldo so by submitting the designated Agent Authorization Form, and the agent may
participate in the Sale if the Sale Holder so approves.
3. A party wishing to purchase at this Sale must register a certifier as part of theprocedure described in Paragraph 1 of this article. However, a certifier may not be
required if it is so approved by the Sale Holder.
4. Upon completion of buyer registration, Buyer will be issued a Buyer Registration
Number Seal (or in the case of an Electronic Auction or Combined Auction, aBuyer Registration Number and other accompanying data (such as Buyer ID
Number and Password)).
5. Buyer must wear the buyer registration number seal where it is clearly visible.
6. Buyer must safekeep the Buyer Registration Number Seal or Buyer Registration
Number and other accompanying data as described in Paragraph 4 of this article.
In the event said item or data is lost or obtained by a Third Party, Buyer shall be
responsible for any results thereof.
7. The Sale Holder has the right to review the forms submitted in relation to
Paragraph 1 and 3 of this Article and make the decision to reject a party’s buyer
registration application.

(Deposits)
Article 17

A party seeking to register as a buyer at this Sale must pay a 50% deposit
according to the expected number and value of purchases. However, exceptions
may be allowed if the Sale Holder so approves.

(Announcements prior to Commencement of Auction)
Article 18

1. The Sale Holder shall announce at the time of auction, in addition to information
contained in the sales catalogue, any conditions in Paragraph 6 of this Article asdeclared by Seller.
2. If there is any information to be added, or upon examination of the information
listed in the sales catalogue, if there are any omissions or errors, Seller must
make a request in writing to the Sale Holder for the appropriate inclusion or
correction to be made before the beginning of the auction.
3. In the event such request as described in the previous paragraph is made, theSale Holder must announce the requested correction or inclusion at the auction
stand.
4. In the event there are inaccuracies in the declared information, Seller shall be
responsible for resolving any resulting disputes between Seller and Buyer, andthe Sale Holder will in no way be responsible for any such disputes.
5. The conditions to be declared as referred to in Paragraph 1 of this article are as
follows:(1) Bad habits (Cribbing, Box-Walking, Weaving, Self-Biting)(2) Eye abnormalities (Cataracts, Amaurosis, Glaucoma), Periodic Ophthalmia

(Moonblindness), blindness in at least one eye(3) Castration(4) History of surgery under general anesthesia(5) Any other conditions the Sale Holder considers necessary(Determination of Successful Bidder and Conclusion of Purchase Transaction)
Article 19

1. If after the auctioneer calls out the highest bid 3 or more times and there is noother higher bidder, the party making the highest bid shall be determined thesuccessful bidder.
2. For the Selection Sale, if the party making the highest bid is also the Seller, theparty will not be determined the successful bidder and the horse will be declared
as being bought back. The auctioneer or his/her assistant shall then announce
immediately the price of the highest bid and Seller’s registration number.
3. The purchase transaction shall be deemed concluded upon the determination of
the successful bidder. The auctioneer or his/her assistant shall then announce
immediately the price of the successful bid and the name and or buyer registration
number of the successful bidder.
4. No party may raise any objections once the auctioneer has determined thesuccessful bidder.
5. All responsibility and risk of loss shall pass to the successful bidder at the time of
conclusion of the purchase transaction except in situations pertaining to Articles
24 and 25 of these Conditions of Sale.
6

Once the successful bidder has been determined, the successful bidder andSeller shall immediately sign a Purchase Confirmation Note. In addition, thesuccessful bidder and Seller shall sign and seal a separate Agreement ofPurchase and Sale as the official documentation of the purchase transaction.

7. In the case of an Electronic Auction or an electronic sale in a Combined Auction,
the successful bidder shall promptly agree to the purchase through thedesignated website’s Purchase Confirmation Page in lieu of signing a PurchaseConfirmation Note.
(Disputes Relating to Determination of the Successful Bidder)
Article 20

1. In the event of a dispute relating to the determination of the successful bidder, theparties involved shall submit to the ruling of the auctioneer.
2. If the auctioneer rules that bidding on the horse shall be resumed, only the parties
originally involved in the dispute may participate in the bidding. However, if thebidding price falls below the price of the bid at the start of the dispute, bidding is
open to all Buyers, and the auctioneer shall make an announcement to that effect.

(Purchase Settlement)
Article 21

1. After the successful bidder has been determined, the successful bidder shall pay
the amount equal to the successful bidding price plus consumption tax(hereinafter the 'transaction price’) no later than the closing time of the salesession in one of the following ways :(1) Payment in the form of Japanese currency in cash at the sales office(2) Payment in the form of check at the sales office(3) Payment by wire transfer to a financial institution designated by the Sale
Holder(4) Payment by a credit card issued by a financial institution designated by theSale Holder
2. If, however, due to unavoidable reasons the successful bidder is unable to pay
the amount equal to the transaction price by the closing time of the Sale, and if
the Sale Holder approves the payment conditions set forth by the successful
bidder, payment due date can be extended to within 10 days from the day
following the closing day of the Sale.
3. The successful bidder must pay the transaction price stipulated in Paragraph 1
above even if an insurance payment is made for the policy described in Article 23of these Conditions of Sale.
4. The Sale Holder will not extend the time of payment stipulated in Paragraph 1 ofthis article regardless of whether Buyer has initiated the procedures set forth in
Articles 24 and 25 of these Conditions of Sale.
5. The Sale Holder shall pay to the Seller the amount derived by deducting the salescommission stipulated in Article 31 (2) herein from the transaction price.
6. The Certificate of Foal Registration submitted by Seller will be delivered by theSale Holder to the successful bidder once the horse’s full transaction price has
been paid.
7. Closing time of the sale session refers to the time the sale closes on the relevant
day of the relevant sale. Close of the Sale refers to the time when all dates of therelevant sale are completed.

(Delivery of Horse)
Article 22

1. Delivery of a horse for which a purchase transaction has been completed shalloccur at a time and location agreed upon by Seller and successful bidder after
payment of the full transaction price.
2. In the event procedures set forth in Articles 24 and 25 of these Conditions of Saleare initiated in connection with a horse for which a purchase transaction has been

concluded, the horse may not be moved without the approval of the Sale Holder,
regardless of whether full payment for the horse has been made.
3. The delivery described in Paragraph 1 of this article shall take place within 10
days from the day following the close of the Sale.
4. Seller is responsible for keeping the horse under proper conditions free of charge
until the time of delivery as stipulated in Paragraph 3 of this article.
(Hokkaido Sale Bridge Insurance)
Article 23

1. The Sale Holder shall, at its own expense, purchase a “Hokkaido Sale Bridge
Insurance” policy (hereinafter “Insurance”) as described in <Appendix 3> of these
Conditions of Sale for all horses for which a purchase transaction has been
completed. The purpose of this insurance will be to insure against loss of life or
racing ability of the purchased horse resulting from any accidents which occur
during the period from the time the successful bid is made to the time of thehorse’s delivery as described in Article 22 Paragraph 3 of these Conditions ofSale. For purposes of this Insurance, the purchased horse shall be insured for its
entire transaction price.
2. The Sale Holder shall, upon receiving any payment based on the Insurance policy,
forward the payment to the successful bidder of the insured horse.

(Rescission of Purchase Transaction)
Article 24

1. If either the successful bidder or Seller breaches these Conditions of Sales inconnection with any purchase transaction, the purchase transaction may be
rescinded through the Sale Holder.
2. If the successful bidder discovers in relation to the horse for which the successful
bid was made any conditions listed in Paragraph 3 of this article which were notdeclared on the day of the sale, the successful bidder may submit a written claim
to that effect, along with the relevant documents or veterinary certificate, to theSale Holder within 10 days from the day following the day of the sale.
3. The conditions referred to in Paragraph 2 of this article are as follows:(1) Bad habits (Cribbing, Box-Walking, Weaving, Self-Biting)(2) Eye abnormalities (Cataracts, Amaurosis, Glaucoma), Periodic Ophthalmia(Moonblindness), blindness in at least one eye(3) Castration(4) History of surgery under general anesthesia(5) Any other condition deemed relevant by the Sale Holder
4. In the event a claim is submitted by the successful bidder pursuant to Paragraph
2 of this article, the Sale Holder shall promptly so inform Seller and shall arrange

through its own efforts or that of its approved veterinarian to have the claim of thesuccessful bidder investigated and shall promptly notify the successful bidder ofthe results of such investigation.
5. If the results of the investigation pursuant to the previous paragraph are found tosupport the contents of the submitted claim, the successful bidder may rescind
the purchase transaction through the Sale Holder.
6. The successful bidder may not make any claim regarding the relevant horse incases of conditions other than those listed in Paragraph 3 of this Article, or if theclaim stipulated in Paragraph 2 of this Article is not made within the designatedtime period.
7. The successful bidder may not transfer title to the relevant horse to any third party
until the Sale Holder determines the results of the investigation.
(Request for Rescission of Purchase Transaction)
Article 25

1. If the successful bidder of a yearling discovers in the yearling any conditions listed
in Paragraph 2 of this article, the successful bidder may submit a written request
to rescind the transaction, along with the relevant veterinary certificate andradiographs, to the Sale Holder within 3 days from the day following the day of thesale. However, this shall not be the case if the successful bidder has takendelivery of said horse from Seller.
2. The conditions referred to in Paragraph 1 of this article are as follows:(1) Bone chips in the joint (excluding Osteo-Chondrosis Dissecans of the hockjoint)(2) Subchondral bone cysts on the joint surface(3) Laryngeal hemiplegia (Laryngeal function Grade III or IV at rest as
described in <Appendix 4>)(4) Wobbler symptoms from stricture of the vertebrae
If however, the limb radiographs or upper airway endoscopy video submitted inaccordance with Article 4 Paragraph 2 of these Conditions of Sale show theconditions (1), (2) or (3) above, the successful bidder may not submit any claim in
connection to such condition as stipulated in Paragraph 1 of this article even if
any of the conditions (1), (2) or (3) are discovered in the horse after making the
successful bid.
3. If the successful bidder makes a request to rescind the purchase transaction, theSale Holder shall so notify Seller. Seller shall arrange for the relevant claim to beinvestigated and submit the relevant veterinary certificates and radiographs andany other necessary documents to the Sale Holder within 3 days from the day
following receipt of the notification from the Sale Holder.

4. The Sale Holder shall submit the veterinary certificates and radiographs and anyother documents submitted by the successful bidder and Seller to the Hokkaido
Sales Judgment Committee (hereinafter the “Judgment Committee”) set forth in
Article 26 of these Conditions of Sale, which shall be the committee entrusted todecide on the matter.
5. The decision of the Judgment Committee will be considered the final decision of
the Sale Holder, and the successful bidder and Seller shall be so notified.
6. If the claim of the successful bidder is recognized after deliberation by the
Judgment Committee, the successful bidder may rescind the purchase transaction
through the Sale Holder.
7. The successful bidder and Seller shall comply with the decision of the Judgment
Committee as notified pursuant to Particle 5 of this article.
8.

Buyer may not transfer title to the relevant horse to any third party until the Sale
Holder reaches its final decision, regardless of whether full payment for the horse
has been made.

9. If the claim of the successful bidder is not recognized, the costs incurred by Seller
in making the necessary reports to the Sale Holder shall be borne by the
successful bidder.
(Judgment Committee)
Article 26

1. The Judgment Committee shall include veterinarians designated by the Sale
Holder.
2. The Judgment Committee shall deliberate and decide matters relating to:(1) Any claims submitted pursuant to Article 25 of these Conditions of Sale.
(2) Any other matters deemed relevant by the Sale Holder
3. The Judgment Committee may investigate at its sole discretion claims of illness
and other matters as deemed necessary.

(Post-Transaction Announcements)
Article 27

1. To announce the results of concluded transactions, the following information will
be made public by the day following each sale day(1)Number of horses offered by breed, sex and age(2)Number of concluded transactions by breed, sex and age(3)The highest, lowest and average transaction price bｙ breed, sex and age.
2. The information listed in the paragraph above will be announced through thefollowing means.
(1) For a sale conducted in a standard auction format, by posting the information
within the sale premises.

(2) For a sale conducted as an Electronic Auction, by posting the information ona designated website.
(3) For a sale conducted as a Combined Auction, by posting the information
within the sale premises and on a designated website.

Chapter 3 Sales Operation Staff and Transaction Staff(Sales Operation Staff)
Article 28

1. The operation of the Sale will be conducted by the following staff:(1)Sale Director

1 person(2)Auctioneer

1 or more persons(3)Veterinarian

1 or more persons(4)Sales Attendant

1 or more persons(5)Assistant to Auctioneer

1 or more persons

2. The Sale Director shall oversee the work of the auctioneer(s), veterinarian(s),sales attendant(s) and assistant(s) to auctioneer(s).
3. The auctioneer(s) shall conduct the running of the auction.
4. The assistant(s) to auctioneer(s) shall assist the auctioneer in conducting therunning of the auction.
5. The staff listed in paragraph 1 of this article must wear an identification badge as
specified separately hereof.

(Prohibited Acts of Auctioneer)
Article 29

The auctioneer is prohibited from performing any of the following acts:(1) Conspiring with any Seller or Buyer in such a manner as to obstruct thelegitimate conducting of transactions or allowing any Seller or Buyer toengage in bid rigging or any other wrongful act.
(2) Receiving money or any other form of gain in connection with the auctioneer’s
professional duties.
(3) Becoming directly involved as a principal in a purchase or sale.
(4) Intentionally obstructing the establishment of a successful bid.
(5) Calling out bids in argot or any other manner not commonly accepted.

(Prohibition of Commercial Brokerage)
Article 30

Commercial brokerage is prohibited in the sales for which these conditions apply.

Chapter 4 Collectible Fees

(Collectible Fees)
Article 31

Collectible fees and their amounts are as follows:(1) Seller Registration Feea) For sellers belonging to organizations listed in <Appendix 5>, the seller
registration fee shall be as represented in <Appendix 6>.
b) For all sellers other than a) above, the seller registration fee shall be twice theamount in <Appendix 6>.
c) The seller registration fee paid by Seller is non-refundable.
(2) Sales Commission
Sales Commission charged to Seller shall be 5/100 of the successful bid plus
consumption tax.
(3) Buy Back Commission
For the Selection Sale, if there is no actual purchase transaction for a horse
per the situation described in Article 19 Paragraph 2, a Buy Back Commission
will be collected from Seller as follows.
a) If the horse is bought back at a price equal to or lower than the preferred
minimum sale price, the Buy Back Commission shall be 1/100 of the buy backprice plus consumption tax.
b) If the horse is bought back at a price higher than the preferred minimum saleprice, the Buy Back Commission shall be 5/100 of the buy back price plus
consumption tax.

Chapter 5 Miscellaneous Provisions(Provisions Concerning Breach of Agreement)
Article 32

1. In the event the purchase transaction is rescinded due to a breach of agreementby the successful bidder, the successful bidder must pay through the Sale Holder
a penalty fine equal to 50% of the transaction price to Seller. Any partial payment
received by Seller may be applied to the aforementioned fine until the full 50% is
received.
2. In the case of Paragraph 1 above, if the Sale Holder has received partial paymentof the transaction price from the successful bidder, the Sale Holder may handover such payment to Seller until the full 50% is received.
3. If deemed necessary to maintain order in Sale proceedings or for any other suchreason, the Sale Holder may agree at the request of Seller to collect the penalty
fine from the successful bidder on Seller’s behalf.
4. In the event of Paragraph 3. above, the Sale Holder shall, irrespective of theconditions detailed in Paragraph 1, act under its own name to collect the penalty

fee described therein, and upon receiving such payment request from the Sale
Holder, the successful bidder shall pay to the Sale Holder said penalty fee.
5. In the event Seller requests the Sale Holder to collect the penalty fee on its behalf
as stipulated in Paragraph 3 above, Seller shall not object to the method used by
the Sale Holder per Paragraph 4 above, or the results thereof. Seller may at any
time cancel its request for the Sale Holder to act on Seller’s behalf, and the Sale
Holder may at any time cancel its agreement to act on Seller’s behalf. In such an
event, the Sale Holder shall not prevent Seller from acting on its own behalf tocollect the penalty fee from the successful bidder.

(Court of Jurisdiction)
Article 33

The Sapporo District Court shall be the court of jurisdiction in the event of adispute arising out of or in connection with any sale transaction.

(Prohibited Acts)
Article 34

The following acts are prohibited to maintain the integrity of the sale process.
(1) Any act involving the broadcasting or transmitting of the Sale (including
images or sounds transmitted by the Hokkaido Sales)(2) Filming/photographing the Sale, including but not limited to the sale facilities,
horses being offered, sale attendees and any other persons involved with theSale, for commercial purposes.

(Provisions Concerning Maintenance of Order on Sales Premises)
Article 35

1. The Sale Holder may remove from or prohibit entry for a designated period of time
onto the sales premises any party to which the following apply:(1) A party that has breached the Conditions of Sales at this or any past Sale
(2) A party that has spread false rumors concerning horses on offer(3) A party that has declared false information to the sales office(4) A party that has obstructed sales operations or disturbed order on the sales
premises or is considered liable to do so(5) A party that has intentionally damaged property on the sales premises orcaused harm to any horses or is considered liable to do so(6) A party that does not follow the instructions of the sales attendants
2. In the event the Sale Holder prohibits entry of a party onto the sales premises
according to the previous paragraph, the Sale Holder will post within the sales
premises the name of the party, the period for which the party is prohibited entry
and the reason for such prohibition.

(Disclaimer)
Article 36

1. In the event the Sale Holder deems it necessary to suspend operation of its online
electronic auction system (hereinafter the “System”) due to reasons including but
not limited to system failures, any irresistible force such as natural disasters,
communication failures and other operational and technical issues, the Sale
Holder may, without advance warning to registered buyers, suspend operation of
the System, in which case buyers using the System will not be able to participate
in the Sale.
2. The Sale Holder will not be responsible for any damages or losses incurred byany registered buyer as a result of Paragraph 1 above.
3. Each buyer shall be responsible for the costs of computers and any other such
communication devices necessary for using the System as well as for allcommunication costs associated with using the System. The Sale Holder will not
be responsible for damages incurred as a result of the hardware or software ofany device used to access the System being affected or failing in any way due tosuch use.
4. The Sale Holder will not be responsible for any damages or losses incurred due todelays resulting from system failures, any irresistible force such as natural
disasters, communication failures and other operational and technical issues, ordue to any other issues related to the System.
5. The Sale Holder does not warrant that the System contains no harmful
components such as computer viruses.
6. The Sale Holder will not be responsible for any damages or losses incurred by the
Seller as a result of Paragraph 1 or 4 above.

(Date of Effect)
Article 37

These conditions of sale shall take effect as of January 31, 2023.

<Appendix 1>
Views and number of X-rays required for the Repository
The direction and location of X-rays of the limbs required for the Repository shall be as
follows.
A total of either 28 views (1 - 28 below) or all 36 views (with views 29 -36 added) may besubmitted.
Left Front Fetlock
1. Dorsal - Palmar direction

3rd Metacarpal - 1st Phalangeal joint(in a 10-20° downward angle)
2. Lateral - Medial direction

3rd Metacarpal distal sagittal ridge / Proximal 1st Phalanx

3. Dorsolateral - Palmaromedial direction

Lateral proximal sesamoid / Medial aspect of

Proximal 1st Phalanx
4. Dorsomedial - Palmarolateral direction

Medial proximal sesamoid / Lateral aspect of

Proximal 1st Phalanx
Left Carpal Joint
5. Lateral - Medial direction
6. Dorsolateral - Palmaromedial direction

Radial Carpus / Medial 3rd Carpus / 4th Carpus

7. Dorsomedial - Palmarolateral direction

Intermediate Carpus / Lateral 3rd Carpus / 2nd

CarpusRight Front Fetlock
8. Dorsal - Palmar direction

3rd Metacarpal - 1st Phalangeal joint(in a 10-20° downward angle)
9. Lateral - Medial direction

3rd Metacarpal distal sagittal ridge / Proximal 1st Phalanx

10. Dorsolateral - Palmaromedial direction

Lateral proximal sesamoid / Medial aspect of

Proximal 1st Phalanx
11. Dorsomedial - Palmarolateral direction

Medial proximal sesamoid / Lateral aspect of

Proximal 1st Phalanx
Right Carpal Joint
12. Lateral - Medial direction
13. Dorsolateral - Palmaromedial direction

Radial Carpus / Medial 3rd Carpus / 4th Carpus

14. Dorsomedial - Palmarolateral direction

Intermediate Carpus / Lateral 3rd Carpus / 2nd

CarpusLeft Hind Fetlock
15. Dorsal - Plantar direction

3rd Metatarsal - 1st Phalangeal joint(in a 10-20° downward angle)
16. Lateral - Medial direction

3rd Metatarsal distal sagittal ridge / Proximal 1st Phalanx

17. Dorsolateral - Plantaromedial direction

Lateral proximal sesamoid / Medial aspect of

Proximal 1st Phalanx
18. Dorsomedial - Plantarolateral direction

Medial proximal sesamoid / Lateral aspect of

Proximal 1st Phalanx
Left Hock
19. Lateral - Medial direction

Central tarsal bone - 3rd Tarsal - Talar joint

20. Dorsolateral - Plantaromedial direction

Medial malleolus of tibia

21. Plantarolateral - Dorsomedial direction

Distal intermediate ridge of tibia / trochlear ridge

Right Hind Fetlock
22. Dorsal - Plantar direction

3rd Metatarsal - 1st Phalangeal joint(in a 10-20° downward angle)
23. Lateral - Medial direction

3rd Metatarsal distal sagittal ridge / Proximal 1st Phalanx

24. Dorsolateral - Plantaromedial direction

Lateral proximal sesamoid / Medial aspect of

Proximal 1st Phalanx
25. Dorsomedial - Plantarolateral direction

Medial proximal sesamoid / Lateral aspect of

Proximal 1st Phalanx
Right Hock
26. Lateral - Medial direction

Central tarsal bone - 3rd Tarsal - Talar joint

27. Dorsolateral - Plantaromedial direction

Medial malleolus of tibia

28. Plantarolateral - Dorsomedial direction

Distal intermediate ridge of tibia / Trochlear

ridge
Left Stifle Joint
29. Caudal - Cranial direction

Medial condyle of femur/ Lateral condyle of femur

Intercondylar

tubercle of tibia
30. Lateral - Medial direction
distal femur

PatellaLateral trochlear ridge / Medial trochlear ridge of

Proximal tibia

31. Caudolateral - Craniomedial direction
32. Flexed Lateral - Medial direction

Lateral trochlear ridge of distal femur

PatellaMedial condyle of distal femur / Patella(in a 10-20° upward angle)
Right Stifle Joint
33. Caudal - Cranial direction

Medial condyle of femur/ Lateral condyle of femur

Intercondylar

tubercle of tibia
34. Lateral - Medial direction
distal femur

PatellaLateral trochlear ridge / Medial trochlear ridge of

Proximal tibia

35. Caudolateral - Craniomedial direction
36. Flexed Lateral - Medial direction(in a 10-20° upward angle)

Lateral trochlear ridge of distal femur

Medial condyle of distal femur / Patella

Patella-----------------------------------------------------------------------------------------------------------------------<Appendix 2>2023 Hokkaido Sales Schedule
Sale

Dates

Selection Sale

July 25 - 26

Summer Sale

August 21 - 25

September Sale

September 19 - 21

Autumn Sale

October 16 - 17-----------------------------------------------------------------------------------------------------------------------<Appendix 3>
Hokkaido Sale Bridge Insurance

Details:● Insurance to be purchased by: Hidaka Horse Breeders Association● Party to be insured: the successful bidder of the horse● Party to receive insurance payment: Hidaka Horse Breeders Association(In the event of an accident resulting in an insurance payment, the Sale Holder will firstreceive the insurance payment and forward it to the successful bidder.)● Insured

property: All horses for which purchase transactions are completed in the

Hokkaido Selection Sale, Summer Sale, September Sale and Autumn Sale.
*However, if the insured horse enters a quarantine facility for export out of Japan, theinsurance policy for said horse will become invalid as of the time such event occurs.
● Term of insurance: Starting from the time a successful bid is established for a horseand ending at midnight 10 days from the day following the close of the Sale

● Amount insured: To be equal to the transaction price but with an upper limit of 500

million yen● Insurance policy to cover:1) Death as a result of the following reasons (including cases where a veterinariandesignated by the insurance company determines that euthanasia in an
emergency situation is necessary):① Accidental injury or illness;② Fire and or lightning; and③ Reportable communicable diseases
2) Loss of racing ability in cases where a veterinarian designated by the insurancecompany determines that the horse will not be fit for racing due to the following
reasons:① Fractures (excluding chip fractures but including intra-articular chip fractures),bone dislocations, external injuries, neural paralysis, ruptured tendons or loss ofsight in one or both eyes
② Lameness due to laminitis, bone chips of the joint (excluding Osteo-Chondrosis
Dissecans of the hock joint) or subchondral bone cysts on the joint surface③ Blindness in at least one eye due to any disease of the eye④ Wobbler symptoms accompanied by severe ataxia and to which at least one of
the following conditions apply:
1) Abnormal formation of the cervical vertebra is observed upon radiography or
myelography2) Nerve compressing lesions are suspected* Insurance may not be paid in the following situations:- When the purchase transaction has been rescinded according to Article 24, 25 or 32
Paragraph 1 of these Conditions of Sale
- When the incident or accident is a result of injury or illness which occurred before
the start of the insurance term
- When there is intentional misconduct or gross negligence on the part of the insured
horse’s caretaker- In the event of earthquake and volcanic eruptions, as well as tsunamis resulting
from such occurrences- In the event of war, revolution, armed insurgences or riots- In the event of water-related disasters such as flooding due to typhoons and severe
storms or high tides- When the incident or accident is due to surgery or vaccination● Insurance Company: Sompo Japan Insurance Inc.

------------------------------------------------------------------------------------------------------------------------

<Appendix 4>
Laryngeal Function Grade at Rest
(Reference: Robinson NE 2004, Equine Veterinary Education, 16: 333-336)
I.

Movement of left and right arytenoid cartilages are synchronous and symmetrical at
all times, and complete abduction is achieved and maintained.

II. Movement of the arytenoid cartilages may be asynchronous and the larynx may beasymmetrical at times, but complete abduction of the arytenoid cartilages can beachieved and maintained.
III. Movement of the arytenoid cartilages is asynchronous and the larynx is asymmetrical.
Complete abduction of the arytenoid cartilages cannot be achieved or maintained.
IV. There is no movement of the arytenoid cartilages or the vocal fold.
-----------------------------------------------------------------------------------------------------------------------<Appendix 5>
1. Hidaka Horse Breeders’ Association (HBA)
2. Iburi Breeders’ Association (IBA)
3. Tokachi Breeders’ Association
4. Aomori Prefecture Breeders' Association
5. Tohoku Breeders' Association
6. Chiba Ryoso Agricultural Cooperative Association
7. Kanto Breeders and Pre-trainers Association
8. Kyushu Breeders' Association------------------------------------------------------------------------------------------------------------------------<Appendix 6>
Hokkaido Sales Seller Registration Fees
Sale

Seller Registration Fee

Selection Sale

110,000yen

Summer Sale

33,000yen

September Sale

33,000yen

Autumn Sale

33,000yen(Includes 10% consumption tax)

* For horses offered in the Selection Sale, Summer Sale or September Sale that arereconsigned to the Autumn Sale, the registration fee will be 11,000yen.
* For supplementary registration during the period designated by Sale Holder, fees willbe 1.5 times the amount above.
-----------------------------------------------------------------------------------------------------------------<Appendix 7>
Reporting and Processing of Withdrawals
1. In the event a horse registered to be sold at the Sale must be withdrawn due tounavoidable reasons such as illness or accident, Seller shall immediately submit a
notice to that effect to the Sale Holder along with a supporting veterinary certificate.
For the Selection Sale, the veterinary certificate must be prepared by a veterinarian
approved by the Sale Holder.
2. On the day of the Sale, the Sale Holder shall post within the sale premises the lot
number, name and Seller of withdrawn horses.
3. If necessary, the Sale Holder will conduct an inspection of the horses after the Sale.
In the event of the following:
1. A supporting veterinary certificate is not submitted by the day after the date thehorse was scheduled to be offered; or.
2. The reason for the horse’s withdrawal is not deemed valid;
the below will be applied to Seller for each of the sales:
Sale

Penalty

Hokkaido Selection Sale

Seller will not be allowed to enter horses in the salefor a period of 2 years from the following year.

Hokkaido Summer Sale

Seller will be
300,000yen.

chargedapenaltyfineofHokkaido September Sale

Seller will be
300,000yen.

chargedapenaltyfineofHokkaido Autumn sale

Seller will be
300,000yen.

chargedapenaltyfineof