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VOG Acknowledgement Response – 2012 rev. 6-2012

2012 Euromarket Designs, Inc. Vendor Operations Guide

Vendor Acknowledgement Form By my signature below, I confirm (a) that I am a duly-authorized representative of Vendor (identified below) and have full authority to bind Vendor and to provide the authorizations and consents requested herein on behalf of Vendor; (b) that I have read and understand the 2012 Euromarket Designs, Inc. Vendor Operations Guide and have shared such guide with all necessary personnel within Vendor; and (c) that Vendor hereby agrees, of its own free act and deed, to abide by all of the terms and conditions set forth in the 2012 Euromarket Designs, Inc. Vendor Operations Guide, in regard to all of its dealings with Euromarket Designs, Inc. and/or Meadowbrook L.L.C. (collectively referenced herein as “EDI”) with the following “Exceptions”, knowing and understanding that such Exceptions will not be or become valid or applicable until and unless accepted by an authorized representative of EDI as indicated by such individual’s initials below and on each attached page, if any:

Euromarket Designs, Inc. approval (authorized initials required for Exceptions to apply): _____ (Attach additional pages as necessary, indicating here the # of pages attached: ____).

Product Liability Insurance (initial whichever one applies) _____ We have Product Liability Insurance and have attached the Certificate of Insurance _____ We do not provide Product Liability Insurance Acknowledged and Agreed Vendor Name (referenced herein as “Vendor”):

Vendor Number:

Signed:

Print Name:

Title:

Dated: Please sign and return this Vendor Acknowledgement Form no later than one month after receipt of the document either by email to [email protected], by fax to 847-272-5276, or by overnight mail (signature required) to Euromarket Designs, Inc., Attn: Stephanie Yonkers, 1250 Techny Road, Northbrook, Illinois 60062. It is Vendor’s responsibility to read, understand and abide by each and every term and condition set forth in the Euromarket Designs, Inc. 2012 Vendor Operations Guide; such responsibilities apply even if Euromarket Designs, Inc. does not receive a signed Vendor Acknowledgement Form by the Response Date. If Vendor accepts a purchase order from Euromarket Designs, Inc., ships product to Euromarket Designs, Inc. and/or otherwise does or continues to do business with Euromarket Designs, Inc. in any respect, Vendor will be deemed to be operating under and to have agreed to all of the terms and conditions set forth in the 2012 Euromarket Designs, Inc. Vendor Operations Guide. If Vendor is not in agreement with and/or prepared to abide by all such stated terms and conditions, Vendor should not accept purchase orders from, ship product to or otherwise do or continue to do business with Euromarket Designs, Inc.

6/4/2012

VENDOR OPERATIONS GUIDE

2012

Vendor Operations Guide 2012 Page 1 Summary of Changes

Summary of Changes We’re very excited to publish our new 2012 Vendor Operations Guide. There have been several changes to Federal and State regulations that we have included here. We highlighted the significant changes throughout the document with a gray background, making them easy to identify. We have always aimed to use common sense in taking a pragmatic approach in our Vendor Operations Guide. It is more than just a list of requirements. Everything relates directly to either our warehouse and store operations or is required by law. So, if you have any questions about the content of this guide, please feel free to contact us. Hopefully we will have a practical and straightforward answer for you. Please see a summary of changes below.

Section Updates and Revisions Page Number Code of Conduct • Updated Code of Conduct Policy 11 Regulatory Requirements

• Updated North America Free Trade Agreement (NAFTA)

21

Canadian Requirements

• Printed Materials Language Policy 23-24

C-TPAT • Updated Container Inspection Criteria • Business Partner Requirement • Security Training and Threat Awareness

26-28

Electronic Purchase Order Management System

• Updated Electronic Purchase Order Management System 29

Merchandising Requirements

• Updated Reasonable Testing Program (CPSIA) • Product Transit Testing Criteria • Updated Product Liability Insurance

32-38

Crate and Barrel Brand Labeling

• Updated Textile Care and Fiber Content Labels • Item Label Errors

44-46

Packaging Requirements

• Silica Gel Packs • Updated Hardware Packaging

50-52

Carton Labeling and Packing Lists

• Updated Master Carton Labeling • Inner Pack Carton Labeling

55-59

Shipping Requirements

• Special Project Charges • Container Weight Limits • Updated Foreign Trade Zone (FTZ) • Updated The Land of Nod Address • Updated Shipment Size Guidelines • Bill of Lading Revisions • New Routing Matrix (revised May, 2012)

64-74

Vendor Operations Guide 2012 Page 2 Table of Contents

Table of Contents Section 1 Introduction to Crate and Barrel………………………………………Pages 5-7

• Euromarket Designs, Inc. • What’s Important to Us?

Section 2 Code of Conduct………………………………………………………..Pages 8-12 Section 3 Environmental Policies………………………………………………..Pages 13-14

• Wood • Examples of Restricted Tropical Woods

Section 4 Regulatory Requirements…………………………………………….Pages 15-21

• U.S. Federal Requirements • U.S. State Requirements • Other U.S. Industry Standards • North American Free Trade Agreement (NAFTA)

Section 5 Canadian Requirements………………………………………………Pages 22-24 Section 6 Customs Trade Partnership against Terrorism (C-TPAT)...........Pages 25-28

• Container and Trailer Security – revised 9/2008 • Physical Access Controls • Personnel Security • Procedural Security • Physical Security • Information Technology Security

Section 7 Electronic Purchase Order Management System……..………………Page 29 Section 8 Merchandising Requirements………………………………………..Pages 30-38

• Buying/Selling Agents • Design Protection and Confidentiality • Brand Product Distribution Rights • Product Information Bulletin (PIB) • Production Changes • Product Quality and Transit Testing Program • Furniture and Housewares Packaging Guidelines • Inbound Quality Assurance Program


Merchandising Requirements (continued) • Assembly Instructions • Replacement Hardware • Private Label Packaging • Product Liability Insurance

Section 9 On-Time Shipping Policy……………………………………………..Pages 39-41

• Purchase Order Contract • On-Time Shipping

Section 10 Crate and Barrel Brand Labeling…………………………………….Pages 42-46

• Barcode Label Procurement Process • Barcode Label Placement • Textile Care and Fiber Content Labels • Item Label Errors

Section 11 Packaging Requirements ……………………………………………..Pages 47-54

• Carton Packaging Guidelines • Rug Packaging Guidelines

Section 12 Carton Labeling and Packing Lists………………………………....Pages 55-63

• Master Carton Labeling • Inner Packs • Inner Pack Carton Labeling • Additional Labeling Requirements • Packing List Specifications • Packing List Placement

Section 13 Shipping Requirements……………………………………………….Pages 64-74

• Warehouse Locations List • Pallet Specifications • Container Weight Limits • Foreign Trade Zone (FTZ) • Import Bill of Lading (B/L) Requirements • Domestic Routing Information • UPS Prepaid Instructions (Canada Only) • FedEx Third Party Billing Instructions – The Land of Nod • Freight Terms • Domestic Bill of Lading (B/L) Requirements


Section 14 Inventory Issues………………………………………………………..Pages 75-77

• Quality • Backorders/Canceled Sales • Automatic Deduction Policy for Furniture • Furniture Shop Expense

Section 15 Return to Vendor…………………………………………………………….Page 78 Section 16 Invoicing…………………………………………………………………Pages 79-80

• Domestic Invoice Processing • Import Invoice Processing

Section 17 Conclusion……………………………………………………………………Page 81 Note: This guide is designed to enable you to separate the sections and forward copies to the appropriate associates within your company. Please provide copies of this document to the appropriate contacts. We will be providing updates periodically, so please keep the original intact and available in a central location.

Vendor Operations Guide 2012 Page 5 Introduction

Section 1 Introduction to Crate and Barrel We have developed many rewarding and personal relationships with our vendors over the years. Some of the same vendors who helped put us on the map back in 1962 are still with us today. Some are new faces that have brought us a fresh perspective, and we hope they will continue to do so. For as much as we are a business built on material goods, in the end it is the non-materialistic nature of this business that keeps us wanting to bring better and more interesting products to our customers …and that is feeling at home, wherever we are. Euromarket Designs, Inc. Based in the Chicago suburb of Northbrook, Illinois, Euromarket Designs, Inc. is the corporation that does business under the name of Crate and Barrel. We refer to Euromarket Designs, Inc. throughout this Vendor Operations Guide by that more commonly known name – Crate and Barrel. Such references to “Crate and Barrel” also are intended to include and to be references to CB2 (the other d/b/a of Euromarket Designs, Inc.) and The Land of Nod (a related entity), unless we specifically indicate otherwise. Crate and Barrel Crate and Barrel was founded in 1962 by Gordon and Carole Segal, who had just returned from their honeymoon in Europe where they were amazed by all of the simple, well-designed and affordable things they had purchased for their home back in Chicago. The Segals realized that no store in the midwest had these wonderful designs for people like them who were just starting out. So being young risk takers and passionate about what they had seen, they set out to introduce this exciting idea to Chicago. The first store was in an old elevator factory on Wells Street. All of the start-up funds had gone to inventory, so crating lumber was hammered over plastered walls, shelves were covered with dyed burlap, and crates and barrels from our first shipments were turned over to become our store fixtures. “Crate and Barrel” wasn’t just a clever name; it was a name based on necessity. A lot has happened between then and now. Our merchandise offerings have expanded over the years. We introduced our first furniture assortment over 30 years ago, which has grown steadily to become a successful part of our business. While we still consider ourselves local shopkeepers, Crate and Barrel is now keeping shop at over 110 locations coast-to-coast. Our Home Stores have won architectural awards for their designs; light-filled atriums create an inspiring setting for our popular housewares and furniture collections. All of this growth and expansion has been due in large part to the fact that we’ve remained loyal to our original mission of offering quality design at exceptional prices. But it’s been accelerated by our enthusiastic staff and the meaningful services we have added over the years to enhance our customer’s shopping experience. Our catalogues feature inspiring layouts that showcase our products throughout the seasons. Our website, crateandbarrel.com, launched in 1999, has dramatically increased our housewares and furniture businesses and has been acknowledged by direct marketing leaders as one of the best e-commerce sites for presentation, ease of use and customer service. Our Gift Registry serves over 160,000 registrants annually in our stores and online.


Today, with more than $1.3 billion in annual sales, Crate and Barrel is a multi-channel brand with many new opportunities on the horizon. Since 1998, we have been a part of the Otto Group of Hamburg, Germany. This relationship has enhanced our operations and allowed for new growth. In September 2008, we began our international expansion with the opening of the first Crate and Barrel store in Toronto, Canada. In 2010 we opened 2 stores in Dubai with our first franchise partnership. Among the most important aspects of our success today have been the leadership and unique culture of the company. In May 2008, Barbara Turf, was named CEO and successor to Gordon Segal. A 40-year veteran of the company, Mrs. Turf spent the majority of her career partnering with Mr. Segal in the leadership and strategic direction of the company. Her appointment as CEO ensures the continuity of vision and leadership for Crate and Barrel. CB2 Our expansion isn’t all just the Crate and Barrel brand. CB2 is our destination for the customer seeking modern, trendy furnishings at very affordable prices, and it is growing at an exciting pace under the leadership of Director Marta Calle. With successful Chicago CB2 stores, cb2.com, Gift Registry and catalog business generating an overwhelming positive response, CB2 continues to meet the customer demand for new stores in new key markets. In November 2007, we began this expansion with an eagerly anticipated store in New York’s SoHo area. We continued our growth in 2009 with new stores in San Francisco and Los Angeles, and a new location in Miami opened in January 2010. In October 2011 we opened out 10th CB2 in the upper east side of Manhattan. We’re set to begin our own international expansion into Canada in 2012! The Land of Nod In 2001, responding to our customers with young families, we worked with founders Jamie Cohen and Scott Eirinberg to help launch The Land of Nod, as our children’s furniture company. We are extremely pleased that in addition to its catalog and website, The Land of Nod now has four stores, three in the Chicago area and one in Seattle. What’s Important to Us? We first opened our doors as a family business. Today, our Crate and Barrel family includes over 6,000 associates nationwide, hundreds of vendors, and continues to grow every day. While we are proud of our growth and achievements over the years, we feel it is what we fondly call the “3 P’s” that has kept our vision and products as fresh and invigorating as the day we opened. People Always first and foremost. An involved associate taking the time to educate a customer about the nuances of a hand blown goblet. A dedicated buyer working with a master weaver to rebuild not only a village’s looms, but ultimately an entire community. The personal pleasure of lifelong friendships with many of our vendors and their families. And there is our amazing family of associates, many of whom have been with us 15, 25, 35 years. It’s these day-to-day relationships that energize our mission.


Product Passion is the best word that captures our fascination and obsession with innovative, high-quality design. While many of our customers are familiar with the Crate and Barrel look, what most of them don’t know is that the majority of our designs are created exclusively for us. Our Product Managers travel the world developing new product ideas with skilled craftsmen and artists. And talk about picky; you should see how many prototypes we reject until every curve of a chair, every stem on a goblet, every weave of a rug is just how we want it. Our passion for product is what started Crate and Barrel. And it will always be what moves us forward. Presentation At Crate and Barrel, we present our products to help our customers’ eye focus on shape, form, color, and function. Our Housewares and Furniture Collections are creatively arranged in a crisp, clean, architectural setting designed to make our customers feel at home. We pace our customers’ experience in our stores with a surprise at every turn. An unexpected take on things that will catch their eye, a spontaneous setting that will invite you to touch, a thoughtful pairing of objects that will make you think… what if?

Vendor Operations Guide 2012 Page 8 Code of Conduct Policy

Section 2 Code of Conduct In today’s international marketplace, we have become increasingly aware of our need to ensure that Crate and Barrel, its agents, and its vendors treat all employees with the highest level of respect and regard for their rights. Accordingly, we have instituted a Code of Conduct for our suppliers, agents and ourselves. This Code of Conduct for your review follows in the next few pages. We ask that you please read through it carefully. Attached with the Crate and Barrel Vendor Operations Guide is an acknowledgement page indicating that you have read the Code of Conduct and are willing to abide by its contents. It is of the utmost importance that we work together at all times to protect the human rights of all people who are affiliated with Crate and Barrel. In addition, on the domestic front, it is our expectation that all of our suppliers abide by the established employment recommendations of the U.S. Labor Department. Our Code of Conduct policy is based on the SA8000 global social accountability standard developed and overseen by Social Accountability International (SAI). For additional information regarding SA8000, please visit http://www.sa-intl.org/ As a supplier, you are critically important to the success of Crate and Barrel in bringing new and innovative products to our customers. Your willingness to join us in prioritizing this important issue is most appreciated. If you have any issues regarding adhering to this policy, your Crate and Barrel Product Manager or Agent is always available to discuss your concerns. We thank you in advance for your cooperation.


Code of Conduct Policy Crate and Barrel believes in social responsibility, environmental protection and fair cooperation as the guiding tenets of all that we do. Our objective is to reconcile our economic, ecological and social responsibilities. This Code of Conduct sets forth the fundamental requirements that Crate and Barrel imposes on its suppliers. These firm principles are consistent with the Business Social Compliance Initiative (BSCI), the conventions of the International Labor Organization (hereinafter referred to as “ILO”), the United Nations Universal Declaration of Human Rights, the U.N. Conventions on the Rights of the Child and for the Elimination of All Forms of Discrimination Against Women, the principles of the U.N. Global Compact as well as the OECD Guidelines for Multinational Enterprises. The principles set forth in this Code of Conduct are not to be regarded as maximum requirements. Instead, they are to be exceeded whenever possible. 1. Scope of application This Code of Conduct forms the basis of all business relationships in reference to all national and international production processes and sites with regard to the final processing level (hereinafter “Production Sites”) for the commodities and non-commodities purchased by Crate and Barrel. It applies around the world to Crate and Barrel itself, its direct business partners and any other suppliers working on their behalf in relation to the production of goods for Crate and Barrel (hereinafter collectively “Business Partners”). The Business Partners guarantee, and shall be responsible for procuring, acceptance of and compliance with the principles set forth in this Code of Conduct. 2. Legal compliance At the various Production Sites, the strictest of all applicable national and international laws and regulations, industrial norms, ILO and U.N. conventions as well as all other relevant provisions (hereinafter collectively “Regulations”) shall be observed. Compliance with this Code of Conduct as well as with the above Regulations must not be circumvented by manipulating the terms of employment or taking comparable actions (e.g., false training programs). 3. Child labor / young employees Crate and Barrel does not tolerate child labor or any other form of the exploitation of young employees. The minimum age for employment must be above the age of 15 or the age at which compulsory education ends. Subject to the exemptions granted under ILO, national regulations designed to protect children and employed youths must be observed. Compliance with the ban on child labor and the limitations imposed on the employment of young employees must be ensured. In particular, youths must not be exposed to dangerous, unsafe or hazardous conditions. In the event of violations against this ban, the Business Partner shall promptly take, and document, remedial action on behalf of any endangered children and/or other young employees. In addition, the Business Partner shall take such actions and implement such processes as may be necessary to see to the rehabilitation and social integration of any endangered children and must further enable them to finish school in accordance with domestic regulations. ILO Conventions 79, 138, 142, 182 as well as ILO Recommendation 146 apply. 4. Discrimination Any form of discrimination in hiring and employment practices, including any distinction, exclusion or preference based on race, caste, skin color, gender, age, religious belief, political opinion, membership in workers’ organizations, physical or mental disability, ethnic, national or social background, nationality, sexual orientation or other personal characteristic, is prohibited. This is the case irrespective of whether such distinction, exclusion or preference originated with the Business Partner. ILO Conventions 100, 111, 143, 158 and 159 apply.


5. Freedom of association and collective bargaining Employees must be protected against any variation in treatment that is related to their employment and aimed against their freedom of association. Their rights to form join or leave and work for associations or other organizations dedicated to promoting and protecting employee interests at their own discretion must be respected, and the pursuit of such activities must not be impeded. If the freedom of association or collective bargaining is restricted by law, employees must at least be permitted and enabled, by way of an alternative, freely and independently to associate for bargaining purposes. ILO Conventions 87, 98, 135 and 154 as well as ILO Recommendation 143 apply. 6. Forced or compulsory labor Crate and Barrel tolerates no form of forced or compulsory labor, bondage, servitude, slavery or conditions similar thereto. It also disapproves of prison labor. Employees must not be compelled to work by way of violence or intimidation, be it directly or indirectly. Instead, all employees must have sought work and/or employment on their own free will. ILO Conventions 29 and 105 apply. 7. Disciplinary measures Employees must be treated with dignity and respect. Sanctions, fines and other penalties or disciplinary measures must (i) conform with applicable national and international regulations and (ii) be imposed in accordance with internationally recognized human rights. No employee must be exposed to verbal, psychological, physical, sexual and/or physical abuse, coercion or harassment. 8. Working hours Working hours must comply with the applicable law, industry standards or relevant ILO conventions, whichever standard is more stringent. The maximum number of weekly hours permitted by national law must not be exceeded. On a regular basis, however, an employee’s weekly hours are limited to 48 hours and to 60 hours with overtime. Individual business and employment models are subject to pertinent national and international regulations, including but not limited to the exemptions granted under ILO. The same is true in the event of serious disruptions to the regular course of business. Following six consecutive days of work, employees must be permitted at least one day of rest. Employees cannot be compelled to work overtime, and any overtime worked must be compensated separately in accordance with national regulations. ILO Conventions 1 and 14 apply. 9. Documentation of employment relationship The Business Partners guarantee that their employees’ terms of employment (e.g., commencement and duration of employment, hours, wages and incentives) in relation to relevant production stages are documented in writing, including but not limited to employee name, date of birth and, whenever possible, residential address. Direct business partners further guarantee such written documentation for any of their other suppliers. Domestic labor and social insurance regulations must not be circumvented. 10. Compensation The Business Partners guarantee that the wages paid to employees equal or exceed the minimum wage prescribed by law or applicable industry-specific custom, whichever is higher. The wage paid shall be sufficient to cover an employee’s basic needs. Illegal and unjustified wage deductions, including but not limited to those affected by way of direct or indirect disciplinary measures, are prohibited. Wages must be disbursed in a manner that is convenient for employees (e.g., in cash or by check), and employees must be informed of the composition of their wages in a comprehensive manner, in regular intervals and in sufficient detail. ILO Conventions 26 und 131 apply.


11. Health & safety The Business Partners shall provide a safe and healthy working environment. They shall adopt the measures needed to prevent such accidents and health hazards as may arise in connection with work. For this purpose, Business Partners put into place systems capable of detecting, avoiding and responding to potential health and safety hazards. In addition, they guarantee, and shall document, that employees are periodically updated and trained on applicable health and safety regulations as well as any precautions taken. Clean toilets and access to drinking water must be provided in sufficient quantity. Insofar as dormitories are available, they must be kept clean and safe and cover basic needs. ILO Convention 155 applies. 12. Environmental protection The protection of nature and the environment is an integral component of Crate and Barrel’s business practice. The Business Partners must comply with all applicable environmental regulations. They are further expected to undertake an ongoing effort to prevent and reduce contaminations. Processes and standards prescribed for waste management, for the handling and disposal of chemicals and other hazardous substances as well as for emissions and wastewater treatment must be observed, with special emphasis placed on the protection and preservation of natural resources as well as on the promotion of environmentally friendly and socially responsible production processes. 13. Information and communication This Code of Conduct must be prominently displayed in the appropriate language and freely accessible to all of the Business Partners’ employees. To individuals who cannot read, the Code of Conduct must be explained verbally. 14. Bribery and corruption Crate and Barrel does not tolerate any form of bribery or corruption, and all Business Partners as well as their employees must conduct themselves in such a way so as to steer clear of personal dependency, obligation or interference. Specifically, all Business Partners, their employees, agents, and anyone acting on their behalf, shall not offer, give, or promise, either directly or indirectly, to any officer or employee of a foreign government or any department, agency or instrumentality thereof, or to any person acting (or having the capacity to act) in an official capacity for or on behalf of any government or department, agency, or instrumentality thereof, any money or thing of value for the purposes (or having the effect) of influencing any act or decision, inducing such official to do or omit any act, securing any improper advantage, or inducing such official to use his/her or its influence with a foreign government or any department, agency or instrumentality thereof. Nor shall any Business Partner (or any of its employees, agents or anyone acting on its/their behalf) engage in any conduct which does or which may violate the U.S. Foreign Corrupt Practices Act (15 U.S.C. § 78dd-1 et. seq.) or the United Nations Convention against Corruption, or any other applicable laws, conventions, treaties, and multilateral instruments created to prevent and combat corruption. All Business Partners, as well as their employees, agents and others acting on its/their behalf, are expected to exhibit a professional manner informed by fairness and full compliance with applicable national and international regulations, conventions, treaties, and laws.

In addition, to bolster and ensure compliance with this provision, all Business Partners shall introduce anti-bribery and anti-corruption policies to be observed by all business divisions. Where gifts are presented in adherence with an applicable country’s individual customs or etiquette, care must be taken to ensure that (i) such gifts do not give rise to obligatory dependencies and (ii) applicable domestic regulations are observed. Information on any violations of this provision or any practices that are or could be perceived or deemed to be corrupt must be reported to Crate and Barrel immediately and in writing as noted in item 18.


15. Management systems In order to implement, ensure compliance with and monitor the principles set forth in this Code of Conduct, the Business Partners shall introduce a management system, which must include clear responsibilities and processes as well as adequate documentation. Documenting, implementing, enforcing and improving the principles set forth in this Code of Conduct require ongoing monitoring, which shall be documented. Direct business partners shall ensure that any other suppliers working on their behalf, too, observe the principles set forth in this Code of Conduct. 16. Monitoring Code of Conduct Crate and Barrel is responsible for enforcing the principles of this Code of Conduct. For this purpose, the Business Partners are obligated to have the Production Sites undergo social audits at the request of Crate and Barrel. Direct business partners guarantee that, whenever the need arises, Crate and Barrel itself or any third party authorized by Crate and Barrel may conduct a review of Business Partners’ compliance with the principles set forth in this Code of Conduct at the direct business partner or other suppliers working on its behalf. For this purpose, the direct business partner undertakes to name the Production Sites accordingly. 17. Sanctions and remedial actions Crate and Barrel is entitled to monitor compliance with the principles set forth in this Code of Conduct. Insofar as instances of non-compliance are unearthed, Business Partners are obligated immediately to take remedial action, with Crate and Barrel providing support and allowing sufficient time for such actions. Crate and Barrel’s right to terminate the business relationship with Business Partners is not compromised thereby, regardless of whether a direct business partner or other suppliers working on its behalf violated the principles set forth in this Code of Conduct. 18. Procedure for complaints Complaints or information about violations of this Code of Conduct may be reported to Crate and Barrel (see below for contacts) at any time - and even anonymously. Individuals filing a complaint are asked only to report information they believe to be true. All Business Partners guarantee that individuals filing complaints will not be subject to reprisals or disciplinary action of any kind. General contact: John Ling Executive Vice President of Global Operations and Supply Chain Management 1250 Techny Road Northbrook, Il 60062 [email protected] 847-239-6633 Contact for cases of bribery and corruption: Vicki Donati General Legal Counsel 1250 Techny Road Northbrook, IL 60062 [email protected] 847-239-6668

Vendor Operations Guide 2012 Page 13 Environmental Policies

Section 3 Environmental Policies Crate and Barrel strives to implement business practices that will achieve our goals while being sensitive to the environmental impact. We appreciate that many of our vendors and suppliers share this awareness and have already prioritized environmental issues. Please review our policies carefully as the requirements apply to any companies importing product into the United States on behalf of Crate and Barrel. Wood As part of Crate and Barrel’s ongoing commitment to Corporate Social Responsibility, we have implemented policies designed to help conserve, protect and restore forests. In addition, all import suppliers of wood and plant based product (furniture, baskets, etc.) must follow new legal requirements under the Lacey Act. The Lacey Act requires that a “Plant Declaration Form” be submitted to U.S. Customs prior to exporting the merchandise. Additional information regarding The Lacey Act can be found in Section 4 of this guide. Other requirements concerning sustainable forestry and tropical woods are provided below and impact all wood products sold to Crate and Barrel. 1. We will give preference, where price and availability allow, to wood and paper products that are

recycled or originate in forests that have been independently certified as well managed. 2. Suppliers must agree not to sell us items produced from wood or pulp product that comes from old

growth or ancient rain forest unless such products are sourced from forests certified by the Forest Stewardship Council (FSC) or a similar third party certification organization.

3. Suppliers are responsible for furnishing all documents required to establish the legality of the wood’s origins, and must comply with the documentation regulations of the purchasing countries.

4. Chain-of-Custody documentation is required to verify the origin of the wood throughout the entire manufacturing and distribution process.

5. Vendors must declare the correct names (scientific) of the delivered wood on all commercial documents and follow the guidelines established through the U.S. Lacey Act.

6. We reserve the right to conduct independent audits of suppliers from time to time to determine if they are in compliance with the policy.

Our Product Managers are actively involved in implementing our wood purchasing policies and continue to introduce product that is sourced from reclaimed wood or environmentally responsible woods. Some of our current activities regarding our wood purchasing policy include: Forest Stewardship Council (FSC) The Forest Stewardship Council (FSC) is an international non-profit organization that promotes environmental and socially responsible forest management. Our Product Managers actively seek the use of FSC certified woods where possible when developing products. Additional information regarding the FSC can be found at www.fsc.org.

Vendor Operations Guide 2012 Page 14 Environmental Policies

TFT The TFT is a non-profit trade association that assists companies trading in tropical hardwood furniture to secure reliable supplies of certified wood. We are proud to say that Crate and Barrel was the first American retailer to become a buying member of the TFT, effective February 8, 2005. TFT is striving to expand the area of natural forest that is independently certified under the FSC, to ensure that forest management is socially beneficial, environmentally appropriate and economically viable. Additional information regarding the TFT can be found at: http://tft-forests.org/ Examples of Restricted Tropical Woods* The woods listed below may only be used if FSC certified or certified from a similar third party certification organization. Common Name Scientific Name Region(s) of Origin Aniegre Aningeria adolfu-friederici West Africa Balsa Ochroma lagopus; Bombacaceae South America, Ceylon, Java Bubinga Guibourtia tessmannii West Africa Ebony Several species of the genus

Diospyros Africa, Asia

Iroko Chlorophora excelsa; Moraceae West Africa Mahogany, African Several species of the genus

Khaya West Africa

Mahogany, Genuine or Honduras

Swietenia macrophylla Central and South America

Mahogany, Philippine (also sold as Lauan or Meranti)

More than 200 species of the genus Shorea and several species of the genus Parashorea from the Dipterocarpaceae family

South East Asia

Rosewood Dalbergia spp., Machaerium spp.; Leguminosae

Central, South America, Asia, Madagascar

Sapele Entandrophragma cylindricum Indonesia, Borneo, Malaysia, Philippines

Teak Tectona grandis; Verbenaceae East and West Africa, West Indies, Philippines

Vendor Operations Guide 2012 Page 15 Regulatory Requirements

Section 4 Regulatory Requirements At Crate and Barrel, our customers are truly important to us and we strive to ensure that the products we sell are safe. One way that we do this is to comply with all U.S. and Canadian legal requirements. Not only is it the law, it is the right thing to do. There are many regulations regarding product safety, performance and composition, and these regulations vary based on product type. It is our expectation that our vendors are aware of and are responsible for complying with all U.S. and Canadian legal requirements for their products for each shipment sent to Crate and Barrel, The Land of Nod, or CB2. We require proof of compliance from a recognized independent testing laboratory prior to shipment of goods. Below is a short list of U.S and Canadian legal requirements for some product categories that we offer. As new legislation is always in development, we will do our best to communicate any new industry standards. Ultimately the vendor should continue to work with the independent testing labs and other industry organizations to maintain awareness of any of these requirements. U.S. Federal Requirements All of the Federal information can be found in the Code of Federal Regulations (CFR). Below is a summary of some regulations and the governmental agencies responsible for their enforcement. Consumer Product Safety Act - 16 CFR 1303 Enacted in 1972, the Consumer Products Safety Act established the Consumer Products Safety Commission (CPSC) providing them with the authority to develop standards to reduce or eliminate risks associated with consumer products. The CPSC has the authority to recall any consumer product that may harm consumers. This act also regulates that lead content in paint and other surface coatings used on furniture and toys not exceed levels higher than 90 ppm when tested. Additional information can be found at: www.cpsc.gov. Consumer Products Safety Improvement Act of 2008 On August 14, 2008 the Consumer Products Safety Improvement Act (CPSIA) was signed into law. The act is the most far reaching consumer product safety law since the creation of the CPSC in 1972. All domestic manufacturers, importers, and private labelers of consumer products must issue a general conformity certificate (GCC) if the product is subject to any rule or regulation enforced by the CPSC (the importer of record is responsible for creating the GCC). A GCC and a supporting product test report are required to certify that the products comply with applicable standards. For children’s product, that test must be conducted by an approved third-party laboratory. Tracking labels for children’s products are also required. Additional information can be found at: Information on the Consumer Product Safety Improvement Act (CPSIA) as well as in the Merchandising section of this document.


Food & Drug Administration (FDA) Enforces laws related to the importation of food, drugs, medical equipment, certain electronic devices and laser devices. The FDA requires that any product with a glazed ceramic surface used to serve, store, or prepare food must be tested for and comply with lead & cadmium levels. Additional information can be found at: www.fda.gov. Bioterrorism Act of 2002 Enforced by the FDA and the Department of Homeland Security, this act is designed to prevent, protect, and provide the U.S. government with the ability to respond to any bioterrorism threats. Vendors who supply food or food packaging must register with the FDA, provide prior notice for any import shipments, and retain shipment records. Additional information can be found at: www.fda.gov. Country of Origin Labeling Regulations – 19 CRF 134.11 Originally established as part of the Tariff Act of 1930, this regulation requires that every article of foreign origin imported in the United States be marked in English in a way that the ultimate consumer can determine the article’s country of origin. The following Country of Origin labeling requirements apply to any company that is importing product into the United States or Canada on behalf of Crate and Barrel. For those products that do not require a SKU bar code label, the vendor is responsible for labeling the item with the country of origin in order to clear U.S. customs. Country of origin labeling (conspicuous placement of legible, indelible, and permanent marking) must be present on all imported product. This information must match the commercial invoice statement of the product’s country of origin. Various types of labels or back stamps are acceptable to U.S. Customs. For large furniture items, it is preferable to stamp the country of origin into the product in a location that does not detract from the visual appeal and use of the item.

For those items that do require a SKU bar code label, the vendor is responsible for providing the correct country of origin information to Crate and Barrel. This information is entered into our systems, and used to transmit our SKU bar code label information, which includes country of origin information. If the vendor provides incorrect information, the vendor will be charged for any label reprinting fees and additional label shipping expenses. Federal Hazardous Substances Act – 16 CFR 1500.48-53 Enforced by the Consumer Products Safety Commission, this act intends to protect children from risk or injury caused by consumer products. This act addresses choking hazards, sharp points, sharp edges, and the testing of toys and other articles that may be used by children. Federal Trade Commission (FTC) The FTC enforces laws and regulations designed to protect consumers from false and misleading trade practices, such as improper product labeling. The FTC requires country of origin, fabric content and care instructions on all textiles under the Textile Fiber Products Identification Act and the Wool Products Labeling Act. Additional information can be found at: www.ftc.gov


Fair Packaging and Labeling Act – 16 CFR 500 This act requires that all "consumer commodities" be labeled to disclose net contents, identity of commodity, and name and place of business of the product's manufacturer, packer, or distributor. Additional information can be found at: www.ftc.gov. Department of Agriculture (USDA) The USDA enforces laws governing the importation of food, plant, and animal products. Inspection of wood pallets and packing materials falls under this agency’s jurisdiction. Additional information can be found at: www.aphis.usda.gov or www.usda.gov. Imported Wood Packaging Materials - 7 CFR 319.40 Effective September 16, 2005, all regulated wood packaging material shall be appropriately treated and marked in the country of export under an official program developed and overseen by the National Plant Protection Organization (NPPO). Additional information can be found at www.aphis.usda.gov. Standard for Surface Flammability for Carpets and Rugs – 16 CFR 1630 / 1631 These standards provide a test method to determine the surface flammability of carpets and rugs when exposed to a small source of ignition. For small rugs (either dimension is less than 6 feet and the area not greater than 24 square feet) that do not meet these flammability standards, the items must be permanently labeled with the following statement: “Flammable: Should not be used near open sources of ignition.” Larger rugs (one dimension greater than 6 feet and the area is greater than 24 square feet) must meet these flammability requirements to sell in the U.S. Standard for the Flammability of Clothing Textiles – 16 CFR 1610 This standard provides methods for testing the flammability of clothing and textiles intended to be used for clothing. Items such as aprons and other articles that can be worn by the consumer must meet these flammability standards. The Lacey Act With the enactment of the 2008 Farm Bill (Food, Conservation, and Energy Act of 2008), the Lacey Act was amended for the purpose of combating illegal logging and expanding the Lacey Act’s anti-trafficking protections to a broader set of plants and plant products. An import declaration for plants and plant products must be filed upon importation that contains the genus, species, country of harvest, and quantity of the plant used. Additional information regarding The Lacey Act may be found at: http://www.aphis.usda.gov/plant_health/lacey_act/index.shtml Import Security Filing (commonly referred to as “10+2”) All importers in the United States are required to electronically submit to U.S. Customs and Border Protection (CBP), an Importer Security Filing (ISF) no later than 24 hours before the container is laden on board the first foreign port of departure. Importers are responsible for the 10 data elements; the carrier is responsible for the 2 additional data elements. Importers can be subject to a $5000 penalty for every ISF that is filed late, incompletely or inaccurately. Additional information may be found at: http://www.cbp.gov, or contact our import department.


U.S. State Requirements Below are some state requirements that apply to consumer goods. Additional information regarding these requirements can be obtained from local state governments. Uniform Bedding and Upholstery Labels and Registration Requirements – U.S. and Canada Certain U.S. states and Canadian provinces have labeling and registration requirements for bedding and upholstery items that contain stuffing. These items include mattresses, seat cushions, quilts, pillows, floor cushions, upholstered furniture, and other housewares articles. The purpose of these labeling requirements is to inform the consumer of the contents of the stuffing material. In US states that require registration, a uniform registry number is obtained that is printed on law labels that are attached to the product. Separate Canadian registration and law labels are also required for these products. Vendors are responsible for the sourcing of these law labels and registering in the appropriate states and provinces. To follow is an example of both a US and a Canadian law label. Additional information regarding law labels and registration requirements can be found at www.abflo.info and www.tssa.org. For additional information regarding Canadian regulations see section 5 of this guide.


California Technical Bulletins 116, 117 TB116 is a cigarette test for full scale pieces of upholstered furniture which are manufactured for residential use and is a voluntary standard used in conjunction with California Technical Bulletin 117. TB117 is a mandatory standard that is both an open flame test and a smoldering cigarette test for the component materials used to make residential upholstered furniture. All upholstered furniture components except frames must comply with this test procedure and criteria. Crate and Barrel requires compliance with both TB116 and TB117. Additional information on the requirements can be found at: www.dca.ca.gov/bhfti. California Technical Bulletin 603 These standards specify testing to measure the resistance of mattresses to open flame sources and cigarettes. In addition to testing, the bulletin addresses labeling requirements for mattresses. Additional information can be found at www.dca.ca.gov/bhfti. California Proposition 65 (Safe Drinking Water and Toxic Enforcement Act) Proposition 65 requires retailers to provide a clear and reasonable warning to the consumer if there is the presence of a chemical known to California to cause cancer or reproductive harm. Additional items may be added to this list and it is the vendor’s responsibility to be aware of items covered by Proposition 65. Additional information on these requirements can be found at: www.oehha.org/prop65.html. California Air Resources Board (CARB) In April, 2008, the California Air Resources Board passed a law that aims to reduce the amount of formaldehyde emissions from composite wood material (MDF, Particle Board, and Hardwood Plywood). When complete, these formaldehyde standards will be the most stringent in the world. The law requires that lumber mills producing composite wood materials undergo a third party certification process to ensure compliance with these formaldehyde limits. In order for the general public to quickly and easily determine that the goods they are purchasing comply with the law, all composite wood materials as well as finished goods are required to be labeled as compliant. If your product is required to be CARB compliant (made with MDF, Particle Board, or Hardwood plywood), the label should be placed on the back or bottom of the product, on the outside of the carton, and on the invoice, and include the following information:

More information regarding this law and labeling requirements can be found at: http://www.arb.ca.gov/toxics/compwood/compwood.htm


California Title 20 (Bulb-In-a-Box) On January 1, 2010 California Title 20 requirements for portable lighting went into effect. This law is part of a state mandate issued by the California Energy Commission to reduce average state-wide energy consumption no less than 50% from 2007 levels for indoor residential lighting. Nicknamed “bulb-in-a-box,” the first provision in selling portable lamps in the state of California requires that manufacturers include a compact fluorescent lamp (CFL) in the product packaging so that a standard screw-based socket can continue to be used in the lamp, but the lamp would be considered energy efficient. There are several other options for complying with this law. More information regarding this law can be found at: http://www.energy.ca.gov/appliances California Tableware Safety Program This program requires the importer or manufacturer of any ceramic tableware item containing lead or cadmium to mark the items with either the name of the importer or the manufacturer. Stuffed Toy Licensing and Labeling Pennsylvania, Ohio, and Massachusetts require the licensing/registering of stuffed toy manufacturers and the labeling of stuffed toys. More information regarding registration and labeling, can be found at: http://www.cpsc.gov/businfo/stufftoysstate.pdf Illinois Lead Poisoning Prevention Act As of January 1, 2010, Illinois law requires lead warning labels for children’s jewelry, child care articles, and toys containing paint that contain more than 40 parts per million (ppm) lead content which significantly lowers the federal lead content limit of 300 ppm. More information regarding this act can be found at: http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=095-1019 Washington State – Ban on Products Containing PBDEs Bans the use of PBDE (a flame-retardant material used in stuffed articles) in mattresses manufactured or sold after January 1, 2008, and in residential upholstered furniture manufactured or sold after January 1, 2011. More information regarding this act can be found at: www.ecy.wa.gov. Other U.S. Industry Standards Electrical Testing Any item that has electrical components must be tested for safety and approved by a Nationally Recognized Testing Laboratory (NRTL). The most commonly accepted testing standard is Underwriters Laboratories (UL). Both the assembled item and its individual components must be listed and approved by a NRTL. Additional information regarding Underwriters Laboratories can be found at: www.ul.com. Candle Testing Candle test standards are written by the American Society for Testing and Materials (ASTM). The ASTM is an international organization that develops and publishes technical standards for a wide range of products and materials. The candle testing standards utilized by Crate and Barrel closely mirror the ASTM – 2417-04 test procedure. Although the testing standards are voluntary at this time, we require our vendors who provide candles and candleholders to comply with these testing requirements. Candle performance falls under the jurisdiction of the Consumer Product Safety


Commission (CPSC) and the CPSC initiates many candle recalls. Additional information can be found at www.astm.org. North American Free Trade Agreement (NAFTA) NAFTA was implemented in 1994 and was designed to remove tariff barriers between the U.S., Canada, and Mexico. NAFTA only applies to goods produced in one of those countries. In order to facilitate our expansion into the Canadian market, we require vendors who produce eligible goods to confirm specific information to allow us to complete a NAFTA certificate for their SKU’s. The confirmation is required annually for each SKU. Our Import/Export Department will work with you to provide instructions, answer questions, and provide forms about NAFTA-eligibility. We need to have your response of confirmation by the deadlines we set when we solicit the information. We are dedicated to handling our Canadian products in a compliant manner and all information received on the NAFTA certificates should be accurate and verifiable. There will be no costs associated with providing the certificate; however, any costs associated with information later found to be inaccurate may be the responsibility of our vendors.

Vendor Operations Guide 2012 Page 22 Canadian Requirements

Section 5 Canadian Requirements Baseball is said to be the great American pastime, but without our Canadian friends who invented the first baseball glove, where would we be? We share our Great Lakes as well as 8,890 kilometers of boundary land, and if you wanted to travel across the longest highway in the world, where do you think you’d go? Well, in fall 2008, Crate and Barrel ventured into Canada as our first international expansion. We’re happy to report that our neighbors to the north love us, and will continue to expand within this great market. While some of the Canadian regulatory requirements are harmonized with the U.S., many are unique. Health Canada is the Federal department responsible for consumer product safety in Canada. Below is a summary of some regulations that apply to consumer products. Health Canada will be your best resource for any questions you may have about the Canadian regulations listed below and can be found at www.hc-sc.gc.ca. Consumer Packaging and Labeling Act Requires that all consumer commodities that are presented to the customer through display packaging contain the following: • product identity • net contents • complete address of the manufacturer, packer or distributor Textile Labeling Act Requires that all textile items are labeled according to the guidelines for the following: • fabric identity • country of origin • complete address of the importer Food and Drug Act Regulates the required labeling for food which includes: • ingredients and nutrition labeling • expiration dates • nutrition and diet related claims Cosmetic Regulations This defines the requirements for the manufacturing, labeling, distribution and sale of cosmetics. Prior to importing cosmetics into Canada, the manufacturer must submit a “Cosmetics Notification Form” to Health Canada. Soap and hand lotion are examples of Crate and Barrel products that would fall into this category.


Bedding and Upholstery Labeling and Registration Requirements These are provincial requirements for Manitoba, Ontario and Quebec that address cleanliness, registration and labeling requirements for stuffed articles. Upholstery and stuffed goods sold in these Provinces must contain the appropriate law label in the correct format. These are not harmonized with the U.S. requirements, so stuffed articles that are subject to these requirements will need to contain two law labels (one for the U.S., the other for Canada). We highly recommend that you have your Canadian law label approved through the Technical Standards & Safety Authority in order to ensure that the labels are in compliance with the Canadian Upholstery and Stuffed Articles regulation. There is a $75.00 fee associated with this service. Information regarding the Canadian registration process, registration fees, and law labels can be found at http://www.tssa.org. Electrical Safety – Canadian Standards Association All electric components must be certified according to Canadian Standards Association requirements. These regulations are governed at the provincial level. Glazed Ceramics and Glassware Standards regarding extractable lead and cadmium are harmonized with the U.S. For decorative items not used for food, appropriate bilingual labeling is required. Lead Content in Painted Surfaces Lead content in paint and other surface coatings used for furniture and toys are harmonized with the U.S. requirements and should not exceed 90ppm (parts per million) when tested. Mercury limits for toys are an additional requirement in Canada and all applicable products must meet these standards. Surface coating does not apply to materials that become absorbed into the surface and become part of the substrate, such as some wood stains and sealers. Flammability Requirements for Textile Products Certain textiles have specific flammability requirements in Canada. These textiles include: • bed linens • mattresses • apparel including kitchen mitts and aprons • carpet and bathmats Many of these flammability requirements are not harmonized with the U.S., and all of the products we purchase must meet these standards. Printed Materials Language Policy In order to support our international expansion and to address the growing population of Spanish speakers in the US market, Crate and Barrel is transitioning to a multi-language company (English, French, and International Spanish). This transition impacts our Crate and Barrel and CB2 brands. The Land of Nod will not require language translation at this time. All product print material such as care, characteristics, warning materials, labels, safety information, and marketing materials which are included with the product should be translated into International French and International Spanish. Guidelines are listed below. Crate and Barrel Supplied Print Material In many cases, Crate and Barrel provides print ready artwork that our vendor’s include with their product. Crate and Barrel will provide this print material in all three languages at no additional


charge to the vendor. No further action is required of these suppliers. Examples of Crate and Barrel supplied print material include: • Private label packaging (anything we sell that has the Crate and Barrel logo such as hangtags,

insert cards, etc.) • Sewn-in care labels used for textiles, rugs, etc. • Back stamp art used for ceramic items • Warning labels for candles • Crate and Barrel or CB2 branded assembly instructions for ready to assemble furniture sourced

through Diagram Designs Vendor Supplied Print Material Vendors may also include print material with their product. Examples include assembly instructions (Dept. 50/fully assembled furniture assembly instructions do not require any changes until further notice), safety and warning information, etc. Effective for all new purchase orders, any print material provided by the vendor should follow the guidelines listed below. • French and Spanish must be equivalent in size to English. • Pamphlets, warning labels, care instructions, safety warnings, product information and

registrations cards must all include English, French and Spanish. • Outer shipping cartons do not need to be translated and may be in English only. In order to provide an accurate and consistent translation, we require that you work with our Language Service Provider, Lionbridge Technologies for all translation materials. The translation cost is the responsibility of the vendor. The average translation cost is a minimum charge of $150.00, or $0.15 per word, whichever is greater, per submittal. By using the Lionbridge Freeway Web Portal, you can upload text files and receive the translated copies usually within a matter of days. To set up a Lionbridge account, please contact [email protected] and allow 3-5 business days for approval. Crate and Barrel is excited about the possibilities for expanding our brands to an international market where English is not the primary language. As you develop product, consider that any customer facing print material will require translation into English, French, and International Spanish. Should you have any questions or require clarification please contact the merchandising team you are working with or send an e-mail to [email protected] for assistance.

Vendor Operations Guide 2012 Page 25 C-TPAT

Section 6 Customs Trade Partnership Against Terrorism (C-TPAT) Through the cooperation and participation of our vendors we are proud to say that Crate and Barrel became one of the first 100 importers to apply to the C-TPAT program. C-TPAT is a voluntary, government-business program that aims to build cooperative relationships between importers and suppliers in regards to U.S. border security. Crate and Barrel received our C-TPAT certification on November 1, 2002, and we continue to work with our vendors to ensure that pertinent security measures are in place throughout the supply chain. We are currently working toward the highest tier of C-TPAT, and you will be required to participate in this important initiative. Effective March 25, 2005, C-TPAT adopted a set of Minimum Security Criteria. These criteria define a baseline of security measures that apply to existing and potential C-TPAT members. Crate and Barrel and their business partners are required to have security processes and procedures consistent with the requirements listed below. It is our expectation that our vendors are actively working toward meeting all of these requirements if they have not already done so. In addition, many countries have or are developing their own C-TPAT type programs that allow exporters to be certified as businesses with secure operations and procedures. In the future, we expect to receive further benefits under C-TPAT if we work with vendors who are members of these foreign programs, so we encourage you to participate in your country-specific program. Additional information can be found at www.cbp.gov. Container and Trailer Security These measures aim to protect against the introduction of unauthorized materials and/or persons into shipping containers. At the point of stuffing, procedures must be in place to properly store, inspect and seal a container or trailer. Container Storage Containers must be stored in a secure area to prevent unauthorized access and/or manipulation. Procedures must be in place for reporting unauthorized entry into containers or storage areas. Container Seals The following procedures must be followed to ensure secure controls on container seals:

• All seals must meet the “PAS ISO 17712” standard for high security bolt seals. • All unused seals must be kept in a secure (locked) location. • A limited number of designated employees should have access to container seals. • Upon receipt of a new shipment of seals, each seal must be entered in a secure log by

number. • Seals must be used in a random (non-sequential) order to prevent anyone from anticipating

what number will be used on any particular container. • Upon use, the specifics of the shipment (date, container number, P.O. or invoice number)

must be entered in the log next to the seal number used. • Voided seals that cannot be used must be designated in the log and destruction authorized by

a supervisor. • Seal numbers must be listed on manifest documents so they can be verified upon arrival. • On a regular basis, the log must be audited to confirm that no seals are unaccounted for.


Container Inspection Containers must be stored in a safe area to prevent tampering. Before loading, a seven-point inspection process is required for all containers or trailers. • Outside and Undercarriage – support beams should be visible • Doors – inspect locking devices for tampering • Left Side – for false walls • Right Side – for false walls • Front Wall – for false wall fronts • Floor – for false floors • Ceiling / Roof – for false ceilings / roofs The results of each inspection should be recorded and kept on file with your other shipping documents. On a semi-annual basis, we will select randomly a small percentage of vendor-loaded containers we have received in the preceding six months. In order to confirm that our vendors have inspected the container before loading, we will request that you send us the container inspection form you used to record the results of the inspection. Physical Access Controls Access controls prevent unauthorized entry to facilities. All employees, visitors and vendors are to provide positive identification prior to entry. Employee Identification Companies should use an employee identification system. Employees should only be given access to those secure areas needed for the performance of their duties. Company management or security must control all identification badges and follow documented procedures regarding the issuance of keys or other access devises. Visitors / Deliveries Visitors must present photo identification for documentation upon arrival. All visitors should be accompanied by a member of the company and visibly display a temporary identification. Personnel Security Processes must be in place to screen potential employees and periodically check current employees. Pre-Employment Verification Application information, such as employment history and references, must be verified prior to employment. Background Checks Consistent with foreign, federal, and state and local regulations, background checks and investigations should be conducted for prospective employees. Periodic checks should be performed based on cause or the sensitivity of the employee’s position.


Termination Procedures Companies must have procedures in place to remove identification, facility and systems access for terminated employees. Procedural Security Processes must be in place to ensure the integrity and security of processes related to the transportation, handling and storage of merchandise. Documentation Processing Information used in the clearing of merchandise must be legible, accurate and protected against the exchange, loss or introduction of erroneous information. Shipping and Receiving Arriving merchandise should be reconciled against information listed on the manifest. Manifest should include merchandise weight, labels, marks and piece count prior to delivering or receiving merchandise. Drivers must be positively identified. Manifest discrepancies such as overages and shortages must be resolved and investigated appropriately. Physical Security Merchandise handling and storage facilities must have physical barriers and deterrents that guard against unauthorized access. Importers should incorporate the following security criteria throughout their supply chains as applicable. Fencing Perimeter fencing should enclose the areas around merchandise handling and storage facilities. All fencing must be regularly inspected for integrity and damage. Gates and Gate Houses Gates through which vehicles and/or personnel enter or exit must be manned and/or monitored. The number of gates should be kept to the minimum necessary for proper access and safety. Parking Private passenger vehicles should be prohibited from parking in or adjacent to merchandise handling and storage areas. Building Structure Buildings must be constructed of materials that resist unlawful entry. The integrity of structures must be maintained by periodic inspection and repair. Locking Devices and Key Controls All external and internal windows, gates and fences must have secured locking devices. Management or security personnel must control the issuance of all locks and keys.


Lighting Adequate lighting must be provided inside and outside the facility including entrances and exits, merchandise handling and storage areas, fence lines and parking areas. Alarms Systems & Video Surveillance Cameras Alarm systems and video surveillance cameras should be utilized to monitor premises and prevent unauthorized access to merchandise handling and storage areas. Information Technology Security Systems must use individually password-protected accounts that require periodic password changes. Training must also be provided to employees covering information technology on security policies, procedures and standards. There must also be a system in place to identify abuse of information technology such as improper access, tampering or altering business data. Business Partner Requirement Vendors must have written and verifiable processes for the selection of business partners including truckers, freight forwarders and customhouse brokers. Participation/Certification in Foreign Customs Administrations Supply Chain Security Programs Current or prospective business partners who have obtained a certification in a supply chain security program being administered by foreign Customs Administration should be required to indicate their status of participation to the vendor. Other Internal criteria or selection Internal requirements, such as financial soundness, capability of meeting contractual security requirements, and the ability to identify and correct security deficiencies as needed, should be addressed. Internal requirements should be assessed against a risk-based process as determined by an internal management team. Security Training and Threat Awareness A threat awareness program should be established and maintained by security personnel to recognize and foster awareness of the threat posed by terrorists at each point in the supply chain. Employees must be made aware of the procedures the company has in place to address a situation and how to report it. Additional training should be provided to employees in the shipping and receiving areas, as well as those receiving and opening mail. Additionally, specific training should be offered to assist employees in maintaining cargo integrity, recognizing internal conspiracies, and protecting access controls. These programs should offer incentives for active employee participation.

Vendor Operations Guide 2012 Page 29 Purchase Order System

Section 7 Electronic Purchase Order Management System Crate and Barrel has partnered with GXS to be our service provider for our electronic purchase order management system. You will utilize a web portal called Order Lifecycle Visibility (OLV). OLV is a web-based tool that allows companies to send and receive purchase order documents electronically. The OLV system is being offered at no cost to our partners. Listed below are the main pieces of information we will be communicating to our vendors, agents, and carriers:

• Crate and Barrel will send purchase order information via the web-portal. • The vendor will provide an electronic acknowledgement and commitment of the purchase

order. • All purchase order changes and updates will occur via the web-portal. • The vendor will electronically re-commit each upcoming shipment in advance of the scheduled

ship date (Pre-ASN). • Import vendors and agents will send Crate and Barrel an advanced ship notice (ASN)

electronically 72 hours before the ship date. Important information required for us to file the ISF (Importer Security Filing) for US Customs will be taken from the ASN. Failure to provide complete and accurate information may results in up to a $5,000 fine which would be the responsibility of the vendor. Domestic vendors will send Crate and Barrel an advanced ship notice (ASN) electronically on the day of shipment or up to one calendar day after shipment has been made.

• Because the ASN is so critical to this process a chargeback of $100.00 will be applied if the vendor does not send Crate and Barrel an ASN on-time as specified above.

While vendors will begin by utilizing the OLV tool initially, if you have the ability to send and receive documents through Electronic Data Interchange (EDI), you can begin testing your EDI transactions after you have completed the registration and set-up process on OLV. You can contact us at [email protected] to begin testing your EDI documents after your OLV account has been created and set up. Crate and Barrel will support the following five EDI documents in ANSI x 12 version 4010:

• 850 - Purchase Order • 855 – Purchase Order Acknowledgement • 860 – Purchase Order Change • 865 – Purchase Order Change Acknowledgement • 856 – Advance Ship Notice

We will contact you with information and the training materials necessary to begin using the online purchase order management tool after your registration has been completed. We are excited about the opportunities this project will provide. These changes will allow our merchandising teams, agents, and vendors to continue to focus their efforts on introducing imaginative, inspiring and innovative product to our customers, while still supporting the need for timely and accurate information. We feel these new enhancements will help us continue to grow and remain a leader in the home furnishing business. Please contact us at [email protected] if you have any questions.

Vendor Operations Guide 2012 Page 30 Merchandising Requirements

Section 8 Merchandising Requirements The purpose of this Vendor Operations Guide is to complement, but not replace the communication that exists between our vendors and our merchandising teams. We realize that the relationships that exist are one of the strengths of our company and we want to continue to foster and develop those relationships. Each individual merchandising team might have requests and needs that may be unique. Buying/Selling Agents Crate and Barrel considers a buying agent to be a person or company who works on behalf of Crate and Barrel to source and acquire merchandise. We consider a selling agent to be a person or company who represents the manufacturer of the imported merchandise. The distinction is important as it impacts how Crate and Barrel pays duties and taxes on these goods. Any and all commissions paid to a foreign selling agent are considered part of the dutiable value of the goods to U.S. Customs and Border Protection. We assume that all such commissions are included in the first cost of the goods. If not, vendors are required to notify the merchandising team and import department to declare any such selling agent’s commissions that are not passed on in an item’s first cost. Buying agents are not allowed to take any additional commissions or fees from the manufacturer. Design Protection and Confidentiality To maintain our position as an industry leader, we expect to be presented only with original designs and product ideas that are available for our use without conflict with other parties’ rights. Designs and other intellectual property that we share must be preserved as ours and ours alone. Each of our vendors’ play a critical role – indeed are required as a condition of doing business with us to play a critical role – in fulfilling these requirements.

First, we insist that all designs and products you present to us be original in design and be your sole property in terms of the intellectual property rights they embody. We are not interested in purchasing, or even being shown, designs which are copied or improperly derived from others’ work or in which you do not have all the rights we will require to sell them to our customers. By signing this guide, you are committing to sell to us only designs or products that you have the full right and ability to sell to us, which means that you either own or have a license to grant to us all rights (including copyrights, patents, rights of publicity and trademarks) that are embodied by any design or product that you offer to sell or sell to us. If you choose to show us a design or product for which you have been granted a license, you agree to immediately inform us about the license.

Second, we insist that you safeguard any designs or other intellectual property we share with you. Whether it is a new design, a revised design or comments on a design you present, or even a design provided to us by others, you may not share that intellectual property with others, other than in the ordinary course of sourcing, designing and manufacturing products solely on our behalf. Such designs or products should not be used in your showroom, nor should they be shown or offered for sale to another person or entity, without our express, prior written permission. Please note that this


applies whether or not we decide to move forward with the design or product on which we have added design assistance or other intellectual property. Please also note that you will be advised by one of our Product Managers or by an agent acting on behalf of Crate and Barrel as to whether we choose to move forward with the manufacture or sourcing of such a design or product; if we choose not to move forward, we require that all artwork, design aids, drafts, sketches, working drawings and all other items referring or relating to or setting forth the design or any intellectual property we provide, be returned to Crate and Barrel or such agent as we designate to act on our behalf in receiving such items. Brand Product Distribution Rights As we expand into the international marketplace, we want to make sure that we will be able to sell or display your product using your brand name. We will need to know the following information in order to do so:

• If you have an exclusive distributor in the U.A.E. or other Gulf Corporation Council Countries we will need the contact information.

• If you have a distribution relationship, when does it expire? • Will you allow Crate and Barrel to exclude our product from this current distribution

arrangement? • Any restrictions that would prevent Crate and Barrel from offering the product we purchase

from you to any of our franchise partners. Product Information Bulletin (PIB) The Crate and Barrel Product Information Bulletin (PIB) helps us bring your product to our customers. The PIB is your opportunity to tell our associates the wonderful features of your product and the details that make your item special. We utilize this information for associate training, catalogue and internet copy, store signage, and packaging/shipping decisions. Additionally, the PIB includes important information necessary for regulatory and importing requirements. Examples include:

• Information needed for our Import Department to classify your SKU for the Importer Security

Filings (commonly referred to as “10+2”) that we are required to submit to U.S. Customs and Border Protection. If a vendor fails to provide us with timely, accurate, and complete information, they may be subject to up to a $5000 penalty.

• The genus, species, country of harvest and quantity used of any wood or plant materials used

to make your product if applicable, needed to comply with the Lacey Act.

• Product information necessary for the Consumer Products Safety Improvement Act. For this reason, it is critical that during the product evaluation and selection process, the vendor complete the PIB in a timely manner upon receipt. After the PIB is completed, please return it with the order confirmation. Sample Procurement Throughout the development process the merchandising team will require several samples, including a final approved sample from the vendor. The required quantity may vary, depending on photography


needs. Each merchandising team has different requirements and will communicate these directly to the vendor. The sample procurement process is extremely time-sensitive. Proper labeling of every sample with the Product Managers name will help to expedite the delivery of your sample to the correct merchandising team. Production Changes Once Crate and Barrel has approved a production sample, no changes can be made to the materials, construction, manufacturing facility, subcontractors, or material suppliers without the prior approval of the Product Manager. Often, even minor changes in the manufacturing process can affect both the look and the performance of an item. If changes are made to the manufacturing process or materials used, you may be required to submit an additional sample for approval and testing prior to shipping the merchandise. Product Quality and Transit Testing Program Our product quality and transit testing program is a vendor pay program. Because of this you should always request a cost quote from the testing company prior to testing. Costs for testing will vary according to the product category and features of your product. The merchandising teams will provide you with the testing requirements. We encourage our vendors to contact us to obtain their test protocols prior to submitting any samples for testing. Ultimately, you are accountable for the safety and quality of the products you provide to Crate and Barrel, and should a product be recalled for any reason, you will be held responsible. Crate and Barrel has created a testing program that is designed to ensure: • All Federal and State legal requirements are met. • The product meets our performance requirements. • The product is packaged in a way that will minimize damages incurred while in transit. Reasonable Testing Program As part of the requirements for the CPSIA (Consumer Product Safety Improvement Act), products that are subject to any rule or regulation enforced by the Consumer Product Safety Commission are required to be tested according to a reasonable testing program and require a General Conformity Certificate (GCC) accompany the appropriate test report. Our reasonable testing program requirements are listed below. Please work with your merchandising team to determine if your product requires annual testing for CPSC enforced rules or regulations.

• Annual testing of specific CPSC regulations • Component testing is allowed • Only one product of a collection needs to be tested for CPSC regulations provided all products

included are produced with the same materials, and processes, and are produced in the same factory.


Quality and Performance Testing These are specific test protocols designed to measure the items’ physical characteristics, performance, and construction qualities as well as identify any potential safety issues. Federal and State regulatory requirements are also included in our testing program and need to be tested annually. Please work with your merchandising team to determine if your product requires annual testing of Federal and State regulatory requirements. The testing program is very valuable to us because it allows us to address issues before the product reaches our customers. Below is a list of product categories for which we currently require testing. • Candles and Candleholders • Glazed ceramic items • Decorated drink ware • All Furniture • Rugs/Textiles • Any item that requires verification of a claim, i.e. tempered glass, dishwasher safe, etc. • All children’s product Product Transit Testing In order to reduce damages caused during shipping, we require certain products pass a transit test protocol using standards adopted by the International Safe Transit Association (ISTA). Test protocols are based on the size and weight of the carton and the type of delivery method being used. Pallets are not considered to be part of a products packaging and will not be included in the transit test. Only an ISTA Certified Laboratory can perform these tests for Crate and Barrel. Specific testing requirements will be provided by the merchandising team that you are working with. Section 11 of this document provides some general packaging recommendations, and packaging guidelines document information can be found below. In general, if your package falls within the below listed parameters then you should have your product transit tested. If you are unsure, please discuss this with the merchandising team you are working with.

• Product is packed as a single, and does NOT fit into one of these two box sizes: o 24” x 20” x 15” o 27” x 20” x 7 7/8”

OR • Weight of a product/package exceeds 30 lbs.

Exceptions to the above parameters:

• Textiles do NOT require transit testing • Chairs that are packed in two’s DO need to be transit tested

Failing to pass our transit test requirements may result in a charge back of $16.00 per piece. If you are unsure of this requirement, please discuss this with your merchandising team.


Product transit testing will be required to be re-tested at a minimum every three years. We are constantly monitoring damage rates due to packaging issues, so we may require more frequent testing. You will be notified by us if additional testing is required. Furniture and Housewares Packaging Guidelines We have created two packaging guidelines documents; one is made specifically for furniture while the other is for all other product categories. Within these documents are guidelines organized by product category that provide recommended types and amounts of packaging materials, and placement of the materials within the package. If you have not received a copy, please contact your merchandising team. You may also contact Kimberly Brining at [email protected] or Jay Iaco at [email protected]. Inbound Quality Assurance Program To further complement our quality product and transit testing program, we have an inbound quality assurance inspection program in our warehouses. The inbound inspection program is based on a random sampling method, a list of audit criteria developed by our merchandising teams, and an acceptable quality level. Upon first receipt of a new SKU, our QA team will inspect the product according to the following categories:

• Labeling – meets labeling requirements set forth in this guide. • Packaging – ensuring that the packaging is executed according to the product transit test

results or agreed upon packaging. • General Appearance and Construction – comparing the production to the approved sample in

terms of overall quality, color, performance, and acceptable characteristics. Our goal is that every shipment will meet our expectations, however if they do not meet these requirements one of the following may occur:

• The item may be returned at the vendor’s expense to the vendor for repair or replacement. • The item may be repaired at the vendor’s expense at a third-party facility or a warehouse. • The entire shipment would undergo a 100% inspection at the vendor’s expense to identify any

acceptable goods. Unacceptable goods may be returned to the vendor or disposed of. • Depending on the nature of the issue, the shipment may be accepted with the understanding

that future shipments will be corrected with agreed upon improvements. On-going inspections are done throughout the year on products with higher than average return rates, known quality or performance issues, or shipments that failed the initial quality inspection. Assembly Instructions For all products that require customer assembly, complete instructions in both English and French (The Land of Nod does not require French) must be included in the package. We have partnered with


an outside company to write and design our assembly instructions for Ready-to-Assemble furniture. This helps us ensure consistency in style. It also allows us to post these assembly instructions on our website at www.crateandbarrel.com for the customer to view. The printing and cost for this service is the vendor’s responsibility, with the prices ranging from $175.00 to $350.00. Our merchandising teams will communicate to you which products will require assembly instructions made by our outside company. For all product other than ready-to-assemble furniture that requires assembly (Furniture Collection items, lighting, decorative accessories), the vendor is responsible for including assembly, care and cleaning information with the products. Before the goods are shipped, Crate and Barrel will provide final approval of all assembly instructions. If you are unsure about the type of assembly instructions needed, please contact your merchandising team. Replacement Hardware A common customer complaint involves missing or incomplete hardware. Crate and Barrel is extremely sensitive to customer issues and would like to resolve them as quickly as possible. Our only option when hardware is unavailable is to pull inventory and remove hardware from existing merchandise. In order to alleviate this situation the Product Manager will negotiate an arrangement for additional hardware free of charge. The replacement hardware will appear on the purchase order contract and will be assigned a SKU and order quantity. It is extremely important that the hardware requests be processed in a timely manner and that the following guidelines are followed. Replacement Hardware Packaging Package the replacement hardware as if it were shipped with the merchandise. For example, if an item required 4 nuts, 4 bolts, and 4 washers to assemble, please assemble all units to form a complete pack. This will allow Crate and Barrel to send the customer a complete assembly packet. Include a copy of the assembly instructions in each packet. Also, label each individual packet with the hardware SKU number, vendor name, and description. Carton Labeling and Shipping Requirements for Hardware Please follow the carton labeling requirements outlined in section 12 of this guide. Mark each carton label “Attention – Receiving Department”. In addition to the invoicing instructions in section 16, hardware must be listed on the invoice and fully detailed as follows:

1. Total number of pieces in the packet must be listed. 2. Components of the hardware packet must be listed (screws, bolts, etc.). 3. Material of all parts must be listed (brass, steel, plastic, etc.). 4. FOB value of the hardware needs to be listed on the invoice for customs purposes only.

Private Label Packaging Many of the products we offer are exclusive to Crate and Barrel and are displayed using packaging specifically designed by us. To ensure consistency with our products, we prefer to source our own display packaging whenever possible. However, due to certain constraints, we may ask for your assistance. If we require your assistance in printing our display packaging, our graphics and


merchandising department will work with you by providing packaging formats, reviewing samples, and approving pricing. Crate and Barrel Private Label Packaging Information Form Our Product Managers will communicate to you any private label packaging requirements. To help improve this process, we have designed the “Private Label Packaging Information Form” that we will ask you to complete. Our merchandising team will fax or e-mail you this form that must be completed before we can write any purchase orders. Vendor Die Lines In certain cases, we may ask you to apply our logo and graphics to your existing packaging or label art. Please submit all die-lines along with your completed “Private Label Packaging Information Form” to our merchandising team. If you have more than one packaging or labeling option for us, please submit all of them for review. Packaging Exclusivity Private label packaging projects shall remain exclusive to Crate and Barrel and under no circumstances should these designs be shown to another company. If Crate and Barrel agrees to release a design to the vendor, that communication will be provided in writing by the Product Manager. Product Liability Insurance Even when manufacturers and retailers operate with the utmost care and provide the best quality products, unforeseen issues can arise and accidents can occur causing illness, injuries and other damages or liabilities. Crate and Barrel requires that its vendors defend, indemnify and hold harmless Crate and Barrel and its affiliates for any liability or claims arising out of or relating to the vendor’s acts or omissions and/or any products or services provided by the vendor (or the vendor’s business partners), including without limitation the costs of defending and resolving any such liabilities and claims. Vendors also must carry minimum amounts of insurance of the types and in the coverage amounts specified below from a licensed or authorized insurer having an A.M. Best rating of A-VIII (“Excellent”) or higher, and must provide Crate and Barrel with certificates of insurance confirming the existence of such coverage and the satisfaction of the additional insured requirements as specified.

General Liability Primary & Excess/Umbrella

• Coverage shall include premises, operations, worldwide products (including defense and indemnity for claims brought in the U.S.), products and completed operations, contractual liability, independent contractors, and personal and advertising injury with primary limits of at least (a) One Million Dollars (USD $1,000,000) per occurrence for bodily injury and/or property damage; (b) Two Million Dollars (USD $2,000,000) in the general aggregate; and (c) Two Million Dollars (USD $2,000,000) products & completed operations aggregate. Any general aggregate limit must apply per project/per location and must be unimpaired.

• Excess or Umbrella Coverage excess of general liability primary in an amount of at least Five Million Dollars (USD $5,000,000) per occurrence is required. Any aggregate limit must be unimpaired.


• All required policies shall name Euromarket Designs, Inc.; Crate & Barrel Holdings, Inc.; Meadowbrook L.L.C.; Crate & Barrel Canada, Inc.; and each of their respective and collective

subsidiaries, affiliates, officers, directors, employees and beneficiaries as additional insured under ISO form #CG2015 or its equivalent, such that those entities and individuals are provided additional insured status for all specified coverage, including without limitation products liability coverage.

• The coverage provided by the additional insured endorsement shall be primary without right of contribution by any coverage carried by Euromarket Designs, Inc.; Crate & Barrel Holdings, Inc.; Meadowbrook L.L.C.; Crate & Barrel Canada, Inc.; or any of their respective or collective subsidiaries, affiliates, officers, directors, and employees.

• The policies shall include a waiver of subrogation endorsement in favor of Euromarket Designs, Inc.; Crate & Barrel Holdings, Inc.; Meadowbrook L.L.C.; Crate & Barrel Canada, Inc.; or any of their respective or collective subsidiaries, affiliates, officers, directors, or employees under ISO form #CG2404 or its equivalent.

• The policies shall contain a severability of interest clause for all additional insureds without cross suits liability exclusion.

In addition, unless you have a written exception from Crate and Barrel, you also must meet the following additional minimum insurance requirements:

Workers’ Compensation/Employer’s Liability

• Workers’ Compensation insurance coverage in such amounts and on such terms as are sufficient to meet all applicable statutory requirements in all applicable jurisdictions.

• Employer’s Liability coverage with limits of at least the following:

° Five Hundred Thousand (USD $500,000) bodily injury by accident – each accident

° Five Hundred Thousand (USD $500,000) bodily injury by disease – each employee

° Five Hundred Thousand (USD $500,000) bodily injury by disease – policy limit

• The Workers’ Compensation and Employer’s Liability limits may be combined with either an Excess or Umbrella Liability policy.

Automobile Liability

Coverage for owned, leased, hired, and non-owned vehicles with a combined single limit of One Million Dollars (USD $1,000,000) per accident for bodily injury and property is required.

We require that you provide Crate and Barrel with Certificates of Insurance evidencing the required insurance coverage specified above. If you are working with or providing product to either the Crate &


Barrel or CB2 brands, please forward your Certificates of Insurance to [email protected]. If you are working with The Land of Nod brand, please forward your Certificates of Insurance to the merchandising team within The Land of Nod with which you are working.

Vendor Operations Guide 2012 Page 39 On-Time Shipping

Section 9 On-Time Shipping Policy As Crate and Barrel has grown as a company, our vendors have grown with us. We value each and every one of our vendor partnerships and consider this to be one of our core strengths. Crate and Barrel is a multi-channel retailer with sales being generated through our Retail, Catalogue, and Internet channels. We believe that our product offering to our customer should be consistent across all of these channels and we count on getting our orders from our vendors – on time and complete. We have made major advertising and catalogue investments in order to present your product to our customer. When we do not have the product we advertise, we not only fail to sell the product, we often lose the customer. We work hard to make sure our customers are never disappointed, and we expect and look forward to your cooperation in this effort. We feel it is important to communicate our expectations to you and provide a corporate policy that is flexible and fair. Purchase Order Contract The ship date on the purchase order is the key to our Shipping Policy. For this reason, it is imperative that when you receive a Crate and Barrel Purchase Order, you review the ship date and confirm that you accept the terms of the purchase order. Please contact the Planner/Product Manager if the ship date is not achievable - we will work together to develop a mutually acceptable ship date and the purchase order document will be revised and re-issued. As always, a purchase order confirmation will again be required. Crate and Barrel does have the right to alter quantities if the ship date is revised. If you find that the anticipated ship date is different from the agreed purchase order, you must contact the Planner/Product Manager to discuss the specific situation and to develop a solution that is mutually acceptable. Pro-active communication of a delay in a shipment can help us to reduce the negative impact on our customers. On-Time Shipping Currently, our on-time shipping policy is the last approved ship date plus or minus 5 calendar days (this creates a shipping window of 11 calendar days). An “early shipment” is defined as shipping more than 5 days earlier than the last approved ship date. A “late shipment” is defined as shipping more than 5 days after the last approved ship date. To support the new U.S. Customs requirements, the ship-date will match the purchase term listed on your purchase order. The purchase term listed on your purchase order is the point where transfer of ownership between the manufacturer and Crate and Barrel takes place. Import – FOB (Freight on Board) – for import PO’s with a purchase term of FOB, the last approved ship date will be defined as the vessel sail date, not the date the product leaves the factory. Import – Ex-Factory – for import PO’s with a purchase term of ex-factory, the last approved ship date is defined as when the shipment leaves the factory.


Domestic – FOB Origin – for domestic PO’s with a purchase term of FOB Origin, the last approved ship date is considered the date the shipment leaves the factory. Domestic – FOB Destination – for domestic PO’s with a purchase term of FOB Destination, the last approved ship date is considered the date the shipment arrives at the warehouse ship-to location. If for any reason, you feel that your shipment will be late, you must contact the Planner/Product Manager prior to the last approved ship date listed on the purchase order to discuss implementation of one of the following options:

• You can upgrade the transportation method in order to get the goods to Crate and Barrel at approximately the same time as if the shipment had been shipped on-time. You will be responsible for the incremental costs of the upgraded transportation. Technically, the shipment has shipped late. However, because you are taking proactive steps to get the merchandise to Crate and Barrel in a timely manner, all other penalties will be waived.

• If a shipment is leaving more than 15 days late, in addition to the late shipment penalty, you

are expected to pay for upgraded transportation with the entire transportation charge being at the vendor’s expense.

• Crate and Barrel has the right to cancel all or part of the late purchase order. Partial Shipments The Crate and Barrel purchase order may contain different ship dates for different items. The items on the purchase order must be shipped in their entirety and on-time. Any split shipments of an item are not permitted without the prior approval from a Crate and Barrel Planner/Product Manager. Split shipments without prior approval may result in implementation of the On-Time Shipping policy for the partial shipment quantities that are late. Product Quantity Variance Crate and Barrel will allow a maximum variance on a purchase order (over or under) of up to 3% per SKU. Specific product categories may not allow any variance and you should contact the merchandising team if you have questions regarding this. If the shipment variance is greater than 3% (over or under), the following may occur:

• If the shipment is under the purchase order quantity, the remaining units on the purchase order are governed by the Crate and Barrel On-Time Shipping policy.

• If the shipment is over the purchase order quantity, one or more of the following may occur:

o Crate and Barrel reserves the right to return the excess units at the vendor’s expense. o Crate and Barrel reserves the right to cancel units on future purchase orders equal to the

amount of variance on the current shipment. o Crate and Barrel will accept the excess units in exchange for a 20% discount from the

purchase price on the excess units.


Cancellation Policy Crate and Barrel reserves the right to cancel all or part of the units on a purchase order if the shipping window has been missed. Crate and Barrel reserves the right to cancel the excess or shortage units that result from a shipment variance to the purchase order greater than 3% (over or under). Early or Late Shipment Penalty If your shipment is early or late (shipping outside of the ship window), Crate and Barrel reserves the right to charge 1% of the purchase price per day for the shipment (this charge will not exceed 15%), and/or charge loss of gross margin sales in the case of a late shipment. We will calculate gross margin loss as: Gross Margin Loss = (Planned Sales – Actual Sales) x Gross Margin %. Note: Gross margin % must be based on our landed cost.

Vendor Operations Guide 2012 Page 42 Crate and Barrel Brand Labeling

Section 10 Crate and Barrel Brand Labeling From the day Crate and Barrel first opened for business almost 50 years ago, the visual appeal of the product has been our primary selling point. For that reason, we display most items in our stores in their full glory, without packaging. For those items that do require packaging, our design criteria are that it be eye-catching and aesthetically pleasing. The SKU bar code and textile sewn-in labels that are applied to our product is extremely small and intended to improve the checkout process without distracting from the appearance of the product. Barcode Label Procurement Process Crate and Barrel has a vendor order and vendor paid barcode label program. Vendors are required to order and purchase labels from an approved barcode label provider. In order to maintain consistency across all products, vendors are not allowed to print barcode labels. Any exceptions must be approved by the Product Manager. The appropriate label formats required for each SKU will be listed on the Crate and Barrel purchase order, and should be ordered well in advance of the purchase order’s ship date. It is the vendor’s responsibility to make sure labels are correct and the order is complete. Crate and Barrel will consider a shipment delay due to label issues to be the vendor’s responsibility. Any exceptions must be discussed directly with the appropriate Product Manager. When you are ordering labels, please order 3-5% extra in the event that some labels are damaged while being applied to the product. Any excess labels that are not used on current or future Crate and Barrel orders must be destroyed and cannot be used on product sold to any other company. The vendor will be responsible for removing the labels from items that Crate and Barrel has not agreed to purchase through a confirmed purchase order. We are currently partnering with Fineline Technologies and Avery Dennison as our preferred barcode label providers. You may use one or both of these providers to source your labels. Each vendor will provide you with order information, pricing, and account set up information. Listed below is their contact information.

• Fineline Technologies 1-800-500-8687 [email protected]

• Avery Dennison

336-808-7275 [email protected]


Barcode Label Formats Illustrations Listed below are examples of the barcode labels currently in use by Crate and Barrel, CB2 and The Land of Nod (The appropriate logo will be used for each company). These are meant for illustration purposes only. The company logo, SKU, description, country of origin, and retail price (where appropriate) will vary based on the specific SKU information.

LABEL ILLUSTRATION LABEL TYPE CODE: DESCRIPTION

• DUM – Dumbbell with Price • DNP – Dumbbell no Price • 905 – CB2 Dumbbell with Price

Primarily used for ornaments, small gifts, some baskets, and other seasonal items.

• SSN – Standard Label no Price • 930 – CB2 Standard Label no Price

Most commonly used barcode label accounting for over 80% of our total volume. Label uses a removable adhesive with a security cut to prevent tampering.

• KIM – Hangtag Label no Price • 915 – CB2 Hangtag Label no Price

Hangtag Label is used for items where an adhesive label will not adhere.

• CLR – Clear Label with no Price

Same size and dimension as the standard label, however this item is printed on clear acetate. Used primarily for colored glass items where a white label would distract from the presentation of the product.

• WSN – Wood Label no Price

Same size and dimension as the standard label, however this item is printed with permanent adhesive to adhere better to wooden products.

• RLP – Removable Label w/ Price

Used primarily for food pantry items. Label utilizes a removable adhesive with a security cut to prevent tampering. Retail price is printed on the bottom of the label.


Barcode Label Placement The barcode label must be applied to the item in such a way as to not distract from the appearance of the product. The location of the barcode must be consistent on every unit of the same item (i.e. a shipment of 500 wine glasses must have the barcode in the same location on each unit). Some items have the barcode label already incorporated into the packaging design provided by Crate and Barrel (example, candles, and food containers). In these instances an additional barcode label will not be required. If you are unsure as to where to place the barcode label, please discuss this with the merchandising team you are working with. If you are working with The Land of Nod, barcode label placement instructions will be provided to you directly by the merchandising team you are working with. Textile Care and Fiber Content Labels All textile products must contain a label that is sewn into the product. The label will list the fiber content, country of origin, care instructions and SKU information in English, French, and Spanish (currently, The Land of Nod does not require French or Spanish labeling). Artwork for these textile labels will be provided by Crate and Barrel. Prior to receiving label artwork, the vendor will be responsible for providing accurate care, fiber content and flammability information. Textile labels should be printed on a material that can withstand ironing. To ensure the barcode scans correctly and the information listed on the label is correct, Crate and Barrel will require a physical proof of the label. It is the vendor’s responsibility to have these labels printed using the artwork provided in a timely manner. Crate and Barrel will consider a shipment delay due to label issues to be the vendor’s responsibility. Any exceptions must be discussed directly with the appropriate Product Manager.


Textile Labels Format Illustration Listed below are examples of the textile labels used for Crate and Barrel and CB2 product. These examples are intended for illustration purposes and the content and label size may vary by product type.

LABEL ILLUSTRATION Description:

Rug care label may either be sewn-in or applied with an adhesive label. Size: 2.5” x 5” Stock: White Tyvek or white polyester to be sewn into product or white adhesive label. Inks: 100% Black

Primarily used for pillows. Label is folded in the center. Size When Folded: 1.375” x 2.23” Stock: White Tyvek or white polyester to be sewn into product. Inks: 100% Black

Used for most textile items. Label is folded in the center. Size When Folded: 1.375” x 2.125” Stock: White Tyvek or white polyester to be sewn into product. Inks: 100% Black

Used for items where a sewn-in label cannot be used due to the construction of the textile item.

Size: 2.125” x 2.125” or 2.625” x 2.625” Stock: White adhesive label Inks: 100% Black


Item Label Errors If the item label is missing or incorrect when Crate and Barrel receives the shipment, the vendor will be responsible for the costs that will be incurred by Crate and Barrel. The cost for any labeling or re-labeling project is $0.25 per unit or the total cost of the labeling project. The vendor will be charged a minimum of $250.00 per receiving location.

Vendor Operations Guide 2012 Page 47 Packaging Requirements

Section 11 Packaging Requirements Crate and Barrel expects its vendors to package their merchandise adequately to endure the normal handling and movement experienced within our own supply chain and while the product is in-transit to our customer. In order to protect the safety of our associates, when multiple same SKU’s are packed in a master pack, the master package (outer-most package) weight should not exceed 60 lbs. The Product Manager will communicate requirements above and beyond those specified here and must agree to any exceptions. Each vendor is responsible for the quality of packaging. Vendors that are identified as having poor packaging will be solely responsible for all damages, concealed shortages, and claims. If you have not yet received a Housewares or Furniture Packaging Guideline document, contact your merchandising team or [email protected] or [email protected] The illustration on the following page shows how many different times your packaged product may be handled within our supply chain before it gets to the consumer! This is why the proper packaging is so critical to ensuring an issue free delivery.


Factory

Consolidator Port

Ocean or Air

Port/Rail yard

Landing Warehouse

Sent to store

Sent to Consumer

Sent to Crossdock

Sent to DC

Sent to Consumer

Sent to Crossdock

Sent to Consumer

Example of how many times your product might be handled within our supply chain.


Carton Packaging Guidelines Due to our wide and varied product offering, it is extremely difficult to provide carton recommendations that will be universal for all vendors. However, we have developed a short list of requirements that address the most common packaging issues that we see.

Carton Strength The carton strength must be adequate for the weight and the stacking strength required to support the full weight of the pallet of boxes (if box is on bottom layer). The following box strength requirements are based on packaging industry standards as well as our own experience. Crate and Barrel will accept either Burst Strength (lbs per sq inch) or Edge Crush as a form of measuring acceptable carton strength.

Carton Weight (LB)

Carton Weight (KG)

Bursting Test (lbs per

sq inch)

Edge Crush Test (lbs per inch width)

Corrugated Combined Board

0-30.0 0-13.0 200 44 Double-wall Greater than 30 Greater than 13 275 51 Double-wall

Flute Direction To prevent damages that may occur due to compression, when carton is positioned in the shipping direction the flute must be in vertical direction. Below is an illustration of properly positioned carton flutes.

Item Cushioning Item cushioning must be adequate to withstand transit. Fragile or breakable items should be packed with cushioning material to limit interior movement and protect against vibration, shock and compression encountered in the transportation environment. Inadequate corner protection is one of the most common issues we see.


Surface Protection For items that may come in contact with each other, the cartons, or interior corrugated dividers should be wrapped in an appropriate protective material. Extremely fragile or breakable items should be wrapped in 3/32 foam to prevent damaging of the surface. Silica Gel Packs Silica gel packs should be used in packaging to prevent damage such as rust on metal and mold or mildew on textiles or wood products. This is of particular concern if products are produced, packaged, or loaded into containers during high humidity seasons. Product/Carton Fit Components within the carton should be secured so no movement is possible within the carton. Corner Protection For furniture items (including Ready-To-Assemble furniture) corners should be protected using cushioning corners (corrugate should be used if possible to minimize the use of EPS foam). A minimum clearance of ¾” (1.9 cm) should be maintained with cushioning between the product surface and the walls of the shipping carton (see illustration below).


Carton Closure The carton closure should be adequate to secure the contents and prevent shipment shortages or damages. Proper carton closure can be achieved utilizing either pressure-sensitive sealing tape or water-activated reinforced tape. The taping method should create an “H” pattern on both the top and bottom of the carton by sealing across all of the major and minor flaps. Cartons weighing less than 15 lbs (or 6.8 kg) should have a minimum tape width of 2 inches (or 5.08 cm). Cartons weighing more than 15 lbs (or 6.8 kg) should have a minimum tape width of 3 inches (or 7.62 cm). Staples or banding may not be used as a carton closure method. Staples and banding often damage the product and expose our customers and associates to possible personal injury when opening. Shown below is an illustration showing the proper “H” pattern closure method for a carton.


Hardware Packaging When packaging an item that contains hardware, please ensure that the hardware packet is clearly labeled and easily identifiable. If not, it may be inadvertently disposed of or misplaced when unpacking the carton. We have found that by using the packaging method listed below, the likelihood of missing hardware is reduced:

A product’s hardware should be packaged in a blister pack or red envelope/sleeve based on

direction provided by your merchandising team. Assembly Instructions should be packaged in a red envelope/sleeve. Attach the blister pack and envelope/sleeve to a red ribbon/string. Secure the blister pack and red envelope/sleeve inside the carton in a way that will not

damage the merchandise while in-transit and that is easy to identify when the carton is opened.

Feed the other end of the string /ribbon through the top flap of the carton and secure to the top or side of the carton.

Label the end of the ribbon/string “Hardware Enclosed”. Hardware Packaging Illustration

Placement of “Hardware Enclosed” label Entire hardware package with label


Rug Packaging Guidelines Packaging a rug in order to protect the product as well as enable shipment to our customer can be a bit tricky. The following rug packaging guidelines have been tested throughout our facilities and we have found them to be the most successful in reducing damages and protecting the product while streamlining the distribution process. General Packaging Guidelines

• Please utilize two 6 mil thick poly bags or corrugated carton for master and inner packaging materials.

• The width of the poly tubing should be sized to fit tightly around the rolled rug. The ends of the poly tubing should be sealed, taped, or secured flush to the ends of the rug roll. We cannot accept rugs that have tassels; knots or handles of poly tubing that extend beyond the end of the rug roll. (See illustration below.)

• Please roll the rug in a compact and tight manner; this enables us to reduce our shipping charges. When rolling a rug, please roll so the smallest dimension is the length. For example, when rolling a 2’ x 3’ rug, roll the rug so the length is 2’.

• We require that all non-cotton rugs be rolled to avoid permanent creasing. • Within a unit pack, each rug must be individually folded or rolled. Do not roll multiple

quantities of rugs in one roll. This creates distribution difficulties for us. • Master carton labels should be placed on both ends of the roll so it can be viewed from either

end when stacked on a pallet. (See illustration below.) • Please utilize silica gel packets in all unit packs to absorb any excess moisture and prevent

mold and odors in transit. Rug Packaging Illustration

Master Carton Label attached to both ends of the package.

Ends of both 6 mil thick poly bags are rolled and taped. Rug has no tassels or loose ends.


Display Packaging In order to prevent cutting through the display packaging (i.e., plastic bags for comforters/sheets, holiday tins, boxed for display photo frames) when opening a carton with a utility knife, please use an additional piece of corrugate on top of the product.

Vendor Operations Guide 2012 Page 55 Carton Labeling and Packing Lists

Section 12 Carton Labeling and Packing Lists In an effort to streamline paperwork requirements for our vendors, we have updated our carton labeling specifications to be consistent for both import and domestic vendors. Because we may allocate your merchandise to our stores in either the full master pack or inner pack units, please note the section regarding inner carton labeling specifications. Please contact the merchandising team you are working with regarding specific inner carton labeling requirements. Master Carton Labeling In order to facilitate shipment receipt at our warehouses, each outer carton should be clearly labeled on two adjacent sides (not the top or the bottom of the carton) with the information listed below. These carton labels are essential to the receiving process in our warehouses and stores.

1. The Crate and Barrel SKU number (each number should be approximately 3/4” high or

larger). There should only be one SKU per carton. 2. Vendor Number 3. SKU Description 4. The Crate and Barrel purchase order number 5. The carton number range by SKU, notated accordingly on the packing list (for example if you

have a shipment of 2 SKU’s and there are 40 of one SKU and 60 of another SKU, than your carton count would be by SKU – 1 of 40, 2 of 40 etc. and SKU - 1 of 60, 2 of 60, etc.)

6. Country of Origin (import requirement) 7. Crate and Barrel and Destination City (for example, Crate and Barrel – Cranbury, NJ) 8. The quantity (piece count) in the box/carton. (If your product comes in more than one box with

only one SKU, this quantity should reflect the number of boxes per set, for example if you have a bed that comes in two boxes, the quantity on each separate box should read: 1 set (1 of 2), 1 set (2 of 2).

9. Gross weight of carton (lbs.) In addition to these basic master carton label requirements, our Furniture Collection Product Manager may request additional information on the master carton labels. This will be requested on items that are packaged in multiple cartons where it is important to keep track of each individual component.


Master Carton Label Illustration The following illustrations are meant for demonstration purposes only. Please feel free to contact us if you have any questions about our label format. Euromarket Designs (EDI)/Crate and Barrel/CB2 Master Carton Label

(1) 123-456

(2) Vendor Number

(3) Pretty Frame

(4) 199-743670

(5) Carton #1 of 10

(6) Made in XYZ

(7) EDI/Crate and Barrel – (Destination City)

(8) 48 pcs.

(9) Gross Weight


The Land of Nod Master Carton Label

(1)123456 (2) Vendor #

(3) Item Description (4) PO# 169-9999999

(5) Carton #1 of 10 (6) 50pcs.

(7) EDI: Naperville, IL (8) Made in XYZ

(9) Gross Weight


Master Carton Label Placement Illustration Below is an illustration of the proper master carton label placement for corrugated cartons.

Inner Packs An inner pack refers to the quantity of product packaged together inside the master carton. An inner pack quantity can be as little as 1 unit (each item packaged individually but placed in a master carton). Our goal is to assign inner pack quantities that are efficient for those occasions when we have to ship less than a full master carton to our stores. In addition, we try to consider inner pack quantities that are consistent with the customer’s purchasing patterns when buying multiple quantities of the same SKU. The required inner pack quantity is listed on the purchase order. The warehouses cannot receive a shipment that differs from the stated inner pack quantity without contacting merchandising for approval. In many cases, when we receive an incorrect inner pack, the inventory must be repackaged. In the event that the inner pack does not match the purchase order, the vendor may be charged back for the additional labor incurred to resolve the situation.

Master Carton Label must appear on two adjacent sides of the carton.


Master Pack/Inner Pack Illustration

Inner Unit Pack Carton Labeling Certain items are not allocated to our stores in full master carton quantities. For these items, we require that you label the inner pack cartons with the following information: 1. The Crate and Barrel SKU number 2. SKU Description 3. The quantity in the inner pack carton Inner Carton Label Illustration

(1) 123-456 (2) Pretty Goblet (3) 9 pieces


Additional Labeling Requirements In addition to the master carton labels which are required for all cartons, additional labeling may be required if any of the following criteria applies. This information can be either printed directly on the carton, or applied using separate labels. Customer Assembly Required Labels If your product requires customer assembly, we require that you attach a bright orange sticker, at least 3” x 5”, with “CUSTOMER ASSEMBLY REQUIRED” printed in black on each box. This sticker should be placed on one side of the box, not on the top or bottom. If you are not sure whether you need to apply this label, contact the merchandising team. Perishable Food Product Labels If your product is perishable food, you must label the outside of the carton as such. Your merchandising team will advise if this is required. Two Man Lift Labels In order to protect the safety of our associates, the master package (outer-most package) weight should not exceed 60 lbs. If the carton weighs over 60 lbs., please apply a sticker at least 3” x 5” with “TWO MAN LIFT” printed in black on each box. This sticker should be placed on one side of the box, not on the top or bottom.


Additional Labeling Requirements Illustration:

Packing List Specifications

The packing list is a critical tool to ensure our warehouses record your shipment accurately and efficiently. For domestic shipments there should only be one packing list per shipment sent. Missing or incomplete packing slips are the most common warehouse receiving issue. With your help and cooperation, we can ensure that merchandise arrives in our warehouses with all the necessary information needed to receive your shipment. Packing List Requirements Please include all of the following information on your packing list:

• Date • Ship from information • Sold to information • Ship to information • Commercial invoice number (s) • Crate and Barrel PO number • Crate and Barrel SKU number • Detailed item number and description of merchandise

Example of the “Two-Man Lift”, and/or “Customer Assembly Required” labels – only use if required.


• Total quantity cartons • Total quantity per carton • Total quantity shipped per SKU • Range of carton #’s that correspond to SKU (carton1 of 10, 2 of 10, etc) • Net weight per carton (lbs. or kgs.) • Gross weight per carton (lbs. or kgs.) • Cube/carton (cbm) • Total net weight of the shipment (lbs. or kgs.) • Total gross weight of the shipment (total weight of product plus packaging – lbs. or

kgs.) • Total cube (cbm)

• For import shipments: the packing list is part of the documentation required for U.S. Customs.

• For domestic shipments: a copy of the packing list must be attached to one of the boxes and marked as such.

• For those vendors who import on behalf of Crate and Barrel and are sending containers to our facilities directly after customs clearance: please fax a copy of the packing list to the appropriate merchandising team listed below and directly to the warehouse that you are shipping to (fax #’s provided on page 64 and 65). Please include the container number on the packing list.

• For those vendors who load goods into containers/trailers at their facilities: please designate the number of pieces of each SKU per P.O. number that are loaded into each container. Also include the container number, container size and seal number on the packing list.

Primary/Backup Attention: Fax Number

Primary Fax Merchandising 847-272-5276 Backup Fax Merchandising 847-291-8784 The Land of Nod Merchandising 847-656-4753

Packing List Illustration The following illustration is meant for demonstration purposes only. Please feel free to contact us if you have any questions about the packing list format.


Packing List Illustration

Packing List Placement Please ensure that the packing slip is attached to the lead carton of the shipment and can be easily identified by the warehouse receiving staff, as illustrated below. Packing List Placement Illustration

Trailer / Container Illustration Pallet Illustration

Vendor Operations Guide 2012 Page 64 Shipping Requirements

Section 13 Shipping Requirements Talk about traffic control. Last year, our warehouse locations received millions of units of merchandise directly from our vendors. And that was just last year. To process this volume efficiently and accurately, we require consistency in the shipping methods from our vendors. Proper shipping documentation, carton labeling and packing list information is critical to the process. Any errors in this data can hold up a shipment from receipt ultimately resulting in a delay in availability to the customer. In the event that a vendor has not met our shipping requirements, the warehouse personnel will inform the merchandising team of the issue. If a substantial delay in the receiving process occurs, the merchandising team will be provided with the amount of time required to properly receive the shipment. The cost of any project is $25.00 per man hour or $0.25 per unit or the total cost of the project. The vendor will be charged a minimum of $250.00 per receiving location. The method of calculating the charge (per hour vs. per unit) is within the discretion of the Merchandising team and will be communicated to the vendor. Crate and Barrel provides general shipping instructions regarding the use of designated freight forwarders, domestic carriers, and efficient shipping methods. Any deviation from the Crate and Barrel shipping guidelines requires prior notification and approval by the Crate and Barrel Import or Transportation Department or penalties may be incurred for the incremental freight expenses, processing fees, and labor charge. Below is a comprehensive list of our facilities and their locations. Locations are subject to change and specific shipping instructions are located on the first page of the purchase order. Housewares Warehouse Locations

West Coast # 499 1605 N. Chrisman Road Tracy, CA 95304

Phone: 209-221-8066 Fax: 209-830-6845

Midwest # 199 # 169

1860 W. Jefferson Naperville, IL 60540

Phone: 630-579-9000 Fax: 630-579-9148

East Coast

# 951 315 Half Acre Road Cranbury, NJ 08512

Phone: 609-819-0158 Fax: 609-819-0092

Furniture Warehouse Locations

West Coast # 491 1705 N. Chrisman Road Tracy, CA 95304

Phone: 209-221-8077 Fax: 209-830-9166

Midwest # 191 # 161

443 Fort Hill Dr. Naperville, IL 60540

Phone: 630-753-8191 Fax: 630-596-1210

East Coast # 971 311 Half Acre Road Cranbury, NJ 08512

Phone: 609-819-0123 Fax: 609-819-0222

North Carolina # 991 621 Lincoln County Parkway Extension Lincolnton, NC 28092

Phone: 828-428-0413 Fax: 828-428-4517


Canada Warehouse Location Toronto #370 6200 Vipond Drive

Mississauga, ON L5T 2B2 Phone: 905-795-3623

Crate and Barrel’s Warehouse Locations Illustration

= Warehouse Locations

Pallet Specifications When shipping merchandise on pallets, each pallet must meet the following specifications:

• Pallets must be reusable, of wooden construction, and comply with Wood Packaging

Materials regulations regarding treatment to eliminate harmful insects. Do not use plastic pallets, as we cannot store them in our racking configuration.

• We will detain, fumigate, and/or export any shipments, at the vendors’ expense, where evidence of insects or non-indigenous organisms is found on pallets or crates.

• Pallet dimensions should be 48” x 40”, 4-way entry (European pallet sizes will NOT be

accepted). If the normal stacking footprint of a single packaged product is larger than a 48” x 40” pallet, the pallet dimensions must equal or exceed the dimensions of the packaged product.

Warehouse 499 & 491 (Tracy, CA )

Warehouse 199 & 191 169 & 161

(Naperville, Il)

Warehouse 991 (Lincolnton, NC)

Warehouse 951 & 971

(Canbury, NJ)


• The maximum height of the pallet and merchandise is seven feet. The strength of the carton

shall be rated to handle the compression load of the weight of a fully stacked pallet of product (see chart on page 49 for carton strength requirements).

• For all less than truckload (LTL) shipments, please make sure the driver is able to accurately

count all pieces on all pallets before stretch wrapping the merchandise to the pallets. If the driver is unable to count the pieces, the vendor will be held responsible for any shortages to the bill of lading.

Container Weight Limits Listed below are the weight limits that we have for import containers. This is the gross weight of the goods (merchandise and all packaging) in the containers. If a container is close to these weight limits merchandise should always be loaded evenly across both axels and braced to prevent slippage en route. If we receive charges to transload an overweight container or a traffic ticket to our trucker for moving an overweight container, any charges will be the responsibility of the vendor. Container Size Weight limit 20’ Container 15,000 kgs 40’ Container 18,000 kgs 40’ High Cube Container 18,000 kgs 45’ Container 18,000 kgs

Foreign Trade Zone (FTZ) A Foreign-Trade Zone is a secure area located in or near a U.S. port of entry. There are many benefits to operating a FTZ including:

• Deferred payment of duty • Lower broker fees • Shorter transit times from the U.S. port to our DC • Improved inventory control

Our distribution center campuses in Cranbury, New Jersey, Naperville, Illinois and Tracy, California are activated Foreign Trade Zones. We anticipate that the Lincolnton, North Carolina Distribution center will be activated in 2012 or 2013. In order to operate a FTZ, the security, shipping, receiving and inventory control procedures have improved and we have different reporting that takes place with U.S. Customs and Border Protection (CBP). One of the most important changes with CBP is how we report the shipments received into the FTZ. FTZ shipments are reported to U.S. Customs based on what we actually physically receive on a shipment after the goods are admitted into our FTZ. As a result we are scrutinized by CBP more closely and they are advised of any shipments with carton discrepancies, large or small.


Because of this, any shipments with carton count discrepancies now require our notification to the forwarder or steamship line. If a carton discrepancy occurs, U.S. Custom’s AMS system (Automated Manifest System) does not close out properly for that shipment. As a result, it appears as if we have not reported all of our goods through U.S. Customs when in fact we have. Extra time is spent changing the manifest and the shipper’s documents, and any fees incurred to change the manifest will be the responsibility of the shipper. We will ask your cooperation in making the necessary document changes so that the contents of our containers exactly match the documents. We are asking all of you to review your internal company procedures and make improvements if necessary. The foundation of our supply chain lies first with the shipper and their ability to start the shipping process accurately. In summary, here is what we are asking you to do:

• Review your internal loading and document procedures. • Make any necessary changes to your procedures to ensure that the SKUs and quantities

loaded exactly match the SKUs and quantities on your documents. Everything in the container must be declared.

• If we advise you of a carton count discrepancy, please revise your documents promptly in order for us to facilitate a manifest change.

We consider our relationship with you to be a partnership; therefore we are here to help in whatever way we can. Please direct your comments or questions to the Import Department. Import Bill of Lading Requirements

• Obtain one bill of lading number for all goods shipping on the same vessel, regardless of container number(s).

• List all Euromarket Designs, Inc. Purchase Order Numbers

• Delivery address of the appropriate Euromarket Designs, Inc. warehouse that you are shipping to

• Consignee on all ocean or air Bills of Lading for Euromarket Designs, Inc., regardless of destination warehouse should be:

Euromarket Designs, Inc. 1250 Techny Road Northbrook, IL 60062

• Consignee on all ocean or air Bills of Lading for Meadowbrook, LLC, regardless of destination warehouse should be:

Meadowbrook, LLC 8135 River Drive

Morton Grove, IL 60053


• The notify parties on all ocean or air Bills of Lading (both Euromarket and Meadowbrook), except those originating from Mexico are:

Schmidt Pritchard & Co. And Euromarket Designs, Inc 9801 W. Lawrence Ave. 1250 Techny Road Schiller Park, IL 60176 Northbrook, IL 60062 tel: 847-671-5130 tel: 847-272-2888 fax: 847-671-1894 fax: 847-272-7397

• The notify parties on all Bills of Lading from Mexico (both Euromarket and Meadowbrook) are:

Ortiz International, Inc. And Euromarket Designs, Inc P.O. Box 1505 1250 Techny Road Laredo, Texas 78042-1505 Northbrook, IL 60062 tel: 956-724-1954 tel: 847-272-2888 fax: 956-724-3834 fax: 847-272-7397

Point of Destination on Bills of Lading will vary depending on country of origin of goods, which Euromarket Designs, Inc. warehouse the order is shipping to, and our preferred routing for specific purchase orders. Contact the Import Department if you are unsure of the appropriate point of destination for your purchase order(s). Domestic Routing Information Below is our routing information for all freight shipments to a Crate and Barrel warehouse. Our goal is to minimize shipping expenses wherever possible. We have negotiated competitive rates with specific carriers and depend on you to follow our routing instructions carefully. It is not our desire to penalize our vendors. However, any deviations from our route guide have a negative financial impact on Crate and Barrel, which will result in a full freight chargeback plus a processing fee. • Please consolidate same day shipments to the same warehouse on one bill of lading. • Unless authorized by the Crate and Barrel Product Manager or the Crate and Barrel

Transportation Department, do not ship more than one less than truckload (LTL) shipment to the same warehouse per week.

Use the table below to determine the appropriate shipping method. Shipment size pertains to a single shipment destined to one Crate and Barrel warehouse.


Shipment Size Per Destination Shipping Method Maximum of 4,000 lbs and less than 11 linear feet of trailer space

Less than Truckload (LTL) - Use Route Matrix on page 74-75. (Instructions to follow)

Over 4,000 lbs or greater than 11 linear feet of trailer space

Trailer Load (TL) - Contact Crate and Barrel Transportation Department at 847-272-2888 (Instructions to follow)

Any temperature controlled and/or perishable shipment

Contact the Crate and Barrel Transportation Department at 847-272-2888

Any finished Furniture Collection case goods or upholstery items

Contact Crate and Barrel Transportation Department at 847-272-2888

8 cartons or less totaling a maximum of 150 lbs shipped from the 48 contiguous U.S. states.

Crate and Barrel: UPS – Third Party Billing The Land of Nod: FedEx – Third Party Billing (Instructions to follow)

8 cartons or less totaling a maximum of 150 lbs shipped from Canada.

UPS - Prepaid (Instructions to follow)

Less than Truckload (LTL) Instructions Please use the following guidelines for shipments with a maximum of 4,000 lbs and less than 11 linear feet of trailer space. • Unless authorized by the Crate and Barrel Product Manager or Crate and Barrel Transportation

Department, do not ship more than one LTL shipment to the same warehouse, per week.

• Contact carrier 24 hours in advance of shipment for pick up.

• Provide the carrier with the total number of cartons, weight, and approximate linear feet of shipment.

• Create a bill of lading with a unique, vendor-assigned bill of lading number (different from the carrier’s pro number or P.O. number). See bill of lading instructions on page 72.

• Include exact carton count and pallet count on the bill of lading. Do not use the phrase “said to contain”. Be specific and accurate. Vendor must have carrier sign for the exact carton count.

• Make sure the driver is able to accurately count all pieces on all pallets before stretch wrapping the merchandise to the pallets. If the driver is unable to count the pieces, the vendor will be held responsible for any shortages to the bill of lading.


• Contact Crate and Barrel Transportation Department if the LTL carrier shown in the route matrix does not provide a direct pick up at your shipping location.

Truck Load (TL) Instructions Please use the following guidelines for shipments over 4,000 lbs or over 11 linear feet of trailer space. • Contact the TL carrier 48 hours in advance of shipment for pick up and then follow up with written

pick up instructions to the carrier.

• Provide the carrier with the total number of cartons, weight, and linear feet of shipment.

• Carriers will provide one-hour free time to load trailer after which detention begins.

• Detention charges incurred during loading will be charged back to the vendor.

• Vendor is responsible for loading and counting all TL shipments.

• Vendor is responsible for creating a bill of lading with a unique, vendor-assigned bill of lading number (not the P.O. number) for each shipment. See bill of lading instructions on page 72.

• Vendor is responsible for properly blocking and bracing shipment and for the expense of the materials to do so.

• Vendor is responsible for sealing all TL shipments and recording seal number on the bill of lading. Please use ISO PAS 17712 compliant seals.

UPS Third Party Billing Instructions – Crate and Barrel Please use the following guidelines for shipments of 8 cartons or less, totaling a maximum of 150 lbs shipped from the 48 contiguous U.S. states. • Consolidate orders to same destination in one carton, if possible.

• Select UPS Commercial Ground Service.

• Bill Third Party to Account: 6R11A3.

• Bill to Address: 1250 Techny Road Northbrook, Il 60062

• Mark cartons “Attention Receiving Department”

• Account number is only to be used for Crate and Barrel orders.

• Use individual cartons less that 128” combined length and girth and less than 70 lbs.

• Do not ship to same Crate and Barrel destination on consecutive days

• Follow carton-labeling instructions listed in section 12.


Reference Field 1: Please include the following information in Reference Field 1 of the UPS waybill. Following this procedure allows us to properly record our transportation expenses. Reference Field 1 codes should follow the format of VS ### #######.

o Position 1,2 = VS ( stands for Vendor Ship) o Position 3 = Space o Position 4, 5, 6 = Three digit Crate and Barrel warehouse location. o Position 7 = Space o Position 8 – 14 = Seven digit Crate and Barrel purchase order number o For example, VS 971 1234567

UPS Prepaid Instructions (Canada Only) Please use the following guidelines for shipments of 8 cartons or less totaling a maximum of 150 lbs shipped from Canada.

• Add the UPS charges to the merchandise invoice.

• UPS charges should be listed as a separate line item on your merchandise invoice.

FedEx Third Party Billing Instructions – The Land of Nod Please use the following guidelines for shipments of 8 cartons or less, totaling a maximum of 150 lbs shipped from the 48 contiguous U.S. states.

• Consolidate orders to same destination in one carton, if possible.

• Select FedEx Ground Service.

• Bill Third Party to Account: 250029101

• Bill to Address: 8135 River Drive Morton Grove, IL 60053

• Mark cartons “Attention Receiving Department”

• Account number is only to be used for Land of Nod orders.

• Use individual cartons less than 128” combined length and girth and less than 70 lbs.

• Do not ship to same Land of Nod destination on consecutive days

• Follow carton-labeling instructions listed in section 12.

Reference Field 1:

Please use the Land of Nod Purchase order number (e.g. 169-2505234)


Freight Terms It has always been Crate and Barrel’s policy to have our vendor’s ship freight collect and FOB origin using specific Crate and Barrel carriers. Our preferred Crate and Barrel carriers have waived any notification and/or drop trailer charges. If the vendor chooses to use a carrier other than a preferred Crate and Barrel carrier, the vendor must ship prepaid and FOB destination and will be responsible for any notification and/or drop trailer charges. Bill of Lading (B/L) Requirements The B/L is a legal document and primary source of information for our supply chain which includes our vendors, carriers and the receiving locations. Therefore it is important that this document contain complete and accurate information required to process your shipment. Please use the following guidelines when preparing the B/L. • Create a separate B/L with a unique B/L number for each shipment (truckload & LTL). Do not use

the purchase order number or the carrier’s pro numbers.

• Enter the complete ship to address and phone number. (See page 64-65 of Vendor Operations Guide).

• Include exact carton count and pallet count on B/L. Please do not use the phrase “said to contain”. Be specific and accurate. For LTL freight, vendor must have carrier sign for the exact carton count.

• For LTL shipments include an accurate product description, item number, and classification as presented in the National Motor Freight Classification Guide (NMFC), for example: Cookware, cast iron, item #52890, class 70. The latest edition of the NMFC guide can be purchased at www.smc3.com.

• Include accurate shipment weight. The vendor is responsible for any additional carrier charges due to inaccurate weight on B/L.

• Include the purchase order number(s) and SKU(s) on the B/L.

• Include your vendor number on the B/L. This number can be found on your purchase order. If you do not know your vendor number, please call our Merchandising Department before shipping.

• Where applicable, declare full freight value. Do not ship at released value.

• For truckload (TL) shipments, specify on B/L that the carrier must call the receiving warehouse at least 48 hours in advance to schedule a delivery appointment.

• Please mark the B/L “freight collect”, unless other arrangements are made with the Crate and Barrel Product Manager or approved by the Transportation Department.


• For Crate and Barrel collect shipments only, please notate on the B/L: Send freight bill to: Crate and Barrel Attn: Michelle Shaw 1250 Techny Road Northbrook, IL 60025 • For The Land of Nod collect shipments only, please notate on the B/L Send freight bill to: The Land of Nod c/o Crate and Barrel Attn: Michelle Shaw 1250 Techny Road Northbrook, Il 60025 Route Matrix for Less than Truckload Shipments (LTL) revised May,2012

Origin Destination Destination Destination Destination

Illinois 199 / 191 – 169/161

California 499 / 491

New Jersey 951 / 971

North Carolina991

Alabama UPS Freight FedEx Economy FedEx Economy UPS Freight Arizona UPS Freight FedEx Economy FedEx Economy UPS Freight Arkansas UPS Freight FedEx Economy FedEx Economy UPS Freight California UPS Freight Oak Harbor FedEx Economy UPS Freight Canada UPS Freight FedEx Economy FedEx Economy UPS Freight Colorado UPS Freight FedEx Economy FedEx Economy UPS Freight Connecticut UPS Freight FedEx Economy FedEx Economy UPS Freight Delaware UPS Freight FedEx Economy FedEx Economy UPS Freight Florida UPS Freight FedEx Economy FedEx Economy UPS Freight Georgia UPS Freight FedEx Economy FedEx Economy UPS Freight Idaho UPS Freight Oak Harbor FedEx Economy UPS Freight Illinois Call 847-272-2888 FedEx Economy FedEx Economy UPS Freight Indiana UPS Freight FedEx Economy FedEx Economy UPS Freight Iowa UPS Freight FedEx Economy FedEx Economy UPS Freight Kansas UPS Freight FedEx Economy FedEx Economy UPS Freight Kentucky UPS Freight FedEx Economy FedEx Economy UPS Freight Louisiana UPS Freight FedEx Economy FedEx Economy UPS Freight Maine UPS Freight FedEx Economy FedEx Economy UPS Freight Maryland UPS Freight FedEx Economy FedEx Economy UPS Freight Massachusetts UPS Freight FedEx Economy FedEx Economy UPS Freight Michigan UPS Freight FedEx Economy FedEx Economy UPS Freight Minnesota UPS Freight FedEx Economy FedEx Economy UPS Freight Mississippi UPS Freight FedEx Economy FedEx Economy UPS Freight Missouri UPS Freight FedEx Economy FedEx Economy UPS Freight Montana UPS Freight FedEx Economy FedEx Economy UPS Freight Nebraska UPS Freight FedEx Economy FedEx Economy UPS Freight


Nevada UPS Freight Oak Harbor FedEx Economy UPS Freight New Hampshire UPS Freight FedEx Economy FedEx Economy UPS Freight New Jersey UPS Freight FedEx Economy FedEx Economy UPS Freight New Mexico UPS Freight FedEx Economy FedEx Economy UPS Freight New York UPS Freight FedEx Economy FedEx Economy UPS Freight North Carolina UPS Freight FedEx Economy FedEx Economy UPS Freight North Dakota UPS Freight FedEx Economy FedEx Economy UPS Freight Ohio UPS Freight FedEx Economy FedEx Economy UPS Freight Oklahoma UPS Freight FedEx Economy FedEx Economy UPS Freight Oregon UPS Freight Oak Harbor FedEx Economy UPS Freight Pennsylvania UPS Freight FedEx Economy FedEx Economy UPS Freight Rhode Island UPS Freight FedEx Economy FedEx Economy UPS Freight South Carolina UPS Freight FedEx Economy FedEx Economy UPS Freight South Dakota UPS Freight FedEx Economy FedEx Economy UPS Freight Tennessee UPS Freight FedEx Economy FedEx Economy UPS Freight Texas UPS Freight FedEx Economy FedEx Economy UPS Freight Utah UPS Freight FedEx Economy FedEx Economy UPS Freight Vermont UPS Freight FedEx Economy FedEx Economy UPS Freight Virginia UPS Freight FedEx Economy FedEx Economy UPS Freight Washington UPS Freight Oak Harbor FedEx Economy UPS Freight West Virginia UPS Freight FedEx Economy FedEx Economy UPS Freight Wisconsin UPS Freight FedEx Economy FedEx Economy UPS Freight Wyoming UPS Freight FedEx Economy FedEx Economy UPS Freight Please call Crate and Barrel Transportation Department (847-272-2888) if the carrier does not provide a direct pick-up. **FedEx Economy specify economy service 866-393-4585 UPS Freight 800-333-7400 Oak Harbor 206-246-2600

Vendor Operations Guide 2012 Page 75 Inventory Issues

Section 14 Inventory Issues

If our customers only knew what’s involved to get that wine glass in their hands, that sofa in their living rooms. But that’s the great part about being the customer; they don’t have to! It’s all for their enjoyment and to enhance their lifestyle. To that end, nothing is more important than how closely we work with our vendors to ensure our product is available to our customer at the appropriate time. Experience has taught us there are a number of issues that can occur which would prevent us from being able to offer the product in a timely manner. In order to provide you with clear and accurate information, this section discusses these issues and the Crate and Barrel policies in the event any of these may occur.

Quality

The quality of the product received by Crate and Barrel should be identical to that of the final sample approved by the Product Manager. If the product deviates in performance or appearance from the approved sample, Crate and Barrel may not be able to sell the item and the expense of this inventory will be charged back to the vendor. In addition, major advertising dollars may have already been spent to advertise the item in our catalogues, ads, billboards or postcards. When a quality issue arises, the resolution of the issue can be time consuming and during that time period the product is unavailable for sale. Depending on the specific situation, a chargeback for a quality issue may include but is not limited to, one or more of the following: cost of non-sellable inventory, cost of advertising, cost to communicate product variance at the Catalogue/Internet Call Center, cost to change product signage at retail stores, customer appeasement expense, cost of backordered and/or canceled sales incurred due to product unavailability, and loss of gross margin sales. We will calculate gross margin loss as: Gross Margin Loss = (Planned Sales – Actual Sales) x Gross Margin %. Note: Gross margin % must be based on our landed cost. Backorders/Canceled Sales Backorders can occur for several reasons, the only positive one being that customer demand exceeds our expectations. However, backorders can also occur because the product is unavailable for sale at the appropriate time due to late delivery of inventory, quality problems or packaging problems. Customers may also decide to cancel their order if product is on backorder for too long. Crate and Barrel incurs an expense of $8.50 per item to cover the expense of shipping an additional package to the customer and additional communication to the customer regarding backorder status. In the event that a backorder or canceled sale is the result of vendor error, merchandising may chargeback the vendor as appropriate to the specific situation and costs incurred.


Automatic Deduction Policy For Furniture If a customer discovers a manufacturing defect when the item is in their home, Crate and Barrel will either replace the item or arrange for an in-home inspection by an independent service technician. Crate and Barrel’s Automatic Deduction Policy allows a Store Manager to deduct, without prior authorization from the vendor, the current cost of a one-way delivery or one hour of in-home service. The one-way delivery rate is $79.00 and can change based on market conditions. Store Managers will continue to contact the vendor regarding any deductions greater than $79.00 or in cases where the customer’s return is not a clear result of a manufacturers defect. Furniture Shop Expense

Our goal is to get great quality goods in our customer’s homes on the first delivery. Our Furniture Warehouse and cross dock locations open and inspect every item prior to shipment, allowing us to ensure a successful delivery. We have trained shop personnel who are experts at furniture touch up and repair. In the event that an item needs repair due to packaging damage or production defects our system will allow us to report and chargeback the work to the vendor. The chargeback amount will be based on an average time required to perform the repair. This chargeback will not include normal inspection and detailing time that we would expect to occur in order to prep the item for delivery. A report will be issued to the vendor that details the amount of time spent on your product. This information will be provided by SKU, by warehouse, and indicate the specific quality issues. It is our goal to eliminate these quality issues altogether. Solving these problems at the point of production will save time for everyone involved and will provide a better quality product to our customers. Listed below is a summary of the repair reasons and average time for each repair.

REPAIR REASON MINUTES TO

REPAIR Finish Issues - Wood and Metal Surfaces Particles Under Finish 30 Crazing / Blushing / Orange Peels / Fisheyes 32 Excessive Fill / Noticeable Repair 31 Uneven Finish / Unfinished/Peeling 28 Glue / Material Under Finish 31 Damage / Chips / Nicks / Dents 33 Surface Abrasion/Scratches/Packaging Marks 30 Construction Repairs - Wood and Metal Components Loose, Open or Mis-fitted Moldings / Joints 34 Out of Square / Not Level 29 Misaligned Borings for Fasteners 32 Doors or Drawers Rubbing / Mis-set 32 Pitted / Rusted Metal 28Upholstery Issues – Surface and Components


Damage – Rips / Tears 30 Incorrect Frame / Leg Finish 28 Open, Loose or Racked Frame 34 Construction – Seams / Welting / Stitches 37

Vendor Operations Guide 2012 Page 78 Return to Vendor

Section 15 Return to Vendor

When appropriate, Crate and Barrel negotiates Return to Vendor agreements with a vendor. These agreements are customized to the specific product and unique characteristics of each vendor and the buying arrangement. Most return to vendor agreements involve the return of products that are received by Crate and Barrel and found to be defective by our staff and/or returned by the customer. We appreciate the support and cooperation of our vendors to the Return to Vendor agreements. In order to manage the program consistently across our store and distribution locations, we have implemented the following procedures to smoothly process return to vendor product between our companies.

• Crate and Barrel will notify the vendor via fax on a weekly basis that Return to Vendor Product for your company is being held at one of our facilities/locations.

• The vendor will have 7 business days to respond to a disposition decision. The disposition

options are:

o Authorize return and arrange to have the merchandise picked up from our facility/location by the carrier of your choice, at the vendor’s expense. Note: if the carrier of your choice does not pick up the merchandise from our facility, or you do not respond to the facility/location within 7 business days, we will ship via our own carrier at the vendor’s expense.

o Authorize return and arrange to have the merchandise sent back to your facility by the carrier of our choice, at the vendor’s expense.

o Authorize payment of the Return to Vendor product, but request that Crate and Barrel dispose of the merchandise in lieu of returning it to your facility. In this event, Crate and Barrel will include a charge of $390 per 40 yard trash container (with the cost appropriately pro-rated for the actual volume involved). This is the exact cost incurred by Crate and Barrel for trash removal.

• If we do not hear back from you in 7 business days, we will assume authorization of the Return to Vendor product has occurred and will return the product using the carrier of our choice, at the vendor’s expense.

If you have any questions or concerns regarding your specific return to vendor agreement, please contact the Crate and Barrel Product Manager.

Vendor Operations Guide 2012 Page 79 Invoicing

Section 16 Invoicing

Domestic Invoice Processing The following instructions are for invoice processing, please send hard copy invoices:

• Only one purchase order per invoice can be accepted. • Please include the following information on each invoice:

o Ship- From Information o Ship-To information o Unique invoice # o Invoice Date o Purchase Terms o Crate and Barrel Purchase Order Number o Crate and Barrel SKU Number o Item Description o Quantity Ordered o Quantity Shipped o Ship Date o Unit Price o Extended Price o Additional Charges or Credits (Freight, Tax, Discounts) o Total Price o CARB ATCM (California Air Resources Board Airborne Toxic Control Measure)

documentation if applicable.

• The ship date listed on the invoice must be accurate.

• Please address all invoices for merchandise sent to warehouses 199, 499, and 951 to:

Crate and Barrel Accounts Payable Department 1250 Techny Road Northbrook, IL 60062

• Please address all invoices for merchandise sent to warehouses 191, 491, 971, and 991 to: Crate and Barrel Accounts Payable Department 1250 Techny Road Northbrook, IL 60062

Vendor Operations Guide 2012 Page 80 Invoicing

• Please address all invoices for The Land of Nod merchandise to:

The Land of Nod Accounting Department 8135 River Drive Morton Grove, IL 60053 Import Invoice Processing A commercial invoice must be filed for each imported shipment entering through U.S. Customs. The invoice must provide the following information in English as required in 19 CFR 141.86 through 141.89. The following section summarizes the information as required by U.S. Customs: (1) The U.S. port of entry; (2) Information about the sale of merchandise – the place where the product was sold, the date

when the product was shipped, the manufacturer of the product, and the importer of record/purchaser of the product;

(3) A detailed product description of the merchandise including what the product is made of and any finish details (such as embroidery, or appliqué), manufacturer identification numbers, the grade or quality, and the numbers of the packages in which the merchandise is packed;

(4) The quantities (providing both gross and net weight and units of measure); (5) The purchase price of each item in the currency of the purchase; (6) The kind of currency used for the purchase; (7) All additional charges itemized by name and amount, including freight, insurance, commission,

and packing; (8) All rebates, drawbacks, and boundaries, separately itemized, allowed upon the exportation of

merchandise; (9) The country of origin; (10) All goods and services furnished for the production of the merchandise (e.g. assists such as

dies, molds, tools, and engineering work) that are not included in the invoice price. Goods or services furnished in the United States are excluded.

(11) CARB ATCM (California Air Resources Board Airborne Toxic Control Measure) documentation if applicable.

In addition to the governmental invoicing requirements, Euromarket Designs requests the following on all commercial invoices of imported product: (1) ATTENTION: IMPORT DEPARTMENT should appear with the Euromarket Designs or

Meadowbrook address; (2) A unique invoice / identification number (not duplicated); (3) Terms of purchase; (4) Terms of payment; (5) Signature of shipper; (6) Packing information on a separate document (Packing List); (7) Harmonized Tariff Schedule of the United States (HTSUS) classification number(s).

Vendor Operations Guide 2012 Page 81 Conclusion

Section 17 Conclusion At Crate and Barrel we value the partnerships we have with our vendors and believe we would not be the successful company that we are today without the continued commitment to excellence that we all share. We hope that this guide has answered any questions you may have regarding our expectations, but if you have additional inquiries, need clarification, or feel you cannot comply with anything in this guide, please feel free to contact your merchandising team. Together, we will work towards a solution that is mutually agreeable. Partnership is our goal. We trust yours is the same.

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