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1. Any customer who purchases $10,000 of mixed product on one order will be guaranteed a specific freight rate no matter how we ship the order to them. (In other words, although our ultimate goal is to ship all product together, if we backorder product on an order we will still guarantee a specific freight rate thereby taking the risk out of the buying decision.) 2. The order must be eligible to ship in one shipment and can only have one destination. 3. The freight will be prepaid by us and the guaranteed freight cost will be added to the invoice. 4. In the event that we backorder product, the backorders will also ship at the guaranteed rate. (This should reduce significantly the cancellation rate on small backorders.) 5. The guaranteed rate will be based on the ship to location on the order. 6. The program applies to furniture as well as all of our accessory categories. Each state is allocated to a zone shown below: I. Zone 1 -AR, LA, MS, AL, TN II. Zone 2 -MO, TX, OK, KY, GA, FL III. Zone 3 -NM, KS, IL, IN, OH, PA, WV, VA, MD, NC, SC, CO, NE, MN, MI, IO, WI IV. Zone 4 -CA, OR, WA, MT, NV, SD, ND, ID, WY, UT, NJ, NY, NH, CT, RI, MA, VT, ME, AZ Guaranteed Freight Percentage on $10,000 Order Zone 1 4% Zone 2 5% Zone 3 6% Zone 4 7% Freight at the above rates will be billed on all qualifying orders. The order size is the only qualifier so customers can order all product lines as the mix of their open to buy dictates. Customers who traditionally support only one or 2 of our lines can now experiment with additional product groups without the fear of large and unpredictable freight charges. When this program is implemented, we will also eliminate the additional $25 charge presently in place on prepaid shipments for orders under this program. The Freight Insurance Program will remain unchanged. Free Freight Programs: Lighting: Any combination of AJ or JRL exceeding $6000 earns free freight. As is the case now the freight charge will be reflected on the invoice but may be deducted if the customer pays the invoice in full within terms. Wall Art: Any combination of prints, oils and mirrors exceeding $6000 earns free freight if paid within terms. Botanicals: $3000 order earns free freight provided the invoice is paid within terms. Insurance will still be invoiced on all orders unless a customer opts out in which case the onus for claims and follow up falls upon the customer. There is no longer an allowance on accessory sales and the previous AJ freight program is replaced by the above program for all John Richard customers. Note: If a portion of an order qualifies for free freight the balance of the order must total at least $10,000 to qualify for the guaranteed freight program.

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