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Licensee and Vendor Standard Program Requirements Booklet January 2010

Licensee and Vendor

Standard Program

Requirements Booklet

January 2010

TABLE OF CONTENTS

Introduction

1-1

Disney’s Code of Conduct for Manufacturers

2-1

Licensee & Vendor Responsibilities

3-1

Sourcing Restrictions

4-1

Facility Authorization

5-1

On-Going Requirements

6-1

Monitoring Facilities

7-1

Loss of Production Authorization

8-1

Frequently Asked Questions

9-1

Appendix

10-1

Facility and Merchandise Authorization (FAMA) Application

10-2

Country and Territory Groupings

10-4

Acceptable Social Compliance Monitors

10-6

Code of Conduct Assessment Notification

10-9

Corrective Action Plan Letter (CAP Letter)

10-10

ICTI CARE Foundation Authorization Form

10-11

Sample Social Compliance Audit Checklist

10-12

Corrective Action Plan Acknowledgement Report (CAPAR)

10-16

Facility Termination Letter

10-18

Page ii Revised January 2010

1 Introduction

Welcome to Disney. As a Disney licensee or vendor you are joining a network of Disney business associates around the world. This guide is intended to help you understand our International Labor Standards (ILS) program and requirements.

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Disney’s International Labor Standards Program

The Walt Disney Company is committed to the promotion and maintenance of responsible labor practices in Disney’s licensing and direct sourcing operations throughout the world. The International Labor Standards (ILS) program is part of Disney’s Corporate Responsibility effort and is designed to evaluate and establish criteria for the working conditions affecting people who make Disney-branded products around the world. Disney’s Code of Conduct for Manufacturers (Code) provides guidelines and principles for the production of Disney- branded goods (see the section Disney’s Code of Conduct for Manufacturers).

As a licensee or vendor, you are responsible for upholding the Disney Code of Conduct in the facilities you select to make Disney-branded products.

For more information about Disney’s International Labor Standards program, visit www.DisneyLaborStandards.com and read Disney’s Corporate Responsibility report at www.disney.com/crreport

About This Guide

This guide provides information on Disney’s Code, licensee and vendor responsibilities and facility approval requirements. It also provides samples of some documents you may send to or receive from Disney.

The information contained in this guide is applicable to all contractual participants in Disney’s ILS program — licensees (including our retailer licensees), vendors, factories and subcontractors.

Licensees and vendors can use this guide to help establish a facility relationship for the first time, keep facility records up to date, and as a reference for ongoing program requirements and documents.

If you have any questions about the information contained in this guide, please contact your designated Disney ILS representative.

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Terminology

Frequently used terms are defined here. In some cases, several words may be used interchangeably throughout this document.

Audit: The following terms are used interchangeably to refer to the process by which an on- site visit is made to a facility to assess compliance with Disney’s or an equivalent Code of Conduct: social compliance assessment, qualified social compliance audit, assessment or audit.

Disney-branded products: The following terms are used to refer to merchandise and/or packaged food items bearing brands, characters or other intellectual property owned, co- owned or licensed by Disney: Disney-branded products, Disney merchandise, Disney-branded merchandise, Disney goods.

Facility: The term “facility” is used to refer to the physical location where Disney-branded products are made, assembled, packaged, labeled or otherwise processed, as well as factory worker dormitories, cafeterias and other ancillary facilities, but not office buildings. For the purposes of this document, the terms “facility,” “factory” and “manufacturer” are used interchangeably. See the section Facility Authorization for additional information.

Licensee: We use the term "licensee" when we refer to a business that obtains the right (a license) to produce and sell Disney-branded products. This definition includes retailer licensees (direct-to-retail relationships).

Monitor: The following terms are used interchangeably to refer to the individuals or organizations that conduct on-site facility audits: auditor, assessor, monitor, audit firm and social compliance monitoring organization.

Vendor: We use the term "vendor" to refer to a supplier from which we obtain Disney- branded products directly (for example, the supplier of products we purchase for resale at our theme parks).

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2 Disney’s Code of Conduct for Manufacturers

Established in 1996, the Disney Code of Conduct for Manufacturers sets forth our requirements for manufacturers of Disney-branded products. The Code is available in more than 50 languages at www.DisneyLaborStandards.com.

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Disney’s Code of Conduct for Manufacturers

Disney’s Code sets forth our requirements for manufacturers of Disney-branded merchandise with respect to labor standards and working conditions in the following areas:

Nondiscrimination Association Health and Safety Compensation Protection of the Environment Other Laws Subcontracting Monitoring and Compliance Publication

Child Labor Involuntary Labor Coercion and Harassment

the

International Labour Organization (ILO), as well as various third party initiatives and corporate codes of conduct pertaining to supply chain labor standards.

The

principles

embodied

in

our

Code

are

consistent

with

core

conventions

of

Disney-branded products are sourced and manufactured by organizations and people in many countries, speaking many different languages. Those involved in licensing and sourcing, or working in facilities, must be able to access and understand our Code so that they are aware of their rights and responsibilities in making Disney-branded products. For this reason, our Code is translated into more than 50 languages and distributed to tens of thousands of licensees, vendors, facilities and individual workers. Available languages include:

Afraikaans

French

Lithuanian

Spanish

Albanian

German

Malay

Swahili

Arabic

Greek

Maltese

Swedish

Bengali

Haitian-Creole

Marathi

Tagalog

Bulgarian

Hebrew

Norwegian

Tamil

Chinese (Simplified)

Hindi

Polish

Thai

Chinese (Traditional)

Hungarian

Portuguese

Turkish

Croatian

Indonesian

Romanian

Turkmen

Czech

Italian

Russian

Ukrainian

Danish

Japanese

Serbian

Urdu

Dutch

Kannada

Sinhalese

Uzbek

English

Khmer (Cambodian)

Siswati

Vietnamese

Finnish

Korean

Slovak

Zulu

Flemish

Latvian

Slovene

Translations of the Disney Code are available at:

www.DisneyLaborStandards.com

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© Code of Conduct for Manufacturers At The Walt Disney Company, we are committed to:

©

Code of Conduct for Manufacturers

At The Walt Disney Company, we are committed to:

a standard of excellence in every aspect of our business and in every corner of the world; ethical and responsible conduct in all of our operations; respect for the rights of all individuals; and respect for the environment.

We expect these same commitments to be shared by all manufacturers of Disney merchandise. At a minimum, we require that all manufacturers of Disney merchandise meet the following standards:

Child Labor

Involuntary Labor

Manufacturers will not use child labor.

The term “child” refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education.

Manufacturers employing young persons who do not fall within the definition of “children” will also comply with any laws and regulations applicable to such persons.

Manufacturers will not use any forced or involuntary labor, whether prison, bonded, indentured or otherwise.

Coercion and Harassment Manufacturers will treat each employee with dignity and respect, and will not use corporal punishment, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse.

Nondiscrimination Manufacturers will not discriminate in hiring and employment practices, including salary, benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.

Manufacturers will respect the rights of employees to associate, organize and bargain collectively in a lawful and peaceful manner, without penalty or interference.

Health and Safety Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation. Manufacturers will also ensure that the same standards of health and safety are applied in any housing that they provide for employees.

Association

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Compensation We expect manufacturers to recognize that wages are essential to meeting employees’ basic needs. Manufacturers will, at a minimum, comply with all applicable wage and hour laws and regulations, including those relating to minimum wages, overtime, maximum hours, piece rates and other elements of compensation, and provide legally mandated benefits. Except in extraordinary business circumstances, manufacturers will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by local law or, where local law does not limit the hours of work, the regular work week plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period.

Manufacturers will compensate employees for overtime hours at such premium rate as is legally required or, if there is no legally prescribed premium rate, at a rate at least equal to the regular hourly compensation rate.

Where local industry standards are higher than applicable legal requirements, we expect manufacturers to meet the higher standards.

Protection of the Environment

Manufacturers will comply with all applicable environmental laws and regulations.

Other Laws

Manufacturers will comply with all applicable laws and regulations, including those pertaining to the manufacture, pricing, sale and distribution of merchandise. All references to “applicable laws and regulations” in this Code of Conduct include local and national codes, rules and regulations as well as applicable treaties and voluntary industry standards.

Subcontracting

Manufacturers will not use subcontractors for the manufacture of Disney merchandise or components thereof without Disney’s express written consent, and only after the subcontractor has entered into a written commitment with Disney to comply with this Code of Conduct.

Monitoring and Compliance Manufacturers will authorize Disney and its designated agents (including third parties) to engage in monitoring activities to confirm compliance with this Code of Conduct, including unannounced on-site inspections of manufacturing facilities and employer-provided housing; reviews of books and records relating to employment matters; and private interviews with employees. Manufacturers will maintain on site all documentation that may be needed to demonstrate compliance with this Code of Conduct.

Publication

Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times.

*

*

*

*

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3 Licensee & Vendor Responsibilities

Our licensees and vendors play a critical role in ensuring that Disney-branded products are made under ethical and responsible working conditions. In this section, you will learn about specific activities required to meet your Disney ILS obligations.

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Licensee and Vendor Responsibilities

All licensees and vendors are required to comply with Disney’s ILS program requirements in the following manner:

Source only from eligible countries and territories: Do not produce Disney-branded products in countries restricted for trade by either the U.S. government or by Disney (see the section Sourcing Location Restrictions).

Select compliant facilities:

Select facilities that are capable of complying with the

Disney Code or comparable standards approved by Disney (see the section Disney’s Code of Conduct for Manufacturers).

Communicate Disney’s expectations to facilities: Inform potential and current facilities of Disney’s Code, ILS program and monitoring and termination procedures so that the facility fully understands Disney’s expectations. Facilities should follow expectations provided by Disney regarding the required submission of audits or expected remediation.

Submit documents in a timely manner: Provide the following documents to Disney

ILS prior to committing any production of Disney-branded products in the facility (see the section Facility Authorization for details):

o

Facility and Merchandise Authorization (FAMA) Application

o

Qualified Social Compliance Audit Report that meets Disney’s Minimum Compliance Standard, if required by ILS.

Obtain approval for facility use: Obtain explicit approval from Disney before starting any Disney-branded production, as evidenced by receipt of a signed Facility and Merchandise Authorization (FAMA) form from Disney.

Remediate:

Work with facilities to encourage improved working conditions, where

needed, including submitting subsequent facility audit reports as required by Disney to demonstrate improvement and in order to maintain approval to continue Disney production.

Provide access to facilities: Allow Disney and its authorized social compliance monitors full access to all facilities to evaluate compliance with ILS program policies and standards, with or without advance notification to licensees, vendors or facilities.

Remove Disney-branded products if required: Terminate all production of branded goods at any facility within 30 days following notification from Disney of the facility’s ineligibility to produce Disney-branded merchandise.

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4 Sourcing Restrictions

Licensees and vendors are prohibited from manufacturing in or purchasing from certain countries or territories subject to Disney and/or U.S. government sanctions. In addition, certain sourcing locations may be subject to additional requirements.

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Restricted Countries and Territories Policy

Licensees and Vendors may not apply, or permit the application of, any Disney proprietary material to items produced in restricted countries or territories (e.g., a Disney logo may not be embroidered on a plain backpack made in a country that has been restricted for manufacturing by Disney). If any of the merchandise is produced, in whole or in part, in a restricted country you will be held responsible, and in addition to any and all rights and remedies available to Disney, you will be required to pay immediately for all costs associated with the collection, return and destruction of such merchandise as Disney may direct. If Disney directs you to destroy the merchandise, you must immediately do so in an environmentally acceptable manner, and provide Disney with a sworn Certificate of Destruction.

In addition, licensees and vendors must abide by restrictions outlined below.

U.S. Government Restrictions

Licensees and vendors may not source or sell products from or into countries, and may not export any controlled products to certain countries, subject to U.S. government trade restriction programs.

The Export Administration Regulations (“EAR”) are administered by the U.S. Department of Commerce. For more information, see the following websites:

http://www.access.gpo.gov/bis/ear/ear_data.html

http://www.bis.doc.gov/complianceandenforcement/index.htm

The OFAC Country Sanctions Programs are administered by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC). OFAC information is available at:

http://www.treas.gov/offices/enforcement/ofac/

In addition, the U.S. prohibits doing business with certain sanctioned parties (e.g. terrorists), wherever they may be located. For more information, see the following websites:

http://www.treas.gov/offices/enforcement/ofac/sdn/

(administered by the

Treasury Department); http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm (administered by the Commerce Department)

Disney applies these trade restrictions to all of its licensees and vendors, regardless of whether the products are intended for a U.S. or non-U.S. market, and to all products and components of products whether or not they bear Disney intellectual property.

It is the responsibility of all licensees and vendors to comply with all trade restriction programs, regardless of where the vendor or licensee is physically located or legally registered. Trade restrictions can apply to countries, products, industries or persons.

Trade Restrictions are subject to change. The above cited websites maintain the most up-to-date information on current U.S. Government trade restriction programs.

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Disney Restrictions

Until further notice, licensees and vendors may not source products from the following countries and territories due to Disney’s heightened level of concern about human rights issues or civil and political instability.

Afghanistan

Libya

Iraq

Northern Mariana Islands (Saipan)

Laos

Syria

This list is subject to change.

Other Sourcing Requirements

The following countries are subject to specific requirements.

Bangladesh

Licensees and vendors cannot place Disney-branded production in new facilities in Bangladesh. If you are currently producing Disney-branded product in Bangladesh you must continue to follow the pre-production and subsequent audit requirements. Please contact your Disney ILS representative for additional details.

Cambodia

Disney supports the International Labour Organization’s Better Factories Cambodia program, which maintains a single assessment process and provides capacity-building opportunities for apparel facilities in Cambodia. In support of this program and to reduce the duplication of monitoring in Cambodian apparel facilities, we will accept only social compliance audits conducted by the Better Factories Cambodia program. See www.betterfactories.org for additional information and contact your Disney ILS representative for additional details.

Haiti and Jordan

Disney supports the International Labour Organization’s Better Work Haiti and Better Work Jordan programs, which maintain a single assessment process and provide capacity-building opportunities for apparel facilities in Haiti and Jordan. In support of this program and to reduce the duplication of monitoring in Haitian and Jordanian apparel facilities, we will accept only social compliance audits conducted by the Better Work program. See www.betterwork.org for additional information and contact your Disney ILS representative for additional details.

As the Better Work program is extended to additional countries, we will consider similar support for the program in those territories.

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5 Facility Authorization

Disney licensees and vendors must disclose all facilities that will produce Disney-branded products. Facility disclosure is communicated to Disney via the Facility and Merchandise Authorization (FAMA) Application; and if required by Disney, a qualified social compliance audit report that demonstrates conformity with Disney's Minimum Compliance Standard.

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Types of Facilities to be Disclosed

Facilities that must be declared to Disney:

Physical locations where Disney-branded products are produced, manufactured, assembled, printed, embroidered or engraved/etched, including locations of any and all subcontractors; Locations of farms, orchards or facilities where Disney-branded agricultural products are processed, labeled or packaged; and Locations where Disney-branded paper products such as leaflets, instruction booklets, and packaging materials are produced, processed or assembled.

At this time, facilities that do not need to be declared to Disney for the purposes of ILS requirements include:

Trading companies, business agents, buying offices, showrooms and other places of business operations where products are not being produced or assembled. Facilities that produce blank products with no Disney-branded images on them. However, blank products cannot be produced in restricted countries or sourced from restricted parties, and Disney urges that licensees and vendors purchase blank products only from facilities who have standards comparable to Disney’s Code . Raw materials, fabric mills or processors of generic commodity items, such as cotton, metals and paper. However, raw materials should not be produced in restricted countries or sourced from restricted parties, and Disney urges that licensees and vendors purchase only raw materials produced and supplied under conditions comparable to Disney’s Code. o Note: Until further notice, cotton from Uzbekistan may not be used in any Disney-branded products.

Examples:

Denim shirt with Mickey embroidered patch and Mickey-shaped buttons You must submit details on the facilities that produce the embroidered patch and Mickey-shaped buttons, as well as the facilities that attach the embroidered patch and buttons onto the shirt. You must also submit information on any factories that produce or assemble labels and/or packaging with Disney proprietary materials. You do not need to submit the facility where the “blank” denim shirts are purchased. However, the blank denim shirts must not be produced in restricted countries.

Disney book You must submit details on the facility that prints the book, as well as any facilities that provide packaging for the book. You do not need to submit information on the design house that produces the art or production film, nor where the “blank” paper is produced. However, the art or production film should not be produced in restricted countries.

Fresh produce You must submit details of the packaging supplier; i.e., the facility that makes any boxes, labels or other material with Disney proprietary materials.

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You must submit details of where the fresh produce is being packed; i.e., the farm, processing facility or other location. You do not need to submit details of the grower if there is no Disney intellectual property being used on site.

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Documents Needed for Facility Disclosure

In order to produce Disney-branded merchandise at a selected facility, each licensee and vendor must first receive authorization to use the facility from the Disney ILS group. To obtain such authorization, the licensee or vendor must submit the following documentation to Disney ILS, prior to commencement of production.

1. Facility and Merchandise Authorization (FAMA) Application

Facility information is submitted by the licensee or vendor using the Facility and Merchandise Authorization (FAMA) Application (see the Facility and Merchandise Authorization Application in the Appendix for a sample). This document must be completed and returned to the appropriate Disney ILS representative. The FAMA form identifies the name and location of the physical facility where you intend to produce Disney-branded goods. A FAMA form signed by Disney also serves as evidence of your authorization to use Disney intellectual property in connection with your products and as a Customs release document.

You must submit one FAMA Application for each facility. Disney requires licensees and vendors to submit the names and addresses of physical locations of ALL licensee/vendor- owned facilities, sub-contractors and third party manufacturers of Disney-branded products.

2. Qualified Social Compliance Audit that Meets Minimum Compliance Standard 1

In certain instances and prior to the start of production, a licensee or vendor may be asked to submit a “qualified audit” for all facilities in which it intends to place Disney-branded production. The audit must demonstrate compliance with Disney’s Minimum Compliance Standard. Please contact your local ILS representative for more information.

If you have been asked to submit an audit prior to the start of Disney production, you should check with your facility as to whether a recent audit has been conducted and whether the report is available.

Minimum Compliance Standard:

Absence of child labor

Absence of involuntary labor

Absence of coercion and harassment

Absence of discrimination

Absence of serious health and safety workplace conditions

Absence of interference with freedom of association

1 Not all licensees and vendors are required to submit audits, please contact your local ILS representative for audit requirements.

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Qualified Audit Criteria

A “qualified audit” must meet all of the following conditions:

Is an audit report documenting the social compliance conditions of a facility (this does

not include GMP - Good Manufacturing Practices, product safety or product quality audits or non audit certificates); Is no more than 12 months old from date of audit to time of submission to Disney;

Was performed by qualified social compliance monitors; i.e.,

o

Social compliance monitors listed (see the Accepted Social Compliance Monitors listed in the Appendix),

o

other credible audit providers as determined by Disney,

o

a known brand with an established social compliance program (e.g., Levi Strauss, Gap, Marks & Spencer, Nike, Timberland) or

o

the licensee’s or vendor’s internal auditors, provided that the licensee or

vendor is able to provide proof, upon request, that the auditors are trained and qualified to conduct social compliance audits. Covers elements of Disney’s Code; i.e., child labor, involuntary labor, coercion and

harassment, nondiscrimination, association, health and safety, compensation, protection of the environment, compliance with other laws, subcontracting, monitoring and compliance, and publication; Was conducted with full access to the facility, required documentation and employee

interviews; Included confidential worker interviews, management interviews, review of

documents and visual inspection of facility premises, including any dormitories; Was conducted without any interference in the audit process that may compromise

the integrity of the audit (e.g., coercion or harassment of auditors, bribe attempts); Identifies the full address and phone number of the facility, including floor and

building designations, street address, district, city and country; and Is in English and submitted electronically.

A “qualified audit” may come from two sources:

1. A social compliance audit that the licensee, vendor or facility shares with Disney, or

2. A Disney audit

Licensees and vendors should seek available audits through their facility contacts first, instead of relying solely on the Disney ILS team to validate existing audits in Disney ILS audit database.

Examples of other acceptable audit standards:

Business Social Compliance Initiative (BSCI) Electronic Industry Citizenship Coalition (EICC) Ethical Trading Initiative (ETI) Fair Labor Association (FLA) International Council of Toy Industries (ICTI) CARE Program (see the section Monitoring Facilities for additional information on ICTI CARE)

of Toy Industries (ICTI) CARE Program (see the section Monitoring Facilities for additional information on ICTI
of Toy Industries (ICTI) CARE Program (see the section Monitoring Facilities for additional information on ICTI
of Toy Industries (ICTI) CARE Program (see the section Monitoring Facilities for additional information on ICTI
of Toy Industries (ICTI) CARE Program (see the section Monitoring Facilities for additional information on ICTI

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SEDEX Members Ethical Trade Audit (SMETA) Social Accountability 8000 (SA8000) (see the section Monitoring Facilities for additional information on SA8000) Worldwide Responsible Accredited Production (WRAP)

section Monitoring Facilities for additional information on SA8000) Worldwide Responsible Accredited Production (WRAP)
section Monitoring Facilities for additional information on SA8000) Worldwide Responsible Accredited Production (WRAP)

Other audit sources will be considered and accepted at Disney’s sole discretion. Licensees and vendors are encouraged to submit available audits for review.

Notes on Declaring Factories

Manufacturing is restricted in some countries and territories. Disney will not accept FAMA

Applications for facilities located in these countries and territories (see the Sourcing Restrictions section for details). Facility addresses in Hong Kong should be double-checked to avoid the submission of

office locations. Production is generally located in mainland China. Provide complete and accurate facility address and phone/fax numbers. Include full

street name, building number, floor number, phone/fax numbers with area or country code and full contact names.

Facilities in Asia, particularly in China, tend to have multiple official names or various translations in English. In order to properly identify the facility, please list all of the facility’s official names from registrations or legal permits, any name variations or translations, and any “also-known-as” or “doing business as” names. If possible, also provide the names in the local characters. It may take from several days to weeks for Disney to review and process the documents

required to authorize a facility.

Licensees and vendors are encouraged to submit the

documents in a timely manner so as not to delay the start of production. Authorization will be evidenced by a FAMA signed by Disney and provided by Disney to the licensee or vendor. Failure to declare facilities is a material breach of Licensee’s or Vendor’s contract with Disney and could result in termination of the contract.

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Facility Authorization Process 2

In order to authorize production of Disney-branded goods, licensees and vendors must submit

a FAMA Application. In addition, certain licensees and vendors are required to submit a

qualified audit for each facility. Once the FAMA Applications are received, Disney will determine if it has an existing record of the facility and the status of each facility. If the facility is not eligible for Disney production, the licensee or vendor must select a different facility.

When a licensee or vendor is required to submit an audit and the facility has a qualified

social compliance audit report on file, Disney ILS will send to the licensee or vendor a signed FAMA authorizing production. When a licensee or vendor is required to submit an audit and the facility does not have a qualified social compliance audit report on file with Disney, then the licensee or vendor will be required to submit the audit to Disney. Once a qualified social compliance audit report is received, reviewed and accepted by Disney, Disney ILS will send to the licensee or vendor a signed FAMA authorizing production.

FACTORY STATUS REQUEST Highly recommend that Licensee / Vendor request audit status from the factory

FACTORY STATUS REQUEST Highly recommend that Licensee / Vendor request audit status from the factory in advance of submitting documentation

Highly recommend that Licensee / Vendor request audit status from the factory in advance of submitting
Highly recommend that Licensee / Vendor request audit status from the factory in advance of submitting

LICENSEE / VENDOR SUBMITS:

1. FAMA Application

2. If requested, a social compliance

assessment report that meets the Minimum Compliance Standard

assessment report that meets the Minimum Compliance Standard ILS REVIEWS AND PROCESSES: 1. FAMA Application 2.

ILS REVIEWS AND PROCESSES:

1. FAMA Application

2. Social compliance assessment report if

necessary

Eligible

Social compliance assessment report if necessary Eligible Not Eligible Documentation meets Disney ILS requirements
Social compliance assessment report if necessary Eligible Not Eligible Documentation meets Disney ILS requirements

Not Eligible

Documentation meets Disney ILS requirements

FAMA released to Licensee / Vendor

Production of Disney goods may begin

Documentation does not meet Disney ILS requirements

Licensee / Vendor will be advised on next steps

Production of Disney goods may not begin

2 Not all licensees and vendors are required to submit audits, please contact your local ILS representative for audit requirements.

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Checklist for Facility Disclosure

Submit a FAMA Application form for each facility.

Submit a qualified audit (i.e., one that meets the Minimum Compliance Standard) when requested by Disney or allow Disney to conduct an audit, if required.

Before commencing any Disney-related production, obtain formal authorization to manufacture (a signed FAMA) from Disney ILS.

Disney does not “certify” facilities. Possession of a Disney FAMA, social compliance assessment report, CAPAR, Corrective Action Plan letter or other document from Disney does not indicate that a facility is currently eligible for Disney production. Always check directly with Disney to confirm the status of a facility.

Disney ILS will not release a signed FAMA authorizing your production, shipment and sale of branded goods without submission and approval of a FAMA Application. In addition, certain licensees and vendors may be asked to submit a qualified social compliance audit as part of the application process.

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6 On-Going Requirements

Once a facility has gained explicit approval from Disney to manufacture Disney-branded product, licensees and vendors who were asked to submit a qualified social compliance audit as part of the initial application process will be asked to provide subsequent facility audit reports, at a time period specified by Disney. These subsequent audits take the form of a qualified social compliance audit that identifies the facility’s level of compliance with local labor laws, the Disney Code and the Minimum Compliance Standard. The failure for this group of licensees and vendors to submit a required social compliance audit report, or submission of a social compliance audit report revealing that a facility no longer meets the Minimum Compliance Standard, will result in loss of authorization to produce Disney-branded products in that facility as well as other possible consequences. Where Disney conducts audits, licensees and vendors are expected to ensure that factories grant Disney access to conduct the audit.

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On-Going Requirements of Licensees and Vendors

In addition to the requirements outlined in the section Licensee & Vendor Responsibilities, licensees and vendors are required to perform the following activities on an on-going basis.

Notify: Inform Disney ILS of any changes in your facility base as soon as they occur, including facilities you wish to add and facilities you no longer intend to use.

Audit: If required by Disney, submit periodic audits on the schedule prescribed by Disney ILS or ensure Disney has access to conduct audits. You will receive a monthly report identifying the next audit due date, which generally follows the monitoring schedule below 3 . Certain programs, such as the ILO Better Work program, may have different timeframes.

Remediate: Work with any and all facilities that produce Disney-branded products to implement corrective action plans, as needed.

Exit: If Disney advises that a facility does not meet its requirements, communicate expectations or requirements to the facility and ensure that all Disney-branded materials are removed from the facility within 30 days or sooner if required by law.

Communicate:

concerns.

Communicate regularly with Disney ILS regarding questions, changes or

Monitoring Timeframes

For licensees and vendors that are required to submit subsequent social compliance audit, the monitoring timeframes vary from 6 to 24 months from the previous audit date, depending on the type and severity of any violations cited in the previous audit and the country/territory grouping as categorized by Disney ILS. See the chart below or contact your Disney ILS representative for questions related to a specific next audit due date.

   

Country/Territory Grouping*

 

Audit

     

Violation

Group 1

Group 2

Group 3

Category

High

6

months

6 months

6 months

Medium

6

months

12

months

12

months

Low/Acceptable

12 months

24

months

24

months

3 Note that in some geographic regions only certain licensees and vendors will receive monthly status reports.

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* See the Appendix 2 for countries and territories that fall into each group. Note: this list is updated annually based upon changes in legal, political and economic conditions in each country. Check with your Disney ILS representative for the most current information.

Examples of Violation Priorities:

The following are select examples of violations that fall into the High, Medium and Low priority categories.

“High” Priority Child labor

Verbal abuse

Discrimination in employment practices

Penalties for legal association

Falsified records preventing assessment of wages and working hours

Mandatory overtime

Restricting or limiting employee freedom of movement

Withholding passports or other identity documents

“Medium” Priority Workers do not have one day off in a seven-day period Workers paid below legal wage rate (regular or overtime) Working hours exceed legal limit or the Disney Code of Conduct Employees are denied or unable to exercise their rights to social benefits Required deposits for tools or uniforms Monetary fines Employees lack labor contracts where required by law Lack of written approval from Disney for any subcontractors

“Low” Priority First aid kit not fully stocked Labor contracts are established but employees are not provided copies Company policies on wage deductions, deposits and/or fines exist on paper but no known instances in practice

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Revised January 2010

7 Monitoring Facilities

Disney conducts its own audits or requires current qualified social compliance audit reports from certain licensees and vendors for facilities making Disney branded products. Those licensees and vendors that are required to submit audits can either obtain existing audit reports or work with a social compliance monitoring firm to have an audit conducted.

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Revised January 2010

Social Compliance Audit Options 4

If you are required to submit an audit to Disney ILS, a social compliance audit report may already exist or you may need to arrange to have a new audit conducted.

1. Ask the facility if they have had a recent social compliance audit and if you can supply this audit to Disney.

2. If not, check with Disney to determine if we have a qualified audit on file for the facility you intend to use.

3. If not, contact one of the monitors noted in the Appendix section “Accepted Social Compliance Monitors” to arrange for a new audit. Licensees and Vendors are responsible for arranging the timeframe and payment structure for the audit. See the remainder of this section for more information about working with social compliance monitors.

While an audit conducted to Disney standards is preferred, we will also accept audits conducted to other code of conduct and monitoring programs. See the Facility Authorization section for examples of other acceptable audit types.

Other audit sources will be considered and accepted at Disney’s sole discretion. Licensees and vendors are encouraged to submit any available social compliance audits for review.

Disney-Directed Audits

Disney may elect to have its own social compliance audits performed at any facilities making Disney-branded products. These audits may be conducted by Disney staff or one of the listed Accepted Social Compliance Monitors on our behalf.

Disney audits may be scheduled in advance or unannounced. Licensees and vendors will generally receive a Code of Conduct Assessment Notification (see the Appendix section Code of Conduct Assessment Notification for a sample). When audits are scheduled in advance, there will also be additional communication to set a specific date for the audit. For unannounced audits, a Code of Conduct Assessment Notification will be sent without indicating a specific date for the audit. We perform unannounced audits because our experience shows that we may obtain a more accurate assessment of the working conditions when audits are conducted in this manner. We will typically also conduct an unannounced audit if there are discrepancies in the information we receive about facility conditions or if allegations are raised by a third party.

In cases where Disney audits are conducted – either by Disney staff or by one of our Accepted Social Compliance Monitors – we will issue a Corrective Action Plan Letter (CAP Letter). Licensees and vendors are expected to review this letter with the facility and implement a corrective action plan.

4 Only applicable to those licensees and vendors that are required by Disney to submit social compliance audits.

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Revised January 2010

Toy Facilities in China and ICTI CARE

Disney has a Memorandum of Understanding (MOU) with the International Council of Toy Industries (ICTI) CARE Foundation, which operates the international toy industry's ethical manufacturing process, aimed at ensuring safe and humane workplace environments for toy facility workers worldwide. This MOU:

Recognizes the ICTI CARE Process as a program through which participating facilities can satisfy Disney’s requirements for labor standards and worker rights. Makes available to Disney the ICTI CARE Process audit database specifically for those facilities that have granted such access to Disney.

to Disney the ICTI CARE Process audit database specifically for those facilities that have granted such

If your toy facility in China is participating in the ICTI CARE Process, please have the facility authorize Disney’s access to its audit reports. This may improve the speed with which your facility is authorized by Disney. Contact ICTI CARE to obtain the appropriate registration and authorizations forms; a sample ICTI CARE Foundation Authorization Form is located in the Appendix.

If your toy facility in China is not currently participating in the ICTI CARE Process, we strongly encourage them to apply and participate. The ICTI CARE Process sets a single social compliance monitoring standard for toy facilities that Disney as well as many other toy brands and retailers recognize. Participation in the ICTI CARE Process will reduce the duplication of monitoring, save costs and may improve the speed with which a facility may be authorized by Disney. See http://www.icti-care.org/applicationpackage.html for the application package.

For more information about ICTI CARE, see http://www.icti-care.org/.

Disney will not accept facility certifications or seals of compliance in lieu of the audits themselves.

Note that Disney may periodically conduct unannounced audits of facilities, regardless of any audits submitted by licensees and vendors (whether or not it is required by Disney) or support for any industry or multi-stakeholder program.

It is at Disney’s sole discretion as to whether a third party audit will be considered for evaluation purposes. Acceptance of a third party audit does not confer approval of the facility.

Social Accountability International and SA8000

Disney is also a member of Social Accountability International (SAI), an international non- profit human rights organization dedicated to the ethical treatment of workers around the world. SAI’s social standard - SA8000 – may also be used to conduct qualified audits for submission to Disney. SA8000 audits are performed by some of the organizations listed in the Accepted Social Compliance Monitors section of the Appendix. For more information about SAI, see http://www.sa-intl.org/.

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Revised January 2010

Working With Social Compliance Monitoring Organizations

Whether you are required to submit social compliance audits to Disney or would like to hire and work with social compliance monitoring organizations for the purpose of improving the compliance level at the factory, some monitoring organizations can provide remediation support as well as conduct facility audits based on the Disney Code of Conduct. However, monitoring organizations are not responsible for dictating or interpreting Disney policy, advising whether the facility is compliant with Disney standards, or providing guidance on follow-up action.

Before hiring an external monitor, ensure that the facility management understands the requirements of the Disney Code and the audit process, and that they will permit the auditors access to the facility premises, employees and relevant documents. Some sample questions that may be asked or reviewed during a social compliance audit are in the Sample Social Compliance Audit Checklist in the Appendix.

Disney recommends the following steps.

1. Contact one of the Accepted Social Compliance Monitors.

2. Ensure that the monitor can conduct the social compliance audits according to your timeframe. Audits may take several months to arrange depending on the location of the facility and the monitoring organization’s existing capacity.

3. Review results and communicate a corrective action plan with the facility immediately. DO NOT send confidential information to the facility (e.g., facility workers’ names) that could result in retribution or negative impact to workers or violation of data privacy laws. Work with the facility to implement the corrective action plan and ensure that any follow-up audits are scheduled with the monitor.

4. Send a copy of the audit results to Disney within five days of receipt. The monitor will not send results directly to Disney unless specifically authorized by the licensee or vendor. Note: the monitor may leave a Corrective Action Plan Acknowledgement Report (CAPAR) with the facility. This is a preliminary assessment of the findings at the facility (see the Appendix for a sample). You may request this from the facility but understand it is not the final, formal assessment of conditions as information may need to be validated or reviewed before final conclusions are made.

5. Communicate the remediation process and any follow-up results to Disney.

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Revised January 2010

Disney’s ILS Ethics Policy

All employees of The Walt Disney Company and its affiliated companies (collectively,

“Disney”) are required to comply with certain ethical and legal standards set forth in

Disney’s “Standards of Business Conduct.” daily operations worldwide.

Disney’s ILS Group follows these standards in its

In addition, Disney’s ILS Group requires that social compliance monitors and other representatives acting on Disney’s behalf (collectively, “Disney representatives”) adhere to the same standards. Among other things, these standards strictly prohibit the solicitation, offer or acceptance of anything of value from any person or company that may impair or be presumed to impair the exercise by any Disney representative of independent judgment and unbiased assessment.

Furthermore, no individual or company may offer anything of value - including, but not limited to, any cash, gratuity, benefit, discount, special privilege, loan, lodging or other favor, or any meals and travel other than as reasonably necessary and incidental to a Disney representative’s work - intended, or which may reasonably appear intended, to influence any Disney representative. Any individual or company doing so is subject to having its contract to manufacture Disney products terminated immediately.

If you have any concerns or questions regarding the behavior of any Disney representative or

to report a violation of the ethics policy, please immediately contact the Disney Hotline in your region at the number listed below:

Argentina

0800-666-1676

Italy

800-78-7634

Australia

A2 1-800-20-8921 AU 1-800-14-0796

Japan

00531-11-5136

     

00798-1-1-005-8393

Brazil

0800-891-4137

Korea

00308-11-0492 (DACOM) 00368-11-0099 (ONSE)

Canada

1-800-699-4870

Mexico

001-800-620-1428

Chile

1230-020-2093

Russia

Must dial from a landline 363-2400 (AT&T access number); After tone, dial 888-475-43-56

China (North)

10-800-711-0583

Spain

900-97-1014

China (South)

10-800-110-0561

United Kingdom

0808-234-6062

France

0800-90-6152

United States

1-800-699-4870

 

Call collect to

 

India

704-973-0301

The hotline may be called any time, day or night, as it is available 24 hours a day, 365 days

a year. Disney strictly prohibits any form of retaliation against anyone who reports any

suspected wrongful conduct to Disney. Reports are also accepted anonymously. Disney will use reasonable efforts to maintain the confidentiality of any report, although it must retain

the right to make disclosures that it deems required by law or otherwise necessary for the protection of the Disney ILS program or other Disney rights and interests.

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Revised January 2010

8 Loss of Production Authorization

Disney is committed to working cooperatively with licensees, vendors and facilities to strengthen their labor practices. However, on occasion, we remove authorization for production of Disney-branded products at certain facilities. There are specific reasons that a facility’s authorization to produce Disney-branded products might be terminated, and also ways to prevent loss of production authorization at your facility.

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Revised January 2010

Loss of Production Authorization

Loss of production authorization means that a facility has not complied with our Code or other Disney ILS program expectations in a specified timeframe. Reasons may include (but are not limited to) the following:

A qualified social compliance audit conducted by Disney, or submitted by licensees and vendors within the required timeframe fails to demonstrate that the facility meets the Minimum Compliance Standard. Two consecutive qualified audits conducted by Disney, or submitted by licensees and vendors within the required timeframe, demonstrate that the facility meets the Minimum Compliance Standard but has “High” priority violations. Three non-consecutive qualified audits submitted by licensees and vendors within the required timeframe in a 24-month period demonstrate that the facility meets the Minimum Compliance Standard but has “High” priority violations. Any attempt was made to offer anything of value intended to influence an auditor or other Disney representative. Two audit attempts are made in which the auditor was denied full or partial access to the facility, its employees for private interviews and/or its records.

Note:

authorization to use a specific facility if it fails to submit subsequent audit reports on the prescribed schedule.

If a licensee or vendor is required to submit audits to Disney, it could also lose its

Process of Authorization Removal

If a facility’s production authorization has been removed, the licensee or vendor:

will be sent a Facility Termination Letter (see Appendix for a sample);

must cease Disney–related production and remove any and all Disney-branded products whether complete or in process within 30 days or as may be required by law.

The Facility Termination Letter is sent to all vendors or licensees that at one time or another have worked with the facility and serves as notification of the facility’s status.

Ways to Minimize Facility Loss of Authorization

1. Adhere to your On-Going Requirements.

These responsibilities include, but are not

limited to, notifying Disney when facilities are added or discontinued for production and notifying Disney when steps have been undertaken with facilities to achieve and sustain compliance with Disney’s Code.

2. Inform the facility that if a facility manager or owner is not available at the time of the audit, an authorized facility representative must be available to assist and provide access to the facility, its employees and its payroll records.

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Revised January 2010

3. Conduct a pre-production audit of any new facility, if required by Disney. Licensees may use Disney’s list of Accepted Social Compliance Monitors to screen facilities prior to proposing them for production of Disney-branded goods.

Facility Reinstatement Process

If a facility’s authorization to produce Disney-branded products has been terminated, there may be an opportunity to have it reinstated. The facility reinstatement process varies depending on the severity of non-compliances revealed during the last audit.

A waiting period of 12 months is required before a facility can be considered for reinstatement. A business case for reinstatement must be submitted by the licensee or vendor, and approved by the Vice President of the applicable Disney business unit and by the Disney ILS group. The reinstatement request must be accompanied by a qualified audit confirming that the facility in question meets the Minimum Compliance Standard and has no “High” priority violations.

If you have a facility you would like to have reinstated for production, please contact your Disney ILS representative for further details.

8-3

Revised January 2010

9 Frequently Asked Questions

9-1

Revised January 2010

Frequently Asked Questions

1.

2.

3.

4.

5.

6.

7.

8.

What are the ILS requirements to produce Disney goods? Submit a Facility and Merchandise Authorization (FAMA) Application for each facility location (all sections of the FAMA must be complete). If asked by Disney, submit a full social compliance audit that meets the Minimum Compliance Standard for each facility location or allow Disney to conduct an audit, if required. Receive a signed FAMA from Disney ILS.

What are the ILS requirements to continue producing Disney goods? Update FAMA forms as needed and monitor progress if asked by Disney. If asked by Disney, submit subsequent audit reports as required to continue producing Disney goods.

Can a terminated facility be reinstated? A facility may be eligible for reinstatement after 12 months. The licensee or vendor must submit a reinstatement request with business case justification along with a qualified audit report that meets the Minimum Compliance Standard and does not have any High priority violations.

What if a licensee or vendor fails to declare a facility? The potential consequences could be as significant as termination of contract.

What are the consequences for a facility failing to meet ILS requirements? A facility that does not meet the Minimum Compliance Standard will be ineligible to produce Disney goods.

If I am asked by Disney to submit an “audit,” what would constitute an "audit" and where can it be obtained? An audit is a full social compliance assessment of the facility that outlines the labor standards conditions in the facility. If required by Disney to submit an audit, the licensee or vendor may request a copy of any recent audit (not more than twelve months old) from the facility or contract with a third party monitoring firm to conduct an audit of the facility (see Accepted Social Compliance Monitors in the Appendix).

Who do I contact in my region to answer ILS questions? Please contact your local Disney ILS representative for additional information about Disney ILS program requirements. If you do not know who your Disney ILS representative is, your primary Disney business contact will be able to direct you.

Has the Disney Code of Conduct changed? The Disney Code of Conduct has not changed. Disney is committed to the promotion and maintenance of responsible labor practices in its licensing and direct sourcing operations throughout the world.

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Revised January 2010

10

Appendix

The following documents are examples of materials you may need to submit to Disney International Labor Standards or otherwise use to meet Disney’s ILS program requirements. These documents are only samples and should not be submitted in this format.

Appendix 1: Facility and Merchandise Authorization Application*

Appendix 2: Country and Territory Groupings

Appendix 3: Acceptable Social Compliance Monitors

Appendix 4: Code of Conduct Assessment Notification

Appendix 5: Corrective Action Plan Letter

Appendix 6: ICTI CARE Foundation Authorization Form

Appendix 7: Sample Social Compliance Audit Checklist

Appendix 8: Corrective Action Plan Acknowledgement Report

Appendix 9: Facility Termination Letter

* Documents that licensees and vendors submit to Disney ILS

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Appendix 1

Facility and Merchandise Authorization (FAMA) Application

FACILITY AND MERCHANDISE AUTHORIZATION APPLICATION

Attached is the Facility and Merchandise Authorization (“FAMA”) application that must be completed for each Facility.

Please make as many copies of the attached FAMA Application as necessary so that you can complete a FAMA Application for each Facility

The Walt Disney Company Address: Contact Name Phone: Fax: E-mai l:
The Walt Disney Company
Address:
Contact Name
Phone:
Fax:
E-mai
l:

Once the FAMA Application is completed for each Facility, please send to the appropriate ILS Regional Analyst.

Disney will verify the information and determine whether each Facility will be allowed to produce Licensed Products.

You may begin production of Licensed Products as authorized under your applicable agreement with Disney, once you receive the signed FAMA from Disney.

You also may present the signed FAMA to Customs officials to facilitate the importation of goods if the Facility is outside the territory where the Licensed Products are to be sold. Emergency Customs letters will no longer be issued.

For those Facilities that are allowed to produce Licensed Products, you must provide a copy of the Code of Conduct for Manufacturers (and any relevant translation) for the Facility’s acceptance and covenant to comply.

Definition of “Facility”: any of Licensee’s own or third-party manufacturers, vendors, factories, suppliers, and other facilities (as well as any sub-manufacturers, factories, suppliers and other facilities) that design, produce, process, finish, assemble, or package Licensed Products, components of Licensed Products, PA materials, labels, hang-tags, or any other item related to the Licensed Products, or that assemble a final product including one or more Licensed Products. Do NOT list facilities that only produce generic items such as cardboard boxes, plastic wrap, or plain buttons UNLESS these components contain any Disney proprietary material. Unless they are involved in the actual production or manufacture of Licensed Products, do NOT list agents, business offices or showrooms as a Facility. The Shipper and/or Importer of Record is strictly the party who transports the goods; if the name is different from that of the Licensee/Vendor or Facility, please so indicate on the FAMA Application.

Incomplete or illegible forms will be returned to you for resubmission. Please make copies of these forms and use the copies to submit your information. Maintain the original in your files for future use.

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Revised January 2010

FACILITY AND MERCHANDISE AUTHORIZATION APPLICATION

(Please Type or Print Legibly in Ink)

LICENSEE/VENDOR NAME:

STREET ADDRESS:

10.1.1 TELEPHONE NUMBER:

FAX NUMBER:

CONTACT NAME, TITLE AND, IF AVAILABLE, E-MAIL ADDRESS:

1. Facility Name (Place Where Merchandise is Produced): 1e. List All Other Names by Which
1.
Facility Name (Place Where Merchandise is Produced):
1e.
List All Other Names by Which the Facility
is Known:
_
1a.
Facility Address:
_
1f.
Is this Manufacturing Facility Owned by the Licensee or Vendor?
Yes
No
1g.
List All Authorized Merchandise Produced in this Facility (as
listed on the License Agreement) : Attach a separate sheet if
necessary
1b.
Telephone Number:
1c.
Fax Number:
1d.
Contact Name and Title:
2.
Disney Property, Brand or Logo (List All Produced in this Facility):
4.
Shipper
Importer of Record (check one). Provide Name and
Address: Only List if the Transporter of the Merchandise is other than Facility
or Licensee/Vendor.
3.
Territory Where Merchandise May Be Sold:

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Revised January 2010

Appendix 2 10.2 Country and Territory Groupings

These countries and groupings are subject to change.

Group 1 Countries/Territories

Albania Algeria Angola Argentina Armenia Azerbaijan Bahrain Bangladesh Belarus Benin Bhutan Bolivia Bosnia-Herzegovina Brazil Burkina Faso Burundi Cambodia Cameroon Central African Republic Chad China Colombia Comoros Congo (Brazzaville; Republic of Congo) Congo (Kinshasa; Democratic Republic of Congo) Cote d'Ivorie Djibouti Dominican Republic

Ecuador Egypt El Salvador Equatorial Guinea Eritrea Ethiopia Fiji Gabon Gambia, The Georgia Ghana Guatemala Guinea Guinea-Bissau Guyana Haiti Honduras India Indonesia Jamaica Jordan Kazakhstan Kenya Kosovo Kuwait Kyrgyzstan Lebanon Lesotho Liberia Macedonia Madagascar

Malawi Maldives Mali Mauritania Mexico Moldova Mongolia Montenegro Morocco Mozambique Namibia Nepal New Caledonia Nicaragua Niger Nigeria Oman Pakistan Palestinian Territories Panama Papua New Guinea Paraguay Philippines Qatar Russia Rwanda Sao Tome & Principe Saudi Arabia Senegal Serbia

Sierra Leone Solomon Islands Somalia South Africa Sri Lanka Swaziland Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tonga Trinidad & Tobago Tunisia Turkey Turkmenistan Uganda United Arab Emirates Uzbekistan Vanuatu Venezuela Vietnam West Bank Gaza Yemen Zambia Zimbabwe

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Revised January 2010

Group 2 Countries/Territories

American Samoa Antigua & Barbuda Belize Botswana Brunei Bulgaria Cape Verde Chile Cook Islands Costa Rica Croatia Czech Republic

Dominica

Martinique Mauritius Malaysia Marshall Islands Nauru Netherlands Antilles Palau Peru Poland Puerto Rico Reunion Romania

Samoa Seychelles Singapore Slovakia South Korea St. Vincent & Grenadines Suriname Ukraine USA Uruguay Virgin Islands – US

Estonia

French Guiana

Greece

Guam

Hong Kong

Hungary

Israel

Kiribati

Latvia

Lithuania

Macau

 

Group 3 Countries/Territories

Andorra

Cyprus

Luxembourg

Spain St. Kitts & Nevis St. Lucia Sweden Switzerland Tuvalu United Kingdom Vatican City Virgin Islands – UK

Anguilla

Denmark

Malta

Aruba

Finland

Micronesia

Australia

France

Monaco

Austria

Germany

Netherlands

Bahamas

Grenada

New Zealand

Barbados

Iceland

Niue

Belgium

Ireland

Norway

Bermuda

Italy

Portugal

Canada

Japan

San Marino

 

Cayman Islands

Liechtenstein

Slovenia

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Revised January 2010

Appendix 3 10.3 Acceptable Social Compliance Monitors

The following organizations have been approved to conduct audits on behalf of Disney and with respect to the requirements outlined in the Disney Code of Conduct. Licensees and vendors may contract with these organizations to conduct audits on their behalf to fulfill Disney’s ILS monitoring requirements.

This list of Acceptable Social Compliance Monitors is subject to change.

BUREAU VERITAS CONSUMER PRODUCTS SERVICES (BVCPS)

NORTH AMERICA AND EUROPE

Contact Person:

Jason Hill

Telephone:

503 764 9190

E-mail:

jason.hill@us.bureauveritas.com

Contact Person:

Maria Basilio

Telephone:

909 628 4368

E-mail:

maria.basilio@us.bureauveritas.com

ASIA Contact Person:

Zoye Chen

Telephone:

8621 2416 6957

Fax:

8621 6489 3423

E-mail:

zoye.chen@cn.bureauveritas.com

INSITE COMPLIANCE SERVICES

USA / INTERNATIONAL Contact Person:

Telephone:

Fax:

E-mail:

Tanvi Patel 415 226 1772 415 986 7599 tanvi.patel@mts-insite.com

Tanvi Patel 415 226 1772 415 986 7599 tanvi.patel@mts-insite.com
Tanvi Patel 415 226 1772 415 986 7599 tanvi.patel@mts-insite.com
Tanvi Patel 415 226 1772 415 986 7599 tanvi.patel@mts-insite.com

INTERTEK TESTING SERVICES

NORTH AMERICA Contact Person:

Toni Bellacosa (US)

Telephone:

212 803 5315

Fax:

212 453 5010

E-mail:

toni.bellacosa@intertek.com

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Revised January 2010

ASIA Contact Person:

K.Y. Cheung (China)

Telephone:

86 755 2602 0868

Fax:

86 755 2602 0899

E-mail:

kamyuen.cheung@intertek.com

EUROPE Contact Person:

Nurten Gunaydin (Turkey)

Telephone:

90 212 473 1340

Fax:

90 212 693 4987

E-mail:

nurten.gunaydin@intertek.com

LATIN AMERICA Contact Person:

Viviana Rodriguez (Colombia)

Telephone:

57 1 610 8458 Ext 104

Fax:

57 1 610 8458 Ext 114

E-mail:

viviana.rodriguez@intertek.com

LEVEL WORKS LTD.

GLOBAL CONTACT & LATIN AMERICA

Contact Person:

Telephone: 1.415.440.4141

Jose Corado (USA)

Fax:

1.415.440.4777

E-mail:

jcorado@level-works.com

INDIA, BANGLADESH, SRI LANKA, PAKISTAN

Contact Person:

B. Ganesh (India)

Telephone:

91 44 23723511 / 91 44 24812498

Fax:

91 44 23728383

E-mail:

ganeshb@level-works.com

CHINA, HONG KONG, MACAU

Contact Person:

Raymond Huang (China)

Telephone:

86 755 8214 4529

Fax:

86 755 8214 4530

E-mail:

rhuang@level-works.com

EUROPE, MIDDLE EAST, AFRICA

Contact Person:

Bahadir Yuce (Turkey)

Telephone:

90 532 445 8298

Fax:

90 212 341 1111

E-mail:

byuce@level-works.com

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Revised January 2010

SOCIAL COMPLIANCE SERVICES ASIA (China, Taiwan, Hong Kong and Macau audits only)

ASIA / INTERNATIONAL Contact Person:

Telephone:

Fax:

E-mail:

Samuel Wong 852 2376 0328 852 2376 2263 samuel.wong@scsagroup.com

Samuel Wong 852 2376 0328 852 2376 2263 samuel.wong@scsagroup.com
Samuel Wong 852 2376 0328 852 2376 2263 samuel.wong@scsagroup.com
Samuel Wong 852 2376 0328 852 2376 2263 samuel.wong@scsagroup.com

SOCIÉTÉ GÉNERALÉ DE SURVEILLANCE (SGS)

ALL REGIONS Contact Person:

Telephone:

Fax:

E-mail:

Margarita Chiriboga 973 461 7928 973 575 1193 margarita.chiriboga@sgs.com

Margarita Chiriboga 973 461 7928 973 575 1193 margarita.chiriboga@sgs.com
Margarita Chiriboga 973 461 7928 973 575 1193 margarita.chiriboga@sgs.com
Margarita Chiriboga 973 461 7928 973 575 1193 margarita.chiriboga@sgs.com

SPECIALIZED TECHNOLOGY RESOURCES (STR) (formerly CSCC) Responsible Sourcing Division

USA / INTERNATIONAL Contact Person:

Jan Salvaryn

Telephone:

310 215 0554 ex.528

Fax:

310 417 9083

E-mail:

Jan.Salvaryn@STRRS.com

VERITE*

USA / INTERNATIONAL Contact Person:

Robin Jaffin

Telephone:

413 253 9227

Fax:

413 256 8960

E-mail:

rjaffin@verite.org

* Note: Provides in-depth assessments, consultation, and training services.

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Revised January 2010

Appendix 4:

10.4 Code of Conduct Assessment Notification

* For Disney-directed audits only

Assessment Notification * For Disney-directed audits only International Labor Standards Group Code of Conduct

International Labor Standards Group Code of Conduct Assessment Notification

500 South Buena Vista Street Burbank, California 91521-8400 USA

Country:
Country:

From:

Tel:

Email:

To:

CORPILS-FANReply@disney.com

Licensee/Vendor:

Licensee/Vendor ILS #:

Fax Number:

Notice of assessment of manufacturing facility producing Disney articles

Disney Worldwide Services, Inc. has selected the following facility for a Code of Conduct compliance assessment by our authorized monitoring organization, in approximately 90 days.

Facility to be assessed:

ILS Number:

Location:

Our records indicate that this is a facility currently engaged in the manufacture of Disney-branded products pursuant to your license agreement with Disney.

As you are aware, your license agreement with Disney requires that our auditors be provided entrance into the facility at the time of assessment. A denial of access to the facility would result in a breach of your license agreement and could result in the termination of the facility’s authorization to manufacture Disney-branded products.

Please notify your facility immediately of this pending assessment

Please contact us promptly, and in any event within 15 days, at CORPILS-FANReply@disney.com and reference the ILS number if:

_1. The manufacturing facility information is incorrect. If this is the case, please provide the correct facility information.

_2. The manufacturing facility has relocated. If this is the case, please provide the new address and contact details.

_3. You are no longer using the manufacturing facility. In this case, please provide the name, address, phone, contact of the manufacturing facility you are using.

Thank you.

Disney Worldwide Services, Inc., an indirect subsidiary of The Walt Disney Company, provides services in support of the International Labor Standards program

Disney Worldwide Services, Inc., an indirect subsidiary of The Walt Disney Company, provides services in support of the International Labor Standards program

of The Walt Disney Company family of companies

of The Walt Disney Company family of companies

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Revised January 2010

Appendix 5

10.5 Corrective Action Plan Letter (CAP Letter)

* For Disney-directed audits only

Date

XYZ Licensee/Vendor [address]

Dear

:

audits only Date XYZ Licensee/Vendor [address] Dear : In accordance with the License Agreement and/or Memorandum

In accordance with the License Agreement and/or Memorandum of Understanding ABC Facility, (K123-4567-8), located in City, State/Province, Country was audited for the second time on Date. This Corrective Action Plan (CAP) letter summarizes the violations of the Disney Code of Conduct and identifies the corrective actions necessary to ensure compliance.

1. Monitoring and Compliance The Disney Code of Conduct requires manufacturers to maintain all documentation on site that may be necessary to demonstrate compliance with the Disney Code of Conduct. Auditors are required to review at least 12 months of records to confirm compliance with the Disney Code of Conduct. We have noted that compliance with overtime wage requirements could not be verified because overtime payroll records were not available to review during the audit. Please ensure that the necessary record-keeping improvements are made and ensure that complete payroll records are available for review during the follow-up audit.

2. Health and Safety The Disney Code of Conduct requires manufacturers to provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations. We have noted the following violations of the Country Law and the Disney Code of Conduct that require immediate attention:

a. Emergency evacuation drills are not conducted regularly;

b. Three fire extinguishers are empty; and

c. Emergency evacuation routes are not marked clearly.

Please ensure that the necessary improvements are made in order to provide a safe and healthy workplace for all employees.

The above issues were discussed with factory management. As the licensee/vendor, it is your responsibility to ensure that each of these violations is rectified. Please address these violations with factory management. Given the nature of the audit findings we will perform a follow-up audit within 180 days.

Should further clarification be required or if you are no longer using this factory, please contact .

Thank you for your time and attention to this matter.

Sincerely,

10-10

Revised January 2010

Appendix 6

Appendix 6 10.6 ICTI CARE Foundation Authorization Form ICTI CARE Foundation Asia Limited WWW.ICTI-CARE.ORG Authorization

10.6 ICTI CARE Foundation Authorization Form

ICTI CARE Foundation Asia Limited WWW.ICTI-CARE.ORG

Authorization Form

Date To : ICTI CARE Foundation Asia Limited Dear Sir/Madam , 1. We hereby confirm
Date
To : ICTI CARE Foundation Asia Limited
Dear Sir/Madam ,
1.
We hereby confirm that we consent to grant Disney access to our audit reports and other
proper information at the ICTI CARE Process database system.
2.
We fully understand that we shall have to inform (written) ICTI CARE Process in the event
of any changes in Disney’s access to the Factory’s database.
ICTI CARE Process( )
For and on behalf of [English Factory Name ]

[Seal Number ]

(Signature & Factory Chop)

Director

Name :

10-11

Revised January 2010

Appendix 7

10.7 Sample Social Compliance Audit Checklist

In preparation for the site visit, facility management should assemble and make available to monitors the following documents.

APPLICABLE LAWS AND REGULATIONS:

Child labor Restrictions on workers below the age of unrestricted employment Minimum wage Maximum daily / weekly hours Overtime Annual leave and required holidays Other benefits and allowances Health and safety Environment

Other benefits and allowances Health and safety Environment FACILITY POLICIES: Employee handbook / terms and conditions

FACILITY POLICIES:

Employee handbook / terms and conditions of employment Wage and hour policies Collective bargaining agreement(s) Government licenses and waivers, certificates of operation, inspection reports re:

sanitation, fire safety, worker safety, structural safety, environmental compliance, etc. Machinery inspection / service logs Policies / procedures on use of personal protective equipment Accident / injury log Emergency medical procedures Evacuation plan Timecard or other work hour support Payroll records in this facility or other for the last 12 months (i.e. piece rate records, pay stubs, etc.) Support for overtime calculations

WORKER DOCUMENTATION:

Personnel file (including job application, employment contracts, discipline letters, etc.) Personal identification cards, birth certificate, or other age identification records

contracts, discipline letters, etc.) Personal identification cards, birth certificate, or other age identification records

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Revised January 2010

DORMITORIES:

Government Licenses, Certificates of Operation, Inspection Reports re: sanitation, fire safety, structural safety, etc. Dormitory rules and regulations

of Operation, Inspection Reports re: sanitation, fire safety, structural safety, etc. Dormitory rules and regulations

CONTRACTS WITH DISNEY:

Memorandum of Understanding (if applicable)

WITH DISNEY: Memorandum of Understanding (if applicable) SAMPLE QUESTIONS: 1. What is the age of the

SAMPLE QUESTIONS:

1. What is the age of the youngest worker in this facility?

2. Are there any work experience programs for school age children?

3. Are there restrictions for workers under 18?

4. What procedures does this facility have in place to verify the age of the employees?

5. Are all employees voluntarily working in this facility?

6. What procedures does this facility have in place to ensure/monitor that all employees are working voluntarily?

7. Are any of workers’ properties detained by the employer during the course of employment?

8. Are there any workers in this facility that are prisoners, have been assigned by the military, or any other branch of government?

9. Are employees free to leave when their work shift ends?

10.Are guards posted only for normal security reasons? If so, what are their basic duties? 11.How are employees recruited (i.e. newspaper ad, agent, contract)? 12.How are employees disciplined for misconduct or poor performance? 13.Does this facility restrict employment by age, race, ethnic group, religion, gender, sexual orientation, political affiliation, and/or national origin? 14.What is the lowest wage paid by this contractor for trained (e.g. production) employees?

For untrained employees? 15.How are employees paid? (cash/check/auto pay/other) 16.How is the pay rate calculated? (per hour/piece rate/per day/other) 17.Is all work attendance documented? 18.How often are employees paid? (weekly/monthly/other) 19.Are there any deductions from employees’ wages? 20.What charges are deducted from your employees’ pay? 21.How is this documented? 22.Does any employee owe the Company money? 23.What allowances and benefits are provided to employees in this facility? (Housing, meals, transportation, and other allowances; health care; child care; sick leave; bereavement leave; emergency leave; pregnancy and menstrual leave; vacation; religious and holiday leave; and contributions for social security, life, health, worker’s compensation and other insurance coverage.) 24.Are benefits and/or allowances included in calculating the minimum wage? 25.Are there any incentive plans offered (e.g. bonus)? 26.Are workers paid for training (if applicable)? 27.Are workers paid for overtime? 28.What is the maximum number of consecutive days worked?

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Revised January 2010

29.What are the operational hours of this facility? 30.How many work shifts are run in this facility? 31.How many hours per work shift? 32.How are overtime wages calculated (e.g. weekdays, 1.5x; holidays 2x, etc.)? 33.What is the average number of overtime hours worked per worker each week? 34.What is the maximum number of work hours per day at regular pay? 35.What is the maximum number of hours employees are asked to work in a given week? 36.Do employees have time each day for a meal? 37.Do employees have time each day for breaks? If yes, how many and what is the duration of each break? 38.Do employees take work home? 39.How are wages for this work determined? 40.Are first aid supplies available in this facility? 41.Are there any medically trained personnel on site? 42.Are safety education/training programs offered (i.e. first aid, etc.)? 43.Do you have fire extinguishers and/or sprinkler systems in this facility? 44.Are fire escapes available for buildings more than one story high? 45.Is personal protective equipment available at no cost to the employee? 46.Do employees have unrestricted access to drinkable water? 47.How many functional toilets does this facility have? (male/female) 48.Does this facility have ventilation and lighting system? 49.Is there a supervisor on the floor for each work shift? 50.How many supervisors per work shift? 51.Does this facility allow its employees to associate? 52.Does this facility provide residential facilities for workers? If yes: vendor/licensee controlled facilities/rental units/other 53.What efforts does this facility make in regards to the environment (i.e. waste management, air purification, and hazardous material disposal)? 54.Does this facility outsource any of its production? 55.Does this facility source to individuals, families or collective work groups? 56.What articles/components are produced by these workers? 57.How are these workers paid?

produced by these workers? 57.How are these workers paid? The following questions pertain to dormitories. 58.Number

The following questions pertain to dormitories.

58.Number of buildings? Number of employees that reside in this dormitory? 59.Average number of employees in a sleeping room? 60.Approximate space (in square meters) per employee in sleeping room? 61.Are sleeping quarters segregated by sex? 62.Are employees provided their own individual mats or sleeping space? 63.Are the room doors in the dorms locked from the inside or outside? 64.Are directions for evacuation in the case of fire or other emergencies posted in all sleeping quarters in the native language? 65.Does this facility have fire extinguishers in all sleeping quarters? 66.Are fire drills conducted? 67.Are fire escapes available for buildings more than one-story high? 68.Are combustible materials stored in the dormitories or buildings connected to the dormitories? 69.Number of toilets and shower facilities for employees (male/female)

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Revised January 2010

70.Is hot water available at the showering facility? 71.Are kitchen or laundry facilities provided? 72.Are the employees charged for the following? (sleeping quarters/ meals/ transportation/ other) How much? 73.Is dormitory access controlled? 74.Are there any curfews on employees? 75.Are employees free to come and go as they please?

74.Are there any curfews on employees? 75.Are employees free to come and go as they please?

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Revised January 2010

Appendix 8

10.8 Corrective Action Plan Acknowledgement Report (CAPAR)

8 10.8 Corrective Action Plan Acknowledgement Report (CAPAR) Corrective Action Plan Acknowledgement Report The Corrective

Corrective Action Plan Acknowledgement Report

The Corrective Action Plan Acknowledgement Report (CAPAR) will be used to summarize the preliminary facility
The Corrective Action Plan Acknowledgement Report (CAPAR) will be used to summarize the preliminary facility audit
findings and a draft corrective action plan that both the auditor and the facility representative believe is reasonable to
ensure conformity with the Disney Code of Conduct for Manufacturers (Disney Code of Conduct) and applicable local
laws.
The form should be used in the following manner:
Document preliminary facility audit findings on the form below prior to the closing meeting;
Then use the form as an agenda during the closing meeting;
During the closing meeting, explain the preliminary facility audit findings with the facility representative;
Document the corrective action plan;
Both auditor and facility representative should sign and date the form.
Please leave one copy of the CAPAR with the facility representative and retain one copy with the audit program or
working papers.
Facility
ILS #
Date
D.B.A / A.K.A
Audit Type
Facility Address
Country
Facility Telephone Number
Fax Number
Auditor Name
Firm
Start time of audit
End time of audit
Facility Representative
Title
CL
- Child Labor
IL
- Involuntary Labor
- Association
- Overtime Hours
- Monitoring & Compliance
- Protection of the Environment
- Publication
CH
DI
- Discrimination
AS
MW
OW
- Overtime wage
OH
SB
OC
- Other Compensation
MC
HS
DO
- Dormitories
PE
Sub
- Coercion and Harassment
- Minimum Wage
- Social Benefits
- Health & Safety
- Subcontracting
OL
- Other Laws
PU
- Health & Safety - Subcontracting OL - Other Laws PU Auditor Facility Rep Page 1
- Health & Safety - Subcontracting OL - Other Laws PU Auditor Facility Rep Page 1

Auditor

Facility Rep

Page 1 of 2

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Revised January 2010

A closing meeting has been performed. The above preliminary facility audit findings were discussed and
A
closing meeting has been performed. The above preliminary facility audit findings were discussed and a draft corrective
action plan was explained to the facility representative. Please note that while all preliminary facility audit findings are
subject to a final review process, and it is possible further updates to these preliminary facility audit findings may be
necessary, the facility is responsible for and expected to take immediate corrective actions of the preliminary facility audit
findings.
The facility should contact the customer who contracted with the facility for Disney-branded production for the final version
of
the Corrective Action Plan letter to ensure that all issues are promptly identified and addressed. Continued finding of
nonconformity with the Disney Code of Conduct and applicable local laws may lead to termination of the facility for all
Disney production.
The signatures below reflect that the auditor has explained the preliminary facility audit findings to the facility
representative.
Signature
Date
Date
Auditor
Signature
Facility Representative
Print name
Date
Date
Auditor
Print name
Facility Representative

Note: Disney may authorize production for a specific period of time and may assess compliance to its Code, but does not currently maintain a list of approved suppliers. Possession of a Disney Manufacturer’s Agreement (MA), Factory and Merchandise Authorization (FAMA), audit, CAPAR, Corrective Action Plan letter, or other document does not indicate that

a facility is an approved Disney supplier.

Page 2 of 2

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Revised January 2010

Appendix 9

10.9 Facility Termination Letter

Date

XYZ Licensee/Vendor [address]

Dear Licensee/Vendor,

Date XYZ Licensee/Vendor [address] Dear Licensee/Vendor, In accordance with the provisions of your licensing

In accordance with the provisions of your licensing agreement to develop, manufacture and distribute Disney- branded products, we have recently conducted a Manufacturers Code of Conduct compliance assessment of the following manufacturing facility:

ABC Facility (Disney ILS#) Facility street address, city, country

The assessment was conducted on [Date].

During the course of the assessment, our auditors documented certain violations of the Code of Conduct. At the completion of the audit, we discussed the violations with the facility's management, if appropriate. Unfortunately, management has failed to rectify the violations or to present a satisfactory plan for doing so in the future.

Therefore, we are terminating your authorization to continue the manufacture of Disney-branded products at this facility, with immediate effect. We therefore require that you cease using this manufacturing facility to produce Disney-branded products and destroy or ship any remaining inventory within the next 30 days, or as may be required by law. If you have already notified us that you are no longer using this facility, this letter will serve as your notice that the facility can no longer be used to produce Disney-branded products.

Sincerely,

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Revised January 2010