Document:

Exhibit
10.2

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

THIS
AMENDED AND RESTATED AGREEMENT (the “Agreement”) is entered into as of March 15, 2019 is entered into between Dennis
M. McGrath, residing at 2 Colonial Court, Medford, NJ 08055 (“Executive”), and PAVmed Inc., a Delaware corporation
having its principal office at One Grand Central Place, Suite 4600, New York, New York 10165 (“Company”) to become
effective immediately.

 

WHEREAS,
the Company and Executive are party to an employment agreement entered into and effective March 20, 2017 (the “Prior Agreement”);

 

WHEREAS,
this Agreement amends and supersedes the Prior Agreement and any other agreement with respect to the matters contained herein.

 

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company and
the Executive hereby agree as follows:

 

1.
Employment, Duties and Acceptance.

 

1.1
General. The Company hereby agrees to employ the Executive as its President and Chief Financial Officer. All of Executive’s
powers and authority in any capacity shall at all times be subject to the direction and control of the Company’s Chief Executive
Officer (“CEO”) and Board of Directors (“Board”). The Board may assign to Executive such management and
supervisory responsibilities and executive duties for the Company or any subsidiary of the Company, including serving as an executive
officer and/or director of any subsidiary, as are consistent with Executive’s status as President and Chief Financial Officer.
The Executive will be granted on a non-voting, non-compensated basis (other than compensation provided herein), the right to participate
and observe in all board of director meetings except for such times the board will hold executive sessions without any management
present.

 

    	 	 	 

    	 

    

 

1.2
Full-Time Position. Executive accepts such employment and agrees to devote his best efforts and full time to promote the
business and affairs of the Company and its affiliated entities and shall be engaged in other business activities only to the
extent that such activities do not materially interfere or conflict with his obligations to the Company hereunder. Nothing herein,
other than Section 5.4 below, shall be construed as preventing Executive from making and supervising personal investments, or
serving on civic, philanthropic, educational, or charitable boards or committees, or with the prior written consent of the Board,
in its sole discretion, on either public or private corporate boards so long as such activities are not restricted under the Company’s
Code of Conduct and employment practices. Executive acknowledges and agrees that Schedule 1.2 attached hereto represents a complete
list of corporate boards on which the Executive serves as of the effective date of this agreement. Notwithstanding any provision
of this Section to the contrary, in no event shall the Executive invest in any business competitive with the Company or that would
otherwise violate the provisions of Section 5.4 below. 

 

1.3
Location. Executive will perform his duties in New York, New York or the Philadelphia (and surrounding Philadelphia suburbs)
as required by the best interest of the Company as determined by the CEO. Executive shall undertake such occasional travel, within
or outside the United States, as is reasonably necessary in the interests of the Company.

 

2.
Term. The initial term of this Agreement shall commence on March 15, 2019 (“Effective Date”) and terminate
on the third anniversary of the Effective Date (the “Initial Term”) unless terminated earlier as provided in this
Agreement. In addition, the term of this Agreement shall thereafter automatically renew for periods of one-year (the “Renewal
Term”) unless either party gives written notice to the other party at least 60 days prior to the end of the term or at least
60 days prior to any one-year renewal period, that the Agreement shall not be further extended. The period commencing on the Effective
Date and ending on the date on which the term of the Executive’s employment under the Agreement terminates is referred to
herein as the “Term”.

 

3.
Compensation and Benefits.

 

3.1
Salary. The Company shall pay to Executive a salary (“Base Salary”) at the annual rate of $345,000. Executive’s
compensation shall be paid in equal, periodic installments in accordance with the Company’s normal payroll procedures. The
Executive’s base salary shall be reviewed periodically by the Board or Committee (as defined below) pursuant to the Board
or Committee’s normal performance review policies for senior level executives.

 

3.2
Bonus. In addition to the Base Salary, Executive shall be eligible to receive a discretionary performance bonus (“Bonus”)
with a target of fifty percent (50%) of the Executive’s Base Salary in effect as of December 31st of the preceding
year based on Executive’s and the Company’s performance over the preceding year. The payment and amount of any Bonus
shall be in the sole discretion of the Board or the Compensation Committee of the Board (the “Committee”).

 

    	 	 	 

    	 

    

 

3.3
Restricted Common Stock Award. Upon the Effective Date, the Company shall grant Executive 500,000 shares of the Company’s
Restricted Common Stock under the Company’s Second Amended 2014 Long-Term Incentive Plan (“Plan”). Subject to
continued service to the Company through the applicable vesting date and the provisions of the Plan, the Restricted Common Stock
shall become non-forfeitable over three years in equal amounts on each anniversary date. Any unvested forfeitable shares, shall
become immediately vested and non-forfeitable in the event of a termination for Good Reason or immediately after any Change of
Control as defined in the Restricted Common Stock Agreement and Indemnification Agreement.

 

3.4
Benefits. Executive shall be entitled to such medical, life, disability and other benefits as are generally afforded to
other executives of the Company, subject to applicable waiting periods and other conditions, as well as participation in all other
company-wide employee benefits, including a defined contribution pension plan and 401(k) plan, as may be made available generally
to executive employees from time to time. The Executive shall be eligible to participate in the Company’s annual and long-term
incentive plans and programs in accordance with the terms of such plans and programs as in effect and afforded to other senior
executives of the Company at levels determined by the Board (or committee of the Board).

 

3.5
Vacation. Executive shall be entitled to twenty-five (25) days of paid vacation in each year during the Term and to a reasonable
number of other days off for religious and personal reasons in accordance with customary Company policy.

 

3.6
Expenses. The Company shall pay or reimburse Executive for all transportation, hotel and other expenses reasonably incurred
by Executive on business trips and for all other ordinary and reasonable out-of-pocket expenses actually incurred by him in the
conduct of the business of the Company, including expenses relating to his laptop, cell phone or other similar devices, against
itemized vouchers submitted with respect to any such expenses and approved in accordance with customary procedures.

 

    	 	 	 

    	 

    

 

4.
Termination.

 

4.1
Death. If Executive dies during the Term, Executive’s employment hereunder shall terminate and the Company shall
pay to Executive’s estate the amount set forth in Section 4.6(a).

 

4.2
Disability. The Company, by written notice to Executive, may terminate Executive’s employment hereunder if Executive
shall fail because of illness or incapacity to render services of the character contemplated by this Agreement for one hundred
eighty (180) days. Upon such termination, the Company shall pay to Executive the amount set forth in Section 4.6(a).

 

4.3
By Company for “Cause” or By the Executive Without “Good Reason”. The Company, by written notice
to Executive, may terminate Executive’s employment hereunder for “Cause.” As used herein, “Cause”
shall mean: (a) the refusal or failure by Executive to carry out any lawful direction of the Board which are of a material nature
and consistent with his status as President and Chief Financial Officer (or whichever positions Executive holds at such time),
or the refusal or failure by Executive to perform a material part of Executive’s duties hereunder; (b) the commission by
Executive of a material breach of any of the provisions of this Agreement; (c) fraud or dishonest action by Executive in his relations
with the Company or any of its subsidiaries or affiliates (“dishonest” for these purposes shall mean Executive’s
knowingly or recklessly making of a material misstatement or omission for his personal benefit); or (d) the conviction of Executive
of a felony under federal or state law. Notwithstanding the foregoing, no “Cause” for termination shall be deemed
to exist with respect to Executive’s acts described in clauses (a) or (b) above, unless the Company shall have given written
notice to Executive within a period not to exceed thirty (30) calendar days of the initial existence of the occurrence, specifying
the “Cause” with reasonable particularity and, within thirty (30) calendar days after such notice, Executive shall
not have cured or eliminated the problem or thing giving rise to such “Cause;” provided, however, no more than two
cure periods need be provided during any twelve-month period. Upon such termination, the Company shall pay to Executive the amount
set forth in Section 4.6(b). The Company shall also pay such amount to Executive upon his termination of employment without “Good
Reason” (as defined below), which Executive shall have the right to do on at least thirty (30) days written notice to the
Company.

 

    	 	 	 

    	 

    

 

4.4
By Executive for “Good Reason”. The Executive, by written notice to the Company, may terminate Executive’s
employment hereunder if a “Good Reason” exists. For purposes of this Agreement, “Good Reason” shall mean
the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a substantial and
material adverse change in the nature of Executive’s title, duties or responsibilities with the Company (other than as a
director of the Company) that represents a demotion from his title, duties or responsibilities as in effect immediately prior
to such change (such change, a “Demotion”); (b) material breach of this Agreement by the Company; (c) a failure by
the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company,
in good faith; (d) a change of the principal office or work place assigned to the Executive to a location more than 35 miles distant
from its location immediately prior to such change; (e) a material reduction of the Executive’s Base Salary or bonus opportunity,
unless pursuant to a reduction in such items applicable proportionally to all senior management and board members; (f) a liquidation,
bankruptcy or receivership of the Company; or (g) any reason or no reason following a Change of Control (as defined in the Restricted
Common Stock Agreement and Indemnification Agreement) and the Executive’s notice of resignation under this subsection is
provided to the surviving entity following a Change of Control within the 60-day period following the closing of the Change of
Control . Notwithstanding the foregoing, no “Good Reason” shall be deemed to exist with respect to the Company’s
acts described in clauses (a), (b), (c), (d) or (e) above, unless Executive shall have given written notice to the Company within
a period not to exceed thirty (30) calendar days of the initial existence of the occurrence, specifying the “Good Reason”
with reasonable particularity and, within thirty (30) calendar days after such notice, the Company shall not have cured or eliminated
the problem or thing giving rise to such “Good Reason”; provided, however, that no more than two cure periods shall
be provided during any twelve-month period of a breach of clauses (a), (b), (c), (d), or (e) above. Upon such termination, the
Company shall pay to Executive the amount set forth in Section 4.6(c). 

4.5
By Company Without “Cause”. The Company may terminate Executive’s employment hereunder without “Cause”
by giving at least sixty (60) days written notice to Executive. Upon such termination, the Company shall pay to Executive the
amount set forth in Section 4.6(c).

 

    	 	 	 

    	 

    

 

4.6
Compensation Upon Termination. In the event that Executive’s employment hereunder is terminated, the Company shall
pay to Executive the following compensation:

 

(a)
Payment Upon Death or Disability. In the event that Executive’s employment is terminated pursuant to Sections 4.1
or 4.2, the Company shall no longer be under any obligation to Executive or his legal representatives pursuant to this Agreement
except for: (i) the Base Salary due Executive pursuant to Section 3.1 hereof through the date of termination; (ii) any Bonus which
would have become payable under Section 3.2 for the year in which the employment was terminated prorated by multiplying the full
amount of the Bonus by a fraction, the numerator of which is the number of “full calendar months” worked by Executive
during the year of termination and the denominator of which is 12 (a “full calendar month” is a month in which the
Executive worked at least two weeks); (iii) all earned and previously approved but unpaid Bonuses for any year prior to the year
of termination; (iv) all valid expense reimbursements, and (v) all accrued but unused vacation pay.

 

(b)
Payment Upon Termination by the Company For “Cause” or by the Executive Without Good Reason. In the event that
the Company terminates Executive’s employment hereunder pursuant to Section 4.3, the Company shall have no further obligations
to the Executive hereunder, except for: (i) the Base Salary due Executive pursuant to Section 3.1 hereof through the date of termination
(ii) all valid expense reimbursements and (iii) all unused vacation pay through the date of termination required by law to be
paid.

 

(c)
Payment Upon Termination by Company Without Cause or by Executive for Good Reason. In the event that Executive’s
employment is terminated pursuant to Sections 4.4 or 4.5, the Company shall have no further obligations to Executive hereunder
except for: (i) the Base Salary (at the rate in effect immediately before Executive’s termination or resignation, as applicable)
due Executive pursuant to Section 3.1 hereof for twelve (12) months from the date of termination or twenty-four (24) months in
the event of a Change of Control that occurred within 60 days of termination, payable in accordance with Section 3.1; (ii) any
Bonus which would have become payable under Section 3.2 for the year in which the employment was terminated prorated by multiplying
the full amount of the Bonus by a fraction, the numerator of which is the number of “full calendar months” worked
by Executive during the year of termination and the denominator of which is 12 (a “full calendar month” is a month
in which the Executive worked at least two weeks); (iii) the Base Salary due Executive pursuant to Section 3.1 hereof through
the date of termination; (iv) all valid expense reimbursements; (v) to the extent the Executive timely elects to receive continuation
coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company
shall pay or reimburse the Executive, on a monthly basis, an amount equal to the full monthly premium for such coverage, from
the date of termination until the earlier of (a) the date twelve (12) months following the date of termination, and (B) the date
of Executive becoming eligible for coverage under a new employer’s health insurance plan (the COBRA health care continuation
coverage period under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”) shall run concurrently
with the foregoing period); and (vi) all accrued but unused vacation pay, subject, in the case of clause (i) and (ii), to Executive’s
compliance with Section 5 and to Executive’s execution of a release of claims in favor of the Company, its affiliates and
their respective officers and directors in a form provided by the Company and such release becoming effective,.

 

(d)
Executive shall have no duty to mitigate awards paid or payable to him pursuant to this Agreement, and any compensation paid or
payable to Executive from sources other than the Company will not offset or terminate the Company’s obligation to pay to
Executive the full amounts pursuant to this Agreement. 

 

5.
Protection of Confidential Information; Non-Competition.

 

5.1
Acknowledgment. Executive acknowledges that:

 

(a)
As a result of his employment with the Company, Executive will obtain secret and confidential information concerning the business
of the Company and its subsidiaries (referred to collectively in this Section 5 as the “Company”), including, without
limitation, financial information, proprietary rights, trade secrets and “know-how,” customers and sources (“Confidential
Information”).

 

(b)
The Company will suffer substantial damage which will be difficult to compute if, during the period of his employment with the
Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.

 

    	 	 	 

    	 

    

 

(c)
The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company.

 

5.2
Confidentiality. Executive agrees that he will not at any time, during the Term or thereafter, divulge to any person or
entity any Confidential Information obtained or learned by him as a result of his employment with the Company, except (i) in the
course of performing his duties hereunder, (ii) with the Company’s prior written consent; (iii) to the extent that any such
information is in the public domain other than as a result of Executive’s breach of any of his obligations hereunder; or
(iv) where required to be disclosed by law, regulation, stock exchange rule, court order, subpoena or other government process.
If Executive shall be required to make disclosure pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, shall
notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (a) take all reasonably necessary
and lawful steps required by the Company to defend against the enforcement of such subpoena, court order or other government process,
and (b) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement
thereof.

 

5.3
Documents. Upon termination of his employment with the Company, Executive will promptly deliver to the Company all memoranda,
notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of
the Company and all property associated therewith, which he may then possess or have under his control; provided, however, that
Executive shall be entitled to retain copies of such documents reasonably necessary to document his financial relationship with
the Company.

 

5.4
Non-competition. During the Term and for a period of one (1) year thereafter, or two (2) years thereafter in the event
of a Change of Control, Executive, without the prior written permission of the Company, shall not, anywhere in the world, (i)
be employed by, or render any services to, any person, firm or corporation engaged in the medical device industry (or any other
business) which is directly in competition with any “material” business conducted by the Company or any of its subsidiaries
at the time of termination (as used herein “material” means a business which generated at least 10% of the Company’s
consolidated revenues for the last full fiscal year for which audited financial statements are available) (“Competitive
Business”); (ii) engage in any Competitive Business for his or its own account; (iii) be associated with or interested in
any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity; (iv) employ or retain, or have or cause any other person or entity
to employ or retain, any person who was employed or retained by the Company while Executive was employed by the Company (other
than Executive’s personal secretary and assistant); or (v) solicit, interfere with, or endeavor to entice away from the
Company, for the benefit of a Competitive Business, any of its customers or other persons with whom the Company has a contractual
relationship. Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from investing his personal assets
in any manner he chooses, provided, however, that Executive may not, during the period referred to in this Section 5.4, own more
than 4.9% of the equity securities of any Competitive Business.

 

    	 	 	 

    	 

    

 

5.5
Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Sections
5.2 or 5.4, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced
by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder
to the Company are of a special, unique and extraordinary character and that any such breach or threatened breach will cause irreparable
injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated
in this Section 5.5 shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under
law or equity. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing
party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees
and costs incurred by the prevailing party.

 

5.6
Modification. If any provision of Sections 5.2 or 5.4 is held to be unenforceable because of the scope, duration or area
of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or
all of them, and such provision or provisions shall then be applicable in such modified form.

 

5.7
Survival. The provisions of this Section 5 shall survive the termination of employment under this Agreement for any reason,
except in the events that Executive’s employment is terminated by the Company without “Cause,” or if Executive
terminates this Agreement with “Good Reason,” (Good Reason for purposes of this Section shall not include termination
for Good Reason defined in Section 4.4 (g) in connection with a Change of Control and while Executive is receiving payments in
accordance with Section 4.6 (c)) in either of which events, clauses (i), (ii) and (iii) of Section 5.4 shall be null and void
and of no further force or effect. 

 

    	 	 	 

    	 

    

 

6.
Miscellaneous Provisions.

 

6.1
Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when
(i) delivered personally to the party to receive the same, or (ii) when mailed first class postage prepaid, by certified mail,
return receipt requested, addressed to the party to receive the same at his or its address set forth below, or such other address
as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 6.1,
or sent via email or facsimile.

 

If
to Executive:

 

Dennis
M. McGrath

2
Colonial Court

Medford,
NJ 08055

Email:
dennis.mcgrathcpa@gmail.com

Facsimile:
(609)-953-9303

 

With
a copy in either case to:

Pavia
& Harcourt LLP

590
Madison Avenue

New
York, New York 10022

Attn:
Adam D. Mitzner, Esq.

Facsimile:
212-969-2900

 

If
to the Company:

 

PAVmed
Inc.

One
Grand Central Place, Suite 4600

New
York, New York 10165

Attn:
Lishan Aklog, M.D.

Email:
la@pavmed.com

Facsimile:
(212) 634-7403

 

With
a copy in either case to:

 

Graubard
Miller

The
Chrysler Building

405
Lexington Ave, 11th Floor

New
York, NY 10170

Attn:
David Alan Miller; Jeffrey M. Gallant

Email:
dmiller@graubard.com; jgallant@graubard.com

Facsimile:
(212) 818-8881

 

    	 	 	 

    	 

    

 

6.2
Entire Agreement; Waiver. This Agreement, the Restricted Common Stock Award and the separate indemnification agreement
being entered simultaneously herewith sets forth the entire agreement of the parties relating to the employment of Executive and
is intended to supersede all prior negotiations, understandings and agreements. No provisions of this Agreement may be waived
or changed except by a writing by the party against whom such waiver or change is sought to be enforced. The failure of any party
to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such
provision.

 

6.3
Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the
parties hereunder, shall be determined in accordance with the law of the State of New York applicable to agreements made and to
be performed entirely in New York.

 

6.4
Binding Effect; Nonassignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns
of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s
heirs and legal representatives.

 

6.5
Severability. Should any provision of this Agreement become legally unenforceable, no other provision of this Agreement
shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.

 

6.6
Section 409A. This Agreement is intended to comply with the provisions of Section 409A of the Internal Revenue Code (“Section
409A”). To the extent that any payments and/or benefits provided hereunder are not considered compliant with Section 409A,
the parties agree that the Company shall take all actions necessary to make such payments and/or benefits become compliant.

 

    	1

    	 

    

 

6.7
Preparation of Agreement. This Agreement has been prepared by Graubard Miller (“GM”) solely as counsel to the
Company. GM is not acting as legal counsel nor providing any legal representation or consultative services to Executive in connection
with the Agreement and the Company has advised Executive to seek the advice of other counsel in connection with the negotiation
and preparation of this Agreement.

 

7.
Arbitration; Expenses. In the event of any dispute under the provisions of this Agreement, other than a dispute in which
the primary relief sought is an equitable remedy such as an injunction, the parties shall be required to have the dispute, controversy
or claim settled by arbitration in the non-moving parties jurisdiction in accordance with the Employment Arbitration Rules and
Mediation Procedures then in effect of the American Arbitration Association, before an arbitrator agreed to by both parties. If
the parties cannot agree upon the choice of arbitrator, the Company and the Executive will each choose an arbitrator. The two
arbitrators will then select a third arbitrator who will serve as the actual arbitrator for the dispute, controversy or claim.
Any award entered by the arbitrator shall be final, binding and nonappealable and judgment may be entered thereon by either party
in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable.
The arbitrator shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving
this Agreement other than a benefit specifically provided under or by virtue of the Agreement. Each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and
shall share the fees of the American Arbitration Association.

 

8.
Attorneys’ Fees. Except as provided in Section 7 above, in any action at law or in equity to enforce or construe
any provisions or rights under this Agreement, the unsuccessful party or parties to such litigation, as determined by the courts
pursuant to a final judgment or decree, shall pay the successful party or parties all costs, expenses, and reasonable attorneys’
fees incurred by such successful party or parties (including, without limitation, such costs, expenses, and fees on any appeals),
and if such successful party or parties shall recover judgment in any such action or proceedings, such costs, expenses, and attorneys’
fees shall be included as part of such judgment.

 

[Signature
Page Follows]

 

    	 	 	 

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

 

	 	PAVMED
    INC.
	 	 	 
	 	By:	/s/
    Ronald M. Sparks
	 	Name: 	Ronald
    M. Sparks
	 	Title:	Chairman
    Compensation Committee
	 	 	 
	 	 	/s/
    Dennis M. McGrath
	 	 	DENNIS
    M. MCGRATHExhibit 4.1

 

FIRST SUPPLEMENTAL INDENTURE

 

dated as of March 20, 2019

 

among

 

TWDC ENTERPRISES 18 CORP.

 

and

THE WALT DISNEY COMPANY

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee

 

to the

 

INDENTURE

 

dated as of September 24, 2001

 

between

 

TWDC ENTERPRISES 18 CORP.

 

and 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee

 

 

This FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of March 20, 2019 among TWDC Enterprises 18 Corp. (formerly The Walt Disney Company), a Delaware corporation (the “Company”), Wells Fargo Bank, National Association, as trustee (the “Trustee”), and The Walt Disney Company (formerly TWDC Holdco 613 Corp.), a Delaware corporation (the “Guarantor”).

 

RECITALS

 WHEREAS the Company and the Trustee have duly executed and delivered an Indenture, dated as of September 24, 2001 (the “Indenture”), providing for the issuance from time to time of unsecured debentures, notes or other evidences of indebtedness (the “Securities”) to be issued in one or more series by the Company; 

WHEREAS the Company is a direct, wholly owned subsidiary of the Guarantor; 

WHEREAS, the Board of Directors of the Guarantor has determined it to be in the best interest of the Guarantor to guarantee, to the extent set forth herein, all of the Company’s Obligations (as defined below) under the Securities and the Indenture;

WHEREAS the Company desires to execute and deliver this First Supplemental Indenture in order to provide for the Guarantee (as defined below); 

WHEREAS in accordance with Section 9.1 of the Indenture, the Company and the Trustee may, without the consent of any Holders of Securities, make any change thereto that does not adversely affect the rights of any Securityholder in any material respect, and accordingly, the Company and the Trustee are permitted to enter into this First Supplemental Indenture; 

WHEREAS for the purposes hereinabove recited, and pursuant to due corporate action, the Company has duly determined to execute and deliver to the Trustee this First Supplemental Indenture; and 

WHEREAS all covenants and conditions necessary to make this First Supplemental Indenture a valid, legal and binding instrument in accordance with its terms have been done and performed, and the execution and delivery hereof have been in all respects duly authorized; 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 Section 1.1. Definitions.

(a) All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

 

2

(b) For all purposes of this First Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words of similar import used in this First Supplemental Indenture refer to this First Supplemental Indenture as a whole and not to any particular section hereof. 

(c) “Excluded Entity” means each of the Hong Kong Disneyland Entities, the Shanghai Project Entities and the Specified Project Entities.

(d) “Hong Kong Disneyland Entity” means any Subsidiary of the Company and any other Person whose equity securities or interests are owned, directly or indirectly, in whole or in part, by the Company or any of its Subsidiaries, the primary business of which is the direct or indirect ownership, management, operation, design, construction and/or financing of the recreational and commercial facilities and complex, or any part thereof or any addition thereto, commonly known as “Hong Kong Disney,” “Hong Kong Disneyland” or “Disneyland Resort Hong Kong,” located at Penny’s Bay on Lantau Island, Hong Kong, which Subsidiaries and other Persons include, without limitation, as of the date hereof, Hongkong International Theme Parks Limited, Hong Kong Disneyland Management Limited and Walt Disney Holdings (Hong Kong) Limited.

(e) “Measured Subsidiary” means, with respect to any Person, any (a) corporation (or foreign equivalent) other than an Excluded Entity or (b) general partnership, limited partnership or limited liability company (or foreign equivalent) other than an Excluded Entity (each, a “Non-Corporate Entity”), in either case, of which more than 50% of the outstanding capital stock (or comparable interest) having ordinary voting power (irrespective of whether at the time capital stock (or comparable interest) of any other class or classes of such corporation or Non-Corporate Entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly (through one or more Measured Subsidiaries) owned by such Person.  In the case of a Non-Corporate Entity, a Person shall be deemed to have more than 50% of interests having ordinary voting power only if such Person’s vote in respect of such interests comprises more than 50% of the total voting power of all such interests in such Non-Corporate Entity.  For purposes of this definition, any managerial powers or rights comparable to managerial powers afforded to a Person solely by reason of such Person’s ownership of general partner or comparable interests (or foreign equivalent) shall not be deemed to be “interests having ordinary voting power.”

(f) “Shanghai Project Entity” means any Subsidiary of the Company and any other Person whose equity securities or interests are owned, directly or indirectly, in whole or in part, by the Company or any of its Subsidiaries, the primary business of which is the direct or indirect ownership, management, operation, design, construction and/or financing of the recreational and commercial facilities and complex or any part thereof or any addition thereto, to be known as “Shanghai Disney”, “Shanghai Disneyland” or “Disneyland Resort Shanghai” or by any similar name, to be located in the Pudong New Area, Shanghai, People’s Republic of China, which Subsidiaries and other Persons include, without limitation, as of the date hereof, Shanghai International Theme Park Company Limited, Shanghai International Theme Park Associated Facilities Company Limited, Shanghai International Theme Park and Resort Management Company Limited and WD Holdings (Shanghai), LLC.

 

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(g) “Specified Project Entity” means:

(i) DVD Financing, Inc.;

(ii) each Affiliate of the Company organized after February 25, 2004 (the “Organization Date”) (or whose business commenced after the Organization Date) and any other Person organized after the Organization Date (or whose business commenced after the Organization Date) whose equity securities or interests are owned, directly or indirectly, in whole or in part, by the Company or any of its Subsidiaries, in each case, if:

(A) such Affiliate or other Person has incurred debt for the purpose of financing all or a part of the costs of the acquisition, construction, development or operation of a particular project (“Project Debt”);

(B) except for customary guarantees, keep-well agreements and similar credit and equity support arrangements in respect of Project Debt incurred by such Affiliate or other Person from the Company or any of its Subsidiaries not in excess of $150,000,000 or from third parties, the source of repayment of such Project Debt is limited to the assets and revenues of such particular project (or, if such particular project comprises all or substantially all of the assets of such Affiliate or other Person, the assets and revenues of such Affiliate or other Person); and

(C) the property over which liens are granted to secure such Project Debt, if any, consists solely of the assets and revenues of such particular project or the equity securities or interests of such Affiliate or other Person or a Subsidiary of the Company referred to in clause (iii) below; and

(iii) each Affiliate of the Company organized after the Organization Date (or whose business commenced after the Organization Date) whose equity securities or interests are owned, directly or indirectly, in whole or in part, by the Company or any of its Subsidiaries, the primary business of which is the direct or indirect ownership, management or operation of, or provision of services to, any Affiliate or other Person referred to in clause (ii) above.

ARTICLE 2

GUARANTEE

Section 2.1. Unconditional Guarantee.  (a) The Guarantor hereby fully and unconditionally guarantees (the “Guarantee”), to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture or the Securities or the obligations of the Company or any other guarantor to the Holders or the Trustee hereunder or thereunder, that: (1) the Principal of and interest on the Securities will be duly and promptly paid in full when due, whether at Stated Maturity, upon redemption, by acceleration or otherwise, and interest on the overdue Principal and (to the extent permitted by law) interest, if any, on the Securities and all other obligations of the Company or the Guarantor to the Holders or the Trustee hereunder or thereunder (including fees, expenses or others) (collectively, the “Obligations”) will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (2) in case of any extension of time of payment or renewal of any Obligations (with or without notice to the Guarantor), the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.  If the Company shall fail to pay when due, or to perform, any Obligations, for whatever reason, the Guarantor shall be jointly and severally obligated to pay in cash, or to perform or cause the performance of, the same promptly.  An Event of Default under the Indenture or the Securities of a particular series shall entitle the Holders of the Securities of such series to accelerate the Obligations of the Guarantor hereunder in the same manner and to the same extent as the Obligations of the Company.

  

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(b)            The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions of the Indenture or the Securities, any release of any other guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not the Guarantee is affixed to any particular Security, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Guarantor.

(c)            The Guarantor further agrees that, as between it, on the one hand, and the Holders of the Securities and the Trustee, on the other hand, (1) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations and (2) in the event of any acceleration of such Obligations as provided in Article VI, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of the Guarantee.

Section 2.2. Waiver.  To the fullest extent permitted by applicable law, the Guarantor waives diligence, presentment, demand of, payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that the Guarantee will not be discharged except by complete performance of the Obligations contained in the Securities and the Indenture.

Section 2.3. Guarantee of Payment.  The Guarantor further agrees that the Guarantee constitutes a guarantee of payment, performance and compliance when due and not a guarantee of collection, and waives any right to require that any resort be had by the Trustee or any Holder of the Securities to the security, if any, held for payment of the Obligations.

Section 2.4. No Discharge or Diminishment of Guarantee.  Subject to Section 2.10 hereof, the obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, termination, impairment or for any reason (other than the payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Trustee or any Holder of the Securities to assert any claim or demand or to enforce any remedy under the Indenture or the Securities, any other guarantee or any other agreement, by any waiver or modification of any provision thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission or delay to do any other act that may or might in any manner or to any extent vary the risk of the Guarantor or that would otherwise operate as a discharge of the Guarantor as a matter of law or equity (other than the payment in full in cash of all the Obligations).

  

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Section 2.5. Defenses of Company Waived.  To the extent permitted by applicable law, the Guarantor waives any defense based on or arising out of any defense of the Company or any other guarantor or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company, other than complete performance of the Obligations contained in the Securities of the applicable series, the Indenture and in the Guarantee.  The Guarantor waives any defense arising out of any such election even though such election operates to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantor against the Company or any security.

Section 2.6. Continued Effectiveness.  Subject to Section 2.10 hereof, the Guarantor further agrees that the Guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of Principal of or interest on any Obligation is rescinded or must otherwise be restored by the Trustee or any Holder of the Securities upon the bankruptcy or reorganization of the Company or otherwise.

Section 2.7. Subrogation.  In furtherance of the foregoing and not in limitation of any other right of the Guarantor by virtue hereof, upon the failure of the Company to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Guarantor hereby promises to and will, upon receipt of written demand by the Trustee or any Holder of the Securities, forthwith pay, or cause to be paid, to the Holders in cash the amount of such unpaid Obligations, and thereupon the Holders shall assign (except to the extent that such assignment would render the Guarantor a “creditor” of the Company within the meaning of Section 547 of Title 11 of the United States Code as now in effect or hereafter amended or any comparable provision of any successor statute) the amount of the Obligations owed to them and paid by the Guarantor pursuant to this Guarantee to the Guarantor, such assignment to be pro rata to the extent the Obligations in question were discharged by the Guarantor, or make such other disposition thereof as the Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders).  If (a) the Guarantor shall make payment to the Holders of all or any part of the Obligations and (b) all the Obligations and all other amounts payable under the Indenture shall be paid in full, the Trustee will, at the Guarantor’s request, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from such payment by the Guarantor.

Section 2.8. Information.  The Guarantor assumes all responsibility for being and keeping itself informed of the Company’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that the Guarantor assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Guarantor of information known to it or any of them regarding such circumstances or risks.

  

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Section 2.9. Subordination.  Upon payment by the Guarantor of any sums to the Holders, as provided above, all rights of the Guarantor against the Company, arising as a result thereof by way of right of subrogation or otherwise, shall in all respects be subordinated and junior in right of payment to the prior payment in full in cash of all the Obligations to the Trustee; provided, however, that any right of subrogation that the Guarantor may have pursuant to the Indenture is subject to Section 2.7 hereof.

Section 2.10. Release of Guarantor.  (a) The Guarantor shall, upon the occurrence of any of the following events, be automatically and unconditionally released and discharged from all obligations under the Indenture and the Guarantee without any action required on the part of the Trustee or any Holder:

(i)            upon notice to the Trustee, at any time the aggregate principal amount of indebtedness for borrowed money (without duplication) issued or borrowed by all Measured Subsidiaries of the Guarantor (collectively) (other than any indebtedness for borrowed money represented by guarantees of third party indebtedness) constitutes (or, as a result of any event or circumstance occurring or arising substantially concurrently therewith, will constitute) no more than 10.0% of the aggregate principal amount of indebtedness for borrowed money of the Guarantor and its Measured Subsidiaries (other than any indebtedness for borrowed money represented by guarantees of third party indebtedness), on a consolidated basis, as of such time;

(ii)          upon (A) the sale, transfer or disposition of all or substantially all of the equity interests of the Company to another Person (other than to any subsidiary of the Guarantor) or (B) the conveyance, transfer or lease (including by way of consolidation or merger) substantially as an entirety of the properties and assets of the Company to another Person (other than to any subsidiary of the Guarantor) in compliance with Article V of the Indenture; or

(iii)        upon the discharge of the Company’s obligations under the Indenture in accordance with its terms.

(b)            The Guarantor shall be automatically and unconditionally released and discharged from all obligations under the Indenture and the Guarantee without any action required on the part of the Trustee or any Holder upon any covenant defeasance or legal defeasance with respect to the Securities, or upon the satisfaction and discharge of the Indenture, in each case subject to reinstatement pursuant to Article VIII of the Indenture.

(c)            The Trustee shall deliver an appropriate instrument evidencing such release upon receipt of a request of the Company accompanied by an Officer’s Certificate certifying as to the compliance with this Section and that such release and discharge is authorized and permitted hereunder upon which the Trustee shall be entitled to fully rely without any obligation to verify, confirm or otherwise review and with no liability therefor.

  

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Section 2.11. Limitation of Guarantor’s Liability.  (a) The Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Guarantee by the Guarantor not constitute a fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantor.  To effectuate the foregoing intention, the Holders and the Guarantor hereby irrevocably agree that the obligations of the Guarantor under the Indenture and the Guarantee shall be limited to the maximum aggregate amount which, after giving effect to all other contingent and fixed liabilities of the Guarantor and after giving effect to any collections from or payments made by or on behalf of any other guarantor in respect of the obligations of such guarantor under its guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of the Guarantor under the Guarantee not constituting such fraudulent transfer or conveyance.

(b) The Guarantee is expressly limited so that in no event, including the acceleration of the maturity of the Securities, shall the amount paid or agreed to be paid in respect of interest on the Securities (or fees or other amounts deemed payment for the use of funds) exceed the maximum permissible amount under applicable law, as in effect on the date hereof and as subsequently amended or modified to allow a greater amount of interest (or fees or other amounts deemed payment for the use of funds) to be paid under the Guarantee.  If for any reason the amount in respect of interest (or fees or other amounts deemed payment for the use of funds) required by the Guarantee exceeds such maximum permissible amount, the obligation to pay interest under the Guarantee (or fees or other amounts deemed payment for the use of funds) shall be automatically reduced to such maximum permissible amount and any amounts collected by any holder of any Security in excess of the permissible amount shall be automatically applied to reduce the outstanding principal on such Security.

Section 2.12. Contribution from Other Guarantors.  If the Guarantor makes a payment or distribution under its Guarantee, it shall be entitled to seek contribution from each other non-paying guarantor in a pro rata amount based on the net assets of each guarantor determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof so long as the existence of such right does not impair the rights of the Holders under the Guarantee.

Section 2.13. No Obligation to Take Action Against the Company.  Neither the Trustee, any Holder nor any other Person shall have any obligation to enforce or exhaust any rights or remedies or take any other steps under any security for the Obligations or against the Company or any other Person or any Property of the Company or any other Person before the Trustee, such Holder or such other Person is entitled to demand payment and performance by the Guarantor of its liabilities and obligations under the Guarantee.

 

ARTICLE 3

MISCELLANEOUS

 

                 Section 3.1. Ratification of the Indenture.

This First Supplemental Indenture is executed and shall be constructed as an indenture supplement to the Indenture, and as supplemented and modified hereby, the Indenture is in all respects ratified and confirmed, and the Indenture and this First Supplemental Indenture shall be read, taken and constructed as one and the same instrument.

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 Section 3.2. Trust Indenture Act Controls.

 If and to the extent that any provision of this First Supplemental Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this First Supplemental Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.

 Section 3.3. Notices.

 All notices and other communications shall be given as provided in the Indenture; provided that any notice or communication to the Guarantor shall be sufficiently given if in writing and delivered in person, sent by electronic delivery, or mailed by first-class mail addressed as follows:

one copy to:

The Walt Disney Company

500 South Buena Vista Street

Burbank, California 91521

Attention: Legal Department

 Email: corp.legal.notices@disney.com

and the second copy to:

The Walt Disney Company

500 South Buena Vista Street

Burbank, California 91521

Attention: Corporate Treasurer

 Email: corp.finance@disney.com

 

                                The Guarantor by notice to the Trustee may designate additional or different addresses for subsequent notices or communications.

Section 3.4. Governing Law. 

THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE COMPANY, THE GUARANTOR, THE TRUSTEE, AND EACH HOLDER OF A SECURITY (BY ACCEPTANCE THEREOF) THEREBY, (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS FIRST SUPPLEMENTAL INDENTURE, (II) IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION IN SUCH SUITS AND (III) IRREVOCABLY WAIVES TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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Section 3.5. Successors.

All agreements of the Company and the Guarantor in this First Supplemental Indenture shall bind their successors. All agreements of the Trustee in this First Supplemental Indenture shall bind its successors.

 Section 3.6. Multiple Originals.

 The parties may sign any number of copies of this First Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this First Supplemental Indenture.

Section 3.7. Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

Section 3.8. Trustee Not Responsible for Recitals.

The recitals contained herein shall be taken as statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or adequacy of this First Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this First Supplemental Indenture and perform its obligations hereunder.

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IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be duly executed as of the date first written above. 

 

	 	
COMPANY:

	 
	 	 	 
	 	
TWDC ENTERPRISES 18 CORP.

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Jonathan S. Headley 	 
	 	 	Name:	Jonathan S. Headley 	 
	 	 	Title: 	Treasurer 	 

 

	 	 	 	 
	
 

	
By: 

	/s/ Daniel F. Grossman 	 
	 	 	Name:	Daniel F. Grossman 	 
	 	 	Title: 	Vice President 	 

 

 

	 	
GUARANTOR:

	 
	 	 	 
	 	
THE WALT DISNEY COMPANY

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Jonathan S. Headley	 
	 	 	Name:	Jonathan S. Headley 	 
	 	 	Title: 	
Senior Vice President, Treasurer and

Corporate Real Estate

	 

 

	 	 	 	 
	
 

	
By: 

	/s/ Daniel F. Grossman 	 
	 	 	Name:	Daniel F. Grossman 	 
	 	 	Title: 	Vice President, Corporate Finance	 
	 	 	 	 

 

 

 

 

 

 

 

[Signature Page to First Supplemental Indenture]

 

 

	 	
TRUSTEE:

	 
	 	 	 
	 	
WELLS FARGO BANK, NATIONAL ASSOCIATION

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Michael Ty	 
	 	 	Name:	Michael Ty	 
	 	 	Title: 	Vice President	 

 

	 	 	 	 
	
 

	
By: 

	/s/ Casey A. Boyle	 
	 	 	Name:	Casey A. Boyle	 
	 	 	Title: 	Asst. Vice President 	 

 

 

 

 

 

 

 

[Signature Page to First Supplemental Indenture]

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