Document:

Exhibit 4.1

 

	
  REGISTERED

  	
  REGISTERED

  

 

	
  NO. FXR-

  	
  MEDIUM-TERM
  NOTE, SERIES C

  (Fixed
  Rate)

  	
  PRINCIPAL AMOUNT:

  U.S.$

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP: 254687AV8

  

 

Unless and until it is exchanged in whole or in part
for Notes in definitive form, this Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, New York, New York (“DTC”), to
the issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of DTC and any payment
is made to Cede & Co. or such other entity as requested by an
authorized representative of DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has as interest herein.

 

	
  ORIGINAL ISSUE DATE: December 4, 2007

  	
  INTEREST RATE: 4.70% per annum

  
	
  MATURITY DATE: December 1, 2012

  	
  EARLIEST REDEMPTION DATE: December 4, 2007

  
	
  ORIGINAL ISSUE PRICE: 99.772%

  	
  INTEREST PAYMENT DATES: June 1 and December 1,

  commencing June 1, 2008

  
	
   

  	
  REDEMPTION PRICE: See paragraph 10 below

  

 

 

Date:

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

This is one of the Notes of the series designated
herein referred to in the within-mentioned Indenture.

 

WELLS FARGO BANK, N.A., as
Trustee

 

 

By:

Authorized Signatory

 

 

THE WALT DISNEY COMPANY, a corporation duly organized
and existing under the laws of the State of Delaware (herein referred to as the
“Company”), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the Principal Amount specified above on the Maturity
Date specified above and to pay interest thereon from the Original Issue Date
specified above or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semiannually in arrears as specified in the
Pricing Supplement, in each year, commencing with the first Interest Payment
Date next succeeding the Original Issue Date, at the rate per annum set forth
above, until the principal hereof is paid or made available for payment; provided, however, that if the Original Issue Date of this
Note is between a Regular Record Date and the related Interest Payment Date,
the first payment of interest on this Note will be made on the Interest Payment
Date immediately following the next succeeding Regular Record Date to the
registered Holder on such next succeeding Regular Record Date. Interest
payments for this Note will include interest accrued to but excluding the
Interest Payment Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture
(as defined below), be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date, as specified in the Pricing Supplement (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date; provided, however, that interest payable at Maturity shall
be payable to the Person to whom principal shall be payable. If any Interest
Payment Date or Maturity with respect to this Note falls on a day that is not a
Business Day, the payment due on such Interest Payment Date or at Maturity will
be made on the following day that is a Business Day as if it were made on the
date such payment was due and no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date or Maturity, as the
case may be. Interest on this Note will be computed on the basis of a 360-day
year of twelve 30-day months. Except as otherwise provided in the Indenture,
any interest not punctually paid or duly provided for on any Interest Payment
Date (herein called “Defaulted Interest”) will forthwith cease to be payable to
the Holder on the Regular Record Date with respect to such Interest Payment
Date and may either be paid to the Person in whose name this Note (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee (as defined below), notice of which shall be given to Holders of
Notes not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made at the
office or agency of the Company maintained for that purpose, initially
designated to be the Corporate Trust Office of the Trustee in Los Angeles,
California, and at such additional offices or agencies as the Company may
designate, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company,
payments of principal of and interest on this Note may be made by check mailed
to the address of the Person entitled thereto as such address shall appear in
the register of Securities or by wire transfer of immediately available funds
to the account of the Holder of this Note if appropriate wire transfer
instructions have been received in writing by the Trustee not less than 15 days
prior to the applicable payment date. Notwithstanding the foregoing, the
Company will make payments of interest on any Interest Payment Date other than
the Maturity Date to each registered Holder of $10,000,000 (or, if the payment
currency is other than United States dollars, the equivalent thereof in the
particular payment currency) or more in aggregate principal amount of
definitive Notes (whether having identical or different terms and provisions)
by wire transfer of immediately available funds if the applicable registered
Holder has delivered appropriate wire transfer instructions in writing to the
Trustee not less than 15 days prior to the particular Interest Payment Date. Any
wire transfer instructions received by the Trustee shall remain in effect until
revoked by the applicable registered Holder.

 

Reference is hereby made to
the further provisions of this Note set forth below, which further provisions
shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by
the Trustee or its duly appointed co-authenticating agent by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

 

2

 

This Note is one of a duly
authorized issue of securities (herein called the “Securities”) of the Company
(which term includes any successor corporation under the Indenture hereinafter
referred to) issued and to be issued pursuant to such Indenture. This Security
is one of a series designated by the Company as its Medium-Term Notes, Series
C. The Indenture does not limit the aggregate principal amount of the
Securities.

 

The Company issued this Note
pursuant to an Indenture, dated as of September 24, 2001 (herein called the “Indenture”),
between the Company and Wells Fargo Bank, N.A., a national banking association,
as trustee (herein called the “Trustee,” which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.

 

The Notes are issuable as
Registered Securities, without coupons, in denominations of $2,000 and any
amount in excess thereof which is an integral multiple of $1,000. As provided
in the Indenture and subject to certain limitations therein set forth, Notes
are exchangeable for a like aggregate principal amount of Notes of like tenor
of any authorized denomination, as requested by the Holder surrendering the
same, upon surrender of the Note or Notes to be exchanged at any office or
agency described below where Notes may be presented for registration of
transfer.

 

The
Company may from time to time, without the consent of existing Note Holders,
issue additional Notes having the same terms and conditions (including maturity
and interest payment terms) as previously issued Notes in all respects, except
for issue date, issue price and the first payment of interest. Additional Notes
issued in this manner will be fungible with the previously issued Notes to the
extent specified in the applicable Pricing Supplement.

 

This Note may not be
redeemed prior to the Earliest Redemption Date set forth above. If no Earliest
Redemption Date is so set forth, this Note is not redeemable prior to the
Maturity Date. This Note is redeemable at any time on or after the Earliest
Redemption Date set forth above at the option of the Company, in whole or from
time to time in part, upon not less than 30 nor more than 60 days’ notice
mailed to the registered Holder hereof, at the Redemption Price equal to the
amount set forth below, together in each case with accrued interest to but
excluding the Redemption Date.

 

Notwithstanding the preceding
paragraph, installments of interest whose Stated Maturity is prior to the
Redemption Date of any Note will be payable to the Holder of such Note, or one
or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates referred to above, all as provided in the
Indenture.

 

The Redemption Price shall
be equal to the greater of the following amounts: (1) 100% of the principal
amount of the Notes to be redeemed; or (2) as determined by the Independent
Investment Banker (as defined below), the sum of the present values of the
remaining scheduled payments of principal and interest on the Notes to be
redeemed (not including any portion of any payments of interest accrued as of
the Redemption Date) discounted to the Redemption Date on a semiannual basis at
the Treasury Rate (as defined below) plus 20 basis points. The Redemption Price
will be calculated assuming a 360-day year consisting of twelve 30-day months.

 

For purposes of calculating
the Redemption Price, the terms below shall have the following meanings:

 

“Treasury Rate” means, with
respect to any Redemption Date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date.

 

The Treasury Rate will be
calculated on the third Business Day preceding the Redemption Date.

 

“Comparable Treasury Issue”
means the United States Treasury security selected by the Independent
Investment Banker as having a maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of those
Notes.

 

3

 

“Comparable Treasury Price”
means, with respect to any Redemption Date, (i) the average of five Reference
Treasury Dealer Quotations for that redemption date, after excluding the
highest and lowest of those Reference Treasury Dealer Quotations, or (ii) if
the Independent Investment Banker obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all of those quotations.

 

“Independent Investment
Banker” means one of Banc of America Securities LLC, Deutsche Bank Securities
Inc., or Merrill Lynch, Pierce, Fenner & Smith Incorporated, and their
respective successors appointed by the Company to act as the Independent
Investment Banker, from time to time, or if any such firm is unwilling or
unable to serve in that capacity, an independent investment and banking
institution of national standing appointed by the Company.

 

“Reference Treasury Dealer”
means: (i) Banc of America Securities LLC, Deutsche Bank Securities Inc., and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and their respective
successors; provided that, if any such firm ceases to be a primary U.S.
Government securities dealer in New York City (“Primary Treasury Dealer”), the
Company will substitute another Primary Treasury Dealer; and (ii) up to two
other Primary Treasury Dealers selected by the Company.

 

“Reference Treasury Dealer
Quotation” means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Independent Investment Banker by such Reference Treasury Dealer
at 5:00 p.m. (New York City time) on the third Business Day preceding that
Redemption Date.

 

All notices of redemption
shall state the Redemption Date, the Redemption Price, if fewer than all the
outstanding Notes with the same Original Issue Date, Interest Rate and Stated
Maturity are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of Notes to be redeemed, that on the Redemption
Date the Redemption Price will become due and payable upon each Note, or
portion thereof, to be redeemed, that interest on each Note, or portion
thereof, called for redemption will cease to accrue on and including the
Redemption Date and the place or places where Notes may be surrendered for
redemption. However, payment of the Redemption Price, together with accrued
interest to but excluding the Redemption Date, for a Note for which a
redemption notice has been delivered is conditioned upon delivery of such Note
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) to the office or agency of the Company maintained for that purpose,
initially designated to be the Corporate Trust Office of the Trustee in Los
Angeles, California, and at such additional offices or agencies as the Company
may designate, at any time (whether prior to, on or after the Redemption Date)
after delivery of the redemption notice. Payment of the Redemption Price for
the Note (or portion thereof to be redeemed), together with accrued interest to
the Redemption Date, will be made on the later of the Redemption Date or
promptly following the time of delivery of the Note. If fewer than all of the
Notes with the same Original Issue Date, Interest Rate and Stated Maturity are
to be redeemed at any time, selection of such Notes for redemption will be made
by the Trustee by such method as the Trustee shall deem fair and appropriate.

 

In the event of redemption
of this Note in part only, a new Note or Notes of like tenor for the aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Notes so surrendered will be issued in the name of the Holder
hereof upon the cancellation hereof.

 

For all purposes of this
Note and the Indenture, unless the context otherwise requires, all provisions
relating to the redemption by the Company of Notes shall relate, in the case of
any Notes redeemed or to be redeemed by the Company only in part, to the
portion of the principal amount of such Notes which has been or is to be so
redeemed.

 

If an Event of Default with respect to the Notes shall
occur and be continuing, the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.

 

4

 

The Indenture permits, in certain circumstances
therein specified, the amendment thereof without the consent of the Holders of
the Securities. The Indenture also permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations under the Indenture of the Company and the rights of Holders of the
Securities of each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all the Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

 

No reference herein to the Indenture and no provision
of this Note or, subject to the provisions for satisfaction and discharge in
Article Eight of the Indenture, of the Indenture, shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the principal
of and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.

 

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Notes is registrable in the
register of Securities, upon surrender of a Note for registration of transfer
at the office or agency of the Company maintained for that purpose, initially
designated to be the Corporate Trust Office of the Trustee in Los Angeles,
California, and at such additional offices or agencies as the Company may
designate, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

 

No service charge shall be made by the Company, the
Trustee or the Registrar for any such registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (other than exchanges
pursuant to Sections 2.11, 3.6, 9.5 or 10.3 of the Indenture, not involving any
transfer).

 

Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

 

5

 

The Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York, including
without limitation, §§ 5-1401 and 5-1402 of the New York General
Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.

 

6

 

IN WITNESS WHEREOF, The Walt Disney Company has caused
this Instrument to be signed by the signature or facsimile signature of its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, or its Treasurer or any Assistant Treasurer and attested by
its Secretary or one of its Assistant Secretaries by his or her signature or a
facsimile thereof, and its corporate seal or a facsimile of its corporate seal
to be affixed hereunto or imprinted hereon.

 

	
  (SEAL)

  	
   

  	
  THE WALT DISNEY COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christine M. McCarthy

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President-Corporate Finance 

  
	
   

  	
   

  	
   

  	
  and Real Estate and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  	
   

  
	
  Title:

  	
  Vice President-Governance Administration and
  Assistant Secretary

  	
   

  	
   

  
						

 

7

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN COM v as tenants in common

  	
  UNIF GIFT MIN ACT        
  Custodian          

  
	
   

  	
  (Cust.)

  	
  (Minor)

  
	
   

  	
   

  
	
   TEN ENT v as
  tenants by the entireties

  	
   

  
	
   

  	
  Under Uniform Gifts to Minors Act

  
	
  JT TEN v as
  joint tenants with right

  	
   

  
	
   

  	
  of survivorship and not as tenants

  	
   

  
	
   

  	
  in common

  	
  (State)

  

 

Additional abbreviations
may also be used though not in the above list.

 

 

FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto

 

Please Insert Social Security or Employer

Identification Number of Assignee

 

                –              –

 

 

Please Print or Typewrite
Name and Address

Including Postal Zip Code
of Assignee

 

the within Security and all rights thereunder, hereby irrevocably
constituting and appointing

                                                                                                             attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  	
   

  

 

NOTICE:                                             The
signature to this assignment must correspond with the name as it appears upon
the face of the within Note in every particular, without alteration or
enlargement or any change whatever.

 

 

THE
WALT DISNEY COMPANY

 

ADDENDUM TO MEDIUM-TERM NOTE

Fixed Rate

 

The following provisions shall be of the same
force and effect as if set forth in the Medium-Term Note of the Walt Disney
Company to which this Addendum is attached.

 

This Note constitutes a portion of the Company’s 4.70% Global Notes due
2012, issued by the Company on the Original Issue Date specified above in the
aggregate principal amount of $750,000,000 (the “4.70% Notes”). The Company
will, subject to certain exceptions and limitations set forth below, pay to the
Holder of any 4.70% Note who is a United States Alien, as additional interest,
such amounts (“Additional Amounts”) as may be necessary in order that every net
payment on such 4.70% Note (including payment of the principal of and interest
on such 4.70% Note) by the Company or a Paying Agent, after deduction or
withholding for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided in such 4.70% Note to be then due and
payable; provided, however, that the foregoing obligation to pay Additional
Amounts will not apply to:

 

(a)           any tax,
assessment or other governmental charge that would not have been so imposed but
for (i) the existence of any present or former connection between such
Holder or beneficial owner of such 4.70% Note (or between a fiduciary, settlor
or beneficiary of, or a person holding a power over, such Holder, if such
Holder is an estate or a trust, or a member or shareholder of such Holder, if
such Holder is a partnership or corporation) and the United States or any
political subdivision or taxing authority thereof or therein, including,
without limitation, such Holder (or such fiduciary, settlor, beneficiary,
person holding a power, member or shareholder) being or having been a citizen
or resident of the United States or treated as a resident thereof or being or
having been engaged in a trade or business or present therein or having or
having had a permanent establishment therein or (ii) such Holder’s or
beneficial owner’s past or present status, as applicable (under prior or
current law), as a personal holding company, foreign personal holding company,
foreign private foundation or other foreign tax-exempt organization with
respect to the United States, passive foreign investment company or controlled
foreign corporation for United States tax purposes or corporation that
accumulates earnings to avoid United States Federal income tax;

 

 

(b)           any
estate, inheritance, gift, excise, sales, transfer, wealth or personal property
tax or any similar tax, assessment or other governmental charge;

 

(c)           any tax,
assessment or other governmental charge that would not have been imposed but
for the presentation by the Holder of a 4.70% Note for payment more than
30 days after the date on which such payment became due and payable or the
date on which payment thereof was duly provided for, whichever occurred later;

 

(d)           any tax,
assessment or other governmental charge that is payable otherwise than by
withholding from a payment on a 4.70% Note;

 

(e)           any tax,
assessment or other governmental charge required to be withheld by any Paying
Agent from a payment on a 4.70% Note, if such payment could be made without
such withholding by any other Paying Agent;

 

(f)            any
tax, assessment or other governmental charge that would not have been imposed
but for a failure to comply with applicable certification, information,
documentation, identification or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of the
Holder or beneficial owner of a 4.70% Note if such compliance is required by
statute or regulation of the United States or by an applicable tax treaty to
which the United States is a party as a precondition to relief or exemption
from such tax, assessment or other governmental charge;

 

(g)           any tax,
assessment or other governmental charge imposed on a Holder that actually or
constructively owns 10 percent or more of the combined voting power of all
classes of the Company’s stock or that is a bank receiving interest on an
extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business;

 

(h)           any
withholding or deduction imposed on a payment to an individual where such
withholding or deduction is required to be made pursuant to Council Directive
2003/48/EC or any other European Union Directive implementing the conclusions
of the ECOFIN Council meeting of 26th — 27th November, 2000 on the
taxation of savings income or any law implementing or complying with, or
introduced in order to conform to, such Directive; or

 

(i)            any
combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

 

nor shall
Additional Amounts be paid with respect to a payment on a 4.70% Note to a
Holder that is a fiduciary or partnership or other than the

 

2

 

sole beneficial
owner of such payment to the extent a beneficiary or settlor with respect to
such fiduciary or a member of such partnership or a beneficial owner would not
have been entitled to Additional Amounts (or payment of Additional Amounts
would not have been necessary) had such beneficiary, settlor, member or
beneficial owner been the Holder of such 4.70% Note.

 

If (a) as a result of any change in, or
amendment to, the laws (or any regulations or rulings promulgated thereunder)
of the United States (or any political subdivision or taxing authority thereof
or therein), or any change in the official application (including a ruling by a
court of competent jurisdiction in the United States) or interpretation of such
laws, regulations or rulings, which change or amendment is announced or becomes
effective on or after the Original Issue Date specified above, the Company
becomes or will become obligated to pay Additional Amounts as described above,
or (b) any act is taken by a taxing authority of the United States on or after
the Original Issue Date specified above, whether or not such act is taken with
respect to the Company or any affiliate, that results in a substantial
likelihood that the Company will or may be required to pay such Additional
Amounts, then the Company may, at its option, redeem, as a whole, but not in
part, the 4.70% Notes on not less than 30 nor more than 60 days’ prior
notice, at a redemption price equal to 100% of their principal amount, together
with interest accrued thereon to the date fixed for redemption; provided that
the Company determines, in its business judgment, that the obligation to pay
such Additional Amounts cannot be avoided by the use of reasonable measures
available to it, not including substitution of the obligor under the 4.70% Notes
or any action that would entail a material cost to the Company. No redemption
pursuant to (b) above may be made unless the Company shall have received
an opinion of independent counsel to the effect that an act taken by a taxing
authority of the United States results in a substantial likelihood that it will
or may be required to pay Additional Amounts described above and the Company
shall have delivered to the Trustee a certificate, signed by a duly authorized
officer, stating that based on such opinion the Company is entitled to redeem
the 4.70% Notes pursuant to their terms.

 

3Exhibit
4.1

 

AMENDMENT
NO. 2 TO

FORBEARANCE AND CONSENT AGREEMENT

 

This
AMENDMENT No. 2 (the “Amendment”) to the FORBEARANCE AND CONSENT
AGREEMENT dated April 17, 2007, as amended pursuant to AMENDMENT No. 1 dated
June 25, 2007 (the “Agreement”), is entered into as of November 30, 2007
by and among ARTISTdirect, Inc., a Delaware corporation and its
subsidiaries and affiliates (collectively, the “Company”), U.S. Bank
National Association, as Collateral Agent under the Note and Warrant Purchase
Agreement (as defined below) (in such capacity, “Collateral Agent”) and
the senior lenders signatories hereto (“Initial Purchasers”).

Recitals

A.            Company, Initial Purchasers and
Collateral Agent are parties to that certain Note and Warrant Purchase
Agreement, dated as of July 28, 2005 (the “Senior Financing Agreement”),
among Company, the investors party thereto, as Initial Purchasers, and
Collateral Agent.  The Senior Financing Agreement, together with the other
Transaction Documents (as defined in the Senior Financing Agreement) as such
documents have been amended from time to time, are collectively referred to
herein as the “Senior Financing Documents”.

B.            Company is in default and may
trigger additional defaults under certain provisions of the Senior Financing
Documents and such defaults are expected to continue.

C.            The Existing Senior Defaults
constitute “Events of Default” for purposes hereof that entitle Collateral
Agent and Initial Purchasers to enforce their rights and remedies under the
Senior Financing Documents.  According to
Schedule I of the Agreement, one of the Events of Default was a failure of the
Company to maintain an effective registration statement covering the resale of
shares of common stock underlying the various securities issued by the Company
to each holder.  This Default was cured
on July 6, 2007, when the Company’s registration statement was declared
effective by the Securities and Exchange Commission.

D.            Company, Initial Purchasers and the
Collateral Agent have previously entered in the Agreement whereby, subject to
the conditions contained therein, Collateral Agent and Initial Purchasers
agreed to forbear from the exercise of their rights and remedies relating to
the Existing Senior Defaults and any other additional Events of Default through
July 31, 2007 for the purpose of affording a period of time for Company to
obtain funds to pay the obligations under the Senior Financing Documents or to
restructure its capital structure.

E.             Subject to the terms contained
herein, Collateral Agent and Initial Purchasers are willing to agree to
continue to forbear from the exercise of their rights and remedies relating to
the Existing Senior Defaults and any other additional Events of Default through
January 31, 2008.

Agreement 

For
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

1.             Definitions. 
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Agreement.

“Forbearance
Period.” means the period commencing on April 17, 2007 and ending on the
earliest to occur of the following:  (i) January 31, 2008; or
(ii) any material representation or warranty made by Company in the
Agreement proves to be materially false as of the date when made.

2.             Agreement to Forbear.

(a)         Subject to the conditions set forth in Section 3 below
and subject to the terms hereof and those set forth in the Agreement, during
the Forbearance Period, Collateral Agent and Initial Purchasers hereby agree to
forbear from exercising any of their rights and remedies under the Senior
Financing Documents existing during the Forbearance Period.

3.             Conditions to Effectiveness. 
The Initial Purchasers’ agreement to forbear for the Forbearance Period shall
be subject to the following conditions being fully satisfied:

(a)         The execution and delivery to Collateral Agent of a
counterpart of this Amendment by Collateral Agent, each Initial Purchaser and
Company.

(b)         All representations and warranties set forth in the
Agreement shall be true and correct as of the date hereof in all material
respects.

(c)         Company agrees to pay to the Initial Purchasers on a pro
rata basis on or before November 30, 2007, the sum of Five Hundred Thousand
Dollars ($500,000) which shall be applied in full against the penalties and
interest on the penalties resulting from the Company’s Defaults under the
Senior Financing Documents.

4.             Miscellaneous.

(a)         This Amendment may be signed in multiple counterparts, each
of which shall constitute an original and all of which, taken together, shall
constitute one and the same instrument.  One or more counterparts of this
Amendment may be delivered by facsimile, with the intention that they shall
have the same effect as an original counterpart thereof and shall be binding on
the person delivering the same.

(b)         Except to the extent expressly amended hereby, the Agreement
shall remain in full force and effect without amendment, impairment or
modification.  Each of Company, Initial Purchasers and Collateral Agent
respectively reaffirm their obligations under the Agreement as amended hereby.

 

2

IN
WITNESS WHEREOF, each of the parties hereto has caused this Forbearance and
Consent Agreement to be duly executed and delivered by its duly authorized
officer as of the date first above written. 

	
   

  	
  JMB CAPITAL PARTNERS,
  L.P., 

  
	
   

  	
  as an Initial Purchaser 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Cyrus Hadidi 

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Cyrus Hadidi 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Partner 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  JMG CAPITAL PARTNERS,
  L.P., 

  
	
   

  	
  as an Initial Purchaser 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Jonathan Glaser 

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Jonathan Glaser 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Member Manager of the L.P.
  

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  JMG TRITON OFFSHORE FUND,
  LTD., 

  
	
   

  	
  as an Initial Purchaser 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Jonathan Glaser 

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Jonathan Glaser 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Member Manager of the
  Investment 

  
	
   

  	
   

  	
   

  	
   

  	
  Manager 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

3

	
   

  	
  CCM MASTER QUALIFIED FUND,
  LTD, 

  
	
   

  	
  as an Initial Purchaser 

  
	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Clint Coghill

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Clint Coghill 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  President of Investment
  Manager, 

  
	
   

  	
   

  	
   

  	
   

  	
  Director of CCM Master
  Qualified 

  
	
   

  	
   

  	
   

  	
   

  	
  Fund, LTD 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, 

  
	
   

  	
  as Collateral Agent for
  Initial Purchasers 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Brad E. Scarbrough

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Brad E. Scarbrough 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Vice President 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  ARTISTDIRECT, INC., 

  
	
   

  	
  a Delaware corporation 

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  	
    

  	
    

  
	
   

  	
  By: 

  	
   

  	
  /s/ Neil McCarthy

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Neil McCarthy

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Interim Chief Financial
  Officer 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]