Document:

EXHIBIT 4.1

 

FIRST
AMENDMENT TO CONVERTIBLE SUBORDINATE NOTE

 

FIRST
AMENDMENT TO CONVERTIBLE SUBORDINATED NOTE (this “Amendment”) made and
entered into as of December 16, 2008, by ARTISTdirect, Inc., a
Delaware corporation (the “Company”) in favor of the Holders, with
reference to the following facts:

 

A.            The Company is
indebted to Holders as evidenced by the Convertible Subordinated Notes dated as
of July 28, 2005, of the Company in favor of the Holders in the original
aggregate principal amount of $30,000,000 (the “Original Notes”), to
which this Amendment is attached.

 

B.            The Company and
Holders of a majority of the now outstanding aggregate principal amount of
$16,880,000 (the “Majority Holders”) desire that the Original Notes
be amended, as set forth herein, to reflect an adjustment to the Conversion
Price.

 

C.            The Company and the
Majority Holders desire that the Original Note issued to CCM Master Qualified
Fund Ltd. and subsequently assigned to Trilogy Capital Partners, Inc. be
amended to waive the 60-day period referred to under the Original Note.

 

D.            The Company and the
Majority Holders desire that the Original Notes held by each of Randy Saaf and
Octavio Herrera be amended to allow Messrs. Saaf and Herrera to adjust the
Maximum Percentage by written notice to the Company.

 

E.             The Majority Holders
have affirmatively voted by written consent without a meeting on December 16, 2008 to amend the
Original Notes, in accordance with Section 17 thereof.

 

NOW, THEREFORE,
the Company and the Majority Holders agree as follows:

 

1.             Conversion Price.
Section 3(b)(ii) of the Original Note is hereby amended as of the
date of this Amendment to read in its entirety as follows:

 

(ii) “CONVERSION
PRICE” means, as of any Conversion Date (as defined below) or other date of determination,
and subject to adjustment as provided herein, $1.00.

 

2.             Waiver of 60-day
Waiting Period.  Section 3(d) of
the Original Note held by Trilogy Capital Partners, Inc. is hereby amended
as of the date of this Amendment by deleting the last sentence and replacing it
with the following:

 

“Notwithstanding anything
herein to the contrary, the Holder may increase or decrease the Maximum
Percentage to any other percentage (“MAXIMUM PERCENTAGE ADJUSTMENT”) by written
notice to the Company, and the Maximum Percentage Adjustment shall take effect
immediately upon receipt by the Company of such written notice.”

 

3.             Adjustment of
Maximum Percentage.   Section 3(d) of
the Original Notes held by each of Randy Saaf and Octavio Herrera is hereby
amended as of the date of this Amendment by adding the following sentence:

 

“Notwithstanding
anything herein to the contrary, the Holder may increase or decrease the
Maximum Percentage to any other percentage (“MAXIMUM PERCENTAGE ADJUSTMENT”) by
written notice to the Company, and the Maximum Percentage Adjustment shall take
effect immediately upon receipt by the Company of such written notice.”

 

 

3. Other
Changes.  Each reference in the
Original Notes, or in any other loan document referring to the Original Notes,
to “this Note,” “hereunder,” “herein,” “hereof” or words of like import
referring to the Original Notes shall hereafter mean and be a reference to the
Original Notes as amended by this Amendment.

 

IN
WITNESS WHEREOF, the Company and Majority Holders have accepted and agreed to
this Amendment, and have executed this Amendment as of the day and year first
above written.

 

 

	
  Company:

  	
   

  	
  Majority Holders:

  
	
   

  	
   

  	
   

  
	
  ARTISTdirect, Inc.

  	
   

  	
  Trilogy Capital Partners, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ DIMITRI VILLARD

  	
   

  	
  By:

  	
    /s/ ROBERT REIN

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Dimitri Villard

  	
   

  	
  Name:

  	
    Robert Rein

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
    Interim Chief Executive Officer

  	
   

  	
  Its:

  	
    Vice Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   /s/ Randy Saaf

  
	
   

  	
   

  	
   

  	
  RANDY SAAF

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   /s/ Octavio Herrera

  
	
   

  	
   

  	
   

  	
  OCTAVIO HERRERAExhibit 4.1

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.
  FXR-

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  (Fixed Rate)

   

  	
   

  	
  PRINCIPAL AMOUNT:

   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP: 254687AW6

  

 

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 22, 2008

  	
   

  	
  INTEREST RATE:
  4.50% per annum

  
	
  MATURITY DATE: December 15, 2013

  	
   

  	
  EARLIEST
  REDEMPTION DATE: December 22, 2008

  
	
  ORIGINAL ISSUE PRICE: 99.026%

  	
   

  	
  INTEREST PAYMENT
  DATES: June 15 and December 15, commencing June 15, 2009

  
	
   

  	
   

  	
  REDEMPTION
  PRICE: See paragraph 10 below

  ADDITIONAL
  AMOUNTS: See paragraphs 11 and 12 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.

 

2

 

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.

 

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 D. 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 50 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

 

3

 

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.

 

“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 Citigroup
Global Markets Inc., Deutsche Bank Securities Inc., or J.P. Morgan Securities
Inc., 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) Citigroup
Global Markets Inc., Deutsche Bank Securities Inc., and  J.P. Morgan Securities Inc., 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.

 

In the event this Note is subject to payment
of Additional Amounts (as defined below) as specified above, the Company
will, subject to certain exceptions and limitations set forth below, pay to the
Holder of hereof who is a United States Alien, as additional interest, such
amounts (“Additional Amounts”) as may be necessary in order that every net
payment on this Note (including payment of the principal of and interest on
such this 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 this 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 this 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

 

4

 

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 this Note for payment more than 10 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 this Note;

 

(e)           any
tax, assessment or other governmental charge required to be withheld by any
Paying Agent from a payment on this  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 this 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 this
Note to a Holder that is a fiduciary or partnership or other than the 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 this 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 Notes on not less than 30

 

5

 

nor more than
60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of such Notes, 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 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 Notes pursuant to their
terms.

 

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.

 

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

 

6

 

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.

 

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.

 

7

 

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

  	
   

  	
   

  
								

 

8

 

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  

  	
   

  	
   

  
	
   

  	
  ofsurvivorship
  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.

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