EXHIBIT 1.1
DIAGEO CAPITAL PLC
DIAGEO FINANCE B.V.
DIAGEO INVESTMENT CORPORATION
DIAGEO PLC
DEBT SECURITIES
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UNDERWRITING AGREEMENT
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November o , 2003
To the Representatives of the Several Underwriters named
in the respective Pricing Agreements hereinafter described
Ladies and Gentlemen:
From time to time Diageo Capital plc (the "Scottish Issuer"), Diageo
Investment Corporation, a Delaware corporation (the "U.S. Issuer") and Diageo
Finance B.V., a private company with limited liability (besloten vennootschap
met beperkte aansprakelijkheid) incorporated under Dutch law (the "Dutch
Issuer") (each an "Issuer" and together the "Issuers"), propose severally to
enter into one or more Pricing Agreements in the form of Annex I hereto, with
such additions and deletions as the parties thereto may determine, and, subject
to the terms and conditions stated herein and therein, to issue and sell, to the
several firms named in Schedule I to the applicable Pricing Agreement (such
firms constituting the "Underwriters" with respect to such Pricing Agreement and
the securities specified therein) the principal amount of their debt securities
identified in Schedule II to such Pricing Agreement (generally and, as the
context may require, with respect to such Pricing Agreement, the "Securities")
to be issued pursuant to the provisions of an indenture identified in such
Pricing Agreement (hereinafter called the "Indenture"), among the applicable
Issuer, Diageo plc, as Guarantor (the "Guarantor"), and the Trustee identified
in such Schedule (the "Trustee"). The Securities are to be unconditionally
guaranteed (the "Guarantees") as to payment of principal and interest by the
Guarantor. All references herein to "this Agreement" shall be deemed to refer to
this Agreement together with the applicable Pricing Agreement.
The Issuers and the Guarantor have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form F-3
(Registration No. 333- o ), including a prospectus relating to the Securities to
be issued severally from time to time by the Issuers. The Issuer set forth in
the applicable Pricing Agreement (the "applicable Issuer") also has filed with,
or proposes to file with, the Commission pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), a Prospectus
Supplement specifically relating to the Securities (the "Prospectus
Supplement"). Upon request, but not without your
agreement, the applicable Issuer may also file a Rule 462(b) Registration
Statement in accordance with Rule 462(b) under the Securities Act. The
registration statement as of the date of this Agreement and any Rule 462(b)
Registration Statement that becomes effective prior to the Closing Date (as
defined in Article IV below) is hereinafter referred to as the "Registration
Statement" and the related prospectus covering the Securities in the form first
used to confirm sales of the Securities is hereinafter referred to as the "Basic
Prospectus". The Basic Prospectus as supplemented by the Prospectus Supplement
specifically relating to the Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Prospectus". Any reference
in this Agreement to the Registration Statement, the Basic Prospectus, any
preliminary form of Prospectus (including the Basic Prospectus, a "preliminary
prospectus") previously filed with the Commission pursuant to Rule 424 or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 6 of Form F-3 under the Securities Act which
were filed under the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Exchange Act")
on or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein. Any reference to "Rule 462(b)
Registration Statement" shall be deemed to refer to a registration statement and
any amendments thereto filed pursuant to Rule 462(b) relating to the offering
covered by the initial Registration Statement. The obligations of the Issuers
under this Agreement shall be several and not joint.
I.
The applicable Issuer (as to itself) and the Guarantor (as to each
Issuer and to itself) represents and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain, and, as amended or supplemented, if applicable, did not or will
not, as the case may be, contain at the time of such amendment or
supplement, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply, as the case may be, in all material respects with the Securities
Act and the applicable rules and regulations of the Commission thereunder,
(iii) the Prospectus does not or will not, as the case may be, as of the
date of the Prospectus and as at the Closing Date, contain and, as amended
or
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supplemented, if applicable, at the time of such amendment or supplement,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph I(b) do not
apply (A) to statements or omissions in the Registration Statement or the
Prospectus, as amended or supplemented, if applicable, based upon
information concerning any Underwriter furnished to the Issuers or the
Guarantor in writing by such Underwriter through you expressly for use
therein or (B) to the Statement of Eligibility and Qualification of the
Trustee on Form T-1 and (iv) each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied or will comply when so filed in all material respects
with the Exchange Act.
(c) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the rules and regulations
of the Commission thereunder.
(d) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended, and has been duly authorized, executed and
delivered by the applicable Issuer and duly authorized, executed and
delivered by the Guarantor and is a valid and legally binding agreement of
such Issuer and the Guarantor, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(e) There has not been any material adverse identifiable change, or
any development involving a prospective material adverse identifiable
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Guarantor and its subsidiaries, taken as a
whole, from that set forth in the Prospectus.
(f) The financial statements, and the related notes thereto, included
or incorporated by in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Guarantor and its
consolidated subsidiaries as of the dates indicated and the results of its
operations and the changes in their consolidated cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; the
supporting schedules included in the Registration Statement present fairly
the information required to be stated therein; and, if applicable, the pro
forma financial information, and the related notes thereto, included in the
Registration Statement and the Prospectus has been prepared in accordance
with the applicable requirements of the Securities Act and is based upon
good faith estimates and assumptions believed by the Guarantor to be
reasonable.
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II.
Each Underwriter represents and agrees that (a) in relation to
Securities which have a maturity of one year or more and which are to be
admitted to the Official List of the U.K. Listing Authority, it has not offered
or sold and will not offer or sell any Securities to persons in the United
Kingdom prior to admission of such Securities to listing in accordance with Part
VI of the Financial Services and Markets Act 2000 (the "FSMA"), except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995 or the FSMA, (b) in relation to
Securities which have a maturity of one year or more and which are not to be
admitted to the Official List of the U.K. Listing Authority, it has not offered
or sold and will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their business or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 or the FSMA, (c) it
has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom and (d) it will only communicate or cause
to be communicated any invitation or inducement to engage in investment activity
(with the meaning of Section 21 of the FSMA) received by it in connection with
the issue and sale of such Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the applicable Issuer or the Guarantor.
Each Underwriter severally represents and agrees that in relation to
Securities issued by the Dutch Issuer that Securities may only be offered by the
Dutch Issuer and such offer may only be announced: (a) to persons who trade or
invest in securities in the conduct of their profession or trade (which includes
banks, securities intermediaries (including dealers and brokers), insurance
companies, pension funds, other institutional investors and commercial
enterprises which as an ancillary activity regularly invest in securities)
("professional investors"), provided that the offer, the applicable Prospectus
and each announcement of the offer states that the offer is exclusively made to
those persons; or (b) otherwise in accordance with the 1995 Act on the
Supervision of the Securities Trade (Wet toezicht effectenverkeer 1995). In
addition, each Underwriter severally represents and agrees that in relation to
Securities issued by the Dutch Issuer, all transfer requirements applicable to
Securities pursuant to the Netherlands Savings Certificates Act (Wet inzake
spaarbewijzen) are complied with.
III.
The Issuers and the Guarantor are advised by you that the Underwriters
propose to make a public offering of their respective portions of the Securities
as soon after the applicable
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Pricing Agreement has become effective as in your judgment is advisable. The
terms of the public offering of the Securities are set forth in the Prospectus
Supplement.
IV.
Payment for the Securities shall be made by certified or official bank
check or checks or wire transfer, as specified in the applicable Pricing
Agreement, payable to the order of the Issuer identified in such Pricing
Agreement in the funds in such Pricing Agreement at the time and place, in each
case as set forth in such Pricing Agreement, or at such other time on the same
or such other date, not later than the third New York business day thereafter,
as shall be designated in writing by you, which date and time may be postponed
by agreement among you, the applicable Issuer and the Guarantor or as provided
in Section IX hereof. The time and date of such payment, as specified in the
applicable Pricing Agreement in relation to an offering of Securities, are
hereinafter referred to as the "Closing Date".
Payment for the Securities shall be made against delivery to you for
the respective accounts of the several Underwriters of the Securities registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the date of delivery, with any
transfer taxes payable in connection with the transfer of the Securities to the
Underwriters duly paid.
V.
The several obligations of the Underwriters hereunder are subject to
the following conditions, appropriately modified for the applicable Issuer:
(a) The applicable Prospectus Supplement shall have been filed with
the Commission pursuant to Rule 424 within the applicable time period
prescribed for such filing by the rules and regulations under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to your satisfaction.
(b) Subsequent to the execution and delivery of the applicable Pricing
Agreement and prior to the Closing Date, there shall not have been any
downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any
of the applicable Issuer's or the Guarantor's securities by any "nationally
recognized statistical rating organization" as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.
(c) There shall not have occurred any change, or any development
involving a
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prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, of the Guarantor and its subsidiaries,
taken as a whole, from that set forth in the Registration Statement, that,
in your reasonable judgment, is material and adverse and that makes it, in
your reasonable judgment, after consultation with the applicable Issuer and
the Guarantor, impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus and Prospectus Supplement.
(d) The Underwriters shall have received on the Closing Date
certificates, dated the Closing Date and signed, respectively, by an
executive officer or a director of each of the applicable Issuer and of the
Guarantor, to the effect set forth in clauses (b) and (c) above and to the
effect that the representations and warranties of such Issuer and the
Guarantor contained in this Agreement are true and correct as of the
Closing Date and that such Issuer and the Guarantor shall have performed in
all material respects all of their respective obligations to be performed
hereunder or satisfied on or prior to the Closing Date. The officer or
director signing and delivering such certificate may certify to the best of
his knowledge.
(e) You shall have received on the Closing Date an opinion of Sullivan
& Cromwell LLP, United States counsel for the Issuers and the Guarantor,
dated the Closing Date, to the effect that:
(i) if applicable, the U.S. Issuer has been duly incorporated
and is an existing corporation in good standing under the laws of
the State of Delaware;
(ii) the Indenture has been duly authorized, executed and
delivered by the U.S. Issuer or, assuming the Indenture has been duly
authorized, executed and delivered by the Scottish Issuer insofar as
the laws of Scotland are concerned, it has been duly executed and
delivered by the Scottish Issuer, or assuming the Indenture has been
duly authorized, executed and delivered by the Dutch Issuer insofar as
the laws of The Netherlands are concerned, it has been duly executed
by the Dutch Issuer, and, assuming the Indenture has been duly
authorized, executed and delivered by the Guarantor insofar as the
laws of England are concerned, it has been duly executed and delivered
by the Guarantor; the Indenture has been duly qualified under the
Trust Indenture Act of 1939 and constitutes a valid and legally
binding obligation of the applicable Issuer and the Guarantor,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iii) the Securities have been duly authorized, executed,
authenticated, issued and delivered by the U.S. Issuer or, assuming
the Securities have been duly authorized, executed, authenticated,
issued and delivered by the Scottish Issuer insofar as the laws of
Scotland are concerned, they have been duly executed,
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authenticated, issued and delivered by the Scottish Issuer, or,
assuming the Securities have been duly authorized, executed,
authenticated, issued and delivered by the Dutch Issuer insofar as the
laws of The Netherlands are concerned, they have been duly authorized,
executed, authenticated, issued and delivered by the Dutch Issuer and
constitute valid and legally binding obligations of the applicable
Issuer, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iv) assuming the Guarantees have been duly authorized, executed
and delivered by the Guarantor insofar as the laws of England are
concerned, the Guarantees have been duly executed and delivered by or
on behalf of the Guarantor and constitute valid and legally binding
obligations of the Guarantor enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(v) this Agreement has been duly authorized, executed and
delivered by the U.S. Issuer or, assuming this Agreement has been duly
authorized, executed and delivered by the Scottish Issuer insofar as
the laws of Scotland are concerned, it has been duly executed and
delivered by the Scottish Issuer, or, assuming this Agreement has been
duly authorized, executed and delivered by the Dutch Issuer insofar as
the laws of The Netherlands are concerned, it has been duly executed
by the Dutch Issuer and, assuming this Agreement has been duly
authorized, executed and delivered by the Guarantor insofar as the
laws of England are concerned, it has been duly executed and delivered
by the Guarantor;
(vi) the issuance of the Securities in accordance with the
Indenture and the sale of the Securities by the applicable Issuer to
the Underwriters pursuant to this Agreement do not, and the
performance by such Issuer and the Guarantor of their respective
obligations under the Indenture, this Agreement, the Securities and
the Guarantees will not, in the case of the U.S. Issuer, violate the
U.S. Issuer's Certificate of Incorporation or By-laws, or violate any
Federal law of the United States, the law of the State of New York or,
in the case of the U.S. Issuer, the General Corporation Law of the
State of Delaware, applicable to such Issuer or the Guarantor;
provided, however, that, with respect to this paragraph (vii), such
counsel need express no opinion with respect to Federal or state
securities laws, other anti-fraud laws and fraudulent transfer laws;
provided, further, that insofar as performance by such Issuer and the
Guarantor of their respective obligations under the Indenture, this
Agreement, the Securities and the Guarantees is concerned, such
counsel need express no opinion as to bankruptcy, insolvency,
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reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights;
(vii) all regulatory consents, authorizations, approvals and
filings required to be obtained or made by the applicable Issuer or
the Guarantor, as the case may be, under the Federal laws of the
United States and the laws of the State of New York for the issuance
by the Guarantor of the Guarantees and the issuance, sale and delivery
of the Securities by the applicable Issuer to the Underwriters have
been obtained or made; and
(viii) the applicable Issuer is not an "investment company" or a
company "controlled" by an "investment company" required to be
registered under the United States Investment Company Act of 1940.
In rendering such opinion, such counsel may state that their opinion
is limited to the Federal laws of the United States, the laws of the State of
New York and the General Corporation Law of the State of Delaware and such
counsel may (i) rely, without independent investigation, as to matters of
English law, upon the opinion of Slaughter and May, English counsel for the
Guarantor, rendered pursuant to Section V(f), the opinion of Morton Fraser,
Scottish counsel to the Scottish Issuer rendered pursuant to Section V(g) and
the opinion of Houthoff Buruma, Dutch Counsel to the Dutch Issuer rendered
pursuant to Section V(h); (ii) assume that any document referred to in their
opinion and executed by the Scottish Issuer or the Dutch Issuer has been duly
authorized, executed and delivered pursuant to Scottish law or Dutch law, as
applicable; and (iii) assume that any document referred to in their opinion and
executed by the Guarantor has been duly authorized, executed and delivered
pursuant to English law.
Such counsel may also state that, with your approval, they have relied
as to certain matters upon certificates of the applicable Issuer and the
Guarantor and each of the applicable Issuer's and Guarantor's officers or
directors and employees and upon information obtained from other sources
believed by them to be responsible, and that they have assumed that the
Indenture has been duly authorized, executed and delivered by the Trustee, that
the Securities conform to the specimens thereof examined by them, that the
Trustee's certificates of authentication of the Securities have been manually
signed by one of the Trustee's duly authorized officers and that the signatures
on all documents examined by us are genuine, assumptions which they have not
independently verified.
Such counsel shall also state that they have reviewed the Registration
Statement, the Basic Prospectus and the Prospectus Supplement and participated
in discussions with representatives of the applicable Issuer and the Guarantor
and their English and, if applicable, Scottish or Dutch counsel, representatives
of the accountants for the applicable Issuer and the Guarantor and
representatives of the Underwriters and their U.S. counsel; and on the basis of
the information that they gained in the course of the performance of such
services, considered in the light of the experience they have gained through
their practice in this field, such counsel shall confirm to the Underwriters
that each part of the Registration Statement, when such part became
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effective, and the Basic Prospectus, as supplemented by the Prospectus
Supplement as of the date of the Prospectus Supplement appeared on their face to
be appropriately responsive in all material respects to the requirements of the
Securities Act, the Trust Indenture Act of 1939 and the applicable rules and
regulations of the Commission thereunder; and nothing that has come to the
attention of such counsel has caused them to believe (a) that any part of the
Registration Statement, when such part became effective, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Basic Prospectus as supplemented by the Prospectus Supplement as of the
date of the Prospectus Supplement, contained any untrue statement of material
fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading or (b) that, in the course of specified procedures performed by them
subsequent to the effective date of the Registration Statement, the Basic
Prospectus, as supplemented by a Prospectus Supplement, as of the date of such
opinion contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Such
opinion may state (1) that such counsel do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Basic Prospectus or any Prospectus Supplement
except for those made under the captions "Description of Debt Securities and
Guarantees" and "Taxation - United States Taxation of Debt Securities" in the
Registration Statement and "Description of the Notes and Guarantees" and
"Underwriting" in a Prospectus Supplement insofar as they relate to the
provisions of documents therein described and (2) that they do not express any
opinion or belief as to the financial statements or other financial data
contained in the Registration Statement or the Basic Prospectus or any
Prospectus Supplement, or as to the statement of the eligibility and
qualification of the Trustee under the Indenture under which the Securities are
being issued, or as to any statement made by Slaughter and May with respect to
English law any statement made by Morton Fraser with respect to Scottish law or
any statement made by Houthoff Buruma with respect to Dutch law, in each case,
in the Registration Statement or in documents incorporated by reference therein.
(f) You shall have received on the Closing Date an opinion of
Slaughter and May, English counsel to the Guarantor, dated the Closing
Date, to the effect that:
(i) the Guarantor is a public limited company duly incorporated
under the laws of England and Wales and is an existing company;
(ii) the Indenture, the Guarantees and this Agreement have been
duly authorized, executed and delivered by the Guarantor;
(iii) the choice of the laws of the State of New York as the
governing law of the Indenture, the Guarantees and this Agreement is a
valid choice of law; the validity and binding nature of the
obligations contained in the Indenture, the
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Guarantees and this Agreement are governed by New York law;
(iv) on the assumption that the Indenture, the Guarantees and
this Agreement create valid and binding obligations of the parties
under New York law, English law will not prevent any provisions of the
Indenture, the Guarantees and this Agreement from being valid and
binding obligations of the Guarantor;
(v) the execution and delivery by the Guarantor of, and the
performance by the Guarantor of its obligations under, the Indenture,
the Guarantees and this Agreement will not contravene any law of
England and Wales or the Memorandum and Articles of Association of the
Guarantor, in each case, that is material to the Guarantor and its
subsidiaries, taken as a whole, or any material judgment, order or
decree of any governmental body, agency or court in England and Wales
having jurisdiction over the Guarantor;
(vi) there are no required authorizations, approvals or consents
of, or registration or filing with, any court, governmental or
regulatory authority of or with the United Kingdom required in
connection with the execution, delivery and performance of the
Guarantees and the Indenture by the Guarantor;
(vii) a final and conclusive judgment against the Guarantor for a
definite sum of money entered by any Federal or State court in the
United States of America in any suit, action or proceeding arising out
of or in connection with the Indenture, the Guarantees or this
Agreement would be enforced by the English courts, without
re-examination or re-litigation of the matters adjudicated upon, by
the English courts, provided that:
(a) the judgment was not obtained by fraud;
(b) the enforcement of the judgment would not be contrary
to English public policy;
(c) the judgment was not obtained in proceedings contrary
to natural justice;
(d) the judgment is not inconsistent with an English
judgment in respect of the same matter;
(e) the judgment is not for multiple damages; and
(f) enforcement proceedings are instituted within six years
after the date of the judgment; and
(viii) Assuming that the submission to the non-exclusive
jurisdiction of any Federal or State court in the Borough of
Manhattan, The City of New York (the "New York Courts") contained in
the Indenture and this Agreement is valid and binding under New York
law, (a) English law will not prevent the same from being valid and
binding upon the Guarantor, (b) the Guarantor is not prevented by its
Memorandum and Articles of Association or any overriding principles of
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English law from agreeing to waive any objection, pursuant to the
Indenture and this Agreement to the venue of proceedings in the New
York Courts and (c) such waiver is valid and binding under the laws of
England;
(ix) Service of process effected in the manner set forth in
Section X of this Agreement and Section 115 of the Indenture, assuming
its validity and effectiveness under New York law, will be effective,
insofar as the laws of England are concerned, to confer valid
jurisdiction over the Guarantor;
(x) The Guarantor has the power to submit, and has taken all
necessary corporate action to submit, to the jurisdiction of any New
York Court, and to appoint Diageo North America, Inc. as its
authorized agent for the purposes and to the extent described in
Section X of this Agreement and in Section 115 of the Indenture; and
(xi) the statements in the "Enforceability of Certain Civil
Liabilities", "Description of Debt Securities and Guarantees - Payment
of Additional Amounts" and "Taxation - United Kingdom Taxation of Debt
Securities" sections of the Prospectus, insofar as they are summaries
of tax considerations or refer to statements of law or legal
conclusions, in all material respects present fairly the information
shown.
In giving such opinion, such counsel may state that such opinion is
confined to and given on the basis of English law as currently applied by the
English courts and on the basis that it will be governed by and construed and
have effect in accordance with English law. Such opinion also may state that
nothing therein is to be taken as indicating that the remedy of an order for
specific performance or the issue of an injunction would be available in an
English court in respect of the obligations arising under the Indenture, the
Guarantees or this Agreement in that such remedies are available only at the
discretion of the court and are not usually granted where damages would be an
adequate remedy. Also in giving such opinion, such counsel may rely upon the
opinion or opinions of counsel named in paragraph (e) of this Article as to
matters of New York and United States federal law.
(g) If applicable, you shall have received on the Closing Date an
opinion of Morton Fraser, Scottish counsel for the Scottish Issuer and the
Guarantor, dated the Closing Date, to the effect that:
(i) the Scottish Issuer is a public limited company, duly
incorporated, validly existing and registered under the laws of
Scotland, and has the full corporate power and authority to execute,
deliver and perform its obligations under the Indenture, the
Securities and this Agreement;
(ii) the Indenture has been duly authorized, executed and
delivered by the Scottish Issuer and, on the assumption that the
Indenture creates valid and
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binding obligations of the parties under New York law, Scottish law
will not prevent any provision of the Indenture from being a valid and
binding obligation of the Scottish Issuer, subject to all limitations
resulting from bankruptcy, insolvency, liquidation, receivership,
administration, reorganization of the Scottish Issuer and court
schemes, moratoria and similar laws of general application affecting
the enforcement of creditors' rights applicable to the Scottish
Issuer;
(iii) the Securities have been duly authorized, executed,
authenticated and issued and delivered by the Scottish Issuer and, on
the assumption that the Securities create valid and binding
obligations of the parties thereto under New York law, Scottish law
will not prevent any provision of the Securities from being a valid
and binding obligation of the Scottish Issuer subject to all
limitations resulting from bankruptcy, insolvency, liquidation,
receivership, administration and reorganization of the Scottish Issuer
and court schemes, moratoria and similar laws of general application
affecting the enforcement of creditors' rights applicable to the
Scottish Issuer;
(iv) this Agreement has been duly authorized, executed, and
delivered by the Scottish Issuer and, on the assumption that this
Agreement creates valid and binding obligations of the parties hereto
under New York law, Scottish law will not prevent any provision of
this Agreement from being a valid and binding obligation of the
Scottish Issuer subject to all limitations resulting from bankruptcy,
insolvency, liquidation, receivership, administration and
reorganization of the Scottish Issuer and court schemes, moratoria and
similar laws of general application affecting the enforcement of
creditors' rights applicable to the Scottish Issuer;
(v) the execution and delivery by the Scottish Issuer of, and
the performance by the Scottish Issuer of its obligations under, this
Agreement, the Securities and the Indenture will not contravene any
provision of Scottish law or the Memorandum and Articles of
Association of the Scottish Issuer or any agreement or other
instrument binding upon the Scottish Issuer or any of its subsidiaries
that, in each case, is material to the Scottish Issuer or any of its
subsidiaries, taken as a whole, or any material judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Scottish Issuer or any such subsidiary;
(vi) there are no required authorizations, approvals or consents
of, or registration or filing with, any governmental or regulatory
authority of or with the United Kingdom required in connection with
the execution, delivery and performance of the Securities by the
Scottish Issuer or of the Indenture by the Scottish Issuer;
-12-
(vii) the choice of law of the State of New York to govern the
Indenture, this Agreement and the Securities is competent in terms of
Scottish law and will be recognized and given effect to by the courts
in Scotland; the validity and binding nature of the obligations
contained in the Indenture, this Agreement and the Securities are
governed by New York law;
(viii) a judgement duly obtained in the courts of New York or
Federal courts of the United States of America sitting in New York in
respect of the Indenture, this Agreement or the Securities will be
enforceable in Scotland provided that such judgement:
(a) is based on the exercise of personal jurisdiction by
the court issuing the judgement;
(b) is for a debt or an ascertained sum of money;
(c) is final and conclusive;
(d) is not inconsistent with a decree of a Scottish court
in respect of the same matter;
(e) is sought to be enforced by properly instituted and
served proceedings within five years of the date of
such judgement; and is not challengeable on the
grounds of:
(1) absence of jurisdiction;
(2) fraud;
(3) public policy;
(4) natural justice;
(5) being a fine or penalty; or
(6) res judicata;
(ix) the submission to the non-exclusive jurisdiction of any
Federal or State court in the Borough of Manhattan, The City of New
York (the "New York Courts") contained in this Agreement and the
Indenture is valid under Scottish law, and the Scottish Issuer is not
prevented by its Memorandum and Articles of Association or any
overriding principles of Scottish law from agreeing to waive any
objection, pursuant to this Agreement or the Indenture, to the venue
of proceedings in the New York Courts, and such waiver is valid and
binding under the laws of Scotland;
(x) service of process effected in the manner set forth in
Section X of this Agreement and Section 115 of the Indenture, assuming
its validity and effectiveness under New York law, will be effective,
insofar as the laws of Scotland are concerned, to confer valid
jurisdiction over the Scottish Issuer; and
(xi) the Scottish Issuer has the power to submit, and has taken
all necessary corporate action to submit, to the jurisdiction of any
New York Court,
-13-
and to appoint Diageo North America, Inc. as its authorized agent for
the purposes and to the extent described in Section X of this
Agreement and in Section 115 of the Indenture.
In rendering such opinion, such counsel may state that they do not
express any opinion concerning any law other than the laws operative for the
time being in Scotland and that their opinion is based on the laws of Scotland
in force on the date thereof and is addressed to the Underwriters solely for
their own benefit in relation to the offering of the Securities and, except with
their prior written consent, is not to be transmitted or disclosed to or used or
relied upon by any other person or used or relied upon by the Underwriters or
other addresses thereof for any other purpose.
Such opinion may also state that nothing therein is to be taken as
indicating that the remedy of a decree of specific implement or the grant of the
prayer of a petition for interdict would be available in a Scottish court in
respect of the obligations arising under the Indenture, the Guarantee or this
Agreement in that such remedies are available only at the discretion of the
court and are not usually granted where damages would be an adequate remedy.
Also in giving such opinion, such counsel may rely upon the opinion or opinions
of counsel named in paragraph (e) of this Section V as to matters of New York
and United States federal law.
(h) If applicable, you shall have received on the Closing Date an
opinion of Houthoff Buruma, Dutch Counsel of the Dutch Issuer and the
Guarantor, dated the Closing Date, to the effect that:
(i) the Dutch Issuer has been incorporated and is existing as a
legal entity (rechtspersoon) in the form of a private company with
limited liability (besloten vennootschap met beperkte
aansprakelijkheid) under Netherlands law;
(ii) the Dutch Issuer has the corporate power to enter into and
perform under the Indenture and this Agreement and to issue and
perform the Securities;
(iii) the Dutch Issuer has taken all necessary corporate action
to authorise its entry into, and performance of, the Indenture, this
Agreement and the Securities;
(iv) the Dutch Issuer has validly signed the Indenture, this
Agreement and the Securities;
(v) under Netherlands law, the choice of New York Law as the
governing law of the Indenture, this Agreement and the Securities is
recognised as a valid choice of law;
(vi) the Indenture, this Agreement and the Securities will,
according to the courts of the Netherlands correctly applying New York
Law as the law
-14-
expressed to be governing the Indenture, this Agreement and the
Securities, constitute valid, binding and enforceable obligations of
the Dutch Issuer;
(vii) no governmental or regulatory consents, approvals or
authorisations required by the Dutch Issuer under Netherlands law in
connection with its entry into or performance of the Indenture, this
Agreement or for the issue and performance of the Securities;
(viii) under Netherlands law, there are no registration, filing
or similar formalities required to ensure the validity, binding effect
and enforceability of the Indenture, this Agreement and the Securities
against the Dutch Issuer;
(ix) under Netherlands law, there exists no requirement as to
the form of the Indenture, this Agreement and the Securities if they
satisfy the formal requirements of New York Law;
(x) the entry into and performance of the Indenture and the
Agreement, and the issue and performance of the Securities, by the
Dutch Issuer does not conflict with or result in a violation of the
Articles of Netherlands law which would affect the validity, binding
effect and enforceability of the Indenture, this Agreement and the
Securities against the Dutch Issuer;
(xi) under Netherlands law, the Underwriters are permitted to
commence proceedings against the Dutch Issuer in a Netherlands court
of competent jurisdiction for claims arising under this Agreement;
(xii) a judgment rendered by a court in the State of New York
will in principle not be recognised and enforced by the Netherlands
courts. However, if a person has obtained a final and conclusive
judgment for the payment of money rendered by a court in the State of
New York (the "foreign court") which is enforceable in the United
States of America (the "foreign judgment") and files his claim with
the Netherlands court of competent jurisdiction, the Netherlands court
will generally give binding effect to the foreign judgment insofar as
it finds that the jurisdiction of the foreign court has been based on
grounds which are internationally acceptable and that proper legal
procedures have been observed, unless the foreign judgment contravenes
Netherlands public policy;
(xiii) no payment by the Dutch Issuer under the Indenture or the
Securities is subject to Netherlands withholding tax (bronbelasting);
and
(xiv) the statements in the Basic Prospectus under the heading
"Taxation - Netherlands Taxation", to the extent that they are
statements as to Netherlands law, are correct in all material
respects.
-15-
In giving such opinion, such counsel may state that such opinion is
confined to and given on the basis of Dutch law as currently applied by the
Dutch courts and on the basis that it will be governed by and construed and have
effect in accordance with Dutch law. Such opinion also may state that nothing
therein is to be taken as indicating that the remedy of an order for specific
performance or the issue of an injunction would be available in a Dutch court in
respect of the obligations arising under the Indenture, the Guarantee or this
Agreement in that such remedies are available only at the discretion of the
court and are not usually granted where damages would be an adequate remedy.
Also in giving such opinion, such counsel may rely upon the opinion or opinions
of counsel named in paragraph (e) of this Section V as to matters of New York
and United States federal law.
(i) You shall have received on the Closing Date an opinion of Davis
Polk & Wardwell, counsel for the Underwriters, dated the Closing Date,
covering certain of the matters referred to in subparagraph (ii), (iii),
(iv), (v) and (vi) and the last paragraph of clause (e) of this Section V.
(j) You shall have received on the date of the applicable Pricing
Agreement a letter dated such date and also on the Closing Date a letter
dated the Closing Date, in each case in form and substance reasonably
satisfactory to you, from the independent certified public accountants who
have certified the financial statements of the Issuers and the Guarantor
and their subsidiaries included in the Registration Statement and the
Prospectus containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(k) With respect to the Securities issued by the Scottish Issuer or
the Dutch Issuer, the Securities and the Guarantees to be delivered shall
have been approved for listing on the New York Stock Exchange, Inc. or
another recognized stock exchange, subject to official notice of issuance.
VI.
In further consideration of the agreements of the Underwriters
herein contained, the Issuers and the Guarantor jointly covenant as follows:
(a) To furnish you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference therein) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto, but including documents incorporated by reference
therein) and, during the period mentioned in paragraph (c) below, as many
copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto as you may reasonably request.
(b) During the period mentioned in paragraph (c) below, before
amending or
-16-
supplementing the Registration Statement or the Prospectus, to furnish you
a copy of each such proposed amendment or supplement, and not to file any
such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the first date of the public offering
of the applicable Securities as, in the opinion of your counsel, the
Prospectus is required by applicable U.S. law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur as a result
of which it is necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with applicable
U.S. law, forthwith to prepare and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the applicable Issuer and the Guarantor) to which Securities may have
been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus as amended or
supplemented, will comply with applicable U.S. law; provided, however, that
in case any Underwriter or dealer is required to deliver a Prospectus under
the Securities Act in connection with the offer or sale of Securities at
any time more than nine months after the Closing Date, the cost of such
preparation and furnishing of such amended or supplemented Prospectus shall
be borne by the Underwriter of such Securities.
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to pay all expenses (including reasonable fees and
disbursements of counsel) in connection with such qualification.
(e) To make generally available to the Guarantor's security holders as
soon as practicable an earnings statement that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) With respect to the Securities of the Scottish Issuer or the Dutch
Issuer, to use their best efforts to list, subject to notice of issuance,
the Securities and the Guarantees on the New York Stock Exchange, Inc. or
another recognized stock exchange.
(g) During the period beginning from the date hereof and continuing to
and including the earlier of (i) the termination of trading restrictions on
the Securities, as notified promptly to the applicable Issuer and the
Guarantor by you, and (ii) the Closing Date, not to offer, sell, contract
to sell or otherwise dispose of in the United States any debt securities or
warrants to purchase debt securities of such Issuer or the Guarantor which
mature more than one year after the Closing Date, and which are
substantially
-17-
similar to the Securities, without your prior written consent, such consent
not to be unreasonably withheld.
VII.
The applicable Issuer and the Guarantor jointly and severally agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal
fees and other expenses incurred in connection with any suit, action or
proceeding on any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the applicable Issuer or the
Guarantor shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Underwriters furnished to an Issuer or the Guarantor in writing by any
Underwriter through you expressly for use therein; provided, however, the
foregoing indemnity with respect to any untrue statement or omission or alleged
untrue statement or omission made in a preliminary prospectus shall not inure to
the benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, liability, claim, damage or expense
purchased any of the Securities that are the subject thereof if such person was
not sent or given a copy of the Prospectus (or the Prospectus as amended or
supplemented) (if the applicable Issuer or the Guarantor shall have furnished
any amendments or supplements thereto to the Underwriters), at or prior to the
written confirmation of the sale of such Securities to such person and the
untrue statement or omission or alleged untrue statement or omission made in
such preliminary prospectus was corrected in the Prospectus (or the Prospectus
as amended or supplemented).
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless each of the Issuers and the Guarantor, their respective directors,
their respective officers who sign the Registration Statement and each person,
if any, who controls each of the Issuers or the Guarantor within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Issuers and the Guarantor to
each Underwriter, but only with reference to information relating to such
Underwriter furnished to the Issuers or the Guarantor in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person
(hereinafter called the "indemnified party") shall
-18-
promptly notify the person against whom such indemnity may be sought
(hereinafter called the "indemnifying party") in writing (or by facsimile and
confirmed in writing) and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties, and that
all such fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by the Lead Manager or Lead Underwriter named in
the applicable Pricing Agreement in the case of parties indemnified pursuant to
the second preceding paragraph and by the applicable Issuer or Issuers and the
Guarantor in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there shall be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the third sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceedings.
If the indemnification provided for in the first or second paragraph
of this Article VII is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the applicable Issuer
-19-
and the Guarantor, on the one hand, and the Underwriters, on the other hand,
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the applicable Issuer and the Guarantor, on
the one hand, and of the Underwriters, on the other hand, in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the applicable Issuer and the Guarantor, on the
one hand, and of the Underwriters, on the other hand, shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the applicable Issuer and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the applicable Prospectus Supplement, bear to
the aggregate public offering price of the Securities. The relative fault of the
applicable Issuer and the Guarantor, on the one hand, and of the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Issuer and the Guarantor, on the one hand, or by the
Underwriters, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The applicable Issuer, the Guarantor and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Article VII
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method or allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
respective obligations to contribute pursuant to this Article VII are several in
proportion to the respective principal amounts of Securities purchased by each
of such Underwriters and not joint. The remedies provided for in this Article
VII are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Article
VII and the representations and warranties of the Issuers and the Guarantor
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement,
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(ii) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of any of the Issuers, the
Guarantor, their respective officers or directors or any other person
controlling the Issuers or the Guarantor and (iii) acceptance of and payment for
any of the Securities.
VIII.
Any Pricing Agreement shall be subject to termination in your
discretion, by notice given to the applicable Issuer and the Guarantor, if (a)
after the execution and delivery of such Pricing Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the applicable Issuer
or the Guarantor shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your reasonable judgment, is material and adverse and (b) in the case
of any of the events specified in clauses (a) (i) through (iv), such event
singly or together with any other such event makes it, in your reasonable
judgment, after consultation with the applicable Issuer and the Guarantor,
impracticable to market the Securities on the terms and in the manner
contemplated in the Basic Prospectus and applicable Prospectus Supplement.
IX.
This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement by the Commission.
If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder and under the applicable Pricing Agreement on such date, and the
aggregate principal amount of Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Securities to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the principal amount of Securities set forth opposite their respective
names in Schedule II bears to the principal amount of Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Securities that
any Underwriter has agreed to purchase pursuant to the applicable Pricing
Agreement be increased pursuant to this Article IX by an amount in excess of
one-ninth of such principal amount of Securities without the written consent
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of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Securities which it or they have agreed to
purchase under the applicable Pricing Agreement on such date, and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased
on such date, and arrangements satisfactory to you, the applicable Issuer and
the Guarantor for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, either Issuer or the Guarantor. In any such
case either you, the applicable Issuer or the Guarantor shall have the right to
postpone the Closing Date but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement, the
Prospectus, the Prospectus Supplement or any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement or a Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
an Issuer or the Guarantor to comply with the terms or to fulfill any of the
conditions of this Agreement or such Pricing Agreement, or if for any reason an
Issuer or the Guarantor shall be unable to perform their respective obligations
under this Agreement or such Pricing Agreement, such Issuer or the Guarantor
will reimburse the Underwriters or such Underwriters as have so terminated this
Agreement or such Pricing Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the reasonable fees and disbursements of
their counsel) reasonably and properly incurred by such Underwriters in
connection with this Agreement or such Pricing Agreement or the offering
contemplated hereunder or thereunder.
X.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. The Scottish Issuer, the Dutch Issuer and the
Guarantor have appointed Diageo North America, Inc. as its authorized agent (the
"Authorized Agent") upon which process may be served in any action based on this
Agreement that may be instituted in any state or federal court in the City,
County and State of New York by any Underwriter or by any person controlling any
Underwriter, and expressly accepts the jurisdiction of any such court in respect
of such action. Such appointment shall be irrevocable for a period of three
years from and after the Closing Date unless and until a successor Authorized
Agent shall be appointed and such successor shall accept such appointment for
the remainder of such three-year period. Each of the Scottish Issuer, the Dutch
Issuer and the Guarantor represents to each of the Underwriters that it has
notified the Authorized Agent of such designation and appointment and that
Authorized Agent has accepted the same in writing. The Scottish Issuer, the
Dutch Issuer and the Guarantor will take any and all action, including the
filing of any and all documents and instruments, that may be necessary to
continue such appointment or appointments in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Scottish Issuer, the Dutch Issuer or the Guarantor (mailed or delivered
as
-22-
aforesaid) shall be deemed, in every respect, effective service of process
upon the Scottish Issuer or the Guarantor. Notwithstanding the foregoing, any
action based on this Agreement may be instituted by any Underwriter against the
Scottish Issuer, the Dutch Issuer or the Guarantor in any competent court in
Scotland, The Netherlands or England and Wales.
XI.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or alone. All statements, requests, notices and agreements
hereunder shall be in writing and, if to the Underwriters shall be delivered or
sent by telex, facsimile transmission, or in writing delivered by hand, or by
telephone (to be promptly confirmed by telex or fax) to you as the
Representatives to the address specified in the applicable Pricing Agreement;
and if to the applicable Issuer or Issuers or the Guarantor shall be delivered
or sent by telex, facsimile transmission, or in writing delivered by hand, or by
telephone (to be promptly confirmed by telex or fax) to the address of such
Issuer or Issuers or the Guarantor, as the case may be, set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section VII hereof shall be delivered or sent by
telex, facsimile transmission, or in writing delivered by hand, or by telephone
(to be promptly confirmed by telex or fax) to such Underwriter as its address
set forth in its Underwriters' Questionnaire, or the telex constituting such
Questionnaire, which address will be supplied to the applicable Issuer and the
Guarantor by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof. This Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Issuers
and the Guarantor and, to the extent provided in Section VII hereof, the
officers and directors of the Issuers and the Guarantor and each person who
controls an Issuer, the Guarantor or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have the right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase. Time shall be of the
essence of this Agreement.
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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Very truly yours,
DIAGEO PLC
By
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Name
Title:
DIAGEO FINANCE B.V.
By
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Name
Title:
By
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Name
Title:
DIAGEO CAPITAL PLC
By
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Name:
Title:
[UNDERWRITERS]
By:
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Name:
Title:
-24-
ANNEX I
[FORM OF PRICING AGREEMENT]
Representatives of the
Several Underwriters named
in Schedule I hereto
---------, ----
Ladies and Gentlemen:
[Diageo Capital plc, a public limited company incorporated under the
laws of Scotland][Diageo Finance B.V., a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under Dutch
law][Diageo Investment Corporation, a Delaware corporation] (the "Issuer"), and
Diageo plc, a public limited company organized under the laws of England and
Wales (the "Guarantor"), propose, subject to the terms and conditions stated
herein and in the Underwriting Agreement, dated o , 2003 (the "Underwriting
Agreement"), a copy of which is attached hereto, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section I of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section XII of the Underwriting
Agreement and the address of the Representatives referred to in such Section XII
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Issuer agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Issuer, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us [ten] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Issuer and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Issuer and the Guarantor for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Diageo plc
By
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Name:
Title:
[Diageo Capital plc]
[Diageo Finance B.V.]
[Diageo Investment Corporation]
By
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Name:
Title:
By
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Name:
Title:
-2-
[UNDERWRITERS]
By:
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Name:
Title:
-3-
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- --------------
$
--------------
Total....................................................... $
==============
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SCHEDULE II
ISSUER:
[Diageo Capital plc]
[Diageo Finance B.V.]
[Diageo Investment Corporation]
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
______% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from to ]
PURCHASE PRICE BY UNDERWRITERS:
______% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from to ]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[_________] funds
METHOD OF PAYMENT:
[Certified or official bank check] [Wire transfer to account ______]
INDENTURE:
[Indenture dated as of August 3, 1998, among Diageo Capital plc, the
Guarantor and Citibank, N.A., as Trustee]
[Indenture dated as of June 1, 1999, among Diageo Investment Corporation,
the Guarantor and Citibank, N.A., as Trustee]
-5-
[Indenture dated as of o , 2003, among Diageo Finance B.V., the Guarantor
and Citibank, N.A., as Trustee]
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing __________,]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise
than through the sinking fund, in whole or in part at the option of the
Issuer, in the amount of [$] or an integral multiple thereof,
[on or after , at the following redemption prices
(expressed in percentages of principal amount). If [redeemed on or
before , %, and if] redeemed during the 12-month period
beginning ,
REDEMPTION
YEAR PRICE
---- ----------
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling in or after , , at the
election of the Issuer, at a redemption price equal to the principal amount
thereof, plus accrued interest to the date of redemption.]
[The Securities are redeemable at the option of the Issuer or the Guarantor
upon certain changes in United Kingdom [or Scottish] [or Dutch] tax law.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of
-6-
certain events or redemption for other changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$] principal amount of Designated Securities on in each of
the years through at 100% of their principal amount plus accrued
interest][,together with [cumulative] [noncumulative] redemptions at the
option of the Issuer to retire an additional [$] principal amount of
Designated Securities in the years through at 100% of their
principal amount plus accrued interest].
EXTENDABLE PROVISIONS:
Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be %, and thereafter annual interest
rate will be adjusted on , and to a rate not less than
% of the effective annual interest rate on U.S. Treasury obligations
with -year maturities as of the [insert date 15 days prior to maturity
date] prior to such [insert maturity date].]
[If Securities are Floating Rate Debt Securities, insert--
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through and thereafter will
be adjusted [monthly] [on each , , ________________ and ]
[to an annual rate of % above the average rate for -year [month]
[securities] [certificates of deposit] issued by and [insert
names of banks].] [and the annual interest rate [thereafter] [from
through ] will be the interest yield equivalent of the weekly average per
annum market discount rate for -month Treasury bills plus % of Interest
Differential (the excess, if any, of (i) then current weekly average per
annum secondary market yield for -month certificates of deposit over
(ii) then current interest yield equivalent of the weekly average per annum
market discount rate for -month Treasury bills); [from and
thereafter the rate will be the then current interest yield equivalent plus
% of Interest Differential].]
DEFEASANCE PROVISIONS:
OVERALLOTMENT OPTION:
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TIME OF DELIVERY:
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
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