Document:

Exhibit 4.1

 

DIAGEO PLC AND DIAGEO CAPITAL PLC

 

OFFICER’S CERTIFICATE

 

In connection with the issuance of the 0.625% Notes due 2016 (the “2016 Notes”), the 1.125% Notes due 2018 (the “2018 Notes”), the 2.625% Notes due 2023 (the “2023 Notes”) and the 3.875% Notes due 2043 (the “2043 Notes” and, together with the 2016 Notes, the 2018 Notes, and the 2023 Notes, the “Securities”) by Diageo Capital plc (the “Issuer”) pursuant to the Indenture dated as of August 3, 1998 (the “Indenture”) among the Issuer, Diageo plc (the “Guarantor”) and The Bank of New York Mellon (as successor in interest to Citibank, N.A. by virtue of the Agreement of Resignation, Appointment and Acceptance dated as of October 16, 2007 among the Guarantor, the Issuer, Diageo Capital plc, Diageo Finance B.V., Citibank, N.A. and The Bank of New York) as trustee (section references herein being to the Indenture), and pursuant to the authorizations of (i) the Board of Directors of the Guarantor by Board Resolutions adopted on August 22, 2012, October 17, 2012 and December 3-4, 2012, (ii) an authorized committee of the Board of Directors of the Guarantor by Board Resolutions adopted on April 17, 2013 and (iii) the Board of Directors of the Issuer by Board Resolutions adopted on April 23, 2013, each of the undersigned hereby confirms that the following terms and conditions of the Securities were established in accordance with Section 301 of the Indenture:

 

	
Title of   Securities:
    	
 
    	
0.625%   Notes due 2016

1.125%   Notes due 2018

2.625%   Notes due 2023

3.875%   Notes due 2043
    
	
 
    	
 
    	
 
    
	
Issue   Price:
    	
 
    	
99.816%   for the 2016 Notes

99.430%   for the 2018 Notes

99.755%   for the 2023 Notes

98.533%   for the 2043 Notes
    
	
 
    	
 
    	
 
    
	
Issue   Date:
    	
 
    	
April 29,   2013 for the Securities
    
	
 
    	
 
    	
 
    
	
Principal   Amount of Guaranteed Notes:
    	
 
    	
$750,000,000   for the 2016 Notes

$650,000,000   for the 2018 Notes

$1,350,000,000   for the 2023 Notes

$500,000,000   for the 2043 Notes
    

 

 

	
Form of   Securities:
    	
 
    	
The   Securities will be issued in the form of global notes that will be deposited   with The Depository Trust Company, New York, New York (“DTC”) on the closing   date.  Each global note will be issued   to Cede & Co. as nominee for DTC, and will be executed,   authenticated and delivered in substantially the respective form attached   hereto as Exhibit A.  In certain circumstances   described in the Indenture, Securities may be issued in definitive form.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
April 29,   2016 for the 2016 Notes

April 29,   2018 for the 2018 Notes

April 29,   2023 for the 2023 Notes

April 29,   2043 for the 2043 Notes
    
	
 
    	
 
    	
 
    
	
Interest   Rate:
    	
 
    	
0.625% per   annum accruing from April 29, 2013 for the 2016 Notes

1.125% per   annum accruing from April 29, 2013 for the 2018 Notes

2.625% per   annum accruing from April 29, 2013 for the 2023 Notes

3.875% per   annum accruing from April 29, 2013 for the 2043 Notes
    
	
 
    	
 
    	
 
    
	
Interest   Payment Dates:
    	
 
    	
On April 29   and October 29 of each year, beginning on October 29, 2013

 

provided that if such Interest Payment Date is not a Business Day, the Interest   Payment Date shall be postponed to the next Business Day.  “Business Day” shall have the meaning   assigned to it in the respective form of Security attached hereto as Exhibit A.
    
	
 
    	
 
    	
 
    
	
Regular   Record Dates:
    	
 
    	
April 15   and October 15 of each year.
    
	
 
    	
 
    	
 
    
	
Place of   Payment, Paying Agent, Registration of Transfer and Exchange:

 
    	
 
    	
The Bank   of New York Mellon

101   Barclay Street

New York,   NY 10286

United   States

Attn:   Corporate Trust Administration
    

 

 

	
Notices   and Demands to Issuer:
    	
 
    	
Diageo   Capital plc

Edinburgh   Park

5 Lochside   Way

Edinburgh,   EH12 9DT

Scotland

Attn:   Secretary
    
	
 
    	
 
    	
 
    
	
 

Notices   and Demands to Guarantor:
    	
 
    	
Diageo plc

Lakeside   Drive, Park Royal

London   NW10 7HQ

United   Kingdom

Attn:   Company Secretary

 

                                        or

 

Diageo   North America, Inc.

801 Main   Avenue

Norwalk,   CT 06851

United   States
    
	
 
    	
 
    	
 
    
	
Tax   Redemption Provisions:
    	
 
    	
Any series   of the Securities may be redeemed, in whole but not in part, at the option of   the Issuer or the Guarantor, at any time in accordance with Section 1108   of the Indenture, the Prospectus and the Prospectus Supplement.
    

 

 

	
Optional   Redemption Provisions:
    	
 
    	
The 2016 Notes   and the 2018 Notes may be redeemed, in whole or in part, at the option of the   Issuer, at any time and from time to time; the 2023 Notes may be redeemed, in   whole or in part, at the option of the Issuer, at any time and from time to   time prior to January 29, 2023; and the 2043 Notes at any time and from   time to time prior to October 29, 2042, in each case at a redemption   price equal to the greater of (1) 100% of the principal amount of the   Securities plus accrued interest to the date of redemption and (2) as   determined by the quotation agent, the sum of the present values of the   remaining scheduled payments of principal and interest on the Securities   (excluding any portion of such payments of interest accrued as of the date of   redemption) discounted to the redemption date on a semi-annual basis   (assuming a 360-day year consisting of twelve 30-day months) at the adjusted   treasury rate, plus 5 basis points for the 2016 Notes, 10 basis points for   the 2018 Notes, 15 basis points for the 2023 Notes and 15 basis points for   the 2043 Notes and, in each case, accrued interest to the date of redemption.

 

In   addition, (i) the 2023 notes may be redeemed, in whole or in part, at   any time and from time to time on or after January 29, 2023, and (ii) the   2043 notes may be redeemed, in whole or in part, at any time and from time to   time on or after October 29, 2042, in each case at a redemption price   equal to 100% of the principal amount of such Securities plus accrued   interest to the date of redemption.
    
	
 
    	
 
    	
 
    
	
Defeasance   and Discharge of Securities (Section 403):
    	
 
    	
Applicable
    

 

 

	
Additional   Amounts:
    	
 
    	
Pursuant   to Section 1004 of the Indenture, the obligations of the Issuer and the   Guarantor to pay additional amounts thereunder shall be subject to the   additional exceptions specified in the form of Security attached hereto as   Exhibit A.
    
	
 
    	
 
    	
 
    
	
Other Term   of the Securities:
    	
 
    	
The other   terms of the Securities shall be substantially as set forth in the Indenture,   the respective form of Note attached hereto as Exhibit A, the Prospectus   dated February 8, 2012 (the “Prospectus”) relating to the Securities and   the Prospectus Supplement dated April 24, 2013 (the “Prospectus   Supplement”) to the Prospectus.
    

 

In connection with the aforementioned issuance, the undersigned hereby certifies to the best of his or her knowledge that:

 

1.                                              He or she has read the provisions of the Indenture setting forth covenants and conditions to the Trustee’s authentication and delivery of the Securities and the Guarantees endorsed thereon by the Guarantor, and the definitions in the Indenture relating thereto.

 

2.                                              He or she has examined the resolutions of the Board of Directors of the Issuer or the Guarantor, as applicable, adopted prior to the date hereof relating to the authorization, issuance, authentication and delivery of the Securities and the Guarantees, such other corporate records of the Issuer and the Guarantor, as applicable, and such other documents deemed necessary as a basis for the opinion hereinafter expressed.

 

3.                                              In his or her opinion, such examination is sufficient to enable him or her to express an informed opinion as to whether the covenants and conditions referred to above have been complied with.

 

4.                                              He or she is of the opinion that the covenants and conditions referred to above have been complied with.

 

 

IN WITNESS WHEREOF, each of the undersigned has hereunto signed his name.

 

	
Dated:   April 29, 2013
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ D Mahlan
    
	
 
    	
Name:
    	
D Mahlan
    
	
 
    	
Title:
    	
Director
    

 

Signature Page to Officer’s Certificate Pursuant to the Indenture

 

 

IN WITNESS WHEREOF, each of the undersigned has hereunto signed his name.

 

	
Dated:   April 29, 2013
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ D Heginbottom
    
	
 
    	
Name:
    	
D Heginbottom
    
	
 
    	
Title:
    	
Director
    

 

Signature Page to Officer’s Certificate Pursuant to the Indenture

 

 

ANNEX A

 

Note Specimens

 

 

 

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A “RELEVANT MEMBER STATE”) WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT MEMBER STATE (THE “RELEVANT IMPLEMENTATION DATE”) THIS SECURITY MAY NOT BE OFFERED TO THE PUBLIC IN THAT RELEVANT MEMBER STATE, OTHER THAN:

 

(A)                               TO ANY LEGAL ENTITY WHICH IS A QUALIFIED INVESTOR AS DEFINED IN THE PROSPECTUS DIRECTIVE;

 

(B)                               TO FEWER THAN 100 OR, IF THE RELEVANT MEMBER STATE HAS IMPLEMENTED THE RELEVANT PROVISION OF THE 2010 PD AMENDING DIRECTIVE, 150, NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE, SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE REPRESENTATIVES OF THE SEVERAL UNDERWRITERS; OR

 

(C)                               IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE,

 

PROVIDED THAT NO SUCH OFFER OF SECURITIES SHALL REQUIRE DIAGEO CAPITAL PLC OR ANY UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE OR SUPPLEMENT A PROSPECTUS PURSUANT TO ARTICLE 16 OF THE PROSPECTUS DIRECTIVE.

 

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF THE SECURITIES TO THE PUBLIC” IN RELATION TO ANY SECURITIES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE SECURITIES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING 

 

 

DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.

 

DIAGEO CAPITAL PLC

 

0.625% NOTES DUE 2016

 

PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,

AND INTEREST FULLY AND UNCONDITIONALLY GUARANTEED BY

DIAGEO PLC

 

$[    ]

 

	
No. [     ]
    	
 
    	
CUSIP   No. 25243Y AS8
    
	
 
    	
 
    	
ISIN   No. US25243YAS81
    

 

DIAGEO CAPITAL PLC, a public limited company incorporated under the laws of Scotland (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [    ] Dollars on April 29, 2016 and to pay interest thereon from April 29, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on April 29 and October 29 in each year, commencing October 29, 2013, at the rate of 0.625% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (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, notice whereof shall be given to Holders of Securities of this series 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 Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Issuer maintained for that purpose in New York City, 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 Issuer payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

 

	
Dated:                  ,   2013
    	
 
    
	
 
    	
DIAGEO CAPITAL PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within mentioned Indenture.

 

	
Dated:                   ,   2013
    	
 
    
	
 
    	
THE BANK OF NEW   YORK MELLON

As   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

Signature Page to Global Note

 

 

(REVERSE)

 

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of August 3, 1998 (herein called the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Diageo plc, a public limited company incorporated under the laws of England and Wales (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and The Bank of New York Mellon (as successor in interest to Citibank, N.A. by virtue of the Agreement of Resignation, Appointment and Acceptance dated as of October 16, 2007 among the Guarantor, the Issuer, Diageo Investment Corporation, Diageo Finance B.V., Citibank, N.A. and The Bank of New York) as Trustee (herein called the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the greater of (i) 100% of the principal amount and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (excluding any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 5 basis points, with one basis point being 0.01%, in each case, together with accrued interest to the Redemption Date.

 

The definitions of certain terms used in the paragraph above are set forth below.

 

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

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as being the most recently issued United States Treasury note or bond as displayed by Bloomberg LP (or any successor service) on screens PX1 through PX8 (or any other screens as may replace such screens on such service) that has a remaining term comparable to the remaining term of the Securities to be redeemed.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date after excluding the highest and lowest of such Reference Treasury Dealer Quotations.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

 

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“Reference Treasury Dealer” means any primary U.S. government securities dealer in or their affiliates and their respective successors in the United States selected by the Trustee after consultation with the Issuer.

 

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by five Reference Treasury Dealers at 3:30 p.m. Eastern Standard Time on the third business day preceding such Redemption Date.

 

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if (a) as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after April 29, 2013 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay additional amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

 

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.

 

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Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

If an Interest Payment Date would fall on a day that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day, and no interest shall accrue during the period from and after such Interest Payment Date.  If the Stated Maturity (or any redemption or repayment date) would fall on a day that is not a Business Day, such payment may be made on the next succeeding Business Day and no interest shall accrue for the period from and after such Stated Maturity or redemption or repayment date. “Business Day”, as used herein, means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of London.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness on this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth thereon, which provisions apply to this Security.

 

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

 

If any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Issuer is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security who, with respect to any such tax, assessment or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder

 

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(or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, or any interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of this Security with a request of the Issuer addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional amounts be paid (i) with respect to any payment in respect of any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional amounts had it been the Holder of such Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at

 

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such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series to waive compliance by the Issuer or the Guarantor 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or interest on this Security on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.  As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this

 

9

 

Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and 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 for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuers, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

 

Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

 

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

 

10

 

 

GUARANTEE

 

For value received, Diageo plc, a public limited company incorporated under the laws of England and Wales, having its registered office at Lakeside Drive, Park Royal, London NW10 7HQ, England (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein.  In case of the failure of Diageo Capital plc (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

 

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Guarantor is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security who, with respect to any such tax, assessment, or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

11

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment, or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, premium, if any, or interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of a Security with a request of the Issuer or the Guarantor addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional interest be paid (i) with respect to any payment of the principal of, premium, if any, or interest on any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional interest had it been the Holder of the Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges or whatever nature of any jurisdiction in which

 

12

 

any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein.

 

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502 of such Indenture.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

 

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Securities of the same series issued under such Indenture shall have been paid in full.

 

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

 

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

 

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

13

 

Executed and dated the date on the face hereof.

 

	
 
    	
DIAGEO PLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Guarantee

 

 

 

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A “RELEVANT MEMBER STATE”) WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT MEMBER STATE (THE “RELEVANT IMPLEMENTATION DATE”) THIS SECURITY MAY NOT BE OFFERED TO THE PUBLIC IN THAT RELEVANT MEMBER STATE, OTHER THAN:

 

(A)                               TO ANY LEGAL ENTITY WHICH IS A QUALIFIED INVESTOR AS DEFINED IN THE PROSPECTUS DIRECTIVE;

 

(B)                               TO FEWER THAN 100 OR, IF THE RELEVANT MEMBER STATE HAS IMPLEMENTED THE RELEVANT PROVISION OF THE 2010 PD AMENDING DIRECTIVE, 150, NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE, SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE REPRESENTATIVES OF THE SEVERAL UNDERWRITERS; OR

 

(C)                               IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE,

 

PROVIDED THAT NO SUCH OFFER OF SECURITIES SHALL REQUIRE DIAGEO CAPITAL PLC OR ANY UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE OR SUPPLEMENT A PROSPECTUS PURSUANT TO ARTICLE 16 OF THE PROSPECTUS DIRECTIVE.

 

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF THE SECURITIES TO THE PUBLIC” IN RELATION TO ANY SECURITIES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE SECURITIES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING 

 

 

DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.

 

DIAGEO CAPITAL PLC

 

1.125% NOTES DUE 2018

 

PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,

AND INTEREST FULLY AND UNCONDITIONALLY GUARANTEED BY

DIAGEO PLC

 

$[    ]

 

	
No. [      ]
    	
 
    	
CUSIP   No. 25243Y AT6
    
	
 
    	
 
    	
ISIN   No. US25243YAT64
    

 

DIAGEO CAPITAL PLC, a public limited company incorporated under the laws of Scotland (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [    ] Dollars on April 29, 2018 and to pay interest thereon from April 29, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on April 29 and October 29 in each year, commencing October 29, 2013, at the rate of 1.125% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (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, notice whereof shall be given to Holders of Securities of this series 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 Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Issuer maintained for that purpose in New York City, 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 Issuer payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

 

	
Dated:                  ,   2013
    	
 
    
	
 
    	
DIAGEO CAPITAL PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within mentioned Indenture.

 

	
Dated:                   ,   2013
    	
 
    
	
 
    	
THE BANK OF NEW   YORK MELLON  

As   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

Signature Page to Global Note

 

 

(REVERSE)

 

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of August 3, 1998 (herein called the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Diageo plc, a public limited company incorporated under the laws of England and Wales (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and The Bank of New York Mellon (as successor in interest to Citibank, N.A. by virtue of the Agreement of Resignation, Appointment and Acceptance dated as of October 16, 2007 among the Guarantor, the Issuer, Diageo Investment Corporation, Diageo Finance B.V., Citibank, N.A. and The Bank of New York) as Trustee (herein called the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the greater of (i) 100% of the principal amount and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (excluding any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 10 basis points, with one basis point being 0.01%, in each case, together with accrued interest to the Redemption Date.

 

The definitions of certain terms used in the paragraph above are set forth below.

 

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

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as being the most recently issued United States Treasury note or bond as displayed by Bloomberg LP (or any successor service) on screens PX1 through PX8 (or any other screens as may replace such screens on such service) that has a remaining term comparable to the remaining term of the Securities to be redeemed.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date after excluding the highest and lowest of such Reference Treasury Dealer Quotations.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

 

5

 

“Reference Treasury Dealer” means any primary U.S. government securities dealer in or their affiliates and their respective successors in the United States selected by the Trustee after consultation with the Issuer.

 

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by five Reference Treasury Dealers at 3:30 p.m. Eastern Standard Time on the third business day preceding such Redemption Date.

 

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if (a) as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after April 29, 2013 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay additional amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

 

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.

 

6

 

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

If an Interest Payment Date would fall on a day that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day, and no interest shall accrue during the period from and after such Interest Payment Date.  If the Stated Maturity (or any redemption or repayment date) would fall on a day that is not a Business Day, such payment may be made on the next succeeding Business Day and no interest shall accrue for the period from and after such Stated Maturity or redemption or repayment date. “Business Day”, as used herein, means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of London.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness on this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth thereon, which provisions apply to this Security.

 

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

 

If any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Issuer is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security who, with respect to any such tax, assessment or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder

 

7

 

(or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, or any interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of this Security with a request of the Issuer addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional amounts be paid (i) with respect to any payment in respect of any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional amounts had it been the Holder of such Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at

 

8

 

such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series to waive compliance by the Issuer or the Guarantor 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or interest on this Security on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.  As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this

 

9

 

Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and 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 for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuers, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

 

Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

 

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

 

10

 

 

GUARANTEE

 

For value received, Diageo plc, a public limited company incorporated under the laws of England and Wales, having its registered office at Lakeside Drive, Park Royal, London NW10 7HQ, England (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein.  In case of the failure of Diageo Capital plc (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

 

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Guarantor is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security who, with respect to any such tax, assessment, or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

11

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment, or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, premium, if any, or interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of a Security with a request of the Issuer or the Guarantor addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional interest be paid (i) with respect to any payment of the principal of, premium, if any, or interest on any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional interest had it been the Holder of the Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges or whatever nature of any jurisdiction in which

 

12

 

any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein.

 

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502 of such Indenture.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

 

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Securities of the same series issued under such Indenture shall have been paid in full.

 

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

 

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

 

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

13

 

Executed and dated the date on the face hereof.

 

	
 
    	
DIAGEO PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 Signature Page to Guarantee

 

 

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A “RELEVANT MEMBER STATE”) WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT MEMBER STATE (THE “RELEVANT IMPLEMENTATION DATE”) THIS SECURITY MAY NOT BE OFFERED TO THE PUBLIC IN THAT RELEVANT MEMBER STATE, OTHER THAN:

 

(A)          TO ANY LEGAL ENTITY WHICH IS A QUALIFIED INVESTOR AS DEFINED IN THE PROSPECTUS DIRECTIVE;

 

(B)          TO FEWER THAN 100 OR, IF THE RELEVANT MEMBER STATE HAS IMPLEMENTED THE RELEVANT PROVISION OF THE 2010 PD AMENDING DIRECTIVE, 150, NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE, SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE REPRESENTATIVES OF THE SEVERAL UNDERWRITERS; OR

 

(C)          IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE,

 

PROVIDED THAT NO SUCH OFFER OF SECURITIES SHALL REQUIRE DIAGEO CAPITAL PLC OR ANY UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE OR SUPPLEMENT A PROSPECTUS PURSUANT TO ARTICLE 16 OF THE PROSPECTUS DIRECTIVE.

 

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF THE SECURITIES TO THE PUBLIC” IN RELATION TO ANY SECURITIES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE SECURITIES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING 

 

 

DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.

 

DIAGEO CAPITAL PLC

 

2.625% NOTES DUE 2023

 

PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,

AND INTEREST FULLY AND UNCONDITIONALLY GUARANTEED BY

DIAGEO PLC

 

	
 
    	
 
    	
$[    ]
    
	
 
    	
 
    	
 
    
	
No. [    ]
    	
 
    	
CUSIP   No. 25243Y AU3
    
	
 
    	
 
    	
ISIN   No. US25243YAU38
    

 

DIAGEO CAPITAL PLC, a public limited company incorporated under the laws of Scotland (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [    ] Dollars on April 29, 2023 and to pay interest thereon from April 29, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on April 29 and October 29 in each year, commencing October 29, 2013, at the rate of 2.625% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (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, notice whereof shall be given to Holders of Securities of this series 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 Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Issuer maintained for that purpose in New York City, 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 Issuer payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

 

Dated:                        , 2013

	
 
    	
DIAGEO CAPITAL PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within mentioned Indenture.

 

Dated:                        , 2013

	
 
    	
THE BANK OF NEW   YORK MELLON  
    As Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

Signature Page to Global Note

 

 

(REVERSE)

 

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of August 3, 1998 (herein called the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Diageo plc, a public limited company incorporated under the laws of England and Wales (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and The Bank of New York Mellon (as successor in interest to Citibank, N.A. by virtue of the Agreement of Resignation, Appointment and Acceptance dated as of October 16, 2007 among the Guarantor, the Issuer, Diageo Investment Corporation, Diageo Finance B.V., Citibank, N.A. and The Bank of New York) as Trustee (herein called the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, at any time and from time to time prior to January 29, 2023, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the greater of (i) 100% of the principal amount and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (excluding any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 15 basis points, with one basis point being 0.01%, in each case, together with accrued interest to the Redemption Date.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, at any time and from time to time on or after January 29, 2023 at a redemption price equal to 100% of the principal amount together with accrued interest to the Redemption Date.

 

The definitions of certain terms used in the paragraph above are set forth below.

 

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

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as being the most recently issued United States Treasury note or bond as displayed by Bloomberg LP (or any successor service) on screens PX1 through PX8 (or any other screens as may replace such screens on such service) that has a remaining term comparable to the remaining term of the Securities to be redeemed.

 

5

 

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date after excluding the highest and lowest of such Reference Treasury Dealer Quotations.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

 

“Reference Treasury Dealer” means any primary U.S. government securities dealer in or their affiliates and their respective successors in the United States selected by the Trustee after consultation with the Issuer.

 

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by five Reference Treasury Dealers at 3:30 p.m. Eastern Standard Time on the third business day preceding such Redemption Date.

 

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if (a) as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after April 29, 2013 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay additional amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

 

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or

 

6

 

the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.

 

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

If an Interest Payment Date would fall on a day that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day, and no interest shall accrue during the period from and after such Interest Payment Date.  If the Stated Maturity (or any redemption or repayment date) would fall on a day that is not a Business Day, such payment may be made on the next succeeding Business Day and no interest shall accrue for the period from and after such Stated Maturity or redemption or repayment date. “Business Day”, as used herein, means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of London.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness on this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth thereon, which provisions apply to this Security.

 

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

 

If any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Issuer is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security who, with respect to any such tax, assessment or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection

 

7

 

between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, or any interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of this Security with a request of the Issuer addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional amounts be paid (i) with respect to any payment in respect of any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any

 

8

 

political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional amounts had it been the Holder of such Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series to waive compliance by the Issuer or the Guarantor 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or interest on this Security on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like

 

9

 

aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.  As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and 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 for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuers, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

 

Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

 

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

 

10

 

GUARANTEE

 

For value received, Diageo plc, a public limited company incorporated under the laws of England and Wales, having its registered office at Lakeside Drive, Park Royal, London NW10 7HQ, England (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein.  In case of the failure of Diageo Capital plc (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

 

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Guarantor is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security who, with respect to any such tax, assessment, or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

11

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment, or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, premium, if any, or interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of a Security with a request of the Issuer or the Guarantor addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional interest be paid (i) with respect to any payment of the principal of, premium, if any, or interest on any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional interest had it been the Holder of the Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges or whatever nature of any jurisdiction in which

 

12

 

any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein.

 

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502 of such Indenture.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

 

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Securities of the same series issued under such Indenture shall have been paid in full.

 

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

 

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

 

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

13

 

Executed and dated the date on the face hereof.

 

	
 
    	
DIAGEO PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 Signature Page to Guarantee

 

 

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A “RELEVANT MEMBER STATE”) WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT MEMBER STATE (THE “RELEVANT IMPLEMENTATION DATE”) THIS SECURITY MAY NOT BE OFFERED TO THE PUBLIC IN THAT RELEVANT MEMBER STATE, OTHER THAN:

 

(A)          TO ANY LEGAL ENTITY WHICH IS A QUALIFIED INVESTOR AS DEFINED IN THE PROSPECTUS DIRECTIVE;

 

(B)          TO FEWER THAN 100 OR, IF THE RELEVANT MEMBER STATE HAS IMPLEMENTED THE RELEVANT PROVISION OF THE 2010 PD AMENDING DIRECTIVE, 150, NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE, SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE REPRESENTATIVES OF THE SEVERAL UNDERWRITERS; OR

 

(C)          IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE,

 

PROVIDED THAT NO SUCH OFFER OF SECURITIES SHALL REQUIRE DIAGEO CAPITAL PLC OR ANY UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE OR SUPPLEMENT A PROSPECTUS PURSUANT TO ARTICLE 16 OF THE PROSPECTUS DIRECTIVE.

 

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF THE SECURITIES TO THE PUBLIC” IN RELATION TO ANY SECURITIES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE SECURITIES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING 

 

 

DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.

 

DIAGEO CAPITAL PLC

 

3.875% NOTES DUE 2043

 

PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,

AND INTEREST FULLY AND UNCONDITIONALLY GUARANTEED BY

DIAGEO PLC

 

	
 
    	
 
    	
$[    ]
    
	
 
    	
 
    	
 
    
	
No. [    ]
    	
 
    	
CUSIP   No. 25243Y AV1
    
	
 
    	
 
    	
ISIN   No. US25243YAV11
    

 

DIAGEO CAPITAL PLC, a public limited company incorporated under the laws of Scotland (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [    ] Dollars on April 29, 2043 and to pay interest thereon from April 29, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on April 29 and October 29 in each year, commencing October 29, 2013, at the rate of 3.875% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (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, notice whereof shall be given to Holders of Securities of this series 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 Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Issuer maintained for that purpose in New York City, 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 Issuer payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

 

Dated:                      , 2013

	
 
    	
DIAGEO CAPITAL PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within mentioned Indenture.

 

Dated:                      , 2013

	
 
    	
THE BANK OF NEW   YORK MELLON  
    As Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

Signature Page to Global Note

 

 

(REVERSE)

 

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of August 3, 1998 (herein called the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Diageo plc, a public limited company incorporated under the laws of England and Wales (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and The Bank of New York Mellon (as successor in interest to Citibank, N.A. by virtue of the Agreement of Resignation, Appointment and Acceptance dated as of October 16, 2007 among the Guarantor, the Issuer, Diageo Investment Corporation, Diageo Finance B.V., Citibank, N.A. and The Bank of New York) as Trustee (herein called the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, at any time and from time to time prior to October 29, 2042,upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the greater of (i) 100% of the principal amount and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (excluding any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 15 basis points, with one basis point being 0.01%, in each case, together with accrued interest to the Redemption Date.

 

The Securities may be redeemed at the option of the Issuer, in whole or in part, at any time and from time to time on or after October 29, 2042 at a redemption price equal to 100% of the principal amount together with accrued interest to the Redemption Date.

 

The definitions of certain terms used in the paragraph above are set forth below.

 

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

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as being the most recently issued United States Treasury note or bond as displayed by Bloomberg LP (or any successor service) on screens PX1 through PX8 (or any other screens as may replace such screens on such service) that has a remaining term comparable to the remaining term of the Securities to be redeemed.

 

5

 

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date after excluding the highest and lowest of such Reference Treasury Dealer Quotations.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

 

“Reference Treasury Dealer” means any primary U.S. government securities dealer in or their affiliates and their respective successors in the United States selected by the Trustee after consultation with the Issuer.

 

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by five Reference Treasury Dealers at 3:30 p.m. Eastern Standard Time on the third business day preceding such Redemption Date.

 

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if (a) as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after April 29, 2013 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay additional amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

 

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or

 

6

 

the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.

 

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

If an Interest Payment Date would fall on a day that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day, and no interest shall accrue during the period from and after such Interest Payment Date.  If the Stated Maturity (or any redemption or repayment date) would fall on a day that is not a Business Day, such payment may be made on the next succeeding Business Day and no interest shall accrue for the period from and after such Stated Maturity or redemption or repayment date. “Business Day”, as used herein, means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of London.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness on this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth thereon, which provisions apply to this Security.

 

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

 

If any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Issuer is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security who, with respect to any such tax, assessment or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection

 

7

 

between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, or any interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of this Security with a request of the Issuer addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional amounts be paid (i) with respect to any payment in respect of any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any

 

8

 

political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional amounts had it been the Holder of such Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series to waive compliance by the Issuer or the Guarantor 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or interest on this Security on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like

 

9

 

aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.  As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and 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 for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuers, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

 

Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

 

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

 

10

 

GUARANTEE

 

For value received, Diageo plc, a public limited company incorporated under the laws of England and Wales, having its registered office at Lakeside Drive, Park Royal, London NW10 7HQ, England (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein.  In case of the failure of Diageo Capital plc (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

 

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes, assessments or other governmental charges of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Guarantor is incorporated shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security who, with respect to any such tax, assessment, or other governmental charge, is not resident in such jurisdiction, after such deduction or withholding, shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts (i) for or on account of any such tax, assessment or governmental charge imposed by the United States or any political subdivision or taxing authority thereof or therein or (ii) for or on account of:

 

(1)                       any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the taxing jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of a Security (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

11

 

(2)                       any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

(3)                       any tax, assessment, or other governmental charge which is payable otherwise than by withholding from payments of (or in respect of) principal of, premium, if any, or interest on, the Securities;

 

(4)                       any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of a Security with a request of the Issuer or the Guarantor addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

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

 

(6)                       any withholding or deduction required to be made with respect to a Security presented for payment by or on behalf of a Holder of such Security who would have been able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent; or

 

(7)                       any combination of items (1), (2), (3), (4), (5) and (6) above;

 

nor shall additional interest be paid (i) with respect to any payment of the principal of, premium, if any, or interest on any Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional interest had it been the Holder of the Security or (ii) in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities.  The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, assessments or governmental charges or whatever nature of any jurisdiction in which

 

12

 

any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein.

 

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502 of such Indenture.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

 

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Securities of the same series issued under such Indenture shall have been paid in full.

 

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

 

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

 

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

13

 

Executed and dated the date on the face hereof.

 

	
 
    	
DIAGEO PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to GuaranteeExhibit 10.194

 

EXECUTION COPY

 

CONSENT AND AMENDMENT AGREEMENT IN RELATION TO
 US$200,000,000 SBLC TERM LOAN FACILITY AGREEMENT

 

This consent and amendment agreement (“Consent Agreement”), dated December 19, 2012, is made among FOCUS MEDIA HOLDING LIMITED, a company incorporated under the laws of the Cayman Islands with its registered office at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman KY1-1111, the Cayman Islands, as borrower (together with its successors and permitted assigns, the “Borrower”), DBS BANK LTD., HONG KONG BRANCH, as lender (the “Lender”), and GIOVANNA ACQUISITION LIMITED, an exempted company incorporated with limited liability under the laws of the Cayman Islands with registered number CT-272577 (the “Bidder”).

 

W I T N E S S E T H

 

WHEREAS, the Lender has extended certain credit facilities (the “New SBLC Loans”) to the Borrower pursuant to and in accordance with the terms and conditions of the US$200,000,000 SBLC Term Loan Facility Agreement, dated as of 21 November, 2012 (the “SBLC Facility Agreement”) by and between the Borrower and the Lender;

 

WHEREAS, the New SBLC Loans are supported by two standby letters of credit, each for an amount of RMB 756,000,000, issued by China Bohai Bank Co., Ltd. on November 22, 2012 and November 26, 2012, respectively, in favor of the Lender, and confirmed by The Export-Import Bank of China pursuant to the confirmation of the standby letters of credit issued on November 22, 2012 and November 27, 2012, respectively;

 

WHEREAS, concurrent herewith , the Borrower is entering into the Agreement and plan of merger, dated as of the date hereof (the “Merger Agreement”), by and among Giovanna Parent Limited, the Bidder and the Borrower, and the Bidder is entering into the Project Giovanna—Commitment Letter, dated as of the date hereof (the “Commitment Letter”), by and among the Bidder, the Lender (or its affiliate) and the other banks listed therein;

 

WHEREAS, the Commitment Letter has attached to it a form of the Facilities Agreement (the “Form Facilities Agreement”) to be entered into prior to Closing (as defined in the Merger Agreement) between the Bidder and the banks referenced therein;

 

WHEREAS, pursuant to the terms of Merger Agreement and the Form Facilities Agreement, the Borrower will engage in the following transactions (collectively, the “Transaction”) (i) merge with the Bidder, with the Borrower as the surviving entity, (ii) assume, incur, secure and/or guarantee indebtedness in connection with such merger and (iii) engage in other transactions contemplated in connection with the Merger Agreement, the Commitment Letter and the Form Facilities Agreement;

 

1

 

WHEREAS, the Borrower has requested pursuant to Clause 17.4 (Amendments in Writing) of the SBLC Facility Agreement for the Lender (i) to agree as of the Closing (as defined in Merger Agreement) (the “Closing”) that amendments to certain representations, warranties, covenants and events of default in the SBLC Facility Agreement shall enter into effect, and (ii) as of the date hereof, to consent to the Transaction and to waive any breaches of the SBLC Facility Agreement which arise as a result of the Borrower or any of its affiliates entering into the Transaction;

 

WHEREAS, the Lender is willing to agree that certain relevant terms of the SBLC Facility Agreement shall be amended to be consistent with the ultimate acquisition facilities agreement that is finally entered into on or prior to Closing (“Final Facilities Agreement”) based upon the Form Facilities Agreement and with such other changes as are agreed between the parties thereto pursuant to the terms of the Commitment Letter; and

 

WHEREAS, the Lender has been provided with a true copy of the Merger Agreement, the Commitment Letter and the Form Facilities Agreement prior to its execution of this Consent Agreement.

 

NOW THEREFORE, in consideration of the Bidder entering into the Merger Agreement and the representations and warranties of the parties contained herein, as well as in consideration of the foregoing premises and other consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereby agree as follows:

 

1.                                      Definitions. All terms not otherwise defined herein and defined in the SBLC Facility Agreement shall have the same meanings herein as in the SBLC Facility Agreement unless the context expressly otherwise requires.

 

2.                                      Consent to the Transaction; Waiver. The Lender hereby consents to the Borrower entering into the Merger Agreement, the Commitment Letter, the Final Facilities Agreement and engaging in the Transaction and the Lender hereby waives (i) any breach of any representation, warranty, covenant, undertaking or other provision of any Finance Document, (ii) any Event of Default or Potential Event of Default under the Finance Documents and (iii) any right to require prepayment it may have under any Finance Document, in each case, arising as a result of the entry into, or the performance of, the Merger Agreement, the Commitment Letter, the Final Facilities Agreement and the Transaction. References in this Clause 2 to the Finance Documents means the Finance Documents prior to their amendment in accordance with this Consent Agreement.

 

3.                                      Execution of Intercreditor Agreement. No later than three (3) Business Days following the later of (i) the entry by the Borrower into this Consent Agreement and (ii) the signing by the parties thereto of the Intercreditor Agreement (as defined in the Final Facilities Agreement), and in any event prior to the Closing, the Lender shall duly execute and deliver its counterpart to the SBLC Intercreditor Agreement in the form attached hereto as Annex A (the “SBLC Intercreditor Agreement”) to the Borrower and the Agent (as defined in the Final Facilities Agreement) on behalf of the Finance Parties (as defined in the Final Facilities Agreement).

 

2

 

4.                                      Amendments to SBLC Facility Agreement. In connection with the Transaction, the Borrower and the Lender hereby agree that as of Closing, without any further action required by any party, the SBLC Facility Agreement will be deemed amended so that:

 

(a)                                 Transaction. The Transaction and the Financial Indebtedness contemplated by the Finance Documents (as defined in the Final Facilities Agreement) shall be expressly permitted under the SBLC Facility Agreement, provided that the total Financial Indebtedness (as defined in the SBLC Facility Agreement) incurred by the Bidder as of the Closing to finance the Transaction does not exceed US$1,525,000,000, exclusive of fees, disbursements and other expenses payable to the lenders or its advisors in connection with the Transaction.

 

(b)                                 Definitions. The following changes are made to defined terms in the SBLC Facility Agreement:

 

(i)                                     Where necessary, associated definitions from the Form Facilities Agreement, as finalized in the Final Acquisition Facility Agreement shall be included, subject to any necessary changes, in the Amended SBLC Facility Agreement. Where applicable in relation to the New SBLC Loans, references to certain terms under the Form Facilities Agreement, as finalized in the Final Facilities Agreement shall be deemed to be references to terms under the SBLC Facility Agreement, including as follows:

 

	
Defined Term in Form Facilities 
   Agreement
    	
 
    	
Defined Term in SBLC Facility 
   Agreement
    
	
Agent
    	
 
    	
Lender
    
	
Agreement
    	
 
    	
Agreement (as   defined in the SBLC Facility Agreement)
    
	
Arranger
    	
 
    	
Lender
    
	
Majority Lender
    	
 
    	
If the Lender has   exercised its assignment rights pursuant to Clause 18.2 of the SBLC Facility   Agreement, any provisions requiring the consent or instruction of the   “Majority Lenders” (as defined in the Final Facilities Agreement) that are   incorporated in the SBLC Facility Agreement pursuant to this Clause 4, shall   be deemed to be a requirement for the consent or instruction of the Majority   Lenders under the SBLC Facility Agreement
    
	
Obligor or   Original Obligor
    	
 
    	
Borrower
    
	
Transaction   Document
    	
 
    	
Finance Document
    
	
Security Agent
    	
 
    	
Lender
    
	
Transaction   Security Documents
    	
 
    	
Security Documents
    

 

(c)                                  Representations and Warranties. The following changes are made, or new representations and warranties are added as follows:

 

3

 

(i)                                     Clause 11 (Representations and Warranties) of the SBLC Facility Agreement is deleted in its entirety and replaced with the representations and warranties contained in the following clauses of the Form Facilities Agreement as finalized in the Final Facilities Agreement after reflecting the additional changes noted in the right-hand column of the table below (if any), conforming changes to the definitions in accordance with Section 4(b) hereof, and any other necessary conforming changes:

 

	
Clauses of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
20.1(a) (General)
    	
 
    	
None
    
	
20.2 (Status)
    	
 
    	
None
    
	
20.3 (Binding Obligations)
    	
 
    	
None
    
	
20.4(a) (Non-conflict with other obligations)
    	
 
    	
The words “pursuant to the Agreed Security Principles (if applicable)”   shall be deleted
    
	
20.5 (Power and authority)
    	
 
    	
None
    
	
20.6 (Validity and admissibility in evidence)
    	
 
    	
None
    
	
20.7 (Governing law and enforcement)
    	
 
    	
None
    
	
20.8 (Insolvency)
    	
 
    	
None
    
	
20.9 (No filing or stamp taxes)
    	
 
    	
None
    
	
20.10 (Deduction of Tax)
    	
 
    	
None
    
	
20.11 (No default)
    	
 
    	
The words “on the Utilisation Date,” shall be deleted.
    
	
20.13(d) (Original Financial Statements)
    	
 
    	
None
    
	
20.14 (No proceedings pending or threatened)
    	
 
    	
The words “Holdco, Parentco or” shall be deleted
    
	
20.15 (No breach of laws)
    	
 
    	
None
    
	
20.16 (Taxation)
    	
 
    	
None
    
	
20.17 (Anti-corruption law)
    	
 
    	
None
    
	
20.18 (Anti-terrorism law)
    	
 
    	
None
    
	
20.19 (Security and Financial Indebtedness)
    	
 
    	
None
    
	
20.20 (Ranking)
    	
 
    	
The words “Except pursuant to the SBLC Intercreditor Agreement,”   shall be inserted at the beginning of the equivalent of such clause.
    
	
20.21 (Good title to assets)
    	
 
    	
None
    
	
20.22(a) (Legal and Beneficial Ownership)
    	
 
    	
None
    
	
20.24 (Intellectual Property)
    	
 
    	
The words “and as contemplated in the Base Case Model.” shall be   deleted.
    
	
20.26 (Accounting Reference Date)
    	
 
    	
None
    
	
20.28 (Pensions)
    	
 
    	
None
    
	
20.30 (Federal Reserve regulations)
    	
 
    	
None
    
	
20.31 (Compliance with SAFE Rules)
    	
 
    	
None
    
	
20.36(a),   (b) and (g) (Times when   representations made)
    	
 
    	
The words “subject to paragraph (d)” and “by each   Obligor on the date of this Agreement and” shall be deleted in the
    

 

4

 

	
Clauses of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
 
    	
 
    	
equivalent of   clause 20.36(a) of the Form Facilities Agreement.

 

The term “Repeating Representations” shall mean such representations   above that are included in the definition of “Repeating Representations” in   the Final Facilities Agreement.
    

 

(ii)                                  A new representation is added as follows:

 

“All written information provided to the Lender by or on behalf of the Borrower in connection with the Facility is true and correct in all material respects and all forecasts and projections contained therein were arrived at after due and careful consideration on the part of the Borrower and were, in its considered opinion, fair and reasonable when made; the Borrower is not aware of any fact which has not been disclosed in writing to the Lender which might have a material effect on any such information, forecasts or projections or which might affect the willingness of the Lender to lend upon the terms of this Agreement.”

 

(iii)                               A new representation is added as follows:

 

“The Borrower is generally subject to civil and commercial law and to legal proceedings and neither the Borrower nor any of its assets or revenues is entitled to any sovereign immunity or privilege from any set-off, judgment, execution, attachment or other legal process.”

 

(iv)                              A new representation is added as follows:

 

“As of the Closing Date, the Bidder has not incurred in excess of US$1,525,000,000 in Financial Indebtedness (as defined in the SBLC Facility Agreement) to finance the Transaction (as defined in the Final Facilities Agreement), exclusive of fees, disbursements and other expenses payable to the lenders or its advisors in connection with the Transaction (as defined in the Final Facilities Agreement).”

 

(v)                                 No amended representation as referred to above shall be construed to be made as of any time prior to the Closing.

 

(d)                                 Undertakings. The following changes are made, or new undertakings are added as follows:

 

(i)                                     Clause 12.1(j) (Use of proceeds), clause 12.1(n) (SBLCs) and clause 12.1(o) (SBLC amount) of the SBLC Facility Agreement (or provisions having the equivalent effect) shall continue in full force and effect and shall be included in the Amended SBLC Facility Agreement (as defined below);

 

5

 

(ii)                                  Except as set forth in Section 4(d)(i) above, clause 12 (Undertakings) of the SBLC Facility Agreement is hereby deleted in its entirety and replaced with the undertakings contained in the following sections of the Form Facilities Agreement as finalized in the Final Facilities Agreement after reflecting the additional changes noted in the right-hand column of the table below (if any), conforming changes to the definitions in accordance with Section 4(b) hereof, and any other necessary conforming changes:

 

	
Clause of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
I. Information   Undertakings
    	
 
    	
 
    
	
21.1(a)(i),   (a)(ii), (b)(i), (b)(ii) (Financial Statements)
    	
 
    	
None
    
	
21.2(a), (b)(i),   (b)(ii), (b)(vi), (b)(vii) and (c) (Provision   and contents of Compliance Certificate)
    	
 
    	
None
    
	
21.3(a)(i),   (a)(ii), (b)(i), (b)(iii), (d) (Requirements as to   financial statements)
    	
 
    	
For avoidance of   doubt, the last paragraph of of clause 21.3(a) of the   Form Facilities Agreement shall be included in the SBLC Facility   Agreement.

 

The equivalent of   clause 21.3(b)(iii) shall be amended by the deletion of the words “For the purposes hereof, the  “Base Reference Financial Statements  “ and replaced with the words “For the purposes hereof, the “Base   Reference Financial Statements” shall mean the “Base Reference Financial Statements” as defined under the Final   Facilities Agreement from time to time.”
    
	
21.6 (Year-end)
    	
 
    	
None
    
	
21.7(a), (b), (c),   (e), (f) and (g) (Information:   miscellaneous)
    	
 
    	
None
    
	
21.8 (Notification of Default)
    	
 
    	
None
    
	
21.9 (“Know your customer” checks)
    	
 
    	
But only with   respect to the Borrower (and not any Additional Guarantor)
    
	
II.Financial Covenants
    	
 
    	
 
    
	
22.1 (Financial definitions)
    	
 
    	
Definitions   applicable solely to the financial covenants in Section 22.2(a) (Cashflow Cover) and 22.2(d) (Capital   Expenditure) shall be deleted in the equivalent of clause 22.1 of   the Form Facilities Agreement.
    
	
22.2(b) (Interest Cover)
    	
 
    	
In each case only   as it relates to the “Interest Cover” and “Leverage” test(s) under the   Final Facilities Agreement (and not Capital Expenditure or Cashflow Cover),   and provided that the Interest Cover and Leverage ratios set forth in the   equivalent of Sections 22.2(b) and 22.2(c) of the   Form Facilities Agreement 
    
	
 
    	
 
    
	
22.2(c) (Leverage)
    	
 
    
	
 
    	
 
    
	
22.3 (Financial Testing)
    	
 
    
	
 
    	
 
    	
shall be deleted   and replaced with the ratios set forth in Annex B 
    
	
22.4 (Pro forma adjustment)
    	
 
    	
attached hereto   under the column heading “SBLC Financing”.
    
	
 
    	
 
    	
shall be deleted   and replaced with the ratios set forth in Annex B 
    
	
22.5 (Equity cure)
    	
 
    	
attached hereto   under the column heading “SBLC Financing”.
    

 

6

 

	
Clause of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
III.General Undertakings
    	
 
    	
 
    
	
23.1 (Authorisations)
    	
 
    	
None
    
	
23.2 (Compliance with laws)
    	
 
    	
None
    
	
23.4 (Taxation)
    	
 
    	
None
    
	
23.5 (Merger)
    	
 
    	
The words “No Obligor shall (and the Borrower shall ensure that no other member   of the Group will)” shall be amended and replaced with the words “The Borrower shall not”
    
	
23.6 (Change of business)
    	
 
    	
None
    
	
23.7 (Acquisitions)
    	
 
    	
The equivalent of   clause 23.7 shall be amended such that any restrictions imposed on the   Borrower thereunder shall not apply following the repayment of all loans   incurred under the Facilities Agreement.
    
	
23.8 (Joint ventures)
    	
 
    	
The equivalent of   clause 23.8 shall be amended such that any restrictions imposed on the   Borrower thereunder shall not apply following the repayment of all loans   incurred under the Facilities Agreement.
    
	
23.11 (Preservation of assets)
    	
 
    	
None
    
	
23.12 (Pari passu ranking)
    	
 
    	
The words “Except pursuant to the SBLC Intercreditor Agreement,”   shall be inserted at the beginning of the equivalent of clause 23.12 of the   Form Facilities Agreement.
    
	
23.14 (Negative pledge)
    	
 
    	
None
    
	
23.15 (Disposals)
    	
 
    	
None
    
	
23.17 (Loans or credit)
    	
 
    	
None
    
	
23.18 (No Guarantees or indemnities)
    	
 
    	
None
    
	
23.21 (Financial Indebtedness)
    	
 
    	
None
    

 

7

 

	
Clause of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
23.30(a)(iii) (Treasury Transactions)
    	
 
    	
The equivalent of   this clause of the Form Facilities Agreement shall be replaced to   provide only that the Borrower shall cause any Onshore Group Member to procure   that any Treasury Transactions entered into by such Onshore Group Member (as   defined in the Final Facilities Agreement) is in the ordinary course of   business (in respect of foreign exchange exposures that arise in the ordinary   course of its day-to-day business and not in connection with Financial   Indebtedness) and not for speculative purposes.
    
	
23.38 (Federal Reserve Regulations)
    	
 
    	
None
    
	
23.39 (Anti-Terrorism Law)
    	
 
    	
None
    
	
23.40 (SAFE Rules and other PRC Authorizations)
    	
 
    	
None
    

 

(iii)                               A new undertaking shall be included to provide that the Borrower undertakes and agrees with the Lender throughout the continuance of the Finance Documents and so long as any sum remains owing thereunder that the Borrower will not, unless the Lender otherwise agrees in writing, (A) purchase or redeem any of its issued shares or reduce its share capital or make a distribution of assets or other capital distribution to its shareholders or make a repayment in respect of any loans or other indebtedness owing to any of its shareholders; or (B) declare or pay any dividend or make any other income distribution to its shareholders, in each of (A) or (B), if any Event of Default or a Potential Event of Default, under the equivalent of Section 24.1 of the Form Facilities Agreement in the SBLC Facility Agreement, has occurred and has not been remedied to the satisfaction of the Lender.

 

(iv)                              The SBLC Facility Agreement shall be amended to reflect any additional representations and warranties, undertakings, and events of default not relating primarily to the Transaction, that are included in the Final Facilities Agreement but that were not included in the Form Facilities Agreement, as reasonably necessary or desirable in the context of the New SBLC Loans, provided that the Bidder shall have received the consent of the Agent (as defined in the Final Facilities Agreement), and/or Arrangers (as defined in the Final Facilities Agreement), where required.

 

(e)                                  Mandatory Prepayment. A new mandatory prepayment clause shall be included to provide that upon the occurrence of a Change of Control (as defined in the Final Facilities Agreement), the Loans will be cancelled (and the commitment of the Lender in respect of the Loans shall immediately be reduced to zero) and all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents, shall become immediately due and payable, and the Borrower shall immediately repay each Loan together with accrued interest, and all other amounts accrued under the Finance Documents.

 

8

 

(f)                                   Events of Default.

 

(i)                                     Clause 13.1(o) (SBLCs) of the SBLC Facility Agreement (or a provision having the equivalent effect) shall continue in full force and effect and shall be included in the Amended SBLC Facility Agreement (as defined below).

 

(ii)                                  Except as set forth in Section 4(f)(i) above, clause 13.1 (Events of Default) of the SBLC Facility Agreement shall be deleted in its entirety and replaced with the events of default contained in the following clauses of the Form Facilities Agreement as finalized in the Final Facilities Agreement after reflecting the additional changes noted in the right-hand column of the table below (if any), conforming changes to the definitions in accordance with Section 4(b) hereof, and any other necessary conforming changes:

 

	
Clause of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
24.1 (Non-payment)
    	
 
    	
None
    
	
24.2(a) (Financial covenants and other obligations)
    	
 
    	
None, but shall   cover the financial undertakings agreed above.
    
	
24.3 (Other obligations)
    	
 
    	
None, but   undertakings shall be allocated to fall within the grace periods as provided   in the Final Facilities Agreement.
    
	
24.4 (Misrepresentation)
    	
 
    	
None
    
	
24.5 (Cross default)
    	
 
    	
None
    
	
24.6 (Insolvency)
    	
 
    	
None
    
	
24.7 (Insolvency proceedings)
    	
 
    	
None
    
	
24.8 (Creditors’ process)
    	
 
    	
None
    
	
24.9 (Failure to comply with final judgments)
    	
 
    	
None
    

 

9

 

	
Clause of Form Facilities Agreement
    	
 
    	
Additional Changes
    
	
24.10 (Unlawfulness and invalidity)
    	
 
    	
The words “, or any person (other than a Secured Party) that is a party to the   Intercreditor Agreement, or any Onshore  Group   Member that is party to any PRC Account Control Agreement, or any Report   Addressee that is party to any Report Proceeds Letter,” shall be deleted in the equivalent of   clause 24.10(a)

 

The words “ or of any person (other than a Secured Party) under the Intercreditor   Agreement or of any Onshore Group Member under any PRC Account Control   Agreement or of any Report Addressee under any Report Proceeds Letter,”   shall be deleted in the equivalent of clause 24.10(b)

 

The words “, any party to the Intercreditor Agreement (other than a Secured   Party) or any Onshore Group Member party to any PRC Account Control Agreement   or any Report Addressee party to any Report Proceeds Letter” shall   be deleted in the equivalent of clause 24.10(c).
    
	
24.12 (Cessation of business)
    	
 
    	
None
    
	
24.14 (Audit qualification)
    	
 
    	
None
    
	
24.15 (Expropriation)
    	
 
    	
None
    
	
24.16 (Repudiation and rescission of agreements)
    	
 
    	
None
    
	
24.17 (Litigation)
    	
 
    	
None
    
	
24.18 (Material adverse change)
    	
 
    	
None
    
	
24.20 (Clean Up Period)
    	
 
    	
None
    

 

10

 

(iii)                               Acceleration. Clause 13.2 of the SBLC Facility Agreement shall be deleted in its entirety and replaced with the following:

 

“Declarations. If an Event of Default has occurred and is continuing the Lender may, by written notice to the Borrower:

 

(a)                                 declare all Loans, accrued interest and all other sums payable hereunder to be, whereupon they shall become, immediately due and payable without further demand, notice or other legality formality of any kind; and/or

 

(b)                                 declare the Facility terminated whereupon the obligation of the Lender to make Loans hereunder shall immediately cease.”

 

(g)                                  Market Disruption. Clause 6.3(b)(ii) of the SBLC Facility Agreement shall be deleted in its entirety.

 

(h)                                 Assignment. Clause 18.2 of the SBLC Facility Agreement shall be amended to provide that (i) Lender may only assign to another person that enters into the SBLC Intercreditor Agreement with the parties thereto and (ii) prior to an Event of Default the Lender may not assign any rights to any person on the Black List, as defined in the Final Acquisition Facilities.

 

(i)                                     Amendment. Clause 17.4 of the SBLC Facility Agreement shall be deleted in its entirety and replaced with the following:

 

“Any provision of this Agreement shall be modified or supplemented only by an instrument in writing signed by the Borrower and the Lender (or if the Lender has assigned any of its rights under this Agreement pursuant to Clause 18.2 hereof, signed by the assignee lenders who hold in the aggregate more than 66.66% of the aggregate amount of the Loans under this Agreement (the “Majority Lenders”) and any provision of this Agreement may be waived or amended by the Lender (or the Majority Lenders if the assignment rights under Clause 18.2 hereof have been exercised), except for (i) any amendment that extends the date of payment of any amount under the Finance Documents or (ii) any reduction in any Margin or a reduction in the amount of any payment of principal , interest or fees or (iii) any increase in or extension of any Commitment or (iv) any amendment to this Clause 17.4.”

 

(j)                                    Miscellaneous. A new Clause shall be inserted as follows:

 

“After the occurrence of an Insolvency Event in relation to the Borrower, to the extent that any amount is distributed or paid in respect of any SBLC Liabilities to the Security Agent pursuant to the provisions of the SBLC Intercreditor Agreement (the “SBLC Intercreditor Agreement”) entered into between the Borrower, the Lender and the Security Agent for the Acquisition Financing, or any amount is paid by any SBLC Bank to the Security Agent pursuant to the SBLC Intercreditor Agreement on account of any SBLC Liabilities, such SBLC Liabilities shall be considered not to have been discharged by the Borrower and shall remain outstanding from the Borrower under, and for all purposes of, this Agreement

 

11

 

except to the extent any such amount has been paid to the Lender for its retention by or on behalf of the Security Agent. Defined terms used in this Clause [ ] shall have the meanings given to them in the SBLC Intercreditor Agreement.”

 

5.                                      Amendment Documentation. As soon as practicable after the execution of the Final Facilities Agreement, the Bidder shall provide a copy of the Final Facilities Agreement to the Lender and the Borrower and the Lender shall enter into an amended and restated SBLC Facility Agreement (the “Amended SBLC Facility Agreement”), documenting the amendments implemented by Section 4 above and making such other modifications to the provisions of the SBLC Facility Agreement, as reasonably necessary or desirable in the context of the New SBLC Loans, provided that the Bidder shall have received the consent of the Agent (as defined in the Final Facilities Agreement), and/or Arrangers (as defined in the Final Facilities Agreement), where required. Such Amended SBLC Facility Agreement shall be effective simultaneously with and following Closing. The Bidder, the Borrower and the Lender agree to act reasonably and in good faith in connection with the documentation process provided in this Section 5. The reasonable and documented out-of-pocket costs and expenses of the Lender (including, without limitation, legal expenses) in connection with negotiating, preparing and executing this Consent Agreement and documenting the Amended SBLC Facility Agreement shall be borne by the Borrower and shall be paid or reimbursed by the Borrower to the Lender within thirty (30) days of demand therefor, provided that such demand is accompanied by an itemization of such out-of-pocket costs and expenses and copies of relevant invoices of any service provider that include a description of the services performed and the costs therefor.

 

6.                                      Acknowledgement. The parties further acknowledge and agree that except as amended and supplemented by this Consent Agreement, the SBLC Facility Agreement continues in full force and effect.

 

7.                                      Miscellaneous. The parties further agree as follows:

 

(a)                                 Notwithstanding any other provision of this Consent Agreement, if the Final Facilities Agreement is amended following Closing, the Lender shall not be under any obligation as a result of such amendment to agree to any amendments to the Amended SBLC Facility Agreement; and

 

(b)                                 If Closing does not occur on or prior to the date falling eleven (11) months after the date hereof (the “Expiry Date”), the Lender and the Borrower shall, as of the Expiry Date, no longer be bound by any provisions of this Consent Agreement.

 

8.                                      Loans. The Lender and the Borrower hereby confirm that two Loans each  of US$100,000,000 have been made under the SBLC Facility Agreement prior to the date of this Consent Agreement

 

9.                                      Successors and Assigns. This Consent Agreement shall be binding upon  the Borrower and the Lender and their respective successors and permitted assigns.

 

10.                               Bidder’s Rights. This Consent Agreement is made by the Borrower and

 

12

 

the Lender in favour of each other as well as the Bidder such that the Bidder shall also have all rights and standing to enforce any obligations of the Borrower and the Lender hereunder.

 

11.                               Severability. The provisions of this Consent Agreement are intended to be  severable. If any provision hereof is held to be invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

 

12.                               Finance Document. The parties agree that this Consent Agreement shall  be a Finance Document for the purposes of the SBLC Facility Agreement.

 

13.                               Governing Law. This Consent Agreement and the rights and obligations  of the parties hereunder shall be governed by and construed in accordance with the laws of Hong Kong.

 

14.                               Jurisdiction. The parties hereby irrevocably agree that any legal action or proceeding arising out of or relating to this Consent Agreement may be brought in the courts of Hong Kong and irrevocably submit to the non—exclusive jurisdiction of such courts.

 

15.                               Waiver, Final Judgment Conclusive. Each party irrevocably and unconditionally waives any objection which it may now or hereafter have to the choice of Hong Kong as the venue of any legal action arising out of or relating to this Consent Agreement and agrees not to claim that any court thereof is not a convenient or appropriate forum. Each party also agrees that a final judgment against it in any such legal action shall be final and conclusive and may be enforced in any other jurisdiction, and that a certified or otherwise duly authenticated copy of the judgment shall be conclusive evidence of the fact and amount of its indebtedness.

 

16.                               Waiver of Immunity. Each party irrevocably and unconditionally waives any immunity to which it or its property may at any time be or become entitled, whether characterised as sovereign immunity or otherwise, from any set—off or legal action in Hong Kong or elsewhere, including immunity from service of process, immunity from jurisdiction of any court or tribunal, and immunity of any of its property from attachment prior to judgment or from execution of a judgment.

 

17.                               Entire Agreement. This Consent Agreement represents the entire agreement of the parties related to the subject matter hereof and supersedes any previous expressions of intent or understandings in respect of the subject matter hereof.

 

18.                               Counterparts. This Consent Agreement:

 

(a)                                 may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Consent Agreement; and

 

13

 

(b)                                 unless the parties hereto agree otherwise, the executed signature pages of each party to this Consent Agreement may be collated into and attached to any number of single copies of the Consent Agreement, as if each of them had been executed by all relevant parties in a single copy, and this has the same effect as if such Consent Agreement had been executed in the relevant number of single copies.

 

[Signature Page Follows]

 

14

 

ANNEX A

 

SBLC INTERCREDITOR AGREEMENT

 

15

 

ANNEX B

 

FINANCIAL COVENANT RATIOS

 

	
 
    	
 
    	
Leverage
    (Net offshore debt / LTM
   EBITDA)
    	
 
    	
Interest Cover
    (LTM EBITDA/LTM
   Interest Expense)
    	
 
    
	
Financial
   Quarter
    	
 
    	
Acquisition
   Financing
    	
 
    	
SBLC
   Financing
    	
 
    	
Acquisition
   Financing
    	
 
    	
SBLC
   Financing
    	
 
    
	
Q4 2013
    	
 
    	
3.39
    	
x
    	
3.56
    	
x
    	
3.25
    	
x
    	
3.09
    	
x
    
	
Q1 2014
    	
 
    	
3.26
    	
x
    	
3.42
    	
x
    	
3.65
    	
x
    	
3.47
    	
x
    
	
Q2 2014
    	
 
    	
3.08
    	
x
    	
3.23
    	
x
    	
4.20
    	
x
    	
3.99
    	
x
    
	
Q3 2014
    	
 
    	
2.31
    	
x
    	
2.43
    	
x
    	
4.90
    	
x
    	
4.66
    	
x
    
	
Q4 2014
    	
 
    	
2.14
    	
x
    	
2.25
    	
x
    	
5.83
    	
x
    	
5.54
    	
x
    
	
Q1 2015
    	
 
    	
2.03
    	
x
    	
2.13
    	
x
    	
6.40
    	
x
    	
6.08
    	
x
    
	
Q2 2015
    	
 
    	
1.93
    	
x
    	
2.03
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q3 2015
    	
 
    	
1.53
    	
x
    	
1.61
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q4 2015
    	
 
    	
1.43
    	
x
    	
1.50
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q1 2016
    	
 
    	
1.32
    	
x
    	
1.39
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q2 2016
    	
 
    	
1.30
    	
x
    	
1.37
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q3 2016
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q4 2016
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q1 2017
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q2 2017
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q3 2017
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q4 2017
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q1 2018
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q2 2018
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q3 2018
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    
	
Q4 2018
    	
 
    	
1.20
    	
x
    	
1.26
    	
x
    	
6.50
    	
x
    	
6.18
    	
x
    

 

16

 

IN WITNESS whereof this Consent Agreement has been executed by the parties hereto on the first date stated above

 

 

	
THE BORROWER
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED for and on   behalf of
    	
 
    	
)
    	
 
    
	
FOCUS MEDIA HOLDING   LIMITED
    	
 
    	
)
    	
 
    
	
by
    	
/s/ Kit Leong Low
    	
.
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
THE LENDER
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED for and on   behalf of
    	
 
    	
)
    	
 
    
	
DBS BANK LTD., HONG KONG
    	
 
    	
)
    	
 
    
	
BRANCH by
    	
/s/ Benjamin Wong
    	
.
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
THE BIDDER
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED for and on   behalf of
    	
 
    	
)
    	
 
    
	
GIOVANNA ACQUISITION
    	
 
    	
)
    	
 
    
	
LIMITED by
    	
/s/Tom Mayrhofer
    	
.
    	
 
    	
)
    	
 
    

 

(Signature Page to Deed of Consent)

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