Exhibit 1.1
The Goldman Sachs Group, Inc.
$25,000,000,000
Medium-Term Notes, Series B
Form of Amended and Restated Distribution Agreement
[ ], 2003
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
The Goldman Sachs Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series B
(the "Securities") in an amount having an aggregate initial offering price of up
to $25,000,000,000 (or such greater amount as the Company may determine from
time to time) and agrees with each Agent as set forth in this Amended and
Restated Distribution Agreement (this "Agreement"), which amends and restates in
its entirety the Amended and Restated Distribution Agreement, dated May 2, 2002,
between the Company and Goldman, Sachs & Co. Each of the terms "the Agents",
"such Agent", "any Agent", "an Agent", "each Agent", "the Purchasing Agent" and
"the Selling Agent", when used in this Agreement or in any Terms Agreement (as
defined below) or in the Annexes hereto, shall mean Goldman, Sachs & Co. except
at any time when more than one Agent is acting as such hereunder, as
contemplated in Section 10 hereof.
The Company acknowledges and agrees that Goldman, Sachs & Co. may use
the Prospectus (as defined below) in connection with offers and sales of the
Securities as contemplated in the Prospectus under the caption "Plan of
Distribution -- Market-Making Resales by Affiliates" ("Secondary Market
Transactions"). The Company further acknowledges and agrees that Goldman, Sachs
& Co. is under no obligation to effect any Secondary Market Transactions and, if
it does so, it may discontinue effecting such transactions at any time without
providing any notice to the Company. The term "Agent", whenever used in this
Agreement, shall include Goldman, Sachs & Co., whether acting in its capacity as
an Agent or acting in connection with a Secondary Market Transaction, except as
may be specifically provided otherwise herein.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company when and as instructed by the Company pursuant to Section 2(a)
hereof and (ii) agrees that, except as otherwise contemplated herein, whenever
it determines to sell Securities directly to any Agent as principal, it will
enter into a separate agreement (each a "Terms Agreement"), substantially in the
form of Annex I hereto or in such other form as may be agreed by the parties to
that particular agreement, relating to such sale in accordance with Section 2(b)
hereof. This Agreement shall not be construed to create either an obligation on
the part of the Company to sell any Securities or an obligation of any of the
Agents to purchase Securities as principal.
The Securities will be issued under an indenture, dated as of May 19,
1999 (as it may be amended or supplemented from time to time, the "Indenture"),
between the Company and The Bank of New York, as trustee (including any
successor trustee thereunder, the "Trustee"). The Securities shall have the
maturity ranges, interest rates, if any, redemption provisions and other terms
set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time. The Securities will be issued, and the terms and
rights thereof established, from time to time by the Company in accordance with
the Indenture.
1. The Company represents and warrants to, and agrees with, each
Agent that:
(a) Two registration statements on Form S-3 (File Nos.
333-63082 and 333-[ ]) in respect of the Securities have been filed
with the Securities and Exchange Commission (the "Commission"); such
registration statements and any post-effective amendments thereto, each
in the form heretofore delivered or to be delivered to such Agent,
excluding exhibits to such registration statements, but including all
documents incorporated by reference in the prospectus included in the
latest registration statement, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering filed pursuant to Rule 462(b) under
the rules and regulations of the Commission under the Securities Act of
1933, as amended (the "Act"), which became or will become effective
upon filing, no other document with respect to such registration
statements or any such incorporated document has heretofore been filed
or transmitted for filing with the Commission (other than the
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act; and no stop order suspending the
effectiveness of any such registration statements, any post-effective
amendments thereto or any registration statement filed pursuant to Rule
462(b) of the Act, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in any such registration statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
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"Preliminary Prospectus"; the various parts of such registration
statements, any post-effective amendments thereto and the registration
statement filed pursuant to Rule 462(b) of the Act, if any, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the latest registration statement at the time
such latest registration statement became effective but excluding all
Forms T-1, each as amended at the time such part of the registration
statements became effective or such part of the registration statement
filed pursuant to Rule 462(b) of the Act, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus (which, pursuant to Rule 429
of the Act is contained in the latest registration statement
(333-[o])), as supplemented by the prospectus supplement dated May [o],
2003 relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities is hereinafter
called a "Pricing Supplement"; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated therein by reference; any reference to any amendment
to the Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the "Prospectus as amended or
supplemented" shall be deemed to refer to and include the Prospectus as
amended or supplemented (including by the applicable Pricing Supplement
filed in accordance with Section 4(a) hereof) in relation to Securities
to be sold pursuant to this Agreement, in the form filed or transmitted
for filing with the Commission pursuant to Rule 424(b) under the Act
and in accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by any Agent expressly for use in the Prospectus as amended or
supplemented relating to a particular issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), as applicable, and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by any Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of Securities;
(d) (i) Neither the Company nor any of its subsidiaries that
are listed in the Company's latest annual report on Form 10-K pursuant
to the requirements of Form 10-K and
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Item 601(b)(21) of the Commission's Regulation S-K (the "Significant
Subsidiaries") has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended or supplemented any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented; and (ii)
since the respective dates as of which information is given in the
Registration Statement and the Prospectus as amended or supplemented,
there has not been any material adverse change in the capital stock or
long-term debt of the Company or any of its Significant Subsidiaries or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise, in any such
case described in clause (i) or (ii), than as set forth or contemplated
in the Prospectus as amended or supplemented;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented;
(f) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(g) The Securities have been duly authorized, and, when issued
and delivered pursuant to this Agreement and any Terms Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; the Indenture has
been duly authorized and duly qualified under the Trust Indenture Act
and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture conforms, and the Securities of any
particular issuance of Securities will conform, to the descriptions
thereof contained in the Prospectus as amended or supplemented to
relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the Amended and Restated
Certificate of Incorporation or the Amended and Restated By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the solicitation of offers to purchase
Securities, the issue and sale of the Securities by the Company or the
consummation by the Company of the
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other transactions contemplated by this Agreement, any Terms Agreement
or the Indenture, except such as have been, or will have been prior to
the Commencement Date (as defined in Section 3 hereof), obtained under
the Act or the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities from the
Company and with purchases of Securities by such Agent as principal, as
the case may be, in each case in the manner contemplated hereby;
(i) Neither the Company nor any of its Significant
Subsidiaries is in violation of its organizational documents or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound;
(j) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Notes We May Offer",
"Description of Debt Securities We May Offer", "Considerations Relating
to Securities Issued in Bearer Form" and "Legal Ownership and
Book-Entry Issuance", insofar as they purport to constitute a summary
of the terms of the Securities, and under the captions "United States
Taxation" and "Plan of Distribution", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is subject, which,
if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(l) The Company is not and, after giving effect to each
offering and sale of the Securities, will not be an "investment
company", as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(m) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities,
warrants, purchase contracts, units, preferred stock and depositary
shares of the Company (other than such Securities) that shall have been
issued and sold pursuant to the Registration Statement will not exceed
the amount of securities registered under the Registration Statement;
(n) The Company and its Significant Subsidiaries possess all
authorizations issued by the appropriate Federal, state and foreign
governments, governmental or regulatory authorities, self-regulatory
organizations and all courts or other tribunals, and are members in
good standing of each Federal, state or foreign exchange, board of
trade, clearing house or association and self-regulatory or similar
organization necessary to conduct their respective businesses as
described in the Prospectus as amended or supplemented, except as would
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not, individually or in the aggregate, have a material adverse effect
on the prospects, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and
(o) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, upon receipt of instructions
from the Company, to act as agent of the Company and to use its reasonable
efforts to solicit and receive offers to purchase a particular Security or
Securities from the Company upon the terms and conditions set forth in the
Prospectus as amended or supplemented from time to time. Each Agent shall
solicit offers to purchase only Securities having such terms, and shall solicit
such offers only during such periods, as the Company shall instruct such Agent.
So long as this Agreement shall remain in effect with respect to any Agent, the
Company shall not, without the consent of such Agent, solicit or accept offers
to purchase, or sell, any debt securities with a maturity at the time of
original issuance of 18 months or more except pursuant to this Agreement or any
Terms Agreement, or except in an offering of Securities that are not and are not
required to be registered under the Act or except in connection with a firm
commitment underwriting pursuant to an underwriting agreement that does not
provide for a continuous offering of medium-term debt securities (other than in
Secondary Market Transactions). However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities directly on its own
behalf in transactions with persons other than broker-dealers, and, in the case
of any such sale not resulting from a solicitation made by any Agent, no
commission will be payable with respect to such sale. These provisions shall not
limit Section 4(f) hereof or any similar provision included in any Terms
Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, at any time
when the Company has instructed any Agent to solicit offers to purchase the
Securities, to instruct such Agent to suspend, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York City,
after receipt of notice from the Company, such Agent will suspend solicitation
of offers to purchase Securities from the Company until such time as the Company
has instructed such Agent to resume such solicitation. During such period, the
Company shall not be required to comply with the provisions of Sections 4(h),
4(i) and 4(j) with regard to such Agent. Upon advising such Agent that such
solicitation may be resumed, however, the Company shall simultaneously provide
the documents (if any) required to be delivered by Sections 4(h), 4(i) and 4(j),
and such Agent shall have no obligation to solicit offers to purchase the
Securities until such documents have been received by such Agent. In addition,
any failure by the Company to comply with its obligations hereunder, including
its obligations to deliver the
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documents required by Sections 4(h), 4(i) and 4(j), with regard to any Agent
shall automatically terminate such Agent's obligations hereunder, including its
obligations to solicit offers to purchase the Securities hereunder as agent or
to purchase Securities hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold or in an amount as
agreed between the Agent and the Company:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 1 year to 1 1/2years .100%
From 1 1/2years to 2 years .150%
From 2 years to less than 3 years .175%
From 3 years to less than 4 years .250%
From 4 years to less than 5 years .300%
From 5 years to less than 6 years .350%
From 6 years to less than 7 years .375%
From 7 years to less than 10 years .400%
From 10 years to less than 12 years .475%
From 12 years to less than 20 years .550%
From 20 years to less than 30 years .600%
From 30 years to less than 40 years .750%
40 years and more .900%
(b) Each sale of Securities by the Company to any Agent as
principal shall be made in accordance with the terms of this Agreement
and (unless the Company and such Agent shall otherwise agree) a Terms
Agreement which will provide for the sale of such Securities by the
Company to, and the purchase thereof by, such Agent; a Terms Agreement
may also specify certain provisions relating to the reoffering of such
Securities by such Agent; the commitment of any Agent to purchase
Securities as principal, whether pursuant to any
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Terms Agreement or otherwise, shall be deemed to have been
made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions
herein set forth; each Terms Agreement shall specify the principal
amount of Securities to be purchased by any Agent pursuant thereto, the
price to be paid to the Company for such Securities, any provisions
relating to rights of, and default by, underwriters acting together
with such Agent in the reoffering of the Securities and the time and
date and place of delivery of and payment for such Securities; such
Terms Agreement shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof and such Terms Agreement may also include such other
provisions (including provisions that modify this Agreement insofar as
it sets forth the agreement between the Company and such Agent) as the
Company and such Agent may agree upon. Unless otherwise specified in a
Terms Agreement, each Agent proposes to offer Securities purchased by
it as principal from the Company for sale at prevailing market prices
or prices related thereto at the time of sale, which may be equal to,
greater than or less than the price at which such Securities are
purchased by such Agent from the Company.
For each sale of Securities by the Company to an Agent as
principal that is not made pursuant to a Terms Agreement, the
procedural details relating to the issue and delivery of such
Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities by the
Company to an Agent as principal that is not made pursuant to a Terms
Agreement, the Company agrees to pay such Agent a commission (or grant
an equivalent discount) as provided in Section 2(a) hereof and in
accordance with the schedule set forth therein (or in such amount as
may be agreed between such Agent and the Company).
Each time and date of delivery of and payment for Securities
to be purchased from the Company by an Agent as principal, whether set
forth in a Terms Agreement or in accordance with the Administrative
Procedure, is referred to herein as a "Time of Delivery".
(c) Each Agent agrees, with respect to any Security
denominated in a currency other than U.S. dollars, and whether acting
as agent, as principal under any Terms Agreement or otherwise
(including, in the case of Goldman, Sachs & Co., in any Secondary
Market Transaction), not to solicit offers to purchase or otherwise
offer, sell or deliver such Security, directly or indirectly, in, or to
residents of, the country issuing such currency, except as permitted by
applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof
on the Commencement Date (as defined below) shall be delivered to the Agents at
the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004,
at 11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by any Agent promptly after reasonable notice
thereof, (B) after the date of any Terms
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Agreement or other agreement by an Agent to purchase Securities as
principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing
as principal promptly after reasonable notice thereof or (C) during the
period beginning on the Commencement Date and continuing for as long as
may be required under applicable law, in the reasonable judgment of
Goldman, Sachs & Co. after consultation with the Company, in order to
offer and sell any Securities in Secondary Market Transactions as
contemplated by the Prospectus (the "Secondary Transactions Period")
which shall be disapproved by Goldman, Sachs & Co. promptly after
reasonable notice thereof;
(ii) to prepare, with respect to any Securities to be sold by
the Company through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Securities in a form previously
approved by such Agent and to file such Pricing Supplement pursuant to
Rule 424(b)(3) under the Act not later than the close of business of
the Commission on the fifth business day after the date on which such
Pricing Supplement is first used;
(iii) to make no amendment or supplement to the Registration
Statement or Prospectus, other than any Pricing Supplement, at any time
prior to having afforded each Agent a reasonable opportunity to review
and comment thereon;
(iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities (including, in
the case of Goldman, Sachs & Co., in any Secondary Market Transactions
during the Secondary Transactions Period), and during such same period
to advise such Agent, promptly after the Company receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or has become effective or any supplement to the
Prospectus or any amended Prospectus (other than any Pricing Supplement
that relates to Securities not purchased through or by such Agent) has
been filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amendment
or supplement of the Registration Statement or Prospectus or for
additional information; and
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(v) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any such prospectus
or suspending any such qualification, to use promptly its best efforts
to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities (including, in the case of Goldman, Sachs & Co., in any Secondary
Market Transactions during the Secondary Transactions Period); provided,
however, that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) (i) To furnish such Agent with copies of the Registration Statement
and each amendment thereto and with copies of the Prospectus as each
time amended or supplemented, other than any Pricing Supplement (except
as provided in the Administrative Procedure), in the form in which it
is filed with the Commission pursuant to Rule 424 under the Act, and
with copies of the documents incorporated by reference therein, all in
such quantities as such Agent may reasonably request from time to time;
(ii) if the delivery of a prospectus is required at any time
in connection with the offering or sale of the Securities (including
Securities purchased from the Company by such Agent as principal and
including, in the case of Goldman, Sachs & Co., in any Secondary Market
Transactions during the Secondary Transactions Period) and if at such
time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event
not later than one business day in New York City later); and if the
Company shall decide to amend or supplement the Registration Statement
or the Prospectus as then amended or supplemented, to so advise such
Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment
or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or
effect such compliance;
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(iii) notwithstanding paragraph (ii) above, if during the
period specified in such paragraph such Agent continues to own
Securities purchased from the Company by such Agent as principal or
such Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities (including, in the case of Goldman,
Sachs & Co., in any Secondary Market Transactions during the Secondary
Transactions Period), to promptly prepare and file with the Commission
such an amendment or supplement and furnish without charge to such
Agent as many copies as it may from time to time during such period
reasonably request of such amendment or supplement; provided, however,
that the Company may elect, upon notice to Goldman, Sachs & Co., not to
comply with this paragraph (iii) with respect to any Secondary Market
Transaction, but only for a period or periods that the Company
reasonably determines are necessary in order to avoid premature
disclosure of material, non-public information, unless, notwithstanding
such election, such disclosure would otherwise be required under this
Agreement; and provided, further, that no such period or periods
described in the preceding proviso shall exceed 90 days in the
aggregate during any period of 12 consecutive calendar months. Upon
receipt of any such notice, Goldman, Sachs & Co. shall cease using the
Prospectus or any amendment or supplement thereto in connection with
Secondary Market Transactions until it receives notice from the Company
that it may resume using such document (or such document as it may be
amended or supplemented);
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 18 months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the
Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158 under the Act);
(e) So long as any Securities are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other) furnished
to stockholders generally, and to deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as such Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
11
(f) That, from the date of any Terms Agreement with such Agent or other
agreement by such Agent to purchase Securities as principal and continuing
to and including the later of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to the
Company by such Agent, and (ii) the related Time of Delivery, the Company
will not, without the prior written consent of such Agent, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which both mature more than 18 months after such Time of Delivery and are
substantially similar to the Securities except pursuant to this Agreement or
any Terms Agreement, or except in an offering of Securities that are not and
are not required to be registered under the Act or except in connection with
a firm commitment underwriting pursuant to an underwriting agreement that
does not provide for a continuous offering of medium-term debt securities
(other than in Secondary Market Transactions);
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase from the Company by such Agent
as principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with such Agent, shall be
deemed to be an affirmation to such Agent that the representations and
warranties of the Company contained in or made pursuant to this Agreement
are true and correct as of the date of such acceptance or of such Terms
Agreement, as the case may be, as though made at and as of such date, and an
undertaking that such representations and warranties will be true and
correct as of the settlement date for the Securities relating to such
acceptance or as of the Time of Delivery relating to such sale, as the case
may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
(h) That reasonably in advance of each time any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act is
incorporated by reference into the Prospectus and each time the Company
sells Securities to such Agent as principal pursuant to a Terms Agreement
and such Terms Agreement specifies the delivery of an opinion or opinions by
Sullivan & Cromwell as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish to such counsel such papers
and information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That reasonably promptly after each time any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act is
incorporated by reference into the Prospectus, and each time the Company
sells Securities to such Agent as principal pursuant to a Terms Agreement
and such Terms Agreement specifies the delivery of a letter under this
Section 4(i) as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall cause the independent certified public
accountants who have certified the financial statements of the Company and
its subsidiaries included or incorporated by reference in the Registration
Statement forthwith to furnish such Agent a letter, dated the date of such
amendment, supplement or incorporation or the Time of Delivery relating to
such sale, as the case may be, in form satisfactory to such Agent, of the
same tenor as the letter referred to in Section 6(d) hereof but modified to
relate to the Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the
extent such financial statements and other
12
information are available as of a date not more than five business days
prior to the date of such letter; provided, however, that, with respect to
any financial information or other matter, such letter may reconfirm as true
and correct at such date as though made at and as of such date, rather than
repeat, statements with respect to such financial information or other
matter made in the letter referred to in Section 6(d) hereof which was last
furnished to such Agent;
(j) That reasonably promptly after each time any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act is
incorporated by reference into the Prospectus and each time the Company
sells Securities to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section 4(j) as
a condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement, amendment or incorporation
or the Time of Delivery relating to such sale, as the case may be, in such
form and executed by such officers of the Company as shall be satisfactory
to such Agent, to the effect that the statements contained in the
certificate referred to in Section 6(i) hereof which was last furnished to
such Agent are true and correct at such date as though made at and as of
such date (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date), or, in lieu of such certificate, a certificate of the same tenor
as the certificates referred to in said Section 6(i) but modified to relate
to the Registration Statement and the Prospectus as amended and supplemented
to such date; and
(k) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such Agent
the right to refuse to purchase and pay for such Securities if, on the
related settlement date fixed pursuant to the Administrative Procedure, any
condition set forth in Section 6(a), 6(e), 6(f), 6(g) or 6(h) hereof shall
not have been satisfied (it being understood that the judgment of such
person with respect to the impracticability or inadvisability of such
purchase of Securities shall be substituted, for purposes of this Section
4(k), for the respective judgments of an Agent with respect to certain
matters referred to in Sections 6(e) and 6(g) hereof, and that such Agent
shall have no duty or obligation whatsoever to exercise the judgment
permitted under such Sections 6(e) and 6(g) on behalf of any such person).
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the cost of printing, producing or reproducing this Agreement, any
Terms Agreement, any Indenture, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 4(b) hereof, including the fees and disbursements of
counsel for the Agents in connection with such qualification and in connection
with the Blue Sky and Legal Investment Memoranda; (iv) any fees charged by
securities rating services for rating the Securities; (v) any filing fees
incident to, and the fees and disbursements of counsel for the Agents in
connection with, any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities (other than, in the
case of Goldman, Sachs & Co., in any Secondary Market Transactions); (vi) the
cost of preparing
13
the Securities; (vii) the fees and expenses of the Trustee and any agent of
the Trustee and any transfer or paying agent of the Company and the fees and
disbursements of counsel for the Trustee or such agent in connection with
the Indenture and the Securities; (viii) any advertising expenses connected
with the solicitation of offers to purchase and the sale of Securities so
long as such advertising expenses have been approved by the Company; and
(ix) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in
this Section. Except as provided in Sections 7 and 8 hereof, each Agent
shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities from the
Company and the obligation of any Agent to purchase Securities from the Company
as principal, pursuant to any Terms Agreement or otherwise, shall in each case
be subject, in such Agent's discretion, to the condition that all
representations and warranties and other statements of the Company herein (and,
in the case of an obligation of an Agent under a Terms Agreement, in or
incorporated by reference in such Terms Agreement) are true and correct at and
as of the Commencement Date and any applicable date referred to in Section 4(j)
hereof that is prior to such Solicitation Time or Time of Delivery, as the case
may be, and at and as of such Solicitation Time or at and as of both such Time
of Delivery and Time of Sale, as the case may be ("Time of Sale" shall mean,
with respect to any obligation of an Agent to purchase Securities as principal,
the time when the related Terms Agreement becomes effective or if there is no
Terms Agreement, the time when the Agent otherwise becomes committed to purchase
the Securities); the condition that prior to such Solicitation Time or Time of
Delivery, as the case may be, the Company shall have performed all of its
obligations hereunder theretofore to be performed; and the following additional
conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and (iii)
all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such
Agent;
(b) (i) Sullivan & Cromwell, acting as counsel to the Company,
shall have furnished to such Agent an opinion and a letter, dated the
Commencement Date, to the effect set forth in Annex III and (ii) if and
to the extent requested by such Agent, Sullivan & Cromwell, acting as
counsel to the Company, shall have furnished to such Agent, with
respect to each applicable filing date and each applicable sale date
relating to such Agent referred to in Section 4(h) hereof that is after
the Commencement Date but is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, a letter or letters, dated such
applicable filing date or the Time of Delivery relating to such
applicable sale date, as the case may be, to the effect that such Agent
may rely on the opinion and letter which were last furnished to such
Agent pursuant to this Section 6(b) to the same extent as though they
were dated the date of such letter or letters authorizing reliance
(except that the statements in such last opinion and letter shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in any case, in lieu of such
an opinion and letter, an opinion and letter of the same tenor as the
opinion and letter referred to in clause (i) but modified to
14
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date; and in each case such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) A General Counsel or Associate General Counsel of the
Company, or other counsel for the Company satisfactory to such Agent,
shall have furnished to such Agent such counsel's written opinions,
dated the Commencement Date, in form and substance satisfactory to such
Agent, to the effect set forth in Annex IV hereto.
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section
4(i) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or such applicable date, as the case may
be, in form and substance satisfactory to such Agent, to the effect set
forth in Annex V hereto;
(e) (i) Neither the Company nor any of its Significant
Subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended or supplemented any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented and (ii)
since the respective dates as of which information is given in the
Prospectus as amended or supplemented there shall not have been any
change in the capital stock or long-term debt of the Company or any of
its Significant Subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its Significant Subsidiaries, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of such Agent so material and adverse
as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the
Company or the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented
relating to the Securities to be delivered at the relevant Time of
Delivery;
(f) On or after the date hereof or of any applicable Terms
Agreement (i) no downgrading shall have occurred in the rating accorded
the Company's debt securities [or preferred stock] by any "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities [or preferred stock];
15
(g) On or after the date hereof or of any applicable Terms
Agreement there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on
the New York Stock Exchange, (ii) a suspension or material limitation
in trading in the Company's securities on the New York Stock Exchange,
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities or a material disruption
in commercial banking or securities settlement or clearance services in
the United States, (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the judgment of such Agent
makes it impracticable or inadvisable to proceed with the solicitation
of offers to purchase Securities or the purchase of the Securities from
the Company as principal pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented
relating to the Securities to be delivered at the relevant Time of
Delivery;
(h) (i) With respect to any Security denominated in a currency
other than the U.S. dollar, more than one currency or a composite
currency or any Security the principal or interest of which is indexed
to such currency, currencies or composite currency, on or after the
date hereof or of any applicable Terms Agreement there shall not have
occurred a suspension or material limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change in
the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the
imposition or proposal of exchange controls by any governmental
authority in the country or countries issuing such currency, currencies
or composite currency; and (ii) with respect to any Security linked to
the capital stock of an issuer other than the Company, additional
conditions comparable to those set forth in Sections 6(e), 6(f) and
6(g) shall have been satisfied with respect to such issuer (with such
additional conditions being identical to those in Sections 6(e), (f)
and (g), except that, for this purpose, all references to the Company
in such sections shall be deemed to mean such other issuer and, if the
principal trading market for such other issuer's capital stock is not
the New York Stock Exchange, the reference to the New York Stock
Exchange in Section 6(g)(i) shall be deemed to mean either the New York
Stock Exchange or such principal trading market and in Section 6(g)(ii)
shall be deemed to mean only such principal trading market), it being
understood that nothing in this clause (ii) shall limit or otherwise
affect conditions in Sections 6(e), (f) and (g), which shall apply in
addition to any conditions applicable pursuant to this clause (ii); and
(i) The Company shall have furnished or caused to be furnished
to such Agent certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in Section 4(j)
hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, as to
the accuracy of the representations and warranties of the Company
herein at and as of the Commencement Date or such applicable date, as
16
the case may be (and in the case of any certificates provided at a Time
of Delivery, also at and as of the applicable Time of Sale), as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date,
as the case may be, as to the matters set forth in subsections (a) and
(e) of this Section 6, and as to such other matters as such Agent may
reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses
are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented, or any such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by such
Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly
for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof,
17
with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought under this Section 7
(whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and each Agent on the other shall be deemed
to be in the same proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent from the
Company in respect thereof. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on
the one hand or by any Agent on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if all
Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
18
Notwithstanding the provisions of this subsection (d), an Agent shall
not be required to contribute any amount in excess of the amount by
which the total public offering price at which the Securities purchased
by or through it were sold exceeds the amount of any damages which such
Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of
each of the Agents under this subsection (d) to contribute are several
in proportion to the respective purchases made by or through it to
which such loss, claim, damage or liability (or action in respect
thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls any Agent within the meaning of the Act; and the
obligations of each Agent under this Section 7 shall be in addition to
any liability which such Agent may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. (a) The provisions of this Agreement relating to the solicitation
of offers to purchase Securities from the Company may be suspended or
terminated at any time by the Company as to any Agent or by any Agent
as to such Agent upon the giving of written notice of such suspension
or termination to such Agent or the Company, as the case may be. In the
event of such suspension or termination with respect to any Agent, (i)
this Agreement shall remain in full force and effect with respect to
any Agent as to which such suspension or termination has not occurred,
(ii) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously
accrued or which relate to Securities which are already issued, agreed
to be issued or the subject of a pending offer at the time of such
suspension or termination (including all Securities that may be the
subject of a Secondary
19
Market Transaction at any time during the Secondary Transactions
Period) and (iii) in any event, this Agreement shall remain in full
force and effect insofar as the fourth paragraph of Section 2(a) and
Sections 4(d), 4(e), 5, 7, 8 and 9 hereof are concerned.
(b) The Company, in its sole discretion, may appoint one or
more additional parties to act as Agents hereunder from time to time.
Any such appointment shall be made in a writing signed by the Company
and the party so appointed. Such appointment shall become effective in
accordance with its terms after the execution and delivery of such
writing by the Company and such other party. When such appointment is
effective, such other party shall be deemed to be one of the Agents
referred to in, and to have the rights and obligations of an Agent
under, this Agreement, subject to the terms and conditions of such
appointment. The Company shall deliver a copy of such appointment to
each other Agent promptly after it becomes effective.
(c) The Company, in its sole discretion, may increase the
aggregate initial offering price of the Securities from time to time
without consent of, or notice to, any Agent.
(d) The Company and any Agent may amend any provision of this
Agreement with respect to such Agent without consent of, or notice to,
any other Agent. Any such amendment shall be made in a writing signed
by the Company and each Agent that is a party to such amendment. In the
event of such amendment, this Agreement shall remain in full force and
effect with respect to any Agent that is not a party to such amendment
(without giving effect to such amendment with respect to such Agent)
unless suspended or terminated with respect to such Agent pursuant to
clause (a) of this Section 10.
11. The following terms shall apply to any Terms Agreement if provided
for therein:
(a) If any Agent shall default in its obligation to purchase
the Securities which it has agreed to purchase pursuant to such Terms
Agreement, the Representatives named in such Terms Agreement may in
their discretion arrange for the Representatives or another party or
other parties to purchase such Securities on the terms provided by such
Terms Agreement. If within thirty-six hours after such default by any
Agent the Representatives do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Securities on such
terms. In the event that, within the respective prescribed periods, the
Representatives notify the Company that they have so arranged for the
purchase of such Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such
Securities, the Representatives or the Company shall have the right to
postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents
or arrangements, and the Company agrees to file promptly any amendments
to the Registration Statement or the Prospectus which in the
Representatives' opinion may thereby be made necessary. The term
"Agent" as used with respect to such Terms Agreement shall include any
person substituted under this Section 11 (if applicable) with like
effect as if such person had originally been a party to such Terms
Agreement.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Agent or Agents by the
Representatives and the Company as provided in
20
subsection (a) above, the aggregate principal amount of such Securities
which remains unpurchased does not exceed one-eleventh of the aggregate
principal amount of all the Securities covered by such Terms Agreement,
then the Company shall have the right to require each non-defaulting
Agent to purchase the principal amount of Securities which such Agent
agreed to purchase pursuant to such Terms Agreement and, in addition,
to require each non-defaulting Agent to purchase its pro rata share
(based on the principal amount of Securities which such Agent agreed to
purchase pursuant to such Terms Agreement) of the Securities of such
defaulting Agent or Agents for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Agent from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Agent or Agents by the
Agents and the Company as provided in subsection (a) above, the
aggregate principal amount of Securities pursuant to such Terms
Agreement which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities under such Terms
Agreement, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Agents to purchase
Securities of a defaulting Agent or Agents, then such Terms Agreement
shall thereupon terminate, without liability on the part of any
non-defaulting Agent or the Company, except for the expenses to be
borne by the Company and the Agents as provided in Section 5 hereof
incorporated therein by reference and the indemnity and contribution
agreement in Section 7 hereof incorporated therein by reference; but
nothing herein shall relieve a defaulting Agent from liability for its
default.
12. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co., shall be sufficient in all respects when
delivered or sent by facsimile transmission, personal delivery or registered
mail to 85 Broad Street, New York, New York 10004, Facsimile Transmission No.
(212) 363-7609, Attention: Credit Department; if to any Agent other than
Goldman, Sachs & Co., shall be sufficient in all respects when delivered or sent
by facsimile transmission, personal delivery or registered mail to the facsimile
number or address provided by such Agent to the Company in the document
appointing such Agent as an Agent under this Agreement; and if to the Company,
shall be sufficient in all respects when delivered or sent by facsimile
transmission, personal delivery or registered mail to 10 Hanover Square, 20th
Floor, New York, New York 10005, Facsimile No. (212) 902-3325, Attention:
Treasury Department. Any such statements, requests, notices or advices shall
take effect upon receipt thereof.
13. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company and, to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
21
15. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
16. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Agents imposing any limitation
of any kind.
22
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, whereupon this letter and the
acceptance by you thereof shall constitute a binding agreement between the
Company and you in accordance with its terms.
Very truly yours,
The Goldman Sachs Group, Inc.
By:....................................
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
...................................
(Goldman, Sachs & Co.)
23
ANNEX I
The Goldman Sachs Group, Inc.
$25,000,000,000
Medium-Term Notes, Series B
Terms Agreement
.........., 200...
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
[Insert names of any other purchasers]
Ladies and Gentlemen:
The Goldman Sachs Group, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Amended and Restated Distribution
Agreement, dated May [ ], 2003 (the "Distribution Agreement"), between the
Company on the one hand and Goldman, Sachs & Co. and any other party acting as
Agent thereunder on the other, to issue and sell to you the securities specified
in the Schedule hereto (the "Purchased Securities"). Each of the provisions of
the Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party subject
to the provisions therein relating to the solicitation of offers to purchase
Securities from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Terms Agreement, except
that each representation and warranty in Section 1 of the Distribution Agreement
which makes reference to the Prospectus shall be deemed to be a representation
and warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [each of] you, and [each of] you agree[s, severally and not
jointly,] to purchase from the Company, the Purchased Securities,
at the time and place, in the principal amount and at the purchase price set
forth [opposite your respective name] in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
[,on behalf of each of the Agents,] this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between [you] [each of the
Agents] and the Company. [It is understood that your acceptance of this letter
on behalf of each of the Agents is or will be pursuant to authority granted to
you by such Agent.]
Very truly yours,
The Goldman Sachs Group, Inc.
By:....................................
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
.............................
(Goldman, Sachs & Co.)
2
Schedule to Annex I
Title of Purchased Securities:
Medium-Term Notes, Series B
Aggregate Principal Amount:
[$ .................... or units of other Specified Currency]
[Price to Public:]
Purchase Price by Goldman, Sachs & Co. [Name(s) of other purchasers]:
% of the principal amount of the Purchased Securities [, plus accrued
interest from ............... to ...............] [and accrued amortization, if
any, from ................. to ................]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of
the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next
day] [immediately available] funds]
Indenture:
Indenture, dated as of May 19, 1999, between the Company and The Bank
of New York, as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %] [Zero Coupon] [Describe applicable floating rate provisions]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
[None]
[(1) The opinion and letter of counsel to the Company referred to in
Section 4(h).]
[(2) The accountants' letter referred to in Section 4(i).]
[(3) The officers' certificate referred to in Section 4(j).]
Other Provisions (including Syndicate Provisions, if applicable):
[The provisions of Section 11 of the Distribution Agreement shall apply
with respect to this Terms Agreement, and the Representatives referred to in
Section 11 shall be Goldman, Sachs & Co.]
3
[expense reimbursement upon termination]
[With regard to the offering and sale of the Securities, all determinations and
actions required or permitted to be made pursuant to the Distribution Agreement
or the Terms Agreement by the Agent(s) or the Representatives (including
determinations as to whether or not any closing condition has been satisfied and
whether or not any unsatisfied conditions shall be waived) shall instead be made
[solely], by [Goldman Sachs & Co. and] [Goldman Sachs International] on behalf
of all of the Agents or Representatives.]
4
ANNEX II
The Goldman Sachs Group, Inc.
Administrative Procedure
This Administrative Procedure relates to the Securities defined in the
Amended and Restated Distribution Agreement, dated May [o], 2003 (the
"Distribution Agreement"), between The Goldman Sachs Group, Inc., a Delaware
corporation (the "Company") on the one hand and Goldman, Sachs & Co. and any
other party acting as Agent thereunder, on the other, to which this
Administrative Procedure is attached as Annex II. Capitalized terms used herein
and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented, the Indenture
or the Securities. To the extent the procedures set forth below conflict with
the provisions of the Securities, the Indenture or the Distribution Agreement,
the relevant provisions of the Securities, the Indenture and the Distribution
Agreement shall control.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary"), and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security"), or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to the Depositary, dated the
date of the Distribution Agreement, and a Medium-Term Note Certificate Agreement
between the Trustee and the Depositary, dated as of April 14, 1989 (the
"Certificate Agreement"), and its obligations as a
II-1
participant in the Depositary, including the Depositary's Same-Day Funds
Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Book-Entry Securities. If the Company accepts an offer to purchase Book-Entry
Securities, it will confirm such acceptance in writing to the Selling Agent or
Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency (it being understood that currently the
Depositary accepts deposits of Global Securities denominated
in U.S. dollars only);
II-2
(7) The Exchange Rate Agent and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date,
(iv) Repayment date, and
(v) Repayment price;
(12) If an Original Issue Discount Book-Entry Security, the total
amount of Original Issue Discount, the yield to Maturity and
the initial accrual period of Original Issue Discount;
(13) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Base Rate,
(vii) Initial Interest Rate,
(viii) Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates,
II-3
(xi) Interest Payment Dates,
(xii) Regular Record Dates, and
(xiii) Calculation Agent; and
(14) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security
representing such Book-Entry Security from a list of CUSIP numbers previously
delivered to the Trustee by the Company and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Ratings Group (or such other entity that
assigns CUSIP numbers or any other identification designations being used for
the relevant Securities):
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary
on behalf of the Selling Agent or Purchasing Agent, as the
case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities that reset daily or weekly shall be the date five
calendar days immediately preceding the applicable Interest
Payment Date and in the case of all other Book-Entry
Securities shall be the Regular Record Date, as defined in the
Security) and, if calculable at that time, the amount of
interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii)
II-4
debit such Agent's settlement account and credit the Trustee's settlement
account for an amount equal to the price of such Book-Entry Security less such
Agent's commission or discount, as the case may be. The entry of such a deliver
order shall constitute a representation and warranty by the Trustee to the
Depositary that (a) the Global Security representing such Book-Entry Security
has been issued and authenticated and (b) the Trustee is holding such Global
Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at Citibank, N.A., New York, New York, or
such other account as the Company may have previously specified to the Trustee,
funds available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchasers either by transmitting to the participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchasers.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the business day following the Trade Date
(as defined below), or if the Company and the purchaser(s) agree to settlement
on the business day following the date of acceptance of such offer, not later
than noon, New York City time, on such date. The Company will arrange to have
the Pricing Supplement filed with the Commission not later than the close of
business of the Commission on the fifth business day following the date on which
such Pricing Supplement is first used.
II-5
Delivery of Confirmation and Prospectus to Purchasers by Selling Agent:
The Selling Agent will deliver to each purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third business day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser(s) agree to settlement on another business day which shall be no
earlier than the next business day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third business day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
--------- ----
A 5:00 p.m. on the business day following the
Trade Date or 10:00 a.m. on the
business day prior to the Settlement
Date, whichever is earlier
B 12:00 noon on the second business day immediately
preceding the Settlement Date
C 2:00 p.m. on the second business day immediately
preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
\ If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second business day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
II-6
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the business day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser(s) thereof (or a person or persons, including an indirect participant
in the Depositary, acting on behalf of such purchaser(s)), such participants
and, in turn the Agent for such Book-Entry Security may enter deliver orders
through the Depositary's Participant Terminal System debiting such Book-Entry
Security to such participants' accounts and crediting such Book-Entry Security
to such Agent's account and then debiting such Book-Entry Security to such
Agent's participant account and crediting such Book-Entry Security to the
Trustee's participant account and shall notify the Company and the Trustee
thereof. Thereafter, the Trustee will (i) immediately notify the Company of such
order and the Company shall transfer to such Agent funds available for immediate
use in an amount equal to the price of such Book-Entry Security which was
credited to the account of the Company maintained at the Trustee in accordance
with Settlement Procedure I, and (ii) deliver the withdrawal message and take
the related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
Company will reimburse such Agent on an equitable basis for its loss of the use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
II-7
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be
purchased;
(2) If a Fixed Rate Certificated Security, the interest
rate and initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is
other than U.S. dollars, the applicable Exchange Rate
for such Specified Currency;
(7) The Exchange Rate Agent and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
II-8
(9) Selling Agent's commission or Purchasing Agent's
discount, as the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Certificated Security,
such of the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
(iii) Amount (% of par) that the Redemption Price
shall decline (but not below par) on each
anniversary of the Redemption Commencement
Date,
(iv) Repayment date, and
(v) Repayment price;
(12) If an Original Issue Discount Certificated Security,
the total amount of Original Issue Discount, the
yield to Maturity and the initial accrual period of
Original Issue Discount;
(13) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Base Rate,
(vii) Initial Interest Rate,
(viii) Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates,
(xi) Interest Payment Dates,
(xii) Regular Record Dates, and
II-9
(xiii) Calculation Agent;
(14) Name, address and taxpayer identification number of
the registered owner(s);
(15) Denomination of certificates to be delivered at
settlement; and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the business day following the Trade
Date, or if the Company and the purchaser(s) agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with the
Commission not later than the close of business of the Commission on the fifth
business day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to each purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement, as applicable) in relation to such Certificated Security prior to or
together with the earlier of the delivery to such purchaser or its agent of (a)
the confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third business day after the date of
acceptance of such offer, unless the Company and the purchaser(s) agree to
settlement (a) on another business day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the business day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities, in which case such instruction will be given
by the Company by 11:00 a.m., New York City time.
II-10
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser(s) of such Certificated Securities
against delivery by the Selling Agent of a receipt therefor. On the Settlement
Date the Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold any payment for which it
has not received funds from the purchaser(s). The Company shall not use any
proceeds advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when the funds were credited to the account
of the Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
II-11
ANNEX III
Form of Opinion of Sullivan & Cromwell
[date]
To Each of the Agents Under the
Distribution Agreement Specified Below.
Ladies and Gentlemen:
[Use the following if the opinion is not being delivered at a Time of
Delivery -- In connection with your offering and sale from time to time of][We
refer to the execution today by you and The Goldman Sachs Group, Inc., a
Delaware corporation (the "Company"), of the Amended and Restated Distribution
Agreement, dated May [ ], 2003 (the "Distribution Agreement"), relating to] up
to $25,000,000,000 initial offering price, or the equivalent thereof in other
currencies or currency units, of the [Company's] Medium-Term Notes, Series B [of
The Goldman Sachs Group, Inc., a Delaware corporation (the "Company")], of which
$________ initial offering price is currently available for offer and sale. Such
series of securities is hereinafter referred to as the "Series" and any
securities to be issued from time to time as part of the Series on or after the
date hereof are hereinafter referred to individually as a "Security" and
collectively as the "Securities". The Securities from time to time are to be
issued pursuant to the Indenture, dated as of May 19, 1999 (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee"), and
are to be offered for sale pursuant to the Distribution Agreement.]
[Use the following if the opinion is being delivered at a Time of
Delivery-- In connection with the [several] purchase[s] today by you [and the
other Agents named in Schedule I to][pursuant to] the Terms Agreement, dated
.........., 200.. (the "Terms Agreement"), between The Goldman Sachs Group, Inc.,
a Delaware corporation (the Company"), and you (the "Agent[s]"), of $..........
principal amount of the Company's [...%][Floating Rate] Notes due .... (the
"Securities") issued pursuant to the Indenture, dated as of May 19, 1999 (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee"),] we, as counsel for the Company, have examined such corporate
records, certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. Upon the
basis of such examination, it is our opinion that:
(1) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware.
(2) The [Distribution Agreement has] [Distribution
Agreement and the Terms Agreement have] been duly authorized,
executed and delivered by the Company.
(3) The Indenture has been duly authorized, executed
and delivered by the Company, has been duly qualified under
the Trust Indenture Act of 1939 and constitutes a valid and
legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer,
III-1
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
[Use the following if the opinion is not being
delivered at a Time of Delivery -- (4) The Series has been
duly authorized and established in conformity with the
Indenture and, when the terms of a particular Security and of
its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity
with the Indenture, and such Security has been duly prepared,
executed, authenticated and issued in accordance with the
Indenture and delivered against payment in accordance with the
Distribution Agreement, such Security will constitute a valid
and legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles.]
[Use the following if the opinion is being delivered
at a Time of Delivery -- (4) The Securities have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.]
(5) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company under the Federal laws of the United States, the laws
of the State of New York and the General Corporation Law of
the State of Delaware for the issuance, sale and delivery of
the Securities by the Company to [or through] the Agents, in
each case in accordance with the Distribution Agreement and
any applicable Terms Agreement, have been obtained or made[;
provided, however, that for the purposes of this paragraph
(5), we express no opinion with respect to state securities
laws or any law that may apply by reason of the fact that an
issuance, sale or delivery of Securities is made through an
Agent, as agent, rather than to an Agent, as principal.]
(6) The issuance of the Securities in accordance with
the Indenture, the sale of the Securities by the Company to or
through the Agents pursuant to the Distribution Agreement and
[any applicable] [the] Terms Agreement, the performance by the
Company of its obligations under the Securities, the
Indenture, the Distribution Agreement and [any
applicable][the] Terms Agreement and the consummation of the
transactions therein contemplated, in each case with respect
to the Securities, will not, (a) violate the Amended and
Restated Certificate of Incorporation or the Amended and
Restated By-laws of the Company, (b) result in a default under
or breach of the agreements filed as exhibits nos. .....
through ....., inclusive, to the Company's Annual Report on
Form 10-K for the fiscal year ended ............., 200... [and
exhibits nos. .... through ...., inclusive, to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
.............., 200...], (c) violate any court orders listed
in the certificate of [a][an Associate] General Counsel of the
Company, dated the date and time of delivery of this letter
and delivered to you in connection with the offering of the
Securities or (d) violate any Federal law of the United States
or law of the State of New York applicable to the Company;
provided, however, that for the purposes of this
III-2
paragraph (6), we express no -------- ------- opinion with
respect to Federal or state securities laws, fraudulent
transfer laws, other antifraud laws and the Employee
Retirement Income Security Act of 1974 and related laws; and
provided, further, that insofar as the performance by the
Company of its obligations under the -------- -------
Securities, the Indenture, the Distribution Agreement and [any
applicable][the] Terms Agreement is concerned, we express no
opinion as to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights.
(7) The Company is not an "investment company" as
such term is defined in the Investment Company Act of 1940.
[Use the following if the opinion is not being delivered at a
Time of Delivery -- In connection with our opinion set forth in paragraphs (4),
(5) and (6) above, we have, with your approval, assumed that at the time of the
issuance, sale and delivery of each particular Security the authorization of the
Series will not have been modified or rescinded and, with respect to each
Security, that such Security will conform to one of the four forms of Securities
(floating rate, fixed rate, mandatory exchangeable and exchangeable) that are
included as Exhibits 4.8, 4.9, 4.10, and 4.11, respectively, to the
Company's Registration Statement on Form S-3 (File Number 333-[ ]) relating to
the Series or to any substantially similar form.
In connection with our opinion set forth in paragraph (4) above, we
have, also with your approval, assumed that at the time of the issuance, sale
and delivery of each particular Security there will not have occurred any change
in law affecting the validity, legally binding character or enforceability of
such Security and that the issuance, sale and delivery of such Security, all of
the terms of such Security and the performance by the Company of its obligations
thereunder will comply with applicable law and with each requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company and will not result in a default under or a breach of any agreement
or instrument then binding upon the Company.
In connection with our opinion set forth in paragraph (5) above, we
have, with your approval, assumed with respect to each particular Security that
the inclusion of any alternative or additional terms in such Security that are
not currently specified in the forms of Securities examined by us would not
require the Company to obtain any regulatory consent, authorization or approval
or make any regulatory filing in order for the Company to issue, sell and
deliver such Security.
Also with your approval, in connection with our opinion set forth in
paragraph (6) above, we have assumed with respect to each particular Security
that the inclusion of any alternative or additional terms in such security that
are not currently specified in the forms of Securities examined by us will not
cause the issuance, sale or delivery of such Security, or the compliance of the
Company with such terms, to violate the Company's Amended and Restated
Certificate of Incorporation or Amended and Restated By-laws or any of the court
orders or laws specified in paragraph (6) above or to result in a default under
or a breach of any of the agreements specified in paragraph (6) above.]
[Use the following if the opinion is not being delivered at a Time of
Delivery or if the Securities are denominated in a non-U.S. dollar currency --
In connection with our opinion set forth in paragraph (4) above, we note that,
as of the date of this opinion, a judgment for money in an action based on
Securities denominated in foreign currencies or currency units in a Federal or
state court in the United States ordinarily would be enforced in the United
States only in U.S. dollars. The date used to determine the rate of conversion
of the foreign currency or currency unit in which a
III-3
particular Security is denominated into U.S. dollars will depend upon various
factors, including which court renders the judgment. In the case of a Security
denominated in a foreign currency, a state court in the State of New York
rendering a judgment on such Security would be required under Section 27 of the
New York Judiciary Law to render such judgment in the foreign currency in which
the Security is denominated, and such judgment would be converted into U.S.
dollars at the exchange rate prevailing on the date of entry of the judgment.]
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, and we express no opinion as to the effect of the laws of any
other jurisdiction. In addition, with your approval, we are expressing no
opinion as to the effect of laws that restrict transactions between United
States persons and citizens or residents of certain foreign countries or
specially designated nationals and organizations.
Also, with your approval, we have relied as to certain matters upon
information obtained from public officials, officers of the Company and other
sources believed by us to be responsible, and we have assumed that the Indenture
has been duly authorized, executed and delivered by the Trustee and that the
signatures on all documents examined by us are genuine, assumptions which we
have not independently verified.
Very truly yours,
III-4
Form of Letter of Sullivan & Cromwell
[date]
To Each of the Agents Under the
Distribution Agreement Specified Below.
Ladies and Gentlemen:
This is with reference to the registration under the Securities Act of
1933 (the "Act") and offering of [Use the following if the letter is not being
delivered at a Time of Delivery-- up to $25,000,000,000 principal amount, or the
equivalent thereof in other currencies or currency units, of Medium-Term Notes,
Series B][Use the following if the letter is being delivered at a Time of
Delivery -- $............ principal amount of [...%][Floating Rate] Notes due
......] (the "Securities") of The Goldman Sachs Group, Inc. (the "Company"). The
two Registration Statements relating to the Securities (File Nos. 333-63082 and
333-[ ]) were filed on different dates on Form S-3 in accordance with procedures
of the Securities and Exchange Commission (the "Commission") permitting a
delayed or continuous offering of securities pursuant thereto and, if
appropriate, a post-effective amendment or prospectus supplement that provides
information relating to the terms of the Securities and the manner of their
distribution. [Use the following if the letter is not being delivered at a Time
of Delivery-- The Securities are being offered by the Prospectus dated May [ ],
2003 (the "Basic Prospectus"), as supplemented by the Prospectus Supplement
dated May [ ], 2003 (the "Prospectus Supplement"). The Basic Prospectus, which
is contained in the second Registration Statement (File No. 333-[ ]) and,
pursuant to Rule 429 under the Act, may be used in connection with the
Securities covered by both Registration Statements, will be further supplemented
by pricing supplements, each of which will be dated approximately as of the date
of sale of the particular Securities and will furnish information as to the
specific terms thereof.][Use the following if the letter is being delivered at a
Time of Delivery-- The Securities have been offered by the Prospectus dated May
[ ], 2003 (the "Basic Prospectus"), as supplemented by the Prospectus Supplement
dated May [ ], 2003 (the "Prospectus Supplement") and the Pricing Supplement No.
.... dated ............, .... (the "Pricing Supplement"). The Basic Prospectus is
contained in the second Registration Statement (File No. 333-[ ]) and, pursuant
to Rule 429 under the Act, may be used in connection with the Securities covered
by both Registration Statements.] The Basic Prospectus as so supplemented does
not necessarily contain a current description of the Company's business and
affairs since, pursuant to Form S-3, it incorporates by reference certain
documents filed with the Commission which contain information as of various
dates.
As counsel for the Company, we reviewed the Registration Statements,
the Basic Prospectus [and][,] the Prospectus Supplement [and the Pricing
Supplement], participated in discussions with representatives of Goldman, Sachs
& Co. and of the Company, its counsel and its accountants and advised the
Company as to the requirements of the Act and the applicable rules and
regulations thereunder. [Use the following if the letter is being delivered at a
Time of Delivery -- Between the date of the Pricing Supplement and the time of
delivery of this letter, we participated in further discussions with
representatives of Goldman, Sachs & Co. and those of the Company, its counsel
and its accountants in which the contents of certain portions of the Basic
Prospectus, as the Prospectus Supplement and the Pricing
Supplement, and certain related matters were discussed, and we reviewed
certificates of certain officers of the Company [and a letter addressed to you
from the Company's independent accountants].]
On the basis of the information that we gained in the course of the
performance of the services referred to above, considered in the light of our
understanding of the applicable law (including the requirements of Form S-3 and
the character of the prospectus contemplated thereby) and the experience we have
gained through our practice under the Act, we confirm to you that, in our
opinion, each part of the Registration Statements, when such part became
effective, and the Basic Prospectus, as supplemented by the Prospectus
Supplement [and the Pricing Supplement], as of [Use the following if the letter
is not being delivered at a Time of Delivery or in connection with the filing of
an annual report on Form 10-K of the Company-- the date and time of delivery of
this letter][Use the following if the letter is being delivered in connection
with the filing of an annual report on Form 10-K of the Company--
..............., ...., the date of filing of the Company's annual report on Form
10-K for the fiscal year ended .........., ....][Use the following if the letter
is being delivered at a Time of Delivery-- the date of the Pricing Supplement],
appeared on their face to be appropriately responsive, in all material respects
relevant to the offering of the Securities, to the requirements of the Act, the
Trust Indenture Act of 1939 and the applicable rules and regulations of the
Commission thereunder. Further, nothing that came to our attention in the course
of such review has caused us to believe that, insofar as relevant to the
offering of the Securities, any part of any of the Registration Statements, when
such part became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Basic Prospectus, as
supplemented by the Prospectus Supplement [and the Pricing Supplement], as of
[the date and time of delivery of this letter] [.............., ....][the date
of the Pricing Supplement], contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. [Use the following if the letter is being delivered at a Time of
Delivery-- Also, nothing that has come to our attention in the course of the
procedures described in the last sentence of the prior paragraph has caused us
to believe that the Basic Prospectus, as supplemented by
III-5
the Prospectus Supplement and the Pricing Supplement, as of the date and time of
delivery of this letter, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.] In addition, insofar as the offering of the Securities is
concerned, we do not know of any documents that are required to be filed as
exhibits to the Registration Statements and are not so filed.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such, however, that we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statements, the Basic Prospectus [or][,] the Prospectus Supplement [or the
Pricing Supplement] except for those made under the captions "Description of
Debt Securities We May Offer", "Legal Ownership and Book-Entry Issuance" and
"Plan of Distribution" in the Basic Prospectus [and][,] "Description of Notes We
May Offer" and "Supplemental Plan of Distribution" in the Prospectus Supplement
[and "Description of the Notes" in the Pricing Supplement], in each case insofar
as they relate to provisions, therein described, of the Securities, the
Indenture under which the Securities are to be issued and the Distribution
Agreement relating to the Securities, and except for those made under the
caption "United States Taxation" in the Basic Prospectus and the Prospectus
Supplement, insofar as they relate to provisions of U.S. Federal income tax law
therein described. Also, we do not express any opinion or belief as to the
financial statements or other financial data
III-6
derived from accounting records contained in the Registration Statements, the
Basic Prospectus [or][,] the Prospectus Supplement [or the Pricing Supplement],
or as to the statement of the eligibility of the Trustee under the Indenture.
This letter is furnished to the several Agents under the Distribution
Agreement by us as counsel for the Company and is solely for the benefit of the
several Agents.
Very truly yours,
III-7
ANNEX IV
Form of Opinion of General Counsel or Associate General Counsel
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus as amended or supplemented (as
defined below);
(ii) The Amended and Restated Distribution Agreement, dated
May [ ], 2003, between the Company and Goldman, Sachs & Co. (the
"Distribution Agreement") has been duly authorized, executed and
delivered by the Company; and
(iii) The Indenture, dated May 19, 1999, between the Company
and The Bank of New York (the "Indenture"), has been duly authorized,
executed and delivered by the Company and the Series has been duly
authorized.
All references in such opinion to the "Prospectus as amended or
supplemented" shall mean the Company's Prospectus dated May [ ], 2003, as
supplemented by the Prospectus Supplement dated May [ ], 2003.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than the Federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware; that he expresses no opinion as to the effect of laws
that restrict transactions between United States persons and citizens or
residents of certain foreign countries or specially designated nationals and
organizations; that, insofar as such opinion involves factual matters, he has
relied upon certificates of officers of the Company and its subsidiaries and
certificates of public officials and other sources believed by such counsel to
be responsible; and that he has assumed that the Indenture has been duly
authorized, executed and delivered by the Trustee, that the Securities will
conform to the forms thereof examined by him (or members of the Company's legal
department acting under his supervision), that the Trustee's certificates of
authentication of the Securities will have been manually signed by one of the
Trustee's authorized signatories and that the signatures on all documents
examined by him (or members of the Company's legal department acting under his
supervision) are genuine (assumptions that he has not independently verified).
In addition, such counsel may state that he has examined, or has caused members
of the Company's legal department to examine, such corporate and partnership
records, certificates and other documents, and such questions of law, as he has
considered necessary or appropriate for the purposes of such opinion.
IV-1
ANNEX V
Accountants' Letter
Pursuant to Sections 4(i) and 6(d), as the case may be, of the Amended
and Restated Distribution Agreement, dated May [ ], 2003, between the Company
and Goldman, Sachs & Co., the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited or
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and, if applicable, they have made a review
in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which
have been furnished to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's Quarterly
Report(s) on Form 10-Q covering periods after the latest full fiscal
year and incorporated by reference into the Prospectus as indicated in
their reports thereon, copies of which have been furnished to the
Agents; and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and/or included or incorporated by reference in Item 6 of
the Company's Annual Report on Form 10-K for the most recent fiscal
year agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
fiscal years;
V-1
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302
and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Report(s) on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included in the
Company's Quarterly Report(s) on Form 10-Q incorporated by
reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus as most recently amended or
supplemented and referred to in clause (B) were not determined
on a basis substantially consistent with the basis for the
audited financial statements included or
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incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma condensed consolidated
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder, or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances or
forfeitures of restricted stock units issued under the
Company's Stock Incentive Plan and repurchases of common stock
in accordance with the Company's common stock repurchase
program or issuances of stock associated with the Company's
employee stock option plans) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated total current
assets or stockholders' equity or other items specified by the
Agents, or any increases in any items specified by the Agents,
in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated total revenues or
consolidated revenues, net of interest expense, pre-tax
earnings or net earnings or other items specified by the
Agents, or any increases in any items specified by the Agents,
in each case as compared with the comparable items in the
comparable period of the preceding year and with any other
period of corresponding length specified by the Agents, except
in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Company
and its subsidiaries which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agents or
in documents incorporated by reference in the Prospectus specified by
the Agents,
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and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement or incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(i) thereof.
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