1
EXHIBIT 1.1
THE GOLDMAN SACHS GROUP, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
UNDERWRITING AGREEMENT
(U.S. VERSION)
........................., 1999
Goldman, Sachs & Co.,
Bear, Stearns & Co. Inc.,
Credit Suisse First Boston Corporation,
Donaldson, Lufkin & Jenrette Securities Corporation,
Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J.P. Morgan Securities Inc.,
Morgan Stanley & Co. Incorporated,
PaineWebber Incorporated,
Prudential Securities Incorporated,
Salomon Smith Barney Inc.,
Sanford C. Bernstein & Co., Inc.,
Schroder & Co. Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
The Goldman Sachs Group, Inc., a Delaware corporation ("GS Inc."),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 33,600,000 shares and, at the election of the Underwriters, up to 7,200,000
additional shares of Common Stock, par value $.01 per share ("Stock"), of GS
Inc., Sumitomo Bank Capital Markets, Inc., proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of
7,200,000 shares of Stock and Kamehameha Activities Association proposes,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of 7,200,000 shares of Stock. The Estate of Bernice Pauahi Bishop
is joining in and consenting to the sale of Stock by Kamehameha Acivities
Association, and for the purposes of Sections 1(b) and (2), the introductory
paragraph to Section 8, and Sections 8(r), 12, 14, 15 and 18, and the first
paragraph following Section 18 only, all references to a Selling Stockholder
shall include Kamehameha Activities Association and the Estate of Bernice
Pauahi Bishop, jointly as if they were one Selling Stockholder. Without
limiting the generality of the foregoing, the Estate of Bernice Pauahi Bishop
intends to and hereby agrees to sell, pursuant to Section 2 hereof, all of its
interest, if any, in the 7,200,000 shares of Stock held of record by
Kamehameha Activities Association to be sold pursuant to this Agreement.
Sumitomo Bank Capital Markets, Inc. and Kamehameha Activities Association, and
for purposes of Section 1(b) and (2), the introductory paragraph to
Section 8, and Sections 8(r), 12, 14, 15 and 18 only, the Estate of Bernice
Pauahi Bishop, are referred to as the "Selling Stockholders" and individually
as a "Selling Stockholder". The aggregate of 48,000,000 shares to be sold by
GS Inc. and the Selling Stockholders is herein called the "Firm Shares" and
the aggregate of 7,200,000 additional
2
shares to be sold by GS Inc. is herein called the "Optional Shares". The Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are herein collectively called the "Shares." For purposes of
the representations and warranties set forth in Section 1(a), the second
sentence of Section 3(e), Section 7 and the conditions set forth in Sections
8(k) and 8(l), prior to the consummation of the Incorporation Transactions (as
defined below), references to the "Company" shall be deemed to be references to
The Goldman Sachs Group, L.P., a Delaware limited partnership ("Group"), and
after consummation of the Incorporation Transactions, references to the
"Company" shall be deemed to be references to GS Inc.
It is understood and agreed to by all parties that GS Inc. and the
Selling Stockholders (including the Estate of Bernice Pauahi Bishop) are
concurrently entering into an agreement (the "Asia/Pacific Underwriting
Agreement") providing for the sale by GS Inc. and the Selling Stockholders of
up to a total of 4,600,000 shares of Stock (the "Asia/Pacific Shares"),
including the option to purchase additional shares thereunder, through
arrangements with certain underwriters in the Asia/Pacific Region (the
"Asia/Pacific Underwriters"), for whom Goldman Sachs (Asia) L.L.C., BOCI Asia
Limited, China Development Industrial Bank Inc., China International
Capital Corporation (Hong Kong) Limited, Daiwa Securities (H.K.) Limited, The
Development Bank of Singapore Ltd, HSBC Investment Bank Asia Limited, Jardine
Fleming Securities Limited, Kokusai Securities (Hong Kong) Limited, Kotak
Mahindra (International) Limited, The Nikko Merchant Bank (Singapore) Limited,
Nomura International plc, Samsung Securities Co., Ltd., Standard Chartered Asia
Limited and Were Stockbroking Limited, are acting as lead managers, and an
agreement (the "International Underwriting Agreement") providing for the sale by
GS Inc. and the Selling Stockholders (including the Estate of Bernice Pauahi
Bishop) of up to a total of 9,200,000 shares of Stock (the "International
Shares"), including the option to purchase additional shares thereunder,
through arrangements with certain underwriters outside the United States and
the Asia/Pacific Region (the "International Underwriters"), for whom Goldman
Sachs International, ABN AMRO Rothschild, Banque Nationale de Paris,
Bayerische Hypo und Vereinsbank AG, Cazenove & Co., Commerzbank
Aktiengesellschaft, Deutsche Bank AG London, ING Barings Limited as Agent for
ING Bank NV, London Branch, Kleinwort Benson Limited, Mediobanca - Banca di
Credito Finanziaro S.p.A., Paribas and UBS AG, acting through its division
Warburg Dillon Read, are acting as lead managers. Anything herein or therein to
the contrary notwithstanding, the respective closings under this Agreement, the
Asia/Pacific Underwriting Agreement and the International Underwriting Agreement
are hereby expressly made conditional on one another. The Underwriters
hereunder, the Asia/Pacific Underwriters and the International Underwriters are
simultaneously entering into an Agreement among Underwriting Syndicates (the
"Agreement among Syndicates") which provides, among other things, that Goldman,
Sachs & Co. shall act as global coordinator for the offering of shares of Stock
and for the transfer of shares of Stock among the three syndicates.
Except as the context may otherwise require, the Asia/Pacific
Underwriters and the International Underwriters are referred to herein
collectively as the "Global Underwriters" and the Asia/Pacific Underwriting
Agreement and the International Underwriting Agreement are referred to herein
collectively as the "Global Underwriting Agreements".
-2-
3
Three forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one relating
to the Shares hereunder (the "U.S. Prospectus"), one relating to the
Asia/Pacific Shares and another relating to the International Shares. The other
two forms of prospectus will be identical to the U.S. Prospectus except for the
front cover page, the back cover page, the text under the caption "Underwriting"
and for the addition of a section captioned "Certain United States Tax
Consequences to Non-U.S. Holders of Common Stock". Except as used in Sections 2,
4, 5, 11 and 13 herein, and except as the context may otherwise require,
references hereinafter to the Shares shall include all the shares of Stock which
may be sold pursuant to either this Agreement, the Asia/Pacific Underwriting
Agreement or the International Underwriting Agreement, and references herein to
any prospectus whether in preliminary or final form, and whether as amended or
supplemented, shall include the U.S., the Asia/Pacific and the International
versions thereof.
It is understood and agreed to by all parties that in connection with
the conversion of the business of Group to corporate form, a series of
transactions that are described in the Prospectus (as defined in Section 1(a)(i)
hereof) under the caption "Certain Relationships and Related Transactions--
Incorporation and Related Transactions--Incorporation Transactions" will occur
not later than concurrent with the First Time of Delivery (as defined in Section
5(a) hereof). Such transactions are hereinafter referred to as the
"Incorporation Transactions". The award of restricted stock units to employees
based on a formula (the "Formula RSUs"), the award of restricted stock units to
employees on a discretionary basis (the "Discretionary RSUs") and the award of
options for Stock to employees on a discretionary basis (the "Discretionary
Options"), and the contribution of the shares of Stock to the defined
contribution plan (the "DCP"), as described in the Prospectus under the heading
"Certain Relationships and Related Transactions--Incorporation and Related
Transactions--Related Transactions" are hereinafter referred to as the "Related
Transactions".
1. (a) GS Inc. represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-74449)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became or will become effective upon filing, no
other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
-3-
4
prospectus included in the Initial 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 "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 6(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did 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 were 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 GS Inc. by
an Underwriter through Goldman, Sachs & Co. or by any QIU expressly for
use therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Items 7 and 11(m) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus
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 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 GS Inc. by an Underwriter through
Goldman, Sachs & Co. or by any QIU expressly for use therein or by a
Selling Stockholder expressly for use in the preparation of the answers
therein to Items 7 and 11(m) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries that are
listed or that are required to be listed pursuant to the requirements
of Form S-1 in Exhibit 21 to
-4-
5
the Registration Statement (the "Significant Subsidiaries") has
sustained since the date of the latest audited financial statements
included in the Prospectus 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; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the partners' capital or
capital stock, as applicable, or long-term debt of the Company or any
of its 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 partners' capital, as applicable, or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(v) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(vi) GS Inc. 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; the
Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; each corporate subsidiary of the
Company that is a Significant Subsidiary (a "Corporate Significant
Subsidiary"), each partnership subsidiary of the Company in which the
Company or one of its subsidiaries is a general partner that is a
Significant Subsidiary (a "Partnership Significant Subsidiary"), each
unlimited liability company subsidiary of the Company that is a
Significant Subsidiary (a "ULLC Significant Subsidiary") and each
limited liability company in which the Company or one of its
subsidiaries is a managing member that is a Significant Subsidiary (an
"LLC Significant Subsidiary") has been duly incorporated or organized,
as the case may be, and is validly existing as a corporation,
partnership, unlimited liability company or limited liability company,
as the case may be, in good standing under the laws of its jurisdiction
of incorporation or organization, as the case may be, with the power
-5-
6
(corporate, partnership, unlimited liability company or limited
liability company, as the case may be) and authority to own its
properties and conduct its business as described in the Prospectus; and
upon consummation of the Incorporation Transactions, which will occur
immediately prior to or simultaneously with the First Time of Delivery,
GS Inc. will succeed to the business of Group as described in the
Prospectus;
(vii) GS Inc. has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of GS
Inc. have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description of the capital stock
contained in the Prospectus; all of the issued shares of capital stock
of each Corporate Significant Subsidiary, all of the issued shares of
each ULLC Significant Subsidiary and all of the membership interests in
each LLC Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and, in the case of any Corporate
Significant Subsidiaries and LLC Significant Subsidiaries, are
non-assessable and (except for (A) directors' qualifying shares, (B) as
of the date of this Agreement, interests in Goldman Sachs Holdings
L.L.C. ("GSHLLC") and (C) as of each Time of Delivery, GSHLLC) are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims; and all of the partnership
interests in each Partnership Significant Subsidiary have been duly and
validly created and (except for (A) as of the date of this Agreement,
interests in Goldman, Sachs & Co., Goldman Sachs Mitsui Marine
Derivative Products, L.P. ("GSMMDP") and J. Aron & Company and (B) as
of each Time of Delivery, GSMMDP) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims;
(viii) The Shares to be issued and sold by GS Inc. to the
Underwriters hereunder and under the Global Underwriting Agreements
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(ix) The issue and sale of the Shares to be sold by GS Inc.
hereunder and under the Global Underwriting Agreements and the
compliance by GS Inc. with all of the provisions of this Agreement and
the Global Underwriting Agreements and the consummation of the
transactions herein and therein contemplated 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 or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of GS Inc. or the organizational documents of
any of its Significant Subsidiaries or any statute or any order, rule
or regulation of any court
-6-
7
or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their 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
issue and sale of the Shares by GS Inc. or the consummation by GS Inc.
of the transactions contemplated by this Agreement and the Global
Underwriting Agreements, except the registration under the Act of the
Shares, the registration of the Stock under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), listing of the Shares on the
New York Stock Exchange, Inc., and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters and the
Global Underwriters;
(x) 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;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the securities described therein,
in the Asia/Pacific and International versions of the Prospectus under
the caption "Certain United States Tax Consequences to Non-U.S. Holders
of Common Stock" and in the Prospectus under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(xii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the 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, partners' capital or
stockholders' equity, as applicable, 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;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company",
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(xiv) The Company and its Significant Subsidiaries have such
concessions, permits, licenses, consents, exemptions, franchises,
authorizations, orders,
-7-
8
registrations, qualifications and other approvals (each, an
"Authorization") of, and have made all filings with and notices to, all
Federal, state and foreign governments, governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, as are necessary to consummate the Incorporation
Transactions and the Related Transactions, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, reasonably be expected to (i) have a
material adverse effect on the prospects, financial position, partners'
capital or stockholders' equity, as applicable, or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect"), or (ii) adversely effect the validity,
performance or consummation of the transactions contemplated by this
Agreement and the Global Underwriting Agreements. Each such
Authorization is valid and in full force and effect and the Company and
each of its Significant Subsidiaries is in compliance with all of the
terms and conditions thereof; and no event has occurred (including,
without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both,
would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of any
such Authorization; and other than as disclosed in the Prospectus, such
Authorizations contain no restrictions that are materially more
burdensome than those imposed on Group or any of its Significant
Subsidiaries immediately prior to the consummation of the Incorporation
Transactions; except in each case described in this sentence where such
failure to be valid and in full force and effect or to be in compliance
or where the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(xv) All stockholder, partnership and limited liability
company member approvals necessary for the Company and each Significant
Subsidiary to consummate the Incorporation Transactions and the Related
Transactions have been obtained and are in full force and effect. The
consummation of the Incorporation Transactions and the Related
Transactions will not (i) conflict with or constitute a breach of any
of the terms or provisions of, or a default under, (A) the
organizational documents of the Company, (B) any of the organizational
documents of any of the Company's Significant Subsidiaries, or (C) any
indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound, or (ii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of
any government or court or any governmental body or agency having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties; except in each case described in clauses
(i)(B) and (C) and clause (ii) of this sentence for such conflicts,
breaches, defaults and violations as would not, singly or in the
aggregate, reasonably be expected to (x) have a Material Adverse
Effect; or (y)
-8-
9
adversely affect the validity, performance or consummation of the
transactions contemplated by this Agreement and the Global Underwriting
Agreements;
(xvi) 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;
(xvii) The statements set forth under the captions
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Risk Management--Operational and Year 2000
Risks--Year 2000 Readiness Disclosure" and "Risk Factors--Firm and
Third-Party Computer Systems May Not Achieve Year 2000 Readiness--Year
2000 Readiness Disclosure" accurately and fairly set forth the current
state of the Company's efforts to address the Year 2000 Problem and the
risks and costs of the Company relating to the Year 2000 Problem. The
"Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, transmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000;
(xviii) PricewaterhouseCoopers LLP, who have certified certain
financial statements of Group and its subsidiaries, are independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder;
(xix) It is not necessary in connection with the (i) the
grant, issuance, offer, sale and delivery of the securities to be
issued by GS Inc. pursuant to the Incorporation Transactions, (ii)
the grant, offer or sale of the Formula RSUs, the Discretionary RSUs,
and the Discretionary Options, or (iii) the contribution of the shares
of Stock to the DCP, to register any such securities under the Act, or
to qualify any indenture under the Trust Indenture Act of 1939, as
amended;
(xx) GS Inc. has duly authorized, executed and delivered the
Shareholders' Agreement, each Employment Agreement and each
Noncompetition Agreement (each such capitalized term not defined herein
having the meaning ascribed to it in the Prospectus); the Shareholders'
Agreement is a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights and to general equity
principles; and GS Inc. has obtained
-9-
10
the signature of each other party to each Employment Agreement, each
Noncompetition Agreement and the Shareholders' Agreement; provided,
however, that GS Inc., makes no representation or warranty as to the
authorization, execution or delivery of any such agreement by any other
party thereto; and
(xxi) No holders of securities of GS Inc. or Group have any
preemptive rights to acquire any securities of the Company or any
rights to the registration of any securities under the Registration
Statement.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and GS Inc. that:
(i) No consent, approval, authorization or order of, or filing
with, any governmental agency or body is required for the
execution and delivery of this Agreement and the Global Underwriting
Agreements, the sale of the Shares to be sold by such Selling
Stockholder or the consummation by such Selling Stockholder of the
transactions contemplated by this Agreement and the Global
Underwriting Agreements, except as described in section 3 of the
Letter Agreement, dated March 15, 1999, among the Sumitomo Bank,
Limited, Sumitomo Bank Capital Markets, Inc. and Group and except the
registration under the Act of such Shares, the registration under the
Exchange Act of the Stock, the listing of such Shares on the New York
Stock Exchange and such as may be required under state securities or
Blue Sky laws, which consents, approvals, authorizations, orders and
filings are the only consents, approvals, authorizations, orders and
filings necessary for the execution and delivery by such Selling
Stockholder of this Agreement, the Global Underwriting Agreements and
the Power of Attorney hereinafter referred to in clause (viii) below,
and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder and under the Global Underwriting Agreements,
and such Selling Stockholder has full right, power and authority to
enter into this Agreement, the Global Underwriting Agreements and
the Power of Attorney and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder hereunder and under the
Global Underwriting Agreements;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the Global Underwriting Agreements and
the compliance by such Selling Stockholder with all of the provisions
of this Agreement, the Global Underwriting Agreements and the Power of
Attorney and the consummation of the transactions herein and therein
contemplated 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 such Selling Stockholder is a party or
by which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
certificate of incorporation, by-laws or other organizational or
constituent documents of such Selling Stockholder or
any statute or any order, rule or regulation of any court or
governmental agency or body
-10-
11
having jurisdiction over such Selling Stockholder or the property of
such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to
the First Time of Delivery (as defined in Section 5 hereof) such
Selling Stockholder will have, good and valid title to the Shares to be
sold by such Selling Stockholder hereunder and under the Global
Underwriting Agreements, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto and thereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters and the Global Underwriters;
(iv) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, it will not, directly or indirectly, offer, sell, contract
to sell or otherwise dispose of, including, without limitation, through
the entry into a cash-settled derivative instrument, except as provided
hereunder or under the Global Underwriting Agreements, any shares of
Stock or any securities of GS Inc. that are substantially similar to
the Stock, including but not limited to any securities that are
convertible into or exercisable or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar
securities, without the prior written consent of Goldman, Sachs & Co.;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of GS Inc.
to facilitate the sale or resale of the Shares;
(vi) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(vii) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to GS Inc. by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will, conform in all material respects
to the
-11-
12
requirements of the Act and the rules and regulations of the Commission
thereunder and did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(viii) Such Selling Stockholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you
(the "Power of Attorney"), appointing the persons indicated in Schedule
II hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to execute
and deliver this Agreement and the Global Underwriting Agreements on
behalf of such Selling Stockholder, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise
to act on behalf of such Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Global Underwriting
Agreements; and
(ix) The appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, is to that extent
irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the dissolution
of such Selling Stockholder or by the occurrence of any other event; if
such Selling Stockholder should be dissolved or if any other such event
should occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Global Underwriting Agreement; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall
be as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) GS Inc.
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly to purchase from GS Inc. at a purchase price per share
of $__________, and (b) each of the Selling Stockholders, severally and not
jointly (except that Kamehameha Activities Association and the Estate of
Bernice Pauahi are acting jointly), agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase
from each of the Selling Stockholders, at the purchase price determined by
GS Inc. and the Underwriters as specified in clause (a), the number of Firm
Shares (to be adjusted by you so as to eliminate fractional shares) determined
by multiplying the aggregate number of Firm Shares to be sold by GS Inc. and
each of the Selling Stockholders as set forth opposite their respective names
in Schedule II hereto by a fraction, the numerator of which is the aggregate
number of Firm Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule I hereto and the denominator of which
is the aggregate number of Firm Shares to be purchased by all of the
Underwriters from GS Inc. and all of the Selling Stockholders hereunder and
(c) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided
-12-
13
below, GS Inc. agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from GS Inc., at the
purchase price per share set forth in clause (a) of this Section 2, that portion
of the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
GS Inc., as and to the extent indicated in Schedule II hereto, hereby
grants to the Underwriters the right to purchase at their election up to
7,200,000 Optional Shares, at the purchase price per share set forth in the
paragraph above, for the sole purpose of covering overallotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
only by written notice from you to GS Inc., given within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by you but in no event earlier than the First
Time of Delivery (as defined in Section 5 hereof) or, unless you and GS Inc.
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. (a) GS Inc. hereby confirms its engagement of Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated as, and Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated hereby severally confirm
their agreement with GS Inc. to render services as, "qualified independent
underwriters" within the meaning of Rule 2720(b)(15) of the National Association
of Securities Dealers, Inc. (the "NASD") with respect to the offering and sale
of the Shares. Donaldson, Lufkin & Jenrette Securities Corporation, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated, in their capacities as qualified independent underwriters and not
otherwise, are referred to herein collectively as the "QIUs".
-13-
14
(b) As compensation for the services of the QIUs hereunder, GS Inc.
agrees to pay the QIUs $_____ in the aggregate at the First Time of Delivery to
be divided equally among the QIUs.
4. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to GS Inc. and the Selling Stockholders shall be delivered by or on
behalf of GS Inc. and the Selling Stockholders to Goldman, Sachs & Co.,
including, at the option of Goldman, Sachs & Co.,
-14-
15
through the facilities of The Depository Trust Company ("DTC") for the
account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to Goldman, Sachs & Co. by GS Inc.
and each of the Selling Stockholders, upon at least forty-eight hours' prior
notice. Kamehameha Activities Association and the Estate of Bernice Pauahi
Bishop agree that Kamehameha Activities Association will receive payment for
the Shares to be sold jointly by them. GS Inc. will cause the certificates
representing the Shares to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery (as defined below) with
respect thereto at the office of Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004 or at the office of DTC or its designated custodian, as
the case may be (the "Designated Office"). The time and date of such delivery
and payment shall be 9:30 a.m., New York City time, on ............., 1999 or
on such other time and date as Goldman, Sachs & Co. and GS Inc. may agree upon
in writing, and, with respect to the Optional Shares, 9:30 a.m., New York City
time, on the date specified by Goldman, Sachs & Co. in the written notice given
by Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co. and GS Inc. may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(q) hereof, will be delivered at the offices
of Sullivan & Cromwell, 125 Broad Street, New York, N.Y. 10004 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
each Time of Delivery. A meeting will be held at the Closing Location at 2:30
p.m., New York City time, on the New York Business Day next preceding each Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 5, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
6. GS Inc. agrees with each of the Underwriters and with each of the
QIUs:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you and the QIUs, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed
-15-
16
and to furnish you and the QIUs copies thereof; to advise you and the QIUs,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the qualification of
the Shares 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 amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith GS Inc. shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction; and to comply with all applicable securities and
other laws, rules and regulations in each such jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters and the QIUs with copies of the Prospectus in New York City in
such quantities as you and the QIUs may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering or
sale of the Shares and if at such time any events 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 period to amend or
supplement the Prospectus, to notify you and the QIUs and upon your request to
prepare and furnish without charge to each Underwriter and each QIU and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the
-16-
17
Registration Statement (as defined in Rule 158(c) under the Act), an earnings
statement of GS Inc. 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 GS Inc., Rule 158 under the Act);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, not to,
directly or indirectly, offer, sell, contract to sell or otherwise dispose of,
including, without limitation, through the entry into a cash-settled derivative
instrument, except as provided hereunder and under the Global Underwriting
Agreements, any shares of Stock or any securities of GS Inc. that are
substantially similar to the Shares, including but not limited to any securities
that are convertible into or exercisable or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities (other
than as contemplated by the Prospectus and pursuant to employee benefit plans
existing on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), and not to directly
or indirectly, agree to any amendment or waiver of the provisions of Section
2.3(a) of the Shareholders' Agreement to permit any Transfer (as defined in the
Shareholders' Agreement) in violation of such Section 2.3(a), in each case
without the prior written consent of Goldman, Sachs & Co.; and during the period
beginning from the date hereof and continuing to and including the date 180 days
after the date of the Prospectus, GS Inc. will not permit any RLP (as such term
is defined in the Prospectus) to directly or indirectly, offer, sell, contract
to sell or otherwise dispose of, including, without limitation, through the
entry into a cash-settled derivative instrument, any shares of Stock received in
the Incorporation Transactions or any securities of GS Inc. received in the
Incorporation Transactions that are substantially similar to the Stock,
including but not limited to any securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive, Stock
or any such substantially similar securities, in violation of the terms of the
Plan of Incorporation (as such term is defined in the Prospectus) without the
prior written consent of Goldman, Sachs & Co.;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of GS Inc. and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to its stockholders
consolidated summary financial information of GS Inc. and its subsidiaries for
such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders generally, and to
deliver to you (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 GS
-17-
18
Inc. is listed; and (ii) such additional information concerning the business and
financial condition of GS Inc. as you may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of GS Inc. and its subsidiaries are consolidated in reports furnished
to its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement and the Global Underwriting Agreements in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance, the
Shares on the New York Stock Exchange, Inc. (the "Exchange");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act; and
(k) If GS Inc. elects to rely upon Rule 462(b) under the Act, to file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
at the time of filing to either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or to give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
7. The Company covenants and agrees with each Selling Stockholder and
with the several Underwriters and the QIUs 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 Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters, the QIUs and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
Global Underwriting Agreements, the Agreement among Syndicates, the Selling
Agreements, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 6(b)
hereof; (iv) all fees and expenses in connection with listing the Shares on the
New York Stock Exchange; (v) the filing fees incident to, and the fees and
disbursements of counsel in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (vi) the fees and reasonable expenses of the QIUs; (vii) the cost of
preparing stock certificates; (viii) the cost and charges of any transfer agent
or registrar; 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. Each Selling Stockholder covenants and agrees with the Company,
the other Selling Stockholder, the
-18-
19
several Underwriters and the QIUs that such Selling Stockholder will pay or
cause to be paid all costs and expenses incident to the performance of such
Selling Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including: (i) any fees and expenses of counsel
for such Selling Stockholder; (ii) such Selling Stockholder's pro rata share of
the fees and expenses of the Attorneys-in-Fact and (iii) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder. In connection with clause (iii) of
the preceding sentence, Goldman, Sachs & Co. agrees to pay New York State stock
transfer tax, and the Selling Stockholder agrees to reimburse Goldman, Sachs &
Co. for associated carrying costs if such tax payment is not rebated on the day
of payment and for any portion of such tax payment not rebated. It is
understood, however, that the Company shall bear, and the Selling Stockholders
shall not be required to pay or to reimburse the Company for, the cost of any
other matters not directly relating to the sale and purchase of the Shares
pursuant to this Agreement, and that, except as provided in this Section, and
Sections 9, 10 and 13 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
8. The respective obligations of the several Underwriters and the
several QIUs hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in the discretion of the Underwriters and the QIUs,
respectively, to the condition that all representations and warranties and other
statements of GS Inc. and of the Selling Stockholders herein are, at and as of
such Time of Delivery, true and correct, the condition that GS Inc. and the
Selling Stockholders shall have performed all of its and their obligations
hereunder theretofore to be performed and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 6(a) hereof; if GS Inc. has elected to rely
upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement
shall have become effective by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to the reasonable satisfaction of the Underwriters;
(b) Cleary, Gottlieb, Steen & Hamilton, counsel for the
Underwriters and the QIUs, shall have furnished to you and the QIUs
such written opinions and letter (a draft of such opinion and letter is
attached as Annex II(a) hereto), dated such
-19-
20
Time of Delivery, to the effect that the matters set forth in the
Asia/Pacific and International versions of the Prospectus under the
caption "Certain United States Tax Consequences to Non-U.S. Holders of
Common Stock", insofar as they purport to describe the provisions of
the laws referred to therein, are accurate, complete and fair and with
respect to the matters set forth in paragraphs (i), (ii), (vi), (ix)
and (xii) of subsection (d) below as well as such other related matters
as you may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Sullivan & Cromwell, counsel for GS Inc., shall have
furnished to you and the QIUs their written opinion (a draft of such
opinion is attached as Annex II(b) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) GS Inc. has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware;
(ii) All of the outstanding shares of Stock,
including the Shares, have been duly authorized and validly
issued and are fully paid and nonassessable;
(iii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by GS
Inc. 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
Shares sold by GS Inc. to the Underwriters have been obtained
or made;
(iv) The issuance of the Shares and the sale of the
Shares by GS Inc. to you pursuant to the Underwriting
Agreement and the Global Underwriting Agreements do not, and
the performance by GS Inc. of its obligations under, the
Underwriting Agreement and the Global Underwriting Agreements
will not, (a) violate the Certificate of Incorporation or
By-laws of GS Inc., (b) violate the Plan of Incorporation of
Group, included as Exhibit Number 2.1 of the Registration
Statement, (c) result in a default under or breach of
the agreements listed in Part II, Item 16(a), Exhibit Numbers
10.1 through 10.28 of the Registration Statement, (d) violate
any court orders listed in the Officer's Certificate of Robert
J. Katz, General Counsel of GS Inc., or (e) violate any
Federal law of the United States or law of the State of New
York applicable to GS Inc.; provided, however, that for
purposes of this paragraph (iv), such counsel may state that
they express no opinion with respect to Federal or state
securities laws, other antifraud laws and fraudulent transfer
laws; provided, further, that such counsel may also state that
insofar as performance by GS Inc. of its obligations under the
Underwriting Agreement is concerned, they
-20-
21
are expressing no opinion as to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability relating to or affecting creditors' rights;
(v) GS Inc. has duly authorized, executed and
delivered each Employment Agreement and each Noncompetition
Agreement;
(vi) This Agreement and the Global Underwriting
Agreements have been duly authorized, executed and delivered
by GS Inc.; and
(vii) GS Inc. is not, and after giving effect to the
offering and sale of the Shares will not be, an "investment
company", as such term is defined in the Investment Company
Act.
Such counsel shall also furnish you and the QIUs with a letter
to the effect that, as counsel to GS Inc., they reviewed the
Registration Statement and the Prospectus, participated in discussions
with your representatives and those of GS Inc. and its accountants and
advised GS Inc. as to the requirements of the Act and the applicable
rules and regulations thereunder; between the date of the Prospectus
and such Time of Delivery, such counsel participated in further
discussions with your representatives and those of GS Inc. and its
accountants in which the contents of certain portions of the Prospectus
and related matters were discussed and reviewed certain certificates of
certain officers of GS Inc., an opinion and letter addressed to you
from Gregory K. Palm, Esq. and letters addressed to you and the QIUs
from GS Inc.'s independent accountants; on the basis of the information
that such counsel gained in the course of the performance of the
services referred to above, considered in the light of such counsel's
understanding of the applicable law and the experience such counsel
have gained through their practice under the Act, they will confirm to
you and the QIUs that, in such counsel's opinion, the Registration
Statement, and the Prospectus, as of the effective date of the
Registration Statement, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the applicable rules and regulations of the Commission thereunder;
nothing that came to such counsel's attention in the course of such
review has caused such counsel to believe that the Registration
Statement, as of its effective date, 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; nothing that came to the attention of such counsel in the
course of the procedures described in the second clause of this
paragraph has caused such counsel to believe that the Prospectus, as of
its date or as of such Time of Delivery, contained or contains any
untrue statement of a material fact or omitted 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;
such counsel may state that the limitations inherent in the independent
verification of factual matters and the character of
-21-
22
determinations involved in the registration process are such that such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for those made under
the captions "Description of Capital Stock" and "Underwriting" in the
Prospectus insofar as they relate to provisions of documents therein
described and those made under the caption "Certain United States Tax
Consequences to Non-U.S. Holders of Common Stock" in the Asia/Pacific
and International versions of the Prospectus insofar as they relate to
provisions of U.S. Federal tax law therein described; also, such
counsel need express no opinion or belief as to the financial
statements or other financial data derived from accounting records
contained in the Registration Statement or the Prospectus; finally,
such counsel may assume that any Rule 462(b) Registration Statement was
filed with the Commission prior to the time that any confirmations of
the sale of any of the Shares were sent or given to investors. In
addition, such counsel shall state that they do not know of any
litigation instituted or threatened against GS Inc. that would be
required to be disclosed in the Prospectus that is not so disclosed,
provided, that such counsel may also state that they call to your
attention that GS Inc. has an internal legal department and that while
such counsel represents GS Inc. and its affiliates on a regular basis,
such counsel's engagement has been limited to specific matters as to
which it was consulted and, accordingly, such counsel's knowledge with
respect to litigation instituted or threatened against GS Inc. is
limited; and that they do not know of any documents that are required
to be filed as exhibits to the Registration Statement that are not so
filed.
In rendering such opinion, such counsel may state that they
express 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. Such counsel
may also state that, insofar as such opinion involves factual matters,
they have relied upon certificates of officers of GS Inc. and its
subsidiaries, certificates of public officials and other sources
believed by such counsel to be responsible;
(d) Gregory K. Palm, Esq., a General Counsel for GS Inc.,
shall have furnished to you and the QIUs his written opinion (a draft
of such opinion is attached as Annex II(c) hereto), dated such Time of
Delivery, in form and substance satisfactory to you to the effect that:
(i) GS Inc. has been duly incorporated and is validly
existing as a corporation in good standing 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;
(ii) GS Inc. has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
capital stock of GS Inc. (including
-22-
23
the Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform to the description of
the Stock contained in the Prospectus;
(iii) GS Inc. has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material
liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of GS Inc., provided that such
counsel shall state that he believes that you and he are
justified in relying upon such opinions and certificates);
(iv) Each of Goldman, Sachs & Co. and J. Aron &
Company has been duly organized and is validly existing as a
limited partnership and general partnership, respectively, in
good standing under the laws of its jurisdiction of formation;
and the general partnership interests in Goldman, Sachs & Co.
and in J. Aron & Company have been duly and validly created
and are owned directly or indirectly by GS Inc., free and
clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of GS Inc. or
its subsidiaries, provided that such counsel shall state that
he believes that you and he are justified in relying upon such
opinions and certificates);
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which GS Inc. or any of
its subsidiaries is a party or of which any property of GS
Inc. or any of its subsidiaries is the subject which is
reasonably likely to 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 GS Inc. and its subsidiaries; and, to the best
of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement and the Global Underwriting
Agreements have been duly authorized, executed and delivered
by GS Inc.;
(vii) The issue and sale of the Shares being
delivered at such Time of Delivery to be sold by GS Inc., and
the compliance by GS Inc. with all of the provisions of this
Agreement and the Global Underwriting Agreements and the
consummation of the transactions herein and therein
contemplated (other than the Incorporation Transactions and
Related Transactions) will not
-23-
24
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which
GS Inc. or any of its subsidiaries is a party or by which GS
Inc. or any of its subsidiaries is bound or to which any of
the property or assets of GS Inc. or any of its subsidiaries
is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws
of GS Inc. or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over GS Inc. or any of its
subsidiaries or any of their properties; provided, however,
that, for the purposes of this paragraph (vii), such counsel
need not express any opinion with respect to Federal or state
securities laws, other antifraud laws, and fraudulent transfer
laws; provided, further, that insofar as the compliance by GS
Inc. with all of the provisions of this Agreement and the
Global Underwriting Agreements and the consummation of the
transactions herein and therein contemplated are concerned,
such counsel need not express any opinion as to bankruptcy,
insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body of the United States of America or
the State of New York is required for the issue and sale of
the Shares or the consummation by GS Inc. of the transactions
contemplated by this Agreement and the Global Underwriting
Agreements (other than the Incorporation Transactions and the
Related Transactions), except the registration under the Act
of the Shares, the registration of the Stock under the
Exchange Act and the listing of the Shares on the New York
Stock Exchange, each of which has been obtained or made, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters and the Global Underwriters;
(ix) The statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the securities
described therein, and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate, complete and
fair;
(x) GS Inc. and its Significant Subsidiaries have
such Authorizations of, and have made all filings with and
notices to, the courts and governmental agencies or bodies of
the United States of America and the State of New York, as are
necessary to consummate the Incorporation
-24-
25
Transactions and the Related Transactions, except where the
failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate,
reasonably be expected to (i) have a Material Adverse Effect
or (ii) adversely affect the validity, or materially affect
the performance, of the transactions contemplated by this
Agreement and the Global Underwriting Agreements (including
the Incorporation Transactions and Related Transactions). Each
such Authorization is valid and in full force and effect; and,
to the best of such counsel's knowledge, no event has occurred
that would reasonably be expected to result in the revocation,
suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would reasonably be
expected to result in any other material impairment of the
rights of the holder of any such Authorization; and other than
as disclosed in the Prospectus, such Authorizations contain no
restrictions that are materially more burdensome than those
imposed on Group or any of its Significant Subsidiaries
immediately prior to the consummation of the Incorporation
Transactions; except in each case described in this sentence
where such failure to be valid and in full force and effect or
the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(xi) All stockholder, partnership and limited
liability company member approvals necessary for GS Inc. and
each Significant Subsidiary to consummate the Incorporation
Transactions and the Related Transactions have been obtained
and are in full force and effect. The consummation of the
Incorporation Transactions and the Related Transactions will
not (i) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, (A) the
organizational documents of GS Inc., (B) the organizational
documents of any of GS Inc.'s Significant Subsidiaries, or (C)
any material indenture, mortgage, deed of trust, loan
agreement, or other agreement or instrument known to such
counsel to which GS Inc. or any of its subsidiaries is a party
or by which GS Inc. or any of its subsidiaries is bound or to
which any of the property or assets of GS Inc. and its
subsidiaries is subject, or (ii) violate or conflict with any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over GS Inc. or any of its subsidiaries or any of
their properties; provided, however, that, for the purposes of
this paragraph (xi), such counsel need not express any opinion
with respect to Federal or state securities laws, other
antifraud laws, and fraudulent transfer laws, and, insofar as
the consummation of the Incorporation Transactions and Related
Transactions are concerned, such counsel need not express any
opinion as to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights; provided, further, except
in each case described in clauses (i)(B) and (c) and
-25-
26
clause (ii) of this sentence, for such conflicts, breaches,
defaults and violations as would not, singly or in the
aggregate, be reasonably expected to (x) have a Material
Adverse Effect, or (y) adversely affect the validity, or
materially affect the performance, of the transactions
contemplated by this Agreement and the Global Underwriting
Agreements (including the Incorporation Transactions and
Related Transactions); and
(xii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by GS
Inc. prior to such Time of Delivery (other than the financial
statements and related schedules therein and other financial
data derived from GS Inc.'s accounting records, as to which
such counsel need not express any opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and regulations thereunder; although he does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in
the opinion in subsections (ii) and (ix) of this Section 8(d),
he has no reason to believe that, as of its effective date,
the Registration Statement or any further amendment thereto
made by GS Inc. prior to such Time of Delivery (other than the
financial statements and related schedules therein and other
financial data derived from GS Inc.'s accounting records, as
to which such counsel need not express any opinion) 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 not misleading or that, as of its
date, the Prospectus or any further amendment or supplement
thereto made by GS Inc. prior to such Time of Delivery (other
than the financial statements and related schedules therein
and other financial data derived from GS Inc.'s accounting
records, as to which such counsel need not express any
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of such Time
of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made
by GS Inc. prior to such Time of Delivery (other than the
financial statements and related schedules therein and other
financial data derived from GS Inc.'s accounting records, as
to which such counsel need not express any opinion) contains
an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and he does not know of any amendment to the
Registration Statement required to be filed or of any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be described in the Registration Statement or the
Prospectus which are not filed or described as required.
-26-
27
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. Such counsel
may also state that, insofar as such opinion involves factual matters,
he has relied upon certificates of officers of GS Inc. and its
subsidiaries and certificates of public officials and other sources
believed by such counsel to be responsible. In addition, such counsel
may state that he has examined, or has caused members of GS Inc.'s
legal department to examine, such partnership records, certificates and
other documents, and such questions of law, as he has considered
necessary or appropriate for the purposes of such opinion;
(e) Linklaters & Paines, United Kingdom counsel for GS Inc.,
shall have furnished to you and the QIUs their written opinion (a draft
of such opinion is attached as Annex II(d) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Goldman Sachs International has been duly
incorporated and is validly existing as a private unlimited
company, in good standing under the laws of England; and
(ii) All of the issued shares of Goldman Sachs
International have been duly and validly authorized and
issued, are fully paid, and are owned by Goldman Sachs
Holdings (U.K.) L.L.C., which are themselves indirectly owned
by GS Inc., free and clear from all liens, encumbrances,
equities or claims.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Companies Act of England. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied upon
certificates of officers of GS Inc. and certificates of public
officials and other sources believed by such counsel to be responsible;
(f) Cravath, Swaine & Moore, special counsel to Sumitomo Bank
Capital Markets, Inc., as indicated in Schedule II hereto, shall have
furnished to you and the QIUs their written opinion (a draft of such
opinion is attached as Annex II(e) hereto) dated the First Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) This Agreement and the Global Underwriting
Agreements have been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder;
(ii) No consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is
required for the consummation of the transactions contemplated
by this Agreement and the Global
-27-
28
Underwriting Agreements in connection with the Shares to be
sold by such Selling Stockholder hereunder or thereunder,
except the registration under the Act of the Shares, the
registration under the Exchange Act of the Stock, the listing
of the Shares on the New York Stock Exchange, all of which
have been duly obtained and are in full force and effect, and
such as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of such
Shares by the Underwriters or the Global Underwriters;
(iii) Good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or
International Underwriters or Asia/Pacific Underwriters, as
the case may be, who have purchased such Shares in good faith
and without notice of any such lien, encumbrance, equity or
claim or any other adverse claim within the meaning of the
Uniform Commercial Code; and
(iv) A Power of Attorney has been duly executed and
delivered by such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder in
accordance with its terms.
In rendering such opinion, such counsel may state that they
express 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;
(g) Robert A. Rabbino, counsel to Sumitomo Bank Capital
Markets, Inc., as indicated in Schedule II hereto, shall have
furnished to you and the QIUs his written opinion (a draft of such
opinion is attached as Annex II(f) hereto) dated the First Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the Global Underwriting
Agreements and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the Global
Underwriting Agreements and the Power of Attorney and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the
organizational documents of such Selling Stockholder or any
statute or any order, rule or regulation of any court or
governmental agency or body having
-28-
29
jurisdiction over such Selling Stockholder or the property of
such Selling Stockholder;
(ii) Immediately prior to such Time of Delivery such
Selling Stockholder had good and valid title to the Shares to
be sold at such Time of Delivery by such Selling Stockholder
under this Agreement and the Global Underwriting Agreements,
free and clear of all liens, encumbrances, equities or claims,
and full right, power and authority to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder
hereunder and thereunder; and
(iii) A Power of Attorney has been duly executed and
delivered by such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder in
accordance with its terms.
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 and in
rendering the opinion in subparagraph (iii) such counsel may rely upon
a certificate of such Selling Stockholder in respect of matters of fact
as to ownership of, and liens, encumbrances, equities or claims on the
Shares sold by such Selling Stockholder, provided that such counsel
shall state that he believes that you, the QIUs and he are justified
in relying upon such certificate;
(h) Cravath, Swaine & Moore, special counsel for Kamehameha
Activities Association and the Estate of Bernice Pauahi Bishop, acting
jointly as if they were one Selling Stockholder, as indicated in
Schedule II hereto, shall have furnished to you their written opinion
(a draft of such opinion is attached as Annex II(g) hereto), dated
the First Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) This Agreement and the Global Underwriting
Agreements have been duly executed and delivered by or on
behalf of such Selling Stockholder;
(ii) No consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is
required for the consummation
-29-
30
of the transactions contemplated by this Agreement and the
Global Underwriting Agreements in connection with the Shares
to be sold by such Selling Stockholder hereunder or
thereunder, except the registration under the Act of such
Shares, the registration under the Exchange Act of the Stock
and the listing of such Shares on the New York Stock Exchange,
all of which have been duly obtained and are in full force and
effect, and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of such Shares by the Underwriters or the Global Underwriters;
(iii) Good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or
International Underwriters or Asia/Pacific Underwriters, as
the case may be, who have purchased such Shares in good faith
and without notice of any such lien, encumbrance, equity or
claim or any other adverse claim within the meaning of the
Uniform Commercial Code; and
(iv) A Power of Attorney has been duly executed and
delivered by such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder in
accordance with its terms.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States and the laws of the State of New
York. Such counsel may also state that as to matters of law of the
State of Hawaii, such counsel has relied on the opinion to you and the
QIUs referred to in Section 8(i) below;
(i) Cades Schutte Fleming & Wright, counsel for Kamehameha
Activities Association and the Estate of Bernice Pauahi Bishop, acting
jointly as if they were one Selling Stockholder, as indicated in
Schedule II hereto, shall have furnished to you and the QIUs their
written opinion (a draft of such opinion is attached as Annex II(h)
hereto), dated the First Time of Delivery, in form and substance
satisfactory to you, to the effect
that:
(i) This Agreement and the Global Underwriting
Agreements have been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder; and the sale of
the Shares to be sold by such Selling Stockholder hereunder
and thereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement and the Global
Underwriting Agreements and the Power of Attorney and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such
Selling Stockholder is a party
-30-
31
or by which such Selling Stockholder is bound, or to which any
of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the
provisions of the organizational documents of such Selling
Stockholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property of such Selling
Stockholder;
(ii) No consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is
required for the consummation of the transactions contemplated
by this Agreement and the Global Underwriting Agreements in
connection with the Shares to be sold by such Selling
Stockholder hereunder or thereunder, except such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Shares by the
Underwriters or the Global Underwriters;
(iii) Immediately prior to such Time of Delivery such
Selling Stockholder had good and valid title to the Shares to
be sold at such Time of Delivery by such Selling Stockholder
under this Agreement and the Global Underwriting Agreements,
free and clear, to the best of such counsel's knowledge, of
all liens, encumbrances, equities or claims, and full right,
power and authority to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder hereunder and
thereunder;
(iv) Good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or
International Underwriters or Asia/Pacific Underwriters, as
the case may be, who have purchased such Shares in good faith
and without notice of any such lien, encumbrance, equity or
claim or any other adverse claim within the meaning of the
Uniform Commercial Code; and
(v) A Power of Attorney has been duly executed and
delivered by such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder in
accordance with its terms.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
laws of the State of Hawaii and in rendering the opinion in
subparagraph (iii) such counsel may rely upon a certificate of such
Selling Stockholder in respect of matters of fact as to ownership of,
and liens, encumbrances, equities or claims on the Shares sold by such
Selling Stockholder, provided that such counsel shall state that they
believe that you and they are justified in relying upon such
certificate. In addition, such counsel may also
-31-
32
state that as to all matters of the laws of the State of New York, such
counsel is relying on the opinion to you and the QIUs referred to in
Section 8(h) hereof;
(j) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, PricewaterhouseCoopers LLP shall have furnished
to you and the QIUs a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(k)(i) Neither the Company nor any of its Significant
Subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Prospectus 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, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the partners' capital or
capital stock, as applicable, 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 subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(l) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities 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;
(m) On or after the date hereof 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 GS Inc.'s securities on
the New York Stock Exchange; (iii) a general moratorium on
-32-
33
commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(n) The Shares to be sold by GS Inc. and the Selling
Stockholders at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange;
(o) The Incorporation Transactions shall have been consummated
in all material respects, as described in the Prospectus;
(p) GS Inc. shall have complied with the provisions of Section
6(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement;
(q) The Amended and Restated Certificate of Incorporation of
GS Inc., in substantially the form filed as an exhibit to the
Registration Statement, shall have been filed with the Secretary of
State of the State of Delaware and shall have become effective; and
(r) GS Inc. shall have furnished or caused to be furnished to
you, and the Selling Stockholders shall have furnished to you, at such
Time of Delivery, certificates of officers of GS Inc. and of the
Selling Stockholders, respectively, satisfactory to you as to the
accuracy of the representations and warranties of GS Inc. and the
Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by GS Inc. and the Selling Stockholders
of all of their respective obligations hereunder to be performed at or
prior to such Time of Delivery, and as to such other matters as you may
reasonably request, and GS Inc. shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a)
and (i) of this Section, and as to such other matters as you may
reasonably request.
9. (a) GS Inc. will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter 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, the Registration Statement or
the Prospectus, 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
-33-
34
necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that GS Inc. 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, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to GS Inc. by any Underwriter through Goldman, Sachs & Co.
expressly for use therein or by any QIU expressly for use therein.
(b) Each Selling Stockholder, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter 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, the Registration Statement or the Prospectus, 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, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to GS Inc. by such Selling Stockholder expressly for use
therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses
are incurred; provided, however, that such Selling Stockholder 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, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity
with written information furnished to GS Inc. by any Underwriter
through Goldman, Sachs & Co. expressly for use therein or by any QIU
expressly for use therein; provided, further, that the liability of a
Selling Stockholder pursuant to this subsection (b) shall not exceed
the amount of net proceeds received by such Selling Stockholder from
the sale of its Shares pursuant to this Agreement. For purposes of
this Section 9(b), written information furnished to GS Inc. by
Kamehameha Activities Association expressly for use in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto shall be deemed to include any
written information furnished to GS Inc. by the Estate of Bernice
Pauahi Bishop for use in any of the foregoing.
(c) Each Underwriter will indemnify and hold harmless GS Inc.
and each Selling Stockholder against any losses, claims, damages or
liabilities to which GS
-34-
35
Inc. or such Selling Stockholder 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, the Registration Statement or the
Prospectus, 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,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to GS Inc. by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse GS Inc. and each Selling
Stockholder for any legal or other expenses reasonably incurred by GS
Inc. or such Selling Stockholder in connection with investigating or
defending any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against an 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, with counsel satisfactory to such indemnified party (which
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 9 (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.
-35-
36
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a), (b) or (c) 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 GS Inc. and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. 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 (d) 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 GS Inc. and
the Selling Stockholders on the one hand and the Underwriters 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 GS Inc. and the Selling Stockholders on
the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses)
received by GS Inc. and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. 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 GS Inc. or the Selling Stockholders on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. GS Inc., each of the Selling Stockholders
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (e) were determined by pro
rata allocation (even if the Underwriters 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 (e). 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 (e) 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. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and no
-36-
37
Selling Stockholder shall be required to contribute an amount that
exceeds the net proceeds received by such Selling Stockholder from the
sale of its Shares pursuant to this Agreement. 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 Underwriters'
obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of GS Inc. and the Selling Stockholders
under this Section 9 shall be in addition to any liability which GS
Inc. and the respective Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 9 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of GS Inc. (INCLUDING ANY PERSON WHO, WITH
HIS OR HER CONSENT, IS NAMED IN THE REGISTRATION STATEMENT AS ABOUT TO
BECOME A DIRECTOR OF GS INC.) and to each person, if any, who controls
GS Inc. or any Selling Stockholder within the meaning of the Act.
10. (a) GS Inc. will indemnify and hold harmless each QIU, in
its capacity as QIU, against any losses, claims, damages or
liabilities, joint or several, to which such QIU may become subject, in
such capacity, 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,
the Registration Statement or the Prospectus, 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 QIU for any legal or other expenses reasonably
incurred by such QIU in connection with investigating or defending any
such action or claim as such expenses are incurred.
(b) Promptly after receipt by a QIU indemnified under
subsection (a) above of notice of the commencement of any action, such
QIU shall, if a claim in respect thereof is to be made against GS Inc.
under such subsection, notify GS Inc. in writing of the commencement
thereof; but the omission so to notify GS Inc. shall not relieve GS
Inc. from any liability which it may have to any QIU otherwise than
under such subsection. In case any such action shall be brought against
any QIU and it shall notify GS Inc. of the commencement thereof, GS
Inc. shall be entitled to participate therein, and, to the extent that
it shall wish to assume the defense thereof, with counsel satisfactory
to such QIU (who shall not, except with the consent of such QIU, be
counsel to GS Inc.), and, after notice from GS Inc. to such QIU of its
election so to assume the defense thereof, GS Inc. shall not be liable
to
-37-
38
such QIU under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such QIU,
in connection with the defense thereof other than reasonable costs of
investigation. GS Inc. shall not, without the written consent of the
QIU being indemnified, 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 10 (whether or not such
QIU is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of such QIU 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 such QIU.
(c) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless a QIU, in its capacity
as QIU, under subsection (a) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then GS Inc. shall contribute to the amount paid or payable by
such QIU 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 GS Inc. on the one hand and
the QIUs on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the QIUs failed to give the notice
required under subsection (b) above, then GS Inc. shall contribute to
such amount paid or payable by such QIU in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of GS Inc. on the one hand and the QIUs 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 GS Inc. on the one hand and the QIUs on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by GS Inc., as set forth in the table on
the cover page of the Prospectus, bear to the total fee payable to the
QIUs pursuant to Section 3 hereof. 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 GS
Inc. on the one hand or the QIUs on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. GS Inc. and each of the QIUs agree
that it would not be just and equitable if contributions pursuant to
this subsection (c) were determined by pro rata allocation (even if the
QIUs 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 (c). The amount
paid or payable by a QIU as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (c) shall be deemed to include any legal or other expenses
reasonably
-38-
39
incurred by such QIU in connection with investigating or defending any
such action or claim. 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.
(d) The obligations of GS Inc. under this Section 10 shall be
in addition to any liability which GS Inc. may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls a QIU within the meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another
party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then GS
Inc. and the Selling Stockholders shall be entitled to a further period
of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In
the event that, within the respective prescribed periods, you notify GS
Inc. and the Selling Stockholders that you have so arranged for the
purchase of such Shares, or GS Inc. and the Selling Stockholders notify
you that they have so arranged for the purchase of such Shares, you or
GS Inc. and the Selling Stockholders shall have the right to postpone
such 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 GS Inc. agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and GS Inc. and the Selling Stockholders as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh of the aggregate number of all
of the Shares to be purchased at such Time of Delivery, then GS Inc.
and the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
-39-
40
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and GS Inc. and the Selling Stockholders as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if GS Inc. and the
Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of GS Inc. to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or any QIU or GS Inc. or the Selling
Stockholders, except for the expenses to be borne by GS Inc. or Group,
as applicable, and the Selling Stockholders and the Underwriters as
provided in Section 3(e) and Section 7 hereof and the indemnity and
contribution agreements in Section 9 and Section 10 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
12. The respective indemnities, agreements, representations, warranties
and other statements of GS Inc., the Selling Stockholders, the several
Underwriters and the QIUs, as set forth in this Agreement or made by or on
behalf of them, respectively, 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 Underwriter, any QIU or any
controlling person of any Underwriter or QIU, or GS Inc., or any of the Selling
Stockholders, or any officer or director or controlling person of GS Inc., or
any controlling person of any Selling Stockholder, and shall survive delivery of
and payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity
agreements of GS Inc. in subsection (a) of Section 9 hereof, the representations
and warranties in subsections (a)(ii) and (a)(iii) of Section 1 hereof and any
representation or warranty as to the accuracy of the Registration Statement or
the Prospectus contained in any certificate furnished by GS Inc. pursuant to
Section 8 hereof, insofar as they may constitute a basis for indemnification for
liabilities (other than payment by GS Inc. of expenses incurred or paid in the
successful defense of any action, suit or proceeding) arising under the Act,
shall not extend to the extent of any interest therein of a controlling person
or partner of an Underwriter who is a director or officer who signed the
Registration Statement or controlling person of GS Inc. when the Registration
Statement has become effective or who, with his or her consent, is named in the
registration statement as about to become a Director of GS Inc., except in each
case to the extent that an interest of such character shall have been determined
by a court of appropriate jurisdiction as not against public policy as expressed
in the Act. Unless in the opinion of counsel for GS Inc. the matter has been
settled by controlling precedent, GS Inc. will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question of whether such interest
-40-
41
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
13. If this Agreement shall be terminated pursuant to Section 11
hereof, none of GS Inc., Group or the Selling Stockholders shall then be under
any liability to any Underwriter or QIU except as provided in the second
sentence of Section 3(e) hereof and Sections 7, 9 and 10 hereof; but, if for any
other reason any Shares are not delivered by or on behalf of GS Inc. and the
Selling Stockholders as provided herein, GS Inc. will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but GS Inc., Group and the Selling Stockholders shall then be under
no further liability to any Underwriter or QIU in respect of the Shares not so
delivered except as provided in the second sentence of Section 3(e) hereof and
Sections 7, 9 and 10 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and GS Inc. shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 9th Floor, New York, New York 10004, Attention: Registration
Department; if to the QIUs shall be delivered or sent by mail, telex, or
facsimile transmission to Donaldson, Lufkin & Jenrette Securities Corporation,
277 Park Avenue, 11th floor, New York, New York 10172, Attention: Elizabeth
DiChiaro, phone: 212 892-4350, facsimile: 212 892-3966, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, 250 Vesey Street, 25th floor, New York, New York
10281, Attention: Investment Banking, phone: 212 449-6739, facsimile: 212
449-1000, and Morgan Stanley & Co. Incorporated, 1585 Broadway, 33rd floor, New
York, New York 10036, Attention: William Wright, phone: 212 761-7911, facsimile
212 761-0358; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Stockholder at its address set
forth in Schedule II hereto; and if to GS Inc. or Group shall be delivered or
sent by mail, telex or facsimile transmission to the address of GS Inc. set
forth in the Registration Statement, Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 9 (d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to GS Inc. or
the Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the QIUs, GS Inc., Group and the Selling
Stockholders and, to the extent provided in Sections 9, 10 and 12 hereof, the
officers and directors of GS Inc. and each
-41-
42
person who controls GS Inc., any Selling Stockholder, any QIU or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
16. Time shall be of the essence of this 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.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us ten counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, each of the
QIUs, GS Inc. and each of the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters (U.S.
Version), the form of which shall be submitted to GS Inc. and the Selling
Stockholders for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
-42-
43
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
The Goldman Sachs Group, Inc.
By:..........................................
Name:
Title:
The Goldman Sachs Group, L.P.
By: The Goldman Sachs Corporation
By:..........................................
Name:
Title:
Sumitomo Bank Capital Markets, Inc.
By:..........................................
Name:
Title:
Kamehameha Activities Association
By:..........................................
Name:
Title:
The Trustees of the Estate of Bernice Pauahi
Bishop
Accepted as of the date hereof,
-43-
44
Goldman, Sachs & Co.
Names of Co-Representatives
By:.......................................................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
Donaldson, Lufkin & Jenrette Securities Corporation
By:.......................................................................
Name:
Title:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:.......................................................................
Name:
Title:
Morgan Stanley & Co. Incorporated
By:.......................................................................
Name:
Title:
-44-
45
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ---------
Goldman, Sachs & Co............................................
Bear, Stearns & Co. Inc........................................
Credit Suisse First Boston Corporation.........................
Donaldson, Lufkin & Jenrette Securities Corporation............
Lehman Brothers Inc............................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............
J.P. Morgan Securities Inc.....................................
Morgan Stanley & Co. Incorporated..............................
PaineWebber Incorporated.......................................
Prudential Securities Incorporated.............................
Salomon Smith Barney Inc.......................................
Sanford C. Bernstein & Co., Inc................................
Schroder & Co. Inc.............................................
---------- ---------
Total................................................. 48,000,000 7,200,000
========== =========
-45-
46
SCHEDULE II
Number of Optional
Shares to be
Total Number Sold if
of Firm Shares Maximum Option
to be Sold Exercised
---------- ---------
The Company ....................................... 33,600,000 7,200,000
The Selling Stockholders:
Sumitomo Bank Capital Markets, Inc. (a) .. 7,200,000
Kamehameha Activities Association and the
Estate of Bernice Pauahi Bishop (b) ...... 7,200,000
---------- ---------
Total .................................... 48,000,000 7,200,000
========== =========
(a) This Selling Stockholder, 277 Park Avenue, New York, New York
10172, is represented by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth
Avenue, New York, New York 10019, as to the matters of the Federal law of the
United States and the laws of the State of New York, and Robert A. Rabbino,
Esq., General Counsel, The Sumitomo Bank, Limited, 277 Park Avenue, New York,
New York, 10172, and has appointed [names of attorney-in-fact (not less than
two)], and each of them as the Attorney-in-Fact for such Selling Stockholder.
(b) This Selling Stockholder, 567 South King Street, Suite 150,
Honolulu, Hawaii 96813, is represented by Cravath, Swaine & Moore, Worldwide
Plaza, 825 Eighth Avenue, New York, New York 10019, as to matters of the
Federal law of the United States and the laws of the State of New York, and
Cades Schutte Fleming & Wright, 1000 Bishop Street, Honolulu, Hawaii 96813, as
to matters of the laws of the State of Hawaii, and has appointed [names of
attorney-in-fact (not less than two)], and each of them as the
Attorney-in-Fact for such Selling Stockholder.
-46-
47
ANNEX I
Pursuant to Section 8(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters and the QIUs to the effect that:
(i) They are independent certified public accountants with
respect to Group and its subsidiaries and GS Inc. within the meaning of
the Act and the applicable rules and regulations adopted by the
Commission;
(ii) In their opinion, the financial statements, the Selected
Consolidated Financial Data with respect to the consolidated results of
operations and financial position of Group for the five most recent
fiscal years, management's discussion and analysis of financial
condition and results of operations and any supplementary financial
information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included
in the Prospectus or the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of
the Act, Item 301 of Regulation S-K under the Act, Item 303 of
Regulation S-K under the Act and the related rules and regulations
adopted by the Commission; and, if applicable, they have made an
examination or a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, financial forecasts, management's
discussion and analysis of financial condition and results of
operations and/or condensed financial statements derived from audited
financial statements of Group for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives");
(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 earnings,
consolidated statements of financial condition, consolidated statements
of changes in partners' capital and consolidated statements of cash
flows included in the Prospectus as indicated in their reports thereon
copies of which have been furnished to the Representatives; and on the
basis of specified procedures including inquiries of officials of Group
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 related rules and regulations adopted by the Commission,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as
to
48
form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations adopted
by the Commission;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
Group for any interim period included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the
unaudited consolidated financial statements for such interim period(s);
(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 and
302, 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 Group and its subsidiaries, inspection
of the minute books of the Management Committee of Group and of the
Board of Directors of GS Inc. and of the general partner of Goldman,
Sachs & Co. since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of Group 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 consolidated statements of
earnings, consolidated statements of financial position,
consolidated statements of changes in partners' capital and
consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related rules and regulations adopted by the Commission, or
(ii) any material modifications should be made to the
unaudited condensed consolidated statements of earnings,
consolidated statements of financial position, consolidated
statements of changes in partners' capital and consolidated
statements of cash flows included in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited statement of earnings data
and statement of financial position 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
-2-
49
items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause
(A) and any unaudited statement of earnings data and statement
of financial position items included in the Prospectus and
referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in partners' capital or any increase in the consolidated
long-term debt of GS Inc. and its subsidiaries, or any
decreases in consolidated net current assets or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included 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
(E) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (D) there were any
decreases in consolidated total revenues or consolidated
revenues, net of interest expense, or pre-tax earnings or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included 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 examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of Group and its subsidiaries, which appear in the Prospectus, or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting
records of Group and its subsidiaries and have found them to be in
agreement.
-3-