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(Face of Security)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE GOLDMAN SACHS
GROUP, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(Face of Security continued on next page)
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CUSIP NO. 38141GAR5
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
------------------------
0.25% Exchangeable Index-Linked Note due 2005
(Linked to the Nasdaq-100 Index(R))
------------------------
The following terms apply to this Security. Capitalized terms that are not
defined the first time they are used in this Security shall have the meanings
indicated elsewhere in this Security.
FACE AMOUNT: $35,000,000
PRINCIPAL AMOUNT: on the Stated Maturity Date, the Company will pay the Holder
cash equal to 100% of the Outstanding Face Amount, unless (i) the Holder
exercises the Exchange Right, (ii) the Company exercises the Call Right or
(iii) an Automatic Exchange occurs, all as provided on the face of this
Security.
EXCHANGE RIGHT: the Holder may elect to exchange this Security, in whole or in
part at any time, for the Exchange Value of the Outstanding Face Amount
exchanged as provided in section 5 and elsewhere on the face of this Security.
EXCHANGE VALUE: a cash amount equal to the product of (i) the Exchange Rate and
(ii) the Closing Index Level on the relevant date specified in section 5 or 7,
as applicable.
EXCHANGE RATE: 0.2515 (subject to adjustment as provided in section 3 on the
face of this Security)
INDEX: the Nasdaq-100 Index(R), as determined and published by the Nasdaq Stock
Market, Inc., or any Successor Index, in each case as it may be modified,
replaced or adjusted from time to time as provided on the face of this
Security.
CALL RIGHT: the Company may redeem this Security as provided in section 6 on
the face of this Security.
AUTOMATIC EXCHANGE: an Automatic Exchange of this Security may occur on the
Stated Maturity Date or on any Call Date, as provided in section 7 on the face
of this Security.
CALCULATION AGENT: Goldman, Sachs & Co.
DEFEASANCE: neither full defeasance nor covenant defeasance applies to this
Security.
The Nasdaq-100(R), Nasdaq-100 Index(R) and Nasdaq(R) are trade or service
marks of The Nasdaq Stock Market, Inc. and are licensed for use by the Issuer.
This Security is not issued, endorsed, sold, promoted or passed on as to
legality or suitability by the licensor or its affiliates.
OTHER TERMS:
All terms used in this Security that are not defined in this Security but
are defined in the Indenture referred to on the reverse of this Security shall
have the meanings assigned to them in the Indenture. References in this Security
to numbered sections are to numbered sections on the face of this Security,
unless the context requires otherwise. Section headings on the face of this
Security are for convenience only and shall not affect the construction of this
Security.
"Authorized Denomination" means, with respect to this Security, a Face
Amount of $1,000 or a multiple of $1,000.
"Automatic Exchange" means an exchange of the Outstanding Face Amount of
this Security for cash, as provided in section 7.
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"Business Day" means any day that is not a Saturday, a Sunday or a day on
which the Nasdaq National Market System is not open for trading or on which
banking institutions in The City of New York generally are authorized or
obligated by law, regulation or executive order to close, or on which the Index
is not calculated and published by the Index Sponsor because the Index Sponsor
is not open for business.
"Call Date" means the day specified by the Company in a Call Notice for
redemption of the Outstanding Face Amount of this Security, unless the Call Date
is postponed to a later date as provided in section 7(c), in which case the Call
Date shall be such later date; provided, however, that a Call Date shall in all
cases be after November 1, 2002. As applied to this Security, the term
"Redemption Date" as used in the Indenture shall mean the Call Date, if any.
"Call Notice" means a notice of redemption given by the Company to the
Holder of this Security as provided in section 6.
"Call Notice Date" means any Business Day on which the Company gives a Call
Notice.
"Closing Index Level" on any date means the closing level of the Index on
such date, subject to adjustment as provided in section 3 on the face of this
Security.
"Default Amount" means, on any day, an amount, in U.S. dollars, equal to
the cost of having a Qualified Financial Institution expressly assume, as of
such day, the due and punctual payment of the principal of and any interest on
this Security, and the performance or observance of every covenant hereof and of
the Indenture on the part of the Company to be performed or observed with
respect to this Security (or to undertake other obligations providing
substantially equivalent economic value to the Holder of this Security as the
Company's obligations hereunder). Such cost will equal (i) the lowest amount
that a Qualified Financial Institution (selected as provided below) would charge
to effect such assumption (or undertaking) plus (ii) the reasonable expenses
(including reasonable attorneys' fees) incurred by the Holder of this Security
in preparing any documentation necessary for such assumption (or undertaking).
During the Default Quotation Period, each of the Holder of this Security and the
Company may request a Qualified Financial Institution to provide a quotation of
the amount it would charge to effect such assumption (or undertaking) and notify
the other in writing of such quotation. The amount referred to in clause (i) of
this paragraph will equal the lowest (or, if there is only one, the only)
quotation so obtained, and as to which notice is so given, during the Default
Quotation Period; provided, however, that, with respect to any quotation, the
party not obtaining such quotation may object, on reasonable and significant
grounds, to the effectuation of such assumption (or undertaking) by the
Qualified Financial Institution providing such quotation and notify the other
party in writing of such grounds within two Business Days after the last day of
the Default Quotation Period, in which case such quotation will be disregarded
in determining the Default Amount. The "Default Quotation Period" will be the
period beginning on the day the Default Amount first becomes due and payable and
ending on the third Business Day after such due day, unless no such quotation is
so obtained, or unless every such quotation so obtained is objected to within
five Business Days after such due day as provided above, in which case the
Default Quotation Period will continue until the third Business Day after the
first Business Day on which prompt notice is given of such a quotation as
provided above, unless such quotation is objected to as provided above within
five Business Days after such first Business Day, in which case the Default
Quotation Period will continue as provided in this sentence. Notwithstanding the
foregoing, if the Default Quotation Period (and the subsequent two Business Day
objection period) has not ended prior to the Determination Date, then the
Default Amount will equal the Principal Amount.
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"Determination Date" means the fifth Business Day prior to November 1,
2005; provided, however, that if a Market Disruption Event occurs or is
continuing on that fifth prior Business Day, the Determination Date will be the
next succeeding Business Day on which a Market Disruption Event does not occur
and is not continuing; provided, further, that in no event will the
Determination Date be later than November 1, 2005 or, if November 1, 2005 is not
a Business Day, later than the first Business Day after November 1, 2005.
"Exchange Date" means, with respect to any exchange of this Security
pursuant to section 5, the fifth Business Day after the Exchange Notice Date for
such exchange. Notwithstanding the foregoing, the Exchange Date may be postponed
as provided in section 5, in which case the Exchange Date shall be the date to
which it is so postponed.
"Exchange Notice Date" means, with respect to any exchange of this Security
pursuant to section 5, the first Business Day on which all Exercise Requirements
have been satisfied with respect to such exchange by 11:00 A.M., New York City
time, on such day, provided that such first Business Day must occur no later
than the earlier of (i) the Business Day prior to the Determination Date and
(ii) any Call Notice Date. If the Exercise Requirements have been satisfied with
respect to an exchange on a Business Day but after 11:00 A.M., New York City
time, the next Business Day will be the Exchange Notice Date for such exchange,
subject to the proviso in the prior sentence. Notwithstanding the foregoing, the
Exchange Notice Date may be postponed as provided in section 5, in which case
the Exchange Notice Date shall be the date to which it is so postponed.
"Exercise Requirements" means, with respect to any exchange of this
Security pursuant to section 5, all the following requirements that apply to
such exchange:
(i) Both the Trustee and the Calculation Agent must receive a properly
completed and signed Notice of Exchange specifying the Outstanding Face
Amount of this Security to be exchanged. In each case, such notice must be
delivered by facsimile to the applicable number and location specified in
the Notice of Exchange (or to such other number and location, or in such
other manner, as the Trustee or Calculation Agent, as applicable, may
specify to the Holder).
(ii) If this Security is not a Global Security, the Trustee must
receive the certificate representing this Security. In each case, such
delivery must be made by mail, by hand or by reputable commercial courier,
to the office of the Trustee, and to the attention of its representative,
specified in the Notice of Exchange (or to such other location, or in such
other manner, as the Trustee may specify to the Holder).
(iii) If this Security is not a Global Security and the Exchange Date
occurs after a Regular Record Date and before the related Interest Payment
Date, the Trustee must receive cash in an amount equal to the interest
payable on the portion of this Security to be exchanged, as provided in
clause (iv) of section 5. In each case, such delivery must be made by
check, as provided in clause (ii) above, or by wire transfer to an account
specified by the Trustee (or in such other manner as the Trustee may
specify).
(iv) If this Security is a Global Security, the beneficial interest in
the portion of the Security to be exchanged must be transferred on the
books of the Depositary to the account of the Trustee at the Depositary and
the Trustee must receive and accept the transfer, all in accordance with
the applicable procedures of the Depositary. If the Trustee receives and
accepts the transfer by 3:00 P.M., New York City time, on any Business Day,
the requirement in this clause (iv) will be deemed satisfied as of 11:00
A.M. on the same Business Day.
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The Calculation Agent will, in its sole discretion, resolve any questions that
may arise as to the validity of a Notice of Exchange or as to whether and when
the Exercise Requirements have been satisfied in respect of any exchange.
"Index Sponsor" means, at any time, the Person or entity, including any
successor sponsor, that determines and publishes the Index as then in effect.
"Index Stocks" means, at any time, the stocks that comprise the Index as
then in effect, after giving effect to any additions, deletions or
substitutions.
"Market Disruption Event" means, with respect to the Index, (i) a
suspension, absence or material limitation of trading in Index Stocks
constituting 20% or more, by weight, of the Index on their primary market for
more than two hours of trading or during the one-half hour period preceding the
close of trading in such market, (ii) a suspension, absence or material
limitation of trading in option or futures contracts related to the Index or to
Index Stocks constituting 20% or more, by weight, of the Index, if available, in
the primary market for such contracts for more than two hours of trading or
during the one-half hour period preceding the close of trading in such market or
(iii) Index Stocks constituting 20% or more, by weight, of the Index, or option
or future contracts related to the Index or to Index Stocks constituting 20% or
more, by weight, of the Index, if available, do not trade on what was the
primary market for those Index Stocks or contracts in each case (i), (ii) and
(iii) as determined by the Calculation Agent; provided, however, that no such
event described in clause (i), (ii) or (iii) will be a Market Disruption Event
unless the Calculation Agent also determines that such event materially
interferes with the ability of the Company or any of its Affiliates to unwind
all or a material portion of any hedge that any of them effects with respect to
this Security. For purposes of determining whether a Market Disruption Event has
occurred, (a) a limitation on the hours or numbers of days of trading in the
relevant market will not constitute a Market Disruption Event if it results from
an announced change in the regular business hours of such market, (b) a decision
to permanently discontinue trading in the relevant option or futures contracts
will not constitute a Market Disruption Event, (c) a suspension or limitation of
trading an Index Stock or in option or futures contracts related to the Index or
an Index Stock, if available, in the primary market for such stock or such
contracts, by reason of (1) a price change exceeding limits set by such market,
(2) an imbalance of orders relating to such stock or such contracts or (3) a
disparity in bid and ask quotes relating to such stock or such contracts, will,
in each case (1), (2) and (3), constitute a suspension or material limitation of
trading in stock or such option contracts related to the Index or an Index Stock
and (d) an "absence of trading" in the primary market on which an Index Stock,
or on which option or futures contracts related to the Index or to an Index
Stock are traded will not include any time when such market is itself closed for
trading under ordinary circumstances.
"Notice of Exchange" means a properly completed and signed notice
substantially in the form attached to the Company's prospectus supplement dated
October 25, 2000 relating to this Security (or such other form as is acceptable
to the Trustee and the Calculation Agent). Once given, a Notice of Exchange may
not be revoked.
"Original Issue Date" means November 1, 2000.
"Qualified Financial Institution" means, at any time, a financial
institution organized under the laws of any jurisdiction in the United States of
America, Europe or Japan that at such time has outstanding debt obligations with
a stated maturity of one year or less from the date of issue and rated A-1 or
higher by Standard & Poor's Ratings Group (or any successor) or P-1 or higher by
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Moody's Investors Service, Inc. (or any successor) or, in either case, such
other comparable rating, if any, then used by such rating agency.
"Redemption Price" means the amount payable in respect of this Security on
a Call Date pursuant to section 6. The Redemption Price payable on any Call Date
does not include any accrued interest payable in respect of this Security.
"Stated Maturity Date" means November 1, 2005 or, if such day is not a
Business Day, the next succeeding Business Day; provided, however, that if the
fifth Business Day preceding November 1, 2005 is not the Determination Date, the
Stated Maturity Date will be the fifth Business Day succeeding the Determination
Date; provided, further, that in no event will the Stated Maturity Date be later
than the fifth Business Day after November 1, 2005 or, if November 1, 2005 is
not a Business Day, later than the sixth Business Day after November 1, 2005.
"Successor Index" means any substitute index approved by the Calculation
Agent as a Successor Index pursuant to section 3.
"Trade Date" means October 25, 2000.
------------------------
1. Promise to Pay Principal and Interest.
The Goldman Sachs Group, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., as nominee for The
Depository Trust Company, or registered assigns, as principal, 100% of the
Outstanding Face Amount on the Stated Maturity Date, subject to the other
provisions of this Security, and to pay interest on the Outstanding Face Amount,
from the Original Issue Date or from the most recent date to which interest has
been paid or duly provided for, on May 1 and November 1 (each an "Interest
Payment Date") in each year, commencing on May 1, 2001, and at the Maturity of
the principal at the rate of 0.25% per annum, until the principal of this
Security is paid or made available for payment. Any such instalment of interest
that is overdue at any time shall also bear interest, at the effective Federal
Funds rate (to the extent that payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Notwithstanding the foregoing, (i) if the Stated Maturity
Date does not occur on November 1, 2005, then the Interest Payment Date that
would otherwise occur on November 1, 2005 shall instead occur on the Stated
Maturity Date, (ii) interest on any overdue amount shall be payable on demand
and (iii) the accrual and payment of interest on any portion of the Face Amount
exchanged by the Holder pursuant to section 5 or subject to an Automatic
Exchange pursuant to section 7 shall be subject to the applicable provisions of
those sections.
2. Payment of Interest.
The interest so payable, and punctually paid or made available for payment,
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such Interest
Payment Date. If this Security is a Global Security, the Regular Record Date for
an Interest Payment Date shall be the first Business Day before such Interest
Payment Date. If this Security is not a Global Security, the Regular Record date
for an Interest Payment Date shall be the fifteenth calendar day (whether or not
a Business Day) next preceding such Interest Payment Date. Any interest so
payable, but not punctually paid or made
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available for payment, on any Interest Payment Date will forthwith cease to be
payable to the Holder on such Regular Record Date and such Defaulted Interest
may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of this Security not less
than 10 days prior to such Special Record Date, or be paid in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
3. Discontinuance or Modification of the Index.
If the Index Sponsor discontinues publication of the Index and the Index
Sponsor or any other Person or entity publishes a substitute index that the
Calculation Agent determines is comparable to the Index and approves as a
Successor Index, then the Calculation Agent will determine the amount payable on
the Call Date, any Exchange Date and the Stated Maturity Date by reference to
the Successor Index.
If the Calculation Agent determines that the publication of the Index is
discontinued and there is no Successor Index, or that the level of the Index is
not available on the Call Notice Date, any Exchange Notice Date and the
Determination Date because of a Market Disruption Event or for any other reason,
the Calculation Agent will determine the amount payable on the Call Date, any
Exchange Date and the Stated Maturity Date by reference to a group of stocks and
a computation methodology that the Calculation Agent determines will as closely
as reasonably possible replicate the Index.
If the Calculation Agent determines that the Index, the stocks comprising
the Index or the method of calculating the Index is changed at any time in any
respect -- including any addition, deletion or substitution and any reweighting
or rebalancing of Index Stocks and whether the change is made by the Index
Sponsor under its existing policies or following a modification of those
policies, is due to the publication of a Successor Index, is due to events
affecting one or more of the Index Stocks or their issuers or is due to any
other reason -- then the Calculation Agent will make such adjustments in the
Index or the method of its calculation as it believes are appropriate to ensure
that any Closing Index Level used to determine the amount payable on the Call
Date, any Exchange Date or the Stated Maturity Date is equitable.
All determinations and adjustments to be made by the Calculation Agent with
respect to the Index may be made by the Calculation Agent in its sole
discretion.
4. Principal Amount.
The principal of this Security that becomes due and payable on the Stated
Maturity Date shall be 100% of the Outstanding Face Amount unless an Automatic
Exchange is to occur on such date, in which case such principal shall be the
cash that the Company is obligated to pay. The principal of this Security that
becomes due and payable on a Call Date shall be the Redemption Price unless an
Automatic Exchange is to occur on such date, in which case such principal shall
be the cash that the Company is obligated to pay in such Automatic Exchange. The
principal of this Security that becomes due and payable on any Exchange Date
shall be the cash that the Company is obligated to deliver (or cause to be
delivered) in exchange for this Security (or any portion hereof being exchanged)
on such date. The principal of this Security that becomes due and payable upon
acceleration of the Maturity hereof after an Event of Default has occurred
pursuant to the Indenture shall be the Default Amount. When the cash that the
Company is obligated to pay as set forth above in this section 4 has been paid
as provided herein (or such payment has been made available), the principal of
this Security (or the portion
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hereof being exchanged, as the case may be) shall be deemed to have been paid in
full, whether or not this Security shall have been surrendered for payment or
cancellation. References to the payment of the principal of this Security on any
day shall be deemed to mean the payment of the cash that the Company is
obligated to pay on such day as provided in this Security. Notwithstanding the
foregoing, solely for the purpose of determining whether any consent, waiver,
notice or other action to be given or taken by Holders of Securities pursuant to
the Indenture has been given or taken by Holders of Outstanding Securities in
the requisite aggregate principal amount, the principal amount of this Security
will be deemed to equal the Outstanding Face Amount. This Security shall cease
to be Outstanding as provided in the definition of such term in the Indenture or
when the principal of this Security shall be deemed to have been paid in full as
provided above and all interest payable on this Security has been paid (or such
payment of interest has been made available).
5. Holder's Exchange Right.
The Holder may elect to exchange the Outstanding Face Amount of this
Security, in whole or in part at any time and from time to time, for cash in an
amount equal to the Exchange Value of the Outstanding Face Amount so exchanged,
based on the Closing Index Level on the Exchange Notice Date, provided that the
Exercise Requirements with respect to such exchange have been satisfied no later
than 11:00 A.M., New York City time, on the earlier of (i) the Business Day
before the Determination Date and (ii) any Call Notice Date. The Company shall
make (or cause its agent to make) the payment due in any such exchange on the
applicable Exchange Date and in the manner provided in section 9 below. No
election to exchange this Security pursuant to this section 5 shall be effective
unless the Exercise Requirements are satisfied with respect to such exchange at
or prior to the date and time specified above. The right of the Holder to
exchange the Security pursuant to this section 5 is herein called the "Exchange
Right".
If a Market Disruption Event occurs or is continuing on a day that would
otherwise be an Exchange Notice Date, then such Exchange Notice Date will be
postponed to the first succeeding Business Day on which a Market Disruption
Event does not occur and is not continuing. In no event, however, will any
Exchange Notice Date be postponed by more than five Business Days. If an
Exchange Notice Date is postponed, the related Exchange Date will also be
postponed, to the fifth Business Day after the day to which such Exchange Notice
Date is postponed. If an Exchange Notice Date is postponed to the last possible
day, and a Market Disruption Event occurs or is continuing on that day, that day
will nevertheless be such Exchange Notice Date.
If the Closing Index Level that must be used to determine the Exchange
Value is not available on the related Exchange Notice Date, either because of a
Market Disruption Event or for any other reason, the Calculation Agent will
nevertheless determine that Closing Index Level based on its assessment, made in
its sole discretion as provided in section 3 on the face of this Security.
Partial exchanges of this Security will be permitted only if the portion of
the Face Amount exchanged is a multiple of $1,000 and only if the unexchanged
portion is an Authorized Denomination. References herein to any portion of this
Security being exchanged shall mean the entire amount of this Security if the
entire amount is being exchanged.
If the Holder exercises the Exchange Right, the applicable provisions of
this paragraph will apply to the exchanged portion of this Security.
(i) If the applicable Exchange Date occurs on an Interest Payment
Date, interest will accrue on the exchanged portion to, but excluding, such
Interest Payment Date. The interest that accrues on such exchanged portion
to such Interest Payment Date, excluding any part
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of such interest that becomes payable prior to such Interest Payment Date,
shall be payable on such Interest Payment Date as provided in section 2
above.
(ii) If the applicable Exchange Date occurs after an Interest Payment
Date but on or before the next Regular Record Date, interest will accrue on
the exchanged portion only to, and excluding, such prior Interest Payment
Date and no interest will accrue or be payable for the later period that
precedes such Exchange Date.
(iii) If the applicable Exchange Date occurs on or before the first
Regular Record Date, interest will not accrue or be payable on such
exchanged portion.
(iv) If this Security is not a Global Security and the applicable
Exchange Date occurs after a Regular Record Date but before the related
Interest Payment Date, interest will accrue on the exchanged portion of
this Security to, but excluding, such Interest Payment Date. The interest
that accrues on such exchanged portion to such Interest Payment Date,
excluding any part of such interest that becomes payable prior to such
Interest Payment Date, will be payable on such Interest Payment Date as
provided in section 2 above; provided, however, that the Holder exercising
the Exchange Right with respect to such portion will be required to pay to
the Trustee (for the benefit of the Company), no later than 11:00 A.M., New
York City time, on the Exchange Notice Date, cash in an amount equal to the
interest that becomes payable on the exchanged portion of this Security on
such Interest Payment Date.
Notwithstanding the foregoing, if the Company defaults on its obligation to make
(or cause to be made) the payment due in respect of any portion of this Security
on an Exchange Date pursuant to this section 5, interest shall accrue on such
portion from the Exchange Date to the day such payment is made or made available
and shall be payable on demand of the Holder.
6. Company's Call Right.
This Security is subject to redemption upon not less than 5 Business Days'
nor more than 15 Business Days' prior notice, at any time after November 1,
2002, in whole but not in part, at the election of the Company for cash at a
Redemption Price equal to 100% of the Outstanding Face Amount on the Call Date,
plus accrued interest to the Call Date. Interest instalments whose Stated
Maturity is on or prior to a Call Date will be payable as provided in section 2.
The Company shall not give a Call Notice that results in a Call Date later
than the Stated Maturity Date. A Call Notice, once given, shall be irrevocable.
If the Company gives a Call Notice, this Security will be subject to the
provisions of section 7(b). If an Automatic Exchange is to occur pursuant to
section 7(b), then, notwithstanding the foregoing, this Security shall not be
subject to redemption pursuant to this section 6. If an Automatic Exchange is
not to occur pursuant to section 7(b), then this Security shall be redeemed on
the Call Date as provided in this section 6 and in the Indenture (as modified by
this section 6).
7. Automatic Exchange.
(a) On the Stated Maturity Date. If the Holder does not exercise the
Exchange Right for the entire Outstanding Face Amount of this Security by 11:00
A.M., New York City time, on the Business Day before the Determination Date and
the Company does not give a Call Notice, the provisions of this section 7(a)
will apply. On the Determination Date, the Calculation Agent (i) will determine
the Closing Index Level on such date subject to section 7(c) below, (ii) will
multiply on such date such Closing Index Level by both the Exchange Rate and the
Outstanding Face Amount on such date, and (iii) will divide the resulting
product of (i) and (ii) by $1,000. The resulting amount
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determined pursuant to the prior sentence and section 7(c), as applicable, is
herein called the "Section 7(a) Amount".
If the Section 7(a) Amount exceeds the sum of (i) the Outstanding Face
Amount on the Determination Date plus (ii) the amount of the regular interest
instalment that would become due on such Outstanding Face Amount on the Stated
Maturity Date if such Outstanding Face Amount were not exchanged or redeemed,
then, without any action being taken by the Holder, this Security will
automatically be exchanged as follows. On the Stated Maturity Date, the Company
will pay to the Holder the Section 7(a) Amount. In determining the amounts
specified in this paragraph and the prior paragraph, the Outstanding Face Amount
on the Determination Date shall be deemed to exclude any portion thereof to be
exchanged pursuant to section 5 on an Exchange Date that occurs on or after the
Determination Date. In addition, if the Outstanding Face Amount on the Stated
Maturity Date is lower than the Face Amount deemed to be Outstanding on the
Determination Date, then the amount of cash to be paid on the Stated Maturity
Date pursuant to this section 7(a) will be proportionately reduced.
If the Section 7(a) Amount does not exceed the sum specified in the prior
paragraph, then this Security shall not be subject to an Automatic Exchange
pursuant to this section 7(a) and the Company will pay the Holder the
Outstanding Face Amount on the Stated Maturity Date as provided in section 1.
If any portion of this Security is subject to an Automatic Exchange
pursuant to this section 7(a), no interest will accrue or be payable on such
portion in respect of the period from the Interest Payment Date prior to the
Stated Maturity Date to the Stated Maturity Date. If the Company defaults on its
obligation to make the delivery or payment due in respect of any portion of the
Security in such an Automatic Exchange, interest shall accrue on such portion
from the Stated Maturity Date to the day such delivery or payment is made or
made available and shall be payable on demand of the Holder.
(b) On a Call Date. If the Company gives a Call Notice, the provisions of
this section 7(b) will apply. On the Section 7(b) Calculation Day (as defined in
section 7(c)), the Calculation Agent (i) will determine the Closing Index Level
on such date,(ii) will multiply such Closing Index Level by both the Exchange
Rate and the Outstanding Face Amount on such date, and (iii) will divide the
resulting product of (i) and (ii) by $1,000, subject to section 7(c) below. The
resulting amount determined pursuant to the prior sentence and section 7(c), as
applicable, is herein called the "Section 7(b) Amount".
If the Section 7(b) Amount exceeds the sum of (i) the Redemption Price that
would be payable on the Call Date in respect of the Outstanding Face Amount on
the Section 7(b) Calculation Day plus (ii) the amount of interest that will have
accrued on such Outstanding Face Amount from and after the last Interest Payment
Date before the Call Date to the Call Date, then, without any action being taken
by the Holder, this Security will automatically be exchanged as follows. On the
Call Date, the Company will pay to the Holder the Section 7 (b) Amount. In
determining the amounts specified in this paragraph and the prior paragraph, the
Outstanding Face Amount on the Section 7(b) Calculation Day will be deemed to
exclude any portion thereof to be exchanged pursuant to section 5 on an Exchange
Date that occurs on or after the Section 7(b) Calculation Day. In addition, if
the Outstanding Face Amount on the Call Date is lower than the Face Amount
deemed to be Outstanding on the Section 7(b) Calculation Day, then the amount of
cash to be paid on the Call Date pursuant to this section 7(b) will be
proportionately reduced.
If the Section 7(b) Amount does not exceed the sum specified in the prior
paragraph, then this Security shall not be subject to an Automatic Exchange
pursuant to this section 7(b) and the Company will redeem the Outstanding Face
Amount on the Call Date as provided in section 6.
(Face of Security continued on next page)
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If any portion of this Security is subject to an Automatic Exchange
pursuant to this section 7(b), no interest will accrue or be payable on such
portion in respect of the period from the Interest Payment Date prior to the
Call Date to the Call Date. If the Company defaults on its obligation to make
the payment due in respect of any portion of this Security in such an Automatic
Exchange, interest shall accrue on such portion from the Call Date to the day
such payment is made or made available and shall be payable on demand of the
Holder.
(c) Deferred Pricing. In determining the Section 7(a) Amount or the
Section 7(b) Amount, the Calculation Agent shall follow the applicable
provisions of clauses (i) and (ii) below. If the Calculation Agent is required
pursuant to this section 7 to determine the Closing Index Level on a particular
day in order to determine the Section 7(a) Amount or the Section 7(b) Amount,
then, for the purposes of this section 7(c), such day is called a "Pricing
Date".
(i) If a Market Disruption Event occurs or is continuing on a day that
would otherwise be a Pricing Date, then the Calculation Agent will use,
instead of the Closing Index Level on such day, the Closing Index Level on
the first Business Day after such day on which no Market Disruption Event
occurs or is continuing. Such first Business Day, however, shall not be
later than the Determination Date, in the case of an Automatic Exchange on
the Stated Maturity Date, or later than the fifth Business Day after the
Call Notice Date, in the case of an Automatic Exchange on the Call Date.
Such first Business Day is herein called a "Deferred Pricing Date" and such
latest Business Day on which a Deferred Pricing Date may occur is herein
called the "Latest Possible Pricing Date". (The Pricing Date may occur on a
Deferred Pricing Date and a Deferred Pricing Date may occur on the Latest
Possible Pricing Date.)
(ii) If a Market Disruption Event occurs or is continuing on a day
that would otherwise be a Pricing Date and on each subsequent Business Day
through and including the Latest Possible Pricing Date, the Calculation
Agent will nevertheless determine the Closing Index Level of the Index (and
the Deferred Pricing Date will occur) on the Latest Possible Pricing Date.
If the Calculation Agent determines that the Closing Index Level is not
available on the Latest Possible Pricing Date, either because of a Market
Disruption Event or for any other reason, the Calculation Agent will
determine the Closing Index Level based on its assessment, made in its sole
discretion as provided in section 3 on the face of this Security, on the
Latest Possible Pricing Date and will use this Closing Index Level, as so
determined, in determining the Section 7(a) Amount or the Section 7(b)
Amount, as the case may be.
If a Call Notice is given and the Calculation Agent uses the Closing Index Level
(however determined as aforesaid) on a Deferred Pricing Date as provided in
clause (i) or (ii) above, the Call Date shall be the later of (x) the fifth
Business Day after such Deferred Pricing Date and (y) the original Call Date
specified in the Call Notice. If the date described in clause (x) is later than
the date in clause (y), the Call Date shall automatically be postponed to such
later date, without notice to the Holder or any other Person and whether this
Security is redeemed or an Automatic Exchange occurs on the Call Date. If a Call
Notice is given, the Pricing Date will be the "Section 7(b) Calculation Day".
8. Role of Calculation Agent.
The Calculation Agent will be solely responsible for all determinations and
calculations regarding the Closing Index Level; Default Amount; whether a Market
Disruption Event has occurred and whether, and if so the day to which, the
Determination Date, Stated Maturity Date or any Exchange Notice Date, Exchange
Date or Call Date is to be postponed; whether an Automatic Exchange is to occur
on the Stated Maturity Date or any Call Date and as to the Section 7(a) Amount
or Section 7(b) Amount, including the relevant Pricing Date and the closing
level of the Index on the Pricing Date and any alternative level to be used in
making this determination; as to the Exchange Rate and the amounts cash
(Face of Security continued on next page)
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payable in exchange for this Security on the Stated Maturity Date or any
Exchange Date or Call Date; and all such other matters as may be specified
elsewhere herein as matters to be determined by the Calculation Agent. The
Calculation Agent shall make all such determinations and calculations in its
sole discretion, and absent manifest error all determinations and calculations
made by the Calculation Agent shall be final and binding on the Company, the
Holder and all other Persons having an interest in this Security, without
liability on the part of the Calculation Agent.
The Company shall take such action as shall be necessary to ensure that
there is at all relevant times a financial institution serving as the
Calculation Agent hereunder. The Company may, in its sole discretion at any time
and from time to time, upon written notice to the Trustee, but without notice to
the Holder of this Security, terminate the appointment of any Person serving as
the Calculation Agent and appoint another Person (including any Affiliate of the
Company) to serve as such agent. Insofar as this Security provides for the
Calculation Agent to obtain the closing level of the Index or other information
from any institution or other source, the Calculation Agent may do so from any
source or sources of the kind contemplated or otherwise permitted hereby
notwithstanding that any one or more of such sources are such agent, Affiliates
of such agent or Affiliates of the Company.
9. Payment.
Payment of any amount payable on this Security in cash will be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Payment of cash on this
Security will be made to an account designated by the Holder (in writing to the
Company and the Trustee on or before the Determination Date) and acceptable to
the Company or, if no such account is designated and acceptable as aforesaid, at
the office or agency of the Company maintained for that purpose in The City of
New York; provided, however, that, at the option of the Company, payment of any
interest may be made by check mailed to the address of the Holder as such
address shall appear in the Security Register; and provided, further, that
payment at Maturity shall be made only upon surrender of this Security at such
office or agency (unless the Company waives surrender). Notwithstanding the
foregoing, if this Security is a Global Security, any payment may be made
pursuant to the Applicable Procedures of the Depositary as permitted in said
Indenture.
10. Holidays.
Notwithstanding any provision of this Security or of the Indenture, if any
payment of principal or interest would otherwise be due on this Security on a
day (the "Specified Day") that is not a Business Day, such payment may be made
(or such principal or interest may be made available for payment) on the next
succeeding Business Day with the same force and effect as if such payment were
made on the Specified Day. The provisions of this section shall apply to this
Security in lieu of the provisions of Section 113 of the Indenture.
11. Reverse of this Security.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
12. Certificate of Authentication.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
(Face of Security continued on next page)
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: November 1, 2000
THE GOLDMAN SACHS GROUP, INC.
By
------------------------------------
Name:
Title:
Dated: November 1, 2000
This is one of the Securities of the series designated herein and referred
to in the Indenture.
THE BANK OF NEW YORK,
as Trustee
By
------------------------------------
Authorized Signatory
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(Reverse of Security)
Reverse
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of May 19, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. Insofar as
the provisions of the Indenture may conflict with the provisions set forth on
the face of this Security, the latter shall control for purposes of this
Security.
This Security is one of the series designated on the face hereof, limited
to an aggregate initial offering price not to exceed $25,000,000,000 (or the
equivalent thereof in any other currency or currencies or currency units), which
amount may be increased at the option of the Company if in the future it
determines that it may wish to sell additional Securities of this series.
References herein to "this series" mean the series designated on the face
hereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected (considered together as one
class for this purpose). The Indenture also contains provisions (i) permitting
the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected under the Indenture (considered
together as one class for this purpose), on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and (ii) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of any series to be
affected under the Indenture (with each such series considered separately for
this purpose), on behalf of the Holders of all Securities of such series, to
waive certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture and, with respect to this Security, on the face hereof.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably satisfactory to
it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not
(Reverse of Security continued on next page)
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apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any interest on this
Security as herein provided.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and interest on this
Security are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing.
Thereupon one or more new Securities of this series and of like tenor, of
Authorized Denominations and for the same aggregate Face Amount, will be issued
to the designated transferee or transferees.
This Security, and any other Securities of this series and of like tenor,
are issuable only in registered form without coupons in Authorized
Denominations. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different Authorized Denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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