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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 TO 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.
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CUSIP NO. 38141GAU8
THE GOLDMAN SACHS GROUP, INC.
MEDIUM-TERM NOTES, SERIES B
0.25% Exchangeable Index-Linked Note due November 7, 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: $20,000,000
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 on the Exchange Notice Date times the
Face Amount exchanged and divided by $1,000 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 on the
face of this Security.
EXCHANGE RATE: 0.25262
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
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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. (which with its affiliates are
the Corporations) and are licensed for use by the Issuer. This Security has not
been passed on by the Corporations as to its legality or suitability. This
Security is not issued, endorsed, sold or promoted by the Corporations. THE
CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THIS
SECURITY.
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.
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which The Nasdaq Stock Market 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 7,
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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
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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.
"Determination Date" means the fifth Business Day prior to
November 7, 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 7, 2005 or, if November 7, 2005 is not
a Business Day, later than the first Business Day after November 7, 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
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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).
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(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.
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
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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 31, 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 7, 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 Moody's Investors Service, Inc. (or any successor) or, in
either case, such other comparable rating, if any, then used by such rating
agency.
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"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.
"Reference Index Level" means 3,148.00 (as determined on the
trade date).
"Stated Maturity Date" means November 7, 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 7, 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 7, 2005 or, if November
7, 2005 is not a Business Day, later than the sixth Business Day after November
7, 2005.
"Successor Index" means any substitute index approved by the
Calculation Agent as a Successor Index pursuant to section 3.
"Trade Date" means October 31, 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 7 and November
7 (each an "Interest Payment Date") in each year, commencing on May 7, 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
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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 7, 2005, then the Interest
Payment Date that would otherwise occur on November 7, 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 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.
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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 the 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.
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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 in such Automatic Exchange. 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 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
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the Exchange Value on the Exchange Notice Date times the Face Amount so
exchanged and divided by $1,000, 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 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.
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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 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
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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 7, 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 (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 by $1,000,
subject to section 7(c) below. The resulting amount determined pursuant to the
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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 Call Notice Date (or if the
Call Notice Date is not the Pricing Date, on the Section 7(b) Calculation Day as
defined
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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 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.
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.
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<PAGE> 18
(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 level of the Index 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 (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
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<PAGE> 19
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
of cash 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
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<PAGE> 20
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
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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.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: November 7, 2000
THE GOLDMAN SACHS GROUP, INC.
By____________________________
Name:
Title:
Dated: November 7, 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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<PAGE> 23
(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
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<PAGE> 24
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 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.
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<PAGE> 25
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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