-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BF5s5h+WjJC+nToP62NnWxHyfgPN2cXaB3+c2OT89N66iy4jYUeSJ9Va9H5/oJTI YumLeacrO2ESJIjdYxxDGA== 0000950123-99-006183.txt : 19990702 0000950123-99-006183.hdr.sgml : 19990702 ACCESSION NUMBER: 0000950123-99-006183 CONFORMED SUBMISSION TYPE: POS EX PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19990701 EFFECTIVENESS DATE: 19990701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP INC CENTRAL INDEX KEY: 0000886982 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133501777 FISCAL YEAR END: 1126 FILING VALUES: FORM TYPE: POS EX SEC ACT: SEC FILE NUMBER: 333-75321 FILM NUMBER: 99657518 BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 POS EX 1 POST-EFFECTIVE AMENDMENT #1 TO FORM S-1 1 REGISTRATION NO. 333-75321 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 THE GOLDMAN SACHS GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 6211 13-4019460 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
85 BROAD STREET NEW YORK, NEW YORK 10004 (212) 902-1000 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) ROBERT J. KATZ GREGORY K. PALM GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 (212) 902-1000 (Name, address, including zip code, and telephone number, including area code, of agent for service) COPIES TO: RICARDO A. MESTRES, JR. JOHN P. MEAD DAVID P. HARMS ROBERT W. REEDER III SULLIVAN & CROMWELL 125 BROAD STREET NEW YORK, NEW YORK 10004 (212) 558-4000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [X] Registration No. 333-75321. If the delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box. [ ] 2 EXPLANATORY NOTE This Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-75321) of The Goldman Sachs Group, Inc. (the "Registration Statement") is being filed pursuant to Rule 462(d) under the Securities Act of 1933, as amended, for the sole purpose of filing additional exhibits to the Registration Statement and, accordingly, shall become effective immediately upon filing with the Securities and Exchange Commission. The contents of the Registration Statement are hereby incorporated herein by reference. 3 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) EXHIBITS 1.1 Form of Distribution Agreement.*** 2.1 Plan of Incorporation.** 2.2 Agreement and Plan of Merger of The Goldman Sachs Corporation into The Goldman Sachs Group, Inc.* 2.3 Agreement and Plan of Merger of The Goldman Sachs Group, L.P. into The Goldman Sachs Group, Inc.* 3.1 Certificate of Incorporation of The Goldman Sachs Group, Inc.** 3.2 Amended and Restated Certificate of Incorporation of The Goldman Sachs Group, Inc.* 3.3 Amended and Restated By-Laws of The Goldman Sachs Group, Inc.* 4.1 Form of Indenture between The Goldman Sachs Group, Inc. and The Bank of New York.*** 4.2 Form of debt securities of The Goldman Sachs Group, Inc. (included in Exhibit 4.1 )*** 4.3 Form of Floating Rate Medium-Term Note. 4.4 Form of Fixed Rate Medium-Term Note. 4.5 Form of Mandatory Exchangeable Note. 4.6 Form of Exchangeable Note. 5.1 Opinion of Gregory K. Palm, Esq., a General Counsel of The Goldman Sachs Group, Inc.*** 8.1 Opinion of Sullivan & Cromwell, United States tax counsel to The Goldman Sachs Group, Inc., re tax matters.*** 8.2 Opinion of Sullivan & Cromwell, United States tax counsel to The Goldman Sachs Group, Inc., re tax matters. 10.1 Lease, dated June 11, 1985, between Metropolitan Life Insurance Company and Goldman, Sachs & Co.** 10.2 Lease, dated April 5,1994, between The Chase Manhattan Bank (National Association) and The Goldman Sachs Group, L.P., as amended.** 10.3 Lease, dated as of August 22, 1997, between Ten Hanover LLC and The Goldman Sachs Group, L.P.** 10.4 Lease, dated as of July 16, 1998, between TCC Acquisition Corp. and The Goldman Sachs Group, L.P.** 10.5 Agreement for Lease, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International, (iii) Restamove Limited, (iv) The Goldman Sachs Group, L.P. and (v) Itochu Corporation.** II-1 4 10.6 Annexure 1 to Agreement for Lease, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International, (iii) Restamove Limited, (iv) The Goldman Sachs Group, L.P. and (v) Itochu Corporation (Form of Occupational Lease among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International and (iii) The Goldman Sachs Group, L.P.).** 10.7 Agreement relating to Developer's Fit Out Works to be carried out at 120 Fleet Street, London, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited, (ii) Goldman Sachs Property Management, (iii) Itochu Corporation and (iv) The Goldman Sachs Group, L.P.** 10.8 Agreement relating to One Carter Lane, London EC4, dated March 25, 1998, among Britel Fund Trustees Limited, Goldman Sachs International, The Goldman Sachs Group, L.P., English Property Corporation plc and MEPC plc.** 10.9 Fit Out Works Agreement relating to One Carter Lane, London EC4, dated March 25, 1998, among Britel Fund Trustees Limited, Goldman Sachs International, Goldman Sachs Property Management, The Goldman Sachs Group, L.P., English Property Corporation plc and MEPC plc.** 10.10 Underlease of premises known as One Carter Lane, London EC4, dated September 9, 1998, among Britel Fund Trustees Limited, Goldman Sachs International and The Goldman Sachs Group, L.P.** 10.11 Lease, dated March 5, 1994, among Shine Hill Development Limited, Shine Belt Limited, Fair Page Limited, Panhy Limited, Maple Court Limited and Goldman Sachs (Asia) Finance, as amended.** 10.12 Guarantee, dated November 17, 1993, between Shine Hill Development Limited and The Goldman Sachs Group, L.P.** 10.13 Agreement for Lease, dated November 29, 1998, between Turbo Top Limited and Goldman Sachs (Asia) Finance.** 10.14 Summary of Tokyo Leases.** 10.15 The Goldman Sachs 1999 Stock Incentive Plan.* 10.16 The Goldman Sachs Defined Contribution Plan.* 10.17 Letter Agreement with Mr. Weinberg.** 10.18 The Goldman Sachs Partner Compensation Plan.* 10.19 Form of Employment Agreement.* 10.20 Form of Agreement Relating to Noncompetition and Other Covenants.* 10.21 Form of Pledge Agreement.* 10.22 Form of Award Agreement (Formula RSUs).* 10.23 Form of Award Agreement (Discretionary RSUs).* 10.24 Form of Option Agreement (Discretionary RSUs).* II-2 5 10.25 Tax Indemnification Agreement, by and among The Goldman Sachs Group, Inc. and various parties.* 10.26 Form of Shareholders' Agreement among The Goldman Sachs Group, Inc. and various parties.* 10.27 Instrument of Indemnification.* 10.28 Form of Indemnification Agreement.* 10.29 Subscription Agreement, dated as of April 24, 1992, among the Trustees of the Estate of Bernice Pauahi Bishop, Pauahi Holdings Corporation, Royal Hawaiian Shopping Center, Inc. and The Goldman Sachs Group, L.P.** 10.30 Subscription Agreement, dated as of November 21, 1994, among the Trustees of the Estate of Bernice Pauahi Bishop, Pauahi Holdings Corporation, Royal Hawaiian Shopping Center, Inc. and The Goldman Sachs Group, L.P.** 10.31 Letter Agreement, dated March 15, 1999, among Kamehameha Activities Association and The Goldman Sachs Group, L.P. (the "Kamehameha Letter Agreement").** 10.32 Amended and Restated Subscription Agreement, dated as of March 28, 1989, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc., Goldman, Sachs & Co. and The Goldman Sachs Group, L.P.** 10.33 Letter Agreement, dated March 15, 1999, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc. and The Goldman Sachs Group, L.P. (the "Sumitomo Letter Agreement").** 10.34 Lease, dated September 24, 1992, from LDT Partners to Goldman Sachs International.** 10.35 Amendment to Kamehameha Letter Agreement (filed as Exhibit 10.31), dated April 30, 1999, among Kamehameha Activities Association, the Trustees of the Estate of Bernice Pauahi Bishop, The Goldman Sachs Group, L.P. and The Goldman Sachs Group, Inc.* 10.36 Amendment to Sumitomo Letter Agreement (filed as Exhibit 10.33), dated April 30, 1999, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc., The Goldman Sachs Group, L.P., The Goldman Sachs Group, Inc. and Goldman, Sachs & Co.* 10.37 Voting Agreement, dated as of April 30, 1999, by and among The Goldman Sachs Group, Inc., on the one hand, and The Trustees of the Estate of Bernice Pauahi Bishop and Kamehameha Activities Association, on the other hand.* 10.38 Voting Agreement, dated as of April 30, 1999, by and among The Goldman Sachs Group, Inc., on the one hand, and The Sumitomo Bank, Limited, and Sumitomo Bank Capital Markets, Inc., on the other hand.* 12.1 Statement re computation of ratios of earnings to fixed charges.*** 15.1 Letter re Unaudited Interim Financial Information.*** 21.1 List of subsidiaries of The Goldman Sachs Group, L.P.** 23.1 Consent of PricewaterhouseCoopers LLP.*** II-3 6 23.2 Consent of Gregory K. Palm, Esq. (included in Exhibit 5.1 above).*** 23.3 Consent of Sullivan & Cromwell (included in Exhibit 8.1 above).*** 23.4 Consent of Securities Data Company.*** 23.5 Consent of Sullivan & Cromwell (included in Exhibit 8.2 above). 24.1 Powers of Attorney.*** 25.1 Statement of Eligibility of Trustee.*** 27.1 Financial Data Schedule.*** - ------------ * Incorporated herein by reference to the corresponding exhibit to the registrant's registration statement on Form S-1 (No. 333-75213). ** Incorporated herein by reference to the corresponding exhibit to the registrant's registration statement on Form S-1 (No. 333-74449). *** Previously filed. II-4 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Post-Effective Amendment No. 1 to the registration statement (No. 333-75321) to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, New York on the 30th day of June, 1999. THE GOLDMAN SACHS GROUP, INC. By: /s/ GREGORY K. PALM ----------------------------- Name: Gregory K. Palm Title: General Counsel Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to the registration statement (No. 333-75321) has been signed by the following persons in the capacities indicated on the 30th day of June, 1999:
TITLE SIGNATURE ----- --------- Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) * --------------------- Henry M. Paulson, Jr. Director and Vice Chairman * --------------------- Robert J. Hurst Director, President and Co-Chief Operating Officer * --------------------- John A. Thain Director, President and Co-Chief Operating Officer * --------------------- John L. Thornton Director --------------------- Sir John Browne Director --------------------- James A. Johnson Director * --------------------- John L. Weinberg Chief Financial Officer (Principal Financial Officer) * --------------------- David A. Viniar Principal Accounting Officer * --------------------- Sarah G. Smith
II-5 8 *By: /s/ GREGORY K. PALM ---------------------------- Name: Gregory K. Palm Attorney-in-Fact II-6 9 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION ------- ----------- 1.1 Form of Distribution Agreement.*** 2.1 Plan of Incorporation.** 2.2 Agreement and Plan of Merger of The Goldman Sachs Corporation into The Goldman Sachs Group, Inc.* 2.3 Agreement and Plan of Merger of The Goldman Sachs Group, L.P. into The Goldman Sachs Group, Inc.* 3.1 Certificate of Incorporation of The Goldman Sachs Group, Inc.** 3.2 Amended and Restated Certificate of Incorporation of The Goldman Sachs Group, Inc.* 3.3 Amended and Restated By-Laws of The Goldman Sachs Group, Inc.* 4.1 Form of Indenture between The Goldman Sachs Group, Inc. and The Bank of New York.*** 4.2 Form of debt securities of The Goldman Sachs Group, Inc. (included in Exhibit 4.1).*** 4.3 Form of Floating Rate Medium-Term Note. 4.4 Form of Fixed Rate Medium-Term Note. 4.5 Form of Mandatory Exchangeable Note. 4.6 Form of Exchangeable Note. 5.1 Opinion of Gregory K. Palm, Esq., a General Counsel of The Goldman Sachs Group, Inc.*** 8.1 Opinion of Sullivan & Cromwell, United States tax counsel to The Goldman Sachs Group, Inc., re tax matters.*** 8.2 Opinion of Sullivan & Cromwell, United States tax counsel to The Goldman Sachs Group, Inc., re tax matters. 10.1 Lease, dated June 11, 1985, between Metropolitan Life Insurance Company and Goldman, Sachs & Co.** 10.2 Lease, dated April 5, 1994, between The Chase Manhattan Bank (National Association) and The Goldman Sachs Group, L.P., as amended.** 10.3 Lease, dated as of August 22, 1997, between Ten Hanover LLC and The Goldman Sachs Group, L.P.** 10.4 Lease, dated as of July 16, 1998, between TCC Acquisition Corp. and The Goldman Sachs Group, L.P.**
10
EXHIBIT NO. DESCRIPTION ------- ----------- 10.5 Agreement for Lease, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International, (iii) Restamove Limited, (iv) The Goldman Sachs Group, L.P. and (v) Itochu Corporation.** 10.6 Annexure 1 to Agreement for Lease, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International, (iii) Restamove Limited, (iv) The Goldman Sachs Group, L.P. and (v) Itochu Corporation (Form of Occupational Lease among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited trading as Fleet Street Partnership, (ii) Goldman Sachs International and (iii) The Goldman Sachs Group, L.P.).** 10.7 Agreement relating to Developer's Fit Out Works to be carried out at 120 Fleet Street, London, dated April 2, 1998, among (i) JC No. 3 (UK) Limited and Fleet Street Square Management Limited, (ii) Goldman Sachs Property Management, (iii) Itochu Corporation and (iv) The Goldman Sachs Group, L.P.** 10.8 Agreement relating to One Carter Lane, London EC4, dated March 25, 1998, among Britel Fund Trustees Limited, Goldman Sachs International, The Goldman Sachs Group, L.P., English Property Corporation plc and MEPC plc.** 10.9 Fit Out Works Agreement relating to One Carter Lane, London EC4, dated March 25, 1998, among Britel Fund Trustees Limited, Goldman Sachs International, Goldman Sachs Property Management, The Goldman Sachs Group, L.P., English Property Corporation plc and MEPC plc.** 10.10 Underlease of premises known as One Carter Lane, London EC4, dated September 9, 1998, among Britel Fund Trustees Limited, Goldman Sachs International and The Goldman Sachs Group, L.P.** 10.11 Lease, dated March 5, 1994, among Shine Hill Development Limited, Shine Belt Limited, Fair Page Limited, Panhy Limited, Maple Court Limited and Goldman Sachs (Asia) Finance, as amended.** 10.12 Guarantee, dated November 17, 1993, between Shine Hill Development Limited and The Goldman Sachs Group, L.P.** 10.13 Agreement for Lease, dated November 29, 1998, between Turbo Top Limited and Goldman Sachs (Asia) Finance.** 10.14 Summary of Tokyo Leases.** 10.15 The Goldman Sachs 1999 Stock Incentive Plan.* 10.16 The Goldman Sachs Defined Contribution Plan.* 10.17 Letter Agreement with Mr. Weinberg.** 10.18 The Goldman Sachs Partner Compensation Plan.* 10.19 Form of Employment Agreement.*
11
EXHIBIT NO. DESCRIPTION ------- ----------- 10.20 Form of Agreement Relating to Noncompetition and Other Covenants.* 10.21 Form of Pledge Agreement.* 10.22 Form of Award Agreement. (Formula RSUs).* 10.23 Form of Award Agreement. (Discretionary RSUs).* 10.24 Form of Option Agreement. (Discretionary Options).* 10.25 Tax Indemnification Agreement, by and among The Goldman Sachs Group, Inc. and various parties.* 10.26 Form of Shareholders' Agreement among The Goldman Sachs Group, Inc. and various parties.* 10.27 Instrument of Indemnification.* 10.28 Form of Indemnification Agreement.* 10.29 Subscription Agreement, dated as of April 24, 1992, among the Trustees of the Estate of Bernice Pauahi Bishop, Pauahi Holdings Corporation, Royal Hawaiian Shopping Center, Inc. and The Goldman Sachs Group, L.P.** 10.30 Subscription Agreement, dated as of November 21, 1994, among the Trustees of the Estate of Bernice Pauahi Bishop, Pauahi Holdings Corporation, Royal Hawaiian Shopping Center, Inc. and The Goldman Sachs Group, L.P.** 10.31 Letter Agreement, dated March 15, 1999, among Kamehameha Activities Association and The Goldman Sachs Group, L.P. (the "Kamehameha Letter Agreement").** 10.32 Amended and Restated Subscription Agreement, dated as of March 28, 1989, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc., Goldman, Sachs & Co. and The Goldman Sachs Group, L.P.** 10.33 Letter Agreement, dated March 15, 1999, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc. and The Goldman Sachs Group, L.P. (the "Sumitomo Letter Agreement"). ** 10.34 Lease, dated September 24, 1992, from LDT Partners to Goldman Sachs International.** 10.35 Amendment to Kamehameha Letter Agreement (filed as Exhibit 10.31), dated April 30, 1999, among Kamehameha Activities Association, the Trustees of the Estate of Bernice Pauahi Bishop, The Goldman Sachs Group, L.P. and The Goldman Sachs Group, Inc.* 10.36 Amendment to Sumitomo Letter Agreement (filed as Exhibit 10.33), dated April 30, 1999, among The Sumitomo Bank, Limited, Sumitomo Bank Capital Markets, Inc., The Goldman Sachs Group, L.P., The Goldman Sachs Group, Inc. and Goldman, Sachs & Co.*
12
EXHIBIT NO. DESCRIPTION ------- ----------- 10.37 Voting Agreement, dated as of April 30, 1999, by and among The Goldman Sachs Group, Inc., on the one hand, and The Trustees of the Estate of Bernice Pauahi Bishop and Kamehameha Activities Association, on the other hand.* 10.38 Voting Agreement, dated as of April 30, 1999, by and among The Goldman Sachs Group, Inc., on the one hand, and The Sumitomo Bank, Limited, and Sumitomo Bank Capital Markets, Inc., on the other hand.* 12.1 Statement re computation of ratios of earnings to fixed charges.*** 15.1 Letter re Unaudited Interim Financial Information.*** 21.1 List of subsidiaries of The Goldman Sachs Group, L.P.** 23.1 Consent of PricewaterhouseCoopers LLP.*** 23.2 Consent of Gregory K. Palm, Esq. (included in Exhibit 5.1 above).*** 23.3 Consent of Sullivan & Cromwell (included in Exhibit 8.1 above).*** 23.4 Consent of Securities Data Company.*** 23.5 Consent of Sullivan & Cromwell (included in Exhibit 8.2 above). 24.1 Powers of Attorney.*** 25.1 Statement of Eligibility of Trustee.*** 27.1 Financial Data Schedule.***
- ------------ * Incorporated herein by reference to the corresponding exhibit to the registrant's registration statement on Form S-1 (No. 333-75213). ** Incorporated herein by reference to the corresponding exhibit to the registrant's registration statement on Form S-1 (No. 333-74449). *** Previously filed. EX-4.3 2 FORM OF FLOATING RATE MEDIUM-TERM NOTE 1 EXHIBIT 4.3 [Form of Floating Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT - 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.] [IF DTC IS THE DEPOSITARY, INSERT -- 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.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 CUSIP No. _______ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTES, SERIES B (Floating Rate) The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: STATED MATURITY DATE: SPECIFIED CURRENCY: U.S. dollars for all payments unless otherwise specified below: - payments of principal and any premium: - payments of interest: - Exchange Rate Agent: Goldman, Sachs & Co. ORIGINAL ISSUE DATE*: ORIGINAL ISSUE DISCOUNT SECURITY: - Total Amount of OID: - Yield to Maturity: - Initial Accrual Period OID: REDEMPTION COMMENCEMENT DATE: - Telerate Page 7051: - Telerate Page 7052 (weekly/monthly): - CMT Index Maturity: REPAYMENT DATE(S): REDEMPTION OR REPAYMENT PRICE(S): BASE RATE: - Commercial Paper Rate: - Prime Rate: - LIBOR: - Telerate LIBOR Page: - Reuters Screen LIBOR Page: - Index Currency: - EURIBOR: - Treasury Rate: - CMT Rate: - CD Rate: - Federal Funds Rate: - Eleventh District Cost of Funds Rate: * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 INDEX MATURITY: SPREAD: SPREAD MULTIPLIER: INITIAL BASE RATE: MAXIMUM RATE: MINIMUM RATE: INTEREST RESET PERIOD: - if semi-annual, reset will occur in each of the following two months in each year: - if annual, reset will occur in the following month in each year: - otherwise, reset will occur daily, weekly, monthly or quarterly in each year as follows: INTEREST RESET DATE(S): as provided in Section 3(a) on the reverse of this Security (unless otherwise specified) INTEREST DETERMINATION DATE(S): as provided in Sections 3(b) through 3(j), as applicable, on the reverse of this Security (unless otherwise specified) INTEREST PAYMENT DATE(S): unless otherwise specified, the third Wednesday of the following: - each of the 12 calendar months in each year - each March, June, September and December in each year - each of the following two calendar months in each year: - the following calendar month in each year: subject to the second paragraph under "Payments Due on a Business Day" below INTEREST CALCULATION DATE(S): as provided in Section 3(n) on the reverse of this Security (unless otherwise specified) CALCULATION AGENT: Goldman, Sachs & Co. DEFEASANCE: - Full Defeasance: N/A - Covenant Defeasance: N/A OTHER TERMS: (Face of Security continued on next page) -3- 4 Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. (Face of Security continued on next page) -4- 5 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), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at a rate per annum determined in accordance with the applicable provisions of Section 3 on the reverse hereof, until the principal hereof is paid or made available for payment. Any premium and any such installment of interest that is overdue at any time shall also bear interest (to the extent that the payment of such interest shall be legally enforceable), at the rate per annum at which the principal then bears interest, from the date any such overdue amount first becomes due until it is paid or made available for payment. Notwithstanding the foregoing, interest on any principal, premium or installment of interest that is overdue shall be payable on demand. The interest so payable, and punctually paid or duly provided for, 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3(n) on the reverse hereof) next preceding such Interest Payment Date (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 may 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. (Face of Security continued on next page) -5- 6 CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country, except as provided in the next sentence. If the euro is specified on the face of this Security as the Specified Currency for any payment, the Specified Currency for such payment shall be such coin or currency as at the time of payment is legal tender for the payment of public and private debts in all EMU Countries (as defined in Section 3(n) on the reverse hereof), provided that, if on any day there are not at least two EMU Countries, or if on any day there are at least two EMU Countries but no coin or currency is legal tender for the payment of public and private debts in all EMU Countries, then the Specified Currency for such payment shall be deemed not to be available to the Company on such day. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Corporation Trust Trustee Administration, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The U.S. dollar amount of any payment made pursuant to the preceding paragraph will be determined by (Face of Security continued on next page) -6- 7 the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (Face of Security continued on next page) -7- 8 (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $1,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Trustee at its Corporate Trust Office, Attention: Corporation Trust Trustee Administration, on or before the fifth Business Day before the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and (Face of Security continued on next page) -8- 9 the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. PAYMENTS DUE ON A BUSINESS DAY (Face of Security continued on next page) -9- 10 Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day (unless the Base Rate is LIBOR or EURIBOR and such next succeeding Business Day falls in the next calendar month, in which case such amount may be paid or made available for payment on the next preceding Business Day) with the same force and effect as if such amount were paid on the Specified Day. The provisions of this paragraph shall apply to this Security in lieu of the provisions of Section 113 of the Indenture. Unless otherwise specified on the face of this Security, the following sentence shall apply to each Interest Payment Date other than one that falls on the date of Maturity of the principal hereof. If any such Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date shall be deferred to the next succeeding Business Day, provided that, if the Base Rate is LIBOR or EURIBOR and the next succeeding Business Day would fall in the next calendar month, then such Interest Payment Date will be advanced to the next preceding Business Day. 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. Unless the certificate of authentication hereon has been executed by the Trustee 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) -10- 11 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: THE GOLDMAN SACHS GROUP, INC. By____________________________ Name: Title: 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 Officer 12 (Reverse of Security) 1. SECURITIES AND INDENTURE 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 and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $15,000,000,000 (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 of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $1,000 and multiples thereof. For each Security of this series having a principal amount payable in a Specified Currency other than U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on the first Business Day next preceding the date on which the Company accepts the offer to purchase such Security, to $1,000 and any multiple thereof. 3. INTEREST RATE (a) INTEREST RATE RESET. The interest rate on this Security will be reset from time to time, as provided in this Section 3, and each date upon which such rate is (Reverse of Security continued on next page) -12- 13 reset as so provided is hereinafter called an "Interest Reset Date". Unless otherwise specified on the face hereof, the Interest Reset Dates with respect to this Security will be as follows: (i) if the Interest Reset Period is daily, each Business Day; (ii) if the Interest Reset Period is weekly and the Base Rate is not the Treasury Rate, the Wednesday of each week; (iii) if the Interest Reset Period is weekly and the Base Rate is the Treasury Rate, except as otherwise provided in the definition of "Treasury Interest Determination Date" in Section 3(n) below, the Tuesday of each week; (iv) if the Interest Reset Period is monthly, the third Wednesday of each month; (v) if the Interest Reset Period is quarterly, the third Wednesday of each March, June, September and December; (vi) if the Interest Reset Period is semi-annual, the third Wednesday of each of two months in each year specified under "Interest Reset Period" on the face hereof; and (vii) if the Interest Reset Period is annual, the third Wednesday of the month in each year specified under "Interest Reset Period" on the face hereof; provided, however, that (x) the Base Rate in effect from the Original Issue Date to but excluding the first Interest Reset Date will be the Initial Base Rate and (y) if the Interest Reset Period is daily or weekly, the Base Rate in effect for each day following the second Business Day immediately prior to an Interest Payment Date to but excluding such Interest Payment Date, and for each day following the second Business Day immediately prior to the day of Maturity of the principal hereof to but excluding such day of Maturity, will be the Base Rate in effect on such applicable second Business Day; and provided, further, that, if any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be the next succeeding day that is a Business Day, except that, unless otherwise specified on the face hereof, if the Base Rate is LIBOR and such next succeeding Business Day (Reverse of Security continued on next page) -13- 14 falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Subject to applicable provisions of law and except as otherwise specified herein, on each Interest Reset Date the interest rate on this Security shall be the rate determined in accordance with such of the following Sections 3(b) through 3(j) as provide for determination of the Base Rate for this Security. The Calculation Agent shall determine the interest rate of this Security in accordance with the applicable Section below. Unless the Base Rate is LIBOR or EURIBOR, the Calculation Agent will determine the interest rate of this Security that takes effect on any Interest Reset Date on a day no later than the Calculation Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. However, the Calculation Agent need not wait until the Calculation Date to determine such interest rate if the rate information it needs to make such determination in the manner specified in the applicable provisions of Sections 3(b) through 3(j) hereof is available from the relevant sources specified in such applicable provisions. Upon request of the Holder to the Calculation Agent, the Calculation Agent will provide the interest rate then in effect on this Security and, if determined, the interest rate that will become effective on the next Interest Reset Date. (b) DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is the Commercial Paper Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the Money Market Yield (as defined in Section 3(n) below) of the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Commercial Paper Interest Determination Date"), for commercial paper having the Index Maturity, as published in H.15(519) (as defined in Section 3(n) below) under the heading "Commercial Paper -- Nonfinancial". If the Commercial Paper Rate cannot be determined as described above, the following procedures will apply in determining the Commercial Paper Rate: (i) If the rate described above does not appear in H.15(519) at 3:00 P.M., New York City time, on the Calculation Date (as defined in Section 3(n) below) corresponding to such Commercial Paper Interest (Reverse of Security continued on next page) -14- 15 Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the Commercial Paper Rate will be the rate, for such Commercial Paper Interest Determination Date, for commercial paper having the Index Maturity, as published in H.15 Daily Update (as defined in Section 3(n) below) or any other recognized electronic source used for displaying that rate, under the heading "Commercial Paper -- Nonfinancial". (ii) If the rate described in clause (i) above does not appear in H.15(519), H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Commercial Paper Rate will be the Money Market Yield of the arithmetic mean of the following offered rates for U.S. dollar commercial paper that has the Index Maturity and is placed for an industrial issuer whose bond rating is "AA", or the equivalent, from a nationally recognized rating agency: the rates offered as of 11:00 A.M., New York City time, on such Commercial Paper Interest Determination Date by three leading U.S. dollar commercial paper dealers in New York City selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the Commercial Paper Rate shall be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(b) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (c) DETERMINATION OF PRIME RATE. If the Base Rate is the Prime Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Prime Interest Determination Date"), published in H.15(519) under the heading "Bank Prime Loan". If the Prime Rate cannot be determined as described above, the following procedures will apply in determining the Prime Rate: (Reverse of Security continued on next page) -15- 16 (i) If the rate described above does not appear in H.15(519) at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Prime Interest Determination Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then the Prime Rate will be the rate, for such Prime Interest Determination Date, as published in H.15 Daily Update or another recognized electronic source used for the purpose of displaying that rate, under the heading "Bank Prime Loan". (ii) If the rate described in clause (i) above does not appear in H.15(519), H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then the Prime Rate will be the arithmetic mean of the following rates as they appear on the Reuters Screen US PRIME 1 Page (as defined in Section 3(n) below): the rate of interest publicly announced by each bank appearing on that page as that bank's prime rate or base lending rate, as of 11:00 A.M., New York City time, on such Prime Interest Determination Date. (iii) If fewer than four of the rates referred to in clause (ii) above appear on the Reuters Screen US PRIME 1 Page, the Prime Rate will be the arithmetic mean of the Prime Rates or base lending rates, as of the close of business on such Prime Interest Determination Date, of three major banks in New York City selected by the Calculation Agent. For this purpose, the Calculation Agent will use rates quoted on the basis of the actual number of days in the year divided by a 360-day year. (iv) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (iii) above, the Prime Rate shall be the Prime Rate in effect on such Prime Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). (Reverse of Security continued on next page) -16- 17 The Base Rate determined in accordance with this Section 3(c) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (d) DETERMINATION OF LIBOR. If the Base Rate is LIBOR, the Base Rate that takes effect on any Interest Reset Date shall be LIBOR on the corresponding LIBOR Interest Determination Date (as defined in Section 3(n) below) and shall be determined in accordance with the following provisions: LIBOR will be either of the following rates, whichever appears on the face hereof: (x) the offered rate appearing on the Telerate LIBOR Page (as defined in Section 3(n) below); or (y) the arithmetic mean of the offered rates appearing on the Reuters Screen LIBOR Page (as defined in Section 3(n) below) unless that page by its terms cites only one rate, in which case that rate; in either case, as of 11:00 A.M., London time, on such LIBOR Interest Determination Date for deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date. If no reference page is specified on the face hereof, Telerate LIBOR Page will apply to this Security: (i) If Telerate LIBOR Page is specified on the face hereof and the rate referenced in clause (x) above does not appear on that page, or if Reuters Screen LIBOR Page is specified on the face hereof and fewer than two of the rates referenced in clause (y) above appear on that page or no rate appears on any page on which only one rate normally appears, then LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent: deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount (Reverse of Security continued on next page) -17- 18 (as defined in Section 3(n) below). The Calculation Agent will request the principal London office of each such bank to provide a quotation of its rate. If at least two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the quotations. (ii) If fewer than two quotations are provided as described in clause (i) above, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. in the principal financial center for the country issuing the Index Currency, on such LIBOR Interest Determination Date, by three major banks in that financial center selected by the Calculation Agent: loans of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount. (iii) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (ii) above, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(d) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. If the Base Rate is LIBOR and no currency is specified on the face hereof as the Index Currency, the Index Currency shall be U.S. dollars. (e) DETERMINATION OF EURIBOR. If the Base Rate is EURIBOR, the Base Rate that takes effect on any Interest Reset Date shall equal the interest rate for deposits in euros designated as "EURIBOR" and sponsored jointly by the European Banking Federation and ACI -- the Financial Market Association (or any company established by the joint sponsors for purposes of compiling and publishing that rate) on the second Euro Business Day (as defined in Section 3(n) below) before such Interest Reset Date (a "EURIBOR Interest Determination Date"), and will be determined in accordance with the following provisions: (Reverse of Security continued on next page) -18- 19 (i) EURIBOR will be the offered rate for deposits in euros having the Index Maturity beginning on such Interest Reset Date, as that rate appears on Telerate Page 248 (as defined in Section 3(n) below) as of 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date. (ii) If the rate described in clause (i) above does not appear on Telerate Page 248, EURIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date, at which deposits of the following kind are offered to prime banks in the Euro-Zone (as defined in Section 3(n) below) interbank market by the principal Euro-Zone office of each of four major banks in that market selected by the Calculation Agent: euro deposits having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount. The Calculation Agent will request the principal Euro-Zone office of each of these banks to provide a quotation of its rate. If at least two quotations are provided, EURIBOR for such EURIBOR Interest Determination Date will be the arithmetic mean of such quotations. (iii) If fewer than two quotations are provided as described in clause (ii) above, EURIBOR for such EURIBOR Interest Determination Date will be the arithmetic mean of the rates for loans of the following kind to leading Euro-Zone banks quoted, at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date, by three major banks in the Euro-Zone selected by the Calculation Agent: loans of euros having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount. (iv) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (iii) above, EURIBOR shall be the EURIBOR in effect on such EURIBOR Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(e) will be adjusted by the addition or subtraction (Reverse of Security continued on next page) -19- 20 of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (f) DETERMINATION OF TREASURY RATE. If the Base Rate is the Treasury Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate for the auction on the corresponding Treasury Interest Determination Date (as defined in Section 3(n) below) of direct obligations of the United States ("Treasury Bills") having the Index Maturity, as that rate appears on Telerate Page 56 or 57 under the heading "Investment Rate". If the Treasury Rate cannot be determined as described above, the following procedures will apply in determining the Treasury Rate: (i) If the rate described above does not appear on either Telerate Page 56 or 57 at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Treasury Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), the Treasury Rate will be the Bond Equivalent Yield (as defined in Section 3(n) below) of the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High". (ii) If the rate described in clause (i) above does not appear in H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the auction rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as announced by the U.S. Department of the Treasury. (iii) If the auction rate described in clause (ii) above is not so announced by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held for the relevant week, then the Treasury Rate will be the Bond Equivalent Yield of the rate, for such Treasury Interest Determination Date and for Treasury Bills having a remaining maturity closest to the Index Maturity, as published in H.15(519) under (Reverse of Security continued on next page) -20- 21 the heading "U.S. Government Securities/Treasury Bills/Secondary Market". (iv) If the rate described in clause (iii) above does not appear in H.15(519) at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then the Treasury Rate will be the rate, for such Treasury Interest Determination Date and for Treasury Bills having a remaining maturity closest to the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/ Treasury Bills /Secondary Market". (v) If the rate described in clause (iv) above does not appear in H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the arithmetic mean of the following secondary market bid rates for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity: the rates bid as of approximately 3:30 P.M., New York City time, on such Treasury Interest Determination Date, by three primary U.S. government securities dealers in New York City selected by the Calculation Agent. (vi) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (v) above, the Treasury Rate shall be the Treasury Rate in effect on such Treasury Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(f) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any, specified on the face hereof. (g) DETERMINATION OF CMT RATE. If the Base Rate is the CMT Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the CMT Rate on the second Business Day immediately preceding such Interest Reset Date (Reverse of Security continued on next page) -21- 22 (the "CMT Interest Determination Date"). "CMT Rate" means the following rate displayed on the Designated CMT Telerate Page (as defined in Section 3(n) below) under the heading " . . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.", under the column for the Designated CMT Index Maturity (as defined in Section 3(n) below): (x) if the Designated CMT Telerate Page is Telerate Page 7051, the rate for such CMT Interest Determination Date; or (y) if the Designated CMT Telerate Page is Telerate Page 7052, the weekly or monthly average, as specified on the face hereof, for the week that ends immediately before the week in which such CMT Interest Determination Date falls, or for the month that ends immediately before the month in which such CMT Interest Determination Date falls, as applicable. If the CMT Rate cannot be determined as described above, the following procedures will apply in determining the CMT Rate: (i) If the applicable rate described above is not displayed on the relevant Designated CMT Telerate Page at 3:00 P.M., New York City time, on the Calculation Date corresponding to such CMT Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CMT Rate will be the applicable Treasury constant maturity rate described above -- i.e., for the Designated CMT Index Maturity and for either such CMT Interest Determination Date or the weekly or monthly average, as applicable -- as published in H.15(519). (ii) If the applicable rate described in clause (i) above does not appear in H.15(519) at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CMT Rate will be the Treasury constant maturity rate, or other U.S. Treasury rate, for the Designated CMT Index Maturity and with reference to such CMT Interest Determination Date, that: (Reverse of Security continued on next page) -22- 23 (a) is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury, and (b) is determined by the Calculation Agent to be comparable to the applicable rate formerly displayed on the Designated CMT Telerate Page and published in H.15(519). (iii) If the rate described in clause (ii) above does not appear in H.15(519) at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CMT will be the yield to maturity of the arithmetic mean of the following secondary market offered rates for the most recently issued Treasury Notes (as defined in Section 3(n) below) having an original maturity of approximately the Designated CMT Index Maturity, having a remaining term to maturity of not less than the Designated CMT Index Maturity minus one year and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. (iv) If the Calculation Agent is unable to obtain three quotations of the kind described in clause (iii) above, the CMT Rate will be the yield to maturity of the arithmetic mean of the following secondary market offered rates for Treasury Notes having an original maturity longer than the Designated CMT Index Maturity, having a remaining term to maturity closest to the Designated CMT Index Maturity and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest (Reverse of Security continued on next page) -23- 24 quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. If two Treasury Notes with an original maturity longer than the CMT Designated Index Maturity have remaining terms to maturity that are equally close to the Designated CMT Index Maturity, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity. (v) If fewer than five but more than two such primary dealers are quoting as described in clause (iv) above, then the CMT Rate for such CMT Interest Determination Date will be based on the arithmetic mean of the offered rates so obtained, and neither the highest nor the lowest of such quotations will be disregarded. (vi) If two or fewer primary dealers selected by the Calculation Agent are quoting as described in clause (v) above, the CMT Rate shall be the CMT Rate in effect on such CMT Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(g) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (h) DETERMINATION OF CD RATE. If the Base Rate is the CD Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "CD Interest Determination Date"), for negotiable U.S. dollar certificates of deposit having the Index Maturity as published in H.15(519) under the heading "CDs (Secondary Market)". If the CD Rate cannot be determined as described above, the following procedures will apply in determining the CD Rate: (i) If the rate described above does not appear in H.15(519) at 3:00 P.M., New York City time, on the Calculation Date corresponding to such CD Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CD Rate shall be the rate (Reverse of Security continued on next page) -24- 25 described above as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "CDs (Secondary Market)". (ii) If the rate described in clause (i) above does not appear in H.15(519), H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then CD Rate shall be the arithmetic mean of the following secondary market offered rates for negotiable U.S. dollar certificates of deposit of major U.S. money center banks having a remaining maturity closest to the Index Maturity and in a Representative Amount: the rates offered as of 10:00 A.M., New York City time, on such CD Interest Determination Date, by three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City, as selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the CD Rate will be the CD Rate in effect on such CD Interest Determination Date (or, in the case of the first Base Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(h) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (i) DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the Federal Funds Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "Federal Funds Interest Determination Date"), for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)", as that rate is displayed on Telerate Page 120. If the Federal Funds Rate cannot be determined as described above, the following procedures will apply in determining the Federal Funds Rate: (i) If the rate described above is not displayed on Telerate Page 120 at 3:00 P.M., New York City time, (Reverse of Security continued on next page) -25- 26 on the Calculation Date corresponding to such Federal Funds Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the Federal Funds Rate will be the rate described above as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "Federal Funds (Effective)". (ii) If the rate described in clause (i) above is not displayed on Telerate Page 120 and does not appear in H.15 (519), H.15 Daily Update or another recognized electronic source at 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the federal funds Rate will be the arithmetic mean of the rates for the last transaction in overnight, U.S. dollar federal funds arranged, before 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date, by three leading brokers of U.S. dollar federal funds transactions in New York City selected by the Calculation Agent. (iii) If fewer than three brokers selected by the Calculation Agent are quoting as described in clause (ii) above, the Federal Funds Rate will be the Federal Funds Rate in effect on such Federal Funds Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(i) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (j) DETERMINATION OF 11TH DISTRICT RATE. If the Base Rate is the Eleventh District Cost of Funds Rate (the "11th District Rate"), the Base Rate that takes effect on any Interest Reset Date shall equal the 11th District Rate on the 11th District Interest Determination Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. The 11th District Rate on any 11th District Interest Determination Date shall be the rate equal to the monthly weighted average cost of funds for the calendar month immediately before such date, as displayed on Telerate Page 7058 under the heading "11th District" as of 11:00 A.M., San (Reverse of Security continued on next page) -26- 27 Francisco time, on such date. If the 11th District Rate cannot be determined as described above, the following procedures will apply in determining the 11th District Rate: (i) If the rate described above does not appear on Telerate Page 7058 on such 11th District Interest Determination Date, then the 11th District Rate on such date will be the monthly weighted average cost of funds paid by institutions that are members of the Eleventh Federal Home Loan District for the calendar month immediately preceding such date, as most recently announced by the Federal Home Loan Bank of San Francisco as such monthly weighted average cost of funds. (ii) If the Federal Home Loan Bank of San Francisco fails to announce the cost of funds described in clause (i) above on or before such 11th District Interest Determination Date, the 11th District Rate that takes effect on such Interest Reset Date will be the 11th District Rate in effect on such 11th District Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(j) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (k) MINIMUM AND MAXIMUM LIMITS. Notwithstanding the foregoing, the rate at which interest accrues on this Security (i) shall not at any time be higher than the Maximum Rate, if any, or less than the Minimum Rate, if any, specified on the face hereof, in each case on an accrual basis, and (ii) shall not at any time be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. (l) CALCULATION OF INTEREST. Payments of interest hereon with respect to any Interest Payment Date or at the Maturity of the principal hereof will include interest accrued to but excluding such Interest Payment Date or the date of such Maturity, as the case may be. Accrued interest from the date of issue or from the last date to which interest has been paid or duly provided for shall be calculated by the Calculation Agent by multiplying the Principal Amount by an accrued interest factor. Such (Reverse of Security continued on next page) -27- 28 accrued interest factor shall be computed by adding the interest factors calculated for each day from and including the Original Issue Date or from and including the last date to which interest has been paid or duly provided for, to but excluding the date for which accrued interest is being calculated. The interest factor for each such day shall be expressed as a decimal and computed by dividing the interest rate (also expressed as a decimal) in effect on such day by 360, if the Base Rate is the Commercial Paper Rate, Prime Rate, LIBOR, EURIBOR, CD Rate, Federal Funds Rate or 11th District Rate, or by the actual number of days in the year, if the Base Rate is the Treasury Rate or CMT Rate. All percentages resulting from any calculation with respect to this Security will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point (e.g., 9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655) ). All amounts used in or resulting from any calculation with respect to this Security will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward. (m) CALCULATION AGENT AND EXCHANGE RATE AGENT. The Company has initially appointed the institutions named on the face of this Security as Calculation Agent and Exchange Rate Agent, respectively, to act as such agents with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are any such agent, Affiliates of any such agent or Affiliates of the Company. (Reverse of Security continued on next page) -28- 29 All determinations made by the Calculation Agent or the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. Neither the Calculation Agent nor the Exchange Rate Agent shall have any liability therefor. (n) DEFINITIONS OF CALCULATION TERMS. As used in this Security, the following terms have the meanings set forth below: "Bond Equivalent Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Bond Equivalent Yield = D x N x 100, ------------- 360 - (D x M) where - "D" equals the annual rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal; - "N" equals 365 or 366, as the case may be; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. "Business Day" means, for this Security, a day that meets the requirements set forth in each of clauses (i) through (iv) below, in each case to the extent such requirements apply to this Security as specified below: (i) is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in The City of New York generally are authorized or obligated by law, regulation or executive order to close; (ii) if the Base Rate is LIBOR, is also a London Business Day; (Reverse of Security continued on next page) -29- 30 (iii) if the Specified Currency for payment of principal of or interest on this Security is other than U.S. dollars or euros, is also a day on which banking institutions in the principal financial center of the country issuing such Specified Currency generally are not authorized or obligated by law, regulation or executive order to close; (iv) if the Base Rate is EURIBOR or if the Specified Currency for payment of principal of or interest on this Security is euros, or the Base Rate is LIBOR for which the Index Currency is euros, is also a Euro Business Day; and (v) solely with respect to any payment or other action to be made or taken at any Place of Payment outside The City of New York, is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in such Place of Payment generally are authorized or obligated by law, regulation or executive order to close. Solely when used in the third paragraph under the heading "Currency of Payment" on the face of this Security, the meaning of the term "Business Day" shall be determined as if the Base Rate for this Security is neither LIBOR nor EURIBOR. With respect to any particular location, the close of business on any day on which business is not being conducted at that location shall be deemed to mean 5:00 P.M., New York City time, on that day. The "Calculation Date" corresponding to any Commercial Paper Interest Determination Date, Prime Interest Determination Date, LIBOR Interest Determination Date, EURIBOR Interest Determination Date, Treasury Interest Determination Date, CMT Interest Determination Date, CD Interest Determination Date, Federal Funds Interest Determination Date or 11th District Interest Determination Date, as the case may be, means the earlier of: (i) the tenth day after such interest determination date or, if any such day is not a Business Day, the next succeeding Business Day; and (Reverse of Security continued on next page) -30- 31 (ii) the Business Day immediately preceding the Interest Payment Date or the date of Maturity of the principal hereof, whichever is the day on which the next payment of interest will be due. The Calculation Date corresponding to any Interest Reset Date means the Calculation Date corresponding to the relevant interest determination date immediately preceding such Interest Reset Date. "Designated CMT Index Maturity" means, if the Base Rate is the CMT Rate, the Index Maturity for this Security and will be the original period to maturity of a U.S. Treasury security -- either 1, 2, 3, 5, 7, 10, 20 or 30 years -- specified on the face hereof, provided that, if no such original maturity period is so specified, the Designated CMT Index Maturity will be 2 years. "Designated CMT Telerate Page" means, if the Base Rate is the CMT Rate, the Telerate Page specified on the face hereof that displays Treasury constant maturities as reported in H.15(519), provided that, if no Telerate Page is so specified, then the applicable page will be Telerate Page 7052 and provided, further, that if Telerate Page 7052 applies but it is not specified on the face hereof whether the weekly or monthly average applies, the weekly average will apply. The "11th District Interest Determination Date" corresponding to a particular Interest Reset Date will be the last working day, in the first calendar month immediately preceding such Interest Reset Date, on which the Federal Home Loan Bank of San Francisco publishes the monthly average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District for the second calendar month immediately preceding such Interest Reset Date. "EMU Countries" means, at any time, the countries (if any) then participating in the European Economic and Monetary Union (or any successor union) pursuant to the Treaty on European Union of February 1992 (or any successor treaty), as it may be amended from time to time. "Euro Business Day" means any day on which the Trans-European Automated Real-Time Gross Settlement Express (Reverse of Security continued on next page) -31- 32 Transfer (TARGET) System, or any successor system, is open for business. "Euro-Zone" means, at any time, the region comprised of the EMU Countries. "H.15(519)" means the weekly statistical release entitled "Statistical Release H.15 (519)", or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of H.15 (519) available through the worldwide web site of the Board of Governors of the Federal Reserve System, at http://www. bog.frb.fed.us/releases/h15/update, or any successor site or publication. The "LIBOR Interest Determination Date" corresponding to any Interest Reset Date means the second London Business Day preceding such Interest Reset Date, unless the Index Currency is pounds sterling, in which case the LIBOR Interest Determination Date will be the Interest Reset Date. "London Business Day" means any day on which dealings in the Index Currency are transacted in the London interbank market. "Money Market Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Money Market Yield = D x 360 x 100, ------------- 360 - (D x M) where - "D" equals the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. "Representative Amount" means an amount that, in the Calculation Agent's judgment, is representative of a (Reverse of Security continued on next page) -32- 33 single transaction in the relevant market at the relevant time. "Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money Rates Service, or any successor service, on the page designated as "LIBO" or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page on the Reuters Monitor Money Rates Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks. "Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Telerate Page" means the display on Bridge Telerate, Inc., or any successor service, on the page or pages specified on the face hereof, or any replacement page or pages on that service. The "Treasury Interest Determination Date" corresponding to any Interest Reset Date means the day of the week in which such Interest Reset Date falls on which Treasury bills would normally be auctioned. If, as the result of a legal holiday, an auction is so held on the Friday in the week immediately preceding the week in which such Interest Reset Day falls, such Friday will be the corresponding Treasury Interest Determination Date. If an auction date shall fall on a day that would otherwise be an Interest Reset Date, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. "Treasury Notes" means direct, noncallable, fixed rate obligations of the U.S. government. References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the United States of America. References in this Security to the euro shall mean, as of any time, the coin or currency (if any) that is (Reverse of Security continued on next page) -33- 34 then legal tender for the payment of public and private debts in all EMU Countries. References in this Security to a particular currency other than U.S. dollars and euros shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. References in this Security to a particular heading or headings on any of Designated CMT Telerate Page, H.15(519), H.15 Daily Update, Reuters Screen LIBOR Page, Reuters Screen US Prime 1 Page, Telerate LIBOR Page or Telerate Page include any successor or replacement heading or headings as determined by the Calculation Agent. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture. 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in an amount equal to any Authorized Denomination (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (Reverse of Security continued on next page) -34- 35 (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this security provides for more than one Repayment Date, and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest repayment date after all conditions to such exercise have been satisfied, and references herein to the applicable Repayment Date shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Trustee set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 15th, and not earlier than the 25th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The Bank of New York, Attention: Corporate Trust Trustee Administration, 101 Barclay Street, New York, New York 10286 (or at such other places as the Company or the Trustee shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of (Reverse of Security continued on next page) -35- 36 any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 15 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE 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 any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 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 nor the Trustee nor any such agent shall be affected by notice to the contrary. (Reverse of Security continued on next page) -36- 37 If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. 7. DEFEASANCE. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture. If so specified on the face hereof, either or both of such provisions are applicable to this Security, as so specified. 8. REMEDIES. 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. 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 premium or interest hereon on or after the respective due dates expressed herein. (Reverse of Security continued on next page) -37- 38 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 premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 9. MODIFICATION AND WAIVER. 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. 10. GOVERNING LAW. THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -38- 39 CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTE, SERIES B OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: - -------------------------------------------------------------------------------- (please print name of the undersigned) - -------------------------------------------------------------------------------- (please print address of the undersigned) - -------------------------------------------------------------------------------- (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Trustee set forth below or at such other place or places of which the Company shall from time to time notify the Holder of such Security, any Business Day not later than the 15th or earlier than the 25th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with this "Option to Elect -39- 40 Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The Bank of New York Attention: Corporate Trust Trustee Administration 101 Barclay Street New York, New York 10286 or at such other place as the Company or the Trustee shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: ________________________ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): ________________________ Date: _______________ ______________________________ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the -40- 41 face of such Security in every particular without alteration or enlargement or any other change whatsoever. -41- 42 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIF GIFT MIN ACT - __________ Custodian _________ (Cust) (Minor) under Uniform Gifts to Minors Act ______________________________ (State) Additional abbreviations may also be used though not in the above list. _____________________________ -42- 43 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________ /______________________/ ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) ________________________________________________________________________________ the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints _______________________________________________________ ________________________________________________________________________________ to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated:______________ Signature Guaranteed _________________________ ___________________________ NOTICE: Signature must be NOTICE: The signature to guaranteed. this assignment must correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -43- EX-4.4 3 FORM OF FIXED RATE MEDIUM-TERM NOTE 1 EXHIBIT 4.4 [Form of Fixed Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT -- 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.] [IF DTC IS THE DEPOSITARY, INSERT -- 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.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 CUSIP NO. _______ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTES, SERIES B (Fixed Rate) The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: STATED MATURITY DATE: SPECIFIED CURRENCY: U.S. dollars for all payments unless otherwise specified below: - payments of principal and any premium: - payments of interest: - Exchange Rate Agent: Goldman, Sachs & Co. INTEREST RATE: _____% per annum INTEREST PAYMENT DATE(S): ORIGINAL ISSUE DATE*: ORIGINAL ISSUE DISCOUNT SECURITY: - Total Amount of OID: - Yield to Maturity: - Initial Accrual Period OID: REDEMPTION COMMENCEMENT DATE: REPAYMENT DATE(S): REDEMPTION OR REPAYMENT PRICE(S): DEFEASANCE: - Full Defeasance: - Covenant Defeasance: OTHER TERMS: Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. - -------------------- * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 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), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at the rate per annum equal to the Interest Rate specified on the face hereof, until the principal hereof is paid or made available for payment. Any premium and any such installment of interest that is overdue at any time shall also bear interest, at the rate per annum at which the principal then bears interest (to the extent that the payment of such interest shall be legally enforceable), from the date any such overdue amount first becomes due until it is paid or made available for payment. Notwithstanding the foregoing, interest on any principal, premium or installment of interest that is overdue shall be payable on demand. The interest so payable, and punctually paid or duly provided for, 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3 on the reverse hereof) next preceding such Interest Payment Date (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 may 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. (Face of Security continued on next page) -3- 4 CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country, except as provided in the next sentence. If the euro is specified on the face of this Security as the Specified Currency for any payment, the Specified Currency for such payment shall be such coin or currency as at the time of payment is legal tender for the payment of public and private debts in all EMU Countries (as defined in Section 3 on the reverse hereof), provided that, if on any day there are not at least two EMU Countries, or if on any day there are at least two EMU Countries but no coin or currency is legal tender for the payment of public and private debts in all EMU Countries, then the Specified Currency for such payment shall be deemed not to be available to the Company on such day. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Corporation Trust Trustee Administration, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The U.S. dollar amount of any payment made pursuant to the immediately preceding paragraph will be determined by the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of (Face of Security continued on next page) -4- 5 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, (Face of Security continued on next page) -5- 6 payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $1,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Trustee at its Corporate Trust Office, Attention: Corporation Trust Trustee Administration, on or before the fifth Business Day before the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such payment and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that (Face of Security continued on next page) -6- 7 first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this Security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. PAYMENTS DUE ON A BUSINESS DAY Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day with the same force and effect as if (Face of Security continued on next page) -7- 8 such amount were paid on the Specified Day. The provisions of this paragraph shall apply to the Security in lieu of the provisions of Section 113 of the Indenture. ------------------------------------ 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. Unless the certificate of authentication hereon has been executed by the Trustee 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) -8- 9 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: THE GOLDMAN SACHS GROUP, INC. By____________________________ Name: Title: 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 Officer -9- 10 (Reverse of Security) 1. SECURITIES AND INDENTURE 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 and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $15,000,000,000 (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 of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $1,000 and multiples thereof. For each Security of this series having a principal amount payable in a Specified Currency other than U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on the first Business Day next preceding the date on which the Company accepts the offer to purchase such Security, to $1,000 and any multiple thereof. 3. EXCHANGE RATE AGENT AND RELATED TERMS If the principal of or interest on this Security is payable in a Specified Currency other than U.S. dollars, (Reverse of Security continued on next page) -10- 11 the Company has initially appointed the institution named on the face of this Security as Exchange Rate Agent to act as such agent with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are such agent, Affiliates of such agent or Affiliates of the Company. All determinations made by the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. The Exchange Rate Agent shall not have any liability therefor. Unless otherwise specified on the face hereof, for all purposes of this Security, the term "Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday that (i) is not a day on which banking institutions in The City of New York generally are authorized or obligated by law, regulation or executive order to close, (ii) if the Specified Currency for any payment on this Security is other than U.S. dollars or euros, is not a day on which banking institutions in the principal financial center of the country issuing such Specified Currency generally are authorized or obligated by law, regulation or executive order to close, (iii) if the Specified Currency for any payment on this Security is euros, is not a Euro Business Day and (iv) solely with respect to any payment or other action to be made or taken at any Place of Payment outside The City of New York, is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in such Place of Payment generally are authorized or obligated by law, regulation or executive order to close. "Euro Business Day" means any day on which the Trans-European Automated Real-Time Gross Settlement Express (TARGET) System, or any successor system, is open for business. With respect to any particular location, the close of business on any day on which business is not being conducted shall be deemed to mean 5:00 P.M., New York City time, on that day. References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then (Reverse of Security continued on next page) -11- 12 legal tender for the payment of public and private debts in the United States of America. References in this Security to the euro shall mean, as of any time, the coin or currency (if any) that is then legal tender for the payment of public and private debts in all EMU Countries. "EMU Countries" means, at any time, the countries (if any) then participating in the European Economic and Monetary Union (or any successor union) pursuant to the Treaty on European Union of February 1992 (or any successor treaty), as it may be amended from time to time. References in this Security to a particular currency other than U.S. dollars and euros shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture. 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in an amount equal to any Authorized Denomination (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (Reverse of Security continued on next page) -12- 13 (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this Security provides for more than one Repayment Date and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest Repayment Date after all conditions to such exercise have been satisfied, and references herein to the "applicable Repayment Date" shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Trustee set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 15th, and not earlier than the 25th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The Bank of New York, Attention: Corporation Trust Trustee Administration, 101 Barclay Street, New York, New York 10286 (or at such other places as the Company or the Trustee shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a (Reverse of Security continued on next page) -13- 14 Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 15 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE 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 any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 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 nor the Trustee nor any such agent shall be affected by notice to the contrary. If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. (Reverse of Security continued on next page) -14- 15 7. Defeasance. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture. If so specified on the face hereof, either or both of such provisions are applicable to this Security, as so specified. 8. Remedies. 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. 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 premium or 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 premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. (Reverse of Security continued on next page) -15- 16 9. MODIFICATION AND WAIVER. 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. 10. GOVERNING LAW. THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (Reverse of Security continued on next page) -16- 17 CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTE, SERIES B OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: - -------------------------------------------------------------------------------- (please print name of the undersigned) - -------------------------------------------------------------------------------- (please print address of the undersigned) - -------------------------------------------------------------------------------- (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Trustee set forth below or at such other place or places of which the Company or the Trustee shall from time to time notify the Holder of such Security, any Business Day not later than the 15th or earlier than the 25th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with this "Option to Elect Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or -17- 18 the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The Bank of New York Attention: Corporation Trust Trustee Administration 101 Barclay Street New York, New York 10286 or at such other place as the Company or the Trustee shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: ____________________________ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): ____________________________ Date: _______________ ______________________________ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the face of such Security in every particular without alteration or enlargement or any other change whatsoever. -18- 19 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIF GIFT MIN ACT - __________ Custodian _________ (Cust) (Minor) under Uniform Gifts to Minors Act ___________________________________ (State) Additional abbreviations may also be used though not in the above list. ___________________________________ -19- 20 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _______________________ /______________________/ _______________________________________________________________________________ _______________________________________________________________________________ (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) _______________________________________________________________________________ the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints __________________________________________ _______________________________________________________________________________ to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated: ____________________ Signature Guaranteed _________________________ ______________________________________________ NOTICE: Signature must be NOTICE: The signature to this assignment must guaranteed. correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -20- EX-4.5 4 FORM OF MANDATORY EXCHANGEABLE NOTE 1 EXHIBIT 4.5 (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. BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 14 ON THE FACE OF THIS SECURITY. (Face of Security continued on next page) -1- 2 CUSIP No. _________ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTES, SERIES B ___% Mandatory Exchangeable Note due ____ (Subject to Mandatory Exchange for Shares of Common Stock of [Index Stock Issuer]) 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: $____________ PRINCIPAL AMOUNT: on the Stated Maturity Date, this Security will be mandatorily exchanged (i) for shares of Stock at the Exchange Rate or (ii) at the option of the Company, for cash in an amount equal to the number of such shares of Stock that would otherwise be delivered in such exchange, multiplied by the Final Stock Price, subject, in either case (i) or (ii), to adjustment as provided in this Security. The Company may exercise its option to pay the cash amount in lieu of delivering Stock by giving the Holder of this Security notice of its election at least ten Business Days prior to the Stated Maturity Date. If the Company fails to give such notice, it will deliver or cause to be delivered Stock on the Stated Maturity Date, except as set forth in the immediately following sentence. If a Market Disruption Event has occurred on the Determination Date or the Stated Maturity Date, or on any day in between such dates, the Company may exercise its option to pay the cash amount in lieu of delivering Stock, whether or not the Company has given the Holder of this Security the notice referred to in the second sentence under this heading. STOCK and STOCK ISSUER: common stock of [Index Stock Issuer], subject to adjustment as provided in this Security. EXCHANGE RATE: (i) if the Final Stock Price equals or exceeds the Threshold Appreciation Price, a number of shares of Stock equal to the Threshold Fraction or (ii) if the Final (Face of Security continued on next page) -2- 3 Stock Price is less than the Threshold Appreciation Price, one share of Stock, in either case (i) or (ii), for each $_____ of the Outstanding Face Amount and subject to adjustment as provided in this Security. INITIAL STOCK PRICE: $_____. FINAL STOCK PRICE: the Closing Price of one share of Stock on the Determination Date, subject to adjustment as provided in this Security. THRESHOLD APPRECIATION PRICE: the Initial Stock Price times ____, which is $_______. THRESHOLD FRACTION: the Threshold Appreciation Price divided by the Final Stock Price. CALCULATION AGENT: Goldman, Sachs & Co. DEFEASANCE: neither full defeasance nor covenant defeasance applies 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. "Business Day" means any day that is not a Saturday, a Sunday or a day on which [the NYSE] [the Nasdaq National Market] (or, if different, the principal securities market in which the Stock is then quoted or traded), or on which banking institutions in The City of New York generally, are authorized or obligated by law, regulation or executive order to close. (Face of Security continued on next page) -3- 4 "Closing Price" means, with respect to any security on any day, the closing sale price or last reported sale price, regular way, for the security on a per-share or other unit basis (i) on the principal national securities exchange on which such security is listed for trading on such day, (ii) in the event such security is not listed on any national securities exchange, on the Nasdaq National Market System on such day or, (iii) in the event such security is not quoted in the Nasdaq National Market System on such day, on such other U.S. national market system that is the primary market for the trading of such security; provided, however, that, in the event such security is not listed or quoted as described in clause (i), (ii) or (iii) above, the Closing Price with respect to such security will be the average, as determined by the Calculation Agent, of the bid prices for such security obtained from as many dealers in such security selected by the Calculation Agent (which may include the Calculation Agent or any affiliate of such agent or of the Company) as will make such bid prices available to the Calculation Agent (provided that the number of such dealers need not exceed three). [Modify as appropriate if primary market is outside United States.] "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 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 (Face of Security continued on next page) -4- 5 so given, during the Default Quotation Period; provided 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. "Determination Date" means the fifth Business Day prior to _________; provided, however, that if a Market Disruption Event occurs or is continuing on such 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 ______ or, if _________ is not a Business Day, later than the first Business Day after ___________. "Distribution Property" means securities, cash and/or other property distributed in any Reorganization Event in respect of the relevant Reference Amount and, in the case of a Spin-Off Event (as defined in section 11), includes such Reference Amount. "Ex-Dividend Date" for any dividend or other distribution in respect of the Stock shall mean the first day on which the Stock trades without the right to receive such dividend or other distribution. (Face of Security continued on next page) -5- 6 "Market Disruption Event" means, with respect to the Stock, (i) a suspension, absence or material limitation of trading of the Stock in the primary market for the Stock 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 contracts related to the Stock, 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) the Stock does not trade in what was the primary market for the Stock, 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 contracts will not constitute a Market Disruption Event, (c) a suspension or limitation of trading in option contracts related to the Stock, if available, in the primary market for such contracts, by reason of (1) a price change exceeding limits set by such market, (2) an imbalance of orders relating to such contracts or (3) a disparity in bid and ask quotes relating to such contracts, will, in each case (1), (2) and (3), constitute a suspension or material limitation of trading in option contracts related to the Stock and (d) an "absence of trading" in the primary market on which option contracts related to the Stock are traded will not include any time when such market is itself closed for trading under ordinary circumstances. References to the Stock in this paragraph will also be deemed to refer to any Distribution Property consisting of securities. "NASD" means the National Association of Securities Dealers, Inc. "Original Issue Date" means _________________. "Qualified Financial Institution" means, at any time, a financial institution organized under the laws of (Face of Security continued on next page) -6- 7 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. "Reference Amount" means, initially, one share of Stock and shall be adjusted, as to the amount (s) and/or type (s) of property comprising the same, by the Calculation Agent as provided in sections 5 through 12. "Stated Maturity Date" means ____________ or, if such day is not a Business Day, the next succeeding Business Day; provided, however, that if the fifth Business Day preceding _______________ 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 _________________ or, if _______________ is not a Business Day, later than the sixth Business Day after _______________. "Trade Date" means _______________. _______________________ 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 deliver or pay (or cause to be delivered or paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, Stock, cash and/or other property as provided under "Principal Amount" and elsewhere on the face of this Security, on the Stated Maturity Date, 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 _______, _______, _______ and _______ (each an "Interest Payment Date") in each year, commencing on _______, and on the Stated Maturity Date, at the rate of ____% per annum, until the principal of this Security is paid or made available for payment. Any such installment of interest that is overdue at any time shall also bear interest, at the rate of ____% per annum (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 ________, then the Interest Payment Date that would otherwise occur on _________ shall instead occur on the Stated Maturity Date and (ii) interest on any overdue amount shall be payable on demand. 2. Payment of Interest The interest so payable, and punctually paid or duly provided for, 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, which shall be the fifteenth (Face of Security continued on next page) -7- 8 calendar day (whether or not a Business Day) next preceding such Interest Payment Date. Any interest so payable, but not punctually paid or duly provided for, 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. No Fractional Shares No fractional share will be delivered in exchange for this Security. If more than one Security of this series and of like tenor shall be surrendered for exchange on the Stated Maturity Date at one time by the same Holder, the number of full shares that will be delivered upon exchange will be calculated on the basis of the aggregate number of Securities so surrendered. In lieu of any fractional share otherwise deliverable in respect of all Securities of this series and of like tenor of any Holder which are exchanged at the Stated Maturity Date, such Holder shall be entitled to receive an amount in cash equal to the value of such fractional share based on the Closing Price of the relevant security on the Determination Date. With respect to any security other than a share of capital stock, a fractional share shall be deemed to mean any denomination other than an authorized denomination for such security. 4. Principal Amount The principal of this Security that becomes due and payable at the Stated Maturity shall be the shares of Stock, together with any cash payable in lieu of any fractional share and after giving effect to any adjustment as provided in this Security, that the Company is obligated to deliver (or cause to be delivered) in exchange for this Security on the Stated Maturity Date, unless the Company elects to exchange this Security for cash as provided above under "Principal Amount", in which case such principal shall be the cash amount that must be paid in exchange for this Security on the Stated Maturity Date. The principal of this Security that becomes due and payable upon acceleration of the Maturity hereof after an Event of Default has occurred (Face of Security continued on next page) -8- 9 pursuant to the Indenture shall be the Default Amount. When the Stock, cash or other property referred to in either of the two preceding sentences has been delivered or paid as provided herein (or such delivery or payment has been duly provided for), the principal of this Security shall be deemed to have been paid in full, whether or not this Security shall have been surrendered for payment or cancellation and regardless of the Face Amount. References to the payment of the principal of this Security on any day shall be deemed to mean the delivery or payment of Stock, cash or other property that is deliverable or payable 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 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 duly provided for). 5. Antidilution Adjustment The Calculation Agent shall adjust the Reference Amount as provided in this Security in respect of each event for which adjustment is required under sections 6 through 11 (and not in respect of any other event). (If more than one such event occurs, the Calculation Agent shall adjust the Reference Amount as so provided for each such event, sequentially, in the order in which such events occur, and on a cumulative basis.) Having adjusted the Reference Amount for any and all such events as so provided, the Calculation Agent shall determine the Final Stock Price, which shall equal the Closing Price for the Reference Amount as so adjusted on the Determination Date. (If the Reference Amount is adjusted pursuant to sections 11 so as to consist of amounts of more than one type of property, then the Final Stock Price shall equal the sum of the respective Closing Prices or other values for all such amounts of property on the Determination Date, determined as provided in section 11.) Having determined the Final Stock Price as so provided, the Calculation Agent shall determine the Threshold Fraction and the Exchange Rate based on such Final Stock Price. Having determined the Exchange Rate in this manner, the Calculation Agent shall multiply such rate by (Face of Security continued on next page) -9- 10 the Reference Amount as so adjusted and the resulting product shall be the amount of Stock that will be deliverable in exchange for each $_____ of the Outstanding Face Amount of this Security on the Stated Maturity Date. If the Company elects to pay cash to the Holder of this Security on the Stated Maturity Date in lieu of exchanging this Security for Stock, then the Calculation Agent shall determine the cash value of the Stock otherwise deliverable in such exchange by multiplying the number of shares of Stock so deliverable by the Closing Price of one share of Stock on the Determination Date (and not by the Final Stock Price). The Calculation Agent shall make all adjustments no later than the Determination Date. Notwithstanding any provision of this Security, if an event for which adjustment is required under sections 6 through 11 occurs, the Calculation Agent may make the adjustment and any related determinations and calculations in a manner that differs from that specified in this Security as necessary to achieve an equitable result. Upon written request by the Holder to the Calculation Agent, the Calculation Agent will provide the Holder with such information about adjustments made pursuant to this Security as such agent determines is appropriate. 6. Stock Splits If the Stock is subject to a stock split, then at the opening of business on the first day on which the Stock trades without the right to receive the stock split, the Calculation Agent will adjust the Reference Amount to equal the sum of the Reference Amount in effect immediately prior to such adjustment plus the product of (i) the number of new shares issued in the stock split with respect to one share of the Stock and (ii) the Reference Amount in effect immediately prior to such adjustment. The Reference Amount will not be adjusted, however, unless such first day occurs after the Trade Date and on or before the Determination Date. 7. Reverse Stock Splits If the Stock is subject to a reverse stock split, then once the reverse stock split becomes effective, the Calculation Agent will adjust the Reference Amount to equal the product of the Reference Amount in effect immediately prior to such adjustment and the quotient of (i) the number of shares of outstanding Stock resulting from the reverse stock split becomes effective divided by (ii) the number of shares of Stock outstanding immediately before the reverse stock split becomes effective. The (Face of Security continued on next page) -10- 11 Reference Amount will not be adjusted, however, unless the reverse stock split becomes effective after the Trade Date and on or before the Determination Date. 8. Stock Dividends If the Stock is subject to a stock dividend that is given ratably to all holders of the Stock, then at the opening of business on the Ex-Dividend Date, the Calculation Agent will adjust the Reference Amount to equal the Reference Amount in effect immediately prior to such adjustment plus the product of (i) the number of shares issued in the Stock dividend with respect to one share of the Stock and (ii) the Reference Amount in effect immediately prior to such adjustment. The Reference Amount will not be adjusted, however, unless such Ex-Dividend Date occurs after the Trade Date and on or before the Determination Date. 9. Other Dividends and Distributions There will be no adjustments to the Reference Amount to reflect dividends or other distributions paid with respect to the Stock other than (i) stock dividends as provided in section 8, (ii) dividends or other distributions constituting Spin-Off Events as provided in section 11 below, (iii) issuances of transferable rights or warrants as provided in section 10 and (iv) Extraordinary Dividends as provided in this section 9. A dividend or other distribution with respect to the Stock will be deemed to be an "Extraordinary Dividend" if the per share value of such dividend or other distribution exceeds the per share value of the immediately preceding dividend or distribution with respect to the Stock, if any, that is not an Extraordinary Dividend by an amount equal to at least 10% of the Closing Price of the Stock on the Business Day immediately preceding the Ex-Dividend Date for such Extraordinary Dividend. If an Extraordinary Dividend occurs with respect to the Stock, the Calculation Agent will adjust the Reference Amount to equal the product of (a) the Reference Amount in effect immediately prior to such adjustment and (b) a fraction, the numerator of which is the Closing Price of the Stock on the Business Day immediately preceding the Ex-Dividend Date and the denominator of which is the amount by which such Closing Price exceeds the Extraordinary Dividend Amount. The "Extraordinary Dividend Amount" with respect to an Extraordinary Dividend for the Stock will equal (1) in the case of cash dividends or other distributions that constitute regular quarterly dividends, the amount per share of such Extraordinary Dividend minus (Face of Security continued on next page) -11- 12 the amount per share of the immediately preceding dividend or distribution with respect to the Stock, if any, that is not an Extraordinary Dividend or (2) in the case of cash dividends or other distributions that do not constitute regular quarterly dividends, the amount per share of such Extraordinary Dividend. To the extent an Extraordinary Dividend is not paid in cash, the value of the non-cash component will be determined by the Calculation Agent. A distribution on the Stock that constitutes a stock dividend, an issuance of transferable rights or warrants or a Spin-Off Event and also constitutes an Extraordinary Dividend will result only in an adjustment to the Reference Amount pursuant to section 8, 10 or 11, as applicable. The Reference Amount will not be adjusted pursuant to this section 9 unless the Ex-Dividend Date for the Extraordinary Dividend occurs after the Trade Date and on or before the Determination Date. 10. Transferable Rights and Warrants If the Stock Issuer issues transferable rights or warrants to all holders of the Stock to subscribe for or purchase the Stock at an exercise price per share less than the Closing Price of the Stock on the Business Day immediately before the Ex-Dividend Date for such issuance, then the Calculation Agent will adjust the Reference Amount by multiplying the Reference Amount in effect immediately prior to such adjustment by a fraction, the numerator of which is the number of shares of Stock outstanding at the close of business on the day before such Ex-Dividend Date plus the number of additional shares of Stock offered for subscription or purchase under such transferable rights or warrants, and the denominator of which is the number of shares of Stock outstanding at the close of business on the day before such Ex-Dividend Date plus the number of additional shares of Stock that the aggregate offering price of the total number of shares of Stock so offered for subscription or purchase would purchase at the Closing Price of the Stock on the Business Day immediately before such Ex-Dividend Date, with such number of additional shares being determined by multiplying the total number of shares so offered by the exercise price of such transferable rights or warrants and dividing the resulting product by the Closing Price of the Stock on the Business Day immediately before such Ex-Dividend Date. The Reference Amount will not be adjusted, however, unless such Ex-Dividend Date occurs after the Trade Date and on or before the Determination Date. 11. Reorganization Events If (i) any reclassification or other change of the Stock occurs, (ii) the Stock Issuer has been subject to a merger, combination or consolidation and is not the surviving entity or it does survive but all the shares of (Face of Security continued on next page) -12- 13 Stock are exchanged for or converted into Distribution Property, (iii) any statutory share exchange involving the outstanding Stock and the securities of another entity occurs (other than in a transaction described in clause (ii) above), (iv) the Stock Issuer sells or otherwise transfers its property and assets as an entirety or substantially as an entirety to another entity, (v) the Stock Issuer issues to all holders of Stock equity securities of an issuer other than the Stock Issuer (other than in a transaction described in clause (i), (ii), (iii) or (iv) above) (a "Spin-Off Event"), (vi) an entity other than the Stock Issuer completes a tender or exchange offer for all the outstanding Stock or for all of a particular type of Exchange Property or (vii) the Stock Issuer is liquidated, dissolved or wound up or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law (any such event in clauses (i) through (vii), a "Reorganization Event"), then the Calculation Agent will adjust the Reference Amount so that the Reference Amount consists of the respective amounts of each type of Distribution Property distributed in such Reorganization Event in respect of the Reference Amount as in effect immediately prior to such adjustment, taken together. Notwithstanding the foregoing, however, the Calculation Agent will not make any adjustment for a Reorganization Event unless the event becomes effective -- or, if the event is a Spin-Off Event, unless the Ex-Dividend Date for the Spin-Off Event occurs -- after the Trade Date and on or before the Determination Date. If a Reorganization Event occurs and the Reference Amount is adjusted pursuant to this section 11, this Security will be exchangeable on the Stated Maturity Date (subject to any further adjustment provided for in this Security) as follows: (a) If the Company does not elect to exchange this Security for cash, each $______ of the Outstanding Face Amount will be exchangeable for the respective amounts of each type of Exchange Property distributed in such Reorganization Event in respect of the Reference Amount in effect immediately prior to such adjustment, as determined by the Calculation Agent. (b) If the Company elects to exchange this Security for cash, each $______ of the Outstanding Face Amount will be exchangeable for cash in an amount (Face of Security continued on next page) -13- 14 equal to the sum of the respective values of each type of Distribution Property distributed in such Reorganization Event in respect of the Reference Amount in effect immediately prior to such adjustment, as determined by the Calculation Agent. If the Calculation Agent determines that the Distribution Property so distributed consists of more than one type of property, as determined by the Calculation Agent, the Calculation Agent will determine the respective amounts of such types that will comprise the adjusted Reference Amount so that the value of each such amount bears the same relationship to the total value of all such amounts as the value of the corresponding component type of Distribution Property so distributed bears to the total value of all Distribution Property so distributed. The Calculation Agent will determine the value of each component type of Distribution Property, using the Closing Price for any such type consisting of securities and such other method as it considers reasonable for any other type. If a holder of the Stock may elect to receive different types or combinations of types of Distribution Property in the Reorganization Event, the Distribution Property will be deemed to include the types and amounts thereof distributed to a holder that makes no election. If a Reorganization Event occurs and as a result the Reference Amount is adjusted to consist of Distribution Property, the Calculation Agent will make further adjustments for subsequent events that affect such Distribution Property or any component type thereof, to the same extent that it would make adjustments if the Stock were outstanding and were affected by the same kinds of events. The Final Stock Price used to calculate the Exchange Rate will be the total value, as determined by the Calculation Agent on the Determination Date, of all components of the Reference Amount, with each component having been adjusted on a sequential and cumulative basis for all relevant events affecting it. If at any time another Person becomes the successor to the Stock Issuer, as determined by the Calculation Agent, such successor Person shall thereupon be deemed to be the Stock Issuer for all purposes of this Security. If at any time the Reference Amount consists of Distribution Property, as determined by the Calculation Agent, then all references in this Security to the "Stock" shall thereupon be deemed to mean such Distribution Property and all references in this Security to a "share of Stock" shall (Face of Security continued on next page) -14- 15 thereupon be deemed to mean a comparable unit of each type of property comprising such Distribution Property, as determined by the Calculation Agent. 12. Minimum Adjustments Notwithstanding the foregoing, no adjustment will be required in respect of any event specified in sections 6 through 10 unless such adjustment would result in a change of at least 0.1% in the Exchange Rate. The Exchange Rate resulting from any adjustment shall be rounded up or down, as appropriate, to the nearest one thousandth, with five ten thousandths being rounded upward--e.g., 0.12344 will be rounded down to 0.1234 and 0.12345 will be rounded up to 0.1235. 13. Role Of Calculation Agent The Calculation Agent will be solely responsible for all determinations and calculations regarding the Default Amount; whether a Market Disruption Event has occurred and whether, and if so the dates to which, the Determination Date and Stated Maturity Date are to be postponed; adjustment of the Reference Amount and Exchange Rate, including whether any event has occurred for which adjustment is required and as to the amounts, types and values of property comprising any Distribution Property and the Reference Amount; the Closing Price or other value of the Stock or any other property; as to the Exchange Rate and the amounts and types of property deliverable or payable in exchange for this Security on the Stated Maturity 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 prices or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated hereby notwithstanding that any one or more of such sources are such agent, Affiliates of such agent or Affiliates of the Company. 14. Tax Characterization By its purchase of this Security, the Holder, on behalf of itself and any other Person having a beneficial (Face of Security continued on next page) -15- 16 interest in this Security, hereby agrees with the Company (in the absence of an administrative determination or judicial ruling to the contrary) to characterize this Security for all U.S. federal income tax purposes as a forward purchase contract to purchase Stock on the Stated Maturity Date, under the terms of which contract (i) at the time of issuance of this Security the Holder deposits irrevocably with the Company a fixed amount of cash equal to the purchase price of this Security to assure the fulfillment of the Holder's purchase obligation described in clause (iii) below, which deposit will unconditionally and irrevocably be applied at the Stated Maturity Date to satisfy such obligation, (ii) until the Stated Maturity Date the Company will be obligated to pay interest on such deposit at a rate equal to the stated rate of interest on this Security (adjusted as appropriate to reflect any difference between the purchase price and the Face Amount) as compensation to the Holder for the Company's use of such cash deposit during the term hereof and (iii) at the Stated Maturity Date such cash deposit unconditionally and irrevocably will be applied by the Company in full satisfaction of the Holder's obligation under the forward purchase contract, and the Company will deliver to the Holder the shares of Stock, or, at the Company's option, an amount of cash equal to the value of the shares of the Stock, that the Holder is entitled to receive at the Stated Maturity Date pursuant to the terms of this Security. The Holder, on behalf of itself and any other Person having a beneficial interest in this Security, further agrees that, consistent with the above characterization, (i) amounts paid to the Company in respect of the original issue of this Security will be treated as allocable in their entirety to the amount of the cash deposit attributable to this Security and (ii) amounts denominated as interest that are payable with respect to this Security will be characterized as interest payable on the amount of such deposit, includible annually in the income of the Holder as interest income in accordance with such Holder's method of accounting. Notwithstanding the foregoing, the Company shall not be obligated to segregate or otherwise set aside any funds, and no act or omission on the part of the Company or any other Person, and no event or circumstance, shall give rise to any default or Event of Default under this Security or the Indenture by reason of any provision of this section 14. 15. Payment and Delivery Payment of any amount payable on this Security in cash will be made in such coin or currency of (Face of Security continued on next page) -16- 17 the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment or delivery of any Stock, cash or other property payable or deliverable 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 interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; and provided, further, that payment or delivery 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 or delivery may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture. 16. Holidays Notwithstanding any provision of this Security or of the Indenture, if any delivery or 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 delivery or payment may be made (or such principal or interest may be made available for delivery or payment) on the next succeeding Business Day with the same force and effect as if such delivery or 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. 17. 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. 18. 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) -17- 18 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: THE GOLDMAN SACHS GROUP, INC. By____________________________ Name: Title: 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 Officer -18- 19 (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 $15,000,000,000 (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 (Reverse of Security continued on next page) -19- 20 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. 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 reasonable 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. 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 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 (Reverse of Security continued on next page) -20- 21 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 denominations of any multiple of $______ that is not less than $50,000. 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. All terms used in this Security which are not defined in this Security but are defined in the Indenture shall have the meanings assigned to them in the Indenture. -21- EX-4.6 5 FORM OF EXCHANGEABLE NOTE 1 Exhibit 4.6 (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) -1- 2 CUSIP NO. ____________ THE GOLDMAN SACHS GROUP, INC. MEDIUM-TERM NOTES, SERIES B __% Exchangeable Note due _____ (Exchangeable for Common Stock of [Index Stock Issuer]) 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: $__________ 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 for Stock at the Exchange Rate, provided that the Company may elect to pay the Holder the cash value of the Stock otherwise deliverable in any such exchange instead of delivering such Stock, all as provided in section 5 on the face of this Security. EXCHANGE RATE: _____ shares of Stock for each $1,000 of the Outstanding Face Amount exchanged, subject to adjustment 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. STOCK and STOCK ISSUER: common stock of [Index Stock Issuer], subject to adjustment as provided 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. (Face of Security continued on next page) -2- 3 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 $10,000 or a multiple of $1,000 in excess of $10,000. "Automatic Exchange" means an exchange of the Outstanding Face Amount of this Security for cash, Stock or other property, as provided in section 7. "Business Day" means any day that is not a Saturday, a Sunday or a day on which [the NYSE] [the Nasdaq National Market] (or, if different, the principal securities market in which the Stock is then quoted or traded), or on which banking institutions in The City of New York generally, are authorized or obligated by law, regulation or executive order to close. "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 _____. 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 Price" means, with respect to any security on any day, the closing sale price or last reported (Face of Security continued on next page) -3- 4 sale price, regular way, for the security on a per-share or other unit basis (i) on the principal national securities exchange on which such security is listed for trading on such day, (ii) in the event such security is not listed on any national securities exchange, on the Nasdaq National Market System on such day or (iii) in the event such security is not quoted in the Nasdaq National Market System on such day, on such other U.S. national market system that is the primary market for the trading of such security; provided, however, that, in the event such security is not listed or quoted as described in clause (i), (ii) or (iii) above, the Closing Price with respect to such security will be the average, as determined by the Calculation Agent, of the bid prices for such security obtained from as many dealers in such security selected by the Calculation Agent (which may include the Calculation Agent or any affiliate of such agent or of the Company) as will make such bid prices available to the Calculation Agent (provided that the number of such dealers need not exceed three). [Modify as appropriate if primary market is outside United States.] "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 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 (Face of Security continued on next page) -4- 5 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. "Determination Date" means the fifth Business Day prior to _______; provided, however, that if a Market Disruption Event occurs or is continuing on each of the fifth, sixth and seventh Business Days prior to ______, 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 _______ or, if ______ is not a Business Day, later than the first Business Day after ________. "Distribution Property" means securities, cash and/or other property distributed in any Reorganization Event in respect of the relevant Reference Amount and, in the case of a Spin-Off Event, includes such Reference Amount. "Exercise Requirements" means, with respect to any exchange of this Security pursuant to section 5, all the following requirements that apply to such exchange: (Face of Security continued on next page) -5- 6 (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. The Calculation Agent will, in its sole discretion, resolve any questions that may arise as to the validity of a Notice (Face of Security continued on next page) -6- 7 of Exchange or as to whether and when the Exercise Requirements have been satisfied in respect of any exchange. "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 third 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. "Ex-Dividend Date" for any dividend or other distribution in respect of the Stock shall mean the first day on which the Stock trades without the right to receive such dividend or other distribution. "Market Disruption Event" means, with respect to the Stock, (i) a suspension, absence or material limitation of trading of the Stock in the primary market for the Stock 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 contracts related to the Stock, 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) the Stock does not trade in what was the primary market for the Stock, 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 (Face of Security continued on next page) -7- 8 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 contracts will not constitute a Market Disruption Event, (c) a suspension or limitation of trading in option contracts related to the Stock, if available, in the primary market for such contracts, by reason of (1) a price change exceeding limits set by such market, (2) an imbalance of orders relating to such contracts or (3) a disparity in bid and ask quotes relating to such contracts, will, in each case (1), (2) and (3), constitute a suspension or material limitation of trading in option contracts related to the Stock and (d) an "absence of trading" in the primary market on which option contracts related to the Stock are traded will not include any time when such market is itself closed for trading under ordinary circumstances. References to the Stock in this paragraph will also be deemed to refer to any Distribution Property consisting of securities. "NASD" means the National Association of Securities Dealers, Inc. "Notice of Exchange" means a properly completed and signed notice substantially in the form attached to the Company's prospectus supplement dated _______ 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. "NYSE" means the New York Stock Exchange, Inc. "Original Issue Date" means __________. "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 (Face of Security continued on next page) -8- 9 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. "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 Amount" means, initially, the amount of Stock specified above under "Exchange Rate" and shall be adjusted, as to the amount(s) and/or type(s) of property comprising the same, by the Calculation Agent as provided in sections 8 through 15. "Stated Maturity Date" means ______ or, if such day is not a Business Day, the next succeeding Business Day; provided, however, that if the fifth Business Day preceding _______ 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 ______ or, if ________ is not a Business Day, later than the sixth Business Day after ______. "Trade Date" means ________. ________________________ 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, 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 __________ and (Face of Security continued on next page) -9- 10 ______________ (each an "Interest Payment Date") in each year, commencing on _____________, and at the Maturity of the principal at the rate of ___% 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 rate of ___% per annum (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 ________, then the Interest Payment Date that would otherwise occur on _________ 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 duly provided for, 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 duly provided for, 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 (Face of Security continued on next page) -10- 11 required by such exchange, all as more fully provided in the Indenture. 3. No Fractional Shares No fractional shares will be delivered in exchange for this Security. If more than one Security of this series and of like tenor are to be exchanged for Stock on the same date and by the same Holder pursuant to section 5, 7(a) or 7(b), the number of full shares that will be delivered upon exchange will be calculated on the basis of the aggregate number of such Securities. If this Security is a Global Security and two or more portions of this Security are to be exchanged for Stock on the same date pursuant to two or more Notices of Exchange, the number of full shares that will be delivered upon exchange will be calculated separately with respect to each such Notice of Exchange, on the basis of the Face Amount to be exchanged pursuant to each such Notice of Exchange. In lieu of any fractional share otherwise deliverable in exchange for this Security, the Holder shall be entitled to receive an amount in cash equal to the value of such fractional share based on the following: (i) for an exchange pursuant to section 5, the Closing Price of the relevant security on the relevant Exchange Notice Date and (ii) for an exchange pursuant to section 7(a) or 7(b), the Average Closing Price of the relevant security, as determined pursuant to such section (or such other price as may apply in lieu thereof pursuant to section 7(c)). With respect to any security other than a share of capital stock, a fractional share shall be deemed to mean any denomination other than an authorized denomination for such security. 4. Principal Amount The principal of this Security that becomes due and payable on the Stated Maturity Date shall be the Outstanding Face Amount unless an Automatic Exchange is to occur on such date, in which case such principal shall be the cash, Stock or other property that the Company is obligated to deliver (or cause to be delivered) 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, Stock or other property that the Company is obligated to deliver (or cause to be delivered) in such Automatic Exchange. The principal of this Security that becomes due (Face of Security continued on next page) -11- 12 and payable on any Exchange Date shall be the cash, Stock or other property that the Company is obligated to deliver 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, Stock or other property referred to above in this section 4 has been paid or delivered as provided herein (or such payment or delivery has been duly provided for), 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 delivery or payment of cash, Stock or other property that is payable or deliverable 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 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 duly provided for). 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 shares of Stock at the Exchange Rate, 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 third Business Day before the Determination Date and (ii) any Call Notice Date. If the Holder makes such an election, the Company may choose, at its sole option, either to deliver such shares of Stock to the Holder (subject to section 3 above) or to pay cash to the Holder in an amount equal to the value of such shares (including any fractional share), which value shall equal the number of such shares (Face of Security continued on next page) -12- 13 multiplied by the Closing Price of the Stock on the applicable Exchange Notice Date. The Company shall make (or cause its agent to make) the delivery or payment due in any such exchange on the applicable Exchange Date and in the manner provided in section 17 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 the Holder exercises the Exchange Right and if the Company chooses to pay cash instead of delivering Stock on the applicable Exchange Date, the Company will notify the Holder of its election no later than the Business Day after the related Exchange Notice Date. If the Holder exercises the Exchange Right and the Company does not notify the Holder of such election on the Business Day after the related Exchange Notice Date, the Company will deliver shares of Stock (subject to section 3) on the Exchange Date, except as provided below in this section 5. The Company will give any such notice by telephone or telecopier to the number specified in the applicable Notice of Exchange by the Person who signs such notice. 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. In the event that a Market Disruption Event occurs or is continuing on an Exchange Notice Date or on any later day through and including the related Exchange Date, the Company may choose to pay cash instead of delivering Stock on such Exchange Date, even if the Company has not notified (Face of Security continued on next page) -13- 14 the Holder of its election to pay cash as provided above in this section 5. If the Company elects to pay the cash value of the Stock otherwise deliverable on an Exchange Date but the Closing Price of the Stock that must be used to determine such cash 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 Price based on its assessment, made in its sole discretion, of the market value of the Stock on such Exchange Notice Date. This paragraph shall apply whether the election to pay cash is made pursuant to the prior paragraph or the second paragraph of this section 5. 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 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. (Face of Security continued on next page) -14- 15 (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 delivery or 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 delivery or 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 8 Business Days' nor more than 15 Business Days'] [not less than 15 days' nor more than 30 days'] notice, at any time after ____________, in whole but not in part, at the election of the Company for cash at [a Redemption Price equal to __% of the Outstanding Face Amount on the Call Date, plus accrued interest to the Call Date] [the following Redemption Prices, which are expressed as a percentage of the Outstanding Face Amount on the Call Date: If redeemed during the 12-month period beginning on ____ of the years indicated, Year Redemption Price % (Face of Security continued on next page) -15- 16 and thereafter at a Redemption Price equal to __% of the Outstanding Face Amount on the Call Date, together in the case of any such redemption with 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 third 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 number of shares of Stock (including any fractional share) that would be deliverable in exchange for the Outstanding Face Amount on such date at the Exchange Rate, if such amount were to be exchanged on such date pursuant to section 5, and (ii) will multiply such number of shares by the average of the Closing Prices of the Stock on each of the three consecutive Business Days ending on and including the Determination Date, 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(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 (Face of Security continued on next page) -16- 17 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, either the Company will deliver to the Holder the shares of Stock specified in clause (i) of the prior paragraph or, at the Company's option, the Company will pay to the Holder cash in an amount equal to the Section 7(a) Amount. The Company will be entitled to select either of these alternatives at its option and without notifying the Holder or any other Person of its selection. 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 number of shares to be delivered or 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 number of shares of Stock (including any fractional share) that (Face of Security continued on next page) -17- 18 would be deliverable in exchange for the Outstanding Face Amount on such day at the Exchange Rate, if such amount were to be exchanged on such day pursuant to section 5, and (ii) will multiply such number of shares by the average of the Closing Prices of the Stock on each of the three consecutive Business Days beginning on and including the Call Notice Date, 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, either the Company will deliver to the Holder the shares of Stock specified in clause (i) of the prior paragraph or, at the Company's option, the Company will pay to the Holder cash in an amount equal to the Section 7(b) Amount. The Company will be entitled to select either of these alternatives at its option and without notifying the Holder or any other Person of its selection. 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 number of shares to be delivered or 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 (Face of Security continued on next page) -18- 19 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 delivery or 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 delivery or 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) through (iv) below. For the purposes of this section 7(c), the three-Business Day pricing periods referred to in sections 7(a) and 7(b) are each called a "Pricing Period" and the averages of the Closing Prices specified in sections 7(a) and 7(b) are each called an "Average Closing Price". (i) If a Market Disruption Event occurs or is continuing on only one Business Day during the relevant Pricing Period, the Calculation Agent will use, instead of the relevant Average Closing Price, the average of the Closing Prices on the two other Business Days during that period. (ii) If a Market Disruption Event occurs or is continuing on only two Business Days during the relevant Pricing Period, the Calculation Agent will use, instead of the relevant Average Closing Price, the Closing Price on the one other Business Day during that period. (iii) If a Market Disruption Event occurs or is continuing on all three Business Days during the relevant Pricing Period, then the Calculation Agent will use, instead of the relevant Average Closing Price, the Closing Price on the first Business Day after that period 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 relevant Pricing Period, 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 (Face of Security continued on next page) -19- 20 Possible Pricing Date". (The Deferred Pricing Date may occur on the Latest Possible Pricing Date.) (iv) If a Market Disruption Event occurs or is continuing on each Business Day during the relevant Pricing Period and on each subsequent Business Day through and including the Latest Possible Pricing Date, the Calculation Agent will nevertheless determine the Closing Price of the Stock (and the Deferred Pricing Date will occur) on the Latest Possible Pricing Date. If the Calculation Agent determines that the Closing Price 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 Price based on its assessment, made in its sole discretion, of the market value of the Stock on the Latest Possible Pricing Date. The Calculation Agent will use the Closing Price on the Latest Possible Pricing Date, however determined, instead of the Average Closing Price. If a Call Notice is given and the Calculation Agent uses the Closing Price (however determined as aforesaid) on a Deferred Pricing Date as provided in clause (iii) or (iv) 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 last day of the relevant Pricing Period will be the "Section 7(b) Calculation Day" unless the Calculation Agent uses a Closing Price on the Deferred Pricing Date to determine the Section 7(b) Amount, in which case the "Section 7(b) Calculation Day" will be such Deferred Pricing Date. 8. Antidilution Adjustment. The Calculation Agent shall adjust the Exchange Rate as provided in this Security in respect of each event for which adjustment is required under sections 9 through 14 (and not in respect of any other event). (If more than one such event occurs, the Calculation Agent shall adjust the Exchange Rate as so provided for each such event, (Face of Security continued on next page) -20- 21 sequentially, in the order in which such events occur, and on a cumulative basis.) With respect to any portion of this Security to be exchanged, including any portion subject to an Automatic Exchange, the Calculation Agent will make the required determinations and adjustments no later than the related Exchange Notice Date. Solely for this purpose, the Exchange Notice Date for an Automatic Exchange will be the last Business Day for which the Closing Price or other market value of the Stock is used to determine the amount of cash payable in such exchange. If any event requiring adjustment occurs during a Pricing Period for an Automatic Exchange, so that one or more but not all the Closing Prices used to calculate the relevant Average Closing Price are affected by the event, the Calculation Agent will make any additional adjustments it considers necessary to give appropriate effect to this fact. Notwithstanding any provision of this Security, if an event for which adjustment is required under sections 9 through 14 occurs, the Calculation Agent may make the adjustment and any related determinations and calculations in a manner that differs from that specified in this Security as necessary to achieve an equitable result. Upon written request by the Holder to the Calculation Agent, the Calculation Agent will provide the Holder with such information about adjustments made pursuant to this Security as such agent determines is appropriate. 9. Stock Splits. If the Stock is subject to a stock split, then at the opening of business on the first day on which the Stock trades without the right to receive the stock split, the Calculation Agent will adjust the Exchange Rate to equal the sum of the Exchange Rate in effect immediately prior to such adjustment plus the product of (i) the number of new shares issued in the stock split with respect to one share of the Stock and (ii) the Exchange Rate in effect immediately prior to such adjustment. The Exchange Rate will not be adjusted, however, unless such first day occurs after the Trade Date and on or before the relevant Exchange Notice Date. 10. Reverse Stock Splits. If the Stock is subject to a reverse stock split, then once the reverse stock split becomes effective, the (Face of Security continued on next page) -21- 22 Calculation Agent will adjust the Exchange Rate to equal the product of the Exchange Rate in effect immediately prior to such adjustment and the quotient of (i) the number of shares of outstanding Stock resulting from the reverse stock split divided by (ii) the number of shares of Stock outstanding immediately before the reverse stock split becomes effective. The Exchange Rate will not be adjusted, however, unless the reverse stock split becomes effective after the Trade Date and on or before the relevant Exchange Notice Date. 11. Stock Dividends. If the Stock is subject to a stock dividend that is given ratably to all holders of the Stock, then at the opening of business on the Ex-Dividend Date, the Calculation Agent will adjust the Exchange Rate to equal the Exchange Rate in effect immediately prior to such adjustment plus the product of (i) the number of shares issued in the Stock dividend with respect to one share of the Stock and (ii) the Exchange Rate in effect immediately prior to such adjustment. The Exchange Rate will not be adjusted, however, unless such Ex-Dividend Date occurs after the Trade Date and on or before the relevant Exchange Notice Date. 12. Other Dividends and Distributions. There will be no adjustments to the Exchange Rate to reflect dividends or other distributions paid with respect to the Stock other than (i) stock dividends as provided in section 11, (ii) dividends or other distributions constituting Spin-Off Events as provided in section 14, (iii) issuances of transferable rights or warrants as provided in section 13 and (iv) Extraordinary Dividends as provided in this section 12. A dividend or other distribution with respect to the Stock will be deemed to be an "Extraordinary Dividend" if the per share value of such dividend or other distribution exceeds the per share value of the immediately preceding dividend or distribution with respect to the Stock, if any, that is not an Extraordinary Dividend by an amount equal to at least 10% of the Closing Price of the Stock on the Business Day immediately preceding the Ex-Dividend Date for such Extraordinary Dividend. If an Extraordinary Dividend occurs with respect to the Stock, the Calculation Agent will adjust the Exchange Rate to equal the product of (a) the Exchange (Face of Security continued on next page) -22- 23 Rate in effect immediately prior to such adjustment and (b) a fraction, the numerator of which is the Closing Price of the Stock on the Business Day immediately preceding the Ex-Dividend Date and the denominator of which is the amount by which such Closing Price exceeds the Extraordinary Dividend Amount. The "Extraordinary Dividend Amount" with respect to an Extraordinary Dividend for the Stock will equal (1) in the case of cash dividends or other distributions that constitute regular quarterly dividends, the amount per share of such Extraordinary Dividend minus the amount per share of the immediately preceding dividend or distribution with respect to the Stock, if any, that is not an Extraordinary Dividend or (2) in the case of cash dividends or other distributions that do not constitute regular quarterly dividends, the amount per share of such Extraordinary Dividend. To the extent an Extraordinary Dividend is not paid in cash, the value of the non-cash component will be determined by the Calculation Agent. A distribution on the Stock that constitutes a stock dividend, an issuance of transferable rights or warrants or a Spin-Off Event and also constitutes an Extraordinary Dividend will result only in an adjustment to the Exchange Rate pursuant to section 11, 13 or 14, as applicable. The Exchange Rate will not be adjusted pursuant to this section 12 unless the Ex-Dividend Date for the Extraordinary Dividend occurs after the Trade Date and on or before the relevant Exchange Notice Date. 13. Transferable Rights and Warrants. If the Stock Issuer issues transferable rights or warrants to all holders of the Stock to subscribe for or purchase the Stock at an exercise price per share less than the Closing Price of the Stock on the Business Day immediately before the Ex-Dividend Date for such issuance, then the Calculation Agent will adjust the Exchange Rate by multiplying the Exchange Rate in effect immediately prior to such adjustment by a fraction, the numerator of which is the number of shares of Stock outstanding at the close of business on the day before such Ex-Dividend Date plus the number of additional shares of Stock offered for subscription or purchase under such transferable rights or warrants, and the denominator of which is the number of shares of Stock outstanding at the close of business on the day before such Ex-Dividend Date plus the number of additional shares of Stock that the aggregate offering price of the total number of shares of Stock so offered for (Face of Security continued on next page) -23- 24 subscription or purchase would purchase at the Closing Price of the Stock on the Business Day immediately before such Ex-Dividend Date, with such number of additional shares being determined by multiplying the total number of shares so offered by the exercise price of such transferable rights or warrants and dividing the resulting product by the Closing Price of the Stock on the Business Day immediately before such Ex-Dividend Date. The Exchange Rate will not be adjusted, however, unless such Ex-Dividend Date occurs after the Trade Date and on or before the relevant Exchange Notice Date. 14. Reorganization Events. If (i) any reclassification or other change of the Stock occurs, (ii) the Stock Issuer has been subject to a merger, combination or consolidation and is not the surviving entity or it does survive but all the shares of Stock are exchanged for or converted into Distribution Property, (iii) any statutory share exchange involving the outstanding Stock and the securities of another entity occurs (other than in a transaction described in clause (ii) above), (iv) the Stock Issuer sells or otherwise transfers its property and assets as an entirety or substantially as an entirety to another entity, (v) the Stock Issuer issues to all holders of Stock equity securities of an issuer other than the Stock Issuer (other than in a transaction described in clause (i), (ii), (iii) or (iv) above) (a "Spin-Off Event"), (vi) an entity other than the Stock Issuer completes a tender or exchange offer for all the outstanding Stock or (vii) the Stock Issuer is liquidated, dissolved or wound up or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law (any such event in clauses (i) through (vii), a "Reorganization Event"), then the Calculation Agent will adjust the Exchange Rate by adjusting the Reference Amount so that the Reference Amount consists of the respective amounts of each type of Distribution Property deemed, for the purposes of this Security, to be distributed in such Reorganization Event in respect of the Reference Amount as in effect immediately prior to such adjustment, taken together. If the Calculation Agent determines that the Distribution Property so distributed consists of more than one type of property, the Calculation Agent will determine the respective amounts of such types that will comprise the (Face of Security continued on next page) -24- 25 adjusted Reference Amount so that the value of each such amount bears the same relationship to the total value of all such amounts as the value of the corresponding component type of Distribution Property so distributed bears to the total value of all Distribution Property so distributed. The Calculation Agent will determine the value of each component type of Distribution Property, using the Closing Price for any such type consisting of securities and such other method as it considers reasonable for any other type. If a holder of the Stock may elect to receive different types or combinations of types of Distribution Property in the Reorganization Event, the Distribution Property will be deemed to include the types and amounts thereof distributed to a holder that makes no election. If a Reorganization Event occurs and as a result the Reference Amount is adjusted to consist of Distribution Property, the Calculation Agent will make further adjustments for subsequent events that affect such Distribution Property or any component type thereof, to the same extent that it would make adjustments if the Stock were outstanding and were affected by the same kinds of events. Consequently, if the Holder exercises the Exchange Right or an Automatic Exchange occurs, the Holder will be entitled to receive, for each $1,000 of the Outstanding Face Amount of this Security being exchanged, all components of the Reference Amount as in effect on the relevant Exchange Notice Date, with each component having been adjusted on a sequential and cumulative basis for all events requiring adjustment on or before the relevant Exchange Notice Date, unless the Company elects to pay cash in the exchange. If the Exchange Right is exercised or an Automatic Exchange occurs and the Company elects to pay cash in the exchange, the Company will do so based on the applicable price of the Stock pursuant to section 5, 7(a) or 7(b) as long as the Reference Amount consists only of Stock. If a Reorganization Event occurs and the Reference Amount consists of property other than Stock, then the amount of cash the Company will pay -- for each $1,000 of the Outstanding Face Amount of this Security being exchanged -- will equal the total value of the adjusted Reference Amount, as in effect on the relevant Exchange Notice Date. The Calculation Agent will determine the value of each component of the adjusted Reference Amount as provided in the prior paragraph. (Face of Security continued on next page) -25- 26 If at any time another Person becomes the successor to the Stock Issuer, as determined by the Calculation Agent, such successor Person shall thereupon be deemed to be the Stock Issuer for all purposes of this Security. If at any time the Reference Amount consists of Distribution Property, as determined by the Calculation Agent, then all references in this Security to the "Stock" shall thereupon be deemed to mean such Distribution Property and all references in this Security to a "share of Stock" shall thereupon be deemed to mean a comparable unit of each type of property comprising such Distribution Property, as determined by the Calculation Agent. Notwithstanding the foregoing, however, the Calculation Agent will not make any adjustment for a Reorganization Event unless the event becomes effective -- or, if the event is a Spin-Off Event, unless the Ex-Dividend Date for the Spin-Off Event occurs -- after the Trade Date and on or before the relevant Exchange Notice Date. 15. Minimum Adjustments. Notwithstanding the foregoing, no adjustment will be required in respect of any event specified in sections 9 through 14 unless such adjustment would result in a change of at least 0.1% in the Exchange Rate. The Exchange Rate resulting from any adjustment shall be rounded up or down, as appropriate, to the nearest ten-thousandth, with five hundred-thousandths being rounded upward -- e.g., 0.12344 will be rounded down to 0.1234 and 0.12345 will be rounded up to 0.1235. 16. Role of Calculation Agent. The Calculation Agent will be solely responsible for all determinations and calculations regarding the 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; adjustment of the Exchange Rate and Reference Amount, including whether any event has occurred for which adjustment is required and as to the amounts, types and values of property comprising any Distribution Property and the Reference Amount; whether an Automatic Exchange is to occur on the Stated Maturity Date or any Call Date and as to (Face of Security continued on next page) -26- 27 the Section 7(a) Amount or Section 7(b) Amount, including the relevant Pricing Period and Average Closing Price and any alternative price to be used in making this determination; the Closing Price or other value of the Stock or any other property; as to the Exchange Rate and the amounts and types of property deliverable or 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 prices or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated hereby notwithstanding that any one or more of such sources are such agent, Affiliates of such agent or Affiliates of the Company. 17. Payment and Delivery. 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 or delivery of any Stock, cash or other property payable or deliverable 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, (Face of Security continued on next page) -27- 28 provided, however, that, at the option of the Company, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; and provided, further, that payment or delivery 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 or delivery may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture. 18. Holidays. Notwithstanding any provision of this Security or of the Indenture, if any delivery or 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 delivery or payment may be made (or such principal or interest may be made available for delivery or payment) on the next succeeding Business Day with the same force and effect as if such delivery or 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. 19. 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. 20. 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) -28- 29 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: THE GOLDMAN SACHS GROUP, INC. By____________________________ Name: Title: 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 Officer -29- 30 (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 $15,000,000,000 (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 (Reverse of Security continued on next page) -30- 31 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. 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 reasonable 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. 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 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 (Reverse of Security continued on next page) -31- 32 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. -32- EX-8.2 6 OPINION RE TAX MATTERS 1 Exhibit 8.2 July 1, 1999 The Goldman Sachs Group, Inc., 85 Broad Street, New York, New York 10004. Ladies and Gentlemen: As counsel to The Goldman Sachs Group, Inc. (the "Company") in connection with the issuance of $72,411,000 aggregate principal amount of 2.00% Exchangeable Notes due 2006 (Exchangeable for Common Stock of Wells Fargo & Company), we hereby confirm to you that the discussion set forth under the heading "Supplemental Discussion of Federal Income Tax Consequences" in the Prospectus Supplement which forms a part of the Registration Statement of the Company to which this opinion is filed as an exhibit is our opinion, subject to the limitations set forth therein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading "Supplemental Discussion of Federal Income Tax Consequences" in the Prospectus Supplement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ SULLIVAN & CROMWELL -----END PRIVACY-ENHANCED MESSAGE-----