GUARANTEE
AGREEMENT , dated as of November 28, 2008 (this “
Agreement ” ), between The Goldman Sachs Group,
Inc., a Delaware corporation (the “ Parent
” ), and Goldman Sachs Bank USA, a bank chartered under
the Laws of the State of New York (together with its predecessors,
the “ Bank ” ).
WHEREAS, in
connection with the Parent becoming a bank holding company under
the U.S. Bank Holding Company Act of 1956, as amended, on
September 21, 2008, Goldman Sachs Capital Markets, L.P., a
limited partnership organized under the Laws of the State of New
York, was merged with and into The Goldman Sachs Trust Company, a
limited-purpose trust chartered under the Laws of the State of New
York ( “ GS Trust ” ), then Goldman Sachs
Capital Markets L.L.C., a Delaware limited liability company, was
merged with and into GS Trust, and then Goldman Sachs Bank USA, an
industrial bank chartered under the Laws of the State of Utah, was
merged with and into GS Trust, in each case with GS Trust as the
surviving entity (collectively, the “ Merger
” );
WHEREAS, upon
consummation of the Merger, GS Trust changed its name to Goldman
Sachs Bank USA and received approval to become a member bank of the
Federal Reserve System (the “ Federal Reserve
System ” ) and to expand its banking
powers;
WHEREAS, the Bank
is a wholly owned subsidiary of the Parent;
WHEREAS, in
connection with the restructuring described above, the Board of
Governors of the Federal Reserve System (the “ Federal
Reserve Board ” ) has provided guidance to the Bank
via teleconference and in a written summary, issued
October 10, 2008, that sets forth the principal terms of the
exemption that it has granted to the Bank from the provisions of
Section 23A of the Federal Reserve Act, as amended (the
“ Section 23A Exemption ” ), to
permit the Parent or another Affiliate to transfer certain assets
to the Bank without complying with the provisions of
Regulation W that would otherwise apply to such transfers
(such assets, as further defined below, the “
Transferred Assets ” ), and has indicated that it
will provide to the Bank a formal written statement of all the
terms of the Section 23A Exemption in due course;
WHEREAS, as a
further condition to granting the Section 23A Exemption, the
Federal Reserve Board has imposed the requirement that the Parent
provide certain guarantees in respect of the Transferred Assets,
and the Parent has agreed to provide such guarantees (collectively,
the “ Guarantee ” );
WHEREAS, this
Agreement is intended to satisfy that condition; and
WHEREAS, upon
receipt by the Bank of the final written statement of the terms of
the Section 23A Exemption, the parties hereto intend to amend this
Agreement and the Collateral Agreement (as defined below), as
necessary, to reflect the terms of such Section 23A
Exemption;
NOW ,
THEREFORE , in consideration of the foregoing premises, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this
Agreement, intending to be legally bound, hereby agree as
follows:
1. Definitions; Interpretation.
(a) The
following terms have the following meanings:
“
Action ” means any claim, action, suit,
arbitration or proceeding by or before any Governmental Authority
or arbitral body.
“
Affiliate ” means any “affiliate” of
the Bank, as defined in Regulation W.
“
Agreement ” has the meaning given to that term in
the Preamble.
“
Bank ” has the meaning given to that term in the
Preamble.
“
Bank Subsidiary ” means any Subsidiary of the
Bank.
“
Business Day ” means any day that (x) is not
a Saturday, a Sunday or other day on which commercial banks in The
City of New York, State of New York, are required or authorized by
Law to be closed and (y) is a day on which the New York Stock
Exchange, Inc. is open for trading during its regular trading
session (notwithstanding its closing prior to its scheduled closing
time).
“
Collateral Agreement ” means the Collateral
Agreement, dated as of November 28, 2008, between the Bank and
the Parent and certain of its Subsidiaries from time to
time.
“
Credit-Related Losses ” means any losses (any such
loss to be calculated as the difference, if negative, between the
Original Transfer Value of such Transferred Asset and its sale
price) incurred upon the sale of any Transferred Assets by the Bank
or any Bank Subsidiary to any party other than the Bank or any
other Bank Subsidiary, except to the extent that the Bank
determines, by reference to credit spreads applicable to the
relevant obligor and using the valuation methods used in the
Bank’s market and risk management activities, that such
losses do not arise from any deterioration in the creditworthiness
of any obligor in respect of such Transferred Asset.
“
Derivatives ” means any swaps, options, futures,
forwards, and other assets arising from similar
transactions.
“
Federal Reserve Board ” has the meaning given to
that term in the Recitals.
“
Federal Reserve System ” has the meaning given to
that term in the Recitals.
“
Governmental Authority ” means any domestic or
foreign governmental or regulatory authority, agency, commission,
body, court or other legislative, executive or judicial
governmental entity.
“ GS
Trust ” has the meaning given to that term in the
Recitals.
“
Guarantee ” has the meaning given to that term in
the Recitals.
“
Law ” means any federal, state, local or foreign
law, statute or ordinance, or any rule, regulation, standard or
agency requirement, of any Governmental Authority.
“
Low-Quality Asset ” has the meaning specified in
Regulation W.
“
Merger ” has the meaning given to that term in the
Recitals.
“
Mortgage Servicing Rights ” means the right to
service a mortgage and collect a fee.
“
Non-Bank Subsidiary ” means any Subsidiary of the
Parent other than the Bank or any Bank Subsidiary.
"
Non-Performing Asset " means any Transferred Asset
that the Bank has identified as non-performing on the basis that,
under the relevant documentation relating to such Transferred
Asset, a Default or Event of Default (each defined in such
documentation) or any similar event, however described, has
occurred.
“
Original Transfer Value ” means, with respect to
any Transferred Asset, (x) if that Transferred Asset was
purchased by the Bank or any Bank Subsidiary from the Parent or any
Non-Bank Subsidiary, the purchase price paid by the Bank or such
Bank Subsidiary for such Transferred Asset, and (y) if that
Transferred Asset was contributed to the Bank or any
Bank
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Subsidiary by
the Parent or any Non-Bank Subsidiary, either directly or by
contributing the equity of or other interests in any Person that
owns such Transferred Asset to the Bank or any Bank Subsidiary, the
fair value of the Transferred Asset as of the date initially
recognized by the Bank.
“
Parent ” has the meaning given to that term in the
Preamble.
“
Person ” means a natural person, corporation,
limited liability company, partnership, joint venture, trust,
estate, unincorporated organization or Governmental
Authority.
“
Regulation W ” means the Federal Reserve
regulation pursuant to Section 23A codified at 12 C.F.R.
Part 223.
“
Section 23A Exemption ” has the meaning given
to that term in the Recitals.
“
Servicing Advances ” means a payment of funds by
the Bank, as servicer of a mortgage pursuant to any Transferred
Mortgage Servicing Rights, for the purpose of preserving collateral
or enforcing rights.
“
Subsidiary ” has the meaning given to that term in
Regulation W.
“
Termination Date ” means, with respect to any
Transferred Asset, the earlier of (x) the date on which all
amounts due under or in respect of such Transferred Asset have been
paid in full, and (y) the date on which such Transferred Asset
is sold by the Bank or any Bank Subsidiary to any Person other than
the Bank or any other Bank Subsidiary; provided, however,
that the Termination Date with respect to any Transferred
Derivative shall be the fifth anniversary of the date on which such
Transferred Derivative was transferred by the Parent or any
Non-Bank Subsidiary to the Bank or any Bank Subsidiary.
“
Transferred Assets ” has the meaning given to that
term in the Recitals; provided, however, that for the
avoidance of doubt, “ Transferred Assets
” shall not include any loans that are held by any Bank
Subsidiary in which a participation has been granted pursuant to
the Master Participation Agreement entered into by certain Bank
Subsidiaries and certain Non-Bank Subsidiaries in connection with
the Mergers.
“
Transferred Derivatives ” means any Transferred
Assets that are Derivatives.
“
Transferred Mortgage Servicing Rights ” means any
Transferred Assets that are Mortgage Servicing Rights.
In
interpreting this Agreement:
(i) words in the
singular shall include the plural and vice versa, and words of one
gender shall include the other gender as the context
requires;
(ii) references to
Articles, Sections, paragraphs, Exhibits, Annexes and Schedules are
references to the Articles, Sections and paragraphs of, and
Exhibits, Annexes and Schedules to, this Agreement unless otherwise
specified;
(iii) references
to “ $ ” shall mean U.S.
dollars;
(iv) the words
“ includes ” and “
including ” and words of similar import shall be
deemed to be followed by the words “ without
limitation ” unless otherwise specified;
(v) the word
“ or ” shall not be exclusive;
(vi) the words
“ herein ” , “ hereof
” and “ hereunder ” , and
similar terms, are to be deemed to refer to this Agreement as a
whole and not to any specific section;
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(vii) the headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement;
(viii) this
Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted;
(ix) if a word or
phrase is defined, the other grammatical forms of such word or
phrase have a corresponding meaning; and
(x) references to
any statute, listing rule, rule, standard, regulation or other law
(a) include a reference to the corresponding rules and
regulations and (b) include a reference to each of them as
amended, modified, supplemented
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