EXHIBIT 10.35
[Execution Copy]
April 30, 1999
Wallace G.K. Chin
President
Kamehameha Activities Association
567 South King Street, Suite 301
Honolulu, HI 96813
The Trustees of the Estate of Bernice Pauahi Bishop
P.O. Box 3466
567 South King Street, Suite 200
Honolulu, HI 96813
Dear Mr. Chin and Bishop Estate Trustees:
This letter (this "Letter Agreement") sets forth the agreement among
Kamehameha Activities Association ("KAA" or "Knight"), The Trustees of the
Estate of Bernice Pauahi Bishop (the "Bishop Estate"), The Goldman Sachs Group,
L.P. ("GS Group") and The Goldman Sachs Group, Inc. ("GS Inc.") with respect to
certain matters, and amends and supplements the Letter Agreement among KAA and
GS Group dated March 15, 1999 (the "KAA Letter Agreement").
Reference is made to the Memorandum of Agreement of GS Group, as
amended and restated as of November 28, 1998 (the "GS Group Partnership
Agreement") and to (i) the Subscription Agreement, dated as of April 24, 1992
(the "1992 Subscription Agreement"), among the Bishop Estate, Pauahi Holdings
Corporation ("Knight's Parent") and Royal Hawaiian Shopping Center, Inc.
("RHSC"), which has transferred all its interests in GS Group to KAA pursuant to
an Assumption Agreement (the "Assumption Agreement") dated as of July 15, 1998
between KAA and RHSC for the benefit of GS Group, and GS Group, (ii) the
Subscription Agreement, dated as of November 21, 1994 (the "1994 Subscription
Agreement" and, collectively with the 1992 Subscription Agreement, the
"Subscription Agreements"), among the Bishop Estate, Knight's Parent and RHSC
and GS Group, and (iii) the Registration Rights Agreement (the "Registration
Rights Agreement"), dated as of April 24, 1992, between RHSC and GS Group, as
amended by Amendment No. 1 thereto dated November 24, 1994. KAA has assumed all
of RHSC's rights and obligations under the Subscription Agreements and the
Registration Rights Agreement pursuant to the Assumption Agreement. Capitalized
terms used herein, but not otherwise defined herein, shall have the meanings
ascribed thereto in the KAA Letter
Kamehameha Activities Association
April 30, 1999
Page 2
Agreement. This Letter Agreement shall be a modification of and an amendment to
the KAA Letter Agreement, the Subscription Agreements and the Registration
Rights Agreement to the extent set forth herein.
The parties hereby agree as follows:
1. Common Stock to be Sold by KAA. In the KAA Letter
Agreement, KAA agreed that, if requested by GS Inc., it would sell
9,000,000 shares of Common Stock in a secondary offering as a part of
the IPO. The provisions of the KAA Letter Agreement are hereby modified
to provide that the Bishop Estate hereby agrees that, if requested by
GS Inc., the Bishop Estate shall join in the sale by KAA of 9,000,000
shares of Common Stock in a secondary offering as a part of the IPO and
shall also consent to such sale. The parties hereto agree that the
indemnification and contribution provisions contained in the
Registration Rights Agreements shall be applicable to any sale of such
shares of Common Stock in the secondary offering as part of the IPO on
the same terms and conditions as are applicable to piggy-back
registrations pursuant to Section 2(b) of the Registration Rights
Agreement.
2. Cooperation in Respect of Filings under Sections 13(d) and
16(a) of the Exchange Act. The Bishop Estate, KAA and GS Inc. each
hereby agree to furnish information to each other and to Sumitomo Bank
Capital Markets, Inc. ("SBCM") to permit each of KAA, SBCM and the
parties to the Shareholders' Agreement to be entered into among the
PLPs in connection with the Plan to satisfy their obligations to file
statements containing the information required by Schedule 13D under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
in accordance with Rule 13d-1 under the Exchange Act, and to file
statements of beneficial ownership under Section 16(a) of the Exchange
Act. GS Inc. hereby agrees to obtain similar undertakings from SBCM for
the benefit of the Bishop Estate, KAA, GS Inc. and the parties to the
foregoing Shareholders' Agreement.
3. Legend on Certificates. Section 10(a) of each of the
Subscription Agreements sets forth the legend that certificates
representing Common Stock shall bear and provides that the Bishop
Estate and GS Group may agree to another form of legend. The Bishop
Estate and GS Group hereby agree that shares of Common Stock issued in
connection with the consummation of the Plan of Incorporation (other
Kamehameha Activities Association
April 30, 1999
Page 3
than, if requested by GS Inc., the 9,000,000 shares of Common Stock to
be sold in the secondary offering as part of the IPO) and thereafter,
unless otherwise agreed by GS Inc. and KAA, shall bear the following
legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
(THE "SHARES") HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR OTHER
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, EXCHANGED,
TRANSFERRED, ASSIGNED, PLEDGED, PARTICIPATED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (EACH, A "TRANSFER") EXCEPT PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND,
IF APPLICABLE, SUCH OTHER SECURITIES LAWS AND FOLLOWING
RECEIPT BY THE GOLDMAN SACHS GROUP, INC. (THE "CORPORATION")
OF A LEGAL OPINION IN FORM AND SUBSTANCE SATISFACTORY TO IT
THAT SUCH TRANSFER IS PERMITTED.
THE SHARES ARE SUBJECT TO THE PROVISIONS OF A LETTER
AGREEMENT, DATED AS OF MARCH 15, 1999 (AS AMENDED, THE "LETTER
AGREEMENT"), AMONG KAMEHAMEHA ACTIVITIES ASSOCIATION ("KAA"),
THE TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP (THE
"BISHOP ESTATE") AND THE CORPORATION (AS SUCCESSOR TO THE
GOLDMAN SACHS GROUP, L.P. ("GSLP")) , A SUBSCRIPTION
AGREEMENT, DATED AS OF APRIL 24, 1992, AMONG KAA (BY
ASSUMPTION FROM ROYAL HAWAIIAN SHOPPING CENTER, INC.), PAUAHI
HOLDINGS CORPORATION, THE BISHOP ESTATE AND THE CORPORATION
(AS SUCCESSOR TO GSLP), AND A SUBSCRIPTION AGREEMENT, DATED AS
OF NOVEMBER 21, 1994, AMONG KAA (BY ASSUMPTION FROM ROYAL
HAWAIIAN SHOPPING CENTER, INC.), PAUAHI HOLDINGS CORPORATION,
THE BISHOP ESTATE AND THE CORPORATION (AS SUCCESSOR TO GSLP),
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE CORPORATION AND WHICH, AMONG OTHER MATTERS, PLACE
RESTRICTIONS ON THE DISPOSITION OF THE SHARES. THE SHARES MAY
BE SOLD, EXCHANGED, TRANSFERRED, ASSIGNED, PLEDGED,
Kamehameha Activities Association
April 30, 1999
Page 4
PARTICIPATED, HYPOTHECATED OR OTHERWISE DISPOSED OF
ONLY IN ACCORDANCE THEREWITH. THE SHARES MAY BE
REGISTERED ONLY IN THE NAME OF KAA OR OF THE CHASE
MANHATTAN BANK OR ITS NOMINEE AS CUSTODIAN FOR
KAA.
ANY HEDGING TRANSACTIONS UNDERTAKEN IN RELATION TO THE SHARES
MUST COMPLY WITH THE HEDGING RESTRICTIONS SET FORTH IN THE
LETTER AGREEMENT.
THE SHARES MAY NOT BE VOTED IN A MANNER INCONSISTENT WITH THE
VOTING AGREEMENT, DATED AS OF APRIL 30, 1999, AMONG THE BISHOP
ESTATE, KAA AND THE CORPORATION.
4. Voting Agreement. The parties hereto agree that the proxies
that have been previously granted by KAA, Knight's Parent and the
Bishop Estate pursuant to the Subscription Agreements will be
terminated and cancelled upon the occurrence of (i) the consummation of
the IPO and (ii) the execution and delivery of the Voting Agreement
attached to the KAA Letter Agreement as Annex B.
5. The Bishop Estate to be a Party to the KAA Letter Agreement
and the Plan. By its execution of this Letter Agreement, the Bishop
Estate shall become a party to the KAA Letter Agreement for all
purposes thereof, and the Bishop Estate accepts the Plan and agrees to
become a party to the Plan.
6. Representations and Warranties. The Bishop Estate hereby
makes, and shall be deemed to have remade on the IPO Date, (a) each of
the representations and warranties set forth in Annex C to the KAA
Letter Agreement (the "Representations"), (b) Representation 8, with
"the Bishop Estate" inserted in place of "KAA" and (c) to the extent
that the Bishop Estate is considered for any purpose to have any
beneficial interest in GS Group, Representations 2 through and
including 7 and Representations 9, 10 and 12, in each case with "the
Bishop Estate" inserted in place of "KAA" each time that it appears.
The Bishop Estate hereby agrees that counsel to GS Group may rely on
the foregoing representations and warranties in rendering an opinion to
GS Group as to tax matters.
Kamehameha Activities Association
April 30, 1999
Page 5
7. Agreements Otherwise Unimpaired. Except as expressly
provided in this Letter Agreement and the Plan of Incorporation, the
KAA Letter Agreement, the Subscription Agreements, the Registration
Rights Agreement and any other agreements between or among the parties
to this Letter Agreement shall not be modified, impaired or affected by
the execution and delivery of this Letter Agreement.
8. Successors and Assigns. This Letter Agreement will be
binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto (including,
with respect to GS Group, GS Inc.).
9. Governing Law. This Letter Agreement is being entered into
and is intended to be performed in the State of New York and will be
construed and enforced in accordance with and governed by the laws of
the State of New York.
10. Counterparts. This Letter Agreement may be executed
simultaneously in several counterparts, each of which is an original,
but all of which together shall constitute one instrument.
Kamehameha Activities Association
April 30, 1999
Page 6
Please indicate your agreement to the terms of this letter by
signing in the space provided below.
THE GOLDMAN SACHS GROUP, L.P.
By The Goldman Sachs Corporation
By: /s/ Robert J. Katz
----------------------------
Robert J. Katz
Executive Vice President
THE GOLDMAN SACHS GROUP, INC.
By: /s/ Robert J. Katz
----------------------------
Robert J. Katz
Executive Vice President
Accepted and Agreed to as
of the date first above
written:
KAMEHAMEHA ACTIVITIES ASSOCIATION
By: /s/ Wallace G.K. Chin
---------------------------------
Wallace G.K. Chin
President
THE TRUSTEES OF THE ESTATE OF BERNICE PUAUHI BISHOP
By: /s/ Richard Sung Hong Wong
---------------------------------
By: /s/ Oswald Kofoad Stender
---------------------------------
By: /s/ Henry Haalilio Peters
---------------------------------