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                                                                   Exhibit 10.59


August 1, 2000



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") and The Goldman Sachs
Group, Inc. ("GS Inc.") with respect to certain matters. Reference is made to
(i) the Subscription Agreement, dated as of April 24, 1992 (as amended from time
to time, the "1992 Subscription Agreement"), among the Bishop Estate, Pauahi
Holdings Corporation ("Knight's Parent") and Royal Hawaiian Shopping Center,
Inc. ("RHSC"), which transferred all its interests in The Goldman Sachs Group,
L.P. ("Group LP") to KAA pursuant to an Assumption Agreement, dated July 15,
1998 (the "Assumption Agreement"), between KAA and RHSC for the benefit of Group
LP, (ii) the Subscription Agreement, dated as of November 21, 1994 (as amended
from time to time, the "1994 Subscription Agreement" and, collectively with the
1992 Subscription Agreement, the "Subscription Agreements"), among the Bishop
Estate, Knight's Parent and RHSC and Group LP, (iii) the Registration Rights
Agreement, dated as of April 24, 1992 (as amended from time to time, the
"Registration Rights Agreement"), between RHSC and Group LP, as amended by
Amendment No. 1 thereto dated November 21, 1994, (iv) the Letter Agreement,
dated March 15, 1999 (as amended from time to time, the "1999 Letter
Agreement"), between KAA and Group LP, and (v) the Amendment to the Letter
Agreement, dated April 30, 1999 (the "1999 Letter Agreement Amendment"), among
KAA, the Bishop Estate, Group LP and GS Inc. KAA has assumed all of RHSC's
rights and obligations under the Subscription Agreements and the Registration
Rights Agreement pursuant to the Assumption Agreement. This Letter Agreement
shall be a modification of and an amendment to the Subscription Agreements, the
Registration Rights Agreement and the 1999 Letter Agreement, as amended by the
1999 Letter Agreement Amendment, to the extent set forth herein.
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Kamehameha Activities Association
August 1, 2000
Page 2



         Pursuant to Section 4(c) of the 1999 Letter Agreement, KAA has made a
request of GS Inc. that KAA be permitted to dispose of 10,987,711 shares (the
"Shares") of the common stock, par value $.01 per share (the "Common Stock"), of
GS Inc. in an underwritten public offering (the "Offering"), and concurrently
with the execution and delivery of this Letter Agreement, KAA is entering into
underwriting agreements with respect to the Offering. Accordingly, the parties
hereby agree as follows:

                  1. Future Dispositions of Common Stock by KAA. The number of
         shares of Common Stock that KAA shall have a right to dispose of
         without the consent of GS Inc. pursuant to Section 4(a)(2) of the 1999
         Letter Agreement subsequent to May 7, 2001 shall be reduced by 662,571
         shares.

                  2. Agreements Otherwise Unimpaired. Except as expressly
         provided in this Letter Agreement, the Subscription Agreements, the
         Registration Rights Agreement, the 1999 Letter Agreement, the 1999
         Letter Agreement Amendment 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.

                  3. 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.

                  4. 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.

                  5. 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.
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         Please indicate your agreement to the terms of this letter by signing
in the space provided below.

                                    THE GOLDMAN SACHS GROUP, INC.



                                    By:          /s/ Dan H. Jester
                                            ------------------------------
                                            Name:    Dan H. Jester
                                            Title:       Authorized Person


Accepted and Agreed to as of the date first above written:

KAMEHAMEHA ACTIVITIES ASSOCIATION


By:  /s/ Wallace G.K. Chin
   -----------------------------
     Name:  Wallace G.K. Chin
     Title:     President


THE TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP


By:  /s/ Francis Ahloy Keala
   -----------------------------


By:  /s/ Constance Hee Lau
   -----------------------------

By:  /s/ David Paul Coon
   -----------------------------