1 Year USD 1-Delta Certificate on the Goldman Sachs Dow Jones-UBS Total Return Strategy Index (ex Agriculture and Livestock)

Transcription

1 1 Year USD 1-Delta Certificate on the Goldman Sachs Dow Jones-UBS Total Return Strategy Index (ex Agriculture and Livestock) - NON-US INVESTORS ONLY - NON-PRINCIPAL PROTECTED - Final Terms and Conditions as of October 18, 2010 (Version 2.00) All material herein is for discussion purposes only and is only a summary. The Final Termsheet shall include the information required for a simplified prospectus pursuant to Article 5 of the Federal Act on Collective Investment Schemes ("CISA"). This document is not a prospectus pursuant to article 652a or article 1156 of the Swiss Federal Code of Obligations and, according to article 5 para 4 CISA, the prospectus requirement is therefore not applicable. Reference should be made to the Offering Circular, which contains the only legally binding terms of the Certificates and other information related to the Issue. The Offering Circular is obtainable free of charge from the Issuer/Lead Manager. Before investing in the Securities you should read the risk factors described under Risk Information below and in the Offering Circular. The Pricing Supplement may describe additional risk factors relating to the Securities. A. PRODUCT DESCRIPTION PRODUCT Issue Size ISIN Certificates GB00B69TGT00 Valor Symbol Exercise Type DJSTR Nominal USD 100 Issue Price USD 100 Trading Size Minimum Exercise/ Minimum Investment European, Automatic exercise on Maturity Date 1 Certificate and multiples of 1 thereafter 1 Certificate and multiples of 1 thereafter DATES Issue Date/Order Date October 14, 2010 Strike Date October 18, 2010 Settlement Date October 29, 2010 First Trading Date October 29, 2010 Maturity Date October 17, 2011 Repayment Date October 31, 2011 UNDERLYING INFORMATION Underlying Goldman Sachs Dow Jones-UBS Total Return Strategy Index (ex Agriculture and Livestock) Bloomberg Page Reuters Underlying Sponsor GSXALT Index NA Goldman, Sachs & Co., or such other corporation or other entity that, in the determination of the Issuer (a) is responsible for setting and reviewing the rules and procedures and the methods of calculation and adjustments, if any, related to the Underlying, and (b) announces (directly or through an agent) the level of such Underlying on a regular basis. Index Dow Jones-UBS Commodity Total Return Index SM * Index Sponsor Dow Jones & Company, Inc. jointly with UBS Securities LLC GENERAL INFORMATION Certificate Right Each Certificate entitles the Investor, in accordance with the respective Terms and Conditions of the Certificates, to receive on the Repayment Date an amount in USD equal to: Nominal * Hedging Fee Factor * ReferenceP rice(final ) ReferenceP rice(initi al) Reference Price Reference Price (Initial) Reference Price (Final) Hedging Fee Hedging Fee Factor The official daily closing level of the Underlying as calculated and published by the Underlying Sponsor on the Bloomberg Page (or any official successor thereto). USD a price of the Underlying on the Strike Date The Reference Price on the Valuation Date, subject to adjustment in accordance with the Consequences of Market Disruption provisions below 0.20% p.a. which reflects all ongoing costs incurred by holding the Certificate. 1 Hedging Fee ^ DCF

2 where DCF means, in respect of a Valuation Date, a value determined by the Calculation Agent as the quotient of (i) the number of calendar days from, but excluding, the Strike Date to, and including, such Valuation Date; and (ii) 365 (If held till Maturity Date, the Hedging Fee Factor will be %) Trading Day Valuation Date Business Days Consequences of Market Disruption Events A day on which (i) the offices of the Underlying Sponsor are open for business in New York City; and (ii) all of the Trading Facilities on which the Commodity Contracts included in the Underlying are traded, are (or but for the occurrence of a Market Disruption Event would have been) scheduled to be open for trading during their regular trading session, notwithstanding any such trading facility closing prior to its scheduled closing time. The Maturity Date. If such date is not a Trading Day, the Valuation Date shall be the next following day that is a Trading Day. Zurich, New York City, London If a Market Disruption Event (as defined below) has occurred on any day which is a Valuation Date, the Reference Price of the Underlying will not be determined with reference to Bloomberg Page GSXALT <INDEX> <GO> (or any official successor thereto), but will instead be determined by the Calculation Agent as follows: (i) with respect to each contract included in the Underlying which is not affected by the Market Disruption Event, the Reference Price of the Underlying will be based on the settlement price of each such Commodity Contract on the originally scheduled Valuation Date, as published by the relevant Exchange; (ii) with respect to each contract included in the Underlying which is affected by the Market Disruption Event (an Affected Commodity Contract ), the Underlying will be based on the settlement prices of each such Affected Commodity Contract on the first Exchange Business Day following the originally scheduled Valuation Date on which no Market Disruption Event is occurring with respect to such Affected Commodity Contract, provided that if such Market Disruption Event continues with respect to any such Affected Commodity Contract for five consecutive (5) Exchange Business Days, the price of such Affected Commodity Contract to be used in calculating the Underlying shall be determined by the Calculation Agent, in a commercially reasonable manner, on the sixth (6th) Exchange Business Day in respect of such Affected Commodity Contract following the originally scheduled Valuation Date; and (iii) the Calculation Agent shall determine Reference Price of the Underlying by reference to the settlement prices or other prices of the relevant Commodity Contracts included in the Underlying determined in accordance with paragraphs (i) and (ii) above using the then current method for calculating the Underlying on the Latest Determination Date. If the offices of the Calculation Agent are not open for business on any relevant Determination Date, any relevant calculation will be made by Goldman, Sachs & Co. or another affiliate of the Calculation Agent. Market Disruption Event means, in respect of the Underlying, the occurrence on any day or any number of consecutive days of any one or more of the following circumstances (as determined by the Calculation Agent): (i) (ii) (iii) the settlement price for any Commodity Contract included in the Underlying is a limit price, which means that the settlement price for such Commodity Contract for a day has increased or decreased from the previous day's settlement price by the maximum amount permitted under applicable rules of the relevant Exchange for such Commodity Contract; or there is a failure by the relevant Exchange or other price source to announce or publish the settlement price for any Commodity Contract included in the Underlying; or trading in any Commodity Contract included in the Underlying is suspended or interrupted subsequent to the opening of trading and trading in such Commodity Contract does not recommence at least ten (10) minutes prior to the regular scheduled close of trading in such Commodity Contract, or in the event trading does not recommence ten (10) minutes prior to the regular scheduled close of trading, trading does not continue until the regular scheduled close of trading in such Commodity Contract. Determination Date means, in respect of an Affected Commodity Contract included in the Underlying, the day on which the settlement price of such Affected Commodity Contract is determined in accordance with paragraph (ii) of Consequences of Market Disruption provisions above. Exchange means any exchange or trading facility or principal trading market on which any Commodity Contract is traded and any successor to such exchange or trading facility or principal trading market to which trading in such Commodity Contract has temporarily relocated, as determined by the Calculation Agent (each an Exchange and together the Exchanges ).

3 "Exchange Business Day" means, in respect of the relevant Affected Commodity Contract, any day on which (a) the Exchange for such Affected Commodity Contract is scheduled to be open for trading for its respective regular trading session; and (b) the offices of the Underlying Sponsor are open for business in New York. "Commodity Contract" means each of the contracts included in the Underlying that is traded on an Exchange that provides for future delivery of, or is based on the price of, a deliverable commodity. Latest Determination Date means, in respect of the Commodity Contracts included in the Underlying, and a Valuation Date, (i) if no Market Disruption Event has occurred for any such Commodity Contract on such Valuation Date, such Valuation Date; or (ii) if a Market Disruption Event has occurred for one or more Commodity Contracts on such Valuation Date, the Determination Date to fall latest in time. Discontinuance or Modification of Underlying and Index If the Underlying or the Index is (i) not calculated and announced by the Underlying Sponsor or Index Sponsor, as the case may be, but is calculated and announced by a successor sponsor acceptable to the Calculation Agent or (ii) replaced by a successor Underlying or index using, in the good faith determination of the Calculation Agent, the same or a substantially similar formula for and method of calculation as used in the calculation of the Underlying or Index, as applicable, then the Underlying or the Index, as applicable, will be deemed to be the Underlying or Index so calculated and announced by that successor sponsor or that successor underlying or index, as the case may be. If, in respect of the Underlying and/or the Index: (i) on or prior to the Valuation Date, (A) the Index Sponsor or (if applicable) the successor sponsor makes, in the judgment of the Calculation Agent, a material change in the formula for or the method of calculating, or determining the composition of, the Index or in any other way materially modifies the Index or (B) the Underlying Sponsor makes a material change in the formula for or the method of calculating the Underlying or in any other way materially modifies the Underlying (in either case, other than a modification prescribed in that formula or method relating to the composition of the Underlying or Index, the weighting of the components of the Underlying or Index and other routine events or modifications which do not, in the judgment of the Calculation Agent, in any way materially modify the Underlying or Index, as the case may be) or permanently cancels the Index and no successor Index exists as at the date of such cancellation; or (ii) on the Valuation Date in the absence of a Market Disruption Event (A) the Underlying Sponsor or (if applicable) the successor sponsor fails to calculate and announce the Underlying (and, for the avoidance of doubt, such failure shall not constitute a Market Disruption Event), or the Underlying has ceased to be calculated by the Underlying Sponsor or a successor sponsor and has not been replaced by a successor underlying; or (B) the Index Sponsor or (if applicable) the successor sponsor fails to calculate and announce the Index, or the Index has ceased to be calculated by the Index Sponsor or a successor sponsor and has not been replaced by a successor index (and, for the avoidance of doubt, such failure or cessation shall not constitute a Market Disruption Event), then the Calculation Agent shall determine if such event has a material effect on the Underlying, and if so, shall calculate the level of the Underlying, in lieu of a published level for the Underlying, in a commercially reasonable manner. In any such circumstances as described above, the Calculation Agent will have no responsibility (in the absence of manifest error) to any person for errors or omissions made in the calculation of the Underlying. The Calculation Agent shall not act as agent of the Investors of the Securities. Listing Secondary Trading Adjustments If the Reference Price of the Underlying published on the Valuation Date is subsequently corrected and the correction is published by the Underlying Sponsor or (if applicable) the successor sponsor not later than 12 noon, New York City time, on the Trading Day immediately following the Valuation Date then the corrected Reference Price for the Valuation Date shall be deemed to be the Reference Price for the Valuation Date and the Calculation Agent shall use the corrected Reference Price in accordance with the above provisions, provided that the foregoing provisions shall not apply to any correction to the Reference Price published on or after the Trading Day immediately preceding the Maturity Date. Application will be made to list the Certificates on the SIX Swiss Exchange The Issuer expects to make a market in the Certificates on Reuters and on the Internet page Although the Issuer/Calculation Agent intends to provide bid and offer prices on a regular basis under normal market conditions, the Issuer/Calculation Agent does not make a commitment to provide liquidity by means of bid and offer prices and does not have a legal obligation to quote any such prices. For modifications to the Terms and Conditions during the term of the certificates as a result of

4 corporate actions or similar events, please refer to the SIX Internet page Issue Size In case of unlisted certificates please refer to the Final Termsheet published on the Internet page The Issuer reserves the right to increase the Issue Size at any time. ISSUER INFORMATION Issuer Issuer Rating Prudential Supervision of the Issuer Lead Manager Paying Agent Swiss Programme Agent Calculation Agent Guarantor Guarantor Rating Prudential Supervision of the Guarantor Guarantee Form Depository/ Settlement Applicable Law Place of Jurisdiction Goldman Sachs International, London, UK Goldman Sachs International, London has not sought or obtained any rating from any of the major rating agencies. The Issuer is regulated by The Financial Services Authority Limited and is an authorized person under The Financial Services and Markets Act 2000 of the United Kingdom and is subject to their rules Goldman Sachs International, London, UK Goldman Sachs International, London, UK, Zurich, Switzerland Goldman Sachs International, London, UK The Goldman Sachs Group, Inc., Delaware, USA A1 (Moody's)/ A (Standard & Poor's) The Guarantor is a financial holding company regulated by the Federal Reserve Irrevocable and unconditional; the Guarantee relates to the payment obligations only. The Guarantee is governed by Swiss law. Uncertificated Securities (the "Securities") SIX SIS AG, Olten, Switzerland Swiss Law Zurich Fees payable by GS: A selling commission may have been paid by Goldman Sachs International or any of its affiliates (collectively, GS ) in relation to this transaction. Please refer to the Pricing Supplement or contact the Lead Manager for further details. OFFERING INFORMATION These Securities do qualify for public offering and distribution in and from Switzerland. You understand that no action has been taken by GS to permit a public offering of the Securities in any jurisdiction other than the ones stated above. You agree that: (i) you will not offer, sell or deliver any of the Securities described in this material in any jurisdiction, except in compliance with all applicable laws, and (ii) you will take, at your own expense, whatever action is required to permit your purchase and resale of the Securities. INDEX DISCLAIMER Dow Jones, DJ, UBS Dow Jones-UBS Commodity Index SM, and DJUBSCI SM are service marks of Dow Jones & Company, Inc. ( Dow Jones ) and UBS AG ( UBS AG ), as the case may be, and have been licensed for use for certain purposes by the Issuer. The Products are not sponsored, endorsed, sold or promoted by Dow Jones, UBS AG, UBS Securities LLC ( UBS Securities ) or any of their subsidiaries or affiliates. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates makes any representation or warranty, express or implied, to the owners of or counterparts to the Product(s) or any member of the public regarding the advisability of investing in securities or commodities generally or in the Product(s) particularly. The only relationship of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates to the Licensee is the licensing of certain trademarks, trade names and service marks and of the DJ-UBSCI SM, which is determined, composed and calculated by Dow Jones in conjunction with UBS Securities without regard to the Issuer or the Product(s). Dow Jones and UBS Securities have no obligation to take the needs of the Issuer or the owners of the Product(s) into consideration in determining, composing or calculating DJ-UBSCI SM. None of Dow Jones, UBS AG, UBS Securities or any of their respective subsidiaries or affiliates is responsible for or has participated in the determination of the timing of, prices at, or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) are to be converted into cash. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates shall have any obligation or liability, including, without limitation, to the Products customers, in

5 connection with the administration, marketing or trading of the Product(s). Notwithstanding the foregoing, UBS AG, UBS Securities and their respective subsidiaries and affiliates may independently issue and/or sponsor financial products unrelated to the Products currently being issued by Licensee, but which may be similar to and competitive with the Products. In addition, UBS AG, UBS Securities and their subsidiaries and affiliates actively trade commodities, commodity indexes and commodity futures (including the Dow Jones-UBS Commodity Index SM and Dow Jones-UBS Commodity Index Total Return SM ), as well as swaps, options and derivatives which are linked to the performance of such commodities, commodity indexes and commodity futures. It is possible that this trading activity will affect the value of the Dow Jones-UBS Commodity Index SM and the Products. This document relates only to the Products and does not relate to the exchange-traded physical commodities underlying any of the Dow Jones-UBS Commodity Index SM components. Purchasers of the Products should not conclude that the inclusion of a futures contract in the Dow Jones-UBS Commodity Index SM is any form of investment recommendation of the futures contract or the underlying exchange-traded physical commodity by Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates. The information in the this document regarding the Dow Jones-UBS Commodity Index SM components has been derived solely from publicly available documents. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates has made any due diligence inquiries with respect to the Dow Jones-UBS Commodity Index SM components in connection with the Products. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates makes any representation that these publicly available documents or any other publicly available information regarding the Dow Jones-UBS Commodity Index SM components, including without limitation a description of factors that affect the prices of such components, are accurate or complete. NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO AND NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ISSUER, OWNERS OF THE PRODUCT(S) OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO. NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS AMONG DOW JONES, UBS SECURITIES AND THE ISSUER, OTHER THAN UBS AG." TAX INFORMATION (indicative) Please note that the following Swiss tax information is only indicative and not approved by the Swiss tax administration. The following Swiss tax information might be subject to change. The investors will be liable for all current and future taxes and duties. The income tax treatment as described below is only applicable to private investors with tax residence in Switzerland holding the products as private assets. The following tax treatment is applicable on the Issue Date. The relevant tax laws or the regulation of the tax authorities are subject to change, possibly with retroactive effect. For Swiss tax purposes this product qualifies as a false future contract. The term of the product is one year. Therefore, gains realized at sale or at redemption are in principle not subject to the Federal Direct Tax (Direkte Bundessteuer). The consequences in relation to the cantonal and communal income taxes for these investors can differ from the tax consequences regarding the Federal Direct Tax. No Swiss withholding tax. No Swiss stamp duty on secondary market transactions. EU Savings Tax: For Swiss paying agents, the product is not subject to the EU Savings Tax TK14. Goldman Sachs expressly excludes all liability in respect of any tax implications. SALES RESTRICTION United States: THIS PRODUCT HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ). THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OF AMERICA OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY UNITED STATES PERSONS (AS SUCH TERMS ARE DEFINED IN THE SECURITIES ACT), UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE. THIS DOCUMENT MAY NOT BE DISTRIBUTED IN THE UNITED STATES. United Kingdom: This term sheet is for information purposes only and does not constitute an invitation or offer to underwrite,

6 subscribe for or otherwise acquire or dispose of any securities in any jurisdiction. This term sheet is only addressed to and directed at persons outside the United Kingdom and persons in the United Kingdom who have professional experience in matters related to investments or who are high net worth persons within article 12(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as Relevant Persons ) and must not be acted on or relied on by other persons in the United Kingdom. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This term sheet is not a prospectus for the purposes of the prospectus rules of the United Kingdom Financial Services Authority but is an advertisement. Distribution to other European Economic Area ( EEA ) Countries: In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State ), each purchaser of the Securities represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date ) it has not made and will not make an offer of the Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State: to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than 43,000,000 and (iii) an annual net turnover of more than 50,000,000, as shown in its last annual or consolidated accounts; to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Securities shall require GS to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of the provision above, the expression an offer of Securities to the public in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. In connection with its distribution in the United Kingdom and the European Economic Area, this material has been issued and approved by Goldman Sachs International which is authorized and regulated by the Financial Services Authority; it is not a product of the Research Department. B. PROFIT / LOSS PROSPECTS PRODUCT DESCRIPTION Market expectation Characteristics Maximum Profit at Maturity/ Maximum Loss at Maturity Certificate specific risks SVSP product categorisation The Certificates are a transparent instrument for investors who wish to participate directly in the price movement of an Underlying. It is suitable for investors who expect prices to rise and seek participation in the development of an Underlying. The easy-to-comprehend structure facilitates flexible investment management. If the price of Underlying changes the value of the Certificate moves by the same ratio. Thus, Investors participate directly in the development of the Underlying, multiplied by the Hedging Fee Factor. Maximum Loss: The Certificate will fall to zero when the price of the Underlying is zero. Investors would lose entire capital invested. Maximum Profit: The potential gain for the investor is theoretically unlimited. The value of the Certificate in the secondary market will track the performance of the Underlying. Gains and losses are reflected in the price of the Certificate. The Investor is not entitled to any additional income from the Underlying, as the Certificate does not confer the right to interest or dividend payments. Tracker Certificates (210) C. SIGNIFICANT RISKS FOR INVESTORS Such information is also contained in sub-section "Certificate specific risks" of section "B PROFIT / LOSS PROSPECTS"

7 RISK INFORMATION THESE SECURITIES ARE NOT PRINCIPAL PROTECTED. THERE IS A RISK THAT YOU COULD LOSE ALL OF YOUR INVESTMENT. No Collective Investment Schemes Units: The Securities are not supervised by the Swiss Financial Market Supervisory Authority (FINMA) and investors do not benefit from the specific investor protection provided under the Federal Act on Collective Investment Schemes (CISA). Investors should be aware, that they are exposed to the credit risk of the Issuer and the Guarantor respectively. Uncertificated Securities: If uncertificated securities are transferred or encumbered prior to the effective date of the Swiss Federal Law on Book-Entry Securities in a way that would fail to comply with the provisions of the Swiss Federal Law on Book- Entry Securities, affected investors may need to undertake certain steps within 12 months after the effective date of the Swiss Federal Law on Book-Entry Securities in order to safeguard their rights. Such investors should consult their own legal and/or financial advisers in this respect and the Issuer takes no responsibility should an investor's rights in the Securities be affected due to a failure by the investor to undertake such necessary steps. Volatility: These Securities are volatile instruments. Volatility refers to the degree of unpredictable change over time of a certain variable in this case the price, performance or investment return of a financial asset. Volatility does not imply direction of the price or investment returns. An instrument that is volatile is likely to increase or decrease in value more often and/or to a greater extent than one that is not volatile. Leverage: These Securities are subject to leverage. Where an investment is subject to leverage, the effective exposure to the underlying asset or payment reference is increased. Leverage may expose investors to increased losses where the value of underlying asset falls. Leverage can be embedded in derivative components of complex financial instruments. Combining investment types: These Securities may have some or all of the characteristics of debt and derivatives instruments. These elements could interact to produce both an enhanced possibility of loss of the initial investment or an enhanced return. Investment return: The price of these Securities and the income generated, if any, may go down or up. You may realize losses on any investment made and you may get back nothing at all. You should read the Offering Circular (Programme for the Issuance of Derivatives ( together with the relevant Pricing Supplement) for the final terms and conditions and for a description of related risks. In addition, you should read the Swiss Bankers Association's "Special Risks in Securities Trading" risk disclosure brochure which is available on Risks include, but are not limited to, the following: The market price of the Securities may be influenced by many unpredictable factors, including economic conditions, the creditworthiness of GS, the value of any underlyings and certain actions taken by GS (see Conflict of Interests below). Accordingly, if you sell your Securities prior to maturity you may receive less than the issue price of the Securities. In the case of Securities referencing one or more indices or other underlying assets (collectively, the Underlyings ), changes in the price of the Securities may not correlate to changes in the value of the Underlyings; any declines or gains in the value of one Underlying may be more than offset by movements in the value of other Underlyings. The price of these Securities may be adversely affected by trading and other transactions by GS relating to the Securities and/or any Underlyings The price of these Securities could be significantly impacted by determinations that GS may make in its sole discretion from time to time as calculation agent and/or index sponsor, as the case may be. Relevant Information: GS may, by virtue of its status as an underwriter, advisor or otherwise, possess or have access to information relating to these Securities, and/or any Underlyings and any derivative instruments referencing them (together Relevant Instruments ). GS will not be obliged to disclose any such Relevant Information to you. No Exchange Guarantee nor Contract Ownership: These Securities are not guaranteed by an exchange nor does it result in the ownership of any futures contracts. No Liquidity: There may be no market for these Securities. An investor must be prepared to hold them until the Maturity Date. GS may, but is not obliged to, make a market. If it does, it may cease at any time without notice. Valuation: Assuming no change in market conditions or other factors, the value of these Securities on the Repayment Date may be significantly less than the execution price on the trade date. If you unwind your investment early, you may receive less than the stated redemption amount. Price Discrepancy: Any price quoted for these Securities by GS may differ significantly from (i) the Securities value determined by reference to GS pricing models and (ii) any price quoted by a third party. Foreign Exchange: Foreign currency denominated Securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, or income derived from, the investment.

8 DISCLAIMER Conflict of Interests: GS may from time to time be an active participant on both sides of the market for the Relevant Instruments at any time and have long or short positions in, or buy and sell Relevant Instruments (on a principal basis or otherwise) identical or related to those mentioned herein. GS hedging and trading activities with respect to the Securities may affect the value of other Relevant Instruments and vice versa. GS may be calculation agent or sponsor of Underlyings and as such may make determinations affecting the value of the Securities. No Offer: This term sheet is not final. It has been prepared for discussion purposes only. It is not an offer to buy the Securities described within or enter into any agreement. Neither GS, nor any of their officers or employees is soliciting any action based upon it. Finalised terms and conditions are subject to further discussion and negotiation and also to GS internal legal, compliance and credit approval. No Representation: GS makes no representations as to (a) the suitability of the Securities for any particular investor (b) the appropriate accounting treatment or possible tax consequences of investing in the Securities or (c) the future performance of the Securities either in absolute terms or relative to competing investments. Changes in the creditworthiness or performance of the Securities or any Underlyer may affect the value of the Securities and could result in it redeeming or being valued at zero. Not Complete Information: This term sheet does not completely describe the merits and risks of the Securities and will, if a transaction results, be superseded by final legal documentation which may contain deemed representations by investors regarding, among other things, offer, resale and hedging of the Securities. No Advice: This material should not be construed as investment, financial, strategic, legal, regulatory, accounting or tax advice. It does not take into account the particular investment objectives, financial situation or needs of individual clients. Certain transactions, including those involving futures, options and high yield securities, give rise to substantial risk and are not suitable for all investors. Accordingly clients should consider whether the Securities described herein are suitable for their particular circumstances and should consult their own accounting, tax, investment and legal advisors before investing. GS is acting as an arm s-length contractual counterparty and not as an advisor or fiduciary. GS does not accept any responsibility to update any opinions or other information contained in this material. Representation: If a transaction arises as a result of this term sheet you agree that you will not offer, sell or deliver the Securities in any jurisdiction except under circumstances that will result in compliance with the applicable laws thereof, and that you will take at your own expense whatever action is required to permit your purchase and resale of the Securities. EEA standard selling restrictions apply. European Distribution: This material has been prepared for the recipient by the Equity Derivatives Division of Goldman Sachs International ( GSI ) and is not the product of the research department. GSI is authorized and regulated by the Financial Services Authority. No prospectus: This document is not, and under no circumstances is to be construed as a prospectus or advertisement. Disclosure of Information: No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means or (ii) redistributed without GS prior written consent. However, GS agrees that, subject to applicable law, any and all aspects of the Securities that are necessary to support any U.S. federal income tax benefits, may be disclosed without GS imposing any limitation of any kind. No bank deposits: The Securities are not bank deposits insured or guaranteed by the United States Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other governmental agency or deposit protection fund run by public, private or community banks. The Securities are guaranteed by the Guarantor and the Guarantee will rank pari passu with all other unsecured and unsubordinated indebtedness of the Guarantor. Description of the Underlying The Underlying is Goldman Sachs Dow Jones-UBS Total Return Strategy Index (ex Agriculture and Livestock). The Underlying is calculated by Goldman Sachs & Co. and reflects the returns that are potentially available through a fully collateralized investment in the commodity contracts included in the Dow Jones-UBS Commodity Total Return Index SM (the Index ) with the exception that the Underlying does not include any of the agriculture or livestock-related contracts currently included in the Index, which result in the non-agriculture and livestock- related commodity contracts having greater weights for the purposes of the Underlyer than in the Index; The Underlying is also a total and not an excess return strategy and therefore includes the U.S. Treasury Bill Return that could be earned on a hypothetical investment in the contract included in the Underlying. For further explanation on the methodology of the Index on which the Underlying is based, please refer to the Dow Jones-UBS Commodity Index Handbook (a document that is considered proprietary to Dow Jones and UBS Securities LLC ( UBS ) and is available at

9 ADDITIONAL RISK FACTORS The Underlying excludes all agriculture and livestock related commodities currently included in the Dow Jones-UBS Commodity Index SM (the Index ), which could adversely affect its performance. The Underlying excludes all agriculture and livestock-related contracts currently included in the Index. As a result, the performance of the Underlying will likely differ from the performance of the Index. Moreover, during periods of increasing agriculture and/or livestock prices, the Underlying will not benefit from such price movements to the same extent as the Index, and the performance of the Underlying will be lower than that of the Index in such circumstances which will affect the value of your Securities. Prices of commodity futures contracts may change unpredictably, affecting the value of your Securities in unforeseeable ways. Commodity prices are affected by a variety of factors that are unpredictable, including, without limitation, changes in supply and demand relationships, weather, governmental programs and policies, national and international political, military, terrorist and economic events, fiscal, monetary and exchange control programs, changes in interest and exchange rates and changes, suspensions or disruptions of market trading activities in commodities and related contracts. These factors may affect in varying ways the value of the Securities, and various factors may cause the value of the commodity and the volatilities of its prices to move in inconsistent directions and at inconsistent rates. Moreover, while all commodity prices are affected by some or all of these factors, they may have a greater adverse impact on the prices of the Underlying to which the Security is linked which may therefore adversely affect the value of the Security. Suspensions or disruptions of market trading in the commodity and related futures contracts may adversely affect the value of your Securities If a Market Disruption Event occurs with respect to any futures contract included in the Underlying, the value of that contract on the Valuation Date will not be calculated until the Calculation Agent can determine a settlement price in accordance with the provisions as described above. If a Market Disruption Event has occurred or is continuing on the Valuation Date, such Valuation Date may be postponed but, in any event, not by more than five Exchange Business Days in respect of the affected contract. If a Market Disruption Event lasts for five consecutive Exchange Business Days, the Calculation Agent will calculate the value of that affected contract on the sixth Exchange Business Day following the Valuation Date, in a commercially reasonable manner. Accordingly, the calculation of your payment may be delayed beyond what would otherwise be the Valuation Date and may be subject to the judgment of the Calculation Agent. Higher future prices of commodities included in the Underlying relative to their current prices may decrease the amount payable on your Securities As the contracts that are included in Underlying come to expiration, they are replaced by contracts that have a later expiration. This process is referred to as rolling. If the market for these contracts is (putting aside other considerations) in backwardation, where the prices are lower in the distant delivery months than in the nearer delivery months, the sale of the July contract would take place at a price that is higher than the price of the August contract, thereby creating an opportunity for a positive roll yield. Some commodities futures contracts have historically traded in contango markets. Contango markets are those in which the prices of contracts are higher in the distant delivery months than in the nearer delivery months. The absence of backwardation in the market for a commodities futures contract could result in negative roll yields, which could adversely affect the value of an index or index tied to that contract, if rolled to nearer rather than more distant delivery months. You have no rights with respect to commodities or commodities contracts or rights to receive any commodities. Investing in the Security will not make you a holder of the physical commodity underlying the Underlying to which the Security is linked or the commodity contracts included in such Underlying.