Common use of Risks relating to the potential exercise by a UK resolution authority of its resolution powers in relation to GSI Clause in Contracts

Risks relating to the potential exercise by a UK resolution authority of its resolution powers in relation to GSI. The EU Bank Recovery and Resolution Directive ("BRRD") entered into force on July 2, 2014. Its stated aim is to provide national "resolution authorities" with powers and tools to address banking crises pre- emptively in order to safeguard financial stability and minimise taxpayers' exposure to losses. The majority of the requirements of the BRRD have been implemented in the UK through the UK Xxxxxxx Xxx 0000, as amended and related statutory instruments (the "UK Banking Act"). The UK Banking Act provides for a "resolution regime" granting substantial powers to the Bank of England (or, in certain circumstances, HM Treasury), to implement resolution measures (in consultation with other UK authorities) with respect to a UK financial institution (for example, such as GSI) where the UK resolution authority considers that the relevant institution is failing or is likely to fail, there is no reasonable prospect of other measures preventing the failure of the institution and action is necessary in the public interest. The resolution powers available to the UK resolution authority include powers to: • write down the amount owing or convert the relevant securities into other securities, including ordinary shares of the relevant institution (or a subsidiary) – the so-called "bail-in" tool; • transfer all or part of the business of the relevant institution to a "bridge bank"; • transfer impaired or problem assets to an asset management vehicle; and • sell the relevant institution to a commercial purchaser. In addition, the UK resolution authority is empowered to modify contractual arrangements, suspend enforcement or termination rights that might otherwise be triggered and disapply or modify laws in the UK (with possible retrospective effect) to enable the recovery and resolution powers under the UK Banking Act to be used effectively. You should be aware that the exercise of any such resolution power or even the suggestion of any such potential exercise in respect of GSI (or any member of the GSI group) could have a material adverse effect on the rights of holders of Securities, and could lead to a loss of some or all of the investment. The resolution regime is designed to be triggered prior to insolvency of the relevant institution, and holders of securities issued by such institution may not be able to anticipate the exercise of any resolution power (including exercise of the "bail-in" tool) by the UK resolution authority. Further, holders of securities issued by an institution which has been taken into a resolution regime will have very limited rights to challenge the exercise of powers by the UK resolution authority, even where such powers have resulted in the write down of the securities or conversion of the securities to equity.

Risks relating to the potential exercise by a UK resolution authority of its resolution powers in relation to GSI. The EU Bank Recovery and Resolution Directive ("BRRD") entered into force on July 2, 2014. EU Member states were required to adopt and publish the laws, regulations and administrative provisions necessary to comply with the BRRD by December 31, 2014 and to apply those with effect from January 1, 2015, except in relation to the bail-in provisions, which were to apply from January 1, 2016 at the latest. Its stated aim is to provide national "resolution authorities" with powers and tools to address banking crises pre- pre-emptively in order to safeguard financial stability and minimise taxpayers' exposure to losses. The majority of the requirements of the BRRD have been implemented in the UK through the UK Xxxxxxx Xxx 0000, as amended and related statutory instruments (together, the "UK Banking Act"). The UK Banking Act provides for a "resolution regime" granting substantial powers to the Bank of England (or, in certain circumstances, HM Treasury), to implement resolution measures (in consultation with other UK authorities) with respect to a UK financial institution (for example, such as GSI) where the UK resolution authority considers that the relevant institution is failing or is likely to fail, there is no reasonable prospect of other measures preventing the failure of the institution and resolution action is necessary in the public interest. The resolution powers available to the UK resolution authority include powers to: • write down the amount owing owing, including to zero, or convert the relevant securities into other securities, including ordinary shares of the relevant institution (or a subsidiary) – the so-called "bail-in" tool; • transfer all or part of the business of the relevant institution to a "bridge bank"; • transfer impaired or problem assets to an asset management vehicle; and • sell the relevant institution to a commercial purchaser. In addition, the UK resolution authority is empowered to modify contractual arrangements, suspend enforcement or termination rights that might otherwise be triggered and disapply or modify laws in the UK (with possible retrospective effect) to enable the recovery and resolution powers under the UK Banking Act to be used effectively. You should assume that, in a resolution situation, financial public support will only be aware that the exercise of any such resolution power or even the suggestion of any such potential exercise in respect of available to GSI (or any member of the GSI groupGoldman Sachs Group) could have as a material adverse effect on the rights of holders of Securities, and could lead to a loss of some or all of the investment. The resolution regime is designed to be triggered prior to insolvency of last resort after the relevant institutionUK resolution authorities have assessed and used, and holders of securities issued by such institution may not be able to anticipate the exercise of any maximum extent practicable, the resolution power (tools, including exercise of the "bail-in" in tool) by the UK resolution authority. Further, holders of securities issued by an institution which has been taken into a resolution regime will have very limited rights to challenge the exercise of powers by the UK resolution authority, even where such powers have resulted in the write down of the securities or conversion of the securities to equity.