The IRS or a court may not respect the treatment of the notes described above, in which case the timing and character of anyincome
or losson your notes could be materially andadverselyaffected. In addition, in 2007 Treasury and the IRS releaseda notice
requesting comments on the U.S. federalincometax treatment of "prepaid forwardcontracts" and similar instruments. The notice
focuses in particular on whether to require investors in these instruments to accrue income over the termof their investment. It also
asks for comments on a number of related topics, including the character of income or loss with respect to theseinstruments; the
relevance of factors such as the nature of the underlyingproperty to which the instruments are linked; the degree, if any, to which
income (includingany mandated accruals) realized by non-U.S. investorsshould besubject to withholding tax; and whether these
instrumentsare or should be subject to the constructiveownership regime described above. While thenotice requests comments on
appropriate transition rules and effective dates, anyTreasury regulations or other guidance promulgated after consideration of these
issues could materially and adversely affect the taxconsequences of aninvestment in the notes, possibly with retroactive effect. You
shouldconsult your tax adviser regarding the U.S. federal income taxconsequences of an investment in the notes, including the
potential application of the constructive ownership rules, possible alternative treatments and theissues presented bythisnotice.
The Estimated Value of the Notes
Theestimated value of the notes set forth on the cover of this pricing supplementis equal to the sum of the values of the following
hypothetical components: (1) a fixed-incomedebt component withthe same maturityasthe notes, valued usingthe internal funding
ratedescribed below, and (2) the derivative or derivatives underlyingtheeconomic terms of the notes.The estimated value of the
notes does not represent a minimum price at which JPMS would be willing to buy your notes in any secondarymarket (if any exists) at
any time.The internal funding rate used inthe determination ofthe estimated valueof the notes may differ from the market-implied
funding rate for vanilla fixed income instrumentsof a similar maturityissued by JPMorgan Chase & Co. or its affiliates. Any difference
maybebased on, among other things, our and our affiliates'view of the funding value of thenotes as well as the higherissuance,
operational and ongoing liability management costs of the notes in comparisonto those costs for the conventional fixed income
instrumentsof JPMorgan Chase & Co. This internal funding rate is based on certain market inputs and assumptions, which may prove
to be incorrect, and is intended to approximatethe prevailing market replacement funding rate for the notes. The use of an internal
funding rate and any potentialchanges to that rate may have an adverse effect on the terms of the notes and any secondary market
prices of the notes. For additional information, see "Selected Risk Considerations - Risks Relating to the Estimated Value and
Secondary Market Pricesof the Notes- The Estimated Value of the NotesIs Derived byReference to anInternal Funding Rate" in this
pricing supplement.
The value of the derivative or derivatives underlying the economic terms of the notes is derived from internal pricing modelsof our
affiliates. Thesemodelsare dependent on inputssuch as the traded market prices of comparable derivative instruments and on
various other inputs, someof which are market-observable, and which can include volatility, dividend rates, interest rates and other
factors, as well as assumptions about future market events and/or environments. Accordingly, the estimated value of thenotes is
determined when the termsof the notes areset based on market conditions and other relevant factors and assumptions existing at that
time.
The estimated value of the notesdoesnot represent future values of thenotesandmay differ from others' estimates. Different pricing
modelsandassumptionscould provide valuations for thenotes that are greater than or less than the estimated value of the notes. In
addition, market conditions and other relevant factors in the future may change, and any assumptions may prove to be incorrect.On
future dates, thevalue of the notescould change significantly based on, among other things, changes in market conditions, our or
JPMorgan Chase & Co.'screditworthiness, interest rate movements and other relevant factors, which may impact the price, if any, at
whichJPMS would be willing to buynotesfromyou in secondarymarket transactions.
The estimated value of thenotes is lowerthan the original issue price of the notes becausecosts associated withselling, structuring
and hedging the notes are includedin the original issueprice of the notes. These costsinclude the selling commissions paid to JPMS
and other affiliated or unaffiliated dealers, the projected profits, if any, that our affiliates expect to realize for assuming risks inherent in
hedging our obligations under the notes and the estimatedcost of hedging our obligations under the notes. Because hedging our
obligations entails riskand may be influenced by market forces beyond our control, this hedging may result in a profit that ismore or
less than expected, or it may result in a loss. A portion of the profits, if any, realized in hedging our obligations under the notes may be
allowed to other affiliated or unaffiliated dealers, and we or one or more of our affiliates will retain any remaining hedging profits. See
"Selected Risk Considerations-Risks Relating to the Estimated Value and SecondaryMarket Prices of the Notes - The Estimated
Value of the Notes Is LowerThan the Original Issue Price (Price to Public) of the Notes" in this pricing supplement.
Secondary Market Prices of the Notes
For information about factors that will impact anysecondarymarket prices of thenotes, see "Risk Factors - Risks Relating to the
Estimated Value and Secondary Market Pricesof the Notes- Secondary market prices of the notes will beimpactedbymany