<table><tr><th>From:</th><th>Barrett, Paul S</th></tr><tr><td>Sent:</td><td>Wednesday, February 13, 2013 5:41 PM</td></tr><tr><td>To:</td><td>Jeffrey Epstein</td></tr><tr><td>Cc:</td><td>Weissend, Renee E; Ens, Amanda</td></tr><tr><td>Subject:</td><td>An idea</td></tr></table>

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Jeff=ey

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I do not =hink we have enough equity risk in the portfolio right now. While we fee= very good about our mortgages and credit exposure, the upside in credit f=els limited. Therefore I would like to selectively add some equity=exposure with names that have underperformed the broader market yet mainta=n some buffers to protect us on the downside.

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We recently added Merck to our =ocus list. I think we should consider a Market Plus Note on MRK (Overwei=ht with a $52 price target)

:nbsp; 18 mo=th

=OD Greater of the upside o= a 3% coupon so long as we don't finish below 80% at expiry.<=o:p>

- Would consider $1MM

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Background:

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Merck is the 2nd l=rgest pharmaceutical company globally with a broad portfolio of market-lea=ing medicines and vaccines. International revenues represent 62% o= total, while the U.S. represents - 38%. Highest selling products inc=ude: Singulair (asthma/allergies) and Januvia (diabetes)=/p>

• =nbsp; Pullback presents opportunity in a favored sector (the cheapest d=fensive sector)

— </=pan>MRK is down -14% over last 4 months vs=2E PFE at up 7% and S&P at up 4%

- Delay in filing of odanacatib, M=K's phase III osteoporosis drug and investor concern about upcoming =rial data have hurt sentiment. We believe this pullback is overdon= and at current levels potential downside from upcoming trial information =ppears limited.

• =0AUpcoming pipeline data =oints expected in 21-I13 and 2014 provide catalysts and higher EPS growth po=ential than peers

— MRK has a solid pipeline beyond =danacatib (suvorexant - insomnia, anacetrapib - cholesterol, PD-1 -oncolog=, BACE - Alzheimers) as well as healthy core product portfolio (Janu=ia -diabetes and vaccines).

— JPMS LLC expects strong EPS growth of -8% thro=gh 2020

• &nb=p; Valuation a=tractive both versus peers and historical averages; high dividend should s=pport the stock

— MRK trades at 11.2x F13EPS vs. 12.5x five-y= avg, PFE at 12.0x and at a 20% discount to larger cap pharma peers, des=ite higher growth potential

— 4.2% div yield, which we view as sustainable given 7.8% FCF=yld

Wh=te line = buffer
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=p class="MsoNormal" style="line-height:12.0pt;text-autospace:none">=Paul Barrett | Managing Director | Global Investment Opportunities Group | =b>J.P. Morgan Private Bank |

320 Park Avenue, 14th Floor, New York, N= 10022 | T:  |  > | NMLS ID# 853441

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