From: Jeffrey Epstein <[email protected]>

From: Jeffrey Epstein <[email protected]> To: "Condren, James" Subject: Re: Bear High Grade Investment CONFIDENTIAL/FOR SETTLEMENT PURPOSES ONLY Date: Thu, 30 Jun 2011 00:10:57 +0000 thanks for your view„ there are also the K-I s that show "withdrawal and distribution" amounts for hg, and" capital contributed "for EL On Wed, Jun 29, 2011 at 3:52 PM, Condren, James < > wrote: Jeffrey and Darren, as I mentioned to Jeffrey a little while ago and in anticipation of the call that Jeffrey and I expect to have tomorrow with Mary Erdoes, this will set forth the rationale for JPM's view that "out of pocket" damages should be assessed by reference to the amount of an investor's initial contribution to the High Grade fund before rollover into the Enhanced Leverage fund. Our view is based on the premise (which we strongly believe is correct) that investors who rolled over from HG to EL did not "redeem" their HG investments. Instead, they made an in-kind transfer of their partnership interest in HG to EL. Among other things (as referred to below), the transaction created no taxable event for the investor, and the tax basis of the investor's interest in EL received in the rollover was the same as the investor's basis in HG before the rollover. The specific points we make in support of our view are as follows: -- To effectuate the transfer of interest, investors did not have to fulfill the redemption requirements set forth in the HG offering documents (i.e., they did not have to submit redemption forms and were not subject to the terms of the PPM concerning withdrawals). -- The documents related to the transaction (a subscription agreement and an interest exchange agreement) refer to an "exchange" of interests and an "in-kind transfer of assets" from HG to EL. -- No cash was paid to investors as part of the transaction. -- As mentioned above, the transaction created no taxable event for investors, and the tax basis of an investor's interest in EL received as a result of the transaction was the same as the basis in HG before the rollover. This transmission may contain information that is privileged, confidential, legally privileged, and/or exempt from disclosure under applicable law. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, or use of the information contained herein (including any reliance thereon) is STRICTLY PROHIBITED. Although this transmission and any attachments are believed to be free of any virus or other defect that might affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by JPMorgan Chase & Co., its subsidiaries and affiliates, as applicable, for any loss or damage arising in any way from its use. If you received this transmission in error, please immediately contact the sender and destroy the material in its entirety, whether in electronic or hard copy format. Thank you. EFTA00913900 The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00913901