by market forces beyond our control, this hedging may result in a
profit that is more or less than expected, or it may result in a
loss. We or one or more of our affiliates will retain any profits
realized in hedging our obligations under the Securities. See "Key
Risks Risks Relating to the Securities Generally JPMS's Estimated
Value of the Securities Is Lower Than the Original Issue Price (Price
to Public) of the Securities" in this pricing supplement.
Secondary Market Prices of the Securities
For information about factors that will impact any secondary market
prices of the Securities, see "Key Risks Risks Relating to the
Securities Generally Secondary Market Prices of the Securities Will
Be Impacted by Many Economic and Market Factors" in this pricing
supplement. In addition, we generally expect that some of the costs
included in the original issue price of the Securities will be
partially paid back to you in connection with any repurchases of your
Securities by JPMS in an amount that will decline to zero over an
initial predetermined period that is intended to be up to seven
months. The length of any such initial period reflects secondary
market volumes for the Securities, the structure of the Securities,
whether our affiliates expect to earn a profit in connection with our
hedging activities, the estimated costs of hedging the Securities and
when these costs are incurred, as determined by JPMS. See "Key Risks
Risks Relating to the Securities Generally The Value of the
Securities as Published by JPMS (and Which May Be Reflected on
Customer Account Statements) May Be Higher Than JPMS's Then-Current
Estimated Value of the Securities for a Limited Time Period."
Supplemental Use of Proceeds
The Securities are offered to meet investor demand for products that
reflect the risk-return profile and market exposure provided by the
Securities. See "Hypothetical Examples" in this pricing supplement
for an illustration of the risk-return profile of the Securities and
the section for the applicable Underlying Stock set forth under "The
Underlying Stocks" in this pricing supplement for a description of
the market exposure provided by the Securities.
The original issue price of the Securities is equal to JPMS's
estimated value of the Securities plus the selling commissions paid
to UBS, plus (minus) the projected profits (losses) that our
affiliates expect to realize for assuming risks inherent in hedging
our obligations under the Securities, plus the estimated cost of
hedging our obligations under the Securities.
Validity of the Securities
In the opinion of Davis Polk & Wardwell LLP, as our special products
counsel, when the Securities offered by this pricing supplement have
been executed and issued by us and authenticated by the trustee
pursuant to the indenture, and delivered against payment as
contemplated herein, such Securities will be our valid and binding
obligations, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, concepts of reasonableness and equitable
principles of general applicability (including, without limitation,
concepts of good faith, fair dealing and the lack of bad faith), provided that such counsel expresses no opinion as to the effect of fraudulent
conveyance, fraudulent transfer or similar provision of applicable
law on the conclusions expressed above. This opinion is given as of
the date hereof and is limited to the federal laws of the United
States of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware. In addition, this opinion
is subject to customary assumptions about the trustee's
authorization, execution and delivery of the indenture and its
authentication of the Securities and the validity, binding nature and
enforceability of the indenture with respect to the trustee, all as
stated in the letter of such counsel dated November 7, 2014, which
was filed as an exhibit to the Registration Statement on Form S-3 by
us on November 7, 2014.