Confidential Treatment Requested by JPMC: “*Note my contact information is updated as of September 5, 2006. Please update your contact information so we don't lose touch, To: Baker, Todd Subject: Re: Can you take a look at this before Monday and give your blessing? I don't trust Goldy on this. They are smart, but this is swimming with the sharks. They were shorting mortgages big time while they were giving CIC advice, i trust Lehman more for something this sensitive, But we would need to assess if they have the smarts we need. — Original Message — From: Baker, Todd To: Killinger, Kerry K. Cc: Casey, Tom; Williams, Robert J.; Rotella, Steve ‘Sent: Fri Oct 12 15:36:00 2007 Subject: Can you take a lock at this before Monday and give your blessing? Kerry: The Finance team, under Tom, is starting next week to look at structural ideas around large scale credit risk transfer (everything from good bank/bad bank to securitization ideas). ‘We would like to bring in a top investment banker to help us brainstorm and think these issues through. The idea at this point is to understand what the range of options is and begin to prepare preliminary plans, We want to be in a position to move forward quickly in the event ‘that market conditions shift or something becomes executable. Akey to our success will be absolute confidentiality, so we want to discuss these issues with only one banker only and not let the other firms know anything about our thoughts or process. This will involve disclosing confidential WM information, which will probably require an engagement letter and a fee discussion, Our strong first choice for this effort would be Gokiman Sachs, as John Mahoney is the smartest banker overall, the best at thinking about financial structures, has been through this before, and his firm is the deepest. He also has the advantage of understanding the CFC situation. oe Hf Bill Longbrake is right we could be in for a rough road ahead and hiring the best brains is always wise when the stakes are high. Goldman also has the strong balance sheet, market heft and risk appetite to do many things themselves for us that others couldn't as part of the solution. On the other hand, they are very expensive and we may have trouble getting John's full attention. John himself is very discreet but we always need to worry a little about Goldman because we need them more than they need us and the firm is run by traders, Nevertheless, we recommend going with John on this. One alternative choice would be Doug Simons at Credit Suisse, as he is incredibly bright and creative, although with less practical experience with credit risk transfer vehicles. He would be very loyal and give us 150% effort. The firm backup would be somewhat weaker but they would view it as a plum assignment. This would be a risk that Doug couldn't deliver but there: is also a chance that we could end up with something unique and out of the box that would work. Lehman would be anther alternative choice. The internal dynamics there are better than they were but it is still a problem getting coordination between Phil (who would insist on running things) and the rest of their team. There are some strong people there, Phil has a good JPM_WM02526618intuitive sense of structuring and he has been through this before. If we could get the right people involved and stay out of their internal squabbles they would do a good job for us, On. the downside, the emotional cost of dealing with Phil's needs (which often seem more important than ours) is steep. His loyalty is a plus. We would not recommend Morgan Stanley, despite the strong relationship, because we believe Kirk/John are less strong around complex deal structures, tax, accounting etc. Oliver at UBS is smart and creative enough, but the team is an unknown. Unless | hear otherwise from you we'd like to contact John Mahoney at Goldman after our first internal meetings next week to see if they have the capacity for something like this. Can you let me know before Monday if you object? Todd Todd H. Baker Executive Vice President — Corporate Strategy & Development Washington Mutual Inc. “Note my contact information is updated as of September 5, 2006. Please update your contact information so we don’ lose touch. ‘Confidential Treatment Requested by JPMC JPM_weo2526619