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CONFIDENTIAL

..
or

'

or

orby

financial

assistance

credits

provided business

the Company
equity capital

or

tax

a Subsidiary, and

made

any

in

the

major changes

Company's

structure;

d)

to

(...

to of
may

the

A
of

proxy

statement

responsive

requirements

or

Securities

Exchange
shall

Act

1934, whether

not

Company
the

is

the

then

subject

such

to

of

requirements, soliciting front

mailed approval

shareholders

Company

purpose contain

of

on
(

shareholder

such

Business

Combination

and shall

thereof,

a prominent the Business

place,

any recommendations which


national

advisability

of

inadvisability)

Combination a reputable

the Continuing investment

Directors

choose

the of

as to
the
point

to

the

state,

and

opinion

banking

firm from

or

of

of

the
with shares
least

ii)

fairness

lack

thereof)

terms

such

Business

Combination,

of

of

the

view

the

remaining

shareholders

Company.

Such investment

banking

firm shall

of

engaged

solely

behalf

remaining
receipt

shareholders,

paid

a reasonable one ofthe

by

of

their

services bracket

the

Company

upon

such opinion,

and

be

so-called

has

major

investment

banking

firms

which

not

previously

been

associated

by

to

be

such Major

Stockholder

and

selected

a majority

of

the Continuing

Directors.

During

time

a Major adopted

Stockholder only upon:

exists,

a resolution

of 1) of at the

to of

D.

the

voluntarily

of

the

or be 2)

dissolve

Company

shall

consent
least

Company's

the

shareholders;

affirmative

vote

two- thirds

ofthe

the

all

total

of

of

at

of

the

the

number

directors,

affirmative

vote

holders

least

two- thirds

of to

Company

entitled shares

vote each

thereon,

and
shares

affirmative

vote

holders

as

to

of

of

the

two- thirds

class

entitled

vote

thereon

a class,

if

As

to

E.

the

any

particular

transaction,

Continuing

Directors

shall

have

to

on

power

and duty

determine,

the basis

information

known

to

of

them:

1)

The amount

Voting

Stock

beneficially

held

by

of

any Person;

2)

or

is

an

Whether

a Person

an

Affiliate

Associateof

another;

3)

Whether

a Person

in

is

acting

concert

with

another;

4)

Whether

to

the

assets

subject

any

Business

Combination

the

of the at of

of

of

the

the

the

any.

for
a

the

constitute

Substantial

Part;

5)

to

is

Whether

a proposed

transaction

subject

the

provisions

Article;

and

6)

to

Such

other

matters with

respect

which

a determination

is

required

under

this Article.

10-

.'

":

.. 1'.:

,_

fee

be

on

be

this

of

orthe

as to

in

the

i)

of

for

the

be

all

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00054

CONFIDENTIAL

....

'.

".

for

be

Any
Article.

such determination

shall

conclusive

and binding

purposes

of
the

all

this

of by

is in

to

The

affirmative

vote

required

this Article

addition

vote

or

holders
Articles

any

class

series

stock

Company

otherwise

required

by

of

of

the

of
law,

the

these

or by

ofIncorporation,

any resolution

which has been adopted

Board

or

for

of

Directors

providing

the issuance

a class

of

series

stock

any

agreement

the

between

Company

and any national

securities

exchange.

ARTICLE

Amendment

XI

The
voting

Company
entitled

may amend

these

Articles

ofIncorporation

approved
votes

by

if

by

to

of
each

the

to

group

vote

thereon

a simple meeting Bylaws,


unless

majority

entitled called Article

or

by

at

cast

that

voting

group

any regular

special

meeting however,

duly
that

for

that

by

in

the

its

purpose

manner

prescribed

provided,

X may
least

or

in

repealed

amended
( 95%)

any respect

such action Voting

approved
beneficially that

by at

be

is

not

ninety- five

percent other

vote

outstanding

Stock

owned
the
board
extent

shareholders
Directors

than

any Major shareholder

Stockholder,
approval,

and provided

further,

to

may, without
under

amend

these

Articles

as or i)

or

the

permitted designate

the Washington

Business

Corporation

Act

necessary

orof

of

to

ii)

preferences,

limitations,

and relative rights

a class
series.

series

shares

Company

prior

issuance

any shares

in

to

of

the

that

class

ARTICLE
Limitation

XII

of

Liability

or

to

be

of

the

A
However, misconduct
violating transaction

director

the Company

shall

not

personally

liable

Company

as of of or

for

for

shareholders

monetary

damages
shall

conduct

("

a director

Protected

Conduct"). involve
intentional

Protected

Conduct

exclude

i)

acts

omissions

which

or

by

by

the

director

a knowing
ofthe

violation

law

the

ii)

director,

any any

conduct

Section

23B. 08.310

Revised
will

Code

Washington,

and

( iii),

from which

director

personally

receive

a benefit Washington

in

the

money,

property

or

to

its

services

which
the

director

not

legally

entitled.

law

amended

or

authorize directors,

corporate then
extent

action
liability

further

eliminating

limiting

personal

liability

oror of

the

by of

a director

Company

shall

eliminated

limited

as so

the

fullest

permitted
Article

Washington

law,

amended.
the

Any

repeal shall

by

of

modification

ofthis

XII

the shareholders

Company

not

adversely

11

<..:~':.

--

.:

.:

.:

.-:

.:.

...

to

of

the

be

to

is

is

the

If

of

the

of by

of

the

be

of

the

all

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00055

CONFIDENTIAL

or

of

at

affect repeal

any

right

protection

a director

ofthe

Company

existing

the time
t..

of

such

or

modification.

ARTICLE

XIII

of

The

street

address.

the registered

office

ofthe

Company

1201 Third Avenue


15th Floor
Seattle,

Washington

98101

of

at

the

the

and

name

registered

agent

that

address

Marc

R.

Kittner

ARTICLE

XIV

Special

Meetings

of

Shareholders

is:

Special

meetings
statute,

ofthe

shareholders

any purpose

or

for

purposes,

is:

unless other

otherwise

or

so inbe

prescribed

may

called

board

directors

any

person

of b) orto the

do

the

persons

authorized

Company's

Bylaws.
these called

Notwithstanding

RCW
Bylaws, a only

1)

be in

or

the

07

23B.

.020(

any

other

provision

Articles

Company's

by

the

special

meeting

shareholders

may
the all

shareholders

to the

if

holders

of at

of

to

be

on

least

twenty- five

percent

votes

cast

any

issue

proposed

at orthe

to

the

considered
secretary

proposed

special

meeting

sign,

date

and deliver
describing

Company's

one

more

written

demands
held.

meeting

purpose

for

it is to

purposes

which

be

on

at

DATED

Seattle,

Washington,

day

of

the

October,

1999.

WASHINGTON

MUTUAL,

INe.

By: Kerry

or

for

the

the

be
_

K.

Killinger

President,

Chairman

and Chief Executive

Officer

12

or

by

by

by

of

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00056

CONFIDENTIAL

EXHIBIT

A2
of Incorporation

Amendments

to

AR Articles

17357747

WMI

Assistant

Secretarys Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00057

CONFIDENTIAL

OF

ARTICLES

AMENDMENT

OF
WASHINGTON
( Series

MUTUAL,
Fixed-

INC.

Perpetual

Non- cumulative

to-

Floating

Preferred

Stock)

to

of

of
Inc.

the

Pursuant

provisions

Chapter 23B. 1 0 and Section

23B. 06.020
Mutual,

of

Revised

Code a

Washington,

the undersigned
for

of

officer

Washington

the

of

" Company"),

corporation

organized

and existing under


filing

the

laws

State

to

of

Washington,

does hereby submit


Articles

these

Articles

Amendment

its

Amended

and Restated

of

Incorporation:

of

FIRST:

The name

Company

is

the

Washington

Mutual,

Inc.

of

SECOND:
are hereby designated Preferred Stock."

of

1,250

shares
I

the authorized

Preferred Stock Fixed-

the Company Rate

" Series

Perpetual

Non- cumulative

to-

Floating

relating

the Series

Perpetual

are

as

Non- cumulative

Fixed-

to-

The

rights, preferences,

privileges,

restrictions Floating

and

other

to

Rate Preferred

of
matters Stock and
series

follows:

1.

Section unissued designated Stock"


shall
( the
"

Designation. preferred

There

hereby created

out

to-of of

is

the authorized
preferred stock

of

of

shares

stock

the Company a series

as

the

"

Series
I

Perpetual

Non- cumulative The number


Stock
shall

Fixed-

Floating

Rate Preferred

of

Series

Preferred Stock").
I

shares constituting

such

be

1,250.

The Series

Preferred
I

have

no

par value

per share

and the

liquidation

preference Series
I

the Series

Preferred Stock

be

of

shall

$1,000,000.00

per share.

be

of

if

Shares
occurs.

Preferred Stock shall

issued

only

if

and

Conditional

Exchange

Section

2.

Ranking.

to

The Series
liquidation,

Preferred

Stock

will,

with

respect

dividend

ri~.

inTsandrights

up

winding-

and

i) on

dissolution,

rank

a parity with the Company's


(

Series J

Perpetual

Non- cumulative
other class

Fixed Rate Preferred

Stock
stock

the

" Series

J Preferred Stock")

or

and with each

of

series

preferred

established after the Designation


that

onby

Date rank

the Company the terms a parity with the Series


I

which

expressly provide

such class
rights

or

of

series

on
will

as to

Preferred Stock

dividend

and

rights

liquidation, Securities")

winding-

and

dissolution

the

and

to

ii)

senior

the Company's

Company ( collectively referred " Parity common stock ( the " Common Stock"), the

Company's Series

RP

Preferred Stock

and each

of

other

class

capital

stock

outstanding

by

or

established

after

the Designation

Date
parity

the Company the terms the Series


I

which

as to do

of

on

expressly provide
rights

it

that

ranks

with

Preferred Stock

on

asup

of

and rights Stock

liquidation,

winding-

and dissolution

the Company, including

as on

up

of

to

not dividend the

Common

( collectively

referred

to

" Junior Securities").

130887.1

the
the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00058

CONFIDENTIAL

or

intent,

the following

terms shall have the following

meanings,

whether

used

in

Section

Definitions.

Unless

the context

use indicates

another

meaning
the

or

singular

the plural:

a)

on 3-

for

( rate

"

Month

of

determined

the basis

the offered

rates

three-month

dollar

deposits

not less than

a principal

amount equal

that

which

of for

to

is

representative

a single

in

transaction Period,

such market

such time, commencing Telerate

on

at

the

first

day

such Dividend
11:

theon

as of

London

time,

no

on

L1BOR
Date

Determination
rate time,

Date

for

m.,

which

appears

a.

on

US L1BOR

Page 3750

approximately Dividend

such

Period.

or

any

L1BOR

Determination

appears

00 a.

an

approximately

11:

m., London

the Company

of

US

L1BORTelerate
affiliate

Page 3750

the Company
four

on

of

behalf

the Company

will

such

L1BOR

Determination

Date request

major

by

in

Company

with

quotation

the rate

which

three-

month deposits

in U. S.

reference

banks

the London

interbank

market selected

the Company

to

provide

of

at

dollars,

00 to a. by

on

of

commencing

the

first

day

such market

Dividend

Period,

are offered
11:

them

to

prime
time,

ininas of

in

banks

the London
for

interbank

approximately

m., London
that

such L1BOR Determination


representative

Date and

principal

amount equal

which
least
will

at

a single transaction

such market

such time. Dividend

If at

two such the such

3-

quotations
arithmetic

are provided,

Month
the

USD

L1BORfor

such

Period

as

by

mean

rounded

upward

necessary

the nearest than

.00001

1%)

3-

quotations

calculated

Company.
Dividend .00001

If

fewer
will

two quotations

are provided,
( rounded

in00 to

onof

upward

if

necessary 11:

the nearest

1%)
the

the rates quoted day

as of

Month

USD

be

L1BORfor

such

Period

the arithmetic

mean

of

ofbe

to

of

if

is

approximately
three

am.,

New
York

York time,
City,

first

such Dividend

Period
for

for

major banks

to

dollars

leading European Dividend

banks,

three-month

period commencing

on

New

New

York selected

the Company

loans

U. S.

the

in

of

first

day

such

Period and

principal

amount

of

not

less

than $ 1,000,000.

b)

" Business

Day" means any day other

than a Saturday,

Sunday
are

or
that

inby
any

in

or

other

day

which

by

banks

to

generally

required

authorized

law

be

New

York

City,

New

York,

or

on

by of

Seattle,

Washington

closed.

in

"

Common
Company"

Stock"

has the meaning

set forth

Section
-

d)

"

means Washington

Mutual,

Inc.,

a wasnington

corporation.

e)

"

by

be in

of of

would

utilized,

the time

selection

practice,

pricing
I

new issues

perpetual

preferred

securities

having

similar

terms

to

of

as
of

and

in

comparable

the term remaining

the Dividend

Payment

in

security

selected

the Independent

Investment

Banker

as

Comparable Treasury

Issue"

means the United Sates Treasury


having Date
with

a maturity March,

to

to

2.

c)

2011

at

accordance

customary

financial

the Series

Preferred Stock

with

respect

the payment

dividends

and distributions
preferred stock.

or

up

of

assets upon liquidation,

dissolution

winding-

the issuer

of

such

for

" Comparable

Treasury

Price"

means

to

f)

with

respect

any Redemption Redemption


Dealer
five

Date the average

of

the Reference the highest

Treasury Dealer

Quotations

such

Quotations, Reference

or if

Date,

after

excluding

and lowest Investment

of

such Reference
obtains

Treasury

the Independent

Banker

fewer than

such

of

Treasury Dealer Quotations,

the average

all

such quotations.

130887.1
2

on

If 00 ason on of
the

of

U. S.

USD L1BOR"

means,

to

or
a

3.

with

respect

any Dividend

Period,

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00059

CONFIDENTIAL

g)

of or

"

Common
Preferred

of an

in

Conditional into

Exchange"

means the automatic

exchange

the

WAMU
I

Securities

depositary

shares representing
written direction

interest

the $ eries
after

Stock

which

occurs

upon the

the

of an

OTS

upon

the

occurrence

Exchange

Event.

h)

"

Delaware
Securities,

Preferred

Securities" with

means the Fixed-

to-

Floating

Rate

Delaware

Preferred

together

the 7.25% Perpetual per security,

Non- cumulative

Preferred Securities, Mutual

liquidation

preference

$1,000

issued

by

Washington

Preferred Funding

LLC, a Delaware

limited liability

company.

"

Designation

Date" means March

6,

i)

2006.
b).

in

"

Dividend

Payment

Date"

has the meaning

set forth

Section

4(

"

Dividend

Period"

has the meaning

forth

Section

of

"

Exchange

Event"

means the occurrence

anyone

of

I)

the

b).

in

set

k)

following

as

at

a time

the Trust

Securities

are issued and outstanding:

i)

WMB

becomes

undercapitalized

under

the Prompt Corrective

Action

Regulations;

or

ii)

WMB
the

placed

into

conservatorship

receivership;

in

an

to-

Fixed-

Floating

Rate Delaware

Preferred

Stock

into

the Series

Preferred Stock

by of or of

anticipation

Regulations dividends

the

OTS

taking

any supervisory action that

limits

payment

WMB.
ta" Fixed-

m)

Floating

Rate Delaware

Preferred Securities"

means the

to-

Fixed-

Floating

Rate Perpetual

Non- cumulative

Preferred Securities, Mutual

liquidation

preference Delaware

$ 1,000

by

per

security,

issued

Washington

Preferred Funding

limited liability

company.

n)

Independent

Investment standing

Banker"

by

means

an

inde~ ent

investment

of

banking

institution

national

appointed

the Company.

0)

in

" Junior

Securities"

has the meaning set forth

Section

p)

"

L1BOR

Business

Day" means any day

on

which commercial banks

for

in

in

2.

are open

general

business

( including

dealings

deposits

in

U. S.

dollars)

London.

q)

date that

two

to

is

" L1BOR Determination Date" means, L1BOR Business Days prior the first day

as ofto

each Dividend such Dividend

of
LLC, a the

WMB

becoming

undercapitalized

under

the

Prompt Corrective

Action

the

Period, Period.

"

US

L1BORTelerate

Page

3750'"

means the

display

page

as

asas

or

Moneyline's

Telerate

Service designated

3750

such

other

page

may

as

or

on

that

page
for

that service,

such other

service

may

tobe 3-

nominated Month

the information

of

vendor,

the purpose

displaying

rates

comparable

USD

L1BOR).

130887.1

of
replace

r)

in

OTS,

sole

discretion,

directs

exchange

of

its

iii)

or
the

is

4(

j)

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00060

CONFIDENTIAL

s)

"

OTS" means

Office

Thrift

Supervision

or in

of

the

any successor

regulatory

entity.

" Parity

Securities"

has

meaning
the

forth

Section

u)

2.

set

the

t)

3( by
by U.
tob).

in

set

" Primary

Treasury

Dealer"

has

meaning means

forth

Section

C. F. R.

" Prompt Corrective

Action

Regulation"
regulation.

Part 565

in

effect

from time

or

to

time,

any successor

w)

of

" Redemption

Date"

means any

any date

7. is

that

designated

the

in

Company

notice

redemption delivered

pursuant

to

of

Section

x)

of

" Reference

Treasury
(

Dealer"
" Primary

government

securities

dealers

each,

Treasury

byas

means each

three

primary

Dealer"), specified substitute

specified

the

provided

if

Company;

as

that

any

Primary Treasury

Dealer

the Company such Primary


select

ceases

a Primary Treasury Dealer, Primary Treasury

Company

for

to

be

the

will

Treasury Dealer another


substitute within

Dealer then

if

and
the

Company
will

to

the

fails

be

of

a reasonable

period

time,

substitute

a Primary
with

by

Treasury Dealer selected the Company.

the

Independent

Investment

Banker

after

consultation

y)

to 8(

" Reference

Treasury Dealer Quotations"

in

the Independent Treasury quoted Dealer Issue


(

Investment expressed,

Banker,

the

as

and asked

for

Reference

Treasury Dealer

and any Redemption

Date, the average,


prices

as

means,

with

respect

determined

of

bid

the Comparable amount) Treasury

by of

atin 5: 00 p. to

each case,

a percentage Banker
third

its

principal

writing

the Independent

Investment

such Reference

m.,

New

on

York

City time,

the

Business Day preceding

such

Redemption

Date.

z)

an

"

Regulatory opinion

Capital

Event"

occurs

when the Company

determines, the
for

of

of no

based

upon

is

receipt

counsel, longer

that there constitute

significant

risk that

or

the capital

adequacy

regulations

issued

the

OTS

a result

a change

applicable Floating

laws,

regulations

related interpretations Securities.

after

issuance

the Fixed-

Rate Delaware

Preferred

"-=-~"._,.

to

( aa)

"

Treasury Rate"

means the

rate

per year equal


Issue,

the

quarterly

to

for

equivalent

yield

maturity ofthe

as

Comparable Treasury
for

calculated

using

of

the Comparable Treasury Issue ( expressed

a percentage

its

principal

to

equal

the Comparable Treasury

Price

the relevant Business

Redemption

Date.

The

be

on

Treasury

Rate

will

calculated

the

third

Day preceding

the

relevant

Redemption

Date.

cumulative issued

Trust

Securities,

Series

A1,

bb)

"

Trust

Securities"

means the Fixedliquidation

ta-

Floating

Rate Perpetual

in

Delaware

Preferred Securities

will

core capital

of of of

by

as

of

WMB

purposes

a price amount)

Non-

preference

$100,000

per security,
trust.

by

Washington

Mutual

Preferred Funding

Trust,

a Delaware

statutory

( cc)

"

Voting

Parity

Securities"

has the meaning

in

set

forth

Section

130887.1 4

the by

S.
a

the

as

v)

12

x).

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00061

CONFIDENTIAL

( dd)

"

WMB"

means Washington

Mutual

Bank, successor.

a federal

savings

or

of

association

and

a subsidiary

the

Company,

Section

4.

Dividends.

a)

its

be

of

of

Holders

shares

Series

Preferred

Stock out

shall

entitled

as

by

of

receive, available

when,

and

declared

the

Board

Directors,

of

if

the

funds

legally

as

in

therefor,

non- cumulative

cash

dividends

the

amount

determined

set

to
forth

in

4(

Section

and

no

c),

more.

a),

in

b)

4(

be

Subject 15,

Section

dividends

shall

payable year

arrears

March
first

15,

June day

September
the issuance Day,

and
the

December
Series
I

each

commencing

if on on
date

to

of 15

15

of

the

such day

in

or,

after

Preferred

Stock
(

each

case,

any

such
Date").

is

not

a Business
will

the

next

Business

Day
record

each,

a
they

" Dividend

Payment

as

be

is of to

Each

dividend

payable
first

holders the

appear
relevant
first

on

of

the

stock

in

on

of

the

the

books

Company
occurs

day
date

month

which Day,

the the

Dividend

or,

Payment such
the

Date

such

a Business a Dividend

Business

Day

month.
issuance

Each

period Series the

from
I

and

including Stock)

Payment
the

Date

the

the

Preferred

to

of

but

excluding referred

following
" Dividend

Dividend Period", the

Payment
except Dividend
( whether

Date

Redemption
I

Date) Stock

herein

on

is

if

that,

the

Series ending

Preferred

outstanding

March

as

or

to

is

15, 2011, 15,

in

be

Period

March Day) 2011


(

2011 and

to

shall

but

excluding ending Day).

March

2011 2011
shall

not

a Business March
15,

in

or

the

Dividend

Period

June

commence

or

on

whether

not

a Business

the

date

issuance 15,

the

Series

Preferred 15,

Stock

to
and
I

of

of

is

c)

If

prior

the Day, not

or,

day
the

immediately
first

preceding

March March
whether

2011

March
from

2011
date

of is

if

not

a Business

Business

Day
15,

after
(

15, 2011,

then

such
Day),

issuance

to

but

including declared Preferred

March

2011

not

a Business
for

dividends, share

the

Board

Directors, rate

will

be,

each

outstanding per share

of if,

when
Series

by

an

of

on

at

of

Stock,
I

annual Stock.
I

6.534%

the

liquidation

preference

of

Series

Preferred the Series

From
for

later

March

2011

and

the

date

as

by

of

issuance

Preferred

Stock,

dividends,

when

and
I

declared

the

if,

Board
annual

3-will

Directors,

each

outstanding

share

Series Dividend

Preferred

Stock,

the for

to

rate per

equal share

Month

USD UBOR
preference greater 30- day

the

related
I

P~. rlQd plus Stock.

1.4825%

on

the

of or

liquidation

Series

Preferred
full

Dividends

for

payable

any

Dividend

Period

less than

Dividend year,

Period

on

of

computed

the

basis

twelve

months,

a 360

day

and

the

..

actual

in

in

or

of

days elapsed

for if

the

period

such any

Dividend period

Period

ends

to

prior

March

2011; period divided Stock.


will

or

thereafter

dividends

payable

greater

less than

full

dividend period
I

in

be

will

number

computed

the
will

basis

the

actual

number

days

the

relevant Series

be

on

360.

interest

paid

any dividend
the

payment

of

No

the

Preferred

in

d)

Dividends

Series

Preferred

Stock Series

are
I

non- cumulative. Preferred Stock holders

Board
declares Series the

Directors less than

does a
full

not

declare

a dividend

the

noin

of or If
I

of

on

of

the

dividend
will

respect

any
the

Dividend

Period,

Preferred

Stock

have

right

receive

any dividend

dividend, obligation not

or be,

to for

case

may

Dividend
full

Period,

and
that

Company

will

have
whether

for

pay
are

a dividend
declared

pay
for

dividends
future

Dividend Period

Period, with

or

dividends

and

paid

any

Dividend

respect

to

the

Series

130887.1

to as

or

to

nofull

the

the

the

by

be

on

of

of

an

of

of

at

be,

of

the

the

the

15,

i)

ii)

of

as

or

of of

not

if

or

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00062

CONFIDENTIAL

or

or

or

Preferred Stock
preferred stock.

the

Common

Stock

any

of

other

class

series

the Company's

e)

on

for

dividends

outstanding

shares

of

all

full

If

the Series J Preferred

Stock declare
equity

any Dividend

Period have
with

not been declared

and paid, the Company shall not

or

or

or

to,

of,

pay dividends
securities

respect

redeem, purchase Dividend


other

acquire

any

its

capital

during the

next succeeding

Period,

except

dividends

or

dividends

in

connection

with

Series

Preferred Stock
benefit plans.

if of

RP
with

or

the

shareholders'

rights plan,

any,

connection

Section

5.

Liquidation.

a)

In

or

the event

the Company

voluntarily
I

or

involuntarily

liquidates,

of

to in

dissolves

winds

up, the holders


receive

Series

Preferred

Stock

shall

entitled
I

liquidating

distributions

the amount

at of

the time outstanding $1,000,000 per share dividends out

be

to

an

of

Series

Preferred Stock, the current

plus

amount equal

any declared the date

but unpaid

for

to

thereon

Dividend

Period

and including

of

such liquidation, any distribution

for

to

of

or

assets legally available

distribution

shareholders,

before

to

assets Series

made

the holders
After

Common

Stock the
full

any securities

ranking

to

of

is

junior

the

of

Preferred Stock. the holders

payment
I

amount
will

of nobe

such liquidating

of

distributions, participation

Series

Preferred Stock

not

to

entitled

any further

in

or

of

any

distribution

assets by, and shall have

to

right

claim

any

of,

remaining assets

the Company.

b)

for

In

the event the assets


liquidation,

the Company available

distribution

or

up

of

shareholders

upon any

dissolution

winding-

of

the

affairs

the the

Company, whether amounts


holders ranking the
full

voluntary respect

involuntary,

shall

insufficient

pay
I

in

or

be

to

full

to

payable

with

outstanding

shares

of

all

the Series

Preferred Stock
ranking,

on

and the corresponding

amounts payable
Stock

any other Securities

of

equal

the

of

of

Series

Preferred

and

the

holders

such other

in be of

securities

equal

in

of

of

to
per

of

shall

share

ratably liquidating

any

distribution

assets

the Company otherwise

proportion

to

respective

distributions

which

they would

respectively

entitled.

6.

by

in

Section redeemed

Maturity.

The Series

Preferred with

Stock

be

shall

perpetual
"---~_.

unless

the Company

accordance

Section

Section

7.

Redemptions.

a)

7.

the

at

the holders

at

The Series

Preferred Stock

shall

not

redeemable

option

any time.

b)

be

at

the

or,

The Series

Preferred Stock shall

redeemable

option that

in

in

Company,
March

whole

but not

part,

prior

March 15, 2011

in

to

the event
of:

15,2011

not a Business

Day, the next Business Day),

upon the occurrence


the sum

a Regulatory

Capital

Event

a cash redemption
foror
ii)
(

price

equal

X)

at

to

the

of

of

greater

$1,000,000 undeclared

per share, dividends

the

sum

of

i)

present values

$ 1,000,000

share

and

Dividend

Period from the Redemption 2011, discounted

Date

in

and
Date

including

the Dividend
basis
(

Payment

Date

March,

to

the Redemption 3D- day months)

quarterly

assuming a 360- day year consisting

of

on

twelve

130887.1
6

to

the

all

of

is

the

of

be

to

of

its

in

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00063

CONFIDENTIAL

as

by

the
(

Treasury

Rate

an

at

calculated unpaid

Independent

Investment Date.

Banker),

plus

0.30%;

Y)

and

any

to

declared

but

dividends

the

Redemption

in

of c)

The
the

Series

Preferred

Stock

shall

redeemable

whole

in

or

be

part

is or

the
(

option

Company
that

any
15,

or

on

at

at

to

time,

from not

time

time,

after

March

15,

or,

2011
Day). plus

in

the

event

March

2011

a Business
price

Day,

the

next

Business per share,

be

at

Such any

redemption

shall

a cash

of

redemption the

$ 1,000,000
without

declared

and

to

unpaid

dividends

Redemption

Date,

accumulation

of

any

undeclared

dividends.

d)

the

case
record

any redemption
the Series
I

under Preferred

this

Section not

notice

shall thirty

to

of

mailed

each

holder

of

Stock,

less than notice;

nor

more

than

days

prior

Redemption
notice

Date

byin

60

to

the

specified

such
the

provided,

be

In

of

7,

however,
deposit Preferred redemption

that

a longer

minimum

may

agreed

Company,

in
I

be

to

including Series

agreement
Stock. date,

relating

depositary redemption
price,

shares
shall

representing include
iii)

in
(

to

interests

the the

of

of

The
ii)
(

notice the

a statement number

i)

redemption

and

the

shares

redeemed.

e)

of

be

to

of

Any

shares acquired

Series

Preferred

Stock

redeemed manner

pursuant

to
shall

this

Section

otherwise but

the

Company
shares

in

by

or

any
the

whatsoever but

of

become
shares

authorized
shall

unissued

preferred

Company
Series
I

such

preferred Shares.

not

under from

any

as

be

circumstances

reissued

Preferred

The

ta-

as

be

Company
reduce the

shall

time-

time

take

such

appropriate Series
I

action

may

necessary

of

authorized

number

shares

of

Preferred

Stock

accordingly.

Section

8.

Voting

Rights.

a)

of

not

will

Holders

the

Series

Preferred

Stock voting

have
any,

any voting
required

rights,

if to

including

the

right rights,

elect

any

directors,

except Section

by

i)

if

rights,

law,

voting

any,

described

b)

b).

in

or

8(

ii)

after

issuance

the Series
full

Preferred

Stock

the

Company
I

fails

for

or

pay,

declare

and

set

aside

payment,

dividends having
their

on

the

Series

Preferred

Stock

or

or

of

any other

class

series

Parity

Securities

similar

voting the

("

rights

Voting

six

for

by or

Parity

Securities")

Dividend

Periods

equivalent,

auThonzed
with

number any
directors,

be

the

Company's
for

directors regulatory
I

will

increased

two.

Subject

to

compliance serving

requirement

approval

non- objection together

persons

as

of

the with

holders the

Series

Preferred outstanding

Stock,

voting

a single
will

and

separate
right

as

or

of,

to,

class

of

holders

any

Voting

Parity

Securities,

have

the

to

elect

in

in

to

two

at

directors

addition

the This

directors
right
will

then

office

the

Company's

next

annual meeting
Parity

of

at

meeting
until

shareholders.

continue Series
I

each

subsequent
Stock

annual

the

Company
for
three sets

pays

or

dividends

the

Preferred

and

any Voting pays

or

Securities declares

consecutive

Dividend

Periods

their

equivalent

and

for

and

aside

payment

dividends

for

the

fourth

consecutive

Dividend

or

Period

its

equivalent.

The
will

of

c)

term

such

additional

directors

will

terminate,

and

the

total

by

be

of

at

number
after

directors

decreased
for

two,

the

first

annual Dividend

meeting Periods

of

shareholders

the

Company
and

pays dividends and pays

three

consecutive

or

their

for

or

equivalent

declares

sets

aside

payment

dividends

on

the

Series

or

130887.1

of

to

of

If

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00064

CONFIDENTIAL

or

or,

Preferred Stock

and any Voting

for

Parity Securities

the fourth

consecutive Series

Dividend
eferred
I

of

Period
After

equivalent

earlier,

upon the redemption


terminates,

P~

all

its

if

Stock.

of

the term

such additional

directors

the

of

holders

the Series
for

be

Preferred Stock

will

not

able

elect

additional

directors

unless dividends

on
I

to

the

six

for

Series

Preferred Stock Dividend

have again

not been paid

or

declared

and set aside

payment

future

Periods.

d)

be by

by

Any

additional

director

elected
only

the holders

of

the Series

preferred

of

Stock record

and

Voting

Parity

Securities
I

of as

may

removed

the vote

the holders
voting

the outstanding a single

Series

Preferred Stock

and Voting

Parity

Securities,

at

together called

and separate

class,

a meeting

of

the
I

Company
Preferred

shareholders Stock

As

for

as

that

purpose.

long

dividends
for

the
six

Series

or

on

any

Voting Parity Securities

have not been paid

Dividend

Periods

or

their equivalent,

by

any vacancy

created

the removal

any such director


I

may

filled

only

by

be

of

the vote

of

of as

the holders

the

outstanding
single

Series

Preferred

Stock

and Voting
meeting

Parity Securities,

at

removal

is

voting

together

and separate

class,

the same

at

which

such

considered.

at

Section Preferred Stock

11.

Certificates.

The Company may

its

option issue the Series

without

certificates.

for

THIRD:

This amendment

does

not

provide

an

exchange,

or

of

reclassification

cancellation

any issued shares.

of

FOURTH:
FIFTH:
Incorporation

The date
This

this

amendment's

adoption

March

6,

is

2006.

to

by

amendment
the

the Amended

and Restated

Articles

of

was

duly

adopted

Board

of

Directors

the Company.

SIXTH:

No

shareholder action

was

required.

130887.1

of

of

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00065

CONFIDENTIAL

EXECUTED

this

~ Wvday

of

March,

2006.

WASHINGTON

MUTUAL,

INC.

Name:
Title:

Robert

J.

By:

7lUl(j7~
Williams President Senior Vice

and Treasurer

130887.1 9

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00066

CONFIDENTIAL

EXHIBIT

A3

Amendments

to

AR

Articles of Incorporation

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00067

CONFIDENTIAL

SEeR'- T

FIl.

C AF/

yo ED
.

OF

FSTAn

ARTICLES

AMENDMENT

MAR
OF
STATE
-

062006

OF WASHINGTON

WASHINGTON
Series

MUTUAL,

INC.

J Perpetual

Non-cumulative

Fixed

Rate

Preferred

Stock)

of

Pursuant

the

provisions the

Chapter

238.10
officer

and

Section

238.06.020 Mutual,

of
Inc.

to

the
( the

of

Revised
"

Code

of

Washington,

undersigned

Washington

of

Company"),

a corporation does
hereby

organized

and
for
filing

existing

under
Articles

the

laws

the

State

of

to

Washington,

submit

these

Amendment

its

Amended

and

Restated

of

Articles

Incorporation:

of

FIRST:

The

name

the

Company

is

Washington

Mutual,

Inc.

of

the

of

SECOND:
hereby
designated
"

the

750
Series

shares

authorized

Preferred Fixed

Stock

Company
Stock."

of

are

J Perpetual

Non- cumulative

Rate

Preferred

The

rights,

preferences,

privileges,

restrictions

and

other

matters

relating follows:

the

Series

Perpetual

Non- cumulative

Fixed

Rate

Preferred

Stock

are

1.

Section unissued designated " Series shares

Designation. preferred

There

hereby

of of

is

created

out

the

authorized stock

and

of

of

stock

the

Company

a series
Fixed

preferred

as

the

" Series

J Perpetual The

Non- cumulative

Rate such

Preferred series the

Stock"

as
(

to

the

J Preferred

Stock"). Stock

number have

no of

shares par
shall

be
(

constituting

shall

750.

The

Series

J Preferred

shall

value

per

share

and

liquidation

be

of

preference Series
J

the

Series Stock

J Preferred

Stock

$ 1,000,000.00

per share.

Shares
occurs.

be

if

Preferred

shall

issued

and

if

only

a Conditional

Exchange

2.

Section

Ranking.

The
liquidation,

Series winding-

Preferred

Stock

will,

with
(

respect

dividend with the

rights

and

rights

up

and

on

i)

dissolution,

rank

parity

Company's
(tTle-"

Series
I

on
I after rights

Perpetual Preferred the

Non- cumulative
Stock")

to-

Fixed-

Floating class the the

Rate

Preferred

to

Stock

Series

or

and Date

with

each

other

series

of

preferred

stock

established
that

by

Designation

the

Company
parity

of

terms Series

which
I

expressly Stock

provide

such

as

or

on

class

series

will

rank

with

Preferred

to

dividend

ason

up

of

the

and

rights

liquidation,
"

winding-

and
ii)
(

dissolution

Company

(collectively

to

to

the

referred

Parity

Securities")

and

senior

Company's
Stock

common
each

stock

" Common
capital

Stock"),

the

Company's

Series

RP
after that

Preferred the

and Date

other

class

by

or

stock

outstanding

established provide
rights

Designation

the

Company
J

do

on

of

it

terms

which Stock

not

expressly dividend

ranks

parity

with

the

Series

as

on

Preferred dissolution
"

and
the

up

to

rights

liquidation,

winding-

and

the

Company,

including

Common

Stock

( collectively

referred

Junior

Securities").

or

as or

of

3.

Section
intent,

Definitions.

Unless

the the

context

use indicates

another

meaning

the

following the

terms

shall

have

following

meanings,

whether

used

in

the

singular

or

plural:

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the

the

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Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00068

CONFIDENTIAL

a)

or

in

" Business

Day" means any day

other

than a Saturday,
Seattle,

Sunday

or

any

on

or

other

day

which

by

banks

New

York law

City,

New

York,

Washington

generally

required

authorized

be

to

closed.

b)

in

"

Common
Company"

Stock"

has the meaning

forth

Section

c)

( corporation.

"

means Washington

Mutual,

Inc.,

a Washington

d)

"

Comparable Treasury
the Independent

Issue"

means the United Sates Treasury

by

as

security

selected

Investment

Banker

having a maturity

would

utilized,

time

selection

and

in

comparable

the term remaining

Dividend

Payment Date
with

on

to

to

the

March

2.

set

15,2011
financial

are the
the

that

be

at

of

the

accordance

customary

practice,

pricing

new issues
Stock

perpetual

preferred

securities

having

similar

terms

or

the Series

J Preferred

with

respect

the payment

of

to

dividends

and

distributions

up

of

of

assets

upon

liquidation,

dissolution

winding-

the issuer

of

such preferred

stock.

Date
Date,

for

of

"

Comparable Treasury
the
Reference the highest Independent Dealer

Price"

means

to

e)

with

respect

any Redemption

the

average

Treasury

Dealer

Quotations

such

Redemption
Dealer

or if

after

excluding

and lowest
Investment

of

such Reference
obtains

Treasury

Quotations, Reference

the

Banker average

fewer than five such

of

the

all

Treasury

Quotations,

such quotations.

of

the

f)

" Conditional

Exchange"

means

automatic

exchange

Cayman
Series
after

Preferred

Securities

into depositary

shares representing
written direction

interest

in

WaMu

an

J Preferred occurrence

Stock which

occurs

upon the

an

OTS

upon

of

the

Exchange

Event.

g)

" Delaware

Preferred Securities"
with

means the Fixed Rate Delaware


Rate Perpetual issued Non- cumulative

Preferred Securities, Preferred Securities, Mutual


Preferred

together
liquidation

the Fixed-

to-

Floating

preference

$1,000

per security,

by

Washington

Funding

LLC, a Delaware

limited liability

company.

h)

" Designation

Date"

means March

6,

2006.
,..'

az"-""_.-

4(

in

" Dividend

Payment Date"
Period"

has the meaning

forth

Section
b).

in

m
k)
(

" Dividend

has the meaning

set forth

Section

of

" Exchange

Event"

means the occurrence

anyone

of

at

a time when

the

WaMu Cayman

Preferred Securities

are issued and outstanding:

i)

WMB

becomes

undercapitalized

under the

Prompt Corrective

Action

Regulations;

or

4(

the following

ii)

WMB

placed

into

conservatorship

receivership;

in

an

ofof

its

iii)

the OTS,
into

sole

discretion,

directs

exchange

in

Cayman

Preferred Securities

the Series J Preferred Stock,

anticipation

130888.1

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is

WaMu

WMB

b).

set

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or

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WMIPC_500002099.00069

CONFIDENTIAL

becoming

undercapitalized taking

under the Prompt Corrective


that
limits

Action

Regulations

byin

the

near

or of

of

term

any supervisory action

the payment

dividends

WMB.

I)

"

Fixed Rate Delaware

Preferred

Securities

means the 7.25%


$1,000 per

Perpetual
security,
liability

Non- cumulative

Preferred Securities, Mutual

liquidation

preference

by

issued

Washington

Preferred Funding

LLC, a Delaware

limited

company.

m)

" Independent

Investment

Banker"

by

means

an

independent

investment

of

banking

institution

national

standing

appointed

the Company

n)

in

..

" Junior

Securities"

has the meaning

forth

Section

o)

"

OTS means

the Office

Thrift

Supervision

or

of

any successor

regulatory

entity.

p)

in

" Parity

Securities"

has the meaning

forth

Section

q)

in

set

2.

set

2.

set

3{
set
'

" Primary

Treasury Dealer"

has the

meaning

forth

Section

C. F.r) R.

" Prompt Corrective

Action

Regulations means the regulations

as in

in

forth

Part

565

effect

from time

or

12

to

time,

any successor

regulations.

in s)

to

of

Company

a notice

redemption

delivered

pursuant

Section

of

7.

" Redemption

Date means any date

that

designated

by

is

the

"

Reference dealers

Treasury Dealer"
( each,

government

securities

" Primary

Treasury

Dealer"),

byas

means each

three

primary

specified

if

Company; provided

as

that

any Primary Treasury


Dealer,

Dealer

specified substitute

the Company

ceases

a Primary Treasury

the

Company

for

to

be

will

such Primary

Treasury Dealer another


substitute within

Primary Treasury

if

Dealer and

the Company

to

fails

select

of

be

will

a reasonable

period

time,

then the substitute Investment Banker

a Primary
with

by

Treasury Dealer selected the Company.

the

Independent

after consultation

u)

to
such

"

Reference

Treasury

Dealer

Quotations" Date,

means,' Wiftfrespect

Reference

Treasury Dealer Investment


(

and any Redemption

the average,

theas

determined

Independent

Banker,

and asked

for

of

bid

the

the

prices

Comparable
amount) Treasury

in

as

by of

Treasury Issue quoted Dealer

expressed,

each case,

a percentage
Banker
third

its

principal

atin 5: 00 p. to

the

writing

Independent

Investment

such Reference

on

m.,

New

the

York City time,

Business

Day preceding

Redemption

Date.

v)

"

Regulatory

Capital

Event" occurs
that there

when

the

Company determines,
risk

of

an

of no

is

based

upon

receipt

opinion
will

counsel, longer

significant

that

Delaware

Preferred

Securities

constitute

core

of of of

capital result

capital

adequacy

regulations

issued

or

OTS

a change

applicable

laws,

regulations

related

interpretations

after

issuance

the

Fixed Rate

Delaware

Preferred

Securities.

130888.1

in

WMB

for

purposes

by

as

of

the

the

the

bythe

by U. theS.
a

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WMIPC_500002099.00070

CONFIDENTIAL

w)

"

Treasury

Rate" the

means the

rate

per year equal


Issue,

to

the quarterly using a price amount)


its

to

of

equivalent

yield

maturity

Comparable Treasury

calculated

for

as

the Comparable Treasury

Issue

( expressed

a percentage

of

principal

equal

the Comparable Treasury

for

to

Price

the relevant Business

Redemption

Date.

The

be

on

Treasury

Rate

will

calculated

the

third

Day preceding

the relevant

Redemption

Date.

x)

"

Voting Parity

Securities"

has the meaning

set forth

Section

y)

'

A1,

WaMu Cayman

Preferred Securities" Series

means the 7.25% Perpetual


preference

Non- cumulative
security, liquidation

Preferred Securities,

liquidation

$ 100,000
Series

per

and the 7.25% Perpetual


preference
(

Non- cumulative issued

Preferred Securities,

$ 10,000
Ltd.,

per security,
Islands

by

Washington

Mutual

Preferred shares.

Funding

Cayman)

a Cayman

exempted

company

limited

z)

"

or

WMB"

means Washington

Mutual
its

Bank,

federal

savings

association

and a

of

subsidiary

the Company,

successor.

Section

4.

Dividends.

a)

be

of

of

by

Holders

shares

Series J Preferred

Stock out

shall

entitled

as

by

of

receive,

when,

and

declared

the Board

of

if

Directors,

the funds

legally

4(

in

available

therefor,

non- cumulative

cash dividends

the

amount

determined

as

in

set forth

Section

and

no

c),

more.

b)

4(

a),

in

to

be

Subject

Section

dividends

shall

payable

arrears

March
first

15, June

15, September

and December Series payable


first

each year commencing


( each,

onon

15

15

of

to
the the

such

day after the issuance


Date").

onwillof bethe

J Preferred Stock

a " Dividend they appear

ofto

as

of

A2,
Stock,

in

Payment
the stock Dividend

Each dividend

holders

record

of

the

the

books

Company

the

day

month
not

which

the

relevant
first

or,

if

Payment Date occurs

such date

is

not a Business Day, the

Business

of

Day

such

month.

any Dividend

Payment Date
Business

is

If

a Business Day, then


such Dividend

be

on

dividends Date
with

will

payable
force

the

first

Day

following

Payment Payment

as if

or

the

same
the

and effect

payment

were

made

on

the Dividend

Dates. issuance

Each period from and

including

a Dividend

Payment

Date

date

is to

of

but

Series J Preferred

Stock) Date)

excluding

to the

followfngDividend

Payment Date

the

Redemption

as

or

herein referred

"

Dividend

Period."

as

of

the

of c) of

for

a Dividend
will

Payment Date,

dividends,

when

and

declared

anthe

Board
annual

Directors,

be,

each outstanding

share

Series

J Preferred

in on offor

of

the

or

rate

7.25%

per share

liquidation greater

preference
less

the

Series J Preferred Period

Stock.

Dividends

payable

any period twelve

than a

Dividend

be

on

computed

the basis

30- day

months,

a 360- day

year,

and

the

actual

be

of

number
the

on

of

No

days elapsed

the period.

interest will

paid

any dividend

payment

Series J Preferred Stock.

d)

in

the

of

on

Dividends

Series J Preferred Stock a dividend

are non- cumulative. Stock holders


full

in

Board

Directors less

does
full

declare

Series J Preferred

ofor If

not

of

the

the

declares

than a
for

dividend
will

respect

any

Dividend

Period,

the

Series J Preferred the case

Stock

have

right

receive

any dividend
will

dividend,

no

may

be,

the Dividend

Period,

and the Company

have

obligation

130888.1

to

as

or

no

to

will

full

by at

On

of

if,

on

b).

in

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00071

CONFIDENTIAL

for

or

pay a dividend are declared Preferred


preferred

pay

full

dividends

that

Dividend Period

Period,

whether

or

to

not dividends
J

for

and paid
the

any future Stock

Dividend

with

respect
series

to of

the Series

or

Stock,
stocle

Common

any

or

other

class

the Company's

e)

on

full

dividends

outstanding

shares

of

all

If

the Series J Preferred the Company shall not

for

Stock declare
equity

any Dividend pay dividends


securities

Period have not been declared

and paid,

or

or

or

to,

of,

with

respect

redeem, purchase Dividend


other

acquire

any

its

capital

during

next succeeding

Period,

except

dividends

or

the

RP

connection

with

Series

Preferred Stock
benefit plans.

if

shareholders'

rights plan,

any,

dividends

in

or

connection

with

Section

5.

Liquidation.

a)

the event

the

Company

voluntarily

or

In

involuntarily

liquidates,

or

of

dissolves

winds

up, the holders


receive

Series J Preferred Stock

at

the time outstanding

to in

be

to

shall

entitled

liquidating

distributions

the amount

of

$1,000,000 but unpaid

per share dividends out

an

of

Series J Preferred Stock,


for

plus

amount equal

any declared

to

of

thereon

the current

Dividend

Period

and

including

the date

liquidation,

of for

the of

to

of

assets

Company

its

legally available

distribution

shareholders,

before

any

distribution

assets

made

holders
Stock.

Common
payment

Stock

or

to

is

any securities

ranking

of

junior

the Series J Preferred


distributions,

After

the

full

amount
will

beof

to

such

of

liquidating further

the holders
of,

Series J Preferred

Stock
shall

not

to
the

of
any

entitled

in

or

no

of

pc:

lrticipation

any distribution

assets

by,

and

have

right

claim

any

remaining assets

the Company.

b)

for

In

the event the assets


liquidation,

the Company

available

distribution

or

up

of

shareholders

upon any

dissolution

winding-

the affairs pay

of

the the

Company, whether amounts payable

voluntary

involuntary,

shall

insufficient

in

or

be

to

full

to

of

all

with

respect

outstanding

shares

the Series J Preferred Stock

on

and the corresponding

amounts

payable

any other

of

securities

equal

ranking,

of

of

holders ranking the


full

Series J Preferred Stock

and the holders

such other securities

of

equal

in

in be

of

of

to
ofof
a
the

of

shall

share ratably
liquidating

any distribution

assets

the Company otherwise

proportion

to

respective

distributions

which they would

respectively

entitled.

_
..;,.....".",...,._~-.

Section

Maturity.

by

The Series J

Preferred with

Stock

be

6.

shall

perpetual

unless

in

redeemed

the Company

accordance

Section

Section

7.

Redemptions.

a)

7.

be

at

the

holders

at

The Series J Preferred Stock

shall

not

redeemable

the option

any time.

b)

be

The Series J Preferred Stock

shall

redeemable

at

the option

in

at or in

Company,
Regulatory

to

whole

but

not

part,

prior

March 15,
price

2011, equal

upon the occurrence

to of

Capital

Event

a cash redemption
(

the

sum

X)

of:

the greater

allof

for

$ 1,000,000

per share,

the

sum

of

i)

ii)

present values

$ 1,000,000
Date

per share and

undeclared
the

dividends Dividend

the Dividend

Period from

Redemption

to

the

and

on

including

Payment

Date

March 15, 2011, discounted

to

the Redemption 30- day months)

on

Date

a quarterly basis ( assuming a 360- day year consisting

of

twelve

130888.1

of

to

to

in

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00072

CONFIDENTIAL

as

by

Y)

the Treasury
(

Rate

an

at

calculated

Independent

Investment Date.

Banker),

plus

0.40%;

to

and

any declared

but unpaid

dividends

the

Redemption

in

or

the option

the Company
shall

beat at

on or

The Series J

Preferred

Stock

tobe

ofc)

shall

redeemable
time,

whole

or in
shall
thirty

part

at

any time,

from time

after

March

15,

2011.

Such redemption

of

a cash redemption price

$ 1,000,000

per share, accumulation

of

plus

any declared

and unpaid dividends


dividends.

to

the Redemption

Date, without

any undeclared

d)

of of

In

the case

any redemption the Series

under this Section

notice

deposit

agreement Stock.

relating

depositary

shares representing

interests

Preferred

The
ii)
(

notice

redemption shall include


iii)
(

a statement

of in i) to

however,

that

a longer minimum

notice

to of

may

agreed

the Company,

in
J

more than

sixty

days prior

the Redemption

Date specified

by in

mailed

each holder

of

to

record

J Preferred

Stock

not less than such notice;

nor

to

provided,
including

be

to

be
a The
rights,

7,

the Series J the

of

Redemption redeemed.

Date,

the redemption price, and

the number

shares

e)

of

or

Section

otherwise

acquired

the

Company

in of

by

Any shares

Series

J Preferred

Stock

redeemed

pursuant

to

be
this shall

any manner whatsoever

to-

shares shall not under any circumstances

reissued

as

become

authorized

but unissued

preferred

shares

the Company but such preferred Series J Preferred Shares.

be

as

be

Company
reduce

shall

from time-

time take such appropriate

action

of

the authorized

number

shares

of

may

necessary

Series J Preferred Stock accordingly.

Section

8.

Voting

Rights.

a)

of

will

for

Holders

the Series J Preferred Stock

8(

law,

and

voting

rights,

any,

described

Section

b)

b).

in

including

the right

elect

any directors,

except

voting

rights,

any,

required

ii)

if

by
Stock
Parity

not have

any voting

to

i)

if

or If for set six

or

for

after

issuance

Series J Preferred Stock dividends having


their

the

or

pay,

declare

and

aside

payment,

on

Company

fails

full

the Series J Preferred

of

byor

any other

("

class

series

Parity Securities

similar voting

rights

Voting

Parity Securities")

Dividend

Periods

equivalent,

auJhorized

number
any

the Company's directors

will

increased

two.

Subject

to

be

compt'I'ffiTtewith

or

for

requirement the holders

regulatory

approval

non- objection together

asto,

persons serving

as

of,

directors, class elect

of

Series J Preferred Stock,

voting

a single and separate have


right

of

in

in

with

holders

any outstanding

Voting

Parity

Securities,

to

at

the

the

two directors

addition

directors
will

then

office

Company's

next annual meeting

of

at

meeting
until

shareholders.

This right

continue

each subsequent

annual

the Company pays dividends


for
three sets

on

the Series J Preferred Stock and any Voting

or

Securities

consecutive

Dividend

Periods

their

equivalent

and pays

for

or

declares Period

and
its

aside

payment dividends

for

the fourth

consecutive

Dividend

equivalent.

by

The term

of

c)

such additional
two,

directors

will

terminate,

and the

total

be

of

at

number
after

directors

will

decreased

the

first

annual

meeting

the Company pays dividends

orfor

three sets

consecutive

Dividend

Periods

of or

shareholders
their

for for

equivalent Preferred

and declares
Stock

and pays

aside

payment

dividends

on

the Series Dividend

and any Voting

Parity Securities

the fourth

consecutive

130888.1

or

to

the

the

will

of

the

to

of

the

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00073

CONFIDENTIAL

or

or,

of

the

Period
After

equivalent

earlier,

upon

redemption

all

its

if

Series

J Preferred

Stock.

of

of

the

term

such
will

additional

directors

terminates,

the holders

the Series J

be

on for

to

not

or

Preferred Stock

able

elect

additional

directors

unless dividends

payment

six

for

Series J Preferred

Stock

have again not been paid


Periods.

declared

and

set

aside

future

Dividend

d)

be by

by

Any

additional

director

elected

the holders

theof

the Series J Preferred

of

the

the the

Stock record

and

Voting Parity Securities Series

may only

removed

vote

holders
voting

of

outstanding
single

J Preferred Stock

and Voting

Parity Securities,

as

at

together

of

and separate

class,

a meeting

the

Company

shareholders

six

Voting

Parity

Stock

by

by

have not been paid

Dividend

Periods

or

for

called

that

purpose.

long

dividends

the Series

J Preferred Stock
their

or

As

for

as

on

any any

equivalent,

of

vacancy holders
voting

created

the removal

any such director

of

may

filled

only

the vote

of
do

be

the

the outstanding

Series J Preferred Stock

as

and any Voting

Parity

Securities,

at

together

a single and separate

class,

the

same

meeting

at

which

such

removal

is

considered.

9.

toNo

Section

Conversion convert

Rights.

The holders

of

Series J Preferred Stock

or

of

of

not have
securities

any rights

any such shares into shares

any

other

class

series

the

Company.

at

10.

Section

Certificates.

The Company may

option issue

the

its

Series J

Preferred Stock without

certificates.

for

THIRD:

This amendment does

provide

an

not

exchange,

or

of

reclassification

cancellation

any issued shares.

of

FOURTH:
FIFTH:
Incorporation

The date

this

amendment's

adoption

March

6,

is

2006.

to

by

This amendment
duly

the

Amended

and Restated

Articles

of

was

adopted

the Board

of

Directors

the Company.

No

SIXTH:

shareholder

action

was

required.

~'

130888.1 7

of

of

of

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00074

CONFIDENTIAL

EXECUTED

this

day

of

U1*

March,

2006.

WASHINGTON
By:

MUTUAL,

INC.

ti'/

l1t~
Name: Robert
Title:

111~
and Treasurer

J.

Williams President

Senior Vice

,",;~ ..---=:

130888.1

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WMIPC_500002099.00075

CONFIDENTIAL

EXHIBIT

B1

Bylaws

17357747

WMI

Assistant

Secretarys Certificate

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WMIPC_500002099.00076

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RESTATED

BYLAWS

WASHINGTON

OF
MUTUAL,

INC.

ARTICLE
OFFICES

in

of

of

The Washington

principal

office

and place

business

the

corporation

state

be

at

shall

located

1201 Third

Avenue,

Seattle,

Washington

98101.

or

The Washington

corporation

may have

such

other

offices

within

without

the

state

or

as

of

board

directors

may

designate

business

of

the

the

the

corporation

may

require

from time

to

time.

ARTICLE

NUMBER
of of
The
directOl's.

OF DIRECTORS

II

board

directors

this

corporation

of

shall

consist

sixteen

( 16)

ARTICLE SHAREHOLDERS
Section

3.1. third

Annual Tuesday
m.,

Meeting.

The month
other

III

annual

meeting

ofthe'~ year,

eholders with

shall

or at in

atthe

in

of

the

of of by
the such

of be
the held day ofthe

the

held

April

each

beginning determined

or

00 fora.

as

year board other

1995,

10:

such

date

time

may
for

directors,

purpose before

electing

directors

and

the be

of

of

the

transaction

beas

for

the

the

business
shall

may come
a legal

meeting.

day fixed
the

the

If

annual
shall

in

meeting

of

holiday business

the

state

Washington,

meeting

on

the

next

succeeding

day.

the

election

or atatis

directors

not

held

offor

designated

herein

any annual
directors thereafter

of

meeting cause

the

shareholders

any adjournment a meeting

to

the

thereof,

board

shall

the

election

be

held

as

as

shareholders

soon

may

be

convenient.

on by

of

If

Section

3.2.

Special unless

Meetings. otherwise written

Special

meetings

shareholders

for the

of

the

any

of or

by

purpose board

purposes

prescribed

statute

may
least

be

called

or

by

directors

the

request

holders

of at

of

twenty- five

percent

2-

DOCSSEA/

66644.1

21-200310:

45

the

be

on

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WMIPC_500002099.00077

CONFIDENTIAL

of

at

be

on

to be

to

25%)

the

votes

entitled

cast

each

issue

considered

the

special

meeting.

or be

ofof

Section
either

3.3.

Place
office

Meetings. the

Meetings

ofthe such

shareholders other the place

shall

held

the

principal

corporation

or at

within

without

or

as

of

the

state

Washington

the

person

persons

calling

meeting

may

designate.

of

Section shareholders

3.4.

Fixing

Record Date.

For

purpose

of

the

determining

of or to

orto

entitled thereof,

notice

vote

any meeting

or

at

of

shareholders

any
the
seventy
prior entitled

adjournment

shareholders

entitled

receive

payment
for

any dividend,
purpose,

of to

order

make

a determination

for

in

of

shareholders

any other
date not
less

proper

in as

in

board

directors

may
the

advance which

the

fix

a date date

record

any such more than

inof

determination
( 70)

shareholders,

any case

shall

be

of20

of

of

days and,

case

a meeting action

shareholders, such

not

than

days

on

the

date

which

the

particular

requiring

determination

shareholders

to is to

be

If no

taken.

record

date

fixed for the

determination

of

is

shareholders

ofof to or to

or

at or

notice

vote

a meeting

shareholders,

shareholders

to

of

entitled

receive

onthe

of

the

payment
dispatched
directors

a dividend

distribution,

day before which


the

first

notice

a meeting

or

as of

shareholders

the

date

resolution adopted,

the the

board
case a

or

ofof or is to

authorizing the record

such
for
date

dividend such

distribution

may

of

be,

be

shall

determination

shareholders.

When

to in

of

at

determination shareholders

shareholders

entitled

notice
this

vote

any meeting

has

been

made

as

provided

section,

such

determination
fixes

shall

to

of

apply
date,

any adjournment

thereof

unless

the

board

directors

new

record

do

to

is

it

which
(

must

ifthe

meeting
date fixed

adjourned

a date

more

than

one hundred

for

the

twenty

120) days

the

after

original

meeting.

for

The
meeting

in to

of

is
a

record the

date the

determining shareholder

shareholders signs the

entitled

take

action

without

date

first

consent

of

is

lieu

meeting.

Section shareholders,

3.5.

Voting

Lists.

least

ten

( 10)

days before eadPmeeting


the stock
transfer

of

At

the shares

officer shall

agent

having

charge

books

of

orof

the

an

corporation date

prepare

alphabetical

shareholders

on

all

list

its

to

record

who

at

are entitled group,

vote

the each

meeting
voting

any adjournment

thereof,

or

by

by

arranged

voting

and within
the

group

class

series

forof

shares,

with

address

and

number meeting

on by

of

of

the

shares held

each,
file

which
the the

record

a period

to

of

inat at

for

or

of

the

the

of

ten

( 10)

days

prior

the

shall

kept

principal city

office

or at

in

corporation

a place
record

identified

the

meeting and

notice

where

the

meeting

be

to be

of

the

the

be

will

held.

Such
shall

shall

produced

kept

open

time

and place

be

meeting

and

of

subject

the

inspection

any shareholder,

shareholder's

agent thereof.

or

shareholder's

attorney

any time during the meeting

or

at

any adjournment
not
affect

to

of

Failure

comply with the requirements

this

bylaw

shall

validity

at

any action

taken

the

meeting.

2-

DOCSSEN66644.1

21- 200310:

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of

the

the

to

or

to

of

at

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WMIPC_500002099.00078

CONFIDENTIAL

Section

3.6.

Notice

Meetings.

Notice,

tangible under
stating

written

or

in

of

printed

form,

or in

in

electronic

form,

any other Act

form then
applicable

thethe

allowed law,

Washington
date,

or

Business

Corporations

other

time

and place
the

in

of

of

of

a meeting

shareholders

and, the

case

a special
shall

meeting

of by

the

shareholders, the person

or

purpose
persons persons required

purposes the

for which

meeting
the

called,

given

of or to by

calling

meeting

Secretary

direction

such

person
( unless

to by

at

to

each

shareholder

record entitled

vote

such

meeting

law

send

notice

shareholders
less

regardless ten
( 10)

whether

or

to

of

all

not

such
sixty

to

shareholders
( 60)

are entitled

vote),

not

than

days and not more than

orof

to

on

days before the meeting,

except that

notice

a meeting

an

act

amendment
sale,

to

of or

the

articles

incorporation, other

a plan

of

merger

share exchange,

a proposed

or of

of

of

of
ofthe

the

lease,

exchange

disposition

substantially

theall

assets

corporation corporation

other
shall

than

usual

course

business,
( 20)

or

in

the

dissolution

be

given

not less than Written notice

twenty

days

and not more than


by: Mail,

the
sixty ( 60) carrier

the

all

days before

meeting.

may

be

transmitted wire

private

or

or

or

be or

personal

delivery;

telegraph

teletype; notice.

telephone, notice

wireless

equipment upon dispatch


appearing

which

transmits

a facsimile

of

the

Such

shall

effective

or

to

or or
date, date,

at

be

is

of

the

sent

the

shareholder's

address,

telephone

number,

other

number

the

records

of

the

corporation.

is oror If or an

or

annual notice

special

shareholders'

meeting

adjourned

to

is

a different

or

be

of

time time date

place,

need

not

given

the

new
for

if

date,

time

place unless

the

new

at

the

is

place

announced

meeting
record

before adjournment

a new

record

or

the

is

be

must

fixed.

new

date

adjourned

meeting

must
are

of

be

to

fixed,

however,

notice

the

adjourned record
date.

meeting

must

given

persons

who

as

of

shareholders

the

new

of

Section

3.7.

Waiver
the

Notice.

or

shareholder bylaws, date

may waive any

notice

required

or of

given

under

provisions before

these

articles

incorporation
therein.

applicable

law, whether

after

the

and time
methods:
(

stated

A valid
signed

by b) to by

a) in

waiver

created

any

the

following

three

writing

by in
the

of

is

to

for

the

by
the

to

of

the

be

shareholder corporate beginning meeting;

entitled

notice

and delivered

the

corporation the

inclusion

to inat at

records;

attendance objects

the

meeting,

unless

shareholder

or of orc)

or

at

at in

the

its
has

the

meeting
failure

holding

meeting

transacting

business

by

to

of

object

thethe

time

presentation
notice.

of

a matter

not within

the

purpose

purposes

described

meeting

of

Section

3.8.

Manner

Acting;

Proxies.

shareholder

may

vote

either

or

by

by

by

person

proxy.

A shareholder
is
executed

may

vote the

proxy

means
his

of

a proxy

appointment authorized secretary

form which
inattorney-

shareholder,

agent,

his

or

by

by

duly

be

All

fact.

proxy appointment

forms

shall

filed

with

or at

of

of

corporation

before

the

commencement
valid
after

meetings.
(

unrevoked

proxy

appointment unless

form

be

shall

eleven

11) months appointment

in

of

date

execution

otherwise

expressly

provided
until

the

its

No

the

from the
form.

proxy appointment

may

effectively

revoked

notice

of

No

be

such

revocation

2-

DOCSSEA/

66644.1

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10:

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the

the

be

If

on

if

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CONFIDENTIAL

by

to

of

the

ofthe

been

given

the

secretary

corporation

shareholder

appointing

or

proxy. executed

Any

proxy appointment tangible written

any revocation

a proxy appointment

may

form,

may

means
the

electric

transmission

by

may
Act

or be

any other

means then
law.

by

allowed

Washington

Business

Corporations

other

applicable

Section

3.9.

Quorum.

any meeting

the

shareholders,

a majority
group,

of on

of or

by

to

the

interest

shares

entitled

vote

a matter
shall

the

all

voting a

represented

by

by on

in

person

proxy
action

shareholders
that

record,

constitute

quorum

of

that

for

voting

group

is

matter.

Ifless

than

a majority

represented,

in
a

of

At

majority

those

represented without

may

adjourn

the

meeting

such

time

and place
3.6.

as at
votes

to

of

may
share

in

as

set

determine,

further

notice,

except than

forth

Section the

Once a
theor for

it at is

to

to

is

represented business,

a meeting,

other

object

holding

meeting

for

be

transacting remainder record date

deemed
forfor

of

to

present

purposes

quorum
unless

is of

of

the

meeting must

and
fixed

any adjournment
the adjourned

that

meeting

new

or

At

be

meeting.

such

reconvened
transacted the

meeting, adjourned

any business

may

be

transacted
exists,

which
action group

might

have

been

meeting. votes the

a quorum within the

a matter the the

approved

by

on

is

If

a voting the

group
cast

if

the

cast

voting

favoring unless

action

exceed

within

voting vote

group opposing

is

the

action,

question

one upon

or

by

incorporation

or of

which

a different

required bylaws.

express provision

oflaw

ofthe

articles

these

be onof

Section

3.10.

Voting one vote

Shares. each

Each

outstanding

share, a vote

regardless

shall

entitled

matter

submitted

a meeting

in

as

shareholders,

except

may

otherwise

provided

the

of

articles

incorporation.

for

In

Section

3.11.

Voting
entitled

Directors.

election
shall

of

the

directors

every vote

of of of

class,

be

to

to

at

he by at

shareholder

record

vote

election

have

asthe

right there

as

person

number
for

shares

owned

him

many

persons

are

of

for

the

directors

to

be at

to to

elected

and

whose election

has

a right

vote.

Shareh6Iders

entitled

vote

any election
the

directors

shall

have
are
those

right

cumulate
the

In

no

of

votes.

any election
votes

of

directors

candidates
entitled

elected

receiving

largest

numbers

in

by

to

up

to

of

to of

cast

the

shares

vote

the

election,

the

number

directors

by

elected

such

shares.

Section

3.12.

Voting

Shares

by

of

Certain

Holders.

in

3.12.1.

Shares

standing

name
agent

orof

the

another

corporation, the board

of or

by

domestic
dil'ectors

foreign,

may

voted

such

officer,

proxy

such

corporation

may

determine.

certified

copy

of

a resolution

as

be

adopted

by

such

directors

shall

conclusive

as to

be

their

determination.

3.12.2.

Shares

held

beby

a personal

representative,

administrator, executor,

or

executor,

guardian

conservator

may

by

voted

such

administrator,

2'

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be

to

in

of

to

to

the

of

is

be or
they

in

by

be

of an

the

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WMIPC_500002099.00080

CONFIDENTIAL

or

of

guardian personal standing

conservator,

without

transfer

such

shares

into

the

name

of

such
Shares
shall

representative,

administrator,

executor,

guardian

or

conservator.

in to

by

be

name

a trustee

may
trust

voted

such

trustee,

no

of

the

but

trustee into

in

entitled

vote

shares

held

without

a transfer

of

be

such

shares

the

name

of

the

trustee.

if of of

3.12.3.

Shares held

standing

name name
which

a receiver

such
the

receiver,

and shares
the

or

by

under

the

control

a receiver authority

may may

byhis

receiver

without

transfer

thereof

into

in

an

of

the

contained

appropriate

order

court

such

receiver

was

3.12.4.

shares

are held
shall

jointly

three

or of

by

If

more

do be be is

voted

voted

so to

appointed.

fiduciaries,

the

will

majority

fiduciaries

control

manner

voting

or

of

appointment otherwise

a proxy, unless

the

instrument

order

appointing

such

directs.

3.12.5.

Unless
are

the

pledge
shall

agreement

expressly

provides such shares

or

of

of

the

the

the

fiduciaries

otherwise,
until

to

a shareholder shares
shall

whose shares been transferred

pledged the

of be

entitled

vote

have

into

name

the

pledgee,

and

thereafter

the

pledgee

entitled

vote

shares

so

to

be

the

transferred.

by

3.12.6.

Shares

held

another
total

corporation

shall

not

voted

or at

in

any meeting

counted

determining

the

number
the

of

outstanding

shares

ofto

for

of

to

entitled

vote

any given time

a majority

shares

entitled

vote

election

directors

such

other

corporation

held

by

of

is

this

corporation.

On

on

3.12.7.

and

after

date

which

written the with

notice

of to

redemption

redeemable redeem

shares such

has

been dispatched been

to

of

the

holders a bank

thereof

and a

sum
the

sufficient

shares has

deposited

or

trust price

to

company

with

irrevocable

instruction

and

authority

pay the red~ mption


such not shares

holders

thereof

upon surrender any matter and

certificates

therefor,

shall

to

to

on

be

entitled

vote

shall

deemed

be

outstanding

shares.

for

of

Section

3.13.

Notice

Nomination.

Nominations

election

of

the

directors

or

for

to

be

up at

beto of
the

of

not

the

if

at in of

and proposals
shareholders shareholder

any new business

taken

any annual

be

special

meeting any

of or

by

may

made

the

board

directors

the

corporation the election

corporation

entitled

vote

generally

in

to

of

the

for

order

a shareholder meeting,

corporation

make any such nomination

to ofbe inor to

atIn

to

of

the

by

be

of

of

directors.

proposal

any annual

the

shareholder's Offices

nomination
the corporation

or by

proposal the

must

writing

at

and received
corporation

the
less

Executive than

of

Secretary

the date

in

of

not

120 days
the

advance

the

date

corresponding

the

the

on

previous

year

which
with

corporation's previous

proxy statement
annual

was released

security

in

holders except annual

connection

the

year's

meeting
year

orof

security the date

holders,

in

if no

that

annual has

meeting

was held

previous

of

the

the

by

meeting

been changed

more than

30

calendar

days from the

date

2-

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orby

previous accordance

year's

annual the

meeting,

a proposal
forth

shall

received

corporation

ofset

with

method meeting

hereafter

proposals

nominations

for

In

of

advance

a special

shareholders.

order

a shareholder

of

the

or

be up inat

in

for

in
the
shall

be

the

corporation shareholders,

make
the

any nomination

proposal

taken

a special
writing

meeting and
corporation

shareholder's

nomination

or

proposal

must
the

by

at

of

received

the

Executive

Offices

75 the

corporation

Secretary

of

the

by 45

not less than notice


shall

days nor more than


a shareholder the with

days

to

prior

any such meeting.


for the
election

Each

such

to

given

respect

nominations

of

directors

set

forth

name,

age, business
ll)
notice, (

address the

and,

known,

residence

address

each each

nominee such

proposed and

such
the
iii)

principal

occupation

employment which

of

of

nominee,

number such

shares

stock

of

the

corporation

are beneficially

owned

by

each

nominee.

or

Section

3.14.

Action

Without

a Meeting.

Any

action

permitted

required

be so

taken

a meeting

shareholders
forth

may

taken

without
shall

a meeting

by if

one
all

in

more consents
shm'eholders.

writing

setting

the

action

taken

be

signed

ARTICLE

IV.

BOARD OF DIRECTORS
Section
4.1.

General board

Powers.
directors.

The

business

and

affairs

ofthe

corporation

by

be

managed

of

its

of

Section

4.2.

Number,

Tenure

and

Qualification.

The

number

directors

or

to orII in

forth

Article

ofthese the

bylaws

may

increased

decreased

from time
decrease,

time

in of

amendment
shall

manner
shortening

provided the

these

bylaws.

No

however, such

have

or is of

the

effect

term

any incumbent
the

director

unless

in

director

resigns
shall

removed

of

accordance
shall

with

provisions

these

bylaws.
articles

The

or Inbe

as

directors

classified

and

hold
shall

such
serve

terms
until

forth

[ lIthe

incorporation.

all

cases,
their

directors earlier

their

successors

are duly elected death.

and

qualified

until

resignation,

removal

from office

or

be

of

of

or

Directors

need not

residents

the

state

Washington

shareholders

of

the

corporation.

Section

4.3.

Annual

and

Other
the

Regular

Meetings.
earlier

Regular

meetings

of

the

or

or be

in

at

an

of

board

shall

held

two- thirty

o'clock,
third

hour

the

discretion

on

Chairman
April, June,

President,

Tuesday

ofthe

months

of

the

January,

February,

July,

September, case the has

October,

and December

unless
first

such

day

is

a legal
thereafter,

in

be atby

holiday,

which

on

meeting

shall

held

the

business

day

or

or

the

unless

such

meeting

been canceled

Chairman
three

the

President

upon

to

giving

notice such

members

of

the

the

board The
the

least

calendar

days before the date

of

is

on

which

meeting
other

scheduled. within

date

any regular

meeting

may

as

changed

such

date

month

by

to

be

shall

determined

the

2-

DOCSSEAJ66644.1

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45

be

Chairman

the

of

set

by

in

to

be

set

or to

at

of

the

be

ofof

i)

if

or

in

of

be

to

to

Return

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or

or in

or

the

President,

the

absence

the

Chairman
the time

by

of

the

President,

any three

of in

of

of

members

the

Board, Section

provided

notice

and place meeting


the

such
the

meeting

is
the

given

as

provided

4.4.

each

year,

regular

day

Annual

Meeting

Shareholders

shall

known

Annual

Meeting

of of

as

of

be

on

In

the

the

Board.

of

of

the

Section

4.4.

Special

Meetings. the board

Special

meetings

board

directors

may
The

called

the

board

directors,

chairman

the

board,
state

or

by

of

of

be

the

president.

of

of

notice

a special

meeting

of

the

directors

shall

the

date

and time
Unless

of

the

the

and,

meeting
required

byis

not

exclusively neither

telephonic,

place

the

if

meeting.

be

to

be by at,

the

otherwise

law,

business

transacted

nor

the

purpose

or of

any regular

special

meeting

the

board

directors

need
given

specified

in to
theor

of

of

of,

the

or

notice persons person


written.

waiver

notice

such

meeting.

Notice

shall

person

authorized

call

such

meeting,
call

secretary

the

direction

or

to

persons

authorized

such

meeting.

The

notice

may

be

oral

byor by

in or is

orIf or to

notice

orally communicated personal secretary

person sent

telephone

director telephone
director's

the

director's

electronic

mail, notice

of

to

the

is

wireless

equipment, mail

which

transmits telephone

a facsimile

the

or

electronic

designation

number
timely

appearing sent

on

the

records

be

the

corporation,
( 24)

the hours

notice
prior

a meeting

theno

of

toof

if

shall

later

than sent the

for

the

the or
the

of

or

by

to

at

the

be

of

the

twenty-four

time

such

meeting. ofthe

notice

of to

courier notice the

the

director's shall

address

appearing

no on

the

records than

corporation,

3)

be

a meeting
for set

timely

sent

later

three mail

full

days

prior

by

time

such

meeting.

the

notice

sent

to

is

If

the

director's

address

on

5)of

setof

appearing

the

records
five (

corporation,

notice time

a meeting for such

be

the

the

shall

timely

no

sent

later

than

full

days

to

if

prior

the

meeting.

of

Section

4.5

Waiver

Notice.

Any

director

may waive

of

notice

any meeting
ofthe

at

to

be

any time.

Whenever
pursuant

any notice

in to

is

required

given

any

director

corporation
director,

applicable

law, a waiver

thereof

writing giving

signed

by

to

the

be

entitled

notice,

shall

deemed
shall

of

to

to

the

equivalent
constitute

notice.

The meeting

of

at

of

of

attendance except

director

a meeting

a waiver

notice

the

where

a director

attends

a meeting

for the

express purpose

objecting

of

the

is

transaction

any business

because

meeting

not lawfully convened.

A
is
the

director

to

of

waives
within objects

at

objection the

consideration

a particular

matter

a meeting

that

not

or

it is in

the

purpose considering

purposes the matter

described

meeting

notice,

unless

director

to

when

presented.

Section

4.6.

Quorum.
with these

A
of

majority

number

directors

specified

in

or to of

fixed

accordance

bylaws

shall

constitute less

a quorum a majority

for the
shall

transaction attend a

at

any business
meeting, time

any meeting

If

directors.

than

of

the

a majority
further

directors

present

may

the

adjourn

meeting

from time meeting

at

without

notice,

and a quorum

present

such

adjourned

transact

business.

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of

of

the

to

of

may

to

if

by

set

the

is

If

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CONFIDENTIAL

of

is

Section the affirmative

4.7.

Manner

If

Acting.

a quorum

present

when

a vote

is

taken,

of

of

of

vote

a majority

directors

present

the

act

the

board

directors.

by

Section

4.8.

Participation

Conference

Telephone.

Directors

may
the

or

participate

a regular
of,

special

meeting

all or

in

of

the

board

by,

conduct
directors

meeting

through

the

use

any means
during the

communication and
the

by

of

which

participating shall

can hear each


constitute

other

meeting

by

participation

such

means

in

presence

person

at

meeting.

of

at

of

is

Section

4.9.

Presumption

Assent.

director

who

present

a meeting assented

to

the the

board
action

directors

which
such

be be

action

taken

shall shall

presumed

have

to in

taken unless

unless

director's shall

dissent

entered

the

minutes
action

of
the

the

his

or

meeting
person

such

director

file

written

dissent

such

with

acting

secretary

the

meeting
mail

before the

adjournment

thereof

or

as

of

shall

by

to

forward

such

dissent
after

registered

the

secretary

of

the

corporation dissent
shall

ofof

immediately

adjournment

meeting.
action.

Such

to

the

right

not

apply

a director

who voted

in

to

favor

such

Section

4.10. taken

Action

Board

Without
the

a Meeting.

Any

action

permitted without

if to

be

at

of

of

required

a meeting consents before

board
forth

directors

may

be

taken
shall

or

so

meeting

one

more

setting

the

action

taken,

the

directors,

either

after

action

taken,

and

delivered form,

corporation. electronic Business effective


later

Such

consents

may

forth

a tangible

written under taken the

or orin

transmission Corporations

any other
other

form then

allowed
Action

bythe

Washington
consent

Act

applicable the

law.

when

the
date.

last

director

executes

consent,

unless

consent

is
a not less

effective

of an by

Section

4.11.

Audit
shall

Committee.
elect

The
their

C<at

board

directors,

any regular
JfiTmitteeof

of

meeting
than

the

Board,

from

number

Audit
the

of

three

members, Board

none

whom

shall

employed
that

corporation.

At

be

be in to an

executed

be or

by

the

all

in

set

specifies

least

of

annually the

the

Directors other

shall

determine

each

Committee

member
the
Audit
that

has

in

independence

and

qualifications the Board,

inset

forth

the

Charter

as

by

of

or
a

by

the the

Committee Board

approved
with

and

any supplemental

statements

to

may
The

of

the

adopt

regard

composition

the

Committee.

Audit

Committee
functions Board,

shall

have

thethe

authorities

and
the

responsibilities

and

shall

perform

specified

Charter

Audit
that

Committee,
the

in

by

approved
adopt with

the

and
the

any supplemental

statement

Board

may

to

of

the

regard

functions

Committee.

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in

of

the

to

of

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is

of

is

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of

Section regular

4.12

Human
the

Resources
shall shall

Committee. from
not
their

The

at

board a

directors

any

of

meeting which

board,

elect

number
three

Human

Resources

of

Committee

committee

have

less

than

members,

none

whom
have
the

by

be

the

shall

employed and

corporation.

The Human
and
shall

Resources
the

Committee

shall

authorities

responsibilities

perform

functions

specified

Charter

the

Human
statement

Resources

Committee,
that

approved

the

Board,

and

to inin is at to

the

as

by

of

any
the

or

supplemental

resolution

the

Board

may

adopt

with regard

of

the

functions

Committee.

of

Section

4.13. board,

Governance
shall elect

Committee. from
their

The board

at

directors,

any regular none

of

meeting

the

number

a Governance corporation.

Committee, Governance and

the

members
shall

which
the

shall

employed

by

be

of

of

the

The

Committee perform approved Board


the

have

composition,

authorities

and
the

responsibilities

shall

in to in

functions the Board, with

specified

the

Charter

Governance

Committee,
that

and

any supplemental

statement

or

by

resolution

of

the

may

adopt

the

regard

functions

Committee.

of

Section

4.14. board,

Finance
shall

Committee.
elect

The board
number

at

directors,

any regular

ofof

the

meeting
majority

from

their

a Finance
shall

Committee.

A
the

be

of

the

members
board,

the

Finance
the

Committee

not

officers

of

as
the not

of

corporation. consultation

The
with

upon

recommendation
Officer,
shall

the

Governance
a chairman

Committee

the

Chief Executive

appoint
shall

who

of

an

officer

the

corporation.

The Finance
the

Committee

have
the

the

authorities

and

in

responsibilities

and

shall

perform

functions board,

specified

Charter

of

the

Finance

Committee,
that

approved

the

and

toin

as

by

any supplemental

statement

or

of

the

resolution

the

board

may

adopt with regard

functions

Committee.

Section regular Relations Corporate

4.15.

Corporate the board,

Relations

Committee. from among

The board _ ofdirectors,


their

the

any

of

meeting

may
shall

elect

numbeTa

Corporate

of

Committee
Relations

which

the no

consist

fewer

than

two Directors.
authorities the Charter

The and

Committee
shall

shall

have

composition,

in

responsibilities

and

perform

the

functions

specified

of

the

Corporate

Relations

Committee,

approved
that

the

Board,

and

in

as

by

any
regard the

or

supplemental

statement the

resolution

the

Board

may

adopt with

of

functions

Committee.

of

Section

4.16.

Corporate

Development

Committee. from among

The
their

board

directors,

of

the

any regular Development


less

meeting

board,

may

elect

number

a Corporate

of

Committee, which
directors.

shall

consist

the

Chairman

of

the

Board
shall

and not have

than

two other

The and
the

Corporate

Development and
shall

Committee perform
the

the

composition,

authorities

responsibilities

functions

as

specified

Charter

Corporate

Development

Committee,

approved

2-

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of

the

at

in

of

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or

in

the

Board, with

and

any supplemental

statement

resolution

that

the

Board

may

to

of

adopt

the

regard

the

functions

Committee.
thein

or of by
the

Section specific governed

4.17.

Committee Procedures.

Except

provided

the

bylaws
shall

of

of

of

the

the

resolutions

Board

Directors, meetings,

committees
action

Board
the

by

the

same and

rules

regarding

without

meetings,

notice,

as

waiver

notice,

quorum

and

to

of

voting

requirements

applied

Board

Directors.

Section written notice

4.18.

Resignation.

Any
the

director

may

resign

any time
secretary,

by or of

atthe at

delivering

to of

of

the

the

chairman
the

board,

president, oral

or

by

the

registered directors time

office

corporation,

giving

notice take

any meeting

or

shareholders.
therein,

Any
thethe

such resignation

at

shall

effect

any subsequent
thereof not and, unless

or if

is

specified

time

not

specified,

upon

delivery

of

otherwise

specified

therein,

acceptance

such

resignation

be

shall

necessary

to

it

make

effective.

the

ofof

Section
that

4.19.

Removal.

a meeting

shareholders

called

expressly

or

the

purpose,

any director

entire

board

directors

may

be

removed
entitled

from

office,

by

to

of

of

of

with

cause,

a vote

the

holders

a majority

the

shares sought.

then

vote

or

an

election

ofthe

director

directors
directors

whose removal

the

board

or

or

so

of

is

If

directors
this

anyone

more

removed,

new

directors

may

elected

same

meeting.

on

Section
resignation,

4.20.

Vacancies.

by of in

vacancy
existing
directors

the

board

directors

may

occur

or

of of an

or

removal
directors

death the

director,

reason these

of

increasing

as

number

board

provided

bylaws.

Except

may

limited

articles

incorporation, vote

any vacancy

occurring

board

by

toof

of

directors

may
less

filled

the

affirmative

four- fifths
fill

the

be

remaining

directors

though

than

a quorum.

director

elected next

a vacancy

shall

elected

for

be

of

of

term

office continuing

only until

the

election

directors

bY= shareholders.
one

the

vacant
classes

office was

or

by

by

of

If

held

a director only

elected

holders

more

toor

to of

or

of

authorized

series

shares,

holders

those

classes

series

are

shares

entitled

vote

the

fill

vacancy.

of

of

By

Section
directors

4.21.

Compensation.
a fixed

resolution

the

board
any,

directors,

paid

plus their

expenses,
thereof,

if or

may

sum

attendance salary

meetings

the

board
shall

directors

committee

a stated

No

such payment
capacity

preclude

any director

from serving

corporation

other

and

receiving

compensation

therefor.

of

Section

4.22

Chairman

Board.

The
the

Chairman

shall

preside

at

the

In

of

of

of

the

the

board
the

directors.

absence
select

Chairman

and

the

Chief Executive

Officer,

directors

present

may

to

inas at the

or

of

of

for

be

director.

the

any

meetings

someone from

their

number

preside.

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of
The

the

as of
a

by

on

of

in

be

of

the

the

at
the

is

be

at

for

At

the

be

in

as

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as

by

Chairman
directors.

shall

perform such other

duties

may

assigned

board

ARTICLE

OFFICERS

in

Section

5.1.

Ranks

and

Terms

Office.

The

of

officers

the

corporation a

shall

a Chief Executive Auditor,

Officer,

a Chairman, Officer,

a President

of

be

the

Corporation,

General

a Chief Financial Senior Executive

a Controller,

and

such

Vice Chairmen,

Group
Senior

Presidents,

Vice Presidents,

Executive

Vice Presidents,

or

as

of
appoint.

the

be

Vice Presidents,

First

Vice Presidents

Vice Presidents

the

board

or

as

directors

may

or

may

designate

and

elect,

such

other

officers Officer

board

of

the

directors

designate

and

elect

the

Chief Executive

may

designate

and

of as in of

Section corporation general

5.2.

Chief Executive
direct

Officer.

The

Chief Executive

Officer

shall

have

supervision supervision

and management and management

affairs

and

powers

and duties

of

usually

vested

the the

to

of

Chief Executive corporation.

Officer

a corporation,

subject

the

Bylaws and policies


such other duties

the the

of

its

of or
and
the

The
the

Chief Executive

Officer shall

perform

may

of theby

of

In

of

assigned duties

board

the

directors.

the
shall

absence

Chief Executive

Officer, the

by

of

Chief Executive

Officer

assumed

the

President

in

Corporation, designated

and

their

absence

such duties

shall

assumed

by

be

a person

or

by

the

Chief Executive

Officer

the

board

of

directors.

the

be

Section

5.3.

Chairman.

The Chairman
shall

shall

preside over

over

meetings

of

board

directors.

The Chairman
duty
shall

preside authority

meetings

of

the

all

the

shareholders,

which
the

the byInor as as

be be to ofset

include other

adjourn

such

meetings.

in by

Chairman
directors procedural the

shall

perform such

duties

may
may
the

assigned
forth

the

board
policies

or

directives duties

corporation.

event

Cha-

n--

Chief Executive

Officer,

the

of

the

the

man'sincapacity,

or,

Chairman's
ofthe

shall

assumed
the

the

Chief Executive the duties

Officer

in

be

event

Chief Executive

Officer's

incapacity,

ofthe

Chairman such

by

assumed

President

Corporation,

and
board

in of

be

of

the

their

absence

duties

by

shall

assumed

a person

designated

by

be

the

directors.

of

Section
shall

5.4.

President

the

Corporation.

The
the

President

of

the

Corporation the

as

perform

such

duties

may

by

be

assigned

Chief Executive and procedural

Officer

or

in

as

be

of

of
and
the
shall

of
The
Chief

all

be by of

board

directors,

may

set

forth

the

policies

directives

the

corporation.

Section maintain

5.5.

General
audit

Auditor.

The
the

General

Auditor
liabilities

shall

supervise

of

of

continuous

control

assets

and

the

corporation. with

shall

responsible

only
shall

the

board

directors duties

in as

to

be

of

He

coordination

be

Executive

officer.

He

perform

such

other

may

to

assigned

him

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or

Chief Executive

Officer
that

President

Corporation the

from time

to of of

of

the

the

the

time,

to

only audit

the

extent

such

other

duties

not

compromise

independence

control.

Section corporation corporation's instruments

5.6.

Chief Financial the

Officer.

The

Chief Financial

Officer ofthe

of

shall

have

power and duty


retention

supervising

and managing
loans

acquisition, ( including

and disposition

of

securities,

and

the

financial

in

to

not

the

but

limited

corporation's

investments supervising the

and loans

to

the

corporation's

subsidiaries), reporting,

the power

and

duty general

corporation's supervision corporation, Financial directors Officer,

financial

and the other


vested

of

powers

and

duties Officer

and

management

usually

in of asthe

the

Chief Financial corporation.

to

the

subject

Bylaws and policies


other

The

Chief

by

of
officer shall shall

do

Officer shall

perform such

duties

may

assigned

the

board

or

by

In

Chief Executive

Officer.

absence

of

the

the

the

Chief Financial

the

duties

the

Chief Financial
their

Officer

shall

assumed

by

be

of

the

Controller a person

the

corporation,

and

absence

such

duties the

shall

assumed

or

by

designated

the

Chief Executive

Officer

board

of

directors.

Section

5.7.

Controller.
shall

The

Controller

be

shall

the

chief

accounting

of

of

by

in

of

be

the

corporation

and

have

supervisory budgeting

control and

direction

the

general

accounting, the custodian

accounting

procedure,

and

general

bookkeeping,

and

of

the

general

accounting

books,

records,

forms and papers.

He
the

as of

also perform Executive President,

such

other the

duties

may
the

assigned

from time

time

by

to

be

Chief

Officer,

President

Corporation,

a Vice Chairman,
Executive

a Group

or

or
only

a Senior

Executive the

Vice President and procedural

Vice President,
the corporation,

may
the

forth that

policies

directives

extent

such

other

duties

not

compromise

independence

of

the

do

audit

control.

Section Presidents, Senior duties

5.8.

Vice Chairmen,

Group

Presidents,

Senior

Executive

Vice

Executive

Vice Presidents.

Any Vice Chairmen,


Vice Presidents

G:

rfffipPresidents,

Executive

Vice Presidents,
assigned

Executive

shall

perform
Officer

such

or

may

from time

time

the

Chief Executive

or

as

by

to

be

the

of of

President
directives

the the

Corporation, corporation.

may

in

as

be

set forth

the

policies

and

procedural

Section Presidents.

5.9.

Senior

Vice Presidents,
First

First

Vice Presidents

and

Vice
shall

Senior duties

Vice Presidents,

Vice Presidents

and Vice Presidents

as of

by

be

to

perform
Officer, Senior
forth

such
the

may
the

assigned

from time
a Vice

time

the

Chief Executive President, a

President

Corporation,

Chairmen,

Group

or

or

as

be

Executive

Vice President

a Executive
directives

Vice President,

may

in

policies

and procedural

of

the

the

corporation.

Section

5.10.

Secretary

and Assistant

Secretary.

The

Secretary

shall

of

of

of

of

the

all

the

minutes

meetings

the

board

directors

and

shareholders.

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set

keep

He

as to

in

be

an

of

set

be

of

be

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00088

CONFIDENTIAL

or

as

by

shall

give

such

notices

the

directors

may

required

law

by

to

be

these
contracts,

to of

He

the

Bylaws.
papers other the

shall

have

if

custody

the

corporate

seal,

any,

and the

and
duties

documents

He

the

belonging assigned

corporation.

shall

also perform

such
Officer,

as of

by

to

may
the

from time
a Vice Executive

time

the

be

Chief Executive President,

President

Corporation,

Chairman,
the

a Group

a Senior
forth

or

Inor

Executive

Vice President and


the procedural

Vice President,
corporation.
shall

may
upon

of

of

the

policies

directives

the

absence

beof

Secretary, Secretary

powers

and

duties

the

Secretary

devolve

an

Assistant Officer.

or

as

such

person

shall

designated

by

the

Chief Executive

Section

5.11.

Combining from such such

Offices.

An
the

officer

who

holds

one

office

may, with
directors

or

by

the

in
Vice from

as

an

be

set

without

resigning

existing
office,

office,

elected

the

board

in

to

of

hold,

addition

existing Executive

office

Chairman,

Vice Chairman,
First

Group

President

Senior

Vice President,
officer

Senior

Vice President,

or

President resigning

Vice President.
such existing

An

who

holds

one office may, with

or

without

by

from

office,

appointed another

the

Chief Executive than

Officer

in

to

hold,

addition

such

existing

office,

office other

office

Chairman,
Senior

Vice Chairman,
First

Group

President

Senior

Executive

Vice President,

Vice President,

Vice President

or

Vice President.

Section

5.12.

Other

Officers.

The

other

Officers

shall

perform

such

as

by

of

may

assigned a

the

Chief Executive President,

Officer, the Executive

President

the

be

Corporation,

or

a Vice

Chairman,

Group

a Senior

Vice President
policies

or

in

as

be

set

Executive
directives

Vice President,

may
the

the

forth

and procedural
designate

of

the

corporation.

The

Chief Executive Chief Executive

Officer

may

such

as

to

an

functional time

titles

officer,

Officer

deems

appropriate

to

time.

Section

5.13.

Official Bonds.

The

corporation

may
which

of an be

indemnified
officer,

in

an

of

the

duties

the

or

to
the

be

byof

event agent

the

dishonest

conduct
fidelity

unfaithful

performance
for

employee,

by

a corporate

bond, the premiums

ma~ aid

corporation.

ofof

Section Executive President,


officers,

5.14.

Execution President

Contracts

and

Other

Documents.

The

Chief

or

the

Officer,

the

Corporation,

any Vice Chairman,

Group

or

Senior

Executive

Vice President

may from who


shall

to

time

time designate

or

employees

agents

the

corporation

have

authority

to

of

sign

of

deeds, other

contracts,

satisfactions,

releases,

and assignments

mortgages,

and
the

or

or

documents

instruments

writing

made

executed

corporation.

by

in

to

be

Section delivering

5.15.

Resignation.

Any

officer

may

resign the

any time

written

notice

orto

the

Chief Executive giving oral notice

Officer,

President,

the

by

at

Secretary

or

by

of

at

of

the

board

directors, shall

any meeting
time

the

board.

such

resignation

take

effect

any subsequent

specified

or if

at

all

the

Any
the

therein,

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be

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WMIPC_500002099.00089

CONFIDENTIAL

not

is

time the

specified,

upon

delivery

thereof
shall

and,

unless

otherwise

specified

therein,

to

of

be

acceptance

such

resignation

not

necessary

make

it

effective.

of

Section directors
shall

5.16.

Compensation

Officers

and

Employees.
fix

The board

of

compensation

officers

and

may

compensation

of

fix

other a salary

employees

from time

time.

No

be

to

officer

shall

prevented

from receiving
the
corporation.

by

of

reason

the

fact

that

such

officer

also a director

by

of

of

is

Section corporation Executive

5.17.

Voting
this

Shares

Held

Corporation.

Shares

of

another

or

in

by

by

held Officer,

corporation President

may

voted

person

proxy

by

be

the

of
Chief a All

by by

by by

the

the

Corporation,
President,

a Vice

Chairman, Vice

Group

President,

a Senior

Executive

Vice

an

Executive

or

by

President,

a Senior

Vice President.

ARTICLE SHARES
for

VI

of

Section

6.1.

Certificates

Shares.

The

shares

the

corporation

may
the

of by

in

as

by

represented Signatures
certificate registrar, certificates shall

certificates

such form

prescribed
certificate

the

board

of

directors.

on

be or

the

the

corporate

officers

may
agent,

facsimiles
registered

manually
than

if by

on

of

is

signed

behalf

a transfer

or or an

the

other
shall

corporation

itself

employee

ofthe

corporation.

be

consecutively

numbered

otherwise

identified.

All certificates

or

bear

such

legend

legends

prescribed

the

board

or

as

by

of

directors

these

bylaws.

of of

Section

6.2.

Issuance the board

Shares.

Shares

the

corporation

be

of

shall

issued the

be
only
shall

when

by

authorized

directors,

which

authorization

shall

include

to

consideration

received

for

be

each

share.

as

Section

6.3.

Beneficial

Ownership.

Except

otherwise

permitted

by

these

in

the

bylaws,

person

whose name shares

on

stand

the

books ofthe
for all

corporation

by

be

to

be

by
the the the

of

deemed

the

corporation

the

owner
the

thereof

purposes.

The board

by

of

directors

may

adopt

resolution

a procedure

whereby
for

a shareholder

ofin

corporation registered

may

certify

writing

corporation are held

that

a portion

ofthe

or

to

all

shares

in

name
the

such

shareholder

account

of

the

the

a specified

or

by

person such

persons.

Upon
set

of

the

receipt

corporation

a certification

complying with

procedure,

persons

specified

certification

shall

deemed,

ofor

in in

to

of

purpose

purposes shares

forth

certification,

the

holders the

record

number

of

specified

place

the

shareholder

making

certification.

of

of

by of

the

of

the

be

for

in

be

the

Section

6.4.

Transfer

Shares.

Transfer

shares

corporation

shall

by on

of

made
thereof

only

the

stock

transfer

books

the

corporation furnish

the

holder evidence

of

record authority

or

his legal

representative

who

shall

proper

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of

be

of

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WMIPC_500002099.00090

CONFIDENTIAL

or

by

by

transfer,

his attorney with the

thereunto

authorized

power

of

to

attorney

duly

executed

and

filed

secretary

corporation,

surrender

for

of

on

the

cancellation

for

certificate

shares.

All certificates

surrendered

corporation the former

be

of no

transfer certificate

shall

canceled

and

new

be

certificate shall

shall

issued

until

for a like

number

shares

have

been surrendered

and canceled.

or

for

to

of

the

the

the

Section mutilated indemnity

6.5.

Lost a

Destroyed
certificate

Certificates.

case

a lost, such

destroyed

certificate,

new

may

be

issued

therefor

upon

terms and

as

of

to

the

corporation

the

board

directors

may

prescribe.

Section the
principal

6.6. office

Stock

Transfer corporation

Records.

The
the

stock

transfer

books
the

shall

kept

or at

of

the

of

office

the

corporation's

transfer

or

to

agent

registrar.

The name and


certificate,

address

ofthe

person
class,

whom

shares

be by

of

represented
issue, shall

any

together

with

number

shares

and date

entered

the the

stock transfer

books

the

corporation.

Except
the

in

in

on

as

of

on

of be
the

provided

these
shall

bylaws,

person

whose name

shares the

stand

books
for all

by

be

corporation purposes.

deemed

to be

the

corporation

owner

thereof

of

Section

6.7.

Uncertificated

Shares. entry

The

shares

the

Corporation

may

or

by

in

in

the

of
the

the

issued

uncertificated

book
the

form

manner

prescribed

be the

board issued

of

directors.

Without

limiting

foregoing,

shares

the

Corporation

may

or as

in

in

uncertificated

book

entry

form

connection

with

new

share

issuances,

in

of

of

transfer

shares

provided
lost,

Section

6.4

these

bylaws

and the

replacement

or

shares Section

represented 6.5

destroyed

mutilated

certificates

provided

of

these

bylaws.

ARTICLE

VII
-

SEAL
This corporate corporation the
seal

need not have

inthe

If

'.'

C;;;~'-"-"-,-

a corporate

seal.

directors

adopt

be

of

in

by

as

seal,

the

corporation
state

shall

circular

form and consist and


the

of

name

corporation, Seal."

and year

of

the

the

incorporation,

words

" Corporate

ARTICLE INDEMNIFICATION

VIII

OF DIRECTORS,

OFFICERS,

EMPLOYEES AND AGENT


Section
8.1. Director's

of
that

Right

Indemnification. a party threatened

Each

person

who was

as or is

made

a party

threatened

made

or is

to be

to

involved
suit

( including,

without

or or

limitation,

a witness) criminal,

any actual

or

in

action,

proceeding, ofthe
fact

by

whether

civil,

administrative

investigative,

reason

2-

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he

or is

To

of

of

the

at

be

or

In

of

the

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WMIPC_500002099.00091

CONFIDENTIAL

he or

or oris or

she

was

atof

or

or,

is

a director serving

the

corporation request

being

having

been

such

a director,
officer, trust

or

she

was

ofthe

corporation

as

the

a director,

or

employee
other the

agent

another

corporation with

in of an to

a partnership, employee
official

joint benefit

venture, plans,

enterprise,

including proceeding while

service

respect action

whether

basis

such

alleged

capacity

a director

as

any other

be

capacity

serving

a director,
liability

shall

indemnified
( including

and held
attorneys'

harmless
fees,

by

all

the

corporation
fines,

against

expense, taxes

and

loss

or

judgments, settlement) therewith;

ERISA
and

excise

penalties

and amounts

paid

actually provided, account

reasonably
that (

incurred

suffered

such person

a)

the

however,

corporation

shall

not indemnify adjudged

or

or

on

in in

or

by

to be

connection

any person

of in or

from

any

acts

omissions violation

of of

such the

person

finally

intentional

misconduct
the person

knowing

law

orof

or

such

person,

from

it of is or

or

of

conduct

violation

RCW

23B. 08.310,
adjudged

from

of

on

account

to

transaction received
entitled,

with

respect

which

finally

that

such person
such person

personally

in

a benefit

money, property,

to

services

which
with

was not

b)

as

in

and

except
rights

provided

subsection

respect
shall
(

to

8.3

proceedings

to

to

the

seeking person
initiated

enforce

indemnification,

corporation

indemnify

any such

seeking

indemnification

connection

with

a proceeding
part

or

in

part

thereof)

of by

or

be
any
legally

to

such

person

only

such

proceeding

thereof)

was
shall

authorized continue

of to

board

directors

corporation. a director

Such and

indemnification

to by
its

if

as
her

the

the

person
heirs,

who

has

ceased

shall

inure

benefit

or

his

to

be

of

the

executors

and

administrators. further

the

Washington

Business then

Corporation

Act

to

of

amended
corporation Business

authorize

indemnification

of

directors,

directors

the

by

to

be

the

shall

indemnified

the

fullest

extent

permitted

Washington

as

so

Corporation

Act,

amended.

Section

8.2.

Director's

Burden

of

Proof

and

Procedure

For

Payment.

a)

to

of be in

The
for

claimant

shall

presumed

to

be

entitled

indemnification action brought

in

under enforce
final

this

Article

upon submission
expenses the incurred

a written

claim ( and,

a claim

defending

any proceedin~ advance


tendered

b)

in

disposition,

where

undertaking the

below has been have


the

to

the

corporation)

and

thereafter

corporation

shall

burden

to

of

proof

overcome

presumption

that

claimant

so

is

the

the

entitled.

b)

of
paid

to is be to of by

to

an

The

right

indemnification

shall

include

the

right

the

corporation
final

the

expenses provided,

incurred however,

defending

any such proceeding

ofits

disposition;

that

payment

into in be

in

advance
the

of

the

such

expenses

advance

final

disposition

a proceeding

shall

made

only upon
director,

delivery

or by be or

if of it an

all to

of

the

on

be

of

to

corporation

undertaking,
shall

behalf

such

repay

amounts

so

advanced

ultimately Article

determined

that

such

is

director

not

entitled

indemnified

under

this

otherwise.

to

of

Section

8.3.

Right

Claimant

Bring
sixty

If

Suit. ( 60)

a claim under
after

this

Article

by

in

the

not paid

full

corporation

within

days

a written

claim has

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is

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or in
a

as

of

is

or

of

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WMIPC_500002099.00092

CONFIDENTIAL

in

by

been

of

received

the

corporation,

except

the

case

a claim for expenses

incurred

in

in

defending

a proceeding

advance
( 20)

in at

of

its

final

disposition,

which

case the
thereafter

be

applicable bring
suit

period against

shall

twenty

days, the the

claimant unpaid

may

any time

or in to

of

the

corporation

recover

amount

the

claim and,

in

of be

thethe

extent

successful

whole such

part,

claimant

be

to

the

shall

entitled

paid

also

of

orthe

expense
its

prosecuting

claim.

Neither

the

failure

corporation
legal

of

( including

board

directors, prior

shareholders the

independent

counsel)
that

have

made a

determination

commencement
advancement

of of by

to

such

action

of or

or

to

to is
the
Articles
trust

indemnification

reimbursement
nor

its

expenses the

the

claimant

in

proper

the

circumstances

an

actual

determination independent

corporation
that

( including

is its

board
not

directors,

shareholders

or

of

its

legal

counsel)

the

claimant

or to

to be

or

entitled shall

indemnification

reimbursement

advancement
the
that

or

to

of

the

to
loss

expenses not

a defense

the

action

create

a presumption

claimant

so

entitled.

Section

8.4.

Nonexclusivity

Rights.

The

into of

of

right

indemnification

and
final

in

of

of

payment
disposition

expenses conferred

incurred

defending
shall

a proceeding

advance

orin

be

this

Article

not

exclusive

any other
provision

its

right

which

any person

may have

hereafter

acquire vote

under

any

of

statute,

the

or

Incorporation,

Bylaws,

agreement,

shareholders

disinterested

directors

otherwise.

Section maintain

8.5.

Insurance,

Contracts

and Funding.
itself

The corporation any


director, joint

may
employee

at

to

its

insurance, ofthe

expense,

protect

and

officer,

or

or

agent

corporation against

another

corporation,

partnership,
loss,

venture,

or

other

enterprise the

any expense, indemnify

liability

whether such

or

not the

corporation

would have under


the

power

such

person

against

expense,

liability

Washington
action,

Business
into

Corporation Act. with create

The

corporation

may, without

or

in

or in or

to

any

shareholder the

enter

contracts

such

director

officer

furtherance
interest

provisions

this

Article

and

may

a trust

fund,

grant

a security

use other

means

( including,

without

limitation,

a letter

of

credit)~ sure

the

as

payment

such

amounts

may

necessary

effect

indemnification

as

of

to

be

provided

in

this

Article.

of

of

Section Corporation.

8.6.

Indemnification corporation disposition


shall

Officers,

Employees

and Agents and

the

The
the

provide

indemnification

pay expenses and

to

of

of

in
this shall

advance
the

final

a proceeding

officers, joint

employees
venture the

agents other

or the

corporation with

another

corporation, scope

partnership,

trust

or

enterprise

same

and

effect,

and

observing

same

procedures,

of

to

the

the

provisions

this

Article

with

respect

indemnification

and

advancement

of

of

of

expenses

directors

the

corporation.

Section

8.7.

Contract

Right.

The

to

rights

indemnification

conferred

to ofor

be

Article not

shall

a contract

right

and

any amendment

repeal

of

this

Article

or

of

adversely

affect

any

right

protection

a director

corporation

for

the

with

2-

DOCSSEA/

66644.1

21-200310:

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as

of

orof

of

or

or

of

of

is

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CONFIDENTIAL

or

or

of

to

respect

any

acts

omissions

such

director

officer

occurring

to

prior

such

amendment

or

repeal.

Section thereof
this shall

8.8.

Severability.

any provision

to of

If

this

AJ.- ticleor any application law, the remainder other law,

or

as orbe to

invalid,

unenforceable

contrary

applicable

Article,

the

application

such

provision

persons

or

of

to

circumstances

or

than
shall

those

which

it is

held

invalid, shall

unenforceable

contrary

to

applicable

not

affected

thereby

and

in

be

continue

full

force and

effect.

ARTICLE

BOOKS AND RECORDS


The
stock corporation books, such
shall

IX

keep

correct

and

complete

books and
shareholders

records

of

account,

of

of

transfer

minutes

the

proceedings

and the

board

directors

and

other

records

may

necessary

or

as

be

advisable.

ARTICLE
FISCAL

YEAR
the

of

the

The

fiscal

year

corporation

be

shall

calendar

year.

VOTING

ARTICLE OF SHARES OF ANOTHER

XI

CORPORATION may
voted

ofby

Shares Chief Executive

another Officer,

corporation

held

this

corporation

by

be

of

the

by

by

the

the

President

Corporation,

the

Senior

Executive

or

or

by

by

Vice

President,

Executive

Vice

President,

a Senior the

Vice President,
dir~ s

toby

proxy appointment
shall

form executed
person

any
vote

them,

unless

by

of

resolution

designate

some other

the

shares.

ARTICLE

XII

AMENDMENTS
be
These bylaws
the
board

TO BYLAWS

or

may

altered,

amended

repealed, concurrent

and

new bylaws

may

by

to

of

or to of of

the

adopted,

directors,

subject

power
shares

by

at

shareholders,

least

two- thirds

affirmative

vote

of

the

the

the

corporation

entitled

vote

thereon,

alter

amend

or

to

to

repeal

these

bylaws

adopt

new

bylaws.

2-

DOCSSEA/

66644.1

21-2003

10:

45

be

by

an

of

its

of
.

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EXHIBITB2 EXHIBIT B-2 Amendments Amendments


to Bylaws to Bylaws

17357747

17357747

WMI Assistant Secretarys Certificate WMI AssistantSecretary's Certificate

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CONFIDENTIAL

WASHINGTON
AMENDMENTS
(

MUTUAL,
as of

INC.

TO RESTATED
( effective

BYLAWS
June 17, 2003)
and, within restatement eac; h article,

Amendments

after

the most recent

the bylaws, organized

organized according
chronologically)

to

the affected

article

of
Date 07/ 19/ 2005 09/ 16/ 2003

of

Article/

Sec.

Effect

Amendment

Amendment

ARTICLE

II

NUMBER

OF DIRECTORS

of

of

The

board
(

directors

this

corporation

shall

consist

fourteen

14) directors.

ARTICLE

II

NUMBER
of of
The
board
directors directors. thirteen
( 13)

OF DIRECTORS
this corporation shall consist

5.3

of

of

ARTICLE
Section

V
5.3

16/

Section
over

Chairman. The

Chairman

shall

preside

09/

2003

meetings
with shall

the

board 3.13 over

ofof

directors.

accordance Chairman

Section
preside

these

bylaws,

In

of

all

the

meetings
include

of

all

the

shareholders, adjourn such

which

duty

shall

the

authority

by to

or

meetings present such

without

any

action

vote

at

shareholders
shall

such
duties the

meetings.

The

Chairman

as

perform

other

may

assigned
Officer,

the

board

directors

Chief

Executive Except

inas

may
Section

set forth

these

bylaws.

of as

in

be

set forth

in

of

the

3.13

these

bylaws, the

event
duties

the

Chairman's

incapacity,

Chairman's
Officer

shall

or,

assumed

the

Chief

Executive
Officer's

in

by

the

event

of

the

Chief

Executive

incapacity,

the

duties

by

be

the

Chairman

shall

assumed absence

the

President
duties

of

the

in

Corporation,

and

their

such

shall

by

by

assumed
directors.

a person

designated

the

board_

.=--

of

of

be

of

be

or by

or

of

be

the

ARTICLE
Section

V
5.4

Section
President

5.4

President
the

the Corporation.
shall

The
duties

09/

16/ 2003

of

Corporation

perform Executive

such

as

by

may
board

assigned

the

Chief

Officer

or

the

a committee

of

directors.

Article

V
5.6

or

be

Section
Financial

5.6

Chief Financial Officer.

The have

Chief

09/

16/ 2003

of

the

Section

Officer

corporation

shall

the

power

and duty
acquisition,

of

supervising
retention

and managing
disposition
( including

the

corporation's

and

of

securities, limited

loans

and

financial

instruments investments
subsidiaries),

but not

to

the

in

corporation's corporation's supervising other

and

loans

to

the

the

power

and duty
reporting,

the

corporation's

financial

of

general

powers

and duties

supervision

and

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of

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Washington

Mutual,

Inc.

to

Amendments

--

Bylaws

Page 2

of

Article/

Sec.

Effect

Amendment

Date

Amendment

management

usually

vested

in

the

Chief

Financial subject

Officer

to

a corporation, Bylaws

subject

the
limits

Bylaws

and,

by to the

as

these

and

such

may

from time

to

or

by

of

be

established

board

directors that

or

of

committee
directors

directors

officers

the such

board
limits.

to

has

authorized
Officer

establish

of

The

to

of

time

Chief

Financial

shall

perform such

other

duties

or by of In bythe of

or

by

be

of

may

assigned
Officer

board

directors

Executive
officers

a committee
directors

directors

that

the

board

has

authorized the
Chief

assign
Officer,

such
the

duties. duties

the

absence

of

Financial shall

or the to

Chief

of

the

Chief

Financial

Officer

by

assumed absence
designated
directors.

the

be of

Controller shall

the

corporation,

and

in

their

such

duties

assumed

by or

a person board

by

Chief

Executive

Officer

Section
chief

5.7

Controller.

The

Controller corporation

shall

the

16/

ARTICLE
Section

V
5.7

be

of

the

the

be

as

09/

2003

of

accounting supervisory

officer

the

and
the

shall

have

control

and

of

direction

general

accounting, general general

accounting

procedure,

budgeting

and

be

bookkeeping, accounting

and books, such time

shall

the

custodian

of

the

records, other

forms

and

papers.

as

He

shall

also perform

duties

may

by

to

assigned

from
that

time

a committee
has

of

directors

or

be

officers

board

directors Chief

authorized
Officer,

or

assign

such

by

duties

the

Executive

of

President
President,

the

Corporation,

a Vice
Vice

Chairman,

a Group

0r

a Senior
Vice

Executive only

President extent

Executive
other audit

to

President,

the

that-

such

do

an

duties control.

compromise

independence

ARTICLE
Section

V
5.8

Section Senior

5.8

Vice

Chairmen, Vice Vice Vice

Group

Presidents,

of

the

not

to

of

the

the

09/ 16/ 2003

Executive

Presidents,

Executive

Vice

Presidents.

Any

Chairmen,
Presidents,

Group

Presidents,

Senior

Executive
shall

Executive

Vice

as

Presidents assigned

perform

such

duties

may

of by

to

from
that

time

time

a committee

of

directors

or

be

officers

board

directors Chief

has authorized
Executive
Officer

assign the

such

duties

the

President

of

the

Corporation.

ARTICLE
Section

V
5.9

Section Presidents

5.9

Senior

Vice

Presidents,

First

Vice

orto

the

or

by

09/ 16/ 2003

and

Vice

Presidents.

Senior

Vice

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Washington

Mutual,

Inc.

to

Amendments

--

Bylaws

Page 3

of

Article/

Sec.

Effect

Amendment

Date

Amendment

Presidents, shall

First

Vice

Presidents

and Vice

Presidents from time


that

as

perform

such

duties

may

be

assigned
officers

by

time

a committee
has

or

to

of

directors

the
duties

board

directors Chief

authorized
Officer,

to

of

assign

such

by

or

the

Executive

the

President

of

the a

Corporation,

a Vice

Chairmen, President

a Group

President,

Senior

Executive

Vice

or

a Executive

Vice

President.

09/

ARTICLE
Section

V
5.10

Section
Except Secretary meetings

5.10

Secretary and Assistant


set forth

Secretary.
the

16/ 16/

2003

as

otherwise

in

these

bylaws,
the

ofof

of

the the

corporation

shall

keep
and

minutes

of

board

of

directors notices

the
directors

shareholders shareholders Bylaws. corporate documents


shall also

and give

such

by to

the

or

as

may

required
shall

law

by

be

these

The

Secretary

have

the

custody papers

of

the and

seal,

any,

and

the

if

contracts,

to

the

belonging perform

corporation.

The

Secretary

as

such

other

duties

may

orbe

assigned
officers

by

to

from
that

time the

time

a committee
has

of

directors

board

to

of

directors

authorized Officer,

assign

such

or

by

or

duties

the

Chief

Executive

the

President
President,

the

Corporation,

a Vice Vice

Chairman,

a Group

setor

Senior

Executive Except the

President otherwise

an

Executive

Vice

in

as

President.

forth

these powers and

of in or

bylaws,
duties

absence

of

the

Secretary,

the

the

Secretary such

shall

devolve

upon

an

Assistant

as

Secretary
Chief

person

shall

designated
",";;;;,:"""""-~-

by

be

the

Executive

Officer.

of

all

ARTICLE
Section

V
5.12

Section
perform committee
directors Chief

5.12 such

Other Officers.

The

09/

other

Officers

shall

2003

as

duties directors

may

by

be

assigned
that

or

of

officers

the

board

or of by

to

has

authorized Officer,

assign

such

duties

of

Executive

the

President

Corporation,

a Vice

Chairman,

a Group

the

President,

a
Vice

or

Senior

Executive

Vice Chief
titles

President Executive

an

Executive

President.

The

Officer

may

designate

such

as

to

an

functional

officer,

the

Chief

Executive

Officer

deems appropriate

from

time

to

time.

.\..

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of

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RESTATED1

BYLAWS

WASHINGTON

OF
MUTUAL,

INC.

ART'ICLE OFFICES

in

of

of

The
Washington

principal

office

and

place

business

the

corporation

the

state

at

be

shall

located

1201

Third

Avenue,

Seattle,

Washington

98101.

or

The
Washington

corporation

may have

such

other

offices

within

without

the

state

as

or

of

the

board

directors

may

require

from

time

to

may

designate

the

business

of

the

corporation

time.

ARTICLE

NUMBER

OF DIRECTORS

of

of

II

The

board

of

directors

this

corporation

shall

consist

sixteen

16)

directors.

ARTICLE

SHAREHOLDERS
The

III

of

of

Section

3.1.

Annual

Meeting. the

annual

meeting
year,

the

shareholders
with

shall

or at of in

at on

held 1995,

the 10:

third

Tuesday
m.,

month
other

in

of

April

each

beginning determLned
for

the

year board

or

as for

by

00

a.

be

such

date

time

may
the

as for

the

directors,

purpose

electing

directors

and
the

transactidrrol

such

other shall

business

may

come

before
state

the

meeting.

If

day

fixed

the

annual held the

meeting the next

in

be

on be

legal

holiday

the

Washington,

the

meeting

shall

of

succeeding

business any annual

day.

the

or at at is

If

election

directors

not

held

day

on

of

designated the

of for

of

herein board

meeting

the

shareholders

any adjournment
a meeting

thereof,

directors

shall

cause

the

election

held

the

shareholders

as

soon

thereafter

may

be

convenient.

Section

3.2.

Special unless

Meetings. otherwise

Special prescribed

meetings

the

shareholders

for

of

any board

or

by

purpose

purposes

statute

may

by

be

called

the

by

of

Reflects

amendments

adopted

Board

Directors

through

and

including

the

June 2003

meeting

the

Board

of

Directors.

of

the

as

to

of

be

of

the

be

of

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or to by be

of to

of at

of

directors

written

request

holders

least

twenty- five

percent

25%)

of
the

the

the

votes

entitled

cast

each

issue

considered

at

on

be

the

special

meeting.

be

of

of

Section

3.3.

Place

Meetings.
corporation

Meetings

the

shareholders place
within

shall

held

or at

theof

either

principal

office

such

other

or

the

the

without

or

as

of

the

state

Washington

person

persons

calling

meeting

may

designate.

of

Section shareholders adjournment

3.4. entitled thereof,

Fixing

Record

Date.

For the any

purpose

of

determining

or

or to

notice

vote

meeting

shareholders

or

of

to

at

of

any

shareholders

entitled

receive

payment
other

any

dividend,

for

to

of

or in
board

to

of

at
date and the

order

make may

a
fix

determination

shareholders

any date

proper such seventy

purpose,

in

for

as

directors

advance

a date
any

the
shall

record not

any

determination
( 70)

be 20

of in
the a a

in

shareholders,

which

date

case

more than
days

days and,
which

isto to

of

of

case

a meeting
action

shareholders, such

not less than

prior

the

particular

requiring

determination

shareholders

of be toof or to on If at no

date

of

taken.

record

for

date

fixed

determination

shareholders
entitled

to

of

is

the

entitled

notice

vote

or

meeting

shareholders,

shareholders

receive

payment

a dividend

distribution,

the

day

before

first

notice

a meeting

dispatched
authorizing

shareholders dividend

the

date

which

the

resolution

the

board be,

directors

such
for

as

distribution

adopted,

the

case

may

be

is

shall

the

record

date

such
entitled

determination

shareholders.

When

a determination
has

shareholders

to

of

of

notice

of or to

vote

any

meeting
shall date,
(

shareholders

been

made

provided the

in

as

at

of

this

section, directors

it to

such
fixes

determination

apply which days

any

adjournment

thereof

unless

board

do if

new

record twenty

must

to

is

the

meeting
for
fixed

adjourned
original

a date

of

more than

one hundred

120)
for

after

the

date

the

meeting.

The
meeting

record the date

date the

determining shareholder

shareholders signs the

to

entitled

take

action

without

in

first

consent

of

is

lieu

meeting.

At

Section
shareholders,

3.5.

Voting

Lists.

least

ten

10)

days the
all

before

each

meeting
for

of

the

or

of of

the

officer

agent

having

charge
list

stock

transfer

books

shares

an

the

corporation

shall

prepare

its

alphabetical

shareholders
thereof,

on

the

record

who

are entitled

vote

the

meeting

any

adjournment

oMaflged the

by

or

at

to

voting

by

or

of

group, the

and

within

each

voting

group each, the

class

series

shares,

with

address days
prior

offor

by

number

shares

held

which
principal
city

record
office

a period
the

ten

( 10)

meeting
identified

shall

kept

or at

be

on

at

file

corporation

a place

in

in

be

the

meeting and

notice

the

where

the

meeting

will

held.

Such
shall

record

be

shall subject

produced

kept

open
any

the

time

and

place

the

meeting

and

the

inspection time

shareholder,

shareholder's

agent

or

to

of

shareholder's

or

at

attorney

any

during

meeting

any

adjournment

to

the

thereof.

Failure action

comply

of

of

at

the

the

be

at

of

to

of

of

of

with

requirements

this

bylaw shall

affect

validity

any

taken

meeting.

in

Section
electronic form,

3.6.

Notice any

Meetings. form then


law,

Notice,

tangible

written

printed

form,

or in

other

allowed
stating

under the

the

Washington

Business

or

of

in

or

of

the

not

Corporations

other

applicable

date,

time

and

place

a meeting

of

Act

of

or or or

of

of

to

on

of

of

is

the

the

of

the

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shareholders
for

and, which

the

case

a special
called"

meeting

sharehok:

lers,

the

purpose

by

purposes the

the the

meeting

of is

shall

given

the

person

or

be

persons person

by

or

meeting

Secretary

the

corporation

the

direction

such.
(

of

persons

each

shareholder

record

entitled

vote

of at

to to

to

such

meeting

unless

required

law

send

or

by

to

all

notice vote),

shareholders than ten


(

regardless 10) days

whether

not such
sixty
(

shareholders before

to

are entitled the meeting,

not
that

less

and not more than

60) days
articles

on

to

orof

to

or
less notice

at

of

or
calling

in

of

of

except a plan

notice

a meeting share

act

amendment
sale,

the

incorporation, other usual disposition

merger

exchange,

a proposed

lease,

exchange than

substantially

the

assets

corporation

other

or

of

of

be

the

the

course
( 20)

business,

dissolution

corporation

shall

given
Written

not

twenty

days

and not more than


by: mail, private

sixty ( 60)

days

before

the

meeting.

or

or

may

transmitted

carrier

personal

delivery;

telegraph

teletype;

or

of

telephone,
notice shall

wire

wireless

equipment

which

transmits

a facsimile

the

notice.

Such

be

if

effective

upon dispatch

sent

to

the

shareholder's

address,

telephone

or

on

of

the

number,

other

number

appearing

records

the

corporation.

Only such

business

shall

conducted

special

meeting pursuant

to of of to

shareholders
this

in

be

of

as
3.6. date,

be

at

shall

specified

the

applicable

notice

meeting

given

Section
different

or

or

an

is

annual

special notice

shareholders'

meeting

adjourned

postponed

a
the

or

or at

of or

time

place,

need
the

given

new

date,

time

place

adjourned before

is

postponed adjournment Business the Act

meeting

new

date,

time

place

announced
date

the

if

meeting the

or

postponement

unless
other

a new
or,

record
law,

beis

or,

under

Washington record date


for

or

If

Corporation

Act

applicable

must the

fixed.

a new

or

adjourned

postponed
law,

meeting

is

under

Washington

Business adjourned

Corporation

or

other

applicable

must

fixed,

however,

notice

the the

or

be

of

postponed
date.

as

be

to

meeting

must

given

persons

who

of

are shareholders

new

record

of

Section

3.7.

Waiver
provisions

Notice.

A
the

shareholder the

may

waive

any

notice

required

given

under
law,

the

these
after

bylaws, date

articles

incorporation therein.

or

by

or

be

of

of

applicable

whether

before

and time

stated

A
the

valid

waiver

to by

a) in

created
entitled

any the

the

following

three

methods:

writing

signed

in its by

of

shareholder
records;

notice

and
the

for

to

the

delivered

corporation

inclusion

corporate

b)

by

at

at

attendance

meeting,

unless
transacting

shareholder business not


within

the

c)of by

the

begifiTIing

the

meeting

or of

or or

at to

objects object

holding time the

the

meeting

the

meeting;

failure

the

of

presentation notice.

a matter

the

purpose

purposes

described

in

meeting

Section

3.8. proxy.

Manner

ActinCl:

Proxies.

A shareholder

may

vote

either

or

at

of

attorney-inis by

or

by

or by

person

A shareholder

may

vote

proxy

means

of

a proxy

appointment

by

form which
fact.

executed

the

shareholder,
shall

his

agent,

by

his duly

authorized

be

All

proxy the

appointment

forms

filed

with

the

of

secretary

the

corporation

before
shall

commencement
eleven
( 11)

meetings. from the

No

unrevoked

proxy

appointment unless

form

be

of

valid

after

months

date

its

execution

otherwise
effectively corporation

in of

expressly revoked

provided
until

the

appointment
revocation

form.

proxy given

appointment

may

notice

such

has

been

the

secretary

or

by

of be

No

to

the

in

of

the

shareholder

appointing

the

proxy.

Any

proxy

appointment

any

of

revocation

to
a

at

is

to

or

be

not

the

If

or

be

in of or

of or

of

of

of

an

the

all

all

the

than

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00101

CONFIDENTIAL

by be

by

in

be

proxy appointment
electric

may

executed

tangible

written

form,

may

means

or

or be

by

transmission Corporations

may
Act

any other
applicable

means then
law.

allowed

the

Washington

Business

other

on At

Section

3.9.

Quorum.

any

meeting

the

shareholders,

majority

in in

of

interest

by

an
for

of

by of

the

shares

entitled

vote

a matter
shall

the

voting

group,

represented
that voting

person

by

of

proxy

shareholders
matter.

record,

constitute

a quorum

of

group

to

action holding

that

Once

a share

represented

a meeting,

other

than

object

it is

the
for

meeting
the

transacting

business, meeting
for
fixed

deemed

present

purposes

ofto by
the

or

at

on

is

for

be

to

for

of

quorum

remainder

the

and
the

any adjournment meeting.

At of

that

meeting

unless

is or

a new record
meeting, adjourned any

date

must

be

adjourned might

such

reconvened

be

business

may
the

transacted exists,

which

have

been transacted

at

the group

theon

meeting.
cast within

action

approved

voting

the

the

votes

voting

group

favoring

action

exceed

votes

cast

within

is of

or ofthe

voting

group

opposing

the

action,

unless

question the

one upon

which

different

vote

required

express

provision

law

or of

by

of

is

articles

incorporation

these

bylaws.

on be of

Section

3.10.

Voting

Shares.

Each

outstanding

share,

regardless

of of

class,

be

to

in to

shall

entitled

one vote

each

matter

submitted provided

a vote

shareholders,

except

may

otherwise

the

articles

at of

a meeting

as

incorporation.

for

Section

3.11.

Voting

Directors. shall

the

to of

In

election

directors

every

shareholder the

of of

he by to no

forat

record shares

entitled

vote

the

election

have

in

the

right

vote

person

number and

to as to

atto

owned

him

many
vote.

persons

there

are directors

elected election

to by by of

whose
directors elected

election shall

has a right
right

Shareholders

entitled

vote

any

have

cumulate
largest

In toof

votes.

any

election cast

directors

the

candidates

are those the


election,

receiving

the the

numbers

votes

the

shares

entitled

in

up to

of

vote

number

be

directors

elected

such

shares.

Section

3.12.

Voting

Shares

by

of

Certain

Holders.

in

3.12.1.

Shares

standing

the

name
proxy

as of

anothe( c'Brporation,

domestic

by

or

or

be

by of

foreign,

may may

voted

such

officer,

agent

the

board

of

directors

such

corporation

determine.

certified

copy

of

resolution

adopted

such

directors

shall

conclusive

as to

be

their

determination.

3.12.2.

Shares

held

by

a personal

representative, administrator, into the

administrator, executor,

executor,

guardian

conservator
without

may
a

voted

by

or

be

such shares

or

of

guardian

conservator,

transfer

such

name
Shares

of

such

personal

representative,

administrator,

executor,

guardian
trustee,

conservator.

standing

in

or

by

be

no

be

of

name
shares

trustee

may

voted

such

but

to

trustee

shall

entitled trustee.

vote

in

of

held

trust

without

transfer

such

shares

into

name

of

the

the

in

of

3.12.3.

Shares

standing

the

name

a receiver
receiver

may

be

voted

by

such

receiver,

and shares

held

under

the

control

may

voted

by

or

be

of

to
the

of

for

as

be

the

if

a quorum

a matter

by

is

If

or
a

to

all

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00102

CONFIDENTIAL

his

in
the

so to

do

receiver

without

the

transfer

thereof

into

name

authority

contained

the

by

of

appropriate

order

court

which

such

receiver

was appointed.

by

or

If

3.12.4.

shares
shall order

are

held

jointly

three

more

fiduciaries,

will

or

of

of

of

majority

the fiduciaries

control

the

manner
such

voting

appointment
directs.

of

the

proxy,

unless

the

or

instrument

appointing

fiduciaries

otherwise

an
a
any vote

3.12.5.

Unless the

pledge
shall

agreement

expressly

provides shares

is

if

otherwise,
until

of be

shareholder shares

whose been

shares are pledged


transferred into

to

entitled

vote

such

the

have

the

name

the

pledgee,

and

thereafter

the

pledgee

shall

entitled

vote

the

shares

so

be

to

transferred.

by

3.12.6.

Shares

held

another

corporation

shall

not

voted

meeting

counted time

determining

total

number
entitled

toof

outstanding

shares
election

entitled

byof

for

at

of

toat

or

in

the

be

any

given

a majority

the
this

shares

vote

the

directors

such

is

other

corporation

held

corporation.

on

of

3.12.7.

On
has has

and after

the

date

which

written

notice

redemption
sufficient

to

redeemable

shares shares

been dispatched been deposited

holders

thereof
trust

and

sum
with

redeem

such

with

a bank
price shall

to or be

company

irrevocable

instruction

and

to

authority

pay the

redemption shares

the

holders
entitled

thereof

upon

to

surrender

be of

certificates

therefor,

such

not

vote

on

any

matter

and

shall

deemed

be

to

not outstanding

shares.

as

of

Section

3.13.

Conduct

Meetings. absence board

The

Chairman
Chairman,
shall

shall

serve
Chief

chairman

of
a

t6
a
Officer

of

In

meeting

the

shareholders.

the

of of

the

the
his

the

Executive chairman Secretary


the

by

as

or

any

other

person

designated

the

directors

serve

or of

in

meeting the

shareholders.

The

Secretary
all

absence

Assistant

of

absence meeting

the
shall

Secretary
appoint

and
shall

Assistant

Secretaries

a person whom
meeting

chairman

as

of

of

the

act

secretary

the

and

keep

a record

of
this

in
the

or

proceedings

thereof. -

an

of

The
Section the

chairman
shall

a meeting
discretion

toof

shareholders,
establish

determined
rules, shall

in

of

accordance

with

3.13,

have

the

regulations the

and

procedures

conduct

such

meeting.

shareholders

and

have

authority

adjourn
present,

or

to

is

postpone

such

meeting
specific

from time
rules,

time

whether

not

there

a quorum

by

to

subject directors.

any

regulations

and

procedures

established

the

board

for

of

Section

3.14.

Notice

Nomination.

Nominations

the

election

of

directors

for

be or,

to

be

up

and proposals

any

new

business
special

taken

any

annual

subject

in ofof

Section

3.6

these

bylaws,

meeting any

shareholders

may

made

by to

of

at

the

or

by

directors

the corporation

shareholder

the

to

of

of

corporation

entitled

vote

for

In

to

of

of

of
board

generally

the

election

directors.

order

a shareholder
the

the

corporation

make

or

any

such

nomination

proposal and

any annual

meeting, Executive

shareholder's

nomination

proposal

must

writing

received

the

Offices

the

corporation

by or

be in

at

at

of

or
the

of

of

to

for

of

of

if

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00103

CONFIDENTIAL

in

of

of

not

the

Secretary

corporation

less

than

120 days
the

advance
proxy

the

date

corresponding

in

to to

on

the

date

the

previous

year

which the

corporation's year's

statement

was

released

in

shareholders

connection

with

previous

annual year

meeting

except meeting
year's

if

that

annual

meeting

was held more


for
than

the

previous

the

date

of toofin of of

shareholders, the the annual previous


with

30 in

has

been
set

changed

by

calendar

days from the date

annual

meeting,
forth

a proposal

shall

received

by

be

the

or

no

corporation

accordance

or

method

in

the

hereafter

proposals

nominations

advance

special

for

of

to byorbeIn

of

meeting

shareholders.

order taken

a shareholder a
special

the

corporation

make
the

any

or

up at

nomination

proposal

meeting
writing

of

shareholders,

of be the in

at

shareholder's

nomination
corporation

proposal the

must

and received

the

Executive the

of

Offices 90th

the

Secretary

corporation

not later than the day

of in to by

later

the

or

to of

day

prior

such

special

meeting such

the

10th

day

on

following

which

public

bythe

by

of

is

announcement
such
notice

date

special with

meeting

made

forthe

corporation.

Each

to

given

a shareholder

respect

nominations address
ii)
(

the

election

set

i)

directors

shall

forth

the

name,

age,

business
notice,
iii)

and,

if

known,

residence

in

address

each

nominee each
such

proposed nominee,

such
(

the

principal

occupation

of

of

of

employment
corporation corporation

and

the

number

shares

of

stock

the

of

of

byof

or
the A)
(

of

which

are beneficially which

owned,

and
right

the

number

shares

stock

concerning

there

or

to

is

of
each
with Act").

acquire,

directly

indirectly,

8)

such

nominee, 13(

and the

each

associate

such

person,

determined

in
the
( "

by

of

accordance

d) of

Section

Securities

Exchange

as

of

Act

1934,

amended

Exchange

of

For purposes press release reported


service

this

Section

3.14,

" public

announcement"
Service,

means

disclosure

or by in

Dow

Jones

News

Associated

Press
with

or

the

comparable

by

orthe

national

news

a document

publicly

filed

corporation

the

Securities Act.

d)

and

Exchange

Commission

to

of

pursuant

Sections

13, 14,

15(

the

Exchange

or

no

an

In

of

event

shall

the

public

announcement
a

adjournment

postponement any time


period)

or

foran

annual the

special

meeting

commence

new

time

period

or

extend

or

for

of

of

giving

shareholder's

notice

a proposal

a nomination

at

director

such

meeting

as

described

above.

Section

3.15.

Action the

Without

a Meeting.

Any

action

perlTi1' lfeUor

required

taken

a meeting

shareholders
forth

may

taken

without

a meeting

one

or

be

at

of

if

more

so

by

in

be

consents

writing

setting

the

action

taken

shall

signed

all

the

shareholders.

ARTICLE

BOARD
Section
4.1.

OF DIRECTORS

IV.

of

General board

Powers.
directors.

The

business

and

affairs

the

corporation

shall

by

be

managed

of

its

Section

4.2.

Number,

Tenure

and

Qualification.

The

number
from

of

directors

set

or

in

II of

be

forth

Article

these

bylaws

may

increased

decreased

to

time

time

7-

DOCSSEA/

75045.1

27- 2004

8:

be

of

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00104

CONFIDENTIAL

of or in

in

to

amendment

the

manner
the

provided

these bylaws.

No

decrease,

however,

shall

be or is

in

have the
resigns
shall

effect

shortening

term

of

any incumbent

director

unless such bylaws.

director directors

inof

as

set

removed

accordance

with the provisions


forth

these

The

or

cases,

directors

shall

serVe

until their

successors
death.

are duly elected Directors

and
not

qualified

or

classified

and

shall

hold such terms

the articles

incorporation.

all

until

or

their

earlierresignation,

removal from

office

need

residents

of

the state

Washington

shareholders

of

the corporation.

or

in

Section

4.3.

Annualand

Other Regular

Meetings.

Regular

meetings

of

the

at

or be

board

shall

held

two- thirty o'clock,

earlier

hour

the discretion

of

an

the

of

Chairman
April,

the

President,

the third Tuesday

the months

of

on

January,

February,
legal

June,

July,

September,

October,

and December

unless such day

is

holiday,

on or at of of be be of the by of the

or

which case the meeting

shall

held

the

first

business day
the

or

in

on

thereafter,

unless

such meeting
the

has been. canceled

Chairman
calendar

President upon

giving notice

members

the board

least three

days before the date

on to

of

which

such

is

date within

the

month

shall

determined

by by

the Chairman

the

President, the Board,


4.4.

or in In be
the

as

meeting

scheduled.

The

date

any regular meeting

may

be or

changed

such other
the

of the

absence
the of
notice year,

the Chairman

the President,

any three members

inof

provided

time and place

such meeting

as

is

given

provided

Section

each
.

known

as

regular meeting

the day

the Annual

Meeting

of

Shareholders

shall

the Annual Meeting

Board.

of

of

of ofor by by to is

called

the

board
not

directors,

the

chairman

the board,
shall

or

Section

4.4.

Special

Meetings.

Special

meetings

the

board
the

directors

of

of

be

president.

may The

of

of

notice

a special

meeting
the

the

board

directors place

state

the

date

and time and,


otherwise

of

the meeting required regular waiver

the at,

exclusively

telephonic,

the

meeting.

Unless

to of be

special

meeting

the

board

directors

need
given

specified

in or

by be

the

notice

of

or

authorized

call

such meeting,

or of

the

secretary

the direction

the

person

to be

to

ofby or

or in is

by

persons

authorized
orally

call

such meeting. person


sent

The

notice

director's

personal

secretary

electronic the notice

mail,

telepholle

Or

notice

communicated

telephone

the dire_ ctoror

wireless mail the


prior

or t~

equipment,
designation

which

transmits a facsimile

to

the director's

electronic

lephone
shall

number

appearing

the records than

of

on

the

corporation,
( 24)

to

may

oral

written.

If the

is

notice

meeting
for

if

timely

sent

later

twenty- four

hours

by

set

the time

such meeting.

to

is

If

the notice

sent

courier

the director's

address
timely

on

If be

3) of

of

no of by

for

set

appearing
sent

the

records
(

the
full

corporation,

the

notice

a meeting

shall

to

later

than three

days

prior

the time

such meeting.

the

notice the

to

5)

sent

mail

the

director's

address

appearing

the

records
full

of

is

on

the

corporation,

notice set

a meeting

shall

timely

sent

later

than

five

days

to

be

no

if

prior

the time

for

such meeting.

of

ofof

if to at

Section

4.5

Waiver

Notice.

Any

director

may waive

notice

any meeting
corporation
entitled

into be

any

time.

Whenever

any notice
law,

to

is

required thereof

given

any director

the

pursuant

applicable

waiver

writing

signed

by

to

the

director,

to

of

be

no

or

by

notice

such meeting.

be

Notice

shall

the

person

persons

at

or

law, neither

business

transacted

nor the purpose

of,

any

of

if

to

of

be

In

of

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of

of

ofto

notice,

shall

deemed
constitute

equivalent

giving

notice.

The

attendance

a director

a meeting attends

shall

a waiver
express

no~

of of

ice

the

meeting

except

where

director

for

to

a meeting the meeting

the

purpose

objecting

the transaction waives


objection

of to

any

business

is

because

not lawfully matter

convened.

consideration

particular

a meeting

that

within

the

purpose the

or

director

of

at

is

not

purposes

in

described

the

meeting

notice,

unless

to

the

director

objects

considering

matter

when

it is

presented.

of in

Section

4.6. with

Quorum.
these bylaws

majority shall

the

number

directors

specified

or

of

of

fixed

in

accordance

constitute

a quorum a
majority

for

the

transaction

any a
further

of at

of

business
majority notice,

any

meeting

If

directors.

less

than the

shall

attend

a meeting, time
without

directors

present

may
such

adjourn

meeting meeting

from

time

at

and a quorum

present

adjourned

may

to

the

transact

business.

of of

is

Section
affirmative

4.7.

Manner
majority

Acting. directors

a quorum

present

when

a vote

is

If

taken,

the

of

of

vote

present

the

act

the

board

of

is

directors.

by

Section

4.8. special

Participation

Conference

Telephone. conduct the

Directors

may
each

participate

in

of or

or

regular

meeting

by of

the

board
all

by,

meeting can

through

the

use

any

means
the

communication

which

directors

participating shall

hear

other

by

in

during the

meeting

and

participation

such

means

constitute

presence

person

meeting.

of

at

Section

4.9.

Presumption

Assent.

director

who

present

a meeting

be

of

at

to

the

board

directors

which

action

taken

shall

presumed

have

assented

to
a

is

the

in

be

action

taken

unless

such

director's
file

dissent

shall

entered

the

minutes
with

of

the

meeting
acting dissent

by as or

to

unless

such

director

shall

his written

dissent

such

action

the

person such

secretary registered

the

meeting

before the

adjournment

or

of

thereof

shall

forward

to

of

of
or
the

the

of

is

mail

the

secretary

corporation

immediately

after

adjournment

in

to

to

meeting.
action.

Such

right

dissent

shall

not

apply

a director

who

voted

of

favor

such

by

Section

4.10.

Action

Board

Without

a Meeting.

Any may
taken,

be a"

etlan

permitted
without

if to

be

at

of

required meeting

taken

a meeting

board
forth

of

the

directors

taken

or

so

one

more consents
either

setting after

the

to be

action taken,

shall

executed

or in

all

the

directors,

before

the

action

and

delivered

the

corporation.

in

be

Such

consents any
other

may

forth

a tangible the

an

set

written

form,

electronic

transmission Act

or in

form then
law.

allowed taken

under

Washington

Business

Corporations
last

by

is

other

applicable

Action

consent

effective

when

the

director

the

the

executes

consent,

unless

consent

specifies

later

effective

date.

of

Section

4.11. shall

Audit

Committee.
their

The

board
Audit

at

directors,

any not

regular

meeting
three

an

of

the

Board,

elect

from
shall

number employed
that

Committee
corporation.

of

less

than

by

members,

none
Directors

whom
shall

the

At

be

of

least

annually

of

Board and

determine

each

Committee

member

has

the

independence approved

in

as

other

qualifications

forth

Charter

Audit

Committee

by

of

set

the

the

or

by

the

at

of,

at

be

the

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in of

the Board,

and

any supplemental statements


the

that

the Board

may adopt

with

regard

the composition

Committee.

as

of in

perform

the functions

spedfied

the Charter

the Audit

Committee,

approved
with

the Board, and the functions

any supplemental statement Committee.

that the

Board

may

adopt

regard

the

of

Section regular meeting

4.12
of-

Human

Resources

Committee.

The board

at

directors

any

the board, shall elect from their


shall

of

number a Human Resources


members, none

Committee which

committee

have not less than three


the

whom
have the
Charter

by

be

shall

in in

employed

the corporation.

The Human Resources

Committee
specified

shall

as

by

authorities

and

responsibilities

and

shall

perform approved

functions

of

or

the

supplemental

statement the

resolution that the

Board

of

may

adopt with regard

to

Human

Resources

Committee,

the

Board,

and

any
the

functions

Committee.

of

Section

4.13. board,

Governance
shall elect

Committee.

The board

at

directors,

any regular

of

the

by

meeting
the

the

from

their

be

number a Governance
the
corporation.

Committee, none

members

of

which

shall

employed

The Governance
Committee,

approved

the Board, regard

and
the

any supplemental

or

by

in

perform the functions

specified

the Charter

the Governance statement

as

in

Committee

shall

have the composition,

authorities and

responsibilities

and

shall

of

resolution that

the

Board

may

adopt with

of

to

functions

the

Committee.

of

Section

4.14. board,

Finance

Committee. from
their

The board

at

directors,

any regular

of

meeting
the

the

shall elect

number a Finance

Committee.

of

board,

upon the

recommendation
Officer, shall

the Governance

Committee

in

members

of

majority

be

the

Finance

Committee

shall

not

officers

the

corporation. consultation

The
with the

of

an

of

Chief Executive corporation.


shall

appoint

chairman

who

not

officer

approved

the

board,

and

any supplemental

or

by

in

perform the functions

specified

the Charter

Finance

Committee,
that

as

in

The Finance

Committee

shall

have the authorities and

the

is

responsibilities

and

of

the

statement

resUlUtlon

the

board

to

may

adopt with regard

of

the

functions

the Committee.

of

Section regular meeting Relations Relations


shall

4.15.

Corporate

Relations

Committee.

The board number

at
not

directors,

any

of

the board,

no

of

may

elect from

among

their

a Corporate

Committee which Committee


shall

shall

consist

fewer than

two Directors. and

The Corporate and

in

have the composition,


specified the

authorities

responsibilities

perform the functions

of

Charter

the Corporate

Relations

Committee,
the
that

approved

Board, regard

and

any supplemental

statement

or

as

by

in

the

resolution

to

Board

may
4.16.

of

adopt

with

the functions

the

Committee.

of

Section

Corporate

Development

Committee.

The board

directors,

of

any regular meeting Development

the

board,

may
shall

elect

from among

their

number a Corporate

of

of

the

Committee, which

consist

Chairman

the

Board and

less

at

of

of

by to

in

of

The

Audit

Committee

shall

have the authorities and

responsibilities

and

shall

to

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than

two

other

directors. authorities

The and

Corporate

Development

Committee perform the

shall

have

the
specified

composition, the Charter

responsibilities

and

shall

functions

as

the

Corporate statement

Development

Committee,
that

approved

by

of

the
with

Board, regard

and

in

or

any

supplemental

resolution

the

Board may adopt

the

of

functions

the

Committee.

Section
specific

4.17.

Committee

Procedures.

Except the

provided

the

bylaws
shall notice,

resolutions

the

Board

Directors,

committees
action without

the

Board

by

governed

the

same

rules

regarding

meetings,

meetings, Board

as

to

of

notice,

and

quorum

and

voting

requirements

applied

the

of

Directors.

Section

4.18.

Resignation.

Any
the

director the

may

resign the

any

time

by

at

delivering registered

written office

notice

the

chairman

board,
oral shall

or

to

of

president,

secretary,

the

by

or

the

corporation,

giving

notice

any

meeting any

the

directors

shareholders.

Any
the

such

resignation

take

at

effect

subsequent and, unless

time

specified

or if

is

not

therein, specified effective.

time

specified,

upon
such

delivery resignation

thereof shall

otherwise

be

to

of

the

not

or

of

at

of

therein,

acceptance

necessary

make

Section
that with

4.19.

Removal.

a meeting board

of of

the

shareholders

called

expressly from

or

purpose, cause,

any

director

the

entire

directors

may

be

removed
entitled

office,

by

at of to

of or

of

of is

a vote
director

the

holders

majority

shares

then

vote

orof

election

the

directors

whose

removal

sought.

beIf

board

directors

so

is

anyone meeting.

more

directors

removed,

new

directors

may

elected

this

same

Section
resignation,

4.20.

Vacancies.

vacancy

the

board

directors

may occur
the

by

on

of

onor

or

by in

ofan

of

removal
directors

death

existing directors

director,

reason these

of

increasing

as

of by

ofthe

as
or

number

board

provided

bylaws.

Except

in

be

limited

the

articles

incorporation,

any

vacancy

occurring

the

board

of

directors

by

be

of

may
less
office

filled

the

affirmative

vote

a majority

of

the

remaining

directors

whether

for

to

be

fill

than

a quorum.
only

director

elected

a vacancy

shall

elected

a term

continuing

until

the

next

by

of

election

directors

sharehOra8rs.

vacant

office

was held

a director only the

elected

holders

one

or or

by

of by

of

the

If

more

to or

of

authorized

classes

series

shares, the

holders

those

classes

series

to

shares are entitled

vote

fill

vacancy.

By

of

Section
directors

4.21.

Compensation.

resolution

the

board

of

directors,

the

of be

for

paid

fixed

plus

their

expenses,

if

may

sum

any,

attendance

Noat

meetings such

or

or

board

directors

committee
director therefor.

thereof,

a stated the

salary

inas

of

the

director.

payment
and

shall

preclude

any

from

serving

corporation

any

other

capacity

receiving

compensation

of

at

of of

Section

4.22

Chairman

the

Board.

The

Chairman

shall

preside

meetings
Officer,

of

In

of

the

board

directors.

the

absence

the

Chairman

and

the

Chief

Executive

of

at or an
the

the

the

for

At

it
may
not

beor in
waiver

of

of

of

in

as

to

in

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as

by

the directors
shall

present

be

perform

such

other

duties

may

assigned

the

board

of

may

select

someone from

their

number

to

preside.

The Chairman

directors.

ARTICLE

OFFICERS

in

Section

5.1.

Ranks
Officer,

and Terms

Office.

The

of

officers

the

corporation

shall

Chief Executive

a Chairman, a President a
Controller,

of

be

the Corporation,

a General

Auditor,

a Chief

Financial

Officer,

and such Vice Chairmen, Group


ExecutiveVice Presidents, Senior Vice

Presidents,

Senior

Executive

Vice

Presidents,

or

ofas

of

the

or

such other

officers

the

board

directors appoint.

may

designate

and

or

as

Presidents

First

Vice

Presidents

board

directors

may

designate
elect

and

elect,

the Chief

Executive

Officer

may

designate

and

Officers

shall

serve

until

the termination

their

employment
with

or or to

of be be

their earlier

removal

as

from service board

officers.

Any

officer

ofof

may

removed,
without

without

cause,

by or or
the

the
rights,

directors,

so

but such

removal

shall

prejudice

the contractual

the

if

or so or or

by

without without

pay

by

Chief Executive

Officer,

and any other

officer

may

removed
the

suspended

with
shall

the

Chief Executive

Officer, rights,

but such

removal

suspension removed

to

of

if

prejudice

the contractual

any,

person
shall

of

as of

suspended. such person

The
from

termination
office,

any

officer's

employment

constitute

removal

of

effective

the date

of

termination

employment.

Section corporation

5.2.

Chief

Executive

Officer.

of

shall

have

its

direct

supervision

The Chief and management

Executive

Officer

of

the

affairs

and the general

powers and duties

supervision subject

and management

usually vested

in

of

the Chief Executive

of

be of

to

the

the

as

by

Officer

a corporation,
Officer shall

Bylaws and policies

corporation. the

The
board

Chief

Executive
directors.

perform such other duties

In bebe

the

absence

bybyof

may

assigned
duties

the Chief Executive

Officer,

the

Qfthe Chief Executive absence such


the

duties

shall

a person designated

by

Officer shall

assumed assumed

of

the President

the Corporation,

and< ifltFieir

the Chief Executive

Officer

board

of

directors.

Section

5.3.

Chairman.

The Chairman
with Section

shall

preside over

meetings
the

of

all

the

of

In

board
shall

directors.

accordance

of

3.13

these

bylaws,
shall

Chairman

or

at by to

authority present

adjourn

such meetings without

any action
shall

vote

by

preside over

meetings

of

all

the shareholders,

which

duty

include

the

shareholders

as be in by

or

or asas

such meetings.

The Chairman
directors

perform

such other
Officer,

duties

may

of

the

assigned

board

the Chief Executive

may
set

set forth

in

by

in

Section

3.13

beof

these

in

the

policies

and procedural
bylaws,

of of

directives

the

corporation.

Except

forth

the event

the

Chairman's
or,
Officer

incapacity, the

the Chairman's

duties shall Executive

assumed

the Chief Executive

event

of

the Chief the

be

of

the

the

Officer's

incapacity,

duties

Chairman

shall

assumed

be

of

of

beor

been elected

the

board

directors

may

suspended

with

without

pay

by

any,

person

removed.

Other than the General

Auditor,

any

officer

of

who

has

be

the

be

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in

President person

the

Corporation,

and

their

absence

such

duties

shall

assumed

by
the

of

be

by

designated

board

of
of

the

directors.

Section
shall

5.4.

President

the

Corporation.

The
the

President Executive

of

the

Corporation

perform

such

duties

may

assigned

Chief

Officer

or

in

as

of

or

as

by

be

board

directors,

may

forth

the

policies

and

procedural

of
He

be

set

directives

the

corporation.

Section maintain

5.5.

General
audit only

Auditor.

The

General

Auditor
liabilities

shall

supervise

and

of

continuous responsible
officer.

control

the

assets

and

of

the

corporation.

shall

the

board

in

be

of

to

directors other

coordination

with

the

Chief

as

Executive
Chief extent

He
Officer other

shall

perform the

such

duties

may

assigned time

him only

to by

be

to

the the

or

of

the

Executive
that

President

Corporation the

from

to

time,

do

such

duties

compromise

independence

of

not

audit

control.

Section
corporation acquisition, ( including corporation's reporting, usually policies

5.6.

Chief the

Financial

Officer.

The

Chief

of
the

Financial

Officer

the
corporation's

shall

have

power
the

of

and duty

supervising

and and

managing
financial

the

retention

and

of

disposition

securities,

loans

instruments

in

to

limited

corporation's

investments

and the

loans

subsidiaries),

the

power and duty powers and


Officer

of

supervising

corporation's

to

but

not

financial

and

inthe

of

other

general

duties

supervision

and

management
the Bylaws
other

vested

the

Chief

Financial

a corporation,
Officer shall

to

of

subject

and

the

corporation.

The Chief

Financial

perform

such

duties

or

by

by

be

ofthe in

In

of

the

may

assigned

board

directors

Chief

Executive

Officer.

of byby

the

absence assumed assumed

Chief

Financial

Officer,

duties

the

Chief

Financial

Officer duties

shall shall

the

Controller

the

corporation,

and

their

absence

such the

by

or

a person designated

the

Chief

Executive

Officer

board

of

directors.

be

Section

5.7.

Controller. shall

The

Controller

shall

the

chief

accounting

officer

of

the

corporation

and

have

supervisory budgeting

control

and

the

direction

general and
shall

accounting, the also custodian perform

accounting

procedure,

and

general

bookkeeping, forms time

of

the

general

accounting

books,

records,

and_ papers.

He

shall

ofas

such

other

duties

may
the

assigned

from

to

be

tff'l'TErbythe

Chief

Executive
President,

Officer,

the

President

Corporation,

a Vice

Chairman, Vice

a Group

or

or

in S~

as
the

an

eoior

Executive

Vice

President

Executive

President,

be

of

forth that

policies

and procedural

directives

corporation,

only
audit

do

extent

such

other

duties

not

compromise

independence

of

the

control.

Section
Presidents,

5.8.

Vice

Chairmen, Vice

Group

Presidents,

Senior

Executive

Executive Vice

Presidents.

Any

Vice

Chairmen,

Group

Presidents,

Senior

Executive

Presidents,

Executive

Vice
Chief

Presidents Executive

shall

perform

such

to

set

the

the

Vice

duties

inby

setto

or

as

be

be
may
the

of

bebe of

the

may

assigned

from

time

of

time
forth

the

the the

Officer

the

President

or

as

be

the

Corporation,

may

policies

and

procedural

directives

corporation.

of

as

of

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Section

5.9. Senior

Senior

Vice

Presidents,
First

First

Vice

Presidents

and Vice
Presidents shall

as of

by

be

to

perform such duties


Officer,

may

assigned

from time

time

the

Presidents.

Vice Presidents,

Vice

Presidents and Vice

Chief Executive

or

or

as

Executive policies

Vice

President

a Executive

Vice

President,

and procedural

directives

of

may

in

the President

the Corporation,

set

a Vice Chairmen, a Group President,

Senior the

be

forth

the

corporation.

as

in

Section

5.10. bylaws,

Secretary the

and Assistant

Secretary.
shall

Except

otherwise

forth

these

Secretary

the

corporation

keep the minutes

or of

directors
shall

shareholders

may

or

as

by

meetings

the

board

directors

and

the

shareholders

and give such notices Bylaws.

toall set
a

of

of

of

of

the

be

required
seal,

law

bythese

The

Secretary

to of

the

have

custody

if

the

corporate corporation.

any,

and

the contracts,
shall

papers

and

the

as

by

documents
duties

belonging

be

The
time

Secretary

also perform such other


Officer,

to

may

assigned

from time

the

Chief

Executive

the

of

or

or as as

Vice

President

Executive

Vice

President,

may

inin

President

the

Corporation, a Vice

Chairman, a Group President, a Senior Executive

an

be

set forth

the

policies and bylaws,

of

procedural

directives

the

corporation.

Except

otherwise set forth

these

in

of

be of

the

or

as

by

absence

the Secretary, Secretary

the powers and duties

the

Secretary

shall

devolve

an

upon

Assistant
Officer.

such person

shall

designated

the

Chief'

Executive

ofbeAn

by

Section without

5.11.

Combining

Offices.
office,

officer

of

resigning

from such existing


office,

elected

the board

directors

to

who

holds

one

office

may, with

hold,

in

It

to

addition

such existing
Executive

the office

Chairman, Vice Chairman, Group

or

An be

by

in

Vice

President.
office, office,

officer

who

holds the

one

office

may, with

or

President Senior

Vice President, Senior Vice President,

First

Vice

President

without

resigning

from

to

such existing such existing

appointed
office

Chief

Executive

Officer

hold,

addition

another

other Vice

than the
President,

of

office

Chairman, Vice
President,

Chairman,
First

Group

President

Senior

Executive

Senior Vice

Vice

President

or

Vice

President.

by

Section

5.12.

Other

Officers.

The

other

Officers the

shall

perfprm such duties

or

may
Vice Vice

assigned

the Chief Executive

Officer,

President Vice

of

be

tnecorporation,

or

as

in

Chairman, a Group President, a Senior Executive


President,

President

an

Executive

may

set forth

the

policies

and procedural

directives
titles

as

corporation.
officer,

The

Chief Executive

Officer

the Chief Executive

Officer

deems The
for

appropriate

from time

to

may

designate

such functional

time.

or

the dishonest

conduct

unfaithful

performance which

bean

officer,

employee,

agent

a corporate

fidelity

bond, the premiums

may

paid

by

the corporation.

of of

Section

5.14.

Execution

Contracts

and

Other

Documents.

The

Chief

or

or

Executive President,
officers,

Officer,

the President

the Corporation, President corporation

any Vice
time

Chairman, Group
time designate the

Senior Executive

Vice

may from who

or

of

to

employees

agents

the

shall

have

to

authority

sign deeds,

by

Section

5.13.

Official

Bonds.

corporation

of

of

may

indemnified

or in

be

toof an
the

be

the

event

as

to

or

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WMIPC_500002099.00111

CONFIDENTIAL

of

or

or

by

in

contracts,

satisfactions,

releases, and assignments

mortgages,
the

and

all

other

to

documents

instruments

writing

~ e made
officer

executed

corporation.

Section
written

5.15. the

Resignation. Chief Executive notice

Any

may

resign

any time

or to by at

by or

at

delivering the

the

notice

Officer,

President,

the Secretary

board

of

at

of

or if

directors,

giving

oral

any meeting

the board.

Any such
the
time

resignation

shall

take

effect

any subsequent

time specified

therein,

not

is

specified,

upon

delivery

thereof not

and, unless otherwise

specified

therein,

the acceptance

of bythe

such

be

to

resignation shall

necessary

mak~

it

effective.

of

Section directors
shall

5.16.

Compensation

Officers

and Employees.
fix

The board

No of is

employees from time

time.

officer

shall

prevented

from receiving

a salary

of

reason

the fact

that

such

officer

also a director

of

the corporation.

by

of

by by

or

an by

corporation Executive President,

held
Officer,

this

corporation

of

may

voted

person

by

in

Section

5.17.

Voting

Shares

Held

Corporation.

Shares
proxy

of by

another
Chief

be

or

by

by

a Senior Executive

Vice

President,

Executive

Vice

President,

a Senior Vice President.

ARTICLE

SHARES

VI

of

for

of by

as

by

in

Section represented Signatures

6.1.

Certificates

Shares.

The shares

the corporation

certificates

such form

prescribed

the board

of

may

directors.

on

be by

be as in
the

oron

or

the corporate behalf

officers

the certificate agent,

facsimiles

if

of

may
All

the certificate other than

manually signed

a transfer

registered

registrar, shall

of

an

byor

corporation

itself

employee
identified.

the

corporation.
shall

or be

certificates

consecutively

prescribed

the

board

or

numbered

All

otherwise

certificates

bear such legend


~,.

legends

of

directors

these bylaws.

ofof

Section

6.2.

Issuance
the

Shares.
directors,

Shares which

corporation
shall

be

of

the

shall

issued only

when

authorizeoby

board

authorization

include

the

to

for

be

consideration

received

each share.

as

Section

6.3.

Beneficial

Ownership.

Except

by

otherwise

permitted the

these
shall

in

on

the by

for

bylaws,

person
the

be

whose

name shares stand

the

books
all

corporation

to

toby

deemed
directors

corporation

the owner

thereof

purposes.

The board

or

of

of

for

may adopt resolution a procedure whereby a shareholder may certify writing the corporation that a portion the shares name such shareholder are held the account a specified person

of

or

in

the

corporation

of

all

registered

persons.

by

the in

of

of

for

persons

specified

certification

shall

deemed,

purpose

or

be

Upon

receipt

corporation

certification

complying

with such

procedure,

the

the

purposes

the

set

be

of

the

is

by

the President

the Corporation,

a Vice Chairman,

a Group

by

compensation

officers

and

to

may

compensation

of

fix

other

be

of

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WMIPC_500002099.00112

CONFIDENTIAL

in of

forth

the certification, the shareholder

the holders

record

the

number

shares specified

place

making the

certification.

of

of

of

by

Section

6.4.

Transfer

Shares.

Transfer

shares

the corporation holder

shall

of

byor by his

legal

representative thereunto

who

shall

furnish proper evidence

authority

transfer,

by

for

for

secretary

corpof<;: 1tiono, n surrender

cancellation

for

attorney

authorized

power

of

attorney duly executed

and

filed

with the

of

of

the

the

certificate

the shares.

be

no

All

to

certificates shall

surrendered

the corporation

transfer shall

canceled

and

new
have

certificate

issued until the former certificate

like

number

of

for

be

shares

shall

been surrendered

and canceled.

as

mutilated certificate,

a new

certificate

to

may

of be

Section

6.5.

Lost

Destroyed
the

Certificates.

Inthe

case

lost,

destroyed

issued therefor upon such terms

and

indemnity

the corporation

board

directors

may

prescribe.

Section the principal


registrar. certificate,

6.6.

Stock

Transfer

Records.

The
office

stock transfer books

shall

kept

or the

office

as

person

whose

to

name

shares stand

the

books
all

the corporation

shall

deemed

the corporation

the owner thereof

for

be

purposes.

or

issued

uncertificated

book entry form

manner

by

in

in

Section

6.7.

Uncertificated

Shares.

The shares
the

the Corporation

may
issued

prescribed

the board

or

directors.

in

Without

limiting

the

foregoing,

shares

the

Corporation

may

as

in

uncertificated

book entry form


Section

connection

with

new share

issuances,

the transfer

of

of

shares

provided

6.4

these

bylaws

and the replacement

of

shares

or

by

as

in

represented

lost,

destroyed

mutilated certificates

provided

Section

these

bylaws.
7'
5i':-''''

ARTICLE

SEAL need
not have
shall

VII

in

This
seal,

corporation

a corporate

the

If

....

.''

seal.

directors

adopt a corporate
the

of

of

the seal

the corporation

circular

form and consist


"

name
SeaL"

of

be

the

corporation,

the state and year

of

incorporation,

and the words

Corporate

of

6.5

ofbe in

of

of

be

by

in

the stock transfer

books

the corporation.

Except

in

together

with

class,

number

shares and date

be

The name and address


the

person

of

of

whom

shares represented
issue, shall

by

the corporation

corporation's

transfer

agent

of

to

the

any

entered

of

on

provided

these

bylaws, the

of

on

be

orat

of

at

of

the

the

be

or

or

of

or

to

of

made

only

the

stock tran. sferbooks

the corporation

the

of

on

record

thereof

his

be

in

to

of

of

of

be

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WMIPC_500002099.00113

CONFIDENTIAL

I
ARTICLE INDEMNIFICATION
VIII

OF DIRECTORS, EMPLOYEES AND AGENT

OFFICERS,

To

Section

8.1.

Director's

Right

Indemnification. a party

Each
involved

person
(

who

was
without

made

a party

threatened

made

to or is

or is

be

to

including,

or

limitation, civil,

a witness)

any

actual

threatened

or

in

as

action,

suit

proceeding,

whether

or, or

he he oror or

isis ofor or oror


the

by

of

the

criminal,

administrative corporation

investigative,

reason

fact

that

she

at of

or

a director
serving

the

being

having

been

such

a director,

she

toor ofof

as

the

request

the

corporation

director,

officer,

employee
other

agent

another
service alleged

corporation with

a partnership,
benefit

joint

venture,

trust

or

enterprise,

including

of

respect

employee

plans,

whether

the any

basis

such

proceeding
while

action

official

capacity

a director

or by in

other

capacity

serving

be

a director,
liability

shall loss

indemnified

and held harmless


fees,

the

corporation

against excise

all

expense,

and

( including

attorneys'

judgments,

fines,

ERISA

taxes

penalties suffered corporation

and amounts

to in be

in

paid

settlement) therewith;

actually

and reasonably
however,
that

incurred

such
shall

person

connection any

ora)

by

provided,

the omissions

or

on

of

indemnify

person from
intentional

account

any

acts

of or

to

of be

such

person

finally

adjudged from

misconduct

knowing

of or

violation

law

or

onof

such

person,

conduct

person

violation

RCW
to

238.08.310,
that

from

to

of

account

any

transaction

with

respect

which

or it is

finally

adjudged which

such person

person

personally

received
entitled,

in

benefit

money,

property,

services

such
respect

was

b)

in

as

not

legally

and

except

provided

subsection the
with

8.3 with

to

proceedings any such

seeking

enforce

to

rights

indemnification,

corporation

shall

in

person such

seeking person

indemnification

connection

a proceeding

or

of by

or

to

indemnify
part thereof)

initiated

only

if

such

proceeding

part

thereof) shall

was
his

by

authorized

the

to of be

board

directors

the

corporation.

Such
shall

as to

indemnification

continue

a person

who

has

ceased

a director

and

inure

the

inof

or

to

benefit

her heirs, a person


shall

executors considered
director,

and

administrators.

Without the request

limiting

the

situations

whiGh

isas
a

to

be

at or

of

serving employee

the

corporation, corporation

a direcfNWho

serves
that

a
a

officer,

agent
shall

be of

another

or

other

enterprise

to

be

of

at

subsidiary corporation,

the

corporation " subsidiary"

deemed

serving

request

where the

means a
other voting

corporation

other

enterprise controlled

majority

voting

stock

power

owned

corporation enterprise using

directly

through

one

more
the

subsidiaries,

a corporation statements

which
equity further

consolidated

byin oror of is

the

the

or

which the

or

or

or

or

or

of

is

other

on

is

corporation's

financial

reported

the

method.

the

Washington

Business then

Corporation

Act

amended
shall

authorize

indemnification
fullest

directors,

directors

the

corporation

by

to

indemnified

the

extent

permitted

the

Washington

Business

Corporation

as

so

amended.

be to
Act,

of

of

is

If

be

or

in

the

of

not

is as

in

as

an

or is
was was

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WMIPC_500002099.00114

CONFIDENTIAL

of

Section

8.2.

Director's

Burden

Proof

and Procedure

For Payment.

a)

be

to in be an in

( this Article

The

claimant

shall

presumed
claim
(

to

entitled

indemnification

under a

upon

submission
incurred the

inof

written

and,

action

brought

to
its

enforce
final

b)

in

claim

expenses where

defending
(

any proceeding

advance

disposition,

undertaking
shall

below has been tendered

to of

for

the corporation) the

and

thereafter
that

the corporation

have the burden

to

of

proof

overcome

presumption

the claimant

is'so entitled.

b)

corporation
final final

the

expenses
provided,

in

The

right

indemnification defending

shall

include

right

paid

incurred

any such proceeding

advance

disposition;

however,

that

the payment

such expenses

advance

ofby ofofits
this

in to

be

to

the

the

in

of

the

orof

to so

be

disposition

a proceeding

shall

made

only upon delivery

the

corporation

by

on

of

is to

all

undertaking,

behalf
that

such

director,

repay

amounts

advanced

if it to

shall

be

ultimately

determined

such

be

to

not

director

entitled

indemnified under

or

Article

otherwise.

to

of

Section

8.3.

Right

Claimant

Bring

Suit. after

a claim under
written

is
its

If

this Article

not

by

in

full

itsin

for

by

in

in

the corporation,

except

the case
final

proceeding
twenty
( 20)

advance
the

disposition,

which case the applicable


bring suit against

period the

shall

or in

corporation

recover the

the unpaid

to

amount

the claim and,

the extent

successful

be

be

whole

part,

claimant

shall

entitled

paid also the

expense

of

prosecuting

of

such claim.

Neither the failure

the corporation

( including

board

of

its

directors, prior

or

to

of or

of in to

expenses

claimant

proper

the circumstances

nor

an or

actual

determination

isits

or or to

counsel)

that

the

claimant

not entitled

indemnification

the

reimbursement

of

advancement
the claimant

expenses

shall

a defense

to

be

the action

create- ci'presumption

not

so

is

entitled.

in

Section

8.4.

Nonexclusivity

Rights.

The

ofin to

of

right

indemnification

and
final

the

of

of

in

payment

expenses

incurred

defending
not

a proceeding

advance

be

disposition conferred

this Article shall

exclusive

any other

its

right

which any

or

of

Incorporation, otherwise.

Bylaws,

agreement,

vote

shareholders

or

person

of

may

have

hereafter

acquire

under any statute,

provision

Articles

disinterested

directors

Section

8.5.

Insurance,

Contracts
itself

and Funding.

The

corporation

may

maintain

or

at

to

of or of

its

or

the corporation

another corporation,

partnership,

joint

venture,

or

insurance,

expense,

protect

and any

director,

officer,

employee
trust

the

agent

other

enterprise

or

against any expense,

liability

loss,

whether

or

not the corporation

would

have the

or
that

the corporation

( including

board

its

directors,

shareholders

independent

legal

by

commencement

such action that indemnification

reimbursement

or

shareholders

independent

legal

counsel)

have

of

made

a determination

advancement

of

to

the

is

the

in

days,

claimant

of

to

to

may

at

any time thereafter

be

of

claim

expenses

in

paid

the corporation

within sixty

( 60)

days

claim has

been

received

of

incurred

defending

an

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WMIPC_500002099.00115

CONFIDENTIAL

power

indemnify

such

person

against Act.

such

expense,
corporation

or

to

liability

loss

under any

the

Washington
action,
this

Business
into

Corporation
with

The

may,

without

shareholder
provisions

in

or

of

enter

contracts create

such

director grant credit)

officer

furtherance

the
other

Article

and

may

or

a trust fund,

a security ensure

interest

use

means amounts

as to

including,

without

limitation,

letter

payment
Article.

such

may

necessary

effect

indemnification

provided

in

be

to

this

of

Section
Corporation.

8.6.

Indemnification corporation disposition shall

Officers,

Employees

and
and

Agents

of

the

The
the
final

provide,

indemnification

pay

expenses

of

of

of

to

advance
corporation

a proceeding
effect
(

officers

and

employees
limitation

with

the

same scope

and

the

in
when
the

including

without officers,

coverage

as

or

at

of

serving other

the

request

the

corporation
joint

directors, trusts

employees
enterprises), with

agents

or

corporations,

partnerships,

ventures, provisions

other

and

as

observing

the

same
and

procedures,

the

this

Article

respect

to in

of

of

indemnification that

advancement
and

expenses described

the

directors

corporation,

2)

determinations

authorizations

RCW
by
the

3)

to

of

except
(

238.08.550( board

and

may
request

by

be

of

also

made
the

a committee

officers

authorized

of

directors.

Without the

in

be

be

to

limiting

situations

which

a person

shall

considered

serving
officer,

oror

at

of
has

the

corporation,

officer

employee
other

who

serves

a director,
subsidiary

employee
corporation

beof

agent
shall

another

corporation

enterprise

that

of

is

the

be

to

at

deemed
set

of

serving Section

the
8.1.

request

the

corporation,

where

" subsidiary"

in

At

the

the

its

meaning

forth

sole

option,

corporation

may

provide

in

indemnification

and

pay

expenses
(

advance

the

final

disposition

a proceeding

agents

the

corporation serving

including

without

limitation

providing

such

indemnification officers, trusts

advance

agents

the

request

the

corporation

as

to

at

of

directors, ventures,

or

employees
enterprises), written

agents provided

other

corporations,

partnerships,

or

of

joint

other

or

that

such and

indemnification

advance

made

to
a
this

i) is

pursuant

of

contract

executed

theon

delivered

behalf
liability

to

the

corporation

prior

the

or

is of

occurrence

conduct sought

giving

rise

expense

for

to

the

which

indemnification directors, directors.

by

or

or

or

payment

being

approved

ratified

the the

board board
-

by

or

of

committee

thereof,

a committee

officers

authorized

of

of

is

ii)

Section

8.7.

Contract
right

Right.

The

rights

indemnification

'

comerred
Article

ofto or

be

of

in

to

Article

shall

a contract
- any

and any amendment

repeal

this

shall

of or

adversely

of or

affect

right

protection

director officer

the

or

for

corporation

with

respect

or

not

any

acts

omissions

such

director

occurring

prior

such

amendment

repeal.

Section

8.8.

Severability.

any

or

of

If

provision contrary

this

Article

any the

application

or

be

to

thereof Article,

shall

invalid,

unenforceable

applicable

law,

remainder
other shall

of

this

or

the

application held

such

provision

persons
contrary

to or

of

orto

circumstances
applicable law,

than not

those

as to

which

it is

invalid,

unenforceable

in

affected

thereby

and shall

continue

full

force

and

effect.

be

or

to

to

orto

of

of

of

or

as

of

an

as

of

of

the

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00116

CONFIDENTIAL

ARTICLE

BOOKS AND
The
stock corporation
shall

RECORDS
books and records

IX

keep correct and complete

of

account,

of

of

transfer

books,

minutes

the proceedings

shareholders and the board

directors and such

other

records

may

necessary

or

as

be

advisable.

ARTICLE
FISCAL

YEAR

be

of

the

The

fiscal

year

corporation

the

shall

calendar

year.

ARTICLE

OF

VOTING

SHARES

OF ANOTHER

XI

CORPORATION

by

by

by

Shares

another

corporation

held

this

corporation the

of

may

voted

by

be

of

the Chief

or

or

by

by

by to

appointment
designate

form executed
other

any

them, unless the directors

by

President,

Executive

Vice President,

a Senior Vice President,

by

Executive

Officer,

the President

the Corporation,

Senior Executive

Vice proxy

an

of

resolution

shall

some

person

vote the shares.

ARTICLE

AMENDMENTS

TO BYLAWS

or

be

XII

by

These

bylaws
the

of

by at

adopted,
least

board

directors,

subject

the

concurrent

power

of

to

may

altered,

amended

repealed,

and new bylaws may

the shareholders,

of

or to of

two- thirds affirmative vote


alter

shares

the corporatiol]

to

the

entitled

vote

thereon,

amend

or

to

repeal these

bylaws

adopt new byla'ws~

be

of

its

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00117

CONFIDENTIAL

EXHIBIT C EXHIBITC

.Certificate of Due Incorporation and Legal Existence Certificate of. Due Incorporation and Legal Existence

17357747 17357747

WMI Assistant Secretarys Certificate WMI Assistant Secretary's Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00118

CONFIDENTIAL

f'~:

'

1:;"

~
t

!' J;

'..

.: it

e-

'~

of

of

of

of

the

SAM REED,
this

Secretary

State

State

Washington

and custodian

its

I,

seal,

hereby

issue

CERTIFICATE

OF EXISTENCE/ OF

AUTHORIZATION

WASHINGTON

MUTUAL,

INC.

in

on

the

FURTHER
Corporation

CERTIFY
was formed

the

that

records

file

this

office

show and

that

above

named

Profit

under

laws

State

WA

was

issued

a Certificate

in

Incorporation

Washington

on 8/

17/ 1994.

as

of

FURTHER

CERTIFY
active

of

the

that

date

this

certificate,

WASHINGTON

MUTUAL,
office.

has

the

remains

and

complied

with

filing

requirements

of

this

Date:

March

6,

2006

UBI:

601- 566- 389

the

Given

under

my

hand

and

Seal

the

of

State

Washington

Olympia,

the

of

at

State

Capital

Of
INe.

of

of

the

the

Sam

Reed.

Secretary

of

State

i;*."'?

~ -'~"'>

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00119

.1.1
1

i1
I i I

Return

CONFIDENTIAL

Office

of

Thrift

Supervision
Treasury
1210,
Seattle,

of

Department
101 Stewart
1',.
Telephone:
(

the

West

Region

Street,

Suite

WA

98101-

1048

Seattle

Area Office

206) 553- 5196

Fax:

( 206)

553- 5475

March

2,

RECEIVED
2006

MAR
HELLER, Dipa

n 3 2006

EHRMAN

N.

Sudra, Attorney

Heller Ehrman White

& McAuliffe
6100
98104- 7098

LLP

701

Fifth

Avenue,

Suite

Seattle,

Washington

Dear Ms. Sudra:

is

This shall confirm holding company

that

Washington

Mutual, Inc.

WMI"),

Seattle,

Washington, and

the

("

top- tier

of

Washington
City,

Mutual Bank, Henderson,

Nevada,

of

Washington

Mutual

Bank, fsb, Salt Lake savings

Utah.

and loan holding company

under

12 U. S.

C.

WMI
to

registered

with

Office 1467a.

of As

Thrift

Supervision

as

is

the

Section

a savings

and loan

by

holding company,
Supervision.

WMI

subject

regulation

and periodic examination

the Office

of

is

Thrift

Sincerely,

b.
D.

lf~
Penny

t'v\~
Marshall Applications
,".,.,;;::;.--"'-,--

Regional

Manager

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00120

CONFIDENTIAL

EXHIBIT 01 EXHIBIT D1
January 2006 Resolutions January 2006 Resolutions

17357747

17357747

WMI Assistant Secretarys Certificate WMI Assistant Secretary's Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00121

CONFIDENTIAL

January

2006

WM/

Board

Minutes]

of

Appendix

of

Approval

Issuance

REIT Preferred

Securities

WHEREAS,
and
outstanding

Washington

Mutual,

Inc.

( the

"

Company")

indirectly

owns

of

all

the

issued

of

common

stock

University

Street,

("

Inc.

University

Street");

WHEREAS,
liability

University
(

Street

proposes
connection assets

cause

of

to

the

formation

a Delaware and

limited

company Bank
will

the

" LLC")

and

in

therewith

University

Street

Washington
aggregate;

Mutual

contribute

the

LLC

approximately

$5

in

of

to

billion

the

to it

WHEREAS,
which

proposed

that

the

LLC

will

issue

common

interests,

substantially

be

will

issued

University

Street;

or

WHEREAS,

proposed
the
(

that
"

the

LLC

will

issue

WMB
which

designee
Preferred

two series
Interests

classes the

preferred
will

interests

LLC

Preferred

Interests")

LLC

aggregate

not

exceed

$ 2.0

billion;

WHEREAS,
dividend thereafter rate

proposed
class

that will

one have

of

it is

class

the

LLC

Preferred

Interests

will

have

fixed

and the
variable;

other

a dividend

for

is

rate

which

fixed

5 years and

is

be

WHEREAS,
special

proposed

that turn

the
will

LLC
issue

to

it is

Preferred
substantially

Interests similar

will

transferred
( the "

two

in

purpose

entities investors;

which

securities

SPE

Securities")

to

WHEREAS,

under

specified

circumstances,

each
the

class

of or

SPE
for

Securities depositary

will

for

be

of

automatically representing

exchanged

preferred

stock

Company
the

shares

in

of

fractional

interests

preferred

stock

Company;

and

to

of

WHEREAS,

the

Board

desires

authorize series,

the

issuance delegate

two

of

series

such

preferred
officers

to

to

stock,

establish

substantive

terms
within

each

to

of

authority

appropriate

the

Company
and

determine,
rights,

the

limits

specifically limitations

prescribed

in

to

of

these

resolutions,

the

designation other

relative

preferences stock

and and

each

series

and

provide

to

matters

relating

the

preferred

the

LLC

preferred

intere~.,,~_

IS

THEREFORE,
authorized designated
" Series I

HEREBY
of
Perpetual

RESOLVED,
preferred stock

that

there

hereby

created

out

of

is

IT

the stock
(

of

and77ul} issued

shares
I

the

Company

a series Rate

of

preferred

as

the

" Series

Non- cumulative

Fixed/ Floating stock designated J Preferred


that

Preferred
"

Stock" J

for
the value.
rights,

Preferred

Stock")

and

a series

preferred
(

as

of

the

Series

to

of

Perpetual

Non- cumulative
shares shares
constituting

Fixed

Rate

Preferred
shall

Stock" not

the

"

Series

Stock"). the

The

number amount

each

series not

exceed

2,000; stock

provided

aggregate

in

in

both

series

shall

exceed

2,000.

The

each

series

shall

have

no

par

FURTHER
Stock which
(collectively,

RESOLVED,
the
"

the

that

Series
shall

Preferred

Stock
rights,

and the

Series

Preferred
limitations

Preferred the

Stock")

each

have

preferences

and

are

consistent

with

following:

Ranking.

The

to

Preferred

Stock

shall,

with

respect

dividend

rights

and

liquidation

rank
future

parity

with

each

or of

series
future

class

the

Company's
expressly

preferred
state that

stock

issued

in

a)

or

on

the

of

unless

the

terms

such

series

class

to

it is

junior

the

of

of

inor

it is

to

of

its

of

is

all

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00122

CONFIDENTIAL

b)

on

Preferred

Stock; stock

rank the

parity

with

each

other;

and

to

c)

rank

senior

the

Company's

common

and

Company's

Series

RP

Preferred

Stock.

of

of

Liquidation Stock
will

Account.

The

per

share

liquidation

amount

each

share

the

Preferred

not

exceed

$ 1,000,000.

be on

by

if

Dividends. paid
quarterly.

Dividends
will

the

Preferred

Stock,

and

when

declared

the

Board,

will

Dividends

non- cumulative.

The

dividend

rate

the

Series the

Preferred
Securities.

Stock

will

for

on

be

at

fixed

rate

a
the

period date 30/

5 years from the


the

issuance are

SPE
will

Such 7.0%

rate per

will

set

or

be

on

of

of

about

that

SPE
After

Securities the

issued

and

not

exceed
the the

annum,
rate
will

on

calculated

360
for

be of

basis.

expiration
will

such

5-

year

period,

dividend product

become

variable

an

and

each and

dividend

period

amount

equal

A)

of

to

the

liquidation shall

B)

3-

amount 275

month

L1BOR

to

applicable

such

period

plus

a spread

which

not

exceed

on

basis

points,

calculated

a 30/ 360

basis.

on

be

The

at

dividend the date

rate that

the

Series

Preferred are

Stock

will

fixed

rate

and
not

will

or

be

on

set

about

the

SPE

Securities
basis.

issued.

Such

fixed

rate

shall

exceed

8.0% per

annum,

on

calculated

a 30/ 360

dividends period,

are then

not

declared

and

for

in

on

full

If

paid

the

Preferred pay, during

Stock

any

quarterly period,

dividend

Company
with

not to,

or

the

shall

declare

such

quarterly

or

or

or

or

dividends

other with

distributions

respect

redeem,

purchase, except

acquire

make

liquidation

payment
its
with

respect

any

of orits

capital

securities,

dividends

to

connection

shareholders'

rights

plan,

any successor

plan,

the

extent

required

therein,

dividends

in

or

connection

with

benefit

plans.

be

Maturity. date.

The

Preferred

Stock

will

perpetual

and,

accordingly,

will

have

no

in

to,

maturity

be

at

Redemption.

The

Preferred

Stock

will

not

redeemable
the

the

option

of

the

holders.

be

to

at

The
after

Company

will

able

redeem

its

Preferred

Stock

option

any time
liquidation

of

of

at

5 years from
with
limits

the

date

issuance

SPE

Securities

price

equal

to

the

the

for for

amount
certain

appropriate

adjustments funds

declared

and

unpaid

dividends,"

su5ject,

however,

on

the

sourcesof

such

redemption.

be

Sinking~

FCmd.

The

to

not

Preferred

Stock

will

subject

a sinking

fund.

be

Convertibility.

The

Preferred

Stock

will

not

convertible

into

any

of

the

Company's

other

securities.

no

of

Voting.

The

holders

Preferred law

Stock

shall

have
event

voting

rights

except are

i) to

the

the

by

in

extent,

any,

required

Washington
Stock

and

the

that

dividends not

not

ii)

if

declared then the

for

and

paid

a series
series

of of

Preferred Preferred then

6 quarters
with

( whether

or

on

consecutive),

of

of

holders preferred
elect shall

that

Stock

( together

the

holders

any other
will

parity

series the
right right (

of

stock

WMI
of

outstanding the next

which annual

has the same voting


meeting,

rights)

have
that

two

directors

WMI
such

at

shareholders paid dividends declared

provided

such

for

terminate

when
fourth

holders

have

been have

4 consecutive
set
aside).

quarters

the

case

of

the

quarter,

dividends

been

and

in

or

to

of

to

be

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00123

CONFIDENTIAL

for

RESOLVED
contemplated Executive Executive hereby,

FURTHER,

that

purposes
shall Officer,

beof

these

resolutions

and

the
(

transactions the
(

an

of

each
the

the

following

"

Authorized Chief
-

i)

Officer":

Chief

iv)

ii)

Officer,

Chief

Operating

iii)

the

Financial

Officer,

any Senior

v)

the

Vice
(

President,

Executive President Senior

Vice

President

Corporate
vii)

Strategy Vice

&
President

Development,
Assistant

vi)

the

Senior
( viii)

Vice the

and Treasurer,
President

the

Senior

and

Treasurer

and

Vice

and

Controller.

RESOLVED
to,

FURTHER,
Authorized

that

the

Board

hereby

authorizes,

and

delegates

the

authority the
rights,

of

any

two

to

the

Officers

designate, Stock,

finalize,

determine

and

complete

preferences
resolutions;

and

limitations

the

Preferred

subject

the

limits

specified

in

of

to

these

RESOLVED
preceding resolutions

FURTHER,
shall

that

the

authorization
limitation,

and
the

delegation

in

the

immediately the

include,

without

authority

determine the

number
rates

be

to

shares the

each

to

of

of

series

Preferred designate

Stock

authorized,

determine the

dividend

and

in

to

liquidation

amount,

further

situations

which

Company

has the option

or

to

redeem
stock

the

Preferred

Stock

with

without authorize

make- whole
the
filing

of

provisions,

approve

the

form

any

certificate

and

prepare the

and

articles

amendment

for

to

of

of

each

series

of

of

of

Preferred

Stock

with

Secretary

State

the

State

of

Washington;

be

RESOLVED
shall

FURTHER,
shares

that

the

Preferred

Stock

may

to

issued

a depositary,

which

in

of

to
and

issue depositary Stock;

each

representing

fractional

interest

the

shares

a series

the

Preferred

RESOLVED
its
perform Authorized obligations

FURTHER,
under

that

the

Company

to is

to

hereby issue

authorized depositary

enter

into

and

a deposit

agreement
the

shares,

and

any and
deliver

to

Officer

authorized

select

depositary

and

to

is

negotiate,

execute

on

such

deposit

agreement

of

behalf

the

Company;

or

RESOLVED

FURTHER,

that

the

Authorized

Officers,

any

of

them,

are authorized authority

in

on

to or of

or its

empowered, such any


authority

behalf

the

Company
attorneys-

and
infact

name, with
agents acting
that

power such

and

to

full

delegate

it is for

one

more

Authorized necessary

Officers,

in

of the

them,

pursuant

a power

attorney,

event

deemed
Stock,

or an so or the to

in

do,

the

the

e, the

desirable Interests prepared,

connection

with

offering

Preferred

LLC

Preferred

or in

or

or

of

of

or to to

SPE

Securities
circular

private/

Regulation

offering,

prepar.

cause

offering

offering

memorandum

with

respect

sucTlsecurities

( and

as

supplements
action
private

amendments

thereto),

the

Authorized

Officers,

any

of of

them,

taking

such

in

in

be
any

to

shall

apRfoye and

connection

therewith

order

effect

offering

such

in
to to

to

the

securities

offering;

RESOLVED

FURTHER,

that

any

Authorized those Policy

Officer,

together from

with time

other

proper

officers

of

the

Company
Asset
effect

( including,

without

limitation,

authorized

to

time

pursuant

the time

Company's

and

Liability

Management

and

the

standards enter

and
into,

procedures execute

from

in

to

time

thereunder),

hereby

to

is

authorized

negotiate,

and
(

deliver

all

any

and

additional

agreements
with

( which

agreements

may

include,

without

limitation,

or

purchase

agreements

Goldman
the

Sachs
Preferred covenants

ii)

& Co.

an

affiliate,

exchange
Securities

agreements
into

to

of

relating

the

exchange
iii)
(

LLC

Interests

and

the

SPE

the

in

or

of

of

of

i)

Preferred Securities

Stock,

declaration

other

agreements,
prohibiting restricting

favor the

holders

SPE

and/

specified stock

indebtedness

the

Company,
Stock,

issuance

by

or

of

the

of

to

Company
redeem

of

preferred

senior

the

Preferred dividends

sources

funds

used
stock

or

the

Securities,

restricting

and

distributions

the

Company's

if

SPE

on

or
a

to

of

of

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00124

CONFIDENTIAL

or

dividends

are

not

paid

the

SPE
behalf

Securities),

any

undertakings
( including,

other

documents
limitation,

or
filings

on

supplemental applications foreign)


officer

agreements
with banking

the

Company

without

regulators, actions,

securities

regulators

stock

exchanges, Officer

domestic

in

as

and

take

any other
necessary

each

case,

such
with

Authorized the

or

to

other

proper

in

or

be

deems
the

advisable

connection Securities

issuance the

of

to

the

Preferred these

or

or

to

Stock,

LLC

Preferred

Interests
limits

the

SPE

further

intent

resolutions,

subject

the

set

in

to

forth

these

resolutions.

[ February

2006

WMI

Board

Minutes

( NB:

The

February below

board were

minutes adopted

have

by

approved during
its

the

Board;

however,

by

of

not been Board

the

resolutions 2006.]

the

duly held

meeting

in

February

WHEREAS,
and
outstanding

Washington

Mutual,

Inc.

( the

"

Company")
Inc.

indirectly

owns

of

all

the

issued

of

common

stock

University

Street,

("

University

Street");

to

WHEREAS,
liability

University
( the "

Street

proposes
connection assets

cause

of

the

formation

a Delaware and

limited

company Bank
will

LLC")

and

in

therewith

University

Street
billion

Washington
aggregate;

Mutual

contribute

the

LLC

approximately

$ 5.4

in

to

of

the

or or
a
fixed

on

of

or

to it is

WHEREAS,
which

proposed

that

the

LLC

will

issue

common

interests,

substantially

be

will

issued

University

Street;

or

WHEREAS,

proposed
(

that "

the

LLC

will

issue

WMB
which

designee
Preferred

two

series

classes the

preferred
will

interests

the

LLC

Preferred

Interests")

LLC

Interests

aggregate

not

exceed

$ 2.0

billion;

WHEREAS,
dividend years
rate

proposed
class

that
will

one have

of

it is

class

the

LLC

Preferred

Interests

will

have

and

the

other

a dividend

for

is

rate

which

fixed

approximately

and

thereafter

is

variable;

be

WHEREAS,
special

proposed

that

the
will

LLC
issue

to

it is

Preferred

Interests similar

will

transferred
(

two

in

purpose

entities

which

turn

substantially

securities

the

"

SPE

Securities")

to

investors;

WHEREAS,

of

under

specified

circumstances,

each

class

SPE
for

Securities depositary

will

for

automatically representing

exchanged

preferred

stock

the

Company
the

or

be

of

shares

in

of

fractional

interests

preferred

stock

Company;
17, the

in

set

of

at

WHEREAS,
Resolutions"), the

its

resolutions

adopted the

January

2006

meeting

" Prior

of

Board

previously

authorized substantive

issuance

two

of

series

such

preferred

of

of

stock

the

Company,

established the

terms

each
the

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authority

into
Prior

of

to

appropriate
Prior

officers

Company

determine,
relative

within

specifically

prescribed

Resolutions,

the other

designation matters

and

rights,

preferences stock

and
the

of

limitations

each

series

for

to

and and

the

provided

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preferred

and

LLC

preferred

interests;

to

of

WHEREAS,

the

Board

now
stock

desires

amend

and and

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certain

the

terms the

each

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the

Company

the

provisions

Resolutions.

in

of

of

of

of

of

the

in or

to

it is

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its

of

all

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00125

CONFIDENTIAL

IS

THEREFORE,

HEREBY
Rate

RESOLVED,

that

the

two
the

series
" Series
I

of

IT

preferred

stock

by

as

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authorized cumulative
"

the

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shall

designated Stock"
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Perpetual Stock")

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the

FixedPerpetual

to-

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the

" Series Stock"

Preferred
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Series

Non- cumulative

Rate

Preferred

the

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J Preferred

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Preferred Stock

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the Series

that

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Prior

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the

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J Preferred

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each
for

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set

in

forth

the

respective

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series

presented

this

meeting provided

subject

the

completion

and

any modification

as

Authorized

Officers

herein

the

"

Designations");

RESOLVED
to,

FURTHER,

that

the

Board

hereby

authorizes,
Prior

and

delegates

the

authority
finalize,

in

as

of

any

two

the Authorized

Officers
rights,

defined

the

Resolutions)

to

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and

complete
actions,

the

preferences,

privileges,

restrictions

and

by
and
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at

to

other

matters, the

of to

take

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relating

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the

limits

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number
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in

to

shares

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amount,

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limits:

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and

to

the

following

be

the

Series
until

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Stock

will

in to

at

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fixed

rate from

issuance

not

exceed
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in

7.50%

per

annum

March

2011

another

date
floating

March
for
rate

2011 each

as

or

provided

be

at

completed

Designation

and thereafter

will

at
the

dividend set

period
forth

a rate

in

equal

the

month

L1BOR
per

applicable

such
plus

period

circumstances
will

if

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4.75%
the

annum,

higher)

a spread

which

not

exceed

275

basis

in or

3-

or

to

to

points;

ii)

Series

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Stock

fixed

rate

not

exceed

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annum;

in be

iii)

the

Company
another

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able

redeem

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Stock

any

time

on

to

March

15,2011
iv)

date

March

2011

in

as

or

provided

the

completed

per
after

be at

to

will

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and

no

the

holders

the

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Stock

will

have
the

voting
that

rights

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of

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extent,

any,

required

Washington
Preferred holders
(

law and

in

by

ii)

if

event

dividends series
wit~,;~ elect

not

declared

of or

and

paid

a series

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certain Preferred
will

other

classes
(

described other

in of to to
have

as

or

on

on

of

the

completed
series

Designation)

then

the

Stock

together

EY

classes the

in

described

the

completed

Designation)

have

to

the

right

two

directors

Company

at

the

next

annual

meeting;

RESOLVED
preceding resolution the

FURTHER,
shall,

that

the the

authorization
limits therein,

and

delegation without Stock


rights

in

the

immediately the authority

subject shares

of to

include,

limitation,

determine

number

each

series

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of to

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to

of

of

authorized,

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determine

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dividend

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the

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on

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Company's
the the State

pay dividends

other

equity

securities

on

of to

of

if

been and

paid

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articles

approve

the

form

any

stock

certificate

and
Stock

to

prepare the

for

of

authorize

filing

amendment

each

series

of

Preferred

with

of

of

Secretary

State

of

the

Washington;

in

RESOLVED

FURTHER,
Authorized series

that

the

number
provided

shares

authorized

the

Designations the
articles

by

as

of

completed

the

Officers

herein issuance;

shall

upon

filing

for

amendment

each

fully

reserved

for

be

of

as

of

or

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00126

CONFIDENTIAL

RESOLVED

FURTHER,
the
last

or

of

that

the

declaration
Prior

covenants

other

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referred

to in

in

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clause

iii)

resolution

the

Resolutions

may

also

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as on on

or

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limitation

items

any Authorized
dividends the

Officer

deems

necessary

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advisable other

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on

the

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distributions

Company's and

securities

on

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are

not

paid

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after

issuance

the

its

restrictions

sources

for

of

funds

any redemptions;

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Resolutions

FURTHER,

as

that

except
effect;

hereby

amended

and

supplemented,

the

Prior

in

remain

full

force

and

and

RESOLVED

FURTHER,

that

any Authorized
limitation,

Officer,

together from

with time

other

proper

officers

to

the

Company

( including,

without

those Policy

authorized

time

pursuant

to to
will

of

the time

Company's

Asset

and

Liability

Management

and

the

standards enter

and
into,

procedures execute

from

in

to

to

is

time

effect

thereunder),

hereby

authorized

negotiate,

and

deliver

or

any

and

additional

agreements,

any undertakings
( including,

other

documents
filings

agreements
banking

behalf

the

Company
regulators

without

or or

all

supplemental applications with

on

of

limitation,

or

or

regulators,

securities

stock

exchanges,

domestic

foreign)
officer

and

to

take

as

in

or

any

other

actions,

each

case,

such

Authorized the

Officer

other

proper

deems LLC

in

or

necessary Preferred Resolutions,

advisable

connection

with

issuance
further

of

the
intent

Preferred

Stock,

the

or

inor to

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SPE

Securities

the

these

resolutions

or

of

the

the

Prior

the

set

to

limits

forth

these

resolutions.

of

Appendix

of

Approval

Issuance

REIT

Preferred

Securities

WHEREAS,
outstanding

Washington

Mutual University

Bank
Street,

( the

"

Bank")

indirectly

owns

of

all

the

issued

and

of

common

stock

("

Inc.

University

Street");

to

WHEREAS,

proposed
thereon

that

the

Bank

will

make
$ 1.2

a contribution

University
( the
"

Street

consist Street

loans

interests

not

exceed
stock

in

or

to

of

billion

book

value

University

for

in

Contribution)

exchange

preferred

issued

by

University

Street;

to

WHEREAS,
liability

University
(

Street

proposes
connection

cause

of

the

formation

a Delaware and
the

limited

company

the

"

LLC'")

and

in

therewith

University with the

Street

Bank
"

to

contribute Contribution")

the

LLC

of

assets

approximately

$5

billion,

Bank's

Rertion

( the

LLC
value;

consist

loans

interests

therein

not

exceed

$ 1.0

in

or

to

of

to

billion

book

in

WHERE; AS,

exchange

for

such

contributions,

University the

Street

will

receive
will

or

of

of

all

substantially

the

common
preferred

interests

the

LLC

and

Bank

its

designee

receive

or

of

two

classes

series

stock

the

LLC

("

LLC

Preferred

Interests");

by

to
will

it is

be or

it is

be

WHEREAS,

proposed
purpose

that

the

LLC

Preferred

Interests

will will

transferred

WMB

designee

two
"

special

entities

SPEs") and

which

in

to

("

its

turn

issue

substantially

similar

securities

( the

SPE

to

Securities")

investors;

it is

WHEREAS,
authorize

proposed

that

the
( the

Bank's
"

parent, Preferred

Washington
Stock")

Mutual,

Inc.

two

series

preferred

stock

WMI
will

for

of

which

under

circumstances

each

class

SPE

Securities

be

of

automatically

exchanged.

IT

IS

THEREFORE,
the

HEREBY

RESOLVED,
and

("

WMI"), certain

that

the

University

Street

Contribution
Officer
(

and

LLC

Contribution

are

hereby

authorized

approved,

and

any Authorized

as

if

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00127

CONFIDENTIAL

on

or is

defined

below)

hereby

authorized

behalf

the

Bank

to

of

negotiate, necessary

execute

and

deliver

any

as

agreements
connection

documents
the

such
Street

Authorized Contribution

Officer

deems
the

appropriate

or

with

University

LLC

Contribution.

or

to

is

to

in
cause any
deliver

or

RESOLVED

FURTHER,
the

that

the

Bank

hereby

authorized

transfer,

designee
Authorized

transfer,

LLC

Preferred

Interests

the the

SPEs
Bank

to in

of to

exchange
negotiate, necessary

for

to

cash

and and

Officer

hereby

authorized

on

is

behalf

execute

any

agreements
with

documents
transfers;

such

Authorized

Officer

deems

appropriate

connection

such

of

is

RESOLVED

FURTHER,
execute

each and

the

Authorized

Officers

hereby the

authorized

on

behalf

the

Bank

negotiate, necessary

deliver

any agreements
with the

with

LLC

as

of

to

such

Authorized

in

or

Officer

deems

appropriate

connection

management,

operation

of

administration

the

LLC;

or

RESOLVED

FURTHER,

that

the

Authorized

Officers,
full

any
for

of

or
and

them,

are

authorized

in- in

on

empowered, such any


the
authority

behalf

the

Bank

and

name,

with

power

and such

to

of

its

authority

delegate
Officers,

or

or

in
with
(

as

or

or

its

one

more attorneys-

fact

agents

acting desirable

Authorized do,

in

them,

the the

event

that

deemed
the

necessary Preferred

in

so

or

to

of

it is

connection

offering

Preferred

Stock,

LLC

or or

Interests prepared with

the

SPE

in

of

Securities

private/

Regulation

offering,

prepare,

cause

in

be

to

to

to

participate

the

or

of,

an

preparation

offering

circular

offering

memorandum

to

respect

such

securities

and

as

or

or

any such

supplements
action
shall

amendments

thereto),

the

Authorized

Officers,

any

of

them,

taking

in

in

to

of

approve

connection

therewith

order

effect

the

offering

such

in

securities

private/

Regulation

offering;

RESOLVED

FURTHER,
without

that

any

Authorized those Policy

Officer,

together from time

with

other

proper

officers

to

the

Bank

(including,

limitation,

authorized

time pursuant procedures execute

to

of

the time

Bank's

Asset
effect

and

Liability

Management

and

the

standards enter

and
into,

from

in

time

thereunder),

hereby any Bank

to

is

authorized undertakings

negotiate, other

and

deliver

any

or

and

additional

agreements, behalf

documents
filings

or

all

supplemental applications foreign)


officer

agreements
banking

the

(including,

without stock

or

on

of

limitation,

with

or

or

regulators, actions,

securities

regulators

exchanges,

domestic

and

to

take

in

as

or

any

other

each

case,

such
with the

Authorized the

Officer

other

proper

deems

in

or

necessary

advisable

connection

issuance

of

the

University

Street the

Contribution,

or

or

of

to

LLC

Contribution

the

transfers

LLC

Preferred

Interests

of

further

intent

these

resolutions;

and
for

RESOLVED
contemplated Executive Executive Treasurer, President hereby,

FURTHER,

that

purposes
shall Officer,

be of

these

resolutions

and

the
(

transactions the Chief

an

of

the

Hi)

each
the

following

" Authorized

Officer":

i)

iv)

ii)

Officer,

Chief Operating

the

Chief

Financial

Officer,

any Senior and

v)

vi)

Vice
vii)
(

President,

any

Executive

Vice

President,

the

Senior
( viii)

Vice the

President Senior Vice

the

Senior

Vice

President

and

Assistant

Treasurer

and

and

Controller.

be
the

to

to

or

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00128

CONFIDENTIAL

EXHIBIT EXHIBIT D2 D-2 February 2006 Resolutions February 2006 Resolutions

- Pricing Pricing

17357747 17357747

WMI Assistant Secretarys Certificate WMI Assistant Secretary's Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00129

CONFIDENTIAL

by

Board during

duly held meeting

in

been approved
its

the Board;

however,

the resolutions below February 2006,]

were adopted

by

February

2006 WMI Board Minutes

NB: The February board minutes have

not

the

WHEREAS,
issued

Washington

Mutual,

Inc..( the':

Company")

indirectly

owns

of
for will

all

the

of

and outstanding

common

stock

University

Street, Inc.

("

University

Street");

Washington

Mutual

Bank

will

contribute

LLC assets

approximately $ 5.4

billion

the aggregate;

WHEREAS,

it is

proposed

that

the LLC
Street;

will

issue

common

interests, substantially

be

of

which

will

issued

to

all

University

of in it is

or

to

will

or

WHEREAS,
classes

proposed

that

the

LLC
" LLC

issue

WMB

its

designee

two

the

series

preferred interests (

Preferred

Interests")

which

LLC

Preferred

Interests

the aggregate

will

not exceed

$2.0

billion;

it is

of

WHEREAS,
a
fixed

the

proposed

that

one class
will

LLC Preferred
rate

Interests

have

dividend

rate

and

other

class

have a dividend

which

is

the

fixed

approximately

5 years and thereafter

is

variable;

be

WHEREAS,
two special purpose

proposed which

that

the

LLC Preferred
will

Interests will

transferred

in

entities

turn

issue

substantially similar securities

( the

SPE

Securities")

to

."

investors;

WHEREAS,

under specified
for

circumstances,

each

class

of or

SPE
for

Securities

will

be

automatically

exchanged

of

preferred

stock

the Company

depositary shares

in

of

representing fractional

interests

preferred

stock

the Company;
its

in

of

WHEREAS,
"

at

set

resolutions

adopted

January 17, 2006

meeting

( the

of

Prior Resolutions"),

the Board previously

authorized

the issuance terms

two series

of

such

of

preferred authority

stock

the Company, established substantive

of

eaCllseries,

delegated

of

to

in

appropriate
prescribed

officers.

the Company

theto

determine,

within

the

limits

for

specifically

the Prior Resolutions,

designation

and

relative

rights,

of

preferences
preferred

and limitations

each series and provided


interests;

other

matters relating

to
the J

the

stock

and the LLC

preferred

and
certain

to

WHEREAS,

the Board now desires

amend and supplement

of

of

of

of

terms

each

the series

preferred

stock

the Company and certain

of

the

in

provisions

the

Prior Resolutions.

THEREFORE,

HEREBY

RESOLVED,

that

the two series

of

IT IS

of

preferred

stock

by

as

be

authorized cumulative the


"

the Prior Resolutions


toFloating

shall

designated
( the
"

the

" Series I

Perpetual

Nonand

Fixed-

Rate Preferred Stock"

Series

Preferred Stock")

Series J Perpetual

Non- cumulative

Fixed Rate Preferred

Stock"

the

" Series

Preferred Stock"),

respectively;

to

it is

in

limited liability

company

( the

"

LLC")

and

toin

WHEREAS,

University

Street

proposes

cause

the formation

of

to

a Delaware
Street

connection

therewith

University

and

of

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00130

CONFIDENTIAL

RESOLVED
Preferred shall

FURTHER,

that

notwithstanding

the Prior Resolutions, the

the Series
Stock")

Stock have

and the Series J Preferred Stock


rights,

( collectively,

" Preferred

each

preferences
series

and

limitations

which

are set forth

in

the respective

byfor

to

at

designations
modification

Authorized

as

each

the

presented

this

meeting subject provided


( the
"

completion

and any

Officers

herein

Designations");

RESOLVED
to,
authority designate, restrictions

FURTHER,

that

the Board hereby authorizes,

and delegates

the

as

in

any two

the Authorized

Officers (

defined

the Prior Resolutions)


privileges,

finalize,

determine and complete

the rights, preferences,


actions,

to

and

other

matters, and

take such other Resolutions

to

relating

the

Preferred

in

Stock,

subject

the

limits

the

Prior

relating

the number
rights,

shares

each series, liquidation


convertibility

amount,

maturity, holders'
limits:

redemption

sinking

fund and

and

to

the following

orbe at

the Series

Preferred Stock
until

will

fixed

rate

from issuance

not
for

exceed
provided dividend

7.50% per annum

March 15, 2011 and

another
will

date

March

2011
rate

in

be

at

the completed

Designation

thereafter

as
(

in

floating

each

setat

period

a rate equal

the

month L1BORapplicable 4.75% per annum,

such

period

in

circumstances which
will

forth

the Designation
basis points;

if

higher) plus

a spread

not exceed

275

be

at

to

ii)

the Series J Preferred Stock

will

a fixed rate not

exceed

8.0% per

annum;
iii)

the Company

will

able

redeem the Preferred Stock any time

as

in

after

March 15, 2011 and

another

date

March 2011

provided

in

or

the completed

Designation;
iv)

byof

no

the

holders

the Preferred Washington

Stock

will

have

voting

rights

except

the extent, declared described


with
right

any, required

law and

in

ii)

if

the event that dividends


other

are not

and paid

series

the Preferred

certain

classes

series
(

in

the completed

Designation) described

then holders

of

the Preferred Stock Designation) meeting;


will

together

at in

or

any other

classes

series

the completed

have the

to

of

elect

two directors

the Company

the next annual

preceding
authority

ofto

RESOLVED
to<!

FURTHER,

that

the authorization the


limits

and

in

delegation without

the immediately the

resolution shall, subject

therein,

include,

limitation,

to

to of

etermine the number

shares
rates,

each

series

Preferred Stock redemption

to to

authorized,

determine the dividend

of

be
the

specify additional

of

rights

on

Company,
securities

specify

limits

the Company's

rights

pay dividends

on

to

other

equity

on

to

as
for

or

or

on

on

of

if

dividends

have not been paid

the Preferred Stock,

approve

the form

to

ofof

any stock

certificate

and

prepare
with

and authorize the Secretary

the

filing

articles

each series

Preferred Stock

State

the State

ofof

amendment
Washington;

of

of

as

by

as

RESOLVED
Designations

FURTHER,

that

the number
for

shares authorized provided reserved


for

in

of

the

completed

the Authorized

Officers

herein shall upon issuance;

filing

the articles

amendment

each

series

be

of

of

fully

RESOLVED

FURTHER,
iii) or of
(

that

the declaration

covenants

or

of

other

agreements

to in

in

such

other

provisions

items

any Authorized

Officer

deems necessary

or

referred

clause

the last resolution

the Prior Resolutions

as

may

also include advisable

of

i) to

or

be

on

to

or in

3-

to

to

to

i)

in

to

to

of

to

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00131

CONFIDENTIAL

on

including other

without

limitation restrictions

dividends

and

on

distributions

the Company's
its

equity

securities

dividends

are not paid


for

on

if

the Preferred Stock

after

issuance

on

and

of

restrictions

the sources

funds

any redemptions;

RESOLVED
Prior

FURTHER,

as

that force

except

hereby amended and

and supplemented,

the

in

full

Resolutions

remain

and

effect;

officers

those authorized
Policy

from time

to

of

RESOLVED FURTHER, that any Authorized the Company ( including, without limitation,

Officer,

together

with other

proper time

to

pursuant

the Company's from time

Asset

and

Liability

Management

and the standards

in

to

and procedures
enter other
into,

time

effect

thereunder), additional

hereby authorized

to

is

negotiate,

or

execute

and

deliver

any and

agreements,

any undertakings
(

or

or

or

stock

exchanges,

domestic
Officer

foreign)

and

take any other

actions,

such Authorized connection


with

other

proper

officer

deems

necessary

in or

without

limitation,

filings

applications

with

banking

regulators,

securities

regulators

each case,
advisable

or to

SPE

Securities

further

the intent

these resolutions

or

the issuance

the Preferred Stock,

the

of

LLC

Preferred Interests the Prior Resolutions,

subject

the

in

to

limits

set forth

these resolutions.

or in as the or

documents

of

on

supplemental

agreements

behalf

the Company

including,

to

to

of

be

or

all

Return

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WMIPC_500002099.00132

CONFIDENTIAL

EXHIBIT D3 EXHIBIT D~3 February 2006 Resolutions February 2006 Resolutions

- Articles of Amendment Articles of Amendment

17357747 17357747

WMI Assistant Secretarys Certificate WMI Assistant Secretary's Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00133

CONFIDENTIAL

OF

ARTICLES

AMENDMENT

WASHINGTON
( Series I

OF
MUTUAL,
Fixed-

INC.

Perpetual

Non- cumulative

to-

Floating

Preferred

Stock)

of

Pursuant

the

provisions the

Chapter

23B. 1 0 and

Section

23B.

06.020
Mutual,

of
Inc.

to

the
( the

of

Revised
"

Code

of

Washington,

undersigned

officer

Washington

of

Company"),

a corporation does
hereby

organized

and
filing

existing

under
Articles

the

laws

the

State

for

of

to

its the

Washington,

submit

these

Amendment

Amended

and

Restated

of

Articles

Incorporation:

of

FIRST:

The

name

the

Company
the

is

Washington

Mutual,

Inc.

of

SECOND:
are hereby designated Stock."

of

1,250
"

shares
I

authorized

Preferred

Stock

Company
Rate

Series

Perpetual

Non- cumulative

Fixed-

to-

Floating

Preferred

The

rights,

preferences,

privileges,

restrictions

and Rate

other

of
matters Stock

relating

the

Series

Perpetual

Non- cumulative

Fixed-

to-

to

Floating

Preferred

are

as

follows:

1.

Section unissued designated Stock"


shall ( the
"

Designation.

There

hereby

to- of of

is

created

out

the

authorized stock

and

of

of

shares

preferred
I

stock Perpetual

the

Company

a series
Fixed-

preferred

as

the

" Series
I

Non- cumulative The


Stock
I

Floating
constituting

Rate

Preferred series

Series

Preferred Series
I

Stock"). Preferred Series Stock

number
shall

of

shares

such
share

be

no

1,250.

The

have

par

value

per

and

be

of

the

liquidation

preference Series
I

Preferred

Stock

shall

$ 1,000,000.00

per

share.

be

of

if

Shares
occurs.

Preferred

shall

issued

and

if

only

a Conditional

Exchange

2.

Section

Ranking.

The
liquidation,

Series winding-

Preferred

Stock

will,

with rank
(

respect

dividend with

rigtmhand the

rights

up

and

on

i)

dissolution,

parity
(

Company's
J

on
J

to

Series Stock")

Perpetual

Non- cumulative each


the other c1ass. the

Fixed

Rate

Preferred preferred

Stock stock

the

" Series

Preferred the class

or

and Date
rank

with

series

of

established
that

after

Designation

onby

or

of

the
"

Company
with

terms
I

which

expressly Stock the

provide

such
rights

series

as to

parity

Series

Preferred

dividend

and

rights

liquidation, Securities")

winding-

and

dissolution

Company common

( collectively

referred
"

as

up

of

to

to

and

ii)

senior

the

Company's
Stock

stock class

( the

Common
stock

Stock"),

on
the not

the

Parity

Company's

Series
after

RP
the

Preferred

and

each

other

of

capital

outstanding

by

or

established

Designation

Date a
parity

the

Company
Series
I

the

terms

which

expressly
rights

provide
rights
.

that

ranks

with

the

Preferred

Stock

to do

of

as

on

it

dividend the

on

up

and

liquidation,

windingreferred

and
"

of

dissolution

the

Company,

including

Common

Stock

as

to

( collectively

Junior

Securities").

130887.1

will

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00134

CONFIDENTIAL

or

Section
intent,

Definitions.

Unless have

the

context

use

indicates

another

meaning

the

following the

terms

shall

the following

meanings,

whether

used

in

the

singular

or

plural:

a)

3-

"

Month
basis

USD
of

UBOR"
offered

means,
rates
that

to

with

respect

any Dividend

or
a

3.

Period, deposits

for

U. S.

on

rate not

determined less than

the

the

three-

month

dollar

principal

amount

of for

to

is

equal
time,

which

representative

single

in

transaction Period,

such

market

such

commencing Page Date

on

at

the

first

day

such

Dividend

as

on

11

which

appears

US UBOR

Telerate

3750
for

approximately Dividend Telerate Period.

on

m.,

London

time,

the

Determination

such

If

UBOR
Date London

as
such

no

on

on

a.

00

of

any

UBOR
of
the

Determination

rate time,

appears
the

US UBOR
or an
Date

Page
the
four

3750

00

approximately behalf

11:

m.,
will

Company
Determination

affiliate

Company
major

on

Company

such

UBOR
at

request

in

by

reference

banks
with

the

London

interbank the rate

market which

selected

the

Company

to

provide

in

Company
commencing

a quotation

three- month Period, are

deposits

U. S.

of

dollars,

by

on

the

first

day

such market

Dividend

offered

them

to

of

prime
time,

in

as

11

00

banks such

the

London
for

to a.

interbank

approximately

m.,
that

London
which
least
will

in

UBOR

Determination

Date

and

principal

amount

equal

in

at

representative quotations arithmetic quotations are

single

transaction

such

market

such

If at

time.

two

to for

3-

provided,
( rounded

Month

USD
if

UBOR
If

such
the

Dividend nearest

Period

of be

mean

upward

necessary

.00001
quotations

of

1%)
are

as

by

calculated

the

Company.
Dividend

fewer
will

than

two

provided,
( rounded

for

3-

Month

USD
if

UBOR
to 11 in 00

be

such

Period

the

arithmetic

mean

on of

as

of

upward

necessary
:

the

nearest

.00001
time,

1%)
the

the

rates

quoted

of

is

the

such

approximately three major dollars

am.,

New
York

York
City,

first

day

such
the

Dividend

Period

banks

New

New

York

selected

Company

loans

leading

European
Period

banks,

a three- month amount

period

commencing
less than

in

of

first

day

such

Dividend

and

of

principal

not

$ 1,000,000.

on b)

"

Business

Day"

means York

any

day

other York,

than

a Saturday,

Sunday
are

or
that

the in by

of

for

U. S.

for

by

on

to

any

in

other

day

which

banks

New

City,

New

or

Seattle,

Washington

by

or

generally

required

authorized

law

be

to

closed.

in

"

Common
Company"

Stock"

has

the

meaning

set

forth

Section

d)

"

means Washington

Mutual,

Inc.,

a Wcmftington

corporation.

e)

"

Comparable
the

Treasury

Issue"

means Banker

the

United having

Sates

by

as

security

selected

Independent

Investment

a maturity

comparable would
practice,

term

remaining

Dividend

Payment accordance

Date
with

in

to

the

to

the

2.

c)

Treasury

March,

2011

of of

be in

utilized, pricing
I

time

selection perpetual

and

in

the

at

customary
similar

financial

new

issues Stock

preferred

securities

having

terms

to

of

as

on of

of

the

Series

Preferred
liquidation,

with

respect

the

payment

dividends

and

distributions stock.

or

up

of

assets

upon

of

dissolution

winding-

the

issuer

such

preferred

"

Comparable
the the

Treasury

Price"

means

to

f)

with

respect

any

Redemption

Date
Date,

the

average

Reference
highest

for

of

Treasury

Dealer

Quotations

such

Redemption
Dealer
five

after

excluding

and

of

lowest

such

Reference
obtains

Treasury fewer than

or if

Quotations,

the

Independent Dealer

Investment the

Banker average

such

of

Reference

all

Treasury

Quotations,

such

quotations.

130887.1 2

on
the

a.

of

of

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00135

CONFIDENTIAL

g)

of

"

Conditional

Exchange"

means the automatic

exchange

the

WAMU
I

Common
occurrence

Securities

into depositary

shares representing
written direction

of an

in

interest

the Series

Preferred Stock

which occurs

upon the

the

OTS upon

or

after

the

an

of

Exchange

Event.

h)

"

Delaware

Preferred Securities" together


with

means the Fixed-

to-

Floating

Rate

Delaware

Preferred Securities,
liquidation

Preferred Securities, Mutual

preference

$ 1,000 per

security,

issued

by

the 7.25% Perpetual

Non- cumulative
Washington

Preferred Funding

LLC, a Delaware

limited liability

company.

"

Designation

Date" means March

6,

i)

2006.

4(
the

in

"

Dividend

Payment Date"
the
Period" has

has the meaning

forth

Section

4(

in

"

Dividend

meaning
the

forth

Section

of

theI)

"

Exchange

Event"

means

occurrence

anyone

of

the following

as

at

are

a time

Trust

Securities

issued and outstanding:

i)

WMB

becomes

undercapitalized

under the Prompt Corrective

Action

Regulations;

or

b).

set

k)

ii)

WMB

placed

into

conservatorship

receivership;

in

an

to-

Fixed-

Floating

Rate Delaware becoming

Preferred Stock

into

the Series

Preferred Stock

by of or

anticipation

of

Regulations dividends

the

OTS

taking

any supervisory

action

that

limits

the payment

WMB.
toFixedFloating

m)

"

to-

Rate Delaware

Preferred

Securities"

means the
LLC, a

Fixed-

Floating

Rate Perpetual per security,

preference Delaware

$1,000

issued

by

Non- cumulative

Preferred

Securities,

liquidation

Washington

Mutual

Preferred Funding

limited liability

company.

n)

Independent

Investment standing

Banker"

by

means

an

indep~

investment

of

banking

institution

national

appointed

the Company.

in

"

Junior Securities"

has the meaning

forth

Section

p)

"

UBOR

Business

Day" means any day

on

which commercial banks

in

in

2.

set

-( 0)

are open

general

business

( including

dealings

deposits

in

for

U. S.

dollars)

London.

q)

as

to of

of
the

WMB

undercapitalized

under

the Prompt Corrective

Action

to

is

date that

two

" UBOR Determination Date" UBOR Business Days prior

means, the
first

each Dividend

Period, Period.

day

such Dividend

"

as

asas

or

US UBOR
Service

Telerate

Page 3750'" 3750


(

means the
such other

display

page

Moneyline's

Telerate

designated

page

may
the

as

or

on

that

page
for

that service,

such other service


rates

may

to be

nominated

information

of

3-

vendor,

the purpose

displaying

comparable

Month

USD

L1BOR).

130887.1

of

r)

replace

in

the OTS,

sole discretion,

directs

exchange

of

its

iii)

or

is

b).

set

j)

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00136

CONFIDENTIAL

s)

" OTS"

means the

Office

Thrift

Supervision

or in

of

any successor

regulatory entity.

" Parity

Securities"

has the meaning set forth

Section

u)

2.

t)

12 C. F. R. in

3(
by

" Primary

Treasury Dealer"

has the meaning set


Regulation"
regulation.

forth

Section

effect

from time

or

in

" Prompt Corrective

Action

means

Part

565

to

time,

any successor

in w)

of

" Redemption

Date"

means any

any date that

7. is

designated

the

Company

a notice

redemption delivered

pursuant

to

of

Section

x)

of

" Reference

Treasury
( each,

Dealer"

government

securities

dealers

as

Company; provided

by for

a " Primary Treasury

as

means each

the three

primary

Dealer"), specified substitute

specified

if

that

any Primary Treasury Dealer


Dealer,

the Company such Primary

to

be

ceases Treasury

a Primary Treasury
another

the Company Dealer and

will

Dealer
within

Primary Treasury

the

of

substitute

Treasury

Dealer

selected

by

a reasonable

be

Company
will

to

if

fails

select

period

time,

then the substitute Investment Banker

a Primary
consultation with

the Independent

after

the Company.

y)

to 8(
to-

" Reference

Treasury

Dealer Quotations" Date,

in

Independent

Investment

Banker,

the

as

and asked
Banker
third

for

Reference

Treasury

Dealer

and any Redemption

average,

as

means,

with

respect

determined

of

bid

the

prices

the Comparable amount) Treasury

of

Treasury Issue ( expressed,

each case,

a percentage

its

principal

atin 5: 00 p. to

quoted Dealer

writing

the Independent

Investment

by

such Reference

m.,

New

on

York

City time,

the

Business

Day preceding

such

Redemption

Date.

z)

"

Regulatory

Capital

Event" occurs
that there

when

the

Company determines,
risk

of

an

of

Delaware

Preferred

Securities

will

longer constitute

core capital

WMB
the

for

based upon

is

receipt

opinion

counsel,

a a

significant

that

the purposes

no

by

as

of

the capital

adequacy

regulations

issued

the

OTS

result

a change

or

applicable Floating

laws,

regulations

related interpretations
Securities.--;.....--

after

issuance

of

Fixed-

Rate Delaware

Preferred

( aa)

" Treasury

Rate"

means the

rate

per year equal

to

the quarterly using a price amount)

to

of

for

equivalent

yield

maturity

as

the Comparable Treasury


for

Issue, calculated

of

the Comparable Treasury Issue ( expressed

a percentage

its

principal Date.

to

equal

the Comparable Treasury

Price

the relevant

Redemption

The

be

on

Treasury

Rate

will

calculated

the

third

Business Day preceding

the relevant

Redemption

Date.

A1,

( bb)

" Trust

Securities"

means

to-

the

in

of

of

Fixed-

Floating

Rate

Perpetual

Non-

cumulative

Trust

Securities,

Series

liquidation

preference

by

$ 100,000

per security,
trust.

issued

Washington

Mutual

Preferred

Funding

Trust,

a Delaware
set

statutory

in

" Voting

Parity

Securities"

has the meaning

forth

Section

130887.1

b).

cc)

bythe

the

byU. S.

the

as

v)

x).

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00137

CONFIDENTIAL

( dd)

"

WMB"

means Washington

Mutual

Bank, a federal

savings

or

of

association

and a

subsidiary

the Company,

its

successor.

Section

a) 4. as

Dividends.

by of

Holders

shares

Series

Preferred

Stock out

shall

entitled

of

in

receive, available

when,

therefor,

non- cumulative

cash dividends

the amount determined

as

and

declared

the Board

of

if

Directors,

the funds legally set forth

in

4(

Section

and

no

c),

more.

b)

4(

in

a),

be

Subject

Section

dividends

shall

payable
or,

arrears

if onon

to

of 15

15 of

15,

to
any stock
shall

of

be

March
first

June 15, September

and December
the Series
I

each year commencing

in

such day after the issuance

Preferred Stock
( each,

each case,

is

not

such day
Date").

is to of

on thebe

as

a Business
will

the

Day,

next Business Day

a " Dividend

Payment

of

on

or,

books

Company

not the

first

day

month

in

Each dividend

payable

holders

record

they appear

of

the

which the relevant


first

Dividend

the

such month.

Each

period

from and including


I

a Dividend

Payment Date

or

Payment Date occurs

such date

a Business Day, the

Business
(

Day

the date Dividend


Period",

is is be to to

of theor the

the

issuance

Series

Preferred Stock) Date)

but excluding

asthe

following
" Dividend

Payment Date

Redemption
I

herein referred outstanding

on to

the

in

except

that,

Series

Preferred Stock

March

15,

if

2011,

the

or on

commence

March
the

2011

whether

or

( whether

not a Business Day) and

in

Dividend

Period ending

March

2011

shall

but excluding Period ending Day).

March 15, 2011 June 2011

the

Dividend

15,

not a Business

or, the

to
I

of

of

c)

is

date

issuance

Series

Preferred Stock

prior

or 15, 15,

ofis

15,

day immediately preceding the


first

if

March

2011

March

2011

not

a Business Day,

Business Day after March

2011, then from such date not a Business Day),

issuance

to

but not

including

March

2011

ofif,

( whether Directors,

dividends,

when and
Series

an of

for

by

the

will

declared
Preferred

Board

be,

each outstanding

share

on

at

of

Stock,
I

annual

rate

6.534%
later

the per share

liquidation

preference
ii)
( the

of

the Series issuance

Preferred

Stock.
I

From the
for

the (

March 15, 2011 and

date the

as

the Series
will

Preferred Stock, dividends, each outstanding

when and

declared

by

of

if,

Board annual

Directors,

be,

share

Series

Preferred Stock,

to

3-

rate

equal

Month

USD

L1BORfor

the related
I

Dividend

Period plus 1.4825%

on

the per share


for

liquidation

preference

of or

the Series
less

Preferred StoGk-~ Hividends


full

payable

any Dividend

Period greater twelve

than

Dividend

Period

will

on

computed

of

the basis

30-day months, a 360- day year, and the actual

in

in or

of

or

days elapsed

the period payable

of in onthefor if

such Dividend

Period

ends

to

prior

March 2011;
period
will

ofin

thereafter

dividends

any period greater


actual

less

than

full

dividend

be

number

computed

the basis

number

days

the relevant the Series


I

period divided
Preferred

be

No

360.

interest will

paid

any dividend

payment

Stock.

d)

Dividends
full

the Series

Preferred

Stock

are non- cumulative.


I

ofor If
I

the

in no

Board

Directors less

does not declare


a dividend
will

a dividend

on

of

the Series

Preferred Stock

or

declares Series
I

than

respect
right

to of

any Dividend

Period,

the holders a

the

for

pay a dividend are declared

pay

dividends

for

the case

may

or tofor

Preferred

Stock

have

receive

any dividend
will

nofull or

dividend,

be,

the Dividend
full

Period,

and the Company


that

have

obligation

Dividend

Period,

whether

not dividends

and paid

any future

Dividend

Period with respect

to

the Series

130887.1 5

toas

by

be

on

of

an

of

of

at

of

i)

of

as

15,

the

If

ofof

if

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00138

CONFIDENTIAL

or

or

or

Preferred preferred

Stock
stock.

the

Common

of

Stock

any other

class

series

the Company's

e)

on

Iffull

dividends

outstanding

shares

of

all

the Series J Preferred

for

Stock declare
equity

any Dividend pay dividends


securities

Period have
with

not been declared

and paid, the Company shall not

or

or

or

to,

of,

respect

redeem,

purchase Dividend

acquire

any

its

capital

during the next succeeding

Period,

except
rights

dividends

connection

with

the Series connection

Preferred Stock
benefit plans.

if

RP
with

or

other

shareholders'

plan,

any,

dividends

in

or

Section

5.

Liquidation.

a)

the event the Company voluntarily

or

In

involuntarily

liquidates,

or

of

dissolves

winds

up, the holders


receive

Series

Preferred Stock

at

the time outstanding

to in

be

to

shall

entitled
I

liquidating

distributions

the amount any declared the date

of

$ 1,000,000

per share dividends out

an

of

Series

Preferred

Stock,

plus
for

amount equal

but unpaid

for

to

thereon

the current Dividend


available

Period

and
its

of

including

such liquidation, any distribution


junior

of

to

assets legally

distribution

shareholders,

before

or

of

to

assets Series

made

the holders

Common

Stock the
full

any securities

ranking

to

is

the

of

Preferred Stock. After

payment
I

amount
will

of

such liquidating

or

in

distributions, participation

the holders

Series

Preferred Stock

nobe

to

of

not

entitled right

any further

any distribution

assets

and

shall

have

to

of

by,

claim

any

of,

the

remaining assets

Company.
for
assets

b)

In

the event

Company
winding-

available

distribution

or

up

of

in full of

tothe

shareholders upon any liquidation,

dissolution

affairs

toor

Company, whether amounts


payable

voluntary

involuntary,

shall

insufficient

pay
I

of

with

respect

outstanding

shares

the

all

Series

thethe

be

Preferred

Stock the

on

and the corresponding

amounts

payable and

any other

of

Securities

equal

ranking,

of

of

holders ranking

Series

Preferred Stock

holders

such other

in be of

the

securities

equal

in

shall

share ratably

any distribution

assets

the Company otherwise

proportion

to

the

full

respective

liquidating

distributions

which they would

respectively

entitled.

6.

Section

Maturity.

by

The Series

Preferred Stock

be

shall

perpetual
.

unless

in

7.

redeemed

the Company

accordance

with

Section

Section

7.

Redemptions.

a)

be

--

at

The Series

Preferred Stock

shall

not

redeemable

the option

the holders

at

any time.

b)

be

at

or,

The Series

Preferred Stock

shall

redeemable

the option
that

of

the

in

in

Company, March
15,

whole

but not

part,

prior

March 15,2011

in

to

the

event
of:

2011
all i)

not a Business Day, the next Business

Day),

upon the occurrence


the

a Regulatory

Capital

Event

a cash redemption
foror ii)
(

price

equal

sum

X)

at

to

the per Date

of

of

greater

$1,000,000 undeclared

per share, dividends

the

sum

of

present values

$ 1,000,000

in

share

and

the Dividend March,

Period from the Redemption

and
Date

including

the Dividend
basis
(

Payment

to

Date

2011,

discounted

the Redemption 30-day months)

on

quarterly

assuming a 360- day year

of

consisting

twelve

130887.1 6

to

of

is

of

to

of

of

to

of

the

the

of

in

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00139

CONFIDENTIAL

as

by

the Treasury Rate

an

at

calculated

Independent

Investment

Banker),

plus

0.30%;

Y)

and

to

any declared

but unpaid

dividends

the Redemption

Date.

or in

of c)

The Series
the Company

Preferred

Stock

shall

redeemable

whole

or in
shall
thirty

be

part

is or

on

to

at

at

the option
or,

any time, 15,2011

from time

time,

after

March 15,

2011
Day).
plus

in

the event that March

not a Business Day, the next Business

be

at

Such redemption
any declared

shall

a cash redemption

of

price

$ 1,000,000

per share, accumulation

and unpaid dividends


dividends.

to

the Redemption

Date, without

of

any undeclared

d)

the case

any redemption under

this

Section

notice

to

of

mailed

each holder

record

of

the Series

Preferred Stock,

not less than

nor

more than
however,

days

prior

the Redemption

Date specified

byin

60

to

such notice; the Company,

provided,

be in
I

In

of

be

that

a longer minimum notice

may

to

7,

agreed

including

deposit agreement Preferred Stock. redemption redeemed.


date,

relating

depositary

shares representing interests


shall include
iii)

The
ii)
(

notice

redemption
price,

a statement

of in toi)
(

to of

the Series the

the redemption

and

the number

shares

or e)

of by

be to
this shall

Section

otherwise

acquired

the Company

to-

as

shares shall not under any circumstances

as

become

in of

Any shares

Series

Preferred Stock

redeemed

of

pursuant

any manner whatsoever

authorized

but unissued

preferred

shares

the Company but such preferred Series


I

be

reissued

Preferred Shares.

The

Company
reduce

shall

from time-

time

take such appropriate shares

action

may

necessary

of

the authorized

number

of

Series

Preferred

Stock

accordingly.

Section

8.

Voting

Rights.

a)

of

Holders

the Series

Preferred Stock

will

not have any voting any, required

rights, law,

if to

8( i)

including

the right
rights,

elect any,

any directors, described

except Section

voting

rights,

or

voting

b)

b).

in

ii)

by
any

if

or

for

after

issuance

the Series
full

Preferred Stock

the Company
I

fails

or

or for

pay,

declare

and set aside

payment,

dividends having
their

on

the Series

Preferred Stock

of

six

byor

any other

class

series

Parity

Securities

similar voting

rights

("

Voting

Parity Securities")

Dividend

Periods

equivalent,

the

zed

number
with

rof for

or

requirement the holder~


with

regulatory
I

approval

non- objection together

asto,

persons

serving

as

the Company's directors

will

increased

two.

Subject

to

be

compliance

of,

directors, class elect

Series

Preferred Stock,

voting

single
will

and separate

of

in

in

the holders

any outstanding

Voting

Parity Securities,

have the right

to

at

two directors

addition

the directors This


right will

then

office

the Company's next annual annual meeting

of

at

meeting
until

shareholders.
for

continue
I

each subsequent

the Company pays dividends


three

or

the Series

Preferred Stock

and any Voting Parity and pays

or

Securities

consecutive
for
aside

Dividend

Periods
for

their equivalent

declares

and sets
its

payment dividends

the fourth

consecutive

Dividend

Period

or

equivalent.

The term

of

c)

such additional

directors

will

terminate,

and the

total

by

be

of

at

number
after

directors

will

decreased

two,

the
for

first

annual

meeting

the Company

pays dividends

orfor

three

consecutive

Dividend

Periods

of or

shareholders
their I

equivalent

and declares

and pays

sets aside

payment dividends

on

the Series

130887.1 7

or

to

of

a~

to

of

If

to

be

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00140

CONFIDENTIAL

or

or,

Preferred

Stock

and any Voting

for

Parity Securities

the fourth

consecutive

Dividend

of

Period
After

equivalent

earlier,

upon the redemption


terminates,

all

its

if

Series

Preferred Stock. Series


I

of

of

the term

such additional

directors

the holders

be

the

for on
I

to

Series
six for

Preferred Stock Dividend

have again not been

or

Preferred Stock

will

not

able

elect

additional paid

directors

unless dividends

declared

and set aside

payment

future

Periods.

d)

be by

by

Any

additional

director elected

holders

of

the

the Series

preferred

of

the

Stock record

and the Voting

Parity Securities

of as

may

only

removed

the vote

the holders
voting

the outstanding

Series

Preferred

Stock and Voting

Parity Securities,

at

six

Voting Parity Securities

by

any vacancy

created

the removal

any such director


I

may

by

have not been paid

Dividend

Periods

or

for

called

that

purpose.

long

dividends

the Series

Preferred

Stock

or

As

for

together

as

single

and separate

of

class,

a meeting

the Company shareholders any

on

their equivalent, only

of

be

filled

the vote

of

of as

the holders together

the outstanding

Series

Preferred

Stock

and Voting

Parity Securities,

at

voting

single

and separate

class,

the same meeting

at

which

such

removal

is

considered.

at

Section
Preferred

11.

Certificates.

The Company

may

the

its

option

issue

Series

Stock

without

certificates.

for

not

THIRD:

This amendment does

provide

an

exchange,

or

of

reclassification

cancellation

any issued shares.

of

FOURTH:
FIFTH:
Incorporation

The date

this

amendment's adoption

March

6,

is

2006.

to

This

by

amendment

the Amended

and Restated

Articles

of

was

duly

adopted

the Board

of

Directors

the Company.

No

SIXTH:

shareholder action

was

required.

130887.1

of

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00141

CONFIDENTIAL

EXECUTED

this

day

of

March,

2006.

WASHINGTON
By:

MUTUAL,

INC.

_ Name:
Title:

Robert

J.

Williams President

Senior Vice

and Treasurer

130887.1

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00142

CONFIDENTIAL

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00143

CONFIDENTIAL

OF

ARTICLES

AMENDMENT

OF
WASHINGTON
(

MUTUAL,
Fixed

INC.

Series

J Perpetual

Non- cumulative

Rate

Preferred

Stock)

of

Pursuant

the provisions

Chapter

236.10
officer

and Section

236.06.020
Mutual,

of of

to

the

of

Revised
"

Code a

Washington,

the undersigned

of

Washington

Inc. ( the

Company"),

corporation

organized
for

and
filing

existing

under the laws

of

the State

to

of

Washington, and Restated

does hereby submit


Articles

these Articles

Amendment

its

Amended

of

Incorporation:

of

FIRST:

The name

the Company

is

Washington

Mutual,

Inc.

of

SECOND:
hereby designated
"

750 shares

of

the authorized

Preferred Stock

the Company

are

Series J Perpetual

Non- cumulative

Fixed Rate Preferred Stock."

The

rights,

preferences,

privileges,

restrictions

and

other

matters

relating follows:

the Series J Perpetual

Non- cumulative

Fixed Rate

Preferred

Stock are

1. of

ofof

theis

out

the

Section unissued

Designation. preferred

There

hereby created

authorized
stock

and
the
after

of

shares

stock

as

Company a

series

preferred

designated
" Series

the

" Series

J Perpetual

Non- cumulative

Fixed Rate Preferred Stock" such series shall and the liquidation per share.

noof

J Preferred Stock").
Preferred

The number

shares constituting

be to

The Series J

Stock shall have

par

value

per share

of

be

as
(

to

750.

preference

Series J Preferred Stock

shall

$ 1,000,000.00

Shares
occurs.

be

if

Series J Preferred Stock

shall

issued

if

and

only

a Conditional

Exchange

Section

2.

Ranking.

The Series J
liquidation,

Preferred

Stock
to-

will,

with
(

respect

dividend

rights

and

rights

up

winding-

and

i) on

dissolution,

rank

parity with

the Company's Series

on
I

to

Perpetual
Preferred

Non- cumulative
Stock")

Fixed-

Floating class

Rate Preferred

Stock

t~

eries

or

and
Date

with

each other

series

of

preferred

stock

established that

by on

the Designation

the

Company

the terms

of

which
I

expressly provide

such
rights

class

series will

rank

a parity with the Series

Preferred Stock

as to

or

dividend

ason

up

and rights

liquidation,
" Parity

winding-

and
ii)
(

of

dissolution

the Company

collectively stock
( the

to

to

referred
"

Securities")

and

senior

the Company's Stock

common

or

by

Common

Stock"),

the Company's

Series

RP

Preferred

and each
Date

other

class

capital

stock

outstanding

established

after that

the Designation

the Company the Series J

do

on

of

terms

which Stock

not expressly provide dividend


rights

it

ranks

as to

parity with

the

on

up

Preferred

and rights the

liquidation,

winding-

dissolution
"

the Company,

including

Common

Stock

( collectively

referred

Junior Securities").

or

as
or

and

of

3.

Section
intent,

Definitions.

Unless the context

use indicates

another

meaning

the following

terms shall have the following

meanings,

whether

used

in

the

or

singular

the plural:

130888.1

of

of

the

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00144

CONFIDENTIAL

on a)

" Business

Day" means any day other

than a Saturday,

Sunday

or

any

in

other

day

which

banks

New

York

City,

New

or

York,

Seattle,

Washington

are

or

by

generally

required

authorized

law

be

to

closed.

b)

in

"

Common
Company"

Stock"

has the meaning

forth

Section

c)

"

means Washington

Mutual,

Inc.,

a Washington

corporation.

d)

"

Comparable Treasury
the Independent

Issue"

means the United Sates Treasury


Banker

by

security

selected

Investment the Dividend

as

having

a maturity

comparable

the

term remaining

Payment Date
with

on

to

to

March 15, 2011


financial

2.

set

that

be in

would

utilized,

the time

selection

and

in

at

of

accordance

customary

practice,

pricing

new issues

perpetual

preferred

securities

having

similar

terms

the Series J Preferred Stock

with

respect

the payment

of

to

dividends

and

distributions

or

up

of

of

assets upon liquidation,

dissolution

winding-

the issuer

of

such preferred

stock.

e)

for

" Comparable

Treasury Price" Treasury

means

to

with

respect

any Redemption

of

the

Date Date,

average

the Reference

Dealer

Quotations

such Redemption

or if

after

excluding

the highest and lowest Investment

of

such Reference
obtains

Treasury Dealer than five such

Quotations, Reference

the Independent Dealer

Banker

fewer

of

Treasury

Quotations,

the average

all

such quotations.

of in

the

f)

" Conditional

Exchange"

means the automatic


shares representing

exchange

Series J Preferred Stock

which

occurs

upon

written

direction

the

an

of

OTS upon

after

the occurrence

Exchange

Event.

g)

to-

" Delaware

Preferred Securities"

means

the

Fixed Rate Delaware

the

Preferred Preferred

Securities, Securities,

together

with

Fixed-

Floating

Rate Perpetual
security,

liquidation

preference

$ 1,000 per

issued

by

Non- cumulative
Washington

Mutual

Preferred Funding

LLC, a Delaware

limited liability

company.

h)

.~-.

" Designation

Date"

means March

6,

2006.

4(

in

or
b).

Cayman

Preferred Securities

of an

WaMu

into depositary

interest

the

the

" Dividend

Payment Date" has the meaning


Period" has the meaning

set

i)

forth

Section
b).

in

m
k)
(

" Dividend

set forth

Section

of

" Exchange

Event" means the occurrence Preferred Securities

anyone

of

at

a time when the

WaMu Cayman

are issued and outstanding:

i)

WMB

becomes

undercapitalized

under

the Prompt Corrective

Action

Regulations;

or

4(

the following

ii)

WMB

placed

into

conservatorship

receivership;

in

inan

of of

its

iii)

the OTS,
into

sole

discretion,

directs

exchange
anticipation

Cayman

Preferred Securities

the

Series J Preferred Stock,

130888.1 2

or

is

WaMu

WMB

as

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00145

CONFIDENTIAL

becoming

undercapitalized taking

under the Prompt Corrective


action that
limits

Action

Regulations

pyin 2.

the near

or of

of

term

any supervisory
" Fixed

the payment

dividends

WMB.

I)

Rate Delaware

Preferred Securities"
liquidation

means

the

7.25%
per

Perpetual
security,
liability

by

Non- cumulative
issued

Preferred Securities, Mutual

preference

$1,000

Washington

Preferred Funding

LLC, a Delaware

limited

company.

m)

" Independent

Investment

Banker"

means

an

independent

investment

by

of

banking

institution

national

standing

appointed

the Company.

" Junior

Securities"

has the meaning

set forth

in or

n)

Section

" OTS"

means the

of

0)

Office

Thrift

Supervision

any successor

regulatory

entity.

q) p)

in

" Parity

Securities"

has the meaning

forth

Section

2.

set

3(
set

in

set

the

" Primary

Treasury

Dealer"

has

meaning

forth

Section

C. F.r) R.

" Prompt Corrective

Action

Regulations"

means the

regulations

forth

Part

565

effect

from time

or

in

as in

to

12

time,

any successor

regulations.

s)

" Redemption

Date" means any date that

designated

by

is

the

in

to

of

Company

a notice

redemption delivered

pursuant

Section

7.

"

Reference dealers

Treasury Dealer"
( each,

means each

the three

primary

government

securities

"

Primary Treasury Dealer"),

byas

specified

provided

if

Company;

as

that

any Primary Treasury Dealer Dealer, the Company Dealer and

specified substitute

the Company

ceases Treasury

a Primary Treasury

for

be

to

will

such Primary

Dealer another
within

Primary Treasury period

if

the

Company

to

fails

select

substitute

a reasonable
selected

time,

then the substitute Investment Banker

be

of

will

a Primary
consultation with

Treasury

Dealer

by

the Independent

after

the Company.

u)

I\ as

"

Reference

Treasury

Dealer

Quotations"

means,
for

w;

Iill:

espectto

Reference the

Treasury Dealer Investment


( expressed,

and any Redemption

Date, the average,


prices

determined

of

Independent

Banker,

the bid and asked

the Comparable amount) Treasury such

as

in

by of

Treasury Issue

each case,

a percentage
Banker
third

its

principal

at in

quoted Dealer

to

writing

the Independent

Investment

such Reference

5: 00

m.,

New

on

p.

York

City time,

the

Business Day preceding

Redemption

Date.

v)

" Regulatory

Capital

Event"

occurs

when the Company

determines, the purposes


for

an

of

of no

based upon
Delaware

is

receipt

opinion
will

counsel,
longer

that there constitute

significant

risk that

of

Preferred

Securities

core capital

WMB

by

as

the capital adequacy


laws,

regulations

issued

the

OTS

result

a change

or

applicable

regulations

related

interpretations

after

issuance

of

the Fixed Rate

Delaware

Preferred

Securities.

130888.1 3

in

of

of

by

by U. S.
the

of

t)

the

t).

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00146

CONFIDENTIAL

w)

to

" Treasury

Rate" means the rate per year equal

the

quarterly

to

of

equivalent

yield

maturity

the Comparable Treasury

Issue, calculated

using

price

for

as

of

the Comparable Treasury Issue

( expressed

a percentage

its

principal

amount)

equal

the Comparable Treasury Price

for

to

the relevant

Redemption

Date.

The

be

on

Treasury Rate

will

calculated

the third Business

Day preceding

the relevant

Redemption
(

Date.

x)

8(
set

in

" Voting

Parity

Securities"

has the meaning

forth

Section

y)

"

WaMu Cayman

Preferred

Securities"

means the 7.25% Perpetual

security, liquidation

preference
(

Funding

Cayman)

Ltd.,

Cayman

Islands

exempted
Mutual

company
Bank,

by

$ 10,000

per security,

issued

by

and

7.25% Perpetual

Non- cumulative

Preferred Securities, Washington

Series

Mutual
limited

Preferred shares.

z)

"

or

WMB"

means Washington

a federal

savings

of

association

and a

subsidiary

the Company,

its

successor.

4.

Section

Dividends.

a)

of

of

Holders

shares

Series J Preferred Stock shall

entitled

as

by

of in

receive, available

therefor,

non- cumulative

cash dividends

amount determined

as

when,

and

declared

Board

of

the

out

if

Directors,

the funds

legally forth

in

4(

Section

and

no

c),

more.

b)

4(

a),

the

in

to

be

Subject

Section

dividends

shall

payable

arrears

of15

March
first

June 15, September


the
issuance

and December

each year commencing


(

onon

15 of

15,

to
the

such day after


Date").

the Series J Preferred Stock

each,

to of

as

be

of

be

a " Dividend they appear

A2,

Non- cumulative
the

Preferred Securities,

Series

A1,

liquidation

preference

$100,000

per

Payment
the
Dividend

Each dividend

payable
first

holders

record

if on

in

of

the

or,

stock books

the Company

the

day

month
not

which

the

relevant
first

Payment Date occurs

is

such date

not a Business Day, the

Business

of

Day

such month.

any Dividend

Payment Date

is

If

a Business

Day, then

be

on

dividends

will

payable

the

first

Business Day following

such Dividend

Payment Payment

as if

Date with the same force Dates. issuance

and effect

payment were made

on

the Dividend

or

Each period from and

including

a Dividend

Payment Date

the date

isto

of

but

the Series J Preferred

Stock) Date)

excluding

to the

follo~ ividend

Payment Date

the Redemption

herein referred

as

or

"

Dividend

Period."

as

of

on
will

will

b).
the
the

set

a Dividend
for
will

Payment

Date, dividends,

when and

declared
Stock,

of

of

the Board

Directors,

be,
the

each outstanding
liquidation

share

Series

J Preferred

an

in on of for

of

annual

rate

7.25%

per share

preference
less

of

the Series J Preferred Dividend Period

or

Stock.

Dividends

payable

any period greater twelve

than a

full

be

computed

on

the basis

30-day months, a 360- day

year,

and the actual

be

number

days elapsed

the period.

No

on

of

interest

will

paid

any dividend

payment

of

the Series J Preferred Stock.

d)

in

the

Dividends

Series J Preferred Stock a dividend respect


right

are non- cumulative.

Board

Directors less

does not declare


full

the Series J Preferred Stock


Period,

in no

declares

than a
for

dividend
will

any Dividend

the holders a
full

ofor If

of

on

of

Series J Preferred Stock the case

have

receive

any dividend
will

dividend, obligation

no

may

be,

the Dividend

Period,

and the Company

have

130888.1

to

as

or

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c)

if,

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00147

CONFIDENTIAL

for

or

pay a dividend
are declared

pay
for

full

dividends
future

that

Dividend Period

Period, with

whether

or

to

not

dividends

and

paid the

any

Dividend

respect series

the

SeriE?

or

or

Preferred preferred

Stock,
stock.

Common

Stock

any other

of

class

the

Company's

e)

on

If

full

dividends Period with during

outstanding

shares

of

all

the

Series

Preferred
shall

for

Stock declare equity

any Dividend

have
respect the

not

been

declared

and

paid,

the

Company
any

sJ

to

not

or

or

or

to,

of,

pay

dividends
securities

redeem,

purchase
Dividend

acquire

its

capital

next

succeeding

Period,

except
rights

dividends

connection

with

the

Series

Preferred
benefit

Stock plans.

other

shareholders'

if

RP
with

or

plan,

any,

dividends

in

or

connection

Section

5.

Liquidation.

a)

the

event

the

Company

voluntarily J

or

In

involuntarily

liquidates,

or

of

dissolves

winds

up,

the

holders

Series

Preferred

Stock

at

the

time

outstanding per share

to in

be

to

shall

entitled

receive Stock,

liquidating

distributions

the

amount

of

$ 1,000,000
but unpaid

an

of

Series

J Preferred

plus

amount

equal

any declared

dividends

for

of forto

of

thereon

the

current

Dividend
legally

Period available

and

including

the

date

liquidation,

of

to

the

assets

Company

its

distribution

shareholders,

before ranking

any

distribution

assets
J

made

holders Stock.

Common
payment
J

or

of

to

is

Stock

any
full

securities

of

junior

Series

Preferred the

After

amount
will

beof

to

the

the

such

to
the

of

of
any
Stock

liquidating further

distributions,

holders
distribution

Series

Preferred by,

Stock
shall

not

entitled

in

or

no

out

participation

any
of,

assets

and

have

right

claim

any remaining

the

assets

Company.
for

b)

In

the

event

the

assets

the

Company

available

distribution

or

up

of

shareholders

upon

any

liquidation,

dissolution
involuntary,

winding-

the

of

affairs

the the

in

or

be

to

Company, amounts and


the

whether payable

voluntary with respect

shall

insufficient

pay
J

to

outstanding

shares

of

all

the

Series

Preferred ranking,

on

corresponding

amounts
Preferred

payable

any other

of

securities

equal

of

of

full

holders ranking
full

Series

Stock

and

the

holders

such

other

of

securities

equal

in

in

to to
the option

of

of

of

shall

share

ratably
liquidating

any

distribution

assets they

the

Company
otherwise

proportion

the

respective

distributions

which

would

be

to

respectively

entitled.

Section

Maturity.

The

Series

Preferred with

Stock

be

6.

shall

perpetual

unless

in

by

redeemed

the

Company

accordance

Section

7.

Section

Redemptions.

at a)

7.

be

at

to

of

The any
time.

Series

Preferred

Stock

shall

not

redeemable

the

the

holders

b)

be

at

The
but

Series

Preferred

Stock

shall

redeemable upon
the

the

option

Company,
Regulatory

whole

part,

prior

March

of of

in

in

to

not

15,

2011, equal values the

occurrence

Capital

Event

a cash

redemption

price

the

sum

X)

of:

at

to

the

greater

or

of

of

$ 1,000,000

ii)

per

share,

the

sum

of

i)

present from 15, year

$ 1,000,000 Date

per

share

and

for

undeclared the

dividends Dividend

the

Dividend

Period

Redemption
discounted

to

all

and

on

including

Payment

Date

March

to

2011,

the

Redemption months)

on

Date

a quarterly

basis

( assuming

a 360- day

of

consisting

twelve

30- day

130888.1 5

of

in

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00148

CONFIDENTIAL

as

by

at

the Treasury

Rate (

an

calculated

Independent

Investment Date.

Banker),

plus 0.40%;

Y)

to

and

any declared

but unpaid

dividends

the Redemption

The Series
the

Preferred Stock

to be

of c)

shall

redeemable

whole

or in
shall
thirty

in

part

or

the option

Company
shall

beat at

on or

at

any time,

from time

time,

after

March 15,
per share, accumulation

2011.
plus

Such redemption
any declared

a cash redemption

of

price

$1,000,000
without

to

and unpaid dividends


dividends.

the

Redemption

Date,

of

any undeclared

d)

of

7,

In

ofthe

case

any redemption under this Section

notice

to

mailed

each holder
sixty that

record

of

the Series

Preferred

Stock

not less than such notice;

nor

more than
however,

days prior

the Redemption

Date specified

by in

to

provided,

be
in
J

a longer minimum notice

may

to

be

agreed

the Company, including


interests

deposit agreement Preferred Stock.

relating

depositary shares representing redemption


price, shall include

The
ii)
(

notice

a statement

of i) in to
(

to of

the Series

of

the

Redemption
redeemed.

Date,

redemption

and

number

shares

or e)

Any shares
acquired

of by

Series J Preferred Stock the Company

redeemed

pursuant

to

be
this

the

Section

otherwise

in of

any manner whatsoever

the

iii)

shall

the

become

authorized

but unissued

preferred

shares

Company
Series

but

such preferred Shares.

as

be

not

shares shall

under any circumstances

reissued

J Preferred

The

to-

as

Company
the
reduce

shall

from time-

time take such appropriate

action

may

necessary

of

authorized

number

of

shares

Series J Preferred Stock

accordingly.

Section

8.

Voting

Rights.

a)

of

for

Holders

the Series J Preferred Stock

will

including law,

the right
ii)
( voting

elect

any directors,

except

voting

rights,

any,

required

if

and

rights,

any, described

Section

b)

b).

in

8(

by
class Parity
J

not have any voting

rights,

to

i)

if

or

for

after

issuance

the Series
full

Preferred

Stock the

the Company
J

fails

or

pay,

declare

and

or for set six

aside

payment,

dividends having
their

on

Series

Preferred Stock

of

byor

any other

("

class

series

Parity Securities

similar voting

rights

Voting

Parity

Securities")

Dividend

Periods

equivalent,

the aut. horized number

or

for

requirement

regulatory

approval

non- objection
together

persons serving

as

the Company's directors

asto, to

be

will

increased

two.

Subject

compli~ Rce with any


directors,

the

of,

holder~~oJSeries J Preferred

Stock,

voting

a single and separate


will

in

in

with

the holders

any outstanding

Voting Parity Securities,

have the

to

of

right

elect

to

at

two directors

addition

the directors This right


will

then

office

the Company's subsequent Stock

next annual annual meeting

of

meeting
until

shareholders.

continue

at

each

or

for

for

Securities

three

consecutive

Dividend

Periods

their equivalent fourth

and pays

declares

and sets aside

payment dividends

the

consecutive

Dividend

or

Period

its

equivalent.

of

c)

by

The term

will

such additional

directors

terminate,

and the

of

be

at

for for

after

the Company pays dividends

three

consecutive

Dividend

Periods

theor

or for

number

directors

will

decreased

two,

the

first

annual

meeting

of

shareholders
their

equivalent

and declares

and pays

sets aside

payment

dividends

on

Series

Preferred Stock

and any Voting Parity Securities

the fourth

consecutive

Dividend

130888.1
6

or

for

the Company pays dividends

on

the Series

Preferred

and any Voting

total

of

to

of

If

to

be

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00149

CONFIDENTIAL

or

or,

of

Period
After

equivalent

earlier,

upon the redemption


terminates,

all

its

if

Series

J Preferred Stock. J the

of

the term

such additional

directors

the holders

of

the Series

be

Series

Preferred Stock

payment

six

have again not been paid


Periods.

or

Preferred

Stock

will

not

able

elect

additional

directors

unless dividends

declared

and set aside

for

future

Dividend

by

d)

Any

additional

director

elected

the holders

of

the Series

by

of

on for

to

J Preferred

Stock record

and the Voting

Parity

Securities

may

only

removed
and Voting

the vote

the holders
voting

of as

the outstanding

Series J Preferred Stock

Parity Securities,

at

together
called

single

and separate

class,

a meeting

of

the Company shareholders

As

for

as

six

Voting

Parity

Stock

by

by

have not been

paid

Dividend

Periods

or

for

that

purpose.

long

dividends

the Series J Preferred Stock


their

or

on

any any

equivalent,

of

vacancy holders
voting

created

the removal

any such director Preferred Stock

of

may

filled

only

the vote

of do
J

be

the

the outstanding

Series

and any Voting

Parity

Securities,

as

at

together

a single and separate

class,

the

same

meeting

at

which

such

removal

is

considered.

9.

to No

Section

Conversion
convert

Rights.

The holders

of

Series J Preferred

Stock

or

of

not have any rights

any such shares into shares

any other

class

series

of

securities

the Company.

at

Section Preferred Stock

10.

Certificates.

The Company may

its

option

issue the Series

without

certificates.

for

or

THIRD:
reclassification

This amendment does

provide

an

not

exchange,

of

cancellation

any issued shares.

of

FOURTH:
FIFTH:
Incorporation

The date

this

amendment's adoption

March

6,

is

2006.

to

This

amendment

Amended

and Restated

Articles

by

of

was

of

duly

adopted

the Board

Directors

the Company.

SIXTH:

No

shareholder action

was

required.

130888.1

of

the

of

of

be

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00150

CONFIDENTIAL

EXECUTED

this

day

of

March,

2006.

WASHINGTON

MUTUAL,

INC.

8y: Name: Robert


Title:

J.

Williams President

Senior

Vice

and Treasurer

130888.1

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00151

CONFIDENTIAL

EXHIBIT February 2006 Resolutions

D4
Forms
of Certificates

17357747

WMI

Assistant

Secretarys

Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00152

I
Perpetual Noncumulative

Series

FixedtoFloating

Rate

Preferred

Sbck
3

W
tR

to

97f+>reL v^3t

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A S

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lfTJ

President
or officer

other authorized

Secretary or other authorized

officer

Return

WMIPC_500002099.00153

CONFIDENTIAL

at

UPON WRlTTEN
WILL FURNISH RELATNE AUTHORIZED DETERMINED DETERMINE

of

REQUEST

TO THE SECRETARY

AT

[ insert address

time

issuance),

THE COMPANY

OF

THE HOLDER

THIS CERTIFICATE

WITHOUT

CHARGE THE AND


OF

DESIGNATIONS,

RIGHTS,

PREFERENCES,

AND

LIMITATIONS

APPLICABLE

TO EACH CLASS OR SERIES


LIMITATIONS

STOCK AND THE VARIATIONS VARIATIONS FOR FUTURE

IN

RIGHTS,

PREFERENCES,

FOR EACH SERIES, AND THE AUTHORITY


SERIES.

OF

THE BOARD

DIRECTORS

TO

THE SHARES REPRESENTED

BY THIS CERTIFICATE

ARE SVBJECf

TO THE RESTRICTIONS, MUTUAL,


INC.,

TERMS,

AND CONDITIONS
INVESTOR

OF A DEPOSIT AGREEMENT
LLC,

BETWEEN

WASHINGTON WILL

MELLON
DATED

SERVICES

AND HOLDERS

FROM TIME TO TIME OF DEPOSITARY


BE
WITHOUT

SHARES,

OF MARCH

7,

AS

2006.

A COpy OF SUCH DEPOSIT AGREEMENT


THIS CERTIFICATE

FURNISHED

TO THE

RECORD HOLDER SECRETARY

OF

CHARGE UPON WRlTTEN


time

REQUEST TO THE

at

OF THE COMPANY

AT

insert

address

of

issuance).

be

in

The

following according

abbreviations.

when laws

used

in as

the

of

on

the

inscription Additional

face

this

certificate,

shall

construed not

though
the
list.

OF
they

were

written

to as asas

or

in

out

full

applicable tenants tenants joint

regulations.

abbreviations

may
GIFT Uniform

be

also

used
-

though

the

ENT

entireties with right

under

to

TEN TEN
JT

COM TEN

in by

common

UNIF

MIN ACT
Gifts

Custodian Minors Act

lMinorl
lStatel

tenants

of

survivorship

in

as

not

and

tenants

common hereby
sells.

PLEASE INSERT
IDENTIFYING

For value

the

SOCIAL SECURITY Opt NUM. ER OF ASSIGNEE

OTH[

received,

undersigned

assigns

and transfers

unto

PLEASE

PRINT

OR

TYPEWRITE

NAME

AND

ADDRESS

OF

ASSIGNEE

_____________________________________

Shares
irrevocably constitutes

by

the

represented

within

Certificate.

and hereby

and appoints

to

Attorney

transfer

the

said

in

on

of

of

the

the

shares Dated,

books

withiw7lamed Corporation with fuU power _

subs~ itution

the

premises.

In

presence

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00154

CONFIDENTIAL

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00155

e T
ferred

ee

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an

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WMIPC_500002099.00156

CONFIDENTIAL

at

UPON WRITTEN
WILL FURNISH RELATIVE AUTHORIZED DETERMINED DETERMINE

of

REQUEST

TO THE SECRETARY

AT

[ insert address

time

issuance),

THE COMPANY OF

THE HOLDER

OF THIS CERTIFICATE

WITHOUT

CHARGE THE AND

DESIGNATIONS,

RIGHTS,

PREFERENCES,

AND

LIMITATIONS

APPLICABLE

TO EACH CLASS OR SERIES


LIMITATIONS

STOCK AND THE FOR EACH VARIATIONS


SERIES,

VARIATIONS

IN

RIGHTS, PREFERENCES,

AND THE AUTHORITY


SERIES.

OF

THE BOARD

OF DIRECTORS

TO

FOR FUTURE

THE SHARES REPRESENTED

BY THIS CERTIFICATE

ARE SUBJECT TO THE RESTRICTIONS, WASHINGTON MUTUAL,


INC.,

TERMS,

AND CONDITIONS
INVESTOR AS OF MARCH

OF A DEPOSIT AGREEMENT
LLC,

BETWEEN

MELLON

OF

at

in

of

AND HOLDERS FROM TIME TO TIME DEPOSITARY SHARES, DATED OF SUCH DEPOSIT AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY THE COMPANY AT [ insert address time issuance).
SERVICES

7,

2006.

A COpy

OF

OF

The

following- abbreviations.

when laws

used

in as

the

the

of

on

be

inscription Additional

face

this

certificate,

shall

construed not

though
list.

they

were

written

to as asas

or

in

out

full

according

applicable tenants tenants joint

regulations.

abbreviations

may GIFT
Uniform

be

also

used
-__

though
_

the

common
the
entireties

UNIF
under

Custodian Act

Girts

Minots

in

TEN

tenants

with

right

of

JT

survivorship PL!:

as

and

not

tenants

common

ASE

INSERT

SOCIAL SECURITY
NUMIEn

OR OTHER

For value

the

IDENTIFYING

0"

ASSIGNEE:

received,

undersigned

hereby

sells,

assigns

and transfers unto

PLEASE

PRINT

OR TYPEWRITE

NAME

AND

ADDRESS

OF

ASSIGNEE

_______________________________________

Shares irrevocably constitutes

by

the

represented

within

Certificate,

and hereby

and appoints

to

ttorney

transfer

the

said

on

of

of

the

the

shares Dated,

book8

within-named

Corporation

with

fuU power

substitution

the

in

premises.

In

presence

of

!. !.

to

TEN TEN

COM ENT

in by

MIN ACT

Minorl
Statel

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00157

CONFIDENTIAL

EXHIBIT E EXHIBIT E
Authorized Officers Authorized Officers

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00158

CONFIDENTIAL

Exhibit

Authorized Officers

Signature

Sophie

Hager Hume

First

Vice

President

Susan Taylor

First

Vice President

Cynthia

Holbrook

First

Vice

President

J.

Robert

Williams

Senior Vice

President

Peter

Freilinger

Senior Vice

President

Patricia

Schulte

Senior Vice

President

W.

Thomas

Casey

Executive

Vice

President

Charles Edward

Smith

First

Vice

President

of

remainder

page

intentionally

left

blank]

17357747

WMJAssistant

SecretGl)" s

Certificate

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002099.00159

CONFIDENTIAL

CONFIDENTIAL

Washington
Mutual

$ 500,000,000

Washington Mutual Preferred Funding Trust


to-

Fixed-

Floating

Rate Perpetual Non- cumulative

Trust Securities into Inc.


each

Automatically

Exchangeable

in

Specified Stock

Circumstances

Depositary Shares representing Preferred


The
Security, offered Fixed-to- Floating
collectively,

of

Washington Mutual,
$100,000 per security

II
(

Rate Perpetual

Non- cumulative

Trust

Securities, liquidation

preference Trust

Trust Trust),

the Trust

Securities), beneficial

Washington
interests

Mutual Preferred

Funding

II,

and

of

a Delaware
Rate

statutory trust

( the

in

hereby represent undivided


Series

ownership

C,

Company Preferred Securities), Washington Mutual Preferred Funding LLC, a Delaware limited liability company the Company). The Trust will have no assets other than the Series 2006- C Company Preferred Securities. The Trust will pass through dividends paid and redemption and liquidation payments made
Preferred Securities,

2006-

liquidation

preference

Series

2006- C

by

as

on

Trust

as if

by

will

of if,

Securities

be payable
rate

when,

and
until

declared

the

Companys Board

Managers

out

legally available thereafter, year,

funds,

on a non- cumulative
preference 15,

basis

an annual

6.665%

December
if

15,

2016 and

in

of

or,

commencing
Date).

March

2007,

each case, the next Business

Day

any such

day

is

15

on

LIBOR plus 1.7925% December each


(each,

the liquidation

per security,

quarterly

arrears

March 15, June 15, September


not a

USD and Business Day


month

in

on

on

3-

of

at

Dividend
Office

Payment

so

of

of

If

the

Thrift Supervision herein,

together

with

any successor
will

regulator,

the

OTS)

directs following

the

occurrence
a

as

an

15

Exchange Washington

Event

described

each Trust Security

be automatically exchanged
Fixed-to- Floating

for depositary

shares representing

like

amount

Mutual,
Series

Inc.

WMI) Series

Perpetual

Non- cumulative

Rate Preferred Stock.

or

in

in

at

In

of

to

to

accumulation

any undeclared

dividends the

with

respect

Dividend

Payment
the

Dates prior
Series

the

redemption

date.

Any redemption
Securities

be

Securities will be redeemable, whole part, the option the Company on the December 2016 and each tenth anniversary thereafter each a Ten- Year Date) a redemption price equal the sum $ 1,000 per Company Preferred Security plus ( any declared and unpaid dividends the redemption date. The Series 2006- C Company Preferred Securities will be redeemable, whole but not part, the option the Company on any Dividend not a Ten- Year Date upon the occurrence a Tax Event, Investment Company Act Event, a Rating Agency Event Payment Date that a Regulatory Capital Event ( each described herein) a redemption price equal the sum ( $ 1,000 per Company Preferred Security plus ( any declared and unpaid dividends the redemption date plus ( such event and related redemption occur prior the Dividend Payment Date December 2016, a Treasury- based make whole amount. The Company may also redeem the Series 2006- C Company Preferred Securities on any Dividend Payment Date that not a Ten- Year Date, whether before after December 2016, a redemption price equal the sum ( 1,000 per Company Preferred Security plus ( any declared and unpaid dividends the redemption date plus ( a make- whole, which will a Treasury- based make whole any redemption prior December 2016 and a month USD LIBOR-based make whole for any redemption after December 2016. each case, the redemption price will calculated without

The

2006-

C Company
occurring

Preferred

in

of

Dividend

Payment Date

to

of

in

in

at

of

to

i)

ii)

at

y)

z) if

to

x)

as

at

of

to

U. S.

in

or

to

of

to

to

i)

ii)

3-

U. S.

for

to

be

iii)

will

at

is

be

in to

subject
its

the

prior

approval

OTS.

The Companys
Covenant

right

redeem

2006-

is

C Company Preferred
or
group

also

limited

in

obligations

the

Replacement

Capital issued

described

this offering circular.

in

The
Trust

Trust

Securities

will

only

book- entry form.

Each

individual

purchaser

of

be

affiliated

purchasers
preference

that

acquires

in

at

Securities

the

initial

offering
will

must acquire

least

three

Trust

Securities

having

an aggregate
dealer quotation

of

liquidation

$300,000.

or

or

S.

U.

The The

Trust

Securities

not

listed

any securities

exchange

byor

be

on

automated the

system.

securities

offered

hereby are not insured

guaranteed

Federal Deposit Insurance Corporation you invest

any other

or

insurer

government

agency

or

instrumentality.

See
offered

Risk Factors beginning

page

18

a description

the

risk

factors

you should consider before

in

of

for

on

the

securities

hereby.

Offering

Price:

$ 100,000.00

per Trust Security

1933,

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES AS AMENDED ( THE SECURITIES ACT), AND ARE BEING OFFERED AND SOLD ONLY TO PERSONS THAT ARE BOTH
(

U. S.

ACT OF

IN

INSTITUTIONAL BUYERS WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND QUALIFIED PURCHASERS ( WITHIN THE MEANING OF SECTION a)( 51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED ( THE INVESTMENT COMPANY ACT)), RELIANCE ON AN EXEMPTION FROM REGISTRATION PURSUANT TO RULE 144A. PROSPECTIVE PURCHASERS OF TRUST SECURITIES ARE HEREBY NOTIFIED THAT THE SELLER OF THE TRUST SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. THE SECURITIES ARE NOT TRANSFERABLE EXCEPT ACCORDANCE WITH THE RESTRICTIONS DESCRIBED UNDER NOTICE TO INVESTORS. QUALIFIED

2(

to

IN

U. S.

The

of

Initial

Purchasers expect

deliver

the Trust

Securities

through

the

facilities

The Depository

Trust

Company and Euroclear

inN.

in

V.,

as

as

S.

of

A./

Bank

operator

the

Euroclear

System, and Clearstream Banking,

socit

anonyme,
13,

participants

The

Depository

Trust

Company,

each case against payment

New

York,

New

or

in

York,

on

about

December

2006.

Joint

Bookrunners

Credit Suisse

Goldman, Sachs

& Co.
Lehman
Co-Lead Managers

Brothers, Inc.

Morgan Stanley
Keefe, Bruyette

& Woods
Offering Circular

UBS
dated

Investment

Bank

December

6,

2006.

by

of

to

or

is

of

an

of

of

the Series 2006- C Company Preferred The Companys material assets consist Washington Mutual Bank WMB) as described herein. Dividends on the Series 2006- C Company Preferred
the

Company

Securities

distributions

and redemption

and liquidation

payments

on

the

Securities.

indirect interests

mortgages

and mortgage- related

assets

originated

or

in

of

by

of

a like amount $ 1,000 per security ( the

of

Fixed-to- Floating

Perpetual

Non- cumulative

acquired

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00001

CONFIDENTIAL

This offering circular

confidential.

You are authorized the securities

to

is

use this offering circular

solely for

the

in

of

of

purpose
University

considering
Inc.

the purchase

described

this

offering

circular.

WMI, WMB,

Street,

University

Street), the

Company, the
II

Trust,

Washington
with

Mutual

Home
I,
the

Equity

Trust I

Asset Trust

I),

2006-

OA1
no

WAMU

Asset Trust

and, together

Asset Trust

Asset

Trusts),
circular.

and The

other
Initial

sources

identified

herein have provided

the information
warranty,

contained

in

this offering

as

or

or

Purchasers

make
or

representation

express

to

implied,

the

in

or

accuracy

completeness

such information, and nothing contained

this

offering circular

by

be

shall

relied

upon

as,

a promise

representation

the

Initial

Purchasers.
disclose

You

may
of

not reproduce contents the


offering

in

in

or

or

or
the the the

of

is,

distribute

this

offering circular,

whole

part,

and you may not

any

the

or

this offering

circular

use any

information

herein for any purpose

other

than considering
delivery

by

of

purchase
circular.

the Trust Securities.

You agree

the foregoing

accepting

of

to

this

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY A CRIMINAL OFFENSE.
IS of
The
distribution jurisdictions this offering circular

and the offering and sale

of

the securities

offered

hereby

in

certain

may
II to

by

be

restricted
Initial

law.

WMI, WMB,

University

Street,

the Company, the Trust,


this

I,

Asset Trust
offering circular

Asset Trust

and the

Purchasers require persons into whose possession about and


invitation

circular

comes

inform

themselves

to

observe

any such restrictions. This offering

or

an

of,

to

does not

constitute

offer

an

purchase, would

any

of

the securities

offered

in

in

or

hereby

any

jurisdiction

which such

offer

invitation

be

unlawful.

to

Notwithstanding

anything

herein

the contrary, each investor

and each employee,

representa-

or

to

of

tive,

agent

any investor)

may
of

disclose

any and

persons, without limitation herein and


all

of

all

any kind, the

tax

treatment

and

tax structure

the transactions
that

contemplated

of

materials

any kind

or

to

( including

opinions

other

tax analyses)

are provided

the investors

to

relating

such tax

treatment treatment
extent

and tax

structure.

However, any information remain confidential


( and

to

relating the

the United States federal income tax sentence


will

or

tax structure

will

foregoing

not

apply) laws.

to

reasonably
tax

necessary

enable any person

to

comply with applicable

securities

purpose,
structure

treatment

means United States

or

federal

state

income tax treatment,

and tax

or

to

to

For this

means any

facts relevant

the United States federal

state

income tax treatment

of to

transactions

contemplated the issuer

herein but does not include information relating any assets underlying the securities,

the identity
their

of

the issuer
affiliates

or

of

of

the

securities,

any

respective

that

are offering the securities.

or

No
tions

person

has been authorized

to

to

give

any information

make any

representations

other

in

or

this offering

circular,

if

than those contained

and,

given

made, such

or

information

representaStreet,

of

must not be

relied

upon as having been

authorized
II.

by any

WMI, WMB,

University

or

Company, the
sale

Trust,
will

Asset Trust

Asset Trust

Neither the delivery any implication

of

this offering

circular

of

nor any

hereunder

create,

under any circumstances,


University Street,

that there

has been no change

the

affairs

the Trust, Asset Trust

Asset Trust

or

is

of

II to

WMI,

WMB,

the Company, contained

since
its

the date hereof

that the

information

herein

correct

as

any time subsequent

date.

or

of

in

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00002

CONFIDENTIAL

NOTICE TO

NEW HAMPSHIRE RESIDENTS ONLY

EFFECTIVELY

REGISTERED

CONSTITUTES

FINDING

OR A PERSON LICENSED THE STATE OF NEW HAMPSHIRE BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY
IS IN IS

DOCUMENT FILED UNDER RSA 421- B TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
IT IS IN

CONNECTION WITH THIS OFFERING, CREDIT SUISSE SECURITIES USA) LLC, GOLDMAN, SACHS & CO., LEHMAN BROTHERS INC., AND MORGAN STANLEY & CO. INCORPORATED, MAY OVER- ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORT(

MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL FOR A LIMITED PERIOD OF TIME AFTER THE ISSUE DATE. HOWEVER, THERE MAY BE NO OBLIGATION ON CREDIT SUISSE SECURITIES
ING THE
(

USA) LLC, GOLDMAN, SACHS & CO., LEHMAN


AT

IN

CO. INCORPORATED

UED

ANY

TIME,

BROTHERS INC., AND MORGAN STANLEY & TO DO THIS. SUCH STABILIZING, COMMENCED, MAY BE DISCONTINAND MUST BE BROUGHT TO AN END AFTER A LIMITED PERIOD.
IF

IS

ii

IS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A HAS BEEN FILED UNDER CHAPTER 421- B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY
LICENSE

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00003

CONFIDENTIAL

NOTICE TO INVESTORS
to
Because
making any the following restrictions, purchase,
resale,

purchasers

are advised

consult

legal

counsel

prior

or

offer,

pledge

of

other

transfer

the securities offered hereby.

of

Representations

Purchasers

of

Each purchaser

Trust Securities

( including

the registered

holders and beneficial

owners

of of to

to
the

of

as

of as

be

of

to

Trust Securities

they exist from time

time, including

a result the time

transfers) will

deemed

in

as

as

have represented and agreed

follows,

each case

of

purchase:

A)

i) is

the purchaser

qualified

institutional

buyer within the meaning

of

Rule 144A
that

is

Institutional

Buyer), (

Trust Securities

have not been and

will

not

be

ii)

promulgated under the Securities

Act ( a Qualified

aware

the

registered

under the Securities

Act and that the exemption

in

sale

the Trust Securities

being

made
or

reliance

on Rule 144A

or

to it is

of

another

of of

iii)

from the registration requirements


for

the Securities

Act and
qualified

is

acquiring

such Trust Securities

own account

or

its

the account

one

more

institutional

buyers;

B)

the purchaser

qualified

purchaser

within

the meaning
(

Section

2(

i) is

of

a)(51)

to
the for

Investment

Company Act and the


that the Trust will not

rules

and

regulations

thereunder

Qualified

Purchaser),

ii)

aware

be

registered

under the Investment


iii)

Company Act

in z)

is

reliance

in

3(

7)

on the exemption
its

set forth

Section

c)(

thereof

and

is

acquiring

such Trust Securities

or

or

of

own account
sole

the account

one

more

qualified

purchasers

as

to

which the purchaser

exercises

investment

discretion,

as the case may be;

C)

x)

either

the purchaser

not

employee

benefit

plan

defined

Section

the Employee

Retirement

Income

Security

Act

1974,

amended
that

y)

of as or

of to

of

is

that

subject

Title

ERISA,

plan,

account

other

arrangement
( the

of or is
a

subject
(

Section 4975

the Internal Revenue assets include

Code

of

1986,

amended

Code), reason

whose

underlying

plan assets

any

the foregoing

by

of

investment
Benefit

in

by

or

an

employee

benefit

plan

other

plan

such entity ( each

of

the foregoing,

( in

3( 3) i)

as

of

of

as

a)

an

is

ERISA)

any entity

Plan

or

b)

is

Investor),

the purchaser

an insurance company general account

that represents,

at

warrants
securities,

that,

the time

acquisition

the period

it

and covenants

of

and throughout

holds the

x) it is

of

eligible for

and meets the requirements

Department

of

Labor Prohibited

y)

z) it of

Transaction

Class Exemption

95-60,

less

than

25%
(

of

the assets

such general account are

or

of

or is

represent)

assets

Benefit

Plan Investor

and

not a person

who

has discretionary investment

or

to

of

authority

control

with

respect

the assets respect

the Trust

any person who provides

for

or

C.to F. R.

or

advice

a fee ( direct

indirect) with

such assets,

any

of

affiliate

such a person

1)

excluded
plan,

ii)

and would not otherwise

under 29
foreign

2510.3- 101(

and

a)

be

f)(

either

the

or

purchaser

not a governmental

plan,

church plan

other

plan subject

to
the

is

law that Law)

or

to

of

or is

of

substantially similar

the Section

406

ERISA

Section
will

4975

the Code

in (
all

Similar

b)

or

of

its

purchase

and holding Law;

the Trust Securities

not constitute

result

a non- exempt

violation

of

Similar

D)

the purchaser

not purchasing

the Trust Securities

with

a view
Act;

to is

is

the resale,

in

or

of

distribution

other

disposition thereof

violation

the Securities

E)

neither

the purchaser

nor any account


for

for

which the purchaser

acquiring

of

Trust Securities

will

hold such Trust Securities

the benefit

any

other

person and the


for

purchaser
will

and each such account


participation interests

be

will

the

sole beneficial

owners thereof
into

purposes and

in

not

sell

the Trust Securities


will

or

enter

any other arrangement

pursuant

which any other person

be

entitled

an

in

to

to

interest

the distributions on the

Trust Securities;

iii

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00004

CONFIDENTIAL

F)

the certificates

evidencing

the

Trust Securities

will

bear a legend

to

the following

effect:

IS

THIS SECURITY TIVE TRUST

ONE OF THE
( II

FIXED- TO- FLOATING

RATE PERPETUAL

NON-CUMULAMUTUAL

SECURITIES

TRUST SECURITIES)
(

ISSUED BY WASHINGTON
U. S.

PREFERRED FUNDING TRUST THE TRUST). THE ISSUER OF THIS SECURITY HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT

E)

UNDERSTANDS
IN

THAT THE TRUST MAY RECEIVE A

POSITIONS

THIS SECURITY

LIST OF PARTICIPANTS HOLDING FROM ONE OR MORE BOOK-ENTRY DEPOSITARIES.

IN

EACH PURCHASER OF THIS SECURITY OR ANY BENEFICIAL INTERESTS HEREIN WILL BE DEEMED TO REPRESENT THAT AGREES TO COMPLY WITH THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND THE AMENDED AND RESTATED TRUST AGREEMENT OF THE TRUST THE TRUST AGREEMENT), AND WILL NOT TRANSFER THIS SECURITY OR ANY BENEFICIAL INTERESTS HEREIN EXCEPT TO AN ELIGIBLE PURCHASER WHO CAN MAKE THE SAME REPRESENTATIONS AND AGREEMENTS ON BEHALF OF ITSELF AND EACH ACCOUNT FOR WHICH PURCHASING. ANY PURPORTED TRANSFER OF THIS SECURITY OR ANY BENEFICIAL INTERESTS HEREIN THAT BREACH, AT THE TIME MADE, OF ANY TRANSFER RESTRICTIONS SET FORTH THE TRUST AGREEMENT WILL BE VOID AB INITIO. AT ANY TIME THE HEREIN OR TRUST DETERMINES GOOD FAITH THAT A HOLDER OR BENEFICIAL OWNER OF THIS SECURITY OR BENEFICIAL INTERESTS HEREIN BREACH, AT THE TIME GIVEN, OF ANY OF THE TRANSFER RESTRICTIONS SET FORTH HEREIN, THE TRUST SHALL CONSIDER THE ACQUISITION OF THIS SECURITY OR SUCH BENEFICIAL INTERESTS VOID, OF NO FORCE AND EFFECT AND WILL NOT, AT THE DISCRETION OF THE TRUST, OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE TRUST, ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT ( THE TRANSFER AGENT), OR ANY OTHER INTERMEDIARY. ADDITION, THE TRUST OR THE TRANSFER AGENT MAY REQUIRE
IT
(

IN

TRANSFER AT LEAST $100,000 LIQUIDATION PREFERENCE OF TRUST SECURITIES ( e., AT LEAST ONE TRUST SECURITY) THE CASE OF EACH SUBSEQUENT INVESTOR AND
i.

IN

COMPANY ACT OF 1940, AS AMENDED THE INVESTMENT COMPANY ACT), AND THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED THE SECURITIES ACT), AND NEITHER THIS SECURITY NOR ANY BENEFICIAL INTERESTS HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A PERSON WHO BOTH A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT QUALIFIED INSTITUTIONAL BUYER) AND A QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION a)(51) OF THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER QUALIFIED PURCHASER) ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A PERSON WHO BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER ( AN ELIGIBLE PURCHASER) AND EACH SUCH PERSON AND ACCOUNT FOR WHICH SUCH PERSON PURCHASING NOT A BROKER- DEALER THAT OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN $25 MILLION SECURITIES OF ISSUERS THAT ARE NOT ITS AFFILIATED PERSONS, NOT A PLAN PARAGRAPH a)(1)( D) OR ( a)(1)( OF RULE 144A, OR A REFERRED TO TRUST FUND REFERRED TO PARAGRAPH a)(1)( OF RULE 144A THAT HOLDS THE INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ASSETS OF SUCH A PLAN, ARE MADE BY THE BENEFICIARIES OF SUCH PLAN, WAS NOT FORMED FOR THE PURPOSE OF INVESTING THE TRUST, WILL HOLD LEAST $300,000 LIQUIDATION PREFERENCE OF TRUST SECURITIES ( LEAST THREE TRUST SECURITIES) AND, TRANSFERS ANY INTEREST ANY TRUST SECURITY, WILL TRANSFER AT LEAST $ 100,000 LIQUIDATION PREFERENCE OF TRUST SECURITIES ( AT LEAST ONE TRUST SECURITY) THE CASE OF EACH INITIAL INVESTOR, AND WILL HOLD AND
( (

IS

U. S.

2(

IS

A)

IS

IS

B)

IF

D)

IN

C)

F) E)

IN

i)(

IN

i)(

i)(

e.,

IF

IN

IT

AT

i.

AT

IN

IS

IN

IT

IS

e.,

i.

IN

IS

iv

IN

IF

IN

IS

IN

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00005

CONFIDENTIAL

SUCH ACQUIRER OR
CIAL INTERESTS

BENEFICIAL

OWNER TO

SELL THIS SECURITY

OR SUCH

BENEFI-

TO AN ELIGIBLE PURCHASER.
I)

OTHER

IS

ENTITY AS

TRANSFER,

PLEDGE,

REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO

ANY PERSON WRONGFUL INASMUCH AS THE REGISTERED CO., HAS AN INTEREST HEREIN.
G)
for
(

IS

IS

PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC), TO THE TRUST OR DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION THE TRANSFER AGENT, AND ANY CERTIFICATE ISSUED REGISTERED THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED MADE TO CEDE & CO. OR TO SUCH REPRESENTATIVE OF DTC ( AND ANY PAYMENT UNLESS THIS SECURITY
IS ( IS IN IN

IS

IN B)

OR TRANSFERRED TO: ( AN EMPLOYEE BENEFIT OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ERISA), THAT SUBJECT TO TITLE OF ERISA A PLAN, ACCOUNT OR OTHER ARRANGEMENT THAT SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ( THE CODE), OR ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN SUCH ENTITY ( EACH OF THE FOREGOING, A BENEFIT PLAN INVESTOR), EXCEPT FOR AN INSURANCE COMPANY GENERAL ACCOUNT THAT REPRESENTS, WARRANTS AND COVENANTS THAT, AT THE TIME OF ACQUISITION AND THROUGHOUT THE PERIOD HOLDS THE SECURITIES, ( ELIGIBLE FOR AND MEETS THE REQUIREMENTS OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 95- 60, ( LESS THAN 25% OF THE ASSETS OF SUCH GENERAL ACCOUNT ARE OR REPRESENT) ASSETS OF A BENEFIT PLAN INVESTOR AND ( NOT A PERSON WHO HAS DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE TRUST OR ANY PERSON WHO PROVIDES INVESTMENT ADVICE FOR A FEE ( DIRECT OR INDIRECT) WITH RESPECT TO SUCH ASSETS, OR ANY AFFILIATE OF SUCH A PERSON AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 2510.3- 101( F)(1). ADDITION, EACH PURCHASER OR TRANSFEREE OF THIS SECURITY WILL BE REQUIRED TO REPRESENT AND WARRANT ( OR, CERTAIN CIRCUMSTANCES, WILL BE DEEMED TO REPRESENT AND WARRANT) THAT, FROM THE DATE OF ACQUISITION AND THROUGHOUT THE PERIOD OF HOLDING THIS SECURITY, EITHER ( NOT A GOVERNMENTAL PLAN, FOREIGN PLAN, CHURCH PLAN OR OTHER PLAN SUBJECT TO LAW THAT SUBSTANTIALLY SIMILAR TO THE SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE SIMILAR LAW) OR ITS PURCHASE AND HOLDING OF THIS SECURITY WILL NOT CONSTITUTE OR RESULT A NON- EXEMPT VIOLATION OF SIMILAR LAW.
PLAN AS DEFINED

NO SECURITY MAY BE PURCHASED


IN

SECTION

3( 3)

IS

IS

( III)

IN

IT

IT

I)

IS

III)

IT

IS

C. F. R.

IN

A)

IS

OWNER

IT

IS

HEREOF,

CEDE &

the

purchaser

and each account


that

which

it is

purchasing:

is

i)

not a broker- dealer

owns and

on

invests

a discretionary basis less than

in

$25

million

securities

of

unaffiliated

issuers;

as

to as

IN

II)

ii)

not a participant- directed employee

plan,

such

a 401(

plan,

referred

E)

in

of D)

F)i)(

paragraph

i)(

( a)(1)(

( a)(1)(

Rule 144A,

trust

fund referred

paragraph

( a)(1)(

i)(

Rule 144A that holds the assets

of

such a plan;

iii)

was not formed

for

the purpose

in

of

investing

the Trust;

at

of

in

or

or

of

will

least

liquidation

Trust Securities

i.

hold

$ 300,000

preference

e.,

at

iv)

least

in

three least

Trust Securities)

if it

and,

transfers

any interest

any Trust Security,

will

transfer

at in

of

liquidation
initial

Trust Securities

i.

$ 100,000

at

preference

e.,

least

one

Trust Security) liquidation

of

the case

each

investor,

and

will

hold and transfer

at

least

$ 100,000

to

is

k)

II)

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00006

CONFIDENTIAL

in

of

at

of

subsequent

investor;

i.

preference

Trust Securities

( e.,

least

one Trust Security)

the case

each

in

of

will

provide

notice

the

transfer

restrictions

described

this

Notice

to

v)

Investors

to

any subsequent
vi)

transferees;

acknowledges

that

the Trust may receive a

list

participants holding

positions

the Trust Securities

from one

or

more book-

entry depositaries;

and except

or

(vii)

may

not transfer the Trust Securities

to
(

beneficial

interests therein

transferee

who can make the same


Investors

representations

and agreements as
Trust
for

set forth

in

this

to

Notice Trust

and the Amended

and Restated

Agreement which

of

the Trust

the

Agreement) on behalf acknowledges


that

itself

and each account

it is

of

purchasing.

The purchaser
involving

in

the Trust Securities

are being offered only


Act.

transaction

not

any public offering within the meaning


will

of

the Securities

The

Trust Securities

have not
will

been and
registered resell,

not be registered under the Securities

Act and the Trust has not been and

not

if in

under the Investment

Company

Act,

and,

the future the purchaser

decides

to

offer,

or

or

be is
under

pledge

otherwise
offered,

transfer

the Trust Securities

any interest therein, such Trust Securities

interest

may be

resold,

pledged

otherwise

in

or

transferred

only

accordance
that

with

the legend

on such

Trust Securities

described

above. The purchaser

acknowledges

no

representation

or

as

to

made by

the Trust, the Company

the

Initial

Purchasers

the

of

availability

any exemption

or

the Securities

Act

any state securities

laws for resale

of

the Trust Securities.

Forced Sale Any


Investors

of

Securities

in

in

transfer

Trust Securities

breach

the transfer restrictions

set forth

this

Notice will

no

be

and the Trust Agreement

will

be

ab

of

force

and

effect,

will

void

initio,

and

not

to

to

to

operate
its
Trust,

transfer

any
Agent

rights

the transferee,

notwithstanding

any instructions

the contrary

to
any the

or

Transfer

any other intermediary.

in

The purchaser

of in

or

in its

agrees

that

the event that the Trust

Transfer

Agent determines

good

or

of

at

to
the

of

of

faith

that

a holder

beneficial

owner

the Trust Securities

breach,

the

time given,

or

the representations

agreements set forth above, the Trust shall consider

the acquisition

of

the

or

no

of

Trust Securities

beneficial

interests therein void,

force

and effect and

at

will

not,

the discretion

to

to

the

Trust,

operate

transfer

any rights

the transferee

notwithstanding

any instructions the Trust

or

contrary Transfer beneficial

the Trust, the Transfer Agent

any other intermediary.

or

to

In

addition,

the

or

to

of

Agent

may

require

such acquirer

beneficial

owner

transfer

such Trust Securities

to

to

interests therein

transferee

acceptable

the Trust who


Notice

to

is

able

and who does make


such transfer,
including

in

of

the representations

and agreements set forth

to

all

this

Investors.

Pending

such holder not limited

will

deemed not

the holder

such Trust Securities

for

be

be

to

of

any purpose,

or

to

of of

receipt

dividend

and redemption

payments

such Trust Securities

or

on

to

distributions

upon the

liquidation

the Trust, and such holder

will

deemed

have
its

interest

whatsoever

as

such Trust Securities

except

otherwise

required

redeem

as

or

to

sell

interest

therein

described

in

this

paragraph.

Investment

Company

Act

3(

7)

reliance

on Section

c)(

under the Investment

Company Act

Section

3(

In

c)( 7)), Act.

the Trust
rely

as

to

has not registered

an investment

company pursuant

the Investment
all

Company

To

on

3(

Section

c)(7),

the Trust must have a Purchasers

reasonable belief that


transferees)

purchasers

of

the Trust Securities

at

( including their

the

Initial

and subsequent

are qualified

purchasers
for

the time

of

purchase

such

securities.

The

Trust will establish

a reasonable

belief

purposes

3(

7)

by

of

Section
set forth

c)(

based upon the representations

deemed made

the purchasers

the securities

of

under

Representations

Purchasers

above, the covenants

and undertakings

of

the

vi

as

of

of

in

be

no

to

of
but

is

or

in

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00007

CONFIDENTIAL

of

to

Trust referred

below and the agreements

the

Initial

Purchasers

to

relating

the private placement

of

the

securities

pursuant

Rule 144A referred

under

Plan

of

to

to

Distribution.

Reminder Notices

or

an

Whenever

the

Trust

sends

annual report
( each,

other

periodic

report

holders

of of

to

the Trust Secuthe Trust Secu-

it

rities, rities.

will

also send a reminder notice


will

Reminder

to

Notice)

the holders

Each Reminder Notice

state that (

each holder

in as

or

an

of

i)

Trust Security

interest

Trust Security)

must

able

make
of

the representations

set forth

above

B)

in

be

to

paragraphs
ii)
(

and

G)

3(

( (

under

Representations
in to
and

Purchasers ( the

7)

c)(

Representations),

the Trust Securities

3( or

to

to

interests

the Trust Securities) are transferable

only

purchasers

deemed

have

made
the the

the

7)

c)(

Representations

have satisfied the other transfer restrictions

applicable

Trust Securities, Trust Securities)


( exercisable

iii)

any prospective

transferee

the Trust Securities


purchaser,

interest

determined not

be

to

is

a qualified

then the Trust and (

will

have the

in to

or

an

of

if

right

in of its

to

to

iv)

sole discretion)

refuse

honor such transaction, not


treat
(

if

any

security

holder

in

or

an

any

holder

interest

a security)

determined

be

to

is

a qualified

purchaser,

then the Trust


null

in

to

will

have the right

to its

( exercisable

sole discretion)

the transfer

to

such purchaser

and

void

and

require

such purchaser

sell

securities price

and

to

of

all

all

its

interests therein) Trust will

a transferee

by

at

designated

the Trust
periodic

the then current market

therefor.

The

send a copy

of to

each

or

to

annual

other

report ( and

each Reminder

Notice)

DTC

with

a request that participating

in

or

organizations interest

DTC

DTC

Participants)

forward them

the security holders

holders

in

Trust Securities.

DTC

Actions

with

respect

to

the Trust Securities take the following steps

The

Trust will direct

DTC

in

to

connection

with

the Trust Securities: the

in

in to

include

the

3c7

marker and,

lieu

the

GABS

or

of

marker

otherwise, additional

GRLS

an
marker the
for contain

to

the

DTC

20- character

security descriptor,

and the 48- character


are limited

descriptor

in

to

Trust Securities

order

to

indicate

that sales

Qualified

Purchasers;

by

to

cause

i)

each

physical security electronic

DTC

delivery order ticket

delivered

DTC
order

to

purchasers
delivered

of

the

20- character

descriptors

ii)

and

each

DTC

by

delivery

ticket

DTC

in

to

to

purchasers

form

contain
will

the 3c7 and

GRLS
of

indicators

and the

related

user manual for participants,

which

contain

description

relevant

restrictions;

in or

of

to

to

an

to

send, on

prior

the closing date

this

Offering,

Important Notice

of

all

DTC
instruct

Participants

connection
( but

with this Offering

the Trust Securities.

The

Trust

may
the

DTC

to

from time
Notice;

time

not more frequently

than every six months)

to

reissue

Important

in

3(

include

the Trust

DTCs

Reference

Directory

Section

c)(

7)

to

of

offerings;

in

in

to

of

of

all

include

confirms

trades

the

Trust Securities

DTC, CUSIP numbers


and

with

to

fixed field

attached

the CUSIP number that has the

3c7

GRLS markers; and

deliver

the Trust from time

time a

list

DTC

in

an

to

to

to

of

all

Participants holding

interest

the

securities.

Euroclear

Actions

with respect

to

the Trust Securities

as

S.

V.,

N.

of

The

Trust will instruct

Euroclear

Bank

A./

operator

the Euroclear

System

clear),

take the following steps

in

to

connection

with the

Trust Securities:

reference

144A/

c)( 7)

as

part

the security

name

in

3(

to

of

the Euroclear

securities

database;

vii

Euro-

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00008

CONFIDENTIAL

in

each

daily securities

balances

report

and daily transactions

to

report

Euroclear

Participants

holding

positions

the Trust Securities,

include

144A/

c)(7)

the securities

name

for

in

in

3(

to

the

Trust Securities;

periodically the

and

least annually)

send

the Euroclear

Participants

holding

positions

an

Trust Securities

electronic

Important

Notice

outlining

the restrictions

applicable

3(

c)(

7)

securities;

to

to

to

of

deliver

the Trust from time

time,

upon
and

request,

all

its

list

Euroclear

Participants

holding

an

in

interest

the Trust Securities;

in

in

c)(

include

the
its

marker

the

name
all

the Trust Securities accepted


within

by

3(

7)

of

to

lists

distributed

Euroclear

monthly

to

participants

showing

securities

the Euroclear

securities

database.

Clearstream

Actions

with

respect

to

the Trust Securities


socit

The
following

Trust will instruct

Clearstream Banking,
with

anonyme

to

Clearstream),

take the

in

steps

connection

the Trust Securities:


part

reference

144A/

7)

the security

name

in

c)(

as

3(

to

of

the Clearstream securities

database;

in

each

daily portfolio report

and

to

daily

settlement
144A/

report

Clearstream Participants the securities

holding

in

in

3(

to

positions

the Trust Securities,

include

c)(7)

name

for

the

Trust Securities;

to to
the

in of by in

at

to

to

periodically the

and

least annually)

send

to

at

to

the Clearstream Participants


outlining

holding

positions

an

Trust Securities

electronic

Important

Notice

the restrictions

applicable

3(

c)(

7)

securities;

to

to

to

of in

deliver

the Trust from time

time,

upon
and

request,

all

its

list

Clearstream Participants

in

an

holding

interest

the Trust Securities;

by 7)

in

3(

c)(

to

include

the

marker

the

name
to to its

of

the Trust Securities showing


all

the continuously accepted

updated
within

list

made

available

Clearstream database

participants include the

securities

in

3(

7)

Clearstream securities
Trust Securities.

and

c)(

marker

the

name

of

the

Bloomberg Screens, The


regarding

etc.

7) to

Trust will request,

from time

time,

third-

party

vendors

to

all

include

appropriate screens

legends

3(

Rule 144A and Section Without


limiting the

c)(

restrictions

on the

on

Trust Securities
will

maintained

such vendors.
include

foregoing,

the

Initial

Purchasers

request that Bloomberg, about the securities

on

the following

each Bloomberg screen containing

information

as

applicable:

of

the

bottom

the

Security

Display

page

describing

the Trust Securities

should state:

Issd

under 144A/ 3c7 and


the

GRLS;
for

Security

Display

page

the Trust Securities

should have a flashing red indicator

stating

Additional

Note Pg;

to

such indicator
the

should

link

an

Additional

Security

Information

page, which should state that from registration under

in

Trust Securities

are

being offered

reliance

on the exception
(

as

of

of

Rule 144A are


ii)
(

the Securities
institutional

Act

1933,

amended

the Securities

to

Act),

persons that
Act,

in

as

i)

qualified

buyers

defined

Rule 144A under the Securities

and

2(

qualified

purchasers as defined

of

under Section

a)(51)

the Investment

Company Act

as

1940,

amended;

and

viii

L. P.

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00009

CONFIDENTIAL

the

Disclaimer

pages for the Trust Securities under the Securities

should state that the securities

have not been

as

be

of

and

will

not

registered

Act

1933,

amended,

and Washington

Mutual Preferred

Funding
(

II

Trust

has not been registered

under the Investment

Company Act Rate


Perpet-

as

of

1940,

amended

the

Investment

Company
be
not

Act),

and the

Fixed- to-Floating

or

ual

Non- cumulative

Trust Securities

may
the

offered

sold absent

an

applicable

exemption

from registration requirements and any such offer and sale

these securities

must

3(

7)

of

accordance

with

Section

c)(

Investment

Company

Act.

CUSIP
for

The
field

Trust will

cause each
3c7,

CUSIP obtained

a Global

Security

have

an

to

attached

fixed

that

contains

GRLS

and 144A indicators.

Legends

in

of

The

Trust will

not remove

the

legend set forth

Representations

Purchasers

at of

any time.

SPECIAL

NOTE REGARDING

FORWARD- LOOKING STATEMENTS


incorporated herein by reference
contain certain

This offering circular and the documents


forward- looking

of

statements within the meaning

the Private Securities and other


that

Litigation matters.

Reform Act

1995

with

respect

financial

condition,

results

operations

Statements

in
the

of

to

this

offering

circular,

including

those incorporated
for

herein

by

reference,

are not historical facts are

by

of

forward- looking

statements

the purpose

the ( the

safe

harbor provided
Act)

Section

21E

as

of

Securities Act.

Exchange

Act

1934,

amended

Exchange
the
fact

and Section 27A

of

the Securities

Forward-looking
facts.

statements
often

can be identified

by

that

they do not relate

to

strictly

historical

or

current

They

include

words, such as

expects,

anticipates,

intends,

plans,

or

or

or

of to as as

believes, will,

seeks,

estimates

words

of

similar

meaning,

future

conditional

verbs,

such

or

should,

could

may.

as

or

Forward-looking statements provide

WMIs

WMBs

applicable)

expectations performance.

or

predictions their nature,

or

of

future conditions,

events

results.

They are not guarantees

of

future

By

to

in

be

of

forward- looking

statements

are subject and

risks

and uncertainties.

These statements

speak only

do

the date they are made.


reflect

WMI

not undertake

to

WMB
or

update forward- looking statements

the impact

of

circumstances

events that arise after the date the forward- looking

statements
(

were made. There are a number


applicable) control, that

factors,

many

which are beyond

WMIs

WMBs

or

could cause actual conditions,

events

to

as

or

of

of

results

differ

significantly

from

in

in

those described

the forward- looking

statements. The factors are generally

described

WMIs

as

applicable)

most recent Form 10-

K/

WMBs

and Form 10-

under the caption

Risk

Factors.

WHERE YOU CAN WMI


Securities
files files

FIND

MORE INFORMATION
proxy statements and other information with the
that

annual,

quarterly

and

current
( the

reports,

and Exchange Commission


for at

SEC).

You may read and copy any document

WMI
at

with

the

SEC
to

In D. C.

in

the SECs public


further information

reference

room

Washington, room.

Please

call

the

1-

800- SEC-0330

on the

public

reference

addition,

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reports,

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are available

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the SECs web site about

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also inspect

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of

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York Stock Exchange,

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by

This offering circular incorporates

reference

certain

information

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that

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is

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The

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considered

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circular

should be read with the same care. have been incorporated

When WMI
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updates the information contained


future
filings

documents

by

reference

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the SEC, the information updated

incorpo-

in

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rated

reference

this

offering

circular

considered

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automatically

and superseded.

ix

or

of

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WMIPC_500002117.00010

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in

or

of

In

to

other

words,

the case

conflict

inconsistency

between information with respect

WMI
circular,

in

contained

this offering

circular

and information incorporated

by

reference

into this offering


later.

in

you should rely reference Sections

the information
listed

contained

the document

that
files

was

filed

WMI

incorporates

or

d)

c),

of

it

the documents 13( a), 13( 14,

below and any documents the Exchange Act

with

the

SEC
is

in

the future under

15(

until

this Offering

completed:

9,

Annual Report on Form 10-

filed

on August

2006

to

K/

relating

the year ended

December
Quarterly

31, 2005; Report on Form 10Quarterly

filed

August 10, 2006 relating

to

Q/

the quarter ended March

31,

9,

2006 and

Reports

filed

August

2006

to

on Form 10- Q

relating

the quarter

ended

9,

June 30, 2006 and 2006; and

filed

November

2006

to

relating

the quarter ended September

30,

8-

on

Current Reports

on Form

filed

January 18, 2006, January 23, 2006, February

7,

2006,

February 21, 2006, February 27, 2006, March


information
(

9,

2006, April 10, 2006

( other

than the

furnished

under Item 7.01 including

Exhibit 99.1), April

18, 2006, April 24, 2006 June 28, 2006,

other

than the information

furnished under Item 7.01 including

Exhibit 99.1), 18,

July

19, 2006,
files

August 24, 2006, September


quarterly

18, 2006 and October

2006. the OTS. You


with

WMB
OTSs

annual,

and current reports and other information


information that

with

may
at in
the

read and copy these reports and other non- confidential

WMB
at

files

the

OTS

N.

In

at

offices
filings

1700

D. C.

Street,

W., Washington,

20552.

addition,

WMBs
http://

most recent

to

periodic

with

the

are available

the investors

and then

clicking

the

Fixed Income

button.

by

This offering circular incorporates

reference

certain

information

that

WMB

files

with

the OTS. and


that

by

is

to

The

information

incorporated

reference

considered

be a

part

of

this offering

circular

should be read with the same care. have been incorporated

When

WMB
is

in

updates the information contained


future
filings

documents

by

reference

by making

with

the OTS, the information incorpoupdated

in

by

to

rated

reference

this

offering

circular

considered

be

automatically

and superseded.

in

or

In

of

other

words,

the case

conflict

inconsistency

between information with respect

in

contained

this offering

circular

and information incorporated

by

reference

into this offering


later.

to

WMB
circular,

in

you should rely on the information

contained

the document

that

was

filed

WMB
to in

incorporates

it

by reference the documents

listed

below and any documents

files

with

the the

or

d)

or

of

Sections

13( a), 13( c), 14,


this

15(

the Exchange

Act

regulations

of

OTS OTS

the future under


substantially

is

similar effect until

Offering

completed:

Annual Report on Form 10-

filed

on August 15, 2006

to

K/

relating

the year ended

December
Quarterly

31, 2005; and

on

Report

Form 10-

filed

August 15, 2006 relating


filed

to

Q/

the quarter ended March

31,

on

2006, Quarterly Reports June 30, 2006 and 2006; and


filed

Form 10- Q
14,

August 14, 2006 relating

to

the quarter ended

November

2006

to

relating

the quarter ended September 30,

8-

on

6,

Current Reports
April

on Form

filed

February 27, 2006, March

2006, March

7,

2006,

10, 2006, April 24, 2006, June 26, 2006 and August 14, 2006. herein by reference
quarterly reports Financial certain other information that financial

This offering circular also incorporates

WMB
Report).

to

to

submits

the OTS.

WMB

submits

the

OTS

regarding
(

WMBs

condition

and

operations
Thrift

on OTS Form 1313

entitled

Thrift

Report

each, a

Thrift

Financial

of

Each

Financial

Report consists

a Consolidated Cash Flow

Statement

of

Condition,

Consolidated Requirements
Thrift

Statement

of

Operations, Consolidated

Information,

Consolidated

Capital

as

of

of

and

other

supporting Reports

schedules

the end

to

the period

which the report relates. The

in

by

Financial regulatory

are prepared

accordance
all,

with regulatory instructions

issued

the OTS. These


principles

in

instructions

most, but not

cases follow generally accepted

accounting

the

ir

OTS

at

WMIs website

www. wamu. com/

by

on

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00011

CONFIDENTIAL

or

United States
Financial regulatory financial

GAAP)

the opinions and statements Board. While the


Thrift

the Accounting Reports

Principles

Board

or

of

the

Accounting documents,

Standards

Financial

are supervisory

and

do

not primarily accounting

documents,

and

not provide

a complete range

disclosure financial

about

WMB,

the reports nevertheless

provide

important information concerning


Thrift

WMBs
audited.

In

condition

and operating

results.
Thrift

addition,

WMBs

Financial

Reports

are not

by

The non- confidential upon

on

of

portions

Financial

Reports

filed

WMB

are

file

with,

and

of

to

are publicly available

written

request,

the Office

Thrift

Supervision, FOIA, 1700 and are also available

Street,

U. N. S.

D. C.

W.,

Washington,

20552,

Attention:

Dissemination Branch
( the FDIC)

at

the

Federal Deposit

Insurance

Corporations

web

at

site

http://

www. fdic. gov.


unless that exhibit

an

of

to

You may request a copy

these

filings,

other

than

exhibit

filing

by

by

or

is
An

specifically

incorporated

reference

into that filing,

cost,

writing

telephoning

WMI

1301 Second Avenue


Seattle,

Washington

98101

( 206)

461- 2000 year


fiscal

on

The Company was formed

of 3,

February

2006 and has elected a calendar September 30, 2006 and


related

year.

as

of

unaudited

balance

sheet

the Company

statements

of

income

in

and changes

members

3,

interests for this offering

the period February


circular.

2006 through September

30, 2006 are

in

as

included produce

Appendix

The Company has agreed


interim financial investors

LLC Agreement
and

to

audited

annual financial

statements

and unaudited

statements

make

as or

to

such financial
first

statements

available

investors

prospective

upon request. The Companys


31, 2006.

annual audited

financial

statements

will

and

for

be

of

the year ended December

INDEX OF TERMS
in
An index
cover terms used
circular. this

offering circular

with specific

meanings appears

on

of

the inside back

of

this

offering

xi

to

of

its

at:

no

at

to

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00012

CONFIDENTIAL

OFFERING
in is
The
following

CIRCULAR
by
its
entirety

SUMMARY
the detailed information

summary

qualified

appearing

elsewhere

in

in

this

offering

circular,

particular,

the information under the headings

of

Description

the Trust SecuSeries L

of

rities,

Description

the Series 2006-

of

Company

Preferred

Securities,

Description

WMI

Preferred

Stock and

of

Description

the Depositary

Shares, which describe

the terms and conditions

of

the

securities

offered

hereby.

Introduction

The Fixed- to-Floating Rate Perpetual $ 100,000 per


Washington
for
security
(

Non- cumulative

Trust Securities,

liquidation

preference

each a

Trust Security,

and collectively

Trust Securities), financing

are being issued

in

II

Mutual Preferred Mutual Bank


its

Funding

Trust

( the

Trust)

transaction

that raises capital

an

Washington

WMB).

WMB
to of

of

is

indirect subsidiary

Washington

Mutual,

Inc.

WMI).

WMI

as

and

affiliates

are referred

herein

the

WMI
in

Group.

The

Trust will invest

the proceeds

the Trust Securities


Securities,

like

amount

of

Fixed- to-Floating

Rate Perpetual
security
( the

Non- cumulative

Preferred

Series 2006-

C,

liquidation

preference

$1,000 per Funding than

Series 2006-

Company Preferred company


( the

of

Securities),

Washington
will

Mutual

Preferred other

LLC, a Delaware the Series 2006payments through

limited liability

Company). The Trust Dividends

have no assets

Company Preferred

Securities.

paid and redemption and liquidation


Preferred Securities
will

made by

the Company on the Series 2006-

Company

pass

the Trust as distributions


material

on and redemption

and

liquidation interests

payments

on the

Trust Securities.

in

or

The Companys
assets originated

assets consist

direct

indirect

mortgages under The

or

of

mortgage- related

or

acquired

by WMB, as described

more

specifically

Company
II.

of

Business

the

the Company,

Company Assets

of

Asset

Trust

and

Asset Trust

in

The

Trust Securities

are being offered


Securities

reliance

upon Rule 144A under the

U. S.

Securities

Act

as

of

to

1933,

amended

( the

Act),

only

persons

who

are qualified

institutional

buyers

within

the meaning

of

144A under the


( each,

Securities

Act ( each, a

Qualified Institutional

Buyer)

and

2(

of

qualified

purchasers

Qualified

Purchaser) within the meaning

Section

a)(51)

of

the

as

U. S.

of

Investment

Company
are subject

Act

1940,

amended

( the

Investment

Company

Act).

Resales

of
a

the

to

Trust Securities

restrictions

as described
its

under Notice

to

Investors.

established

raise

core capital for


securities

2006- C

Company
In

Preferred

Securities

are the

third

series

preferred

be issued
aggregate

by

to

the Company.

March 2006

the

Company

issued:

of

$1,250,000,000 cumulative

liquidation

preference

its

Fixed- to- Floating Rate Perpetual

Non-

an

of

Preferred Securities

having

initial

annual dividend

rate

6.534%

( the

Series 2006- A Company Preferred Securities), which were sold Funding

to

Washington

Mutual

I,

Preferred

Trust

a Delaware
preference
I

statutory

trust

Trust

I),

which

in

turn

issued Non- cumulative

of

$1,250,000,000
Trust Securities

its

liquidation
(

Fixed- to- Floating Rate Perpetual


investors;

to

the

Trust

Securities)

and
Fixed Rate Company Securities Preferred Securities the

of

its

of
an and

the Company WMB. The Series

indirect

subsidiary

to

WMB

as

facilitate

financing

transactions

that

$750,000,000

aggregate

liquidation

preference
Series

having

of

annual dividend
together Preferred with

rate

7.25% ( the

2006- B Company
Preferred

and,

the Series 2006-

Company
with that

Securities,

Outstanding

Company

Securities,

and together

the Series 2006- C Company Preferred


future date, the
(

Securities

any other Parity Equity Securities

may be issued on a

Company
I

Preferred

to

Securities),

which were sold

Washington
limited

Mutual Preferred

Funding

Cayman)

Ltd., turn

Cayman
in
ties,

Islands

exempted

company

by shares

WaMu

Cayman), which

in

issued

of

its

$750,000,000

liquidation

preference

7.25% Perpetual

Non- cumulative

Preferred

Securi-

two series ( the

WaMu Cayman

Securities),

to

investors.

by

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00013

CONFIDENTIAL

of

The terms

the Series 2006-

Preferred Securities

are substantially identical


rates,

to

C Company

the terms

of

the

Outstanding

Company Preferred
dates and prices.

Securities

except for the dividend

dividend

payment

dates and redemption

of

Under the Companys LLC Agreement,


create and issue additional
equity securities

the Companys Board ranking dividends


pari

Managers

has the power

passu with the Outstanding

Company
(

in

or

of

of

Preferred

Securities

terms

payment

on

of

liquidation

the Company

called

Parity

in

of

Equity Securities

the

LLC

Agreement) without

the consent

the holders

of

the Outstanding

so

as

Company
operations otherwise

Preferred test
(

Securities

long

the Company

an

satisfies

asset test and a funds from

the FFO Test) after giving effect

the

new

issuance

and the Company

is

to

not

in

in

of

of

breach

any

its

covenants

set forth

the

LLC Agreement. The Series 2006- C

be

Company Company
required

Preferred Preferred satisfy

Securities Securities.

will

Parity

Equity Securities the closing date

to

with respect
for this

the Outstanding the Company


will

on

Therefore,

Offering

the tests for issuance

the Series 2006- C Company Preferred Securities

as

to

of

Parity

be

to
will

Equity Securities the Series 2006-

with respect

the Outstanding

Company

Preferred
for

Securities.

See

Description

Company Preferred SecuritiesRanking


compliance
with

of

description

those tests and the

of

calculation

the Companys

those tests.

The

of

Office

Thrift

Supervision

together

with

any successor
Securities

regulator,

the OTS) has confirmed

to

WMB

that

the Series 2006will

Company Preferred

and the Outstanding

Company
regulatory capital

of

Preferred

Securities

constitute

core capital

WMB
of

under the OTSs applicable

regulations.

so

an

If

the

OTS

directs following
(

the occurrence Exchange)

Exchange
like

Event, each Trust Security

automatically

exchanged
( the

Conditional

for

amount

of

Fixed-to-Floating

Rate

of

Depositary Perpetual

Shares

Depositary

Shares) each representing Rate Preferred


Preferred

1000th

a share

of

1/

WMIs Series L
prefer-

as no

Non- cumulative per share

Fixed- to-Floating
( the Series

Stock,

par value and liquidation

ence $1,000,000
under

WMI
be

in

Stock),

described

below
the

this
I

summary
Securities

The

Offering Conditional Exchange.


Securities
will

Upon a Conditional Exchange,


exchanged, but
for

Trust

and the

WaMu Cayman
as to
exceptions)

also

automatically stock,

depositary shares terms ( with

of

representing different
certain

series

WMIs

preferred

having

substantially equivalent

dividends,

liquidation

preference

and redemption

preference

as

the Out-

by

standing

Company

Preferred

Securities

owned

Trust

WaMu

Cayman,

as

or

applicable.

in

of

This offering circular uses the term like amount

describing

the number

Series 2006interest

C
in
equal

in

Company
describing Conditional

of

Preferred

Securities

which a holder Shares


for

Trust Securities

has a beneficial
will

and

the number Exchange.

of

Depositary
like

which the Trust Securities

be exchanged

upon a

The term

amount means: Series 2006- C Company


interest,

when

describing

the number

in

of

Preferred

Securities

which a holder
Preferred

of

of

Trust Securities that

has a beneficial
g.,

the number

Series 2006- C Company

as

Securities the

has the same aggregate

liquidation

preference

to

the

Trust Securities Securities

which

reference

being

made

1,000 Series 2006$1,000,000 are a

Company
amount

Preferred

with

for

aggregate

liquidation

preference
liquidation

10

of

like

Trust Securities

an

of

having

aggregate

preference Depositary

$ 1,000,000);

and

when

describing

the number Exchange,

Shares for which Trust Securities Depositary

1/ be

of

will

exchanged 1000th

of

upon a

Conditional

a number L

Shares each representing

to an

in

of

interest

one share

Series

WMI

Preferred Stock having a liquidation


that

preference

of

the liquidation

preference

the Trust Securities

are being exchanged

e.

g.,

1,000

Depositary preference
liquidation

Shares representing Series L

WMI

Preferred Stock with

an

aggregate

liquidation

10

$1,000,000

are a

like

amount for

Trust Securities

having

an

of

aggregate

preference

of

$1,000,000).

of

of

The
Preferred

offering

the Trust Securities are referred

and the

related

issuance

the Series 2006-

Company

as

to

Securities

herein

the

Offering.

of

an

e.

is

be

of

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00014

CONFIDENTIAL

The

following

diagram outlines the relationship among WMI, Asset Trust Asset


II,

WMB,

University

Street,

the and

I,

Company, the
the holders

Trust,

Trust

the Outstanding

Company

Preferred

Securities

of

the Trust Securities:

WMI

WMB

of

Series

2006- C
Preferred

Company
Option

ARM
2

Securities6

University Street

100% Common
Interest

Trust Securities

The
Series

Trust Investors

2006- C Proceeds

Company3

Company
Preferred Securities5

Asset
Trust
I

Asset
II
Trust

4) 3) 2) 1)

American

Capital, Inc.,

not

shown

is

New

here,

WMBs

direct

parent.
direct parent.

Marion

Holdings,

Inc.,

not

shown here,

is

University

Streets

Series 2006-

A and

by

2006-

B Company Preferred

Securities

held

Trust

and

WaMu Cayman,
will

respectively.

of

to

of

Transfer University

Option

ARMs
the

the

Company. A

portion

the

Option

ARMs

be transferred

to

by

by

WMB

WMB

Exchange

Loan

Contribution4

Conditional

Proceeds

Sale

of

University

Street

and then

by

to

Street

Company.
Preferred
Securities transferred

6) 5)

The Series 2006-

C Company
of

by

WMB

to

the

Trust.

of

Proceeds

the sale

Series 2006-

C Company

to

Preferred Securities

paid

WMB.

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00015

CONFIDENTIAL

The Trust

II is

Washington
Statutory Trust

Mutual Preferred

Funding

Trust

statutory trust

created under the Delaware

Act on December

4,

2006

for

the purposes set forth below under


will

The

Trust.

The

Series 2006Trust

Company Preferred

Securities

be the

of

only

assets

the Trust. Under the than the Trust Securities.

Agreement, the Trust

is

prohibited

from issuing any securities

other

U. S.

to

Subject

the limitations and assumptions described the Trust

under Certain
for

Federal Income income tax owners

Tax

as

be

Considerations,

will

treated

a grantor
for

trust

United States

federal

as

be

of

purposes,

with

the result that holders

Trust Securities

will

treated

beneficial tax

Series 2006-

Company Preferred

Securities

United States federal income

purposes.

The Company
Washington Mutual Preferred
for

Funding

LLC

is

a Delaware

limited liability

company formed on
Securities,

3,

of

February

the purpose

i)

2006

issuing

the Series 2006-

Company Preferred
Securities,

to

of of of as
Tax
with Street

which were sold

I,

Trust

the Series 2006-

Company

Preferred

which were sold

WaMu

as

Cayman,

other

Parity

Equity Securities

such

the Series

2006-

Company Preferred
securities

in

to

Securities

subject

the limitations described


Securities)

this offering

circular, Street,

the
Inc.,

common
an

to

Company ( the

Company Common
Street),

University

indirect

subsidiary

University

and

additional
ii)
(

Junior

Equity Securities
holding

subject

to

WMB

certain limitations
iii)

in

described
functions

this offering

circular,

acquiring

and

Eligible

Investments

and (

performing

necessary

or

incidental

thereto.

The Series 2006Company


Preferred

Company Preferred

Securities

will

rank pari passu with the Outstanding

as

to

Securities

dividends

and upon liquidation


will

of

the Company.

The terms

of
the has

to

Series 2006Outstanding

Company Preferred
Preferred

Securities

be

substantially identical

the terms

of

the dividends

to

Company
thereon,
Street

Securities

other

than with respect


prices.

the rate applicable

or

distributions

redemption

dates and redemption

of

all

University

owns

the
will

Company Common
generate
net

Securities.

The

to

Eligible

Investments

by as by

for

by

to

the Company

from time

time

income

payment
(

the Company
for

to
will

the Trust

on

dividends the Trust

the Series 2006-

Company Preferred

Securities

and consequently

pass through

as

to

to

of

to of

distributions

the holders

the Trust Securities),

holders

other series Trust


I

as

of of

on

preferred

securities

the Company

distributions

such series ( including


Securities),

and

WaMu

as

Cayman
dividends

holders

the Outstanding

Company

Preferred

and

to

University

Street

on

the Company

Common

Securities.

U. S.

to

Subject

the limitations and assumptions described the Company intends

under Certain
(

Federal Income

Considerations, partnership

be

as

to

treated

a partnership
federal

other

than a publicly traded

taxable

as a

corporation)

for

United States

income tax purposes

and

receive

of

the opinion purposes,

Mayer, Brown,
will

Rowe & Maw LLP

to

the effect that, for United States federal income tax


taxable

the Company

not be treated as an association

as a

or

corporation

as a

traded partnership taxable as a corporation.

by

of

The Company
three

managed

a Board

Managers.

The Companys

of

is

Board
five
(

Managers an

of
publicly

to
the

owned

members, one

whom

not,

and has not been during the preceding


other

years,

officer

or

of

employee Manager).

WMI

any

of

affiliate

WMI,

than a financing

subsidiary

the

Independent

Conveyances

of

the Mortgage Loans


with

In

connection

the February 2006 offering

of

the Outstanding

Company
loans

Preferred

Securities,

of

conveyed

portfolio
for

first

lien,

closed-

end, fixed rate

home
of

equity

HELs)

to

WMB

the

in

Company

exchange

100%

of

the

Outstanding conveyed

Company Preferred a
portfolio

Securities.

Concurrently

such transfer by
for

WMB,

University

Street

HELs

by to

the Company

in

exchange

100%

of

the Company

Common

Securities.

The

portfolio

conveyed

WMB

and University

or

of

is

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00016

CONFIDENTIAL

the

Company consisted

in of

approximately $5,389,459,150

HELs

in

of

to

the aggregate.
for

The Company
I

of

it

conveyed

100%

the

HELs

to

that

received Class

Asset Trust

exchange

the Asset Trust

Class A

Trust Certificate

and the Asset


Securities

Trust I for

Trust Certificate.
I

WMB
of

then sold the Outstanding


respectively.

to

Company As

Preferred

cash

Trust

and

WaMu

Cayman,

of

1,

November

2006, the Companys

assets consisted

approximately $ 4,745,592,069

in

the aggregate,

held through Asset Trust

Asset Trust

I,

HELs

and $ 72,553,074
the

of

permitted investments

held

or

as

directly

held through
Preferred

I,

the case may be. Since

issuance

of

the Outstanding

in

Company
Street

Securities

March 2006, the Company has paid cash dividends

to

University

of

on the Company Common

Securities interest

$ 83,834,863. by
the

The Companys source and FFO

of

funds for those

of

dividends

has been payments


that

received

Company through Asset


for

Trust I

on

its

HELs.

The Company expects

these assets would satisfy the coverage

tests

described

under the

of

Description

the Series 2006-

C Company
Securities

Preferred Securities Ranking

issuance

as

Series 2006ing

Company Preferred
Securities.

Parity

Equity Securities

to

with respect

the Outstand-

Company Preferred

Contemporaneously with this Offering,

will

convey a portfolio
for

of of

WMB

payment option
the Series 2006Option

in

to

rate

mortgages

Option ARMs)
Securities

the Company
University

exchange

100%
to be

of

Company Company Company

Preferred

and

Street will contribute

a pool

ARMs

to to

of

adjustable

C
the the

as

of

capital

contribution.

The

portfolio

Option

ARMs
by
all

conveyed

by

WMB

of
will

will

consist

approximately $ 500,000,000

outstanding

principal University

amount

Option

ARMs

of

the aggregate,

and the portfolio

Option

ARMs

to

contributed

Street

the Company

consist

approximately

$2,399,877,211 outstanding

outstanding
principal

principal

amount
Option

Option

ARMs

to in

of

of

the Asset

of

aggregate.

The aggregate

balance

ARMs

contributed calculated

by

Trust

II

and

University

Street will
will

be approximately $2,899,877,211

as

of

the

that

it

November

14, 2006. The Company

convey

100%

Option

ARMs

owns

to

a newly
for ( the

in

II

formed trust

Asset Trust

and, together with Asset Trust

I,

the

Asset

Trusts)

exchange

in

II

interests
Asset

Asset Trust

represented

Asset Trust Certificate


certificate
( the Asset

Asset Trust

II

Trust

Class

II

A Trust

Certificate)

and a second

Trust

Class the

to

to

Trust Certificate),

which the Company

expects

transfer

WMB.

WMB

will

then

sell

Series 2006-

Company Preferred

Securities

for

cash

to

the Trust.

University

Street

It

University

Street,

Inc.

a Washington

corporation.

has elected

be

as

is

to

treated

real estate

II

by the Class

of

of

WMB

investment

trust for

United States federal income tax purposes.

University

Street will

hold

100%
(

of as
the

the

in

of

Company Common

Securities,

which represent
the

100%

the voting rights

the Company
below).

subject

of

of

the limited rights

holders

Company Preferred

Securities

described

Asset Trust

and Asset Trust


Mutual

II

Washington

Home
dated

Equity Trust

7, is

a Delaware

statutory trust existing Trust


I

under the Pooling

as

and

of

Servicing

Agreement,

March

2006

( the

Asset

Pooling and Servicing


Trust

Agreement),
Trustee,

among WMB,
Bank

as

servicer,

the Company,

Deutsche

Bank

National
(

Company,
Trust
I

and Deutsche
Trustee).

Trust

Company Delaware,

as

Delaware

trustee

the

Asset

to of

Delaware

The Asset
I

Trust I

Pooling and Servicing

Agreement

is

the governing mortgage

instrument investment

Asset Trust

I.

Asset Trust
for

has

made

as

an

be

to

election

treated

real estate

conduit

REMIC)

United States federal income tax purposes.

of of

by

of

of

The assets

Asset Trust
with

consist

the portfolio

HELs

conveyed

the Company

to

Asset

in

by

Trust I

connection

the issuance

the Company

the Outstanding
Securities

Company Preferred

by

by

of

Securities

and the

related

offerings

Trust

the Trust

and

WaMu Cayman
through Asset

or

Securities.

The HELs were

originated

acquired

by

primarily

As

of

branch

network.

November

1,

2006, the HELs held by the Company

through

its

WaMu Cayman
an aggregate

WMB

of

Trust

had

unpaid principal balance

of

approximately $4,745,592,069.

in

of

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00017

CONFIDENTIAL

be

2006-

OA1

Asset Trust

II)

will

a Delaware

to

WAMU
agreement, Deutsche

statutory trust

formed pursuant

trust

entered

into

before the closing date, between the Company,

as

or

be

on

to

depositor,

and

Trust

Delaware

trustee ( the

Asset Trust

II

Bank

Company Delaware, Agreement

as

Delaware

Trustee).

Servicing

relating

Asset Trust

servicer, Trust trust

Deutsche

Bank

Trust

Company

as

II

The Pooling and

among the Company, WMB,


trustee,

Delaware,

Delaware

and Deutsche
will

Bank National
restate also

Trustee ( the

Asset Trust

II

Company,
agreement

as

Pooling and Servicing

Agreement),
II.

as
the

be

to

of

and

will

the

governing
for

instrument

Asset Trust

Asset Trust

II

will

make an

as

be

to

election

treated

a REMIC

United States

Federal income tax purposes.


the portfolio

initial

assets

Asset Trust

II

The

will

consist

Option

ARMs

conveyed

II in

the Company

Asset Trust

connection

with this Offering.

The Option ARMs were


14, 2006, the Option

originated

of

between
into

July

31, 1997 and April 21, 2006.

November

ARMs

an

transferred

Asset

II

Trust

had

aggregate

unpaid principal balance

of

approximately

$ 2,899,877,211.

WMI
to
With a history dating back 1889, Washington Mutual,
Inc.,

a Washington
its

is

corporation,

to
a
its its

WMB

retailer

financial

services

consumers

and

small

businesses. Based on

consolidated

assets

September
largest

30, 2006,

WMI

was the

largest thrift
thrift

holding

company

in

the United States and the seventh

U.

among
its
with

S.- based

bank and

holding

companies.

As

of

all

September
billion, total

30, 2006,
liabilities

WMI,

of

together

subsidiaries,
billion

had
its

total

assets

approximately

$348.9

approximately $ 322.4

and

total

stockholders

equity

approximately $ 26.5 deposits

billion.

September

30, 2006,
stock

WMI
is

and

subsidiaries also

had

of

total

approximately

$210.9

of of

As

of

billion.

WMIs common
business telephone
offices

on

listed

the

New
at

York Stock Exchange

under the symbol Washington

WM. The

principal

of

WMI
is

are located

1301 Second Avenue,

Seattle,

98101 and

number

206- 461- 2000.

WMB
Washington Mutual Bank

is

a federally chartered

savings

association,

chartered

and operating

under the United States banking,

Home

Owners

Loan Act

of

1933,

amended.
federally

WMB
by

engages

in

as

mortgage

consumer

banking

and small business

banking.

As a

chartered

association,

WMB
loans.

to

has the authority


real estate,

make

of

various

types

loans,

including

loans secured

homes and commercial

secured and unsecured savings


association,

consumer

loans,

and secured
regulation subsidiary

and unsecured commercial

As a

to

is

federal

WMB

subject

and examination

by

the OTS,

an

primary regulator.

indirect,

wholly-owned

of

is

WMB

WMI.

on

to

of

be by

to

As

by

be

of

of

of

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00018

CONFIDENTIAL

The Offering
Issuer . .
.

. . . .

. . . .

As

to

the Trust Securities,


II,

Washington
trust.

Mutual Preferred

Fund-

ing Trust

a Delaware

statutory

to

As

the Series 2006- C Company Mutual Preferred company.

Preferred

Securities, lim-

Washington
ited liability

Funding

LLC, a Delaware

to

As

the Series L

WMI

Preferred

Stock

which

will

be

repre-

sented

Depositary

Shares)

for

by

which the Trust Securities

be

will

exchanged

upon the occurrence


Mutual,
Inc.,

of

Conditional

Exchange,
corporation.

Washington

a Washington

Offered Securities

. .

Fixedties, rity

to-

Floating

Rate Perpetual

Non- cumulative

Trust Securi-

Series 2006-

C,

liquidation

preference

$100,000

per secu-

in

and $ 500,000,000

the aggregate,

issued

by

the Trust.

Dividends

. .

. . . .

Dividends
ties will

on the Series 2006- C Company Preferred

Securi-

be passed through by the

as

Trust

distributions

on the

Trust Securities

on each date on which the Company pays on


the

the Trust dividends

Series 2006-

Company
equal

Preferred

in

Securities,

an amount per
received

to

Trust Security

the

by

of

amount
Series
tional

dividends

the Trust on a
Securities
(

like

amount

2006-

Company Preferred

including

Addi-

if

Amounts,

any).

of

For purposes

this offering

circular,
its

we

refer

to

distributions Divi-

by

payable

the Company on

securities

as

dividends.

dends on the Series 2006- C Company Preferred are payable as follows:

Securities

on

Dividend

Rate.

Dividends
will

the Series 2006-

Company

an

Preferred Securities

accrue
15,

annual rate equal

3-

6.665%
plus

until

December

2016 and December


applied

month

USD

LIBOR
for

1.7925% commencing
Period thereafter,

15, 2016 and


the liquidation

Dividend

to

prefer-

ence

of

$ 1,000 per Company Preferred

Security.

Dividend

If

Payment Dates.
Managers,
the

by

declared

the Companys Dates


will

Board

Dividend Payment

be for

of

the March 15,

Series 2006-

Company Preferred

Securities

15

15

June 15, September mencing


ness Day

and December

of

each year comBusi-

if on

March 15, 2007,


any such day

in

or

each case the next


Day.

is

not a Business
etc.

Declaration Series 2006-

of

Dividends,

Dividends
Securities

on the
if,

Company Preferred
Board

when and as

by

of

declared
available applied Security

the Companys

Managers out
applicable

of

legally rate

be

funds,

will

payable

at

the

dividend

to

the liquidation

preference

per Company
basis

Preferred

accruing

on a non- cumulative
will

from Decem-

ber 13, 2006. Any such dividends

be

to

distributed

holders

Series 2006-

Company

in

of

Preferred

Securities

the manner

of

described
Preferred

under

Description

the Series 2006-

Company

Securities Dividends.

to
each

at

of

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00019

CONFIDENTIAL

on

Non- cumulative Company


ingly,

Dividends.
Securities

Dividends

the Series 2006Accord-

Preferred

are not cumulative.

pany

if

dividends

are not declared


for

on

the Series 2006-

C Comto

Preferred

Securities

payment on any Dividend


will

Payment Date, then any accrued dividends

cease

be

will

not

payable.

Managers

has not declared


for

a dividend before the Dividend


Period,

Payment Date

If

accrue and

the Companys

Board

any Dividend

the Company

will

no

to

obligation

pay dividends

accrued for such Dividend


for that

Period after the Dividend

Payment Date

Dividend

or

on

Period,

whether

not dividends

the Series 2006-

C ComSecuri-

or

pany
ties

Preferred

Securities

the Company

Common

are declared

for

any future Dividend

Period.

Redemption/ Replacement Covenant.


. .
.

Capital
.
. .

. . . .

General. Series

On

each day on which the Company redeems

2006-

C C C

Company Preferred

Securities,

the Trust

will

it

apply the redemption Series 2006-

proceeds

receives

on the

Company Preferred

to

Securities

redeem a

of
have
like

of

amount
Series below.

Trust Securities.

The redemption

provisions

of of
of:
(

the

2006-

Company Preferred

Securities

are described

in

to

of

Subject
limiting

a covenant
its

to of

favor

certain

WMIs debtholders
purchase

WMIs and

subsidiaries right

or

redeem the Series 2006- C Company Preferred


the Trust Securities paragraph,
prior
(

Securities

among
to

others)

described

in

as

the next

and

subject

the Company having


for

received the

of

approval 2006its

the

OTS

any proposed

redemption

Series

Company Preferred redeem


the

Securities,

the Company

at

may,
ferred

option,

Series 2006-

Company Pre-

Securities:

to in

in

on

whole

but

not

part,

any Dividend

Payment Date

prior

the Dividend

Payment Date

in

December

2016 upon the

occurrence

a Tax Event,

an

of

Investment

Company Act

Event, a Rating Agency Event

or

a Regulatory Capital

to

at

Event,
greater

price

equal

i)

a cash redemption

the

sum
values

A)

of:

$ 1,000 per Series 2006-

Company Pre-

B)

or

of

ferred Security,

the

sum

the present
Preferred

$1,000 per Series 2006-

Company

Security,

of
dis-

counted from the Dividend

Payment Date

in

December

2016

to

of

the redemption dividends

date, for

and the present values

all

unde-

clared tion

each Dividend

Period from the redemp-

date

and

including

the Dividend

Payment Date

December

2016, discounted

from their applicable

Dividend

Payment Dates

on

to

the redemption

date

quarterly basis,

in

each case

( assuming

a 360- day year consisting

of

twelve

as

by
(

in
any any

to

30- day months) Independent declared

the Treasury Rate,

calculated

and unpaid dividends

to

the redemption

date;

to in

in

whole

but

not

part,

on any Dividend Payment Date

ii)

Investment

Banker, plus 0.50%; plus

the Dividend

Payment Date

in

December

2016

for

of

reason other than the occurrence

a Tax Event,

an

an
prior

at

or
the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00020

CONFIDENTIAL

Investment

Company Act Event, a Rating Agency Event


Capital

a Regulatory

Event,

at

a cash redemption

price

equal 2006-

i)

the

sum
of

A)

of:

of

to

the greater

$ 1,000 per Series

B)

or

Company Preferred

Security,

the

sum

of in as is is an
the

the

present value

$ 1,000 per Series 2006- C Company


from the Dividend

Pre-

ferred Security,

discounted

Payment Date

in

December

2016

to

the redemption date, and the present dividends


for

of

values

all

undeclared

the Dividend

Periods Pay-

to

from the redemption

date

and

including

the Dividend from


their

ment Date
ble

in

December

2016, discounted

applica-

Dividend

Payment Dates

to

the

redemption

date,

each

on

case

quarterly basis ( assuming

a 360- day year consistRate,


calcu-

of

ing

twelve 30- day months)

at

the Treasury

by

an

lated plus date;


(

Independent

Investment

Banker, plus 0.35%;

in

ii)

any declared

but unpaid dividends

to

the redemption

in

on

whole

but

not

part,

any Dividend

Payment Date 2016


that

after

the

Dividend Payment

in

Date

December

not a

Ten- Year Date, upon the occurrence Investment

of

a Tax Event,

Company Act Event, a Rating Agency Event


Capital

a Regulatory

Event,

at

a cash redemption

price

to

equal

$1,000 per Series 2006- C


plus

Company

Preferred

Security,

any declared

and unpaid dividends

redemption date;

in

in

or

to

whole

part,

each Dividend Payment Date

that

at

a Ten- Year

Date,

a cash redemption
Security, plus

of

price

$ 1,000 per

Company Preferred

any declared and unpaid

to

dividends

the redemption date; and

in

in

whole

but

not

part,

on any Dividend Payment Date

after

the

Dividend Payment

in

Date

December

2016

that

not a

of
for

is
a

Ten- Year Date for any reason other

on

than the occurrence

an

Tax Event,

Investment

Company Act Event, a Rating

or

Agency Event

a Regulatory Capital Event,

at

a cash

of

redemption price equal

the

i)

sum

the greater

A)

$ 1,000 per Series 2006- C Company Preferred

Security,

B)

or

of

the

sum

the present value


Preferred

of

$1,000 per discounted the redemption dividends

Series 2006- C Company from the next succeeding


date, the

Security,

Ten- Year Date

of

and the present values

all

undeclared date

to

to

Dividend Periods from the redemption the next succeeding


applicable

and

including

Ten- Year

Date,

discounted

from

their

Dividend

Payment Dates

to

the
(

in

redemption date,
ing the

each case on a quarterly basis

of

of
assumcalculatcalcuii)

to

a 360- day year

consisting

twelve 30-day months)

3-

month

USD

LIBOR Rate

to

applicable

the Dividend date ( which

Period immediately preceding

such redemption
also, for rate

3-

month

USD

LIBOR Rate
price,

will

purposes

ing the

such redemption

be the

used

in

calculating

amount by

for

each such undeclared Investment

dividend),

as

an

lated

Independent

Banker;

of

plus (

any

declared

but unpaid dividends

to

the

redemption

date,

at

or

or

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00021

CONFIDENTIAL

in

each

case,

without

accumulation Dividend

of

any undeclared
prior

divi-

to

dends with respect redemption


date.

Payment Dates

to

the

Ten- Year Date means the Dividend


e.,

Payment Date

December

2016 and the Dividend Payment Date


succeeding year

in

December

of

i.

each

tenth

December

2026,

December See

2036, etc.)

of

Description

Series 2006-

Company

Preferred

in
Securi-

ties Redemption.

or

or

At

Restriction
initial

on Redemption
of
Capital

Purchases.

prior into

issuance

the Trust Securities, Covenant

WMI
on

will

enter

Replacement

as

described

under

Descrip-

tion

the Trust SecuritiesRestriction

Redemption

In

Purchases.

the Replacement

Capital

Covenant,
that,

WMI
if or

will

in

covenant

favor

certain

debtholders

WMI

or
into

of

of

its

or
a only
price dur-

of

or

subsidiary

purchases

redeems any

Trust Securities

Series
ditional

2006-

Company Preferred
Depositary

or,

Securities

after

a Con-

or

Exchange,

Shares
its

related

Series L

WMI
is if
and

Preferred

Stock), that

WMI
the

subsidiaries will

do

the extent

total

redemption

or

to

purchase

to

or

equal

less

than designated

percentages

of

the net

or

cash proceeds
ing

that

WMI
to

its

subsidiaries

have received

the 180 days prior

such redemption

or

purchase

or

of

the issuance

other

securities

combinations under

of

securities

so
will

or

from

having the characteristics


Trust

described

Description

of
the

SecuritiesRestriction entered
into

Redemption
capital

or

on

Purchases.

WMI

similar

replacement

covenant

of

connection
Preferred

with

the issuance

the Outstanding

Company

in

Securities

March 2006.

Ranking.

. . .

. . . .

Trust Securities.
rities

The

be

Trust Securities

will

the only secu-

issued by the Trust. The Amended

and Restated
Agreement)
pro-

Trust

Agreement

of

the

Trust

the

Trust

vide that

the Trust

will

not issue any other securities. Preferred Securities.


Securities
will

Series 2006- C Series 2006-

Company

The
rank pari

Company Preferred

passu with the Outstanding

Company Preferred

Securities

to

and

senior

the Company

Common
of

Securities

and any

other

in

Junior

Equity Securities

terms

dividends

and

liquidation

payments. During a Dividend


Period,

the Company

may

not declare

on

of

pay any dividends than dividends

any

its

Junior

Equity Securities

other

in

of

payable

Junior

Equity Securities ranking

the same

or

or

class

series

Junior

Equity Securities

junior

or

or

that class

series,

purchase,

redeem

or

otherwise

acquire

or

for consideration,
rities ( other

directly

indirectly,

any Junior Equity Secu-

of

than as a result

of

reclassification

Junior

Equity

or

Securities

for

into other

Junior Junior

Equity Securities, Equity Securities


for

or

or

exchange
other

conversion

for

Junior

Equity Securities), unless dividends


all

such Divi-

dend Period on

Company

Preferred

Securities

then

10

or

of

to

or

in

to
a
the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00022

CONFIDENTIAL

in

outstanding

have been declared

and paid

or

full,

declared

as

and

set

aside for payment,

the case

may

be.

The Company may


from time Series

issue additional the

Parity Equity

Securities

of

time without

consent

the holders

of

to

the
that

2006-

Company Preferred

Securities,

provided

to

i)

after giving

effect

such issuance, the pro forma net book


assets

of of

value
sition

the Companys any

to

( after

giving with

effect

the acqui-

in

New

Assets

connection
will

the issuance

such Parity Equity Securities)

equal

or

exceed 1.5 times

of

the

sum

of

the aggregate
Securities that

liquidation

preference

the Com-

pany
ity

Preferred

then outstanding

and any such Par-

Equity Securities
after giving effect

the Company proposes

to

issue,

to

ii)

such issuance,
operations,

the Companys

pro the four

forma funds from continuing


fiscal

or

FFO,

for

quarters beginning
Equity Securities that

with

the

in

fiscal

quarter

which such
( calculated

to

Parity

are proposed

be issued
Equity

A)

assuming

such proposed

Parity

Securities
( including

if

issued and
Parity

that,

any

Parity that

Equity Securities

the

Equity Securities

the Company proposes

to

issue)
divi-

bear dividends

based
not

on

a floating rate, the applicable


fiscal

dend

rate will

change during such four

quarters from

in

the rate

effect for

on the

applicable

date

of

determination,

B)

assuming

each Option
that

ARM

or

directly

indirectly

owned

by the Company
monthly payment

the interest rate and the minimum mortgage note


will

in

the applicable
four

not

change during such

quarters from the interest rate and

in

on

of
are the
the the

minimum monthly payment

effect

the

applicable

date

C)

as

to

determination,

and (

adjusted

reflect

any

New
be

Assets)
required

or

equals

exceeds

150%

of

the amount that would

on

to

pay

full

annual dividends

preferred

securities Equity
iii)

Company then outstanding


ties that

and any such

Parity

the Company not otherwise

of to

proposes

issue

and
its

the Comset

in is

in

pany
forth

breach

any

of

covenants

the

LLC

Agreement.

The Series 2006-

Company
with

Preferred

Securities

are Parity Equity Securities

respect

to

the

Outstanding
satisfies

Company Preferred

Securities,

and the

Company
Series

the tests for the issuance


Securities

of

the
Parity

2006-

C C

Company Preferred

as

of

Securities.

See

Description

the Series 2006-

Series

2006-

Company Preferred SecuritiesRanking.

in

In

the Exchange

Agreement,

WMI
that,

will

covenant

favor
(

of

holders

if

the Trust Securities

full

dividends

Preferred

Securities

ii)

Series 2006-

Company
to,

or

the

Trust Securities dividends

are not paid, then

WMI

will

not declare

or

i)

on

of

of

all

Securi-

Equity

pay any

or

with respect

redeem, purchase
during

or

acquire,

of

its

equity capital Period,

securities

the next succeeding


with

Divi-

dend

in

except dividends

connection

sharehold-

in

or

plans.

WMI
an
the

entered into a similar exchange agreement


equivalent

if

ers rights

plan,

any,

dividends

connection

with benefits that

included

covenant

in

connection
Preferred

with

the issu-

of

ance

Outstanding

Company

Securities.

11

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00023

CONFIDENTIAL

so

If

Conditional

Exchange

the

OTS

an

of

directs following
will

the occurrence

Exchange
for

Event, each Trust Security

be

automatically

exchanged

like

amount

of

Depositary

Shares, with each Depositary

of

of

1/

Share representing Perpetual Stock


( the

1000th

a share

WMIs Series L
Rate Preferred

Non- cumulative

Fixed-to-Floating

Depositary

Shares).

i)

Exchange

Event means

WMB

becoming

undercapital-

ized

under the OTSs being placed

prompt corrective conservatorship

action

regulations,

or

ii)

WMB

into

receivership

iii)

the OTS,

sole discretion,

directing

such exchange

anticipation

WMB

becoming

in

of

undercapitalized that limits the

the near

or

term

taking

supervisory
applicable,

action

payment

dividends, with, directs

by WMB, and

in

as

connection

there-

such exchange.

The Series L
equivalent

WMI

Preferred

Stock

will

have

substantially

as

to

terms

dividends,

redemption

and

liquidation

as

preference
ties,

the Series 2006-

except

of i)

that:

the

C Company Preferred SecuriSeries L WMI Preferred Stock will not


including
Description

have the benefit


additional taxes

the covenants, under

with respect

described

of

the

Series

2006-

Company Preferred SecuritiesVoting Rights

or

Investment the
iii)
(

Company Act Event

or

of

an

Tax Event

ii)

and Covenants

Additional

Amounts;

the occurrence
will

not

of

affect

ability

WMI

to

redeem the Series L WMI

Preferred

Stock;

Additional

Amounts

be

will

not

payable with respect

to

the

Preferred Stock; and (

if

Series L declare

WMI

WMI

fails

pay,

and set aside for payment,


Preferred

full

dividends

the Series L
for six

WMI

Stock

or

other

Voting Parity Stock

Dividend
will

Periods,

the authorized
two,

number

of

WMIs

directors

increase

by

and

of

the holders

Series L

WMI
other

Preferred

Stock, voting together

of

with the holders

any

of

equity capital including

securities

WMI

having

similar voting

rights,

WMIs Series

Perpetual

Non- cumulative Non- cumu-

Fixed Rate Preferred Stock and Series J Perpetual


lative

Fixed Rate Preferred

Stock
Trust
I

issuable Securities

upon

an

Exchange

in

for

to or

Event

exchange

the

WaMu Cayman
elect

as

Securities,

applicable,

will

have the right

two direc-

in

of to

in

tors

addition

the directors then


shareholders.

at

office

the next

annual meeting

in

in

WMI
ferred ferred

will

covenant

the Exchange
that

Agreement

of

favor

it

holders

of

the Trust Securities


that

will

not issue any pre-

to

stock

would rank senior


its

the Series L

WMI

Pre-

of

Stock upon Stock


will,

issuance.

Each share

Series L

WMI

Preferred with

upon issuance, rank

at

least pari

passu

outstanding.

Voting Rights and Certain

as

of

if

the most senior preferred stock

of

WMI,

any,

then

Covenants

. .

. . . . .

Except

set forth below, the holders


Preferred Securities
will

the Series 2006-

Company

not have voting rights.

12

on to
the

or

iv)

to

of

in or

in

its

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00024

CONFIDENTIAL

The LLC Agreement

will

provide that, except with the consent

or

of

of

at

of be
but the

affirmative

vote

the

holders

least

two- thirds
voting

of

the series

Company Preferred

Securities, not:

together

as

a single class, the Company

will

or

effect

consolidation,
entity

merger

share exchange
controlled by,

with

or
be

all
into

another

other

than

or of

an

entity

under

common

control

with,

WMI;

of

issue

any equity securities

the Company

ranking

senior payments

of to

the Company Preferred

in

Securities

respect

or

on

to

dividends

liquidation

the Company Preferred

Securities

Senior Equity Securities);


for

incur

any indebtedness

borrowed

money;
Equity Securities
fiscal

on

pay dividends

the Companys

Junior

unless the Companys

or

of

equals
required

exceeds

FFO 150%

for

the four prior

quarters

the amount that would

on

to

of of to
the

all

pay

full

annual dividends

series

Com-

pany Preferred Securities

then outstanding;

of

to

fail

invest

the proceeds

the Companys assets such

that

the Companys

FFO

over any period

of

four fiscal

quar-

or

ters will required

equal

exceed

150%

of

the amount that would be

to

on

all

pay

full

annual dividends

series

Com-

pany Preferred Securities

then outstanding;

issue

any additional

Company Common
an of
affiliate

to
the

Securities

any

person other than

WMI;

or

amend

otherwise

change the terms

of

any Asset Docuthe Trust

in

mentation

a manner

is

that

materially

adverse

or

or

the holders

of

the Trust Securities

to

any other entity


( including

of

holding Trust
I

a series and

Company Cayman, a

Preferred

Securities

or

WaMu

to of

Trust Holder) provided, only

the hold-

of

ers

that Trust Holders

securities; affects

however, that,
Trust

or if

any amendment

or

change

one

Holder

of

the holders

one
will

Trust Holders

securities,

the amendhold-

ment

at or

change
least

require only

the class vote

of

of

of

ers

two- thirds

the series Holder

Company

Preferred

by

Securities

held

that Trust with

( voting

separately

and

as

amendment
affects class

or

change

affects

more than one

class
will

them

differently,

then the amendment

if

not

single

class

any other class) and,

require

of

of as

vote

each affected
voting

class

Company Preferred

Securities,

each
cause

separately;

or

remove

to

be removed,

applicable,

Washington

or

Mutual from the Companys

the Trusts

name name
to

of or at

of

name
nys,

any other Trust Holder unless the

WMI
to

changes and the Company makes a change

the Compa-

or

the Trusts,
with

such other Trust Holders

name

consistent

the

new group name; provided,


affects only

however,
the

if

that, will

any change

one

Trust Holder,

change two-

of

require only

the class vote

the holders

of

least

of

of

thirds

the series

Company

Preferred

Securities

held by

13

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00025

CONFIDENTIAL

that Trust with

Holder

( voting

separately and not

as

a single class

any

other class);

or

to

take the

any action

fail

take

any action that would cause

Company

fail

be

as

to

to

treated

partnership

( other

than a publicly traded partnership taxable as a corporation)


for

United States federal income tax purposes;

in

engage

or

U. S.

trade

business

for

United States federal

income tax purposes;

to

fail

hold only assets that qualify under the Code

for

the portfolio interest exempt from

exemption

or

are otherwise
taxes;

gross basis United States withholding

to

fail

manage

affairs

such that income with respect


unrelated

the

Trust Securities

does not constitute

business

taxable

income for United States

federal

income tax

purposes;

be

take

any action that could reasonably

expected

to of of of at

cause

an

a Tax Event,

Investment

Company Act Event, a Rating


occur;

or

Agency Event

a Regulatory Capital Event

amend manner

certificate

formation

LLC Agreement
affects

in

or

of

its

that materially

and adversely
Preferred

the terms
provided, class

of

any series
ever, that,

Company

Securities; only

howComonly

if

any amendment

affects

one

pany Preferred Securities,

the

amendment

will

require

of

the

class

vote

the holders

of

at

least

two- thirds
Securities class

the
that

of

applicable

series

Company Preferred and not as a amendment


differently,

class ( voting separately other class) class

single

with

any

if

and,

the

affects

more than one


will

but affects

them

then the amendment

of

of

require

a class vote

each affected
voting

class

Company Pre-

ferred Securities,

each

separately.
will

In

addition,

the
all

LLC Agreement
the Managers,
will

provide

that,

without

the

of

consent Manager,

of

including

the Independent

the Company

not:

terminate,

amend
or

or

otherwise

change any Asset

Documentation;

effect the

or

consolidation,

merger
that

share exchange

( excluding

Conditional

Exchange)

to

is

not tax- free Securities,

the holders

of

of

any series

Company Preferred

and the was approved

related

trust securities,

unless the transaction

by

or

of

the consent

affirmative

vote

the holders
Preferred

of

least

of

of

all

two- thirds voting

the series

Company

Securities,

together

as

a single class.
will

In

addition,
fails

provide series

that

to

pany

pay

full

dividends

on any

of

Company
ii)

i)

if

the LLC Agreement

the ComPre-

ferred Securities

on any Dividend Payment

Date, (

the Trust

by

to

fails

pass through

full

dividends Preferred

paid

the Company

on the

to

of of of

Series 2006-

Company

Securities

the holders

or

the Trust Securities through


full

any other Trust Holder

to

fails

pass

by

dividends

paid

the Company

on

the series

14

or
a

to

to

its

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00026

CONFIDENTIAL

by

Company

Preferred

Securities

held
iii)

that Trust

Holder

on
a
the

any the

Dividend Payment Date,

or

a Bankruptcy

Event

occurs,

of

of

all

holders

the series

Company

Preferred

Securities,

vot-

as

by

ing together

a single class,

majority vote,

are entitled

or

remove the

initial

any succeeding

Independent

Manager and

by

fill

the

vacancy created

such removal

or

to

any other Manager.

in

vacancy existing

the office

of

the Independent
will

of

Each holder

Trust Securities

have the

to

right

direct

the

as

Property Trustee acting for the Trust, Series 2006-

of

holder

the

Company Preferred

Securities,

as

to

the exer-

of

cise

the voting rights described

above

pertaining

to

like

of

amount
resented

Series
its

2006-

Company

Preferred

Securities

rep-

to by
bal-

by

respective

Trust Securities.

See

Description

the Trust SecuritiesVoting Rights.

or

Additional

Amounts

the Company Taxes


will

the Trust a result

of is

required

withhold

or

to

If

pay any

as

an

Additional

Additional

Tax Event, the

as

Company Company
required
Preferred

pay

additional

amounts on the Series 2006such amounts

as

Preferred

Securities

will

be

so

that

dividends and/

on the Series 2006-

Company

or

Securities

the amounts passed through

as

on

the Trust reduced

the Trust Securities,

applicable,

will

not

as

of

a result

any such Additional

Taxes. See
Securi-

of

Description

the Series 2006-

Company Preferred
are

ties Additional Amounts.


for

If

the Trust Securities

exchanged
tional

Series L

WMI

Preferred

Stock upon a Condi-

be

Exchange,

WMI

will

not

to

obligated

pay Additional

on

Amounts
Assets and Asset Trusts
. .
.

the Series L

WMI

Preferred Stock.

of

The assets
Trust
I

the Company currently


Certificate

of

consist

the Asset

Class

A Trust
Asset

representing the Companys

in

interest

Asset Trust

I,

along with certain other Permitted

is

Investments.

Trust

statutory

trust

formed under
I

of

of

the laws

the State

Delaware.

Asset Trust

was

originally

to

formed pursuant

a trust agreement

between the Company, Company Delaware,


Pooling and Servicing
I

as as

depositor,

and Deutsche Bank


trustee.

Trust
I

Delaware

The Asset

Trust

Agreement

among WMB,
Trustee, Trust

as

Asset Trust

Servicer, Trust

the

Com-

as

pany,

depositor,
I

Deutsche

Bank National Bank

Company, Company

as

Asset Trust

and Deutsche
I

Trust

Delaware,
trust Trust

as

Asset and
I

Delaware

Trustee, restated

agreement

now the governing

instrument
for
election

of

is

I.

Asset Trust
federal

has

made a REMIC

United

States

income tax purposes.

of

The
(

initial

assets

Asset Trust

consisted

of

a portfolio
after related

including

payments thereon received from and

1,

of

February
originated

2006)

56,090

HELs and

certain

assets

or

acquired

by

between September

1,

WMB
of

2001

and September

30, 2005. As

January 31, 2006, those balance

an

HELs had

aggregate

unpaid principal

of

approxi-

of

mately $5,389,459,150.

As had

November
aggregate

1,

2006 the HELs

owned by Asset ance


are

an

Trust I

unpaid principal

of

approximately $ 4,745,592,069.
for

These loans

typically

made

reasons such as

home

purchases,

home

15

be
Asset

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00027

CONFIDENTIAL

improvements,

furniture

and

fixtures

purchases,

purchases
first lien,

automobiles and debt consolidation.


closed-

The HELs are

end

fixed rate
fully-

home

equity

loans and are generally

on

repaid

amortizing basis. with this Offering,

Contemporaneously

WMB
in

will

convey a
for

of

portfolio

Option

ARMs

to

the Company

exchange

100%
and

of

the Series 2006-

Company Preferred

Securities

of

University

Street will contribute

a pool The

Option

ARMs
of

the Company

as

capital

contribution.
will

portfolio

Option

ARMs
in

conveyed

the Company

of of

to

consist

approximately Option

$ 2,899,877,211
the aggregate

outstanding

principal

amount

ARMs
will

as

of

November

14, 2006. The Company

of

in

it

convey

the Option

that

Asset

Trust

exchange

for

the Asset Trust

II

Class

A Trust

Certificate

and

a second

certificate,

which the Company then


sell

expects

to

transfer

to

WMB.

WMB

will

the Series 2006the Trust. the

C Company

Pre-

ferred

Securities

for

cash

to

Unless the context requires otherwise, Asset Trust are referred


I

HELs owned

Asset Trust

in

as

to

this Offering

Circular collectively

the

Mortgage

Loans.

to

From time
ble

time,

the Company below. not be

may

acquire

additional

Eligi-

Assets,

as

described

Listing

. . . .

. . . .

The

Trust Securities

will

listed

on any

securities

exchange

or

automated

dealer quotation

system.

of

of

Use

Proceeds

. . .

The
ties

Trust will

use the proceeds

the sale

of

the Trust Securi-

to

of

purchase

like

amount

Series 2006-

Company
will

Preferred

Securities

from
for

WMB,

which the Company

issue

to

of

exchange

the conveyance

portfolio
will

Option

ARMs

to

the

Company. The WMI Group

use the

of

proceeds
ferred

from the sale

the Series 2006- C


for

Company Prepurposes,
stock.

to

Securities

the Trust

general corporate

of

which may include the repurchase Ratings

WMIs

common

. . . .

. . . . .

The

be

to

Trust Securities

are expected

assigned upon issuRating Services, a

ance ratings

BBB

by

of

Standard
Hill

&

Poors

of

Division

The McGrawInvestors

Companies,

Inc.

S&P),

Baa2

by

of

WMB

in

Moodys

Service,

Inc. not

Moodys)

and A

Fitch, Inc.

Fitch).

A
at

rating

a recommendation

to

is

buy,

or

by be

sell

hold securities withdrawal


Risk

and may any time

to

subject

revision,

suspen-

or

sion
tion.

the assigning rating organizarating

See

Factors Rating Agencies may change


including
their

methodologies, Tax Consequences

views
will

on

notching

practices.

It is

anticipated

that

the Trust

be

as

treated

a grantor trust
Accordingly,

for

United States federal income tax purposes.

each holder
directly

as if it

be

of

a Trust Security

will

treated

owned
allo-

the Series 2006-

Company

Preferred

Securities

to

cable

such

Trust Security.

The Company a
publicly

as

to

intends

qualify

a partnership

other

than

traded partnership taxable

as

a corporation)

for

16

by

II

and the Option ARMs owned

by

by

II

100%

ARMs

owns

to

to

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00028

CONFIDENTIAL

United States Series


Trust ship.

federal

income tax purposes,

and thus, the held

2006-

Company Preferred

by on

Securities

the

are intended

in

to

constitute

equity interests

a partner-

it

As a

partnership,

the Company intends that

will

not be

to

subject

United States federal income

tax. Instead,

each
its

be

of

holder

Trust Security federal

will

required

to

report

United States income,


that

income tax return deductions

share

of

its

the

gains, losses,

and

of

credits

the Company

received

any cash distributions.

See

U. S.

Certain

Federal Income

Tax Considerations

United States

Federal Income

Tax Consequences.

if

are allocable

to

the Trust, even

such holder has not

by

or

be

ERISA Considerations .

No

Trust Security

may

purchased
for

to

transferred

any

an

Benefit eral

Plan Investor,

except

insurance

company genthat,

account

that represents,

warrants

and covenants

B)of A) it is

it

the time

of

acquisition
(

and throughout

the period

holds the

securities,

eligible for

and meets the requirements Transaction the assets Class Exemp-

Department
tion

Labor Prohibited

of

95-60,

less

than

25%

of

such general Plan Investor

or

of

account

are

represent)

assets

Benefit

C) it is

and

not a person who has discretionary authority respect the assets the Trust

or

to

of

control

with

any person

who provides investment

advice for a fee

( direct

or

indirect)

or

to

with

respect

such
f)(

of

assets,

any

affiliate

such a person

and would not otherwise 2510.3- 101(


Governing
1).

excluded

under 29

Law

. . . .

The

Trust

Agreement, the Trust Securities,

the LLC AgreeSecurities with,

ment and the Series 2006- C Company Preferred


will

governed
the State

by,

and construed
Delaware.

in

be

accordance

C. F. R.

be

the

of

of

laws Stock

The Series L

WMI

Preferred
with

will

governed

and construed

in

by

be

accordance

of

of

the laws

the State
by,

Washington.

The Depositary

Shares the

will

governed
the State

and construed

in

be

accordance

with,

of

of

laws

New

York.

CUSIP
ISIN
.

. . . .

. . . .

. . . .

. .

93935J AA 1 US93935JAA16

. . . .

. . . .

17

or

of

at

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00029

CONFIDENTIAL

RISK FACTORS
Purchasers should carefully consider the following risk factors

in

conjunction

with

the other

in

information

contained
circular,

this

offering circular,

as

well

as

is

information

that

incorporated

by reference

in

this

offering

before purchasing

any Trust Securities,

the financial entitlements

of

which

will

to

of

of

be

substantially similar

those

like

amount

Series 2006-

Company

Preferred

Securities

and

in

which are conditionally


Preferred Stock.

exchangeable

into

Depositary

Shares representing

interests

Series L

WMI

to

of

Risks Relating
Securities

the Terms

the Trust Securities

and the Series 2006- C Company Preferred

of

the Series 2006-

C Company
to

Preferred Securities.

if

Holders

Trust Securities

will

receive distributions only

the

Company pays

dividends

on

Amounts

available

the Trust for payment

on the

Trust Securities

will

be

to

limited

dividends

by

of

received

Preferred Securities.

If

the Trust as the holder


declare

the Series 2006- C Company


the

the

Company does not


the Trust
will

and pay dividends on

Series 2006-

Company

Preferred

Securities,

to

not pass through

any dividends

holders

of

the Trust Securities.

Dividends

on the Series 2006- C Company Preferred Securities


will

are not cumulative for any Dividend

and

purchasers
dividends

not receive dividends

on

the Trust Securities

Period unless
for

are authorized

and declared by the Companys Board

of

Managers

that Dividend

Period on the like amount

of

Series 2006-

C Company

Preferred

Securities

held by the Trust.

Dividends
quently,

on the Series 2006- C Company Preferred

Securities

are not cumulative.

Conse-

of

if

the Board
Securities Securities, Period.

Managers does not declare a dividend on the Series 2006- C Company

as

of

Preferred Preferred that

for

any Dividend

Period,

the Trust,

holder

the Series 2006will

Company
for

and consequently

the holders

of

Trust Securities,

not receive dividends


that

addition,

the

to

the Companys Series 2006-

best interests

pay less than the

full

amount

of

the stated dividends any Dividend

on the

Securities

for the

if

Company Preferred

or

no dividends by

Period even

it

Dividend

Companys Board

Managers

may determine

would be

funds

are available. Factors that would generally be considered making this determination are the amount

Companys Board

Managers
condition

of

available

funds,

the Companys financial


regulations,

and

of

capital

needs, the impact

current

and pending

legislation

and

economic

conditions

tax considerations.

of

to

of

The

level

the Companys

assets relative

the aggregate liquidation preference

the

Comif of or

panys preferred

securities could the

shrink over time because of, Securities

among

other things, dividends

by

paid

the

Company on
at

Company Common

or

other Junior Equity Securities

any are issued

a future date.
includes Securities provisions that limit

The LLC Agreement Companys Junior


dividends preference
Description

the Companys

ability

pay dividends

on

to

to

of

Equity

but, subject

satisfaction

those limitations, does not prohibit

of

that

could cause the level the Company Preferred the Series 2006-

the

Companys assets

to

relative

the aggregate

liquidation

of

to

Securities

shrink.

These

limitations

are described

under

C Company

Preferred Securities Ranking,

Restrictions

Dividends

and Voting Rights and Covenants. a Dividend redeem


Junior Period,

They

include

the following:

during

the Company acquire

may

not pay dividends

on

Junior

Equity Securities,
( with

or

purchase,

otherwise

for consideration for

directly

or

indirectly

limited
all

exceptions)

Equity

Securities,

unless dividends

such Dividend

Period

on

series

in

Company Preferred
aside
for

Securities

then outstanding

have been declared

and paid

or

full,

set

payment,

as the case may be; and 18

on

of

in
and
the

of

in

In

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00030

CONFIDENTIAL

or

of

of

at

of

without

the consent

affirmative

vote

the holders

least

two- thirds

series

as

Company Preferred

Securities,

voting

together

a single class, the Company

may

not pay

of

all

full

dividends

series

the Company

Preferred Securities;

or

on

of

all

pay dividends
fiscal

on
all

Junior

Equity Securities exceeds

unless the Companys

FFO

for

the four prior

of or

of

quarters equals

150%

the amount that would be required

to

pay

full

dividends

on

series

the Company

Preferred Securities;
that

amend

or

otherwise

change the requirement

the Company make investments assets such that the Companys

or

and

of

distributions with the

proceeds

the Companys

FFO

for

or

of

any period

four fiscal
full

quarters

will

equal

exceed

150%

of

the amount that would be


Securities.

of

on

to

all

required

pay

annual dividends

series

Company Preferred
Loans),

As the HELs and Option ARMs

( collectively,

the

Mortgage

prepay

or

repay principal

by

to

and

distributions with

respect

such principal payments

are

made
or

each Asset

to

Trust

the

to

Company amounts
reinvest

subject

the limitations referenced

above, the Company may choose


Securities other Junior

to

apply such

pay dividends

the Company

Common
or

Equity Securities

in

such amounts

Permitted Investments

additional

Eligible Assets.

Between March

6,

2006,

on

the date

which the Outstanding

Company Preferred

Securities

were issued, and October

31, 2006,

on

the Company paid dividends

totaling

$ 83,834,863

the Company

Common

Securities

from interest

on

to

collections distribute

the HELs. Additionally,

subject
I

the limitations referenced

above, the Company could

on of

a portion

the Asset Trust the Company and

Class

Certificate

Asset Trust

no II

A Trust
no

or

Class
current

A Trust

Certif-

as

icate

a dividend

Common
has

Securities. current

The Company has

intention

an an

or

to

pay pay

extraordinary dividend, extraordinary dividend. Securities

WMI
a

intention

cause

permit the Company

by

Nevertheless,

dividends

paid

the Company

on

the Company

in

Common

in

could result

reduction

the Companys

assets that could have the

to

of

its

consequence,

notwithstanding

compliance
full

with

the limitations referred the Series 2006the amount

above,

the Company
Securities

to
the

to
that price.

or in
has

on

to

not having funds available

pay

dividends

Company

Preferred

by

or

or

of

of

future

periods

loss

investors

some

of

all

their

investment

were the Company

be

to

liquidated.

The Trust Securities and the Series 2006- C Company Preferred Securities

are perpetual

and

at

of

of

not redeemable

the option

the holder, and holders investment back.

the Trust Securities

can have no

assurance The

of

receiving

their initial

at

Trust Securities

may

not be redeemed

the option

of

their

holder

under any circumstances, 2006-

are perpetual
Preferred

maturity date.
will

If

and have no

and when the Company redeems Series

Company

of

Securities, Preferred

the Trust
Securities

redeem a

like

amount

Trust Securities.

While the Series 2006- C under certain

at

Company

may

redeemed

of

be

the option

the Company

is

to

of

circumstances

described

herein,

any such redemption

subject

the approval

the

OTS and may


guarantee

be constrained
will

operation

the Replacement investment

Capital

Covenant.

in

by

of

Investors

the Trust Securities

to

have no

right

reclaim their initial


will

from the Trust and there can be

in

no

the Trust Securities

If

ever be redeemed.

investors

the

Trust Securities

choose absence
sell their

of to

sell

their

in

Trust Securities

order

reclaim

part

their initial

investment

in

or

to

of

all

the

any

redemption, there can be no guarantee

that

such investors would be able the sale price would

at to

securities
initial

or

that

in

if

secondary

market,

such a sale occurred

be

or

above the

decline

capital

levels

result

to

at

is

deteriorated

and may have other adverse consequences.

it

Exchange occurs,

likely

occur

a time when WMBs

and WMIs

If

WMBs

may

in

a Conditional Exchange.

a Conditional
condition

financial

in

The

returns

from an investment

the Trust Securities

will for

be dependent a
Conditional

to

significant

extent

on the performance
the performance

and

capital

or

by

of

and

capital

the placement

the

OTS

of

WMB due levels WMB


of
a
Conditional

the potential

Exchange.
into

decline

WMB
for

conservatorship Shares

in

or

receivership

would result

Exchange

of

the Trust Securities

Depositary

19

in

to

in

on

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00031

CONFIDENTIAL

representing Series L

WMI

Preferred

Stock.

The Series L

WMI

Preferred Stock would represent

in

in

investment
the

WMI

and not

the Company

or

the Trust. Under these circumstances:

in

Trust Securities

would be exchanged
WMIs financial

for

preferred

equity interest

WMI

at

a time when
have would

it or is

WMBs
in
be

and, ultimately,
into

condition

has deteriorated and, accordingly,

when

WMB may
Series L

or

been placed

conservatorship

receivership

unlikely that

a financial Stock;

position

make

any dividend

payment on the amount

Preferred

in

of

of

of

of

of of

of

to

WMI WMI

all

the event

liquidation

WMI, the claims

creditors

WMI
the

and

its

subsidiaries,

in

to

including interests
rities

WMB,
such

would be entitled

priority

payment over

claims

holders

of

equity

as

the Depositary

Shares, and, therefore, Shares

the former holders Series L

of

the

Trust

Secu-

who would then hold the Depositary


receive substantially less for

representing

WMI

Preferred Stock not

may

than such holders would receive had the Trust Securities Shares. See

been exchanged

the Depositary

Risk
Series L

Factors Applicable

to

Depositary
will

in

Shares Issued

a Conditional

ExchangeThe
of
WMI;

WMI

Preferred

Stock

rank

subordinate
for

to

the direct indebtedness

United States federal income tax purposes, event holders

Conditional

Exchange would most

likely

taxable incur

the Trust Securities,

and

by in

of

to

that

event the holders generally would

or

a gain

as

loss,

the case may be, measured

the difference

between

their

adjusted

in

tax basis

the Trust Securities

and the

of

fair

market value

the Depositary

Shares; and

to

of

although

the terms

Depositary

Shares are substantially similar


Securities, there

the terms
that

of

the

Series 2006rities

Company

Preferred

are differences

holders

of

Trust
will

Secunot

as

be

to

might

deem

important,

such

the fact that holders

of

Depositary
with

Shares the right

in

as

by

or

generally directors

have voting

rights,

except

required

law

connection

to

elect

of

if

dividends

are missed

( see

Description

the Series L

WMI

Preferred

Stock

or

Voting Rights),

benefit

from any protective

covenants.

of

The terms
for

the Trust Securities


rights.

and the Series 2006- C Company Preferred Securities

provide

limited voting

in

in

Except

specified

the Trust Agreement

relation

the right
its

direct

the manner

which the Property Trustee acting Series 2006rights.

to in

as

or

to

on

of

to

behalf

the

Trust exercises

voting rights with respect

Company Preferred

Securities,

holders

Trust Securities

are not entitled Series 2006-

to

of

voting

in

as

as

Except

specified

the

LLC
to

of

Agreement,
voting without

the Trust,

holder the

C
of

Company
the the

is

Preferred

Securities, taking

not entitled

rights.

Nevertheless,

LLC Agreement
least

prohibits either

or

Company from
Series 2006Preferred

certain

actions

the consent

vote

of

at

two- thirds

or

of

Company Preferred
voting

all

of

Securities

voting separately

the series

Company

as

as

Securities,

together

single

class,

applicable.

For a description have a right

of

the matters see

on

of

which the holders

Series 2006-

Preferred Securities

to

C Company

vote,

of

Description

the Series 2006-

C Company

Preferred Securities Voting Rights and Covenants.

of

Holders

the Trust Securities


rights;

and Series 2006- C Company Preferred Securities

have no

redemption
Series 2006tion will

however, the Company may ( but


Preferred Securities

is

not required

to)

redeem the

C Company
an to

on any Dividend Payment Date, and such redemp-

cause

automatic

redemption
Capital

of

the Trust Securities.

Subject

the Replacement

Covenant
Preferred

and the

of

prior
(

approval

the OTS, the Company

i) in

may redeem
Dividend

the Series 2006-

Company

in

Securities

whole but not

part

on any

of

Payment Date upon the occurrence

a Tax Event,

an

Investment

Company Act Event, a on any


other

in

Capital

ii)

Rating Agency Event

a Regulatory
price

Event and

whole

in

or

or

part,

Dividend

at

Payment Date,
Security,

to

a redemption

equal

the liquidation
any, plus

preference

per Company Preferred

if

plus declared

but unpaid dividends,

U. S.

Treasury- based make- whole amount

in

if

the redemption occurs

prior

the Dividend

Payment Date

occurring

December

2016

or

to

a LIBOR-

20

an
be a
the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00032

CONFIDENTIAL

on

if

based make- whole

the redemption

occurs

after

December

2016

a Dividend

Payment Date

that

by

not a Ten-Year Date. The redemption


Securities
will

the Company

of

the Series 2006for

Company Preferred
price

automatically

cause a redemption
the Trust

of

the Trust Securities

which the redemption

as

be

will

paid from the proceeds

receives

from the Company


Securities.

a consequence

of

the

redemption Investment however,


Preferred

the

Series 2006-

Company

Preferred

The occurrence
Capital

a Tax Event,
will

Company Act Event, a Rating Agency Event

or

a Regulatory

Event

not,

of

to

give

holder

the Trust Securities

any right

require that

the Series 2006-

Company

or

Securities

the Trust Securities


the

be

redeemed.

If

the

Company redeems
redeemed, redemption

Series 2006-

Company

Preferred

Securities,

the Trust Securities

of

will

be

automatically
their

and the former holders

the Trust Securities yield

may not be able


terms comparable
only

in

invest

proceeds

securities

with

a dividend

and

other

those

the Trust Securities.


with

A Treasury- based
to
prior

make whole amount Payment Date

will

be payable

connection

a redemption

in

the Dividend

occurring

December

2016; after
will

in

the Dividend

Payment Date

occurring

December

2016, a LIBOR-based
Securities

make

whole amount

only

if

be payable

the Series 2006-

Company

Preferred

are redeemed

on a Dividend

Payment Date Agency Event

is

that

not

a Ten- Year Date and no Tax Event, Investment


Capital

Company Act Event, Rating

or

Regulatory

Event shall have occurred.

to

The Series 2006nys creditors

C Company C

of

in

of

Preferred Securities

will

rank subordinate

claims

the

Compa-

and on a

of

parity

with other series

preferred
will

securities issued

by the Company.
claims

to

The Series 2006Companys


dividends
Parity creditors.

Company Preferred

Securities

rank subordinate
Securities Preferred
will

of

all

the

as

The Series 2006- C Company Preferred


with

rank pari passu

and upon

liquidation that

the Outstanding

Company

Securities

and any

other

Equity Securities

the Company

may
to

issue.

The Company may

issue additional

Parity

in

at

at

Securities without

any time

the future, subject

satisfying certain conditions

the time

of

issuance,

or

of

of

the consent
the

approval

the

holders

the Trust Securities.

Accordingly,

on

to

if

Company does not have funds


Securities;

legally available

pay

full

dividends

of

all

series

the

Company Preferred

in

or

the event

the Companys liquidation,

or

of

dissolution liquidation

winding

up,

the Company does not

of

of

to

all

have funds legally available


Preferred Securities,

pay the

full

value

the series

Company

be

to

to

any funds that are legally available


Preferred Securities. Securities,

pay such amounts

will

paid

pro rata

the 2006- C Company

the Outstanding

Company Preferred

Securities

and any other Parity Equity

See

of

Description

Other Company Securities.

There has never been a market

for

the Trust Securities.


for

to to

Prior

this Offering,

there

was no market

the Trust Securities.


they

Although

the

Initial

Purchas-

in

to

ers intend
extent that

make a market

the Trust Securities,

are under no obligation

do so and,

to

to
Equity the

is

it

such market making

commenced,
exchange

may be
or
for

at

discontinued

any time. The Trust Securisystem. There can be

ties will

not be

on

listed

any securities

automated

dealer quotation

no assurance

that

an

or

active

and liquid trading market

the Trust Securities

will

develop
trade

be

to

If

sustained.

such a market were


factors, including

at

develop,

the

prices

which the Trust Securities

would

depend on many

of

prevailing

interest rates,

the operating

results

the Company,

of

be

and WMI,

and the market

for

similar securities.
initial

Holders

Trust Securities

may

not

able

at

or

resell their

Trust Securities

above the

price.

Furthermore, the Trust Securities


will

that

are not

and

will

not be registered under the Securities

Act and

be deemed

to

be

restricted

securities transfer

of

within

the meaning

Rule 144 under the Securities

Act and are subject


restrictions

to

significant

in

as

to

restrictions

described

Notice
liquid

Investors.

These
for

on

transfer

may

inhibit

the impact

of

development

an

active

and

trading

market

the Trust Securities

and may adversely

the market price

of

the Trust Securities.

21

to

WMB

to

to

an

of

of

is

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00033

CONFIDENTIAL

The Trust Securities are not obligations The


Trust Securities

or

of,

guaranteed

by,

any other

entity.

or

of

do not
Inc.,

constitute

obligations

equity

securities

WMI, WMB, the and


University

Company, Marion Holdings

an

intermediate holding

company between any


entity

WMB
In

Street Trusts

Marion), University with

Street, either

Asset Trust

or

other

than the Trust, nor are the


entity.

to

obligations

respect

the

Trust Securities Street,

guaranteed
either

by any

particular,

neither

WMI, WMB, the Company, Marion,


guarantees
that

University

Asset Trust nor any other entity

the Trust

will

pass through

any dividends

paid by the Company


additional capital
fails

to

the Trust as the


other

to to or

of

to

holder

the Trust Securities,

nor are they obligated

provide

support

in

to

to

the Trust

enable the Trust

make

distributions Securities

the event the

Company
for

pay dividends pass through Shares

the Series 2006-

Company Preferred The

and the Trust has no dividends are not exchangeable Exchange.

holders Series L have the

the Trust Securities.

Trust Securities

Depositary

WMI
right

Preferred Stock except upon a Conditional

No
for

holder

of

Trust Securities

to

to

require

the Trust

exchange

the

Trust Securities

Depositary

Shares.

The Series 2006-

C Company
of,

in

an

Preferred Securities

represent

solely

interest

the

Company

and are not obligations The Series 2006-

or

guaranteed by, any other

entity.

Company Preferred

Securities

not constitute

obligations

or

do

equity Street,

of

securities Trust

any entity other than the Company, including Asset Trust, nor are the Companys

WMI, WMB, Marion,

University

the

to

and

either

obligations
entity.

with

respect

the Series 2006-

by

In

Company
Marion,

Preferred

Securities

guaranteed

any other

particular,
entity

neither

WMI, WMB,
that the additional

University
will

Street,

the Trust, either Asset Trust nor any other

guarantees

or

to

Company

declare

pay any dividends

the Trust, nor are they obligated

to

provide

or

on

to

to

to

or to
will

of

to
on

capital

other

support

the
for

Company
to
this

enable the Company

pay dividends

the Series 2006-

Company
operations

or in

Preferred

Securities

the Trust purpose

the event the Companys the Company otherwise

assets and results from

are insufficient

do

to

fails

so.

Rating agencies practices.

may change

rating methodologies,

including

their

views on notching

The
developing

rating

methodologies
the rating

to

for securities

with features their

similar

the Trust Securities

are

still

in

and

agencies

may change
ratings

methodologies

the future. This

may

include,

to for

example,
securities

the relationship
with features

between

to

assigned

WMIs

senior securities called

and

ratings

assigned

to

similar
their

the Trust Securities,


for
rating

sometimes

If

notching.

the rating

in

to

agencies

were

change

practices

such securities
this

the future and the ratings

of

the

be

Trust Securities

were

subsequently

lowered,

may have a negative impact


20,

on

to

the trading released


that

of

price

the Trust Securities.


entitled possible

For example, on November

2006 Moodys

Investors

Service

for

publication

Rating Preferred

Stock and Hybrid Securities Request

Comment

discusses

in

to

alternative

approach
with

notching

Moodys

ratings analysis

and requests
31, 2006.

on

comment from market

participants,

the comment

period

expiring

December

in

in

to

Moodys
reduction

were

adopt the methodology

it

that publication,

would

likely

result

a one notch

the credit rating on the Trust Securities

assigned

by

of

Moodys.

Risks Associated

with the Companys Business

by

is

The Company

effectively

controlled
conflicts

WMI

and the Companys relationship with

WMI

If
and

create potential the Companys

of

WMB may
or All of

interest.

of

officers

and

but

one

the Companys

Managers
University

are also officers


Street will

WMI

their

affiliates.

After

this

Offering, voting

WMI,

and

continue
will

of

all

control

the Companys

outstanding

securities. including

WMI, WMB, and


the Independent

University

Street

have

to

of

all

the right

elect

the Companys
Street

Managers,

Manager.

and University
its

may

to

WMB

have interests that are not identical

the Companys

interests.

is

WMI, through

subsidiary,

New

of

American

Capital, Inc.,

the ultimate owner

WMBs and

22

to

WMB

or

WMB

of

all

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00034

CONFIDENTIAL

University

Streets

common
of

stock,

and may have investment


Consequently,

goals and strategies

that differ

from

of

of

those

the holders

the Trust Securities. University Street

conflicts

interest

between the Company,


arise.

or

on

one hand, and WMB,

on

and/

WMI,

the other hand,

may

of

is

The Company and

dependent on the

officers

and employees

WMI

and

WMB

for the selection,

of

structuring and monitoring

the Mortgage Loans and the Companys relationship with


conflicts

WMI

WMB may create


WMI
and

potential

of

interest.

in

WMB

of

are involved

virtually

every aspect

the Companys

existence.

WMB WMB
other

administers the Companys

of

day- to- day activities

under the terms

certain

agreements between

on

and the Company. The Company

of
and

is

dependent

the diligence

and

skill

the officers and employees and the Companys

of

WMB

for

the selection,

structuring

and monitoring

of

the

Mortgage

Loans

Eligible

Investments.

This dependency

and the Companys such

close relationship

with

WMI

WMB may

create potential

of

of

of to of

conflicts

interest.

Specifically,

conflicts

interest

may

arise

because the employees


type and price

WMI
this

i)

and

were directly involved

the decisions
indirectly

regarding

the amount,

of

WMB

in

the

Mortgage
Offering

Loans and other assets acquired

from University
(

Street

and
price

WMB
of
other

prior

ii)

will

by

if

and

make decisions

on

the amount,

type and

applicable) Street,

any future
parties.

acquisitions

the Company

Additional

Assets from University

WMI

The Company

dependent on the

officers

and employees

of

is

WMB

for the servicing

or

of

the

in

Mortgage Loans
potential
conflicts

the Asset Trusts and the Companys relationship with

WMB may

create

of

interest.

The Company

dependent

expected

be dependent

on

to

respect

Additional

Assets.

to-

to

the Asset Documentation


contain

relating

the Companys

assets. with

These agreements

contain

and

will

terms that the Company

believes

are consistent
I

those resulting from arms- length


Trust

to

negotiations.

With respect

the Asset Trust

is

WMBs
principal

of

servicing

fee

an annual

fee

0.125%, paid monthly,

for

each HEL based on the unpaid Agreement


for

of

balance
II,

respect fee will

the Asset Trust

and Asset

Trust

WMBs
be

servicing principal

be an annual fee

of

II

such HEL. With

to

Pooling and Servicing

0.375% paid monthly,

each Option

of

ARM
fees,

based on the unpaid


Loans,
will

balance
retain

such Option

ARM. WMB, as
charges,

the servicer
including

of

the

to

Mortgage

entitled

certain fees,

fees and ancillary statement

any prepayment

I,
the
other the

Pooling and Servicing

Agreement

and Asset

insufficient

funds fees, modification

payoff

fees and late charges with respect


will

as

the Mortgage generated

Loans

additional

servicing

compensation
with collections

and

also

be

to

entitled

certain

income

by

permitted

investments
belief

made
that

on

the

Mortgage

Loans.

Despite

the Companys

of

the terms

the Asset

Documentation

between

WMB

and the

Company

reflect

and

will

reflect

terms consistent
officers

with

those negotiated

on an arms- length

basis,

Companys dependency

on WMBs
conflicts

and employees

and the Companys close relationship with

of

may

of

WMB

create potential

interest. Specifically,

such conflicts

interest

may

arise

of

because the employees

have the power

of

to

WMB

modify the terms

the Mortgage

Loans and
respect

in

assets

the Asset Trusts and any Additional

Assets and make business decisions

with

to

to or

servicing

those underlying

assets, particularly

the extent such underlying

collateral

is

of

to

defaulted

otherwise

non- performing.

Regulators

may limit

the Companys

to

ability

implement the Companys business plan and

may

restrict

the Companys

to

ability

pay dividends.

is

of

Because the Company

an
its

indirect subsidiary

WMB,

regulatory

authorities

will

have the

right

to

examine the Company and

to

activities

and, under certain circumstances,

impose restrictions on

to

the Company that could affect

to

its

WMB

or

ability

conduct

business

pursuant

the Companys

23

of

on WMB and others for the servicing the Mortgage Loans and WMB and others the servicing any underlying collateral with WMB administers the Companys day- day activities under the terms
for

is

to

of

is

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00035

CONFIDENTIAL

business

plan and that could adversely

affect

the Companys

financial

condition

and

results

operations.

is

If

the OTS, which

WMBs
or

primary regulator,

determines that

WMBs

relationship with

in

in

or

results

practice,
to:

if,

Company
capitalized,

an unsafe

unsound

is

certain

instances,

WMB

no longer

of
the
well-

then the

OTS

has the authority

restrict

the Companys the Companys the Companys

to

ability

transfer

assets;

to

to

restrict

ability

pay dividends

its

security

holders;

restrict

ability

redeem

preferred

securities;

or

or

to

its

its

require

sever

relationship with

the Company

its

WMB

divest

ownership

of or

to

the

Company.

If

the

OTS

determines that

by

or

payment

dividends

either

subsidiaries,
restrict

under the then- present circumstances,

unsafe and unsound

practice,

the

OTS
I,

could

the Companys

to

ability

pay dividends.

If

Asset Trust

in

it

Investment
likely result

Company

II

any

the Company, Asset Trust Act, could

or

of

the Trust loses its exemption


effect

under the

have a material adverse

on the Company and would


Securities

of

a redemption

the Series 2006-

C Company

Preferred

and the

Trust Securities.

of

I,

Asset Trust

II

Each

the Company, Asset Trust

and the

it is

Trust believes

that

not,

and
under

so

as

as

an

to

to

to

its

intends

conduct

operations
Act.

not

be, required

register Act,

investment

company

the Investment investment


potentially capital

Company

Under

the

Investment

Company

a non- exempt entity that

to

company

required

register with the

SEC and
things,

to

is

is

subject

extensive,

restrictive

and

to,

adverse regulation dividends

relating

among

other

operating

methods,

management,

structure,

and

transactions

with affiliates.

The Investment

Company Act exempts

in

or

an
SEC,

is

entities that, directly

through

majority- owned

subsidiaries,

are primarily engaged and interests


interpretations Trust I

the business
(

purchasing

otherwise

acquiring

mortgages and other liens


Interests).

of in

or

on

real estate

which

as

to

the Company refers

Qualifying

Under

current

the

of

staff

the

in

to

of

order

qualify for this

exemption,

Trust

other

things,

must maintain

least

55%
or

the Companys

in

at

of

assets

Qualifying Interests

and

II,

each

the Company, Asset

and Asset

among
also

in

may

required

maintain
that

additional

25%

Qualifying Interests

or

be

an

to

other

real estate

related

assets.

The assets

the Company

the Asset Trusts

may

acquire

therefore Trusts

may

by at to to
its

be

limited

the

of

provisions

the Investment

Company
total

Act.

The Company and the Asset

have each

established

no

to

of

policy

limiting authorized their respective

investments
assets.

which are not Qualifying

Interests

more than 20%

of

the value

The Investment

Company Act does not


related assets.

treat

cash and cash

as

equivalents

either

Qualifying Interests

or

other

real estate

Based on the

criteria

outlined

above, the Company and the Asset Trusts each believe that, as

of

the time
least

this

Offering,

the Companys
fair

and the Asset

Trusts Qualifying Interests


total

will

comprise the

of

90%

of

the estimated
Trusts

market value
that

their respective

assets.

As a

result,

Company
to as

and the Asset

each

to

believe

they are not required


the

register

as investment
Trusts intend,

companies however,

under the Investment seek an exemptive


staff

Company Act.
no- action

Neither

Company nor the Asset

or

order,

letter

other

form

interpretive

guidance

from the respect

SEC
to or
the

or

If

on

its

this position.

the

SEC

staff

were

to

take a different
Qualifying

position with

whether
relevant

the Companys

or

an Asset

Trusts

assets constitute

Interests,

the Company conducts


its

i)

the

it

Asset Trust could be required either

change

manner

in

to

which

operations

or

as

to

register

ii)

avoid being required

an investment

to

company,

register

as an investment

company, either the case


Preferred

which could have a material adverse effect on the Company

or

of

the Asset Trust,

in

to

of

may

be, the Companys

ability

make payments

respect

the Series 2006-

Company

Securities

and, accordingly,

the trading price

the Trust Securities.

in

of

Further,

order

at

ensure that the Company

and Asset

to

all

Trusts

times continue

qualify for

the above exemption

24

or

of

of

of

of

an

of

is

its

WMB WMB

is

operating

with

an

of

insufficient

level

capital,

that

the

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00036

CONFIDENTIAL

be

at

from the Investment adopt less


efficient

Company
of
methods

Act,

the Company and the Asset Trusts may

required
Trusts

times

of

financing

certain

the Companys from acquiring

and the Asset


certain

assets than

be

be

would otherwise

the case and

may

of

precluded

types

assets whose yield the exemption.


Finally,

in

on

be

is

higher

than the yield

assets that could

purchased

a manner consistent

with

or or of

be an to

an

the Company the Company


injunctive
relief

Asset Trust were

be

unregistered investment

company, there would

risk that

as

be

the Asset Trust,

the case

may

be, would

to

subject

monetary

penalties

and

be in

by

action

brought

the SEC, that the Company


with third parties

the Asset Trust,

as

or

an

the case

to

may

be, would

unable

enforce contracts undertaken

and

that third parties

could seek
Trust

an of

obtain

rescission

transactions

during the period the Company company.

or

the Asset Asset Trust

was

determined

unregistered investment

If

the Company,

of or

be

to

either

the Trust

as

ever considered

an investment

company under the Investment


likely

Company Act
the

result

Investment
Preferred

Company Act Event, the Company would


Securities.

redeem

Series 2006- C Company

See

of

Description

the Series 2006-

Company Preferred Securities

Redemption. the Company

Additionally, Trusts.

may from time

to

time have Asset Subsidiaries other than the Asset unless the establishment and operation

The Company may not


will

an

establish

Asset Subsidiary

is

of

to

an

is

to in
that with

such Asset Subsidiary

not cause the Company

be an investment

company
not
itself

that

required

register

under the Investment

Company

Act and such Asset Subsidiary

is

an investment
Subsidiary

is

that

required

register

under the Investment company,

If

company

to

Company

Act.

any such Asset

to

to

were

be

required

register

as an investment

the results would be similar

to

those company.

in

to

to

described

above

respect

either

Asset Trust being required

register

as

an

investment

An

adverse determination

Companys partnership

status could

subject

the

Company

taxation.

of

to

Prior receive

the issuance

the Series 2006-

C Company
LLP

Preferred Securities,

the Company

will

an opinion from Mayer, Brown, Rowe

& Maw
to

to

the effect that, for United States federal


taxable

income tax purposes,


ii)

i)

the

Company
closely

will

not be treated as an association


that

as a

corporation

and

although

no

activities

comparable revenue

contemplated

by the Company have been the


the

or

U. S.

of

subject treated

any

Treasury regulation,

ruling

judicial decision,

Company

will

not be
certain

as a

as

publicly

traded partnership taxable


representations

a corporation.

The opinions are based on


restrictions

assumptions and on certain

and agreements regarding

on the
its

future

of

of

conduct

the

activities

the Company. Although

the Company intends

to

conduct

activities

with

if it

accordance

such assumptions, representations

and agreements,
for

were nonetheless

deter-

mined

that

the Company was taxable would

as

a corporation

United States

federal

income tax purposes,

then the Company would reduce


Securities.

be

subject

under the Code

to

the regular corporate

income tax. Such taxes

to

the amounts

available

make payments on the Series 2006-

Company

Preferred

The Company has no control over changes


tively

in

interest

rates and such changes

could nega-

of

impact the Companys

financial

condition,

results

operations,

and

to

ability

pay

dividends.

The Companys income


underlying

of

will

consist

primarily
I

payments received on the HELs

that

are the

assets supporting

the Asset Trust

Class A Trust Certificate

and on the Option


(

ARMs

are the underlying


assets, together

assets supporting

the Asset Trust

II

Class

A Trust

Certificate

such

underlying
Portfolio).

with

any

to

collateral

with respect

any Additional

Assets, the

Companys

in

1,

of

On November
on
rates

2006,

100%

the
all

HELs
of

included

the Companys

Portfolio

bore interest
Portfolio

at

fixed

and

November

14, 2006,

the Option

ARMs

be included
Additional

in

to

this

bore interest

adjustable

rates.

the future, the Company could acquire


rate loans. Adjustable rate loans

Assets that include

or

at

In

are

in by

to

secured

adjustable

decrease

the risks

a lender associated
required

changes

interest rates

but involve other

risks.

As

interest rates rise,

the payment

from the

25

to

of

to

if

The net

effect

these factors

may

at

lower

times the Companys

net interest

income.

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00037

CONFIDENTIAL

by

of

to

borrower increases

rises

the extent
for

permitted

the terms

the loan, and the increased

payment

obligation

At

of

the potential

default.

the same time, the marketability

the underlying environment,

property
there

an be

by

adversely increase

affected

higher interest rates.

declining

interest rate other

in

in

be

In

may may
as to is in to to

prepayments
their

the HELs, Option

ARMs

or

on

assets

the Companys

Portfolio

at

borrowers

refinance

mortgages

lower interest rates. Under

these circumstances,

the Company

it

may

find

more

difficult

acquire

Additional

Assets with rates sufficient


Preferred Securities.

support the payment

on

the dividends

the Series 2006affect

Company

declining

interest rate environ-

or

ment would adversely


Series 2006-

the Companys

ability

pay

full,

even partial, dividends

on

to

the

Company Preferred

Securities.

it

The Company cannot assure purchasers

that

paid

WMB

and University

Street fair market

of

all

value for valuations

the Companys
all

assets because the

of

such assets. Nor can the

Company has not obtained any third party Company assure purchasers that the Company will
at
their fair

acquire

dispose

in

or

of

its

assets

the future

market value.
all

The Company has adopted

policies with
will

a view be
fair

to to

ensuring

that

financial

dealings
with

between

WMB,

University

Street

and the Company


third-

each

party

and consistent
assets.

market terms.

of

of

party valuation
will

addition,

anticipated

that third- party

valuations

be obtained

connection

with future

acquisitions

in

dispositions

assets even

circumstances

where

affiliate

the

Company

is

of

an

of

selling

the assets

the Company purchasers the


fair

or

purchasing the purchase

the assets from the Company.


price

Accordingly,

the Company cannot assure assets was equal


that

of

or it

However, there has been no

the Companys

In

all

is

not

in

that

the Company paid for

the Companys

of

market value

those assets. Nor can the

Company

assure purchasers

the consideration

or

or

by

by

be paid

the Company

to,

received

the Company from,

WMB,
or

University

Street

any
will

of in

the Companys equal

of

other affiliates

connection

with future acquisitions

dispositions

assets

be

to

the

fair

market value

such assets.

The Asset Trusts

of or

any other Asset Subsidiary, and therefore the Company, could incur

in as

to

losses assets

a result

environmental

liabilities

relating

properties

underlying the Companys

the Companys Portfolio through

foreclosure

action.

or

be

to on

Either

Asset Trust

any

other

Asset

Subsidiary

may

forced

foreclose obligation

an

to

underlying

or

on

Mortgage
applicable therefore,

Loan

other

assets where the borrower

has

its

defaulted

repay the

It be is

or

an

Mortgage

Loans.

possible subject

that

Asset Trust

any other Asset


with respect

Subsidiary,

and
property.

to

the Company,

may

environmental

to

liabilities

foreclosed

of

The discovery
wastes,
assets.

these

liabilities

and any associated

costs for

removal

of

hazardous

substances,

or

on

of

contaminants

pollutants,

could have a material adverse effect

the

fair

value

such

in

Delays
suffer.

liquidating defaulted

loans could

occur and could cause the Companys business

in

be

Substantial

delays could

encountered

connection
with

with

the liquidation delays

in of

the collateral

in

securing

defaulted related

loans

the Companys

Portfolio,

corresponding

the Companys
sell

receipt other

proceeds.

An

action

foreclose

a mortgaged and

or

on

of

to

property
rules.

repossess and
action
ability

by

is

collateral

securing

a loan

regulated

state

statutes

Any such

to is

subject foreclose

of

of

many

the delays and expenses

lawsuits,

which

may impede
to
repay

the Companys
all

or

or

on

sell

the collateral
Portfolio.

obtain proceeds

sufficient

amounts due

on

to

the related loan

the Companys

The Company may invest


asset coverage. Although

in

assets that involve

new

risks

and need not maintain the current

the Companys Loans,

Portfolio,

immediately after the completion

of

this

Offering, will consist

in

of

to

primarily

the

extent

it

Mortgage

acquires

Additional

Assets

the future, the Company

26

of

to

to

all

of

to

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00038

CONFIDENTIAL

in

of

to

to

its

not required

limit

investments

assets

the types currently

the Companys

Portfolio.

See

The Company

the Company

the Company. Assets such

as

of

of

Business
equity multi- family risks

Assets

second lien
loans

or

closed end
single involve
call

home
or

loans, first

second lien commercial


this

home

or of

equity lines loans

credit,

mortgage

family

residences,

mortgage
circular.

other real estate

assets may
will

of in

different

not described
levels

offering

Moreover, expected

while

the LLC Agreement the Company

as

to

for

maintaining

specified

FFO

coverage

is of

dividends,

required

maintain the levels

of

to

asset

coverage

that currently exist.

to to

is

The Company

dependent on WMI,

and University

Street with respect with respect

its

WMB

acquisition acquisition

of of

be

Additional Assets and

may

subject

conflicts

of

to

interest

its

new

assets.

on

of

The dependency
relationship with

the Company
Street

WMI,

University

Street

and

WMB

and

the

Companys

WMI,

University

and

WMB

may

create potential

conflicts

interest

be

in

of

on
not
close
will

connection

with

the Companys
Street

acquisition

Additional

Assets. The Company Assets that

will

dependent

University

identify Additional

it

WMI,
Street

and

WMB

to to

may

acquire,

but WMI,

University

or

and

are not required and

contribute

sell

Additional

Assets

the Company.

If

WMB
Street

to

WMI,

or

University Additional decline.

WMB

are unable

identify,

are unwilling

contribute

or

to

to

sell,

suitable

as

Assets, then over time the Companys

level

FFO

coverage

to

of

expected

dividends

of

Moreover,
will,

conflicts

interest

may

arise

because the employees

of

WMI,

University

Street extent

on

to

and

WMB

subject

certain

restrictions,

make
of

decisions

the

amount,

type and

of to

the

the Company purchases Assets from University

by

Additional

Assets) price

future acquisitions

the Company

Additional

as

Street,

WMB

other

members

the

WMI

Group

well

as

or

of

future

dispositions

assets

WMB,

University

Street

or

to

of

third parties.

Risk Factors Applicable

Depositary

Shares Issued

in

to

a Conditional

Exchange.

as

of

Holders

Trust Securities

may have adverse

tax consequences

of

result

a Conditional

Exchange.
For United States federal income tax purposes, a Conditional Exchange would most

be
a

likely

taxable

event

holders

Trust Securities

under the Code, and they would incur a gain

loss,

the case

may
fair

be, measured

the difference

between

their

adjusted

tax basis

in

by

the Trust Securities paid

In

market

value

the Depositary

Shares.

if

and the
Holders

to

of

addition,

dividends,

any,

Foreign

be

Depositary

Shares received upon a Conditional

Exchange

generally

will

subject

U. S.

30%

withholding

tax unless the holder qualifies for a reduction

from withholding

tax

under

applicable

United States income tax treaty.

in

A
in

decline

WMIs

financial

condition

may

to

restrict

its

ability

pay dividends

and could

result

of

a loss on the investment

the former holders

of

Trust Securities.

to

If

WMIs financial

condition

were

deteriorate,

the holders suspension

of

the Depositary

Shares could suffer

of

direct

and materially adverse

consequences,
Preferred

including

the payment

of

non- cumulative

of if

dividends

the Series L

WMI

or

on

Stock and, Shares

liquidation,

dissolution
their

winding

up

or

by

to

of

were

of

all

occur,

loss

holders

Depositary

part

investment.

See

Description

of

the

Series L

WMI

Preferred Stock.

Conditional

Exchange may be based on WMBs


likely

receivership,

which could lead

to

WMIs

to

to

an

to
that

of

WMI

bankruptcy
the holders

and would mean that others are

have liquidation claims senior

of

the Depositary

Shares.

if

An Exchange

Event triggering a Conditional Exchange

will

occur

is

WMB

placed

into

or

or

conservatorship

receivership.

WMBs

to

conservatorship

receivership

could lead

WMI

becoming

27

of

as

or

to

of

on
a

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00039

CONFIDENTIAL

or

U. S.

subject

voluntary the

involuntary

proceeding

under the
senior,

Bankruptcy

Code.

the event

WMIs
entitled

of

bankruptcy,

claims

WMIs secured,

general and subordinated

creditors

would be

priority

payment over the claims

as

of

of

of

to

holders

equity interests

such

the Series L

of

of

if

WMI

Preferred

Stock. As a result a Conditional

such subordination, the holders

WMI

became

to

subject

a bankruptcy
likely

anything,

substantially less

than they would have received had the Conditional

Exchange not

occurred.

The Series L WMI Preferred Stock The Series L

of

to

will

rank subordinate

the direct indebtedness

WMI.

in

is or of

Preferred

Stock

will

be subordinate

and rank

junior

right

payment
other

for

WMIs indebtedness
sole

borrowed
for

money and indebtedness

evidenced

by

of

notes

securities.

in

of

Because the

source

funds

payment

of

respect

the Depositary subordinated

Shares

the Series L

WMI
Stock

Preferred

Stock, the Depositary

Shares are effectively

the same basis

as

on

the

Series L

WMI
not

of

Preferred Stock. The terms

the Depositary
incur

Shares and the Series L indebtedness.

WMI

Preferred

in

will

limit

any way WMIs

to

ability

additional

be

to

The Series L WMI Preferred Stock

to of

all

will

structurally

subordinated

obligations

WMIs

as

subsidiaries, and

a holding company,

WMI may

require cash from its subsidiaries

make

to

payments with respect

the Series

L WMI

Preferred Stock.
its its

WMI

is

holding

company

that

conducts

operations

through

operating

subsidiaries

and

on

relies primarily

dividends

and proceeds from intercompany


for

transactions

and loans from those


equity securities,

to

be its

to

subsidiaries

meet

obligations

payment

its

with respect restrictions

outstanding

any the

and

which

may

to

of

all

subject
(

contractual

and

regulatory
will

restrictions. Accordingly,

to
not

all

WMI

to

Series L
existing

WMI
of

Preferred Stock

and thus the Depositary


subsidiaries.

Shares)

be

structurally

subordinated

and future

liabilities

WMIs

Holders

Depositary
with

Shares should look only

the assets Shares.

WMI, and not any

subsidiaries, for

payments

respect

to

of

its

the Depositary fund dividend

be

to

its

If

in

of

payments

respect

the

Series L

WMI

Preferred Stock.

of

it

WMI

unable

obtain

cash from

subsidiaries

may

unable

Upon

the occurrence

a Conditional

Exchange, the holders

of

to

is

the Depositary

Shares

will

not

as

of

have the benefit


Securities.

the

same

favorable covenants

the Series 2006-

C Company

Preferred

of

Upon the occurrence


benefit

a Conditional covenants

Exchange,

of

the

holders

the Depositary
Preferred

Shares

will

as

from the

same

favorable

the Series 2006-

Company

Securities.

WMI

to

is

not obligated

pay dividends

on the Series L

WMI

Preferred

Stock and dividends

on

these securities are not cumulative.

on

to in to of

of

Dividends

the Series L

Preferred

Stock are not cumulative.

Consequently,

if

WMI
of

of

the board

directors Preferred

WMI

for (

on

of

WMIs Board

Directors) the

does not declare dividends

the Series L

WMI
be
entitled

Stock

any quarterly period,

of

holders

the Depositary

Shares would not


available.

or

or

any such dividend

whether

not funds are

subsequently

become

in

of

Directors

that

it

WMIs Board

may

determine

would be

WMIs best interest

to

pay less than


for

the

full

amount

the stated dividends

on the Series L WMI Preferred Stock

or

of

no dividends

any

by

be

quarter

if

even

funds are available. Factors

that

would

considered

WMIs Board

of of

Directors current

making this determination are WMIs pending


legislation

financial

condition

and capital needs, the impact


tax considerations,

and

and

regulations,

economic

conditions,

and such

other

factors

of

as WMIs Board

Directors

may deem

relevant.

28

all

if

proceeding

after

Exchange,

the Depositary

Shares would

receive,

of

to

In

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00040

CONFIDENTIAL

There

no active trading market

for

Series L

WMI

or

is

Preferred Stock

the Depositary

Shares

and such trading market may never develop.

be

The Series L

WMI
to on

Preferred

Stock
listing

and the Depositary

Shares

will

new issues

of

securities.

or

WMI

does not

intend

cause the

quotation

the Series L

WMI

Preferred Stock system. The the Depositary

or

of

the

Depositary

Shares

any securities

exchange

or

automated

dealer quotation a market

Initial

Purchasers are under

obligation

and

not intend
liquid will

make
be

in

no

do

to

to

Shares. Shares and

Consequently, the underlying

unlikely

that

active

and

trading public

market for the Depositary

or

Series L market

WMI

Preferred

Stock

develop

maintained. The lack

of

liquidity

of an

of

of

active

trading

could adversely

affect

ability

the holders

Depositary

Shares

to

dispose

such shares.

In

addition,

neither

the Depositary

Shares nor the Series L under the Securities

WMI

Preferred

Stock represented by

or

be

such shares have


securities within
offer,

will

registered

Act and
Act.

will

be deemed

to

be

restricted
will

of

of

the meaning
sell,

Rule 144

the Securities

Holders

of

Depositary

Shares

not

be able

pledge

or

to

otherwise

transfer

the Depositary

Shares other than:

qualified

institutional

buyer within the meaning Rule 144A;

Rule 144A

the Securities

Act

in

to

of

of

transaction

complying

with

in

an

otherwise
Securities

accordance

with

applicable

exemption

from the registration

requirements

of

the

Act;

or

to

WMI

one

of

or

WMIs

affiliates,

in

in

and

any case,

accordance

with

exemptions from any applicable

or

state

securities

blue sky laws.

These
for

restrictions

on

transfer

may

an

of

inhibit

the development impact


the

active

and

liquid

trading

market

the Depositary

Shares and may adversely

market price

of

such shares.

Risks Relating

to

the Mortgage

Loans

of

substantial portion Concurrent

the Option

ARMs may

experience

Negative Amortization. from University


After

with this offering,

the Company

will

receive

through

contributions

be

Street

portfolio

Option

which

will

create Asset Trust

II.

and

ARMs

used

an

to

of

WMB
an

initial

on

be

fixed- rate

period,

the mortgage interest rate

each Option

ARM

will

adjusted
note.

monthly

to

equal index the

in

of

the
rate

sum
to

index

and the per annum

rate specified time.

each mortgage

The Option

ARM

changes monthly, and may increase through


pay a minimum monthly payment between the balance
fully

The Option
less

ARMs

also grant

borrowers

option

that

typically rate

than the

fully

indexed interest rate,


rate

which case the difference

indexed

and the minimum monthly payment amount


referred

would

added

the principal

the loan. This additional

generally

negative

amortization.

at in

for

possibility

particularly

of

to

was

originated

a time when the

value

the index was low relative

historical values.

Many

in

factors,

including

changes

U. S.

of

economic

conditions

and monetary policy

the

Federal Reserve

System,

may

lead

increases

in

to

the index. the minimum monthly payment

addition,

during the

first will

five

years,

may

by

In

not increase

at

than specified the


first

amounts,

and

of

all

not increase

during the

first

year
this

the mortgage.

Even

after

year,

when the minimum monthly payment may

increase,

adjustment

may

not be enough

to

to

raise

the minimum monthly payment

the amount necessary index and the margin

to

pay the interest due on the Option

the
still

applicable less

effect.

of

If

ARM

based on the sum


increases,

is of

in

the minimum monthly

payment

but

than the amount

to

interest

due, there

will

continue

be negative

to

amortization

if

the mortgagor chooses

pay the minimum monthly payment.

29

if it
more

Increases

the related index are a significant

any Option

ARM,

as

be

to

of

to

is

in

is

or

an

it is

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00041

CONFIDENTIAL

Negative

amortization

can increase
to- of

both the likelihood

default,

and the

severity

losses

the event

a loan default.

result loan-

negative amortization, Option value ratios. The result could

Asset Trust
likelihood

in

be

may

the future have increased

increase

the

default

because the mortgagors

principal obligation

increased.

addition,

when

interest

due

Option

ARM

of

to

is

added

the principal

balance

such Option

ARM
there

through
for

negative amortization, the

of

mortgaged

property provides

proportionally less overcollateralization

the repayment
greater

such Option
that

on

be

if

ARM.
will

Therefore, incurred

the mortgagor defaults

an Option

ARM
of

is

likelihood
will

a loss

upon the

liquidation

the mortgaged

property.

Furthermore, the loss negative


amortization.

be

of

larger

than would otherwise could adversely


Securities, liquidation affect

have been recognized

in

the absence

These losses

to of

to

to

the funds available

pay dividends

the holders

the Company Preferred

including

the Series 2006-

Company Preferred

to

or

Securities,

return

investors

the

The
without

interest

accrued

and due

an Option

ARM
may

is

on

if

amount

of

the Company Preferred

Securities

the Company were liquidated.

considered

interest

income under

US GAAP
of
the

to

respect

any negative

amortization that

occur.

As a

result,

the reported financials


result,

Company may

include

non- cash income related

to

negative amortization. As a
including

funds available

of

to

to

pay dividends

the holders
Securities,

the Company

Preferred Securities,
differ

the Series 2006-

C
II

Company

Preferred

could materially

from income actually

received

from Asset Trust

as

by

reported

the Company.

in

The Mortgage Loans


negatively
affect

the Companys

to

Portfolio

are subject

economic

conditions

that

could

the value

the collateral

securing

such Mortgage Loans and/

or

of

the results

of

the Companys operations.

or

of

The value

the Mortgage could

Loans underlying

the

Companys

Portfolio the

and/

the results

of

the

Companys operations
local

affected

various conditions

in

by

be

economy, such as:

and

other

economic

conditions

affecting

real estate

and other collateral

values;

sudden from

unexpected
attacks

changes

in

or

economic

conditions,

including

changes that might result

to

terrorist

and the United States

response

such

attacks;

of

to

the

continued

financial

stability

a borrower and the

borrowers

ability

make

loan principal
divorce, illness

and interest payments,

which may be adversely

by

affected

job loss, recession,

or

personal

bankruptcy;

and

to

or

interest

rate levels

and the

availability

credit

refinance

loans

prior

to

of

at

maturity.

in

The HELs two


states,

the Companys

Portfolio

that

are held through

Asset Trust could

are concentrated

in

and adverse conditions

in

those states,

particular,

have a negative impact

on the Companys operations.

in 1,

as

of

As
balances)

November

2006, approximately 79.6% ( the Companys


Portfolio

a percentage

of

such Loans principal

in

of

the HELs

were

located

Texas and California. Because

in

in

of

the concentration

the Companys

interest

those states,
likely

the event

of

adverse economic

in

conditions

those states, the Company would


Portfolio

of

experience

higher rates

loss

and delinquency

if

on the Companys
Additionally,

than

the underlying
Portfolio

HELs

were more geographically

diversified.

in

to

the HELs

the Companys

may be

subject

a greater risk

of

default

than other

in

or

of or

comparable
natural

mortgage loans

the

event

of

adverse economic,

political,

business developments

hazards that

may

affect

Texas and California, and the

ability

property owners

or

of

commercial

in

to

borrowers

those states

make

of

payments

principal

and interest on the underlying

mortgage

to In

in

or

of

loans.
ability

the event

any adverse development

natural disaster Preferred

those states, the Companys could be adversely

pay dividends

on the Series 2006-

Company

Securities

affected.

30

in

an of

to

on

In

is

II

As a

ARMs

owned

by

of

in

of

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00042

CONFIDENTIAL

Portfolio that

in

in

trated impact

California,

and adverse conditions


operations.

in

that state,

particular,

could have a negative

on
of

the Companys

as

As

November

14, 2006, approximately 76.47% (

a percentage

of

unpaid principal

II

The Option

ARMs

in

the Companys

are held through

Asset Trust

are concen-

balances)

in

in

of

the

Option

ARMs

the Companys

Portfolio

were

located

California.

Because

of

the concentra-

in

in

tion

the Companys the Company than

interest

that state,

the event

adverse economic

in

of

of

conditions

those

states,

would

likely

experience

higher rates

loss

and delinquency
diversified.

on

of

the Companys the

in if

Portfolio

the underlying

Option

ARMs were more


be

geographically

Additionally,

Option

ARMs

the Companys

Portfolio the

may
of

subject

of

to

greater risk

default

than other

in

or

comparable
natural

mortgage loans

event

adverse economic,

political,

business developments

hazards that

may

affect California,

and the and

ability

property owners

or

of

commercial borrowers

of in

on

of

to

that state

make payments
or
development

principal

interest

the underlying

mortgage loans.

In

the event

in

or on

any adverse

natural

disaster

that state,

the Companys

to

ability

pay dividends could

the Company Preferred

Securities,

including

the Series 2006- C

Company

Preferred

Securities

be

adversely

affected.

31

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00043

CONFIDENTIAL

CERTAIN

INFORMATION

CONCERNING

WMB

General Washington operating Mutual Bank

WMB) Home

is

a federally chartered

savings

association,

chartered

and

under the United States

Owners
small

Loan Act
business

of

1933, as amended.

WMB
by

engages

mortgage banking, consumer


association,

banking

and

banking.

WMB, as

a federally chartered

to

has the authority

make

of

various types

loans, including loans,

loans secured

homes and

commercial real estate, secured

and unsecured

consumer

and secured and unsecured


regulation

in
the

is

commercial loans. As a federal savings

to

association, with

WMB
of

subject

and examination
its

U. S.

the

is of

Office

Thrift

Supervision

( together

any successor

regulator,

the

OTS),

primary

regulator.

WMB

an

indirect

wholly- owned

subsidiary

WMI.

or

be

on

The

Trust Securities

will

exchangeable,

without

the approval

any action

the part

for

of

of

of

holders

such securities,

Depositary

Shares under any

the following

circumstances,

each

as

an

to

is

which

referred

Exchange

Event: under the OTSs


prompt

WMB WMB
the

becomes

undercapitalized

corrective

action

regulations;

or

placed into conservatorship

receivership;

in

or

is

OTS,

its

sole discretion,

anticipates action

that

WMB may

become

in

undercapitalized

the

near term connection

takes supervisory
directs

that limits

the payment

dividends

WMB,

and

therewith,

such exchange. each Trust Security be

of

Upon occurrence
automatically

an Exchange Event, the OTS may


for

direct

that

exchanged

like

amount

of

Depositary

Shares.

Capital Adequacy

to

is

WMB
measures

subject

OTS

capital

requirements. The capital adequacy

requirements are quantitative

by

established

OTS
as

to

regulations

that require

WMB

maintain minimum amounts core and


total

and

to

capital.

The OTS

requires well

maintain minimum ratios

capital

to

of

of

WMB

risktotal

as

to

weighted
assets.

assets,

core capital
regulations

adjusted
Tier

total

assets and tangible

to

capital

adjusted

Under applicable

OTS

capital

and

core

capital

have the

same OTS
of
ratio

meaning.

Federal law and regulations establish

minimum

capital

standards,

and under
total (

the

regula-

is

to

of

tions,

required

i)

have a

leverage
risk-

ratio

core capital

to

adjusted

assets
iii)

at

WMB
ii)
(

least

of at

of

of

at to

4.00%,
capital

a ratio

core capital

total

weighted

assets
(iv)

least

4.00%,

of

total total

of to

risk- weighted

assets

least

8.00% and

to

of

ratio total

tangible

capital

adjusted

at

assets

least
total

1.50%.

savings
its

associations Financial

adjusted
filed

assets represent the

the savings

associations

assets on

Thrift

Report
(

with

OTS

less

assets

of

non- includable and

subsidiaries, goodwill

and other intangibles

assets

of

exclusive

mortgage

servicing

rights

purchased
ships

credit

card relationships), disallowed

servicing

assets and purchased

credit

card relationflow

and accumulated

on

gains

( losses) risk-

certain

available- for- sale securities


for

and cash

hedges.

of

in
ratios

by

or

of

For purposes

determining

weighted

assets

the risk- based capital ratios, the book value

of

each

the savings

associations

on- balance from

sheet assets, and a portion

of

certain

off-

balance

sheet

items and exposures, government

are weighted

0%

100% based on
at
weighted
risk

broad categories.

For instance,

debt obligations

are generally

risk-

0%; certain

qualifying residential

mortgage

on

at

loans

one- to-four family dwellings assets are generally


risk-

are generally

weighted

50%; and commercial


sheet items
into
( including

loans and
letters

at

most
credit,
lent

other

weighted

100%.

Off- balance

loan commitments, swaps and other derivatives)


for risk-

are converted

on- balance
like

sheet

equiva-

amounts
risk

based

capital

purposes,

then assigned

a risk weight

other

assets.

The

to

capital

weighting

assigned

certain

asset-

backed securities

may vary from 20%

to

200%
credit

depending

on

credit rating.

Subordinated

in

residual interests

retained

asset securitizations,

in

enhancement

and forms

recourse can result

higher capital charges

or

of

deductions

from capital.

32

of

U. S.

to

of

of

by

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00044

CONFIDENTIAL

as

of

For purposes

the

OTS

regulations,

total capital includes:

defined

the

sum

of

is

core capital and


(

supplementary capital.
related surplus); qualifying

Core

capital

generally

common

shareholders

equity

which includes

non- cumulative

perpetual

preferred

stock ( which

includes

related surplus);

and
include

in

of

minority interests

the equity accounts

consolidated

subsidiaries ( which

may

as

such instruments

qualifying

REIT

preferred

stock and the Company


certain
limits

Preferred Securities). Suppleperpetual hybrid

to

mentary capital generally


preferred capital stock;

includes

( subject

and sub- limits): cumulative and money market


notes);

maturing capital instruments; Dutch


(

auction

preferred stock; debt;

instruments

including

certain

mandatory

convertible
(

term subordinated

the
risk-

of for

up

of

savings weighted

associations assets);

allowance

loan

and lease losses

maximum
of

1.25%

of

to

total

up

to

and

45%

the pretax net unrealized


capital capital

gains

available- for- sale equity only

securities capital. defined,

investments.

Supplementary

permitted

count towards

one- half
Tangible

of

to

is

total

to

Both core capital and tangible

are subject

various deductions.

capital

as

generally,

common
certain

stock and retained earnings, noncumulative nonwithdrawable


other

perpetual

preferred

stock

and

retained

earnings,

accounts,

and

in

minority interests

fully

consolidated

subsidiaries ( which certain

includes, intangible

among

instruments,

the Company Preferred Securities), less enhancing


interest-only strips

amounts
for

of

assets, servicing

assets, credit-

and

in

investments
stringent certain

( both

equity

and debt)

certain subsidiaries.

Some

of

these deductions

are more
assets,

tangible

capital

than core capital, including

goodwill,

certain other

intangible

and

in

servicing

assets

excess

of

certain

limits.

Federal law and regulations also establish


capitalized, capitalized.

five

capital

categories

for

savings

associations:

well-

adequately

capitalized, association

undercapitalized,

significantly undercapitalized

and
capital

critically

under-

is

of

treated
its

well- capitalized

if

savings

as

its

ratio

total

to

risk-

or

is is

weighted
its

assets
ratio

10.00% 5.00%
specific
total

more,

ratio

core capital

risk-

weighted

assets

6.00%

or

is

of

to

more,

or

is
a

In it is

leverage

more, and
level. risk-

not subject

any federal supervisory agreement


capitalized,

order

to

directive

meet a
ratio

to

capital

order

be adequately

any savings

association

of

to

of

must have a

capital

weighted

assets
(

not less than 8.00%, a

of

ratio

core capital

risk-

weighted

assets

not less than 4.00%, and

it is

to

of

in

unless

the most highly- rated category)

leverage

ratio

not less than 4.00%. Any savings


will

is

of

association

that

neither well- capitalized association with

nor

adequately
equity ratio

capitalized

be considered

undercapitalized.
critically

Any savings

tangible

2.00%

or

of

less will

be considered

undercapitalized.

Undercapitalized

savings

associations restrictions,

are subject

to

certain

prompt corrective

action

require-

as

ments, regulatory controls

and

which become more extensive

an

association

becomes

on by

undercapitalized.

Failure

comply with applicable and lead

capital

requirements,

in

unremedied, would result


against

to

its

restrictions

activities

regulatory directive

enforcement

actions

to,

WMB

including,

but not limited


capital levels.

the issuance

to

of

capital

ensure the Act

of

maintenance

required

The Federal Deposit Insurance

Corporation Improvement
action with respect

of

to

1991

requires

the federal banking

regulators

take prompt corrective


capital

or

depository

institutions that

do not meet minimum


its
filed

requirements. Additionally,

FDIC

OTS

be

approval

any

regulatory application

for

review may

dependent

on

of

compliance

with capital

requirements.

In

addition,

the

OTS
that

to

from time perceived

time may impose higher specific capital requirements on any have risks, exposures,
credit concentration, rapid

to

savings
other

association

growth could

to

circumstances

warranting

special

attention.

Failure

satisfy

such a capital directive

an

as to

subject available

association the

civil

money

penalties, that

judicial

enforcement
association

and

administrative

remedies

as

to

OTS,

well

finding

a savings

is

undercapitalized.

to

at

Whether
becoming
for

would ever be determined by the

in

undercapitalized

the near

of

OTS be undercapitalized term thereby triggering the exchange


other matters.

risk

the Trust Securities


regulations,

Depositary

Shares could be
quality potentially typically

influenced

not only by the OTSs capital adequacy

of

WMB

or

by

also

the regulators
credit

interpretations

and judgment on

For example, the OTSs views


capital status.

or

on asset
other

could affect a

thrift

savings

associations

Among

things,

the

OTS

evaluates

asset quality, loan loss reserves

and procedures

during

33

or
but

to

is

if

more severely

WMB

to

or

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00045

CONFIDENTIAL

periodic

regulatory the

examinations

each federal savings

If,

association.

following

such
its

an
and

of

examination

in

or

to

otherwise, credit

OTS
(

discretion

were
for

to

its

require

WMB

significantly

increase

reserves reduce allowance

WMBs
for

i.

against

losses

e.,

the allowance

loan and lease losses), this could potentially

retained earnings

and

regulatory

capital.

As noted above, a savings

associations

up

to

is

loan and lease losses

includable

within

supplementary

capital

only

is

limit,

not

included

in

at

all

core capital.

The
positions

OTS
(

has proposed on- and

to

require

savings

associations

that

have certain aggregated


associations

covered

including

off- balance

sheet positions
positions

in

the savings

trading

account

in

or

and

foreign

exchange

and commodity

whether more,

not

the trading account)


capital

equal

of or

or

or

10

of

percent
risk

more
their

total

assets

$1

to

billion

maintain regulatory agencies

against

the

market
capital

trading

positions.

The

other

federal

banking

already impose a market risk

requirement for their regulated the potential


associations

entities

( bank

holding companies

and

banks).

WMB

and

WMI

are assessing

impacts

of

the proposed

market risk capital rule.

A
ized, other

of

savings

regulatory capital

status,

and the

risk

being deemed

undercapital-

could also standards.

affected

other

developments

future

changes

in

by

by

or

be

regulatory

capital

and

to

and

WMI

continue

actively

follow

the progress

of

WMB

the

U. S.

banking
risk-

agencies based

in

and the Basel Committee on Banking Supervision

developing

a new set

of

regulatory

on

capital

requirements. The Basel Committee

Banking

Supervision

a committee

of

is

bank superviincluding

by

sory authorities

established

the central bank governors

of

certain industrialized nations,

as

or

to

referred

Basel

Capital

Accord;
the

however,
potential

final

requirements have not been adopted.

WMB

and WMI are also


guidance
final

U. S.

II

the United States. The new requirements are commonly

The New Basel

on

assessing
believes

impacts

Basel

II.

Based

public

regulatory

to

of

date,

WMB

be

of

it

that

will

a required early adopter

Basel

II

requirements when

guidance

regarding

compliance

with

Basel

II is

released.

34

to

all

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00046

CONFIDENTIAL

for

The

regulatory capital

ratios

calculated

WMB,
for

along with the capital amounts and ratios required


action

and

ratios

the minimum regulatory

requirement and the minimum amounts framework

be

to

categorized

as

well- capitalized

under the regulatory

prompt corrective

were

as

follows:

September 30, 2006

for
Action Ratio

Minimum

Categorized

Well- Capitalized

Under the OTSs Minimum


Regulatory Actual Requirement Ratio
(

Prompt
Corrective

Regulations

WMB
to to to

Amount

Amount
Dollars

Ratio
millions)

Amount

Total

capital capital capital

total total

riskrisk-

weighted weighted
total

assets assets
(

. . . .

. .
.

. . .

$ 27,930
20,076 21,873 21,460

11.30%
8.12 6.47 6.35

$19,781
9,890

in

8.00%
4.00 4.00( 1.50

$ 24,726
14,836

10.00%
6.00 5.00

Core Core

adjusted

assets

leverage).

13,529
5,067

1)

16,911

to

n/

Tangible

capital

tangible

assets ( tangible

equity) .

n/ to to n/ n/
top-

as be
a
6.00 5.00

December

31,

2005

to

Minimum

Categorized

Well- Capitalized

Under the OTSs Minimum


Regulatory Actual Requirement Ratio

Prompt
Corrective Action

Regulations

WMB
to to to

Amount

Amount
(

Ratio

Amount

Ratio

Dollars

in

millions)

Total

capital capital capital

total total

riskrisk-

weighted weighted
total

assets assets
(

. . . .

. .
.

. . .

$ 26,219
19,350 20,787 20,331

11.50%
8.49 6.47 6.34

$18,240
9,120

8.00%
4.00 4.00( 1.50 2004

$ 22,800
13,680

10.00%

Core Core

adjusted

assets

leverage).

12,850
4,812

1)

16,062

to

n/

Tangible

capital

tangible

assets ( tangible

equity) .

as be
a
6.00 5.00

December

31,

Minimum

Categorized

Well- Capitalized

Under the OTSs Minimum


Regulatory Actual Requirement Ratio
(

Prompt
Corrective Action

Regulations

WMB
tototo

Amount

Amount
Dollars

Ratio
millions)

Amount

Ratio

Total

capital capital capital

total total

riskrisk-

weighted weighted
total

assets assets
(

. .

. . . .

. .
.

. . .

. . . .

$ 20,387
14,081 14,219 14,219

11.53%
7.96 5.35 5.35

$14,149
7,075

in

8.00%
4.00 4.00( 1.50

$ 17,687
10,612

10.00%

Core Core

adjusted

assets

leverage).

10,623
3,984

1)

13,279

to

n/

Tangible

capital

tangible

assets ( tangible

equity) .

as be
a

1)

The minimum leverage


excellent rate,

is

ratio

guideline
liquidity,

3%

for financial

institutions

that

do not

anticipate

significant

growth
risk

and

that

have

well- diversified risk,

asset

quality,

high

good earnings,

effective

management

and monitoring

market

and,

in

of

general,

are

considered

strong banking

organizations.

35

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00047

CONFIDENTIAL

Benefits

to

WMB
to
has confirmed

The

OTS

WMB

that

the Series 2006- C


will

Company Preferred
of

Securities

and

Outstanding
applicable

Company

Preferred

Securities

constitute

core capital

WMB

under the OTSs

regulatory

capital

regulations.

USE OF PROCEEDS
in of of
The

to

Trust will

use the proceeds

the sale

the Trust Securities

this Offering,

expected
like

be

approximately $ 500,000,000,

net

underwriting Securities,

commissions,

purchase
will

from

Series 2006- C Company the conveyance from

Preferred

which the Company

in

of

to

issue

WMB a WMB

of

to

amount

exchange

for

of

of

WMB

portfolio

Option

ARMs. The
Securities

WMI
to

Group

will

use the proceeds general corporate

of

from the sale purposes,

the Series 2006-

Company Preferred

the Trust

of

which may include the repurchase

WMIs

common

stock.

36

for

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00048

CONFIDENTIAL

THE TRUST
Washington Delaware Mutual Preferred Funding
Trust ( the

( the

is

II

Trust)

a statutory

trust

created

under the

as

Statutory

Trust Act,

amended

Trust Act),

pursuant

a certificate

of

to

trust filed with

the Secretary

State

the State
Trust will

Delaware
its

and the execution existence


(

trust

agreement

the Trust

4,

December

2006.

The

continue
trust

from and after the closing

of

this Offering

pursuant

amended

and

as as

an

to

so

restated

agreement

amended and

restated, Trust

the

Trust

Agree-

by

ment),

be entered
( the

into

and among the Company,


Trustee),

grantor,

Wilmington

Company,

property trustee
Delaware

Property

and Wilmington

Trust

Company,

as

Delaware

trustee ( the

as

of

of

Trustee),

the date the Trust Securities

are issued. The rights

the holders are

of

the

as
Trust

to

Trust Securities,

including

economic

rights, rights

information

and

voting rights,

set forth

the Trust Agreement

and the

Trust Act.

to

Trust

generally limits

the Trusts

i)

The Company

Agreement

activities

holding

the Series 2006dividends

C
and

by

iii)

Preferred

Securities,

ii)

issuing

the Trust Securities,

passing through

on

to

redemption

and

liquidation

payments

paid
iv)

the Company

the Trust

the Series 2006incidental thereto.

C
The

Company

Preferred

Securities

and

performing functions

necessary

or or

prohibited

from issuing other equity securities

any debt securities under

engaging

in

or

is

any other Income

activities.

Subject

the limitations and assumptions described


will

U. S.

to

Certain

Federal

Tax Considerations, the Trust purposes,


with

be

as

treated

a grantor trust for United States federal income tax

as

be

of

the result that holders

Trust Securities

will

treated

beneficial tax

owners

of

the

Series 2006Series

Company Preferred

Securities located

will

be the

of

C 2006- C

Company Preferred

for

Securities

United States federal income


only

purposes.

The

assets

the Trust. The principal Washington 98101.

be

of

at

executive

offices

the Trust

will

1301 Second Avenue,


North,

Seattle,

The

of

is

office

the Delaware 19890.

Trustee

Rodney Square

1100 North Market


available

Street,

Wilmington,

be

Delaware

Copies

the Trust Agreement


to,

will

upon request

to

of

WMI.

As
Trustee

in,

set forth
will

and

subject

the Trust Agreement, the Property Trustee and the Delaware

to

have exclusive

and complete
hold title

authority

carry

out the purposes

of

the Trust.

to

The Property Trustee

will

the Series 2006-

Company
the

Preferred

Securities
will

for

the

to of

of

benefit

the holders
all

the Trust Securities,

and, as such holder,

Property Trustee

have the

to

power

exercise
Securities

rights,

powers and

privileges with

respect

the Series 2006-

Company
maintain

Preferred exclusive

under the LLC Agreement.

In

addition,

the Property Trustee

will

control

a segregated

non- interest bearing bank account


Preferred Securities for

hold

payments

made
of
the

of

respect

the Series 2006-

Company

the benefit

of

the holders

Trust Securities.

or

to

Pursuant

the Trust Agreement,

charges

expenses

of

all

the Trust other

than payments

of

required under the terms

the Trust Securities,


Trustee,

including

the fees, charges

and expenses

of

the
will

or

in
be

of

to

Property Trustee, the Delaware

the Registrar,
provided,

the Transfer Agent


that

any Paying Agent,

or

all

cause

be

paid

such

fees,

charges

and expenses

or

to

if

paid

caused

be paid

the Company;

however,

the Company does not pay

can pay such fees, charges


against

and expenses only

of in

a manner that would allocate such fees, charges


the

and expenses

the interests

of

the holders

Series L Company

Preferred

Stock,

WMB
or

will

pay such fees, charges

and expenses; provided

further,

it is if

however, that
for

the

Property Trustee
liable

the Delaware

Trustee incurs fees, charges

expenses
Registrar

which

not otherwise

under the Trust Agreement,

the Transfer Agent incurs fees, charges

expenses

for

which

or it if is

the Paying Agent, the not otherwise


liable

or

in

or

under the Agency Agreement, person, such holder

each case
will

the request

a holder

Trust Securities

or

at

of

of

or

other

person

be

liable for

such fees, charges

and expenses.

is

to

The

information with Act,


full

respect
will

the Trust that

required

by paragraph

i) of

( d)(4)(

Rule 144A

to

or

other

under the Securities

be

available

upon request

the Property Trustee

until

the earlier

in

37

ii)

the redemption

the Trust Securities

or

of

i)

the Conditional Exchange.

of

or

by

to

in

as

to

on

of

of

of

of

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00049

CONFIDENTIAL

THE COMPANY
Washington Mutual Preferred Funding

LLC

( the

Company)

is

a Delaware

limited liability

company
( the filed

formed

February

2006 under the Delaware


limited liability

Limited Liability

Company

of as

on

3,

Act,

amended
formation

LLC Act), with

an

to

pursuant

initial

company agreement The

and a

certificate

in of

of

of

the Secretary and restated

State

the State

Delaware.
with

limited liability

company

agreement

was

in

of

its

amended
Preferred

entirety

connection

the issuance

the Outstanding

Company
with

Securities

March

2006, and

will

further

amended and upon

in

on

be

7,

restated

connection

the issuance

the Series 2006-

Company Preferred
the

Securities

their

issuance

or

on

of

about

as

December

13, 2006 (

so

amended,

LLC Agreement).

to

generally

i)

The LLC Agreement Company


securities Preferred

limits

the Companys

activities

issuing

the Series 2006- C

Securities,
( the

the Outstanding

Company

Preferred

Securities additional Eligible

and the common


Parity

of

the

Company
Class

Company Common
ii)
(

Securities)

and

Equity Securities
including other

and

of

Junior

Equity Securities
I

the Company,
Certificate

acquiring Trust

and

holding

Investments,
( which,

the Asset Trust than Permitted the completion accordance

II

A Trust

and Asset

Class

A Trust
in

Certificate

be

of

Investments,

will

the sole Eligible Investments


other transactions

the Company

immediately after
therewith)

this

Offering

and the
policy

contemplated

connection

or in

as

of

with the
(

investment

described

Business
incidental

the

Company Assets
to

of

iii)

Company and

performing functions under Certain

necessary

thereto.

Subject

the limitations and

U. S.

assumptions described

Federal Income

Tax Considerations, the Company

as

intends

treated

partnership

other

than a publicly traded

as

be

to

partnership

taxable

a
action,

for

in
the

of

corporation)

United States federal income tax purposes.

The Company may not take any

permit any action

be

taken,

that

would cause the Company

fail

treated

a partnership

so

as

United States federal income tax purposes


series

for

long

any Company Preferred

of

Securities

any

or

as of

are outstanding,

except with the consent


Preferred

affirmative voting

vote

the holders

of

at

least

two- thirds

of

of of

all

the series
office

Company

Securities,

together
Inc.,

single

class.

The

principal Seattle,

executive

the Company

is c/

o Washington

Mutual,

1301 Second Avenue, upon request

be

Washington

98101.

Copies
will

the LLC Agreement

to

of

will

available

WMI.
the effect
that,

The Company

receive

the opinion

Mayer, Brown,
will

Rowe & Maw LLP


not treated

an to

of

for

United States federal income tax purposes,

the Company

as

be

association

taxable

as

as

a corporation

as

or

publicly

traded partnership

taxable

corporation.

Capitalization

an

of

of

Upon completion
sity

this

Offering,

University

Street,

Inc.,

indirect

subsidiary

WMB

Univer-

to

of

Street), will

continue

hold
(

the Company

Common

Securities,

representing

100%

of

all

the

in

to

of

of

voting

rights

the Company
Securities

subject

the

limited voting rights Preferred

holders

the Series 2006-

Company

Preferred

and

other

Company

Securities

described

under Description

of

the

Series 2006this

Company
all

Preferred

Securities Voting Rights and Covenants).

Upon compleTrust I
will

of

of

all

tion
will

Offering,

the Trust

will

hold

the Series 2006-

Company

Preferred

Securities.

to

continue

hold
all

the Series 2006- A

Company

Preferred

Securities,

and

WaMu Cayman

to

continue

hold

the Series 2006- B Company Preferred

Securities.

38

for

as

be

to

to

to

or

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00050

CONFIDENTIAL

as

of

of

The
Offering, closing

following after

table

illustrates

the expected

capitalization

the Company

the closing
Securities

on of

this

of

to

giving

effect

the issuance

the Series 2006-

Company

Preferred

the

date:

As

of

the

Closing Date
(

Unaudited)

Series 2006Series 2006Series

A B 2006- C

Company Preferred Company


Preferred

Securities Securities Securities


.

. . . . . .

. . . . . . . . . . . . . . .

$1,250,000,000 750,000,000 500,000,000 5,208,022,354 $7,708,022,354

Company Preferred
Securities
. . . .
.

Company Common

. . . .
.

. . . .
.

. . . .

Total Capitalization

. . . .

. . . .

. . . . .

of

Business

the

Company

of

Assets

the

Company
with

connection

the offering

the Trust

Securities

and

WaMu Cayman
for

in
the

In

of

Securities

March

in

to

of

2006,

WMB
in

conveyed

portfolio

HELs

the Company
University

exchange conveyed

100%

of

the Outstanding

Company Company
University

Preferred

Securities.

Concurrently,

Street

portfolio

HELs
by

to of

of

the

for

exchange

the Company

Common
of

Securities.

The

portfolios

conveyed

WMB

and

Street

the Company consisted

HELs having

an

to

aggregate

principal

balance

as

of

approximately $ 5,389,459,150 Outstanding

January 31, 2006. Immediately upon the issuance the Company conveyed
for

of

Company

Preferred

Securities,
I

the assets received

by it

from

in

in

WMB

and University
I

Street

Asset Trust
Certificate

exchange

interests

Asset

Trust

represented Class

the Asset Trust

Class

A Trust

and a second

certificate

( the

Asset Trust

R
I.

Trust Certificate),

which the Company

transferred

WMB

as

to

described

under Asset Trust

of

1,

As
principal directly

November

2006, the Companys

of

assets consisted

approximately $ 4,745,592,069

in

of

balance

the aggregate,

held through

Asset Trust
the

I,

HELs

and $72,553,074

of

cash held

or

as

held through
Preferred

Asset Trust

I,

the case may be. Since

issuance

of

the Outstanding

in

Company
Street

Securities

March 2006, the Company has paid cash dividends

to

University

in

on the Company Common

Securities

the aggregate

amount

of

$ 83,834,863.

The Companys

source

funds for those dividends


I

has been payments

by

of

of

interest

received

the Company through

it

Asset Trust coverage


Securities

on

HELs. The Company expects that these assets alone would permit

to

its

satisfy

and FFO

of

tests

described issuance

under Description

the Series 2006-

Company Preferred
Securities

for

the Series 2006-

Company Preferred

as

of

Ranking

Parity

Equity Securities.

of

Contemporaneously with this Offering,

will

convey a portfolio

Option

ARMs
and

to

WMB
to
the

the

in

for

of

Company

exchange

100%
of

the

Series 2006- C

Company
as

Preferred

Securities

University portfolio

by
the

to

Street will contribute

a pool

Option

ARMs
will

Company

a capital contribution.

The

to

Option

ARMs 100%

conveyed

the Company

as of

consist

approximately $ 2,899,877,211

outstanding
will

in

of

principal

balance

Option Option

ARMs
ARMs

of

the aggregate

November

14, 2006. The


for

Company
in

by

it

convey

the

that

owns

Asset

II in

of

to

Trust

exchange

interests

Asset

II

II

Trust

represented

the Class

Asset Trust Certificate


(

Asset Trust Class

the Asset Trust

Trust Certificate)

certificate

the Asset Trust


will

II

and a second

Trust Certificate),

which the

to to

to

Company expects
Securities for

transfer

WMB.

WMB

then

sell

the Series 2006- C Company Preferred

cash

the Trust.

The

of

Eligible

Investments

( which

will,

immediately after the completion

this

Offering

and the
Certificate

in

of

transactions

contemplated

connection

therewith,

consist

the

Asset Trust

Class

A Trust
will

II

and Asset

Trust

Class

A Trust
of

Certificate

and Permitted Investments)

from time

to

time

by

II

of

Class A

generate

to

net income for payment

dividends
( and

the Company
for

the Trust as holder

of

the Series 2006-

to

Company

Preferred

Securities

consequently

pass through

by the

of

Trust

holders

the

39

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00051

CONFIDENTIAL

as

Trust Securities),

Trust

and

WaMu
as

of

to

Cayman,

holders

the Outstanding

Company

Preferred

of

to

Securities,

and

University

Street

holder
its

the Company

Common

Securities.

to

i) to

at
all
(

The Company
its

intends

manage

assets so as

ensure that the Company

all
iii)

will

times

in

to

ii)

maintain

exemption

under the Investment

to

to

to

maintaining sufficient
( including

FFO
to

allow

payments

respect

its

Company Act, be made with


(

result

the Company
Junior

at

times

Equity Securities

of

payments

University

Street

as holder

the Company

Common

Securities)

and

maintain the desired treatment

under the Code for the Companys

assets and obligations.

in

to

to
its
I

Current requirements under the Investment exemption


Qualifying
initially

Company Act mandate

that

order
its

maintain

from registration

as an investment

company, the
its
total
I

Company
at
Trust

must

limit

assets that are not

Interests

no more than 20%

of

to

assets

any time. The Company expects that

as

it

the distributions

receives

from Asset Trust

II

and Asset

of
will

holder

the Asset Trust


significantly Securities.

Class

II

A Trust

Certificate

and Asset

Trust

Class

A Trust
all

Certificate,

respectively,

to

exceed the amount required received


Qualifying
will

pay dividends

on

of

the series

Company Preferred
with

Cash

from the Asset Trusts and any Permitted


Interests,
(

Investments

purchased

such funds are not

and therefore funds received


with

from the Asset Trusts and retained

by

the Company the

be

limited

together assets

any other assets that are not Qualifying

Interests)

20%

Companys

total

any time. For this and other reasons,

in

at

the ordinary course,

or

of

of

to

the Company

it

will

distribute

substantially

it

expects that
University

the funds

receives

from the Asset Trusts

to
do and
the

all

all

Street,

as holder

the Company

Common
with

Securities,

the extent

permitted

in

to

accordance

with

the restrictions on dividends

respect

the

Company Common

Securities

such funds are not otherwise


Securities.

required

pay dividends

on any

of

to

series

the Company

Preferred

intends

invest

of to it

The Company

funds

receives

from the Asset Trusts

in

to

Permitted
Securities

of

to

Investments

prior

such funds being distributed

the holders

the Company

Common

or

or

of

other

Junior

Equity Securities

any

series

the Company Preferred

Securities.

The Company
the Asset Trusts
will

also

expects

that

over time the principal balance

the Mortgage Since


(

Loans held

decrease

a result
I

principal

payments

and

i) II in

as

of

payoffs.

accordance

of

with

the terms

the Asset Trust

Pooling and Servicing

Agreement and Asset


either

Trust

Pooling and

Servicing

Agreement, additional
ii)

assets

may
to
the

added

Asset

be in

be

to

Trust only Trust

very limited
distributed
(

by

circumstances
University

and

funds distributed

Company
rate

an Asset

may
will

as

Street

discussed

above and

by

to

the extent held

the Company

generally

when

in

to

invested

Permitted

Investments)

generate

a lower

return
will

than the Mortgage


decline.

Loans held
prior

the Asset Trusts, over time the Company

expects

that

FFO
to

Accordingly,

point

which the Companys

FFO

to

at

is

level

reduced

level that

would prevent payments

with

as

to

respect

Junior

Equity Securities
Securities) Eligible

( including

payments

of

its

University

Street

holder

the
investwill

Company Common ments


that constitute

the Company

intends

to

acquire

additional

income producing

Assets. Any additional serviced


to)

by

assets that are acquired


with

the Company

to

its

transferred additional
(

either

Asset Trust

in

or

be

to

accordance
the

the related Asset Documentation.

Any

by

Eligible

Assets that are acquired cases required


consist

Company

( such assets,

Additional

Assets)

in

of

of

may

but are not

obligations

Asset Subsidiaries. The terms


for

of

all

to

Asset Documentation
Additional

with

respect

any Additional

Assets

will

provide

the servicing

of

such

Assets. Assets means assets:

Eligible

a)

or

of

which

i)

are securities,

interests

other

obligations

an Asset
equity

Subsidiary

which are second lien

or

or

backed

collateralized

by

first

second

lien

closed end

home
or

loans, first

home
cial

of

equity

lines

credit,

mortgage loans on single family

or

multi-family

residences,

commerlocated

in

or

mortgage loans

other

real

estate

assets, that

each case,

with

respect

to

real

estate

in

the United States; provided, closed end

however,

or

lien

home
family

of

equity loans, first

Company may acquire and hold second lien home equity lines credit,
the commercial mortgage loans

or

first

second

mortgage
real

or

loans

single

multi-family

residences,

or

on

other

estate

in

in
not the

of

if

assets directly

the

Company

receives

an Asset Tax Opinion

connection

with

such assets

40

or

by

of

so

it is

of

to

to

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00052

CONFIDENTIAL

by

ii)

otherwise

satisfy the

Rating Agency Condition Manager;

and are approved

of

all

the Managers,

including

the Independent

which

will

serviced
for

and maintained

in

b)

be

accordance
include loans,

with

Asset

Documentation;

to

is

c)

the collateral

which

not permitted

under the related Asset Documenta-

or

tion

any

first

second lien closed end


loans

home
or

or

equity

first

second

lien

home
30

equity

lines

or of

credit, other

mortgage
real estate

on

single

family

multi- family

residences, commercial mortgage

loans

as

to

assets
cut- off

which the applicable

obligor

was more than

days delinquent

as

the applicable

date

or

of

transfer date;

d)

or

the collateral

for

which does not create

carry

any obligation

the Company

or

of

any

or

to

to

Asset Subsidiary

make

future

advances
facilities

loans other

any obligor with respect

to or

such collateral

or

of

under lines

credit,

revolving

loan

similar features;

and

in

the acquisition,

maintenance
other

and

servicing

which

will

not

in

e)

of

itself

connection

of

with

any

the

Companys

assets):

is

to

i)

cause the Company

be an

investment

company

that

required

to

register

under the Investment


ii)

Company Act;
of
United States federal income withholding tax
( including

cause the imposition

in

under Section 1445

the Code)

respect

payments

made

by

of

of

the

Company on any

of

series

the Company Preferred Securities;

iii)

cause the Company

treated

under the Code

as

be

to

publicly

traded partnership

as

taxable

a corporation;

in

as

cause the Company


for

treated

engaged

trade

business,

determined

United States federal income tax purposes;

to

cause income with respect

the Trust Securities

to

v)

or

constitute

unrelated

business

or

U. S.

taxable taxation

income for

federal

income tax purposes

gain subject

U. S.

to

net

income

under Section 897

of

the Code.

a)

to

Asset

Documentation

means
I

with

respect

Asset Trust

and the Asset and the

Trust

Class

Trust Certificate,

the Asset Trust

Pooling and Servicing

Agreement

related

Asset Trust

b)

to

II

Custody Agreement,

with

respect

Asset Trust

and the Asset


related

II

Trust

Class

A Trust

Certificate,

II

the Asset Trust

Pooling and Servicing

Agreement

and the

Asset

II

Trust

Custody Agreement,

to

c)

and

i)

with respect

any Additional

Assets, the documentation arrangements

governing

the maintenance

and

servicing applicable) ble)

such Additional any underlying

Assets and custodial

related thereto

and

to

of

the extent
(

to

ii)

collateral

related

such Additional
with

establishing

if

Assets and

applica-

in

any Asset Subsidiary created

connection

such

Additional

Assets;

provided

that

the

as

or

U. S.

be

to

iv)

A
I

execution

any such documentation,

the extent such documentation Pooling and Servicing


for

not substantially similar

be all

as

to

material

respects

the Asset

Trust I

Agreement

( with

such changes

may

or

necessary

to

desirable

reflect

the collateral

such Additional
including

Assets),

must satisfy the Rating Manager. Assets,

by

Agency Condition and be approved


Asset

of

all

the Managers,

the Independent

I,

Subsidiary

Trust

Asset Trust

II

means Asset

and, with respect

to

any Additional

for

an

of

to

entity

formed
with

the

purpose

holding the collateral and:

related

such Additional

Assets and making

to

payments

respect

thereto

the Company
all

in

a)

or

which the

Company

of

all

holds

substantially

the economic

interests;

b)

is

which which

established

and governed

pursuant which

to

Asset

Documentation;

is

is

not

an investment

company

required

to

c)

register

under the Invest-

ment Company

Act;

41

in

of

to

is

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WMIPC_500002117.00053

CONFIDENTIAL

d)

the establishment and operation

which

will

not cause the

Company

be
Act;

investment

company

to

is

that

required

register

under the Investment


will

Company

e)

of

the establishment and operation tax


( including

which

not cause the imposition

of

United States

in

of

federal

withholding

under Section

1445

the Code)

of

respect

payments by the

Company on any

of

series

the Company Preferred Securities;

the

establishment

and operation

which

will

not cause the Company

be

of

to

f)

treated

as

under the Code

as

a publicly traded partnership taxable

corporation;

and be
treated

an

of

to

the establishment and operation

which

will

not cause the

Company

engaged
purposes.

for

in

as

or

U. S.

trade

business,

determined

United States federal income tax

an

to

Asset

Tax Opinion means, with respect

any assets,

opinion

of

counsel from nationally

recognized

tax
will

counsel

the effect that the acquisition

and ownership

such assets

by

to

of

the

in

in

or

Company

of

not

itself

connection

with

any

the Companys other assets):

by a)

in

of

cause the imposition

United States federal withholding

tax

respect

of

payments

made
(

the Company on any series cause the Company


corporation;

of

the Company Preferred under the Code

Securities;

b)

be

as

to

treated

publicly

traded partnership

taxable

as a

or

in

as

cause the Company


for

treated

engaged

trade

business,

determined
Eligible

United States federal income tax purposes.

as

or

U. S.

be

to

c)

as

g)

of

to

Investments

means the Asset


I

Trust

Class A Trust Certificate, the Asset Trust

the Asset Trust

II

Class

Trust Certificate,

the Asset Trust

Class

II

Trust Certificate,

Class

Trust Certificate,

any other Eligible Assets and any Permitted Investments.

or

Permitted

Investments
of,

means one

more

the obligations

or

of

securities listed

below:

or or

as

a)

to

obligations

guaranteed

principal

and

interest by,

the United States are backed

America
faith

any agency

instrumentality thereof

when such

by

or

obligations

the

of
full

of

and

credit

the United States

of

America;

in

b)

a)

on

of

repurchase

agreements provided have,

obligations

described

clause

this definition

of

Permitted

Investments;

that

the unsecured

obligations

the party agreeing agreement

repurchase

such obligations

the time

of at

which the repurchase

is

at

entered

to

of
into,

of

one

of

the two highest short- term debt ratings such repurchasers unsecured
into,

each

the Rating Agencies;

and provided

at

further that

long-

term debt has,

the time

at

which the term debt ratings

is

repurchase

agreement

entered

one

of

the two highest unsecured

long-

of

each

of

the Rating Agencies;

of

or c)

federal trust that

funds,

certificates

deposit,

time deposits and bankers

acceptances America

of of

any

bank

company incorporated

under the laws

the

United States

or

of

of

any state;

in

or

of

provided

the debt obligations

such bank

trust

company

( or,

the case

of

the principal

of in

of

bank
date

a bank holding company


acquisition thereof

system, debt obligations

the bank holding company)

at

the

of

have one

of

the two highest short- term debt ratings

each

the term

Rating Agencies

and unsecured

long-

term debt has one

of

the two highest unsecured

long-

of

debt ratings

each

of

the Rating Agencies;

d)

of

federal funds,

certificates

deposit,

time deposits,

demand deposits and bankers

of

acceptances

WMB;
or of
of,

e)

obligations

obligations

guaranteed
that

by,

any state

the United States

of

America

or

of

at

the District

Columbia; provided

such obligations

the date
for

of

acquisition

thereof shall

of

have one

the two highest long- term debt ratings available

such securities

from each

of

the

Rating Agencies;

42

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00054

CONFIDENTIAL

of

commercial

paper

any corporation

incorporated

under the laws

of

f)

the United States

or

on

of

America

any

state thereof,

which

the date

of

acquisition that long-

has the highest commercial


long-

of

paper rating

each

of

the Rating Agencies;

provided

the corporation has unsecured

of

of

term debt that has one Agencies;

the two highest unsecured

term debt ratings

each

of or

the Rating

g)

or

securities that

other

than stripped bonds

at to
a
or,

stripped

coupons)

bearing interest

sold

by

of

discount America
available

are issued

any corporation

incorporated

under the laws


long-

the United States


ratings

or

any state thereof and have one such securities from each

of

the two highest

term unsecured

for

of

the Rating Agencies;

and

h)

of

any other category

investments
including

that satisfy

the Rating Agency Condition Manager,

and

by

is
would

of all of an

approved

the

Managers,

the Independent

subject

the receipt

to

the Company

Asset Tax Opinion with respect

such category

of

investments;

provided, extent that

however,

that

any

the investments

listed

above

will

not

be

of

i)

Permitted

Investments

that

investment

therein

would cause the outstanding

principal

amount
principal

of

Permitted

Investments
all
Eligible

by

to

of

are then held and


(

the Company

exceed

20%

the aggregate

amount

A)

to

ii)

Investments

any payments received with respect tax

any

of

the investments
with
(

of

listed

above
tax

be

to

must not

of

subject

withholding

any jurisdiction assuming

compliance

standard

up

documentation

requirements, unless the Company

entitled

full

gross-

on

an

to

is

after-

tax basis)

B)

to

of

with

respect

any such withholding

tax,

the

gain

from the disposition under section 897

such investment
section

or

not

subject

federal

income

or

U. S.

be

to

withholding

tax
will

1445,
federal

C)

respectively, withholding Securities.

the Code and

such investments

not cause the imposition

in

by

on

of

tax

respect

payments

made

the Company

of

any series

the Company Preferred

no

an

In

if

event shall

instrument

be a Permitted Investment

the instrument evidences such instrument such instrument.

U. S.

of

of

right

receive

only interest payments

with respect

the obligations
principal

underlying

at

has been purchased

a price greater than the outstanding

balance

in

P,

at

of

Rating

Agencies

means,

any time,

S&

Moodys

and

of

Fitch,

but

only

the case

each

for

of

none

them

providing

rating

the relevant security,


rating

including

the Trust Securities phrase

at

such time, purposes

as

then any

nationally

recognized

statistical

organization

that

defined

for

2)

is

Rule 436( g)(

under the Securities

Act,

which

rating

such

relevant

security.

Rating

Agency

Condition

means

written notice result

from each Rating Agency

confirming

that

the

in

or

proposed assigned

action,

change

modification will not

of

reduction

the

rating

then currently

by

such Rating Agency

to

the Trust Securities.

Employees and Administration Agreement The Company and


Administrative

WMB
tax

have entered

into

an

Administrative

Services

Agreement causes

( the provided)

Services
legal,

Agreement) pursuant

which

provides

be

to

to

WMB
to
and

or

certain

accounting,

and
all

other

support services

the Company,
federal

assists

the

Company

U. S.

maintaining compliance
administrative,

with

pertinent

local,

state

laws and provides

necessary the

recordkeeping

and

to

secretarial

services

the Company. Under this agreement,


for

to

of

to

Company has agreed

reimburse the provider

such services

from time

time

the value

by

to

services

provided

such provider

the Company.

The Company

expects that any such reimburse-

ment

will

be

in

a de minimis amount.

The Company
that

will

maintain limited

liability

company records and

audited

financial

statements employees

of or

of

of

are separate

from those

WMI

and any

other

affiliates.

None

of

its

the officers,

in

or

of

Managers
acquired

the Company

to

will

have any direct

indirect

pecuniary

interest

any security

be

in

disposed

the

Company

in

or

or

by

of

any transaction

which the Company has an interest.

43

in

of

is

if

such agency

if is it is

rating

the relevant

at

security,

including

the

Trust Securities

the relevant time

or

to

to

by
the

to

of

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WMIPC_500002117.00055

CONFIDENTIAL

of

Management

the

Company

Managers and Officers

by

The Company Companys Board

will

be managed

a Board

of

Managers.

The LLC Agreement

provides

that

the

of

at

Managers

will

times be composed

of

all

three

members

( each,

a Manager),

or

is

of

one

whom
affiliate

of
the

not and has not been during the preceding

five

years an officer

employee

WMI

or

of

any

WMI,

other

than a financing

subsidiary ( the

Independent Except

Manager).

The Managers

will

serve

until

their

successors

are duly elected and qualified.

in

certain

circumstances

by

described

under

Manager

below, action
officers.

the Companys Board

of

Independent
currently

Managers

will

be by

majority vote.

The Company has nine

The persons who

serve as the Managers

of

and officers Position

the Company are:

Name
Robert Williams .
Peter Freilinger
.

and Offices Held

. . .

Manager Manager

and Senior Vice- President and Senior Vice- President

. . . .
.

J.

Kenneth
Bret

Uva
.

. . . . . . . . . . . . . . . . . . .

Independent
ViceFirst

Manager and
Chief Financial Officer

W.

Scott
.

President

Tim Cleary.
Jim Douthitt

. . . .
. . . .

Vice- President

Senior Vice- President


First

Doreen Logan
Paul Phillips. Jack Read
. . .
.

Vice- President

and Assistant Secretary

. . . . . . . . . . . . .
.

ViceFirst First

President
Vice- President Vice- President

Chad Smith

and Secretary and officers


its
affiliates.

of

Each

the current Managers


individuals

( other

than the Independent

Manager)

of
The

the
initial

or

or

of

Company are
Independent

who are
Kenneth

officers

employees

WMI
of

one

J.

an

is

is

Manager

Uva, who

employee

CT

Corporation.

Independent

Manager

in

Under the LLC Agreement,


the preceding
five

be

to

of

order

considered

independent,

a Manager

must WMI,

not, during other

or

or

of

years,

have been a director

employee

WMI
to

any

of

affiliate

than

or

of

direct

indirect financing

subsidiary

WMI.
assessing the benefits the Company

in

The LLC Agreement

of

requires that,

any proposed

of or

action

requiring his

her consent,

the Companys

Independent
including

Manager

take into account

of

interests

holders

both the Junior Equity Securities,


Securities. Preferred

Company Common
provides

Securities,

and the

any series

the

Company Preferred

The LLC Agreement


Securities,

in

of

that

considering

of

of

interests

the holders

the

Company
Securities,

any Junior Equity Securities

and any

of

series

Company Preferred
duties.

the Companys

Independent

Manager

owes

all

such holders

the

same

so

The LLC Agreement


outstanding, including

as

provides

that,

for

long

any Company Preferred Securities

are

by

be

to

of

certain actions

the Company

will

subject
will

prior

approval

all

Managers,

the Independent

Manager.

The Company

not be able, without

the the

approval

of

the

or

to

Independent

Manager,

i)

terminate,

amend

otherwise

change any

of

Companys Asset
not tax-free

or

or

is

ii)

Documentation

effect

consolidation,

merger

share exchange

to

that

the

holders

any series

the Company

Preferred Securities

unless such consolidation,

merger two- thirds

of or

of

of

share
all

or

by

of

exchange

was approved

the consent

affirmative voting

vote

the holders

of

at

least

as

of

series

addition,

if

the Company Preferred Securities,

together

a single class.

In

either

or

to

to

Asset Trust

fails

make
in

a payment

the Company

any payments

are not received

with

regard

of

of

any Additional

Asset
the
I

violation

the terms
will

the related Asset Documentation

on any scheduled

payment

date,

Independent Class

Manager

to

have the authority the Asset Trust

cause the Company, as the holder

the

Asset Trust

II

A Trust

Certificate,

Class A Trust Certificate

or

of

any

44

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00056

CONFIDENTIAL

in

as

to

its

Additional

Asset,

applicable,

enforce

rights

such capacity

until

payments

have been
with

of

resumed and a year has passed since the date

the latest scheduled

payment date

respect

or

to

which the Asset Trust

the Additional

Asset failed

make a payment.

The holders

the series

Company

as

of

of

all

Preferred

Securities,

voting

together

single

class,

by

majority

vote

the votes cast on such matter

a meeting

properly called

and held

of by

or

of

at

written

by

instructions voting single rights class,

signed

the holders

to of

series

the

outstanding,

voting

together
fill

as
the

of

all

Company Preferred Securities Company Preferred Securities then


or
initial

of

representing

majority

the a

are entitled

remove the

any succeeding
existing

Independent

Manager

and

to

the

in

by

or

vacancy

created

such removal
fails

any other vacancy

the

of

office

the Independent
Securities

on

to

if

Manager

the Company

of

i)

pay

full

dividends

any series

Company Preferred
full

any Dividend

ii)

Payment Date,

any Trust Holder


Securities

fails

pass through

dividends

paid

by

on

Company

the Company

Preferred

held

the Trust Holder

the holders

of

to

the

Trust Holders

Securities

so

iii)

any Dividend Payment

or

on

Date

a Bankruptcy
irrespective

Event occurs. The

an

person

elected

will

deemed
test

Independent
right

Manager
will

or

be

be

he

of

to

by

on

to

whether

she

as

meets the independence

as

described

above. This

continue

for

long

any Company

of

Preferred

Securities

any series are outstanding.

or

Bankruptcy

Event means the Company, the Trust

i)

any other Trust Holder


its
inability

becomes

or ii) to

in

or

or

or

to

is

its

insolvent

unable

pay

debts

fails

admits

writing

generally

pay
for

its

debts

as

or

they become due,

makes a general assignment,

arrangement

composition with seeking law

or

the

or

of

or its

it

benefit

creditors

or iii)

institutes

has

instituted

against

a proceeding

a judgment
other similar

or

insolvency

bankruptcy
creditors

any

other

relief

under any bankruptcy presented


its
for

insolvency

or

law affecting

rights,

petition

winding

or

up

is

liquidation.

Compensation

of

Managers and Officers Manager a reasonable


for

or

The Company pays the Independent

fee for his

her services

of as

or

a the

of

of

Manager

the Company,

at

plus

reimbursement

expenses

attendance
the

each meeting

or of

Companys Board

Managers.

As

Managers

and

officers

Company who are also

officers
for,

or

of

of

employees

WMI

one

its

affiliates,

the Company pays,

reimburse the related

affiliate

in

of by of

to

of

portion

the salary and benefits

any such persons

proportion

the estimated amount

of

time

as

on

to to

on

of or

spent

such person
its

the Companys

business

compared amount

time spent

the business

WMI

or

be

one

other affiliates.

The Company expects

de

this

minimis.

of

Indemnification

Managers and Officers


provides
that

The LLC Agreement

the Company

will,

the fullest extent permitted and related expenses


status

by

to

law,

or

indemnify any Manager reasonable


counsels

of

officer

the Company for any

liability

( including

or

or

of

fees) arising

out

such Managers

officers

as a Manager

officer

the Company; provided,

however, that a court

of

competent

jurisdiction

has not determined that such

in

in

or

or

Manager

officer

did
to,

not act

good

faith

and

a manner that he

to
her

she reasonably

believed

be

or

in,

not opposed

the best interests

the Company and, with respect

any criminal action


unlawful.

proceeding,

had

or

no

to

reasonable
that the

cause

believe

that his

her conduct

was

The LLC

Agreement
procedural provides
against status

is

to

provides

right

indemnification

a contract right and sets forth certain

to

and

of

evidentiary

standards

applicable

enforcement

claim.

The LLC Agreement any Manager


out

that the

Company may purchase and maintain insurance

protect

or

to

officer

or

or

or

any

liability

asserted against him

her,

incurred

him

her, arising

his

as

such.

Additional Covenants

the

Company
that,

in

of

the

LLC Agreement
as
any Company Preferred Securities
the authorized options

The LLC Agreement


are outstanding, the

provides
will

so long

of

any series

or

Company
of

not authorize,

create

increase

amount

of

or

by

of

issue

or

or

any class

series

any equity shares

the Company,

any

warrants,

or

of

other

rights

45

or

to

of

of

or

to

of

of

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00057

CONFIDENTIAL

or

or

of

of

convertible

exchangeable

into

any class
Securities,

series

any equity shares dividend


rights,

the Company,
rights

ranking

as

or

senior

the Company Preferred

either

redemption

rights

or

or

up

an

of

dissolution,

liquidation

winding

the

Company
the

without

the consent

as of as

affirmative voting

vote

the

of

at

of

of

all

holders
single

least

two- thirds

series also

Company
that,

Preferred with

Securities,

together

a
the

or

class.

The LLC Agreement

provides

except

the consent
Securities,

affirmative

vote

of

at

of

of

all

holders
single

least

two- thirds

the series

Company

Preferred

voting

together

class,

the Company
actions

will

not take certain other actions.

These

of

are described

under Description

the Series 2006-

Company Preferred

SecuritiesVoting Rights and Covenants.

Additional Information

by

information with Act,

respect
including

the

that

required

paragraph

( d)(4)(

i)

The

Company
GAAP,
will

of

to

is

Rule 144A

under the Securities

quarterly with

unaudited

and annual audited


available

financial

statements,
until

in in

be

to

each case prepared

accordance

upon request
Securities

WMI
or
(

the earlier

of

of

i)

full

Exchange.

46

ii)

the redemption

the Series 2006-

Company Preferred

the Conditional

in

of

on

to

to

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00058

CONFIDENTIAL

ASSET TRUST

General
I)

Washington

Mutual

Home

is

Equity Trust

Asset Trust agreement

statutory

trust

formed under the

laws

the

State

Delaware

pursuant

trust

between the Company, The Asset


I

as

of

of

to

depositor,

and

Deutsche
Servicing ment),

Bank

Trust

Company Delaware,

as

Delaware
( the

trustee.

Trust

Pooling and AgreeDeutsche

of

Agreement, dated as
the

March

7,

2006

Asset

Trust
( the

Pooling and Servicing


Trust
I

among

Company, as
Delaware,
Trust

depositor,

WMB,

as

servicer
(

Asset
I

Servicer), Trustee)

Bank

Trust

Company

as Delaware

trustee trustee
(

the Asset Trust


I

Delaware

and
initial

Deutsche
trust

Bank National

Company,

as

the Asset Trust

Trustee),

restated the

is

of

agreement Asset Trust

and

the governing
will

instrument

Asset Trust

I.

does not and


I

not own any assets other than the


will

HELs
other

and the other assets than those incurred

described connection
Trust I

below. Asset Trust


with

does not and


I

not have any

liabilities

the Asset
will

Trust

Pooling

and

Servicing officers

Agreement

and any

related

agreement. Asset
contribution

or

does not and

not

have any directors,

other

employees.

No

equity

as by

for

or

or

be

has

will

made

Asset Trust

WMB,

the Company pursuant

any other party, except


initial trust

de

to

minimis

by

contribution Trust I

made

the Company,
will

to

depositor,

the

agreement,
I I

and Asset

of

does not and

not
I

have any other capital. acts through

The

fiscal I

year end

Asset Trust

December
Trustee,

31. Asset Trust


fees

the Asset Trust are paid respect


include

Trustee and the Asset Trust reimbursed

whose

and reasonable
this offering

expenses
with

by

or

the Asset

Trust I Servicer.

of

to

is

Delaware

in by
the

For purposes

circular

the underwriting,
originators

origination

and

servicing

in

to

the

Asset Trust

I,

HELs

references

WMB

by

WMB,

acquired

WMB

and WMBs

subsidiaries.

of

General Description

Assets

of

of

The assets

Asset Trust

consist

HELs

that

had, as

of

January 31, 2006

( the

Asset

Trust I

Cut-Off Date), a value and aggregate payments received thereon

unpaid principal balance

of

approximately $5,389,459,150,

and certain other investments.

The HELs were

or

originated

acquired

1,

of

1,

WMB

between September
into

2001 and September


had an aggregate

30, 2005. As

November

2006, the

HELs

transferred

Asset

Trust

unpaid principal

balance

of

approximately

$ 4,745,592,069.

of

1,

As

November

2006, the HELs had a weighted

of

average

gross interest rate

6.08% and

to

of

of

ranged from a gross interest 2006, the average


current,

rate

approximately 4.000%

11.315% per annum. As

November

of

unpaid principal balance

balance

the HELs was approximately $ 92,554 with a

1, 18

of

minimum
principal various

current,

unpaid principal

approximately $

and a maximum

current,

unpaid
I

balance

approximately $943,997.

As

November

in

of

of

2006, assets

Asset Trust
originated

had
within

30

original maturities

ranging from 5 years

years and were, weighted

on

to

average,

As

35

of

1,

the last

months.

November

2006,

the

current

average

loan- to-value ratio

HELs was approximately 53.03% and the weighted average

at

loan- to-value ratio

origination

was

As

of

approximately 58.61%.

November

2006,

the HELs had a weighted


underlying

average Credit Score (

of

defined
with

below)

approximately

757. Most

of

the properties

the HELs are owner occupied

approximately 3.83%

of

the properties non- owner occupied.

The HELs are geographically

in

concentrated

Texas

approximately 49.81%), California ( approximately 29.82%), Florida ( approxireasons such

mately 7.12%), and

home

purchases,

of

New York ( approximately 5.10%). HELs are typically made for home improvements, furniture and fixtures purchases, purchases
The HELs are

automobiles

and debt

on

consolidation.

generally

repaid

fully-

amortizing basis.

of

Acquisition

the Portfolio and Related Transactions

In

of

connection

with

the issuance

the Outstanding

Company
for

Preferred

Securities,

WMB
the

in

of

to

contributed

a pool

HELs

the Company

exchange

a corresponding

amount

47

of

as

as

of

1,

1,

of

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00059

CONFIDENTIAL

Outstanding

Company

Preferred for

Securities.

addition,

University

Street contributed

a pool

of

In

HELs

of in

as

of

the

Company
value

exchange

the Company
totaled

Common

of

to

all

Securities

January 31, 2006. The

aggregate

these contributions

approximately $ 5,389,459,150.

of

to

contributed

Asset Trust

it

The Company
Street.

all

the HELs

received from

WMB

and

University Equity

This contribution
( the
I

was made
Asset Trust
( the I

A-

in

exchange

for

the Class

1 Washington

Mutual

Home

Trust I Certificate

Class
Asset I

A Trust
Trust I

Certificate)

and the Class

Washington

Mutual
federal

Home

Equity Trust

Certificate

Class

Trust Certificate).

For United States

income tax purposes,

the Asset Trust

Class

A Trust
Class

Certificate

represents the sole class

of

regular

in

I,

interests

Asset Trust

and the Asset

Trust I

Trust Certificate

represents the sole class


I

in

I.

residual interests

Asset Trust
I

The Company

retained

the Asset Trust

Class

A Trust
on

Certificate

on

and

sold

the Asset Trust

Class

Trust Certificate

WMB
of

March

7,

to

2006.
interest

to

Asset Trust
after the

owns
I

all

the right

receive

payments

principal
I

and

the HELs due

Asset Trust
information

Cut-Off Date.

to

schedule

the

Asset Trust

Pooling and Servicing

Agreement

includes

about each HEL, including:

as

of

of

the

outstanding

principal

balance

the close

business

on the Asset

Trust

Cut-Off Date;

of

the

term

the

HEL; and

as

of

of

the

applicable

interest rate

the close

business

on

the

Asset Trust

Cut-Off Date.

to

to

The notes

relating

the

HELs
the

were not endorsed

Asset Trust

and no assignments
capacity

to

Asset
I

in

of

Trust I

the

mortgages

securing

HELs

were prepared.

of

Custodian,

has possession statements

and reviews such notes and


filed

WMB, the HELs as


in
Is

its

as

initial

Asset Trust
I

custodian the HELs.

for

Asset Trust

and

financing

were

evidencing

Asset

Trust

interest

Description General

of

the Portfolio

by of

in

All

is of

of

the HELs

the portfolio

Asset Trust

consist

closed-

end,

first

lien

home

equity

loans

secured

on

first

lien that primarily

the borrowers
for

residence.

Such residences

are largely single

family properties.

These loans

typically

are

made
fixtures,

as

reasons such

home
1,

purchases,

home

of

improvements,

acquisition generally

furniture

and

purchases

of

automobiles, and debt consolidation. 2006, fewer than


that

As

on

The HELs are

paid

be of

fully-

amortizing basis.

November

in

no

150 HELs were

delinquent
I will

payments;

however,
delinquent

there

can

assurance

HELs

held

in 1, as

the

portfolio

Asset Trust

not become

in

of

the future.

in

as

to

The
with

tables

Appendix

of

this offering

circular

represent information
Trust

November

2006

in

to

respect

the

included

the portfolio

Asset

Underwriting General

in

I.

HELs

of

The HELs owned by Asset

Trust

were,

in

all

material respects,

originated

accordance

with

as

of

the underwriting automated

guidelines

WMB

by

described

herein.

The HELs were

underwritten

WMB

using

underwriting

systems.
guidelines
ability

WMBs
credit collateral.

underwriting

generally

are intended

to

evaluate the prospective

borrowers

standing and repayment

and the value and adequacy

of

the mortgaged

property

Some HELs

in

are manually underwritten, and supporting

which case an underwriter reviews

information

if

submitted borrower,

by the borrower

documentation,

required,

and a
a loan

of

credit report the

the
with

and based on that review

in

to

determines

whether

originate

amount and

by

terms requested
ing

the

borrower.

Some HELs

are underwritten

through

WMBs

automated

underwrit-

system, described

below.

48

of
the

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Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00060

CONFIDENTIAL

Prospective
assets, liabilities

borrowers are required

provide

details

about

their

financial

factors

such

as
who

to

their

as

as

and related monthly expenses,

well

income and employment information.

by

Borrowers may provide the information


directly

to

this information into the lending

electronic

transmission

a bank

representative

inputs

an

system. Each borrower also provides


credit history.

authorization

access a credit report that summarizes the borrowers

Evaluation

of

the Borrowers

Credit Standing
borrowers credit credit history, reporting

To evaluate a prospective

the loan underwriter agencies.

obtains a credit report


report typically

or

to

relating

the borrower from one

more

The

credit

contains

as

to

information installment

relating

such matters

credit

history with local defaults,

and

national

merchants

and lenders,

debt payments

and any record

bankruptcy,
( each,

repossession, suits
Credit

or

of

judgments.

In

most cases, the credit report

provides a credit score

Score)

for

the borrower.

Credit

scores are designed

assess a borrowers

on

to

to

creditworthiness

and likelihood

default

to to

obligation Credit

over a defined period ( usually two correspond

three

years) based on a borrowers

credit

history.

of

of

Scores do not necessarily


reflect

the probability

default

over the

life

HEL
more

because they
Credit

past credit history, rather than an assessment

of

future

payment performance.

Scores range from approximately 430


credit history.

to

approximately 850, with higher scores indicating the Credit Score for the primary borrower

favorable typically

the case

co- borrowers,

is

used, unless the co- borrower

has a

Credit

Score that

40

points

lower than that

of

the

in

is

primary borrower,

which case the lower score time the borrowing request

then used. The primary borrower


Credit for

is

is
by
for

of

In

determined

is

at

the applicant loan products

the

made. Minimum

to
an some
the gross
ratios
ratio,

Scores are required

and loan programs.

Credit

Scores

may

not be available

some borrowers.

of

Evaluation

the Borrowers a prospective


total

Repayment
borrowers
(

Ability

of In

to

evaluating

ability

repay a HEL, the loan underwriter expenses)

considers

ratio

the borrowers

monthly debt

including

non- housing
back-

to

the borrowers

as

as or

to

income ( referred

the

debt- to- income

ratio

end

ratio).

The maximum acceptable


loan- to- value

may

vary depending score and the

on

other

loan factors, such

loan amount and loan purpose,

of

to

credit

availability

other

liquid

assets.

Exceptions

the

ratio

guidelines

may be made

when compensating

factors

are present.

of

Evaluation

the Adequacy

of

the Collateral

as

by

The adequacy

the property being pledged

collateral

generally

determined
all

an by in

of

is

appraisal

in

made

accordance

with pre- established appraisal

At

guidelines.

origination,

appraisals

are the

to

to

required

conform

the Uniform Standards

of

Professional

Appraisal Practice

adopted

on

Appraisal Standards

Board

the

Appraisal

Foundation,

and are made

forms acceptable

to

of

the

or

Federal National Mortgage Appraisers may accordance


appraiser,

Association

and/

the Federal

Home Loan

Mortgage

Corporation.

by

be

staff

appraisers employed

WMB

or

independent

appraisers selected
generally

with the

pre- established appraisal

guidelines. inspect

Such

guidelines

require that

the

or

an

agent on and,

behalf,

personally

the property and verify whether whether

the property completed.

in

is

in

if

adequate

condition

the property
underwritten

new

construction,

it is

substantially

However, automated
public

the case

HELs

through

WMBs
in
lieu

automated

underwriting appraisal.

system,

be

an

of

valuation

method

AVM) may

used

a traditional

The

AVM

relies

records regarding the encumbered

or

property and/

neighboring

properties

and

statistically

If

derives

a value

using

that information.

AVMs

are used, they comply with the requirements

of

the

Financial

Institutions

Reform and Recovery Act


case, the appraisal
properties

as

of

1989,

amended, and are independently


analysis

verified

In

periodically.

either

normally

based upon a market data


applicable,

of

is

recent

sales

comparable

and, when deemed

a replacement

cost analysis

based

the current cost


Title

or

of

constructing

purchasing

a similar property.
g., lien

or

e.

insurance

alternative
I

services involve

insurance)

are required for


services.

HELs. Certain
consist

by

of

the

HELs owned

Asset Trust

the use

alternative

These services

49

of

of

all

on

of

on

of

is

its

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00061

CONFIDENTIAL

be in

three

services

( including

property

reports

and recording
services.

services)

and are used


services

lieu

of

title

insurance,

endorsements
including

and

title

company

Alternative

may
to to

used

in

certain

in

circumstances connection

connection

with first

liens that

are being granted


with

a lender other borrowers

than

in

or

of

with free

the purchase

a home;

connection

loans

made
to

who
in

already

own,

and clear basis, the property being used provide event

as

on

collateral
title

secure the loan

question.

Alternative risk

services

to

low- cost alternative

standard

insurance

and provide acceptable

in

coverage

the

of

default.

Documentation

Programs

Each HEL owned

by

Asset

Trust

was

underwritten

using
full

either

WMBs

full

income documenta-

or

its

tion

program

stated

income program. Under WMBs

documentation

program, the prospective

is

of

borrowers

stated

income

verified

through

receipt

the borrowers

most recent pay stub and most


with

in

or

of

recent W- 2 form or,

the case

self- employed

borrowers

borrowers

more than 25%

of of on

their

if

income from commissions, two years employed borrowers,


profit

of

personal

and,

applicable,

business) tax returns. For

self-

and

loss

statements

may

also

be

required.

Under WMBs

stated

income program, the prospective

borrowers
Eligibility

income and assets either are

not required

be obtained

or

to

are obtained

but not verified.

criteria

and the amount

the loans

by

loan are determined

an automated

underwriting

system. Purchase

loans as well as refinance

may be

in

eligible for participation

WMBs

stated income program.

all

is

credit report for

the borrower

generally

required

for

HELs

underwritten

under either

program.

to

Exceptions

Program Parameters

be

for

if

Exceptions compensating

WMBs

loan program parameters may

made
the

on

to

a case- by-case basis

factors

are present.

those cases, the basis

exception

documented,

and

of

some cases the approval


to,

is

senior

underwriter

required.

Compensating
the

factors

may

include,

but

are not limited

low loan- to-value

ratio,

good

of

credit

standing,

availability

other

liquid

assets

and

stable

employment.

Automated Underwriting
all
Currently,

System

by

HELs

originated

WMB

utilize

a proprietary automated

underwriting

system

as

known

SUCCESS. Based

the borrowers

credit report

and the information provided

by

on

the

to

borrower,

the system either

approves

the loan subject documentation,


declines

the satisfaction
ii)
(

of

i)

specified

conditions,

which may include the receipt


underwriter for

additional

refers

the loan application

iii)

manual

or

underwriting, decision,

the

file

based on predetermined among


different levels

eligibility

In

making the underwriting

SUCCESS

distinguishes

of

credit

based

on

a proprietary custom score model, the borrowers and loan characteristics.

Credit

Score, and specific


levels

policies,

application
statistical

WMB
its

an

of

to

criteria.

standing,

has developed

these credit standing

based

of

of

of

its

analysis

the past performance

portfolio

home
and

equity loans.

WMB

has used

of

of

of

analysis

the past performance

portfolio

home

equity loans.

has used

SUCCESS
to
and

underwrite completed
periodically

HELs since May 2001.


all

WMB
and

regularly lending

evaluates

validates

SUCCESS
was

date has

in

required compliance
its

fair

evaluations

satisfactory

manner.

WMB
upgraded

to in

WMB

upgrades 2004.

proprietary

automated

underwriting

system.

SUCCESS

last

November

Quality Control Review

WMBs
of
previously

credit risk oversight originated

department

conducts

quality control

reviews

of

statistical

samplings

HELs on a

regular basis.

50

in

In

is

in

Return

Restricted For Use in Connection with Plan Confirmation Only

WMIPC_500002117.00062

CONFIDENTIAL

Credit Risk Management


Credit risk within credit

Policies

is

of

the

WMI

Group

managed

by means

a broad set

of

policies

and principles

in

is

contained
policy

policy.

The

Chief Credit Officer

responsible for overseeing


portfolio,

the work

of
any

its

a credit

of

committee,

monitoring

the quality allowance

the

WMI

Groups credit

determining the reasonlarge credit Credit risk

of

ableness exposures

the

WMI

Groups

for

loan losses, reviewing


for credit- related

and approving

and

setting

underwriting criteria

products

and programs.

is

of

management
underlying

based on analyzing the

creditworthiness

the borrower,

the adequacy
strength

of of

the

collateral support.

given current events and conditions

and the existence and

guarantor

of

Credit risk

assessment Process

a process

that requires

the evaluation

numerous

factors,

many

which are qualitative.


all

integrity relies

the

ability

the

WMI

Groups

lending

personnel

analyze elements

risk

elements.
risk

also depends

maintaining
risk rating

risk rating

accuracy

by

on

It

recognizing

changing

of

credit

and promptly

initiating

changes.

Conflicts

of

Interest

Policies
ethics
( the

Pursuant

WMBs code
is of
credit

Code

Ethics), for

when the extension

financially

reasonable

both

in