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SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of this~ day of 

lt.-.a.A... 2021, by, between, and among the following undersigned parties (collectively, "Parties," 

and each a "Party"): the Federal Deposit Insurance Corporation (''FDIC") as Receiver for 

Colonial Bank ("FDIC-R"), on the one hand, and HSBC Securities (USA) [nc. ("HSBC''), on the 

other. 

WHEREAS: 

Colonial Bank was a depository institution organized and existing under the laws of the 

United States and the State of Alabama. When Colonial Bank was closed, the FDIC was 

appointed Receiver pursuantto 12 U.S.C. § 182 l(c). 

In accordance with 12 U.S.C. § 182 l(d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of Colonial Bank, including those with respect to its assets. 

The FDIC-R represents that among the assets of Colonial Bank 10 which the FDIC-R 

succeeded were any and all of Colonial Bank's claims, demands, and causes of action arising 

from any action or inaction related to any loss incurred by Colonial Bank. 

The FDIC-R is the plaintiff in a residential mortgage-backed securities ("RMBS") 

lawsuit. FDIC as Receiver for Colonial Bank v. Chase Mortgage Finance Corp., et al., No. 12-

1- 6166 (LLS) (S.D.N. Y.), pending in the United States District Court for the Southern District 

of New Yor , 1 • BC is a defendant the "RMBS Action"). An RMBS certificate at 

issue in the RMBS Action is.__ ________ "the "HSBC Certificate''). 

HSBC denies all liability with respect to all claims that the FDIC-R has brought against it 

in the RMBS Action. 

The Parties deem it in their best interests to enter into this Agreement to avoid the 

uncertainty, trouble, and expense of further litigation of claims asserted against HSBC in the 

RMBS Action. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the Parties 

agree, each with the other, as follows: 

I. Payment of the Settlement Funds. As an essential covenant and condition to this 

Agreement, and as consideration for the releases and dismissals contained herein, HSBC 

shall pay or cause to be paid FIFTEEN MILLION FOUR HUNDRED THOUSAND 

DOLLARS ($ I 5,400,000) to the FDIC-R ("Settlement Funds") within 30 days of the 

effective date of this Agreement ("Payment Date" ). The effective date of this Agreement 

shall be the later of the day upon which the FDIC-R provides HSBC with a current W-9 

and wire instructions, and the date upon which all Parties shall have executed this 

Agreement as evidenced by the latest date on the signature pages hereto. In the event that 

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the Setllement Funds are not delivered to the FDIC-R by the Payment Date, interest shall 

accrue on all unpaid amounts at the rate of 5 percent per annum from the Payment Date 

until the date the FDIC-R receives payment. Without waiving any other rights that the 

FDIC-R may have, in the event that all Settlement Funds are not received by the FDIC-R 

by the Payment Date, then the FDIC-R, in its sole discretion, shall have the right to 

declare this Agreement null and void, shall have the right to extend the terms of this 

Agreement for any period of time until it receives all Settlement Funds (including all 

accrued interest), and/or shall have the right to enforce this Agreement, in which event 

HSBC agrees to jurisdiction in the United States District Court for the District of 

Columbia. The non-prevailing party in any such litigation agrees to pay the other's 

reasonable attorney's fees. Any decision by the FDIC-R to exlend the terms of this 

Agreement or to accept a portion of the Settlement Funds shall not prejudice its rights to 

declare this Agreement null and void at any time prior to receipt of all Settlement Funds 

(including all accrued interest) or to enforce the terms of this Settlement Agreement; 

provided, however, that in the event the FDIC-R declares this Agreement null and void. 

the FDIC-R will return to 1-fSBC any and all amounts paid to the FDIC-R under this 

Agreement. 

2. Dismissal. No later than five business days after the Settlement Funds are received by 

the FDIC-R, the FDIC-R shall move for the entry of an order in the RMBS Action in the 

form of Exhibit A, dismissing with prejudice the claims asserted ugainst HSBC. 

3. FDIC-R Releases. Upon receipt of the Settlement Funds, the FDIC-R hereby releases 

and discharges HSBC and all of its current or fonner direct or indirect parents, 

subsidiaries. and affiliates, together with each of their respective successors and each of 

their respective current or former shareholders, officers, directors, employees, attorneys 

and other agents, but solely in their capacities as such ("HSBC Releasees"), from any and 

all claims, demands, actions, causes of action, and liabilities of any type, whether known 

or unknown, whether asserted or unasserted, whether disclosed or undisclosed, whether 

accrued or unaccrued, whether fixed or contingent, whether direct or indirect, and 

whether at law or in equity, based upon or relating to Colonial Bank's purchase, 

ownership, or sale of the HSBC Certificate identified above, including the facts, 

transactions, representations, or omissions alleged in the complaint and amended 

complaints filed in the RMBS Action. For the avoidance of doubt, this release does not 

apply to any claims, demands, actions, causes of action, or liabilities of any type, whether 

known or unknown. whether asserted or unasserted, whether disclosed or undisclosed, 

whether accrued or unaccrued, whether fixed or contingent, whether direct or indirect, 

and whether at law or in equity based upon or relating to Colonial Bank's purchase. 

ownership, or sale of any RMBS certificates other than the HSBC Certificate. 

For the avoidance of doubt, and without limiting the generality of the foregoing in any 

way, it is understood and agreed that the releases set forth in this paragraph 3 release and 

discharge any and all released claims that at any time were owned or controlled by or 

could have been asserted by CBG Investments, Inc. ("CBGI"), fonnerly a subsidiary of 

Colonial Bank, to the fullest extent the FDIC-R has legal ability and authority to release 

such claims in its capacity as Receiver for Colonial Bank. 

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4. Reciprocal Releases. Upon entry of the order of dismissal described in paragraph 2 

above, HSBC hereby releases and discharges the FDIC-R and the FDIC. and each of 

them, and each of their current or former employees, officers, directors, representatives, 

successors, and assigns, from any and all claims, demands, actions, causes of action, and 

liabilities of any type, whether known or unknown, whether asserted or unasserted, 

whether disclosed or undisclosed, whether accrued or unaccrued, whether fixed or 

contingent. whether direct or indirect, and whether at law or in equity. based upon or 

relating to Colonial Bank's purchase, ownership, or sale of the HSBC Certificate 

identified above. 

5. Release of Unknown Claims. Each of the FDIC-Rand HSBC acknowledges that it has 

been advised by its attorneys concerning, and is familiar with, California Civil Code 

Section 1542 and expressly waives any and all provisions, rights, and benefits conferred 

by California Civil Code Section 1542 or any law of any state or territory of the United 

States, or principle of common law, which is similar, comparable. or equivalent to the 

provisions of the California Civil Code Section I 542, including that provision itself, 

which reads as follows: 

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE 

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST 

IN HIS OR HER FAVOR AT THE TIME OF EXECUTrNG THE RELEASE, AND 

THAT, IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED 

HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." 

The Parties acknowledge that inclusion of the provisions of this Paragraph 5 of this 

Agreement was a material and separately bargained-for element of this Agreement. The 

Parties further acknowledge that the releases granted herein are specific releases, not 

general releases. 

6. Authority. The FDIC-R represents that under the Federal Deposit Insurance Act, the 

FDIC is authorized to be appointed as receiver for failed depository institutions and that it 

succeeded to all rights, titles, powers, and privileges of Colonial Bank, and any 

shareholder, member, accountholder, depositor, officer, and director of Colonial Bank 

with respect to Colonial Bank and the assets of Colonial Bank, including, but not limited 

to. Colonial Bank's claims against HSBC. The FOIC-R further represents that it is 

empowered lo sue and complain in any court of law lo pursue, inter alia, the claims 

against HSBC asserted in the RMBS Action and that no other person or entity has such 

right. The FDIC-R further represents and warrants that CBGI has been dissolved and no 

longer exists, that none of the released claims that at any time were owned or controlled 

by CBGI, or any interest in such claims, has been assigned, transferred, or otherwise 

given (in whole or in part) to any third parties, and that the FDIC-R has not received any 

information suggesting that any third party intends to assert any such released claims that 

at any time were owned or controlled by CBOI. Notwithstanding the foregoing, subject 

to Paragraph 7, the FDIC-R represents that h has the authority to release all of the claims 

based upon or relating to the purchase, ownership, or sale of the HSBC Certificate 

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identified above by Colonial Bank or CBGI to the full extent set forth in paragraph 3. 

Each Party represents that it has full authority to enter into this Agreement and that it has 

the full power and authority to bind such Party to each and every provision of the 

Agreement. 

7. Certain FDIC Claims Not Released. Notwithstanding the releases in Paragraph 3 

above, the FDIC, in any capacity, shall not release, and shall expressly preserve fully and 

to the same extent as If the Agreement had not been executed (provided, that this 

provision shall not be construed as an acknowledgment that any such claims or causes of 

action exist or are valid): 

a. any claims or causes of action against HSBC or any other person or entity for 

liability, if any, incurred as the maker. endorser or guarantor of any promissory 

note or indebtedness payable or owed by them to the FDIC, to any financial 

institutions in receivership, to other financial institutions, or to any other person or 

entity (including without limitation any claims acquired by the FDIC as successor 

in interest to any financial institutions in receivership or any person or entity, 

excluding for avoidance of doubt any claims or causes of action expressly 

released in the Agreement); 

b. any claims or causes of action against HSBC or any other person or entity relating 

in any way to the London Interbank Offered Rate including, but not limited to, 

FDIC as Receiver for Amcore Bank, N.A. v. Bank of America Corp., et al., No. 

I 4-cv-1757 (S.D.N. Y .) and FDIC as Receiver for Amcore Bank. N.A .. and others 

v. Barclays Bank PLC, w1d others, No. FL-2017-000002 (EWHC (Ch.)); 

c. any claims or causes of action against HSBC or any other person or entity by or 

on behalfof the FDIC, in any capacity, as a class member in any actions that are, 

are part of. or are related to the consolidated actions, centralized actions, or multidistrict litigations: (i) In re GSE Bonds Antitrust litigation, case No. I: 19-cv0170./ (S.D.N. Y.); (ii) In re Foreign Exchange Benchmark Rates Antitrust 

litigation, No. l:13-cv-07789 (S.D.N.Y.); (iii)Alaska Electrical Pension Fundv. 

Bank of America, et al., No. I: 14-cv-07126 (S.D.N.Y.); and (iv) Sullivan v. 

Barclays PLC, et al., No. I: 13-cv-02811 (S.D.N. Y .); including any successor 

actions, or in the event the FDIC, in any capacity, elects to opt out of any class in 

any of those actions, to any opt-out claim brought by the FDIC, in any capacity, 

on the same subject; 

d. any claims or causes of action by the FDIC against HSBC or any other person or 

entity relating in any way to HSBC's performance of duties or obligations as 

trustee for structured finance securities, including but not limited to RMBS, 

purchased by any failed financial institution: 

e. any claims or causes of action by the FDIC in any capacity other than as Receiver 

for Colonial Bank; 
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f. any claims or causes of action relating to RMBS certificates other than the HSBC 

Certificate identi tied above; and 

g. any claims or causes of action against any person or entity, including, but not 

limited to, HSBC, not expressly released in this Agreement. 

h. HSBC fully reserves all of its rights, claims and defenses relating to any claim or 

causes of action that is not released by the FDIC under this Agreement. 

8. Enforcement Except as otherwise expressly stated herein, nothing in this Agreement 

shall be construed or interpreted as limiting, waiving, releasing or compromising the 

jurisdiction and authority of the FDIC in the exercise of its supervisory or regulatory 

authority or to diminish its ability to institute administrative enforcement proceedings 

seeking removal, prohibition, or any other administrative enforcement action which may 

arise by operation of law, rule, or regulation. 

9. Aetions of the United States. Notwithstanding any other provision of this Agreement, 

this Agreement shall not be construed or interpreted as waiving. or intending to waive, 

any claims that could be brought by the United States or any department, agency, or 

instrumentality thereof(otherthan the FDIC-R), including, but not limited to, through the 

United States Department of Justice or any United States Attorney's Office. 

10. No Confidentiality. HSBC and the FDIC-R acknowledge and agree that this Agreement 

shall not be confidential and will be disclosed pursuant to the FDIC's applicable policies, 

procedures, and other legal requirements. 

1 l. No Admission of Liability. The Parties each acknowledge and agree that the matters set 

forth in this Agreement constitute the settlement and compromise of disputed claims and 

that the Agreement is not an admission or evidence of liability or the insufficiency of any 

defense by any of them regarding any claim, all of which are expressly disputed. The 

Parties further acknowledge that they may not base any claim of waiver or estoppel in 

any other matter upon the execution of the Agreement or payment of consideration 

described herein. 

12. Representations and Aeknowledgcments. 

a. Execution in Counterpnrts. TI1is Agreement may be executed in counterparts by 

one or more of the Parties and all such counterparts when so executed shall 

together constitute the final Agreement, as if one document had been signed by all 

Parties hereto; and each such counterpart, upon execution and delivery, shall be 

deemed a complete original, binding the Party or Parties subscribed thereto upon 

the execution by all Parties to the Agreement. 

b. Binding Effect. Each of the signatories below represents and warrants that he or 

she is authorized to sign this Agreement on behalf of the Party for which he or she 

signs, and that he or she has the full power and authority to bind such Party to 
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each and every provision of the Agreement. The Agreement shall be binding upon 

and inure to the benefit of the Parties and their respective heirs, executors, 

administrators, representatives, successors and assigns. 

c. Choice of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal law, or in its absence, the laws of the State of New 

York, without regard to conflicts oflaw principles. 

d. Jurisdiction. All Parties hereto submit to the personal jurisdiction of the United 

States District Court for the District of Columbia for purposes of implementing 

and enforcing the settlement embodied in this Ab,Tfeemenl. 

e. Entire Agreement and Amendments. Except as otherwise provided herein, this 

Agreement constitutes the entire agreement and understanding between and 

among the Parties concerning the matters set forth herein and replaces all prior 

negotiations and terms proposed or discussed, whether in writing or orally, about 

such matters. The Agreement may not be amended or modified except by another 

written instrument signed by the Parties. 

f. Reasonable Cooperation. The Parties agree to cooperate in good faith to 

effectuate all the terms and conditions of this Agreement, including doing or 

causing their agents and attorneys to do whatever is reasonably necessary to 

effectuate the signing, delivery, and execution of any documents necessary to 

perform the terms of this Agreement. 

g. Advice of Counsel. Each Party hereby acknowledges that it has consulted with 

and obtained the advice of counsel prior to executing this Agreement, and that the 

Agreement has been e.xplained to that Party by his or her counsel. 

h. Notices. Notices required or permitted by this Agreement shall be communicated 

by email and any fonn of overnight mail or in person to: 

If to the Federal Deposit Insurance Corporation: 

Attn: Mark Black ~-------~ Professional Liability & Financial Crimes Section 

Room VS-B 7010 

3501 Fairfax Drive 

Arlington, VA 22226 

and 

DavidJ. 

Grais & ....,.,l,.... sw__o_rt-r--1....,....,=-------~ 

950 Third Avenue, 24th Floor 

New York, New York I 0022 

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A1torneysfor FDIC-R 

/fto HSBC: 

and 

Domenic C. Cervoni 

H SBC Securities (U ,J.-.------------ nc. 

452 Fifth Avenue 

New York, NY 10018 

Andrew Z. Michaelso 

King & Spalding LLP '------------' 

1185 Avenue of the Americas, 341

h Floor 

New Yorkj NY 10036 

Attorneys for HSBC 

lN WITNESS WHEREOF, the Panies hereto have caused this Agreement to be executed by 

each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date: 2/12/21 

Date: _______ _ 

FEDERAL DEPOSIT INSURANCE 

CORPORATION AS RECEIVER FOR 

COLONIAL BANK 

, 

BY:I.__ ----~----------' 

PRINT NAME: Mark Black 

TITLE: Counsel 

HSBC SECURITIES (USA) INC. 

BY: ____________ _ 

PRINT NAME: Jason Henderson 

TITLE: Head of Global Markets, North America 

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Auorneys/or FDIC-R 

/fto HSBC: 

and 

Domenic C. Cervoni 

HSBC Securities (U.+-r~ n-c-. --------~ 

452 Fifth Avenue 

New York, NY 10018 

Andrew Z. Michaelson I ===-===--== 

King & Spalding LLP 

1185 A venue of the Americas, 34th Floor 

New York, NY I 0036 

Allorneysfor HSBC 

fN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by 

each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date: - - -

Date: ,},i../a.l 

FEDERAL DEPOSIT INSURANCE 

CORPORATION AS RECEIVER FOR 

COLONIAL BANK 

BY: -------------

PRINT NAME: Mark A. Black 

TITLE: Counsel 

HSBC SECU ITIES 

B 

PRINT NAME: Jason Henderson 

TITLE: 

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INTERNAL I 
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EXHIBIT A 

UNITED ST ATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

FEDERAL DEPOSIT INSURANCE 

CORPORATION as Receiver for 

COLONIAL BANK, 

Plaintiff, 

v. 

CHASE MORTGAGE FINANCE CORP., et 

al., 

Defendants. 

No. 12Civ.6166 (LLS) 

STIPULATION AND IPROPOSEDI ORDER REGARDING 

PARTIAL DlSMISSAL WITH PREJUDICE 

Pursuant to Federal Rule of Civil Procedure 41 (a), Plaintiff Federal Deposit Insurance 

Corporation as Receiver for Colonial Bank and Defendant HSBC Securities (USA) Inc. stipulate 

that all claims relating to CMAL T 2007-AS I A6 are hereby dismissed with prejudice, with each 

side to bear its own costs and attorneys' fees. All remaining claims are expressly preserved. 

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Dated: _________ _ 

GRAJS & ELLSWORTH LLP 

950 Third Avenue, 24th Floor 

New York, New York I 0022 

Telephone: (212) 755-0010 

Facsimile: (212) 755-0052 

SPOTSWOOD SANSOM & SANSBURY 

LLC 

ne ·e era ace 

1819 Fifth Avenue North, Suite 1050 

Binningham, Alabama 35203 

Telephone: (205) 986-3620 

Facsimile: (205) 986-3639 

Attorneys /or Plaint[fl Federal Deposit 

Insurance Corporation as Receiver for 

Colonial Bank 

IT IS SO ORDERED: 

DATED: 

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KING & SPALDING LLP 

By: _______ _ 

MA YER BROWN LLP 

1221 A venue o the Americas 

New York, New York 10020 

Phone:(212)506-2500 

Allomeys for Defendant HSBC Sec11rilies 

(USA) Inc. 

The Honorable Louis L. Stanton 

United States District Judge 

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