SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of the 27th day of 

January, 2017, 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 First Hori70n Asset Securities Inc., First 

Tennessee Bank National Association (successor by merger to First Horizon Home Loan 

Corporation), FTN Financial Securities Corp. (collectively, ·'First Horizon"), HSBC Securities 

(USA) Inc. ("HSBC") and Credit Suisse Securities (USA) LLC ("Credit Suisse") (each of HSBC 

and Credit Suisse an ''Underwriter" and collectively, the "Underwriters"), 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 pursuant to 12 U.S.C. § 182 l(c). 

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

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

FDJC represents that among the assets of Colonial Bank to which the FDIC-R succeeded 

\Vere 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. 

FDIC-R is the plaintiff in a residential mortgage-backed securities c··RMBS'') lawsuit in 

which First Horizon and the Underwriters are defendants (the ''RMBS Action"). 1 A lbt of the 

RMBS certificates at issue in the RMBS Action that are the subject of this Agreement (the "First 

Horizon Certificates"), is set forth in Exhibit A. 

First Horizon and the Underwriters deny all liability with respect to all claims that the 

FDIC-R has brought against them in the RMBS Action. 

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

uncertainty, trouble, and expense offurther litigation ofc!aims asserted against First Horizon and 

the Underwriters 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: 

1 The RMBS Action is FDIC as Receirerj()r Culonial Bank v. Banc ofAmerica Funding 

Corporation, et al .• No. 03-CV-20 l 2-90 I 035.00, pending in the Circuit Court for Montgomery County, 

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

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

Horizon shall pay or cause to be paid Nineteen Million Seven Hundred Thousand 

DOLLARS ($ I 9,700,000.00) to the FD!C-R ("Settlement Funds") by February 27, 2017 

(''Payment Date"). No payment is due from the Underwriters. In the event that the 

Settlement 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 

First Horizon agrees to jurisdiction in the United States District Court for the District of 

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

reasonable attorney's fees. Any decision by the FDIC-R to extend the term!:> 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 al! 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 First Horizon any and all amount!:> paid to the FDIC-R under 

this Agreement. 

2. Dismissal. Wilhin three (3) business days after receipt of the Settlement Funds by the 

FDIC-R, the FDIC-R shall move for the entry of orders in the RMBS Action dismissing 

with prejudice the claims asserted against First Horizon and HSBC and dismissing with 

prejudice the claims asserted against Credit Suisse as an underwriter of First Horizon 

-Certificates. All other claims asserted in the RMBS Action against Credit Suisse shall 

remain pending. 

3. FDIC-R Releases. 

a. Upon receipt of the Settlement Funds, the FDIC-R hereby releases and discharges 

First Horizon and all of its current or former direct or indirect parents, subsidiaries, and 

amliates, together with each of their respective successors and each of their rc!:>pcctivc 

current or fonner shareholders, officers, directors, employees, attorneys and other agents, 

but solely in their capacities as such ("First I Iorizon 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 unaccrned, 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 First Horizon Certificates identified in Exhibit A, including but 

not limited to the facts, transactions, representations, or omissions alleged in the 

complaint and amended complaints filed in the RMHS 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 knmvn or unknown, whether asserted or unasserted, 

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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 those identified in Exhibit A. 

b. Upon receipt of the Settlement Funds, the FDIC-R hereby releases and discharges 

HSBC and all of its current or former 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 Jaw or in equity, based upon or relating to Colonial Bank's purchase, 

ownership, or sale of the First Horizon Certificates identified in Exhibit A, including but 

not limited to the facts, transactions, representations, or omissions al!eged in the 

complaint and amended complaints filed in the RMBS Action. For the avoidance of 

doubt, this release docs 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 those identified in Exhibit A. 

c. Upon receipt of the Settlement Funds, the FDIC-R hereby releases and discharges 

Credit Suisse and all of its current or former 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 ("Credit Suisse Releasees''), from any and all claims. 

demands, actions, causes of action, and liabilities of any type, \Vhether 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 First Horizon Certificates identified on Exhibit A, including but 

not limited to the facts, transactions. representations, or omissions a[\eged 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, \Vhether 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 Hank's purchase, ownership, or sale of any RMHS certificates other 

than those identified in Exhibit A. 

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 mvned or controlled by CBG Investments, 

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Inc. ("CBGI"), formerly a subsidiary of Colonial Bank, to the ful!cst extent FDIC·R has legal 

ability and authority to release such claims in its capacity as receiver for Colonial Bank. 

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

above, each of First Horizon, HSBC, and Credit Suisse 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 First Horizon Certificates listed in Exhibit A, including but not 

limited to the facts, transactions, representations, or omissions alleged in the complaint 

and amended complaints filed in the RMBS Action. 

5. Release of Unknown Claims. Each of the FDIC-R, First Horizon and the Underwriters 

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 1542, including that 

provision itself, which reads as follows: 

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 

CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR 

AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR 

HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH 

THE DEBTOR." 

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 FD!C-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 First Horizon and the Underwriters. The FDIC-R 

further represents that it is empowered to sue and complain in any court of law to pursue, 

inter a!ia, the claims against First f lorizon and the Underwriters 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 

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parties, and that the FDIC-R has nol received any information suggesting that any third 

party intends to assert any such released claims that at any time were owned or controlled 

by CBGI. 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 

this Agreement. 

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

above, the FDIC. in any capacity, shall not release, and expressly preserves fully and to 

the same extent as if this 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 First Horizon or any Underwriter 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 (ineluding 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 this Agreement); 

b. any claims or causes of action against first Horizon or any Underwriter or any 

other person or entity relating in any way to the London Interbank Offered Rate; 

c. any claims or causes of action by the FDIC against First Horizon or any 

Underwriter or any other person or entity relating in any way to First Horizon's or 

the Underwriter's performance of duties or obligations as trustee for structured 

finance securities, including but not limited to RMBS, purchased by any failed 

financial institution; 

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

for Colonial Bank; 

e. any claims or causes of action relating to RMI3S certificates not listed in Exhibit 

A; and 

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

limited to, First Horizon and the Underwriters. not expressly released in this 

Agreement. 

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

shall be construed or interpreted as limiting, \vaiving, 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. 

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9. Actions 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(other than the FDIC-R). including, but not limited to, through the 

United States Department ofJustice or any United States Attorney's Office. 

10. No Confidentiality. First Horizon, the Underwriters 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. 

11. 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 this Agreement is not an admission or evidence of liability or the insufficiency or any 

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

Parties further acknO\vledgc that they may not base any claim of waiver or estoppel in 

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

described herein. 

12. Representations and Acknowledgements. 

a. Execution in Counterparts. This 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 ifonc 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 this Agreement. 

b. Binding Effect. Each of the Parties represents and warrants that it is a Party 

hereto or is authorized to sign this Agreement on behalf of the respective Party, 

and that it has the full power and authority to bind such Party to each and every 

provision of this Agreement. This Agreement shall be binding upon and inure to 

the benefit of the Parties and their respective heirs, executors, administrators, 

representatives, successors and assigns. 

c. ~~hoice 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 of law 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 Agreement. 

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 

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(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

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

such matters. This 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 this 

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

h. Notices. Notices required by this Agreement shall be communicated by email and 

any form of overnight mail or in person to: 

Federal Deposit Insurance Corporation 

Attn: Mark Black. 

Pro fess io nal"L-i"'"ab'"i"l i"t y--,&,.-,,F-i n"a"'n"'"c-ia-,-/1 Crimes Section 

350 I Fairfax Drive 

Arlington, VA 22226 

and 

David J. Grais 

Grais & El!swoLrt~h-L~L~P-------' 

1211 Avenue ofthc Americas, 32nd Floor 

New York, New York l 0036 

Attorneys/or FDIC-R 

First I lorizon 

Attn: Desiree Franklin ..,_~~-~-----' First Horizon National Corporation 

165 Madison A venue, 8th F!oor 

Memphis, TN 38103 

and 

Amanda F. Davidoff 

Sullivan & Crom\'.'Cll'-,1-,J'"_p,,...-------~ 

1700 New York Avenue NW 

Washington, DC 20006 

Altorneysfbr First Horizon 

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(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

IlSBC 

Ann: Dmncnic Ccrvnni 

HSBC Securities( ~L°"'S7'A'"")'""I'""n-,-. -------~ 

452 fifth Avenue 

New York., ~cw York 10018 

and 

Amanda F, Davido.fft -

Sullivan & CromweH~l-,J-,JT"> ------~ 

1700 New York Avenue NW 

Washington, DC 2000(i 

Attorneys for l lS'JJC 

Credit Suisse 

Attn: Peter Kozlowski, hq. '"""=,,....,..,..,,------~ Credit Suisse Securities (lJSA) f,T,C 

One Madison A venue 

New York, NY. 10010 

and 

Michad T. Reynolds -~-=~----~ Cravath, Swaine & Moore LLP 

Worldwide Plaza 

825 Eighth A venue 

New York, New York 10019-7475 

Allorneysfhr Credit ,)'uisse 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be execukd hy 

each of them or their duly m1thorizcd representatives on lhc dates hereinafter suhscrihed. 

Date· 0 \ / z. ?:{~,-:;- , 

l'EOl,RAL OEl'OSIT 11\SURANCT. 

C:ORPORJ\T!Ot-: AS RFCFIVER FOR 

COLONIAL J\Af\.'j, 

llY·l.___ __ ___,1----

PRfNTNAME: 11\, rk ;-I. b\,cl,_ 

TIT! ,f,,: ( '.ounsel 

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(b)(6) Date: l-11-17 

Dale: --

Date: --

Date: --

FlRST HORJZON ASSET SECURITIES INC. 

BY:! L 

PRINT NAME: t:~ pr/J~ /]0/,/"IA.,/ 

TITLE: ,l',,e,£ .r, ,!J!l,..)I 

FIRST TENNESSEE BANK NATIONAL 

ASSOCIATION (successor by merger to FIRST 

HORIZON HOME LOAN CORPORATION) 

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

PRINT NAME: _______ _ 

TITLE: 

FTN FINANCIAL SECURITIES CORP. 

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

PRINT NAME: _______ _ 

TITLE: 

HSBC SECURITIES (USA) INC. 

BY: __________ _ 

PRINT NAME: _______ _ 

TITLE: 

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Date: 

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Date: __ _ 

Date: __ _ 

FIRST HORIZON ASSET SECURITIES INC. 

BY: ___________ _ 

PRINT NAME: ________ _ 

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FIRST TENNESSEE BANK NATIONAL 

ASSOCIATION (successor by merger to FIRST 

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TITLE: PM,-,·~ 

FTN FINANCIAL SECURITIES CORP. 

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

PRINT NAME: ________ _ 

TITLE: 

HSBC SECURITIES (USA) INC. 

BY: 

PRINT NAME: ________ _ 

TITLE: 

- 9 -
Date: __ _ 

Date; 

Date: 

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FIRST HORIZON ASSET SECURITIES INC. 

BY: ___________ _ 

PRINT NAME: _______ _ 

TITLE: 

FIRST TENNESSEE BANK NATIONAL 

ASSOC'IA TION (successor by merger to FIRST 

HORIZON HOME LOAN CORPORATION) 

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PRINT NAME: _______ _ 

TITLE 

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BY. L,-----0--,-,----EPRINT NAME· t.#o~,~~...£..L!:1£.~ 

TITLE: 

HSBC SECURITIES (USA) INC 

BY· ___________ _ 

PRINTNAME: --------

TITLE: 

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EXHIBIT A 

I) FHAMS 2006-FA6 1-A-2 

2) FHAMS 2006-FA6 2-A-3 

3) FHAMS 2006-FA7 A-4 

4) FHAMS 2007-FA4 1-A-4 

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