Bank of America Settlement Agreement — page 1

This Settlement Agreement (“Agreement”) is entered into between the United States

acting through the United States Department of Justice (“Department of Justice”), along with

the States of California, Delaware, Illinois, Maryland, and New York, and the Commonwealth

of Kentucky, acting through their respective Attorneys General (collectively, “the States”),

and Bank of America Corporation, Bank of America, N.A., and Banc of America Mortgage

Securities, as well as their current and former subsidiaries and affiliates (collectively, “Bank

of America”). The United States, the States, and Bank of America are collectively referred to

herein as “the Parties.”

RECITALS

The United States Attorney’s Offices for the District of New Jersey, the Western

District of North Carolina, the Northern District of Georgia, and the Central District of California

conducted investigations of the packaging, origination, marketing, sale, structuring, arrangement,

and issuance of residential mortgage-backed securities (“RMBS”) and collateralized debt

obligations (“CDOs”) by Bank of America; Countrywide Financial Corporation, Countrywide

Home Loans, Inc., and Countrywide Securities Corporation, as well as their current and former

subsidiaries and affiliates (collectively, “Countrywide”); Merrill Lynch, Pierce, Fenner & Smith,

Inc., Merrill Lynch Mortgage Lending, Inc., and Merrill Lynch Mortgage Investors, Inc., as well

as their current and former subsidiaries and affiliates (collectively, “Merrill Lynch”); and First

Franklin Financial Corporation, as well as its current and former subsidiaries and affiliates

(“First Franklin”). Based on these investigations, the United States believes that there are

potential legal claims by the United States against Bank of America, Countrywide, Merrill Lynch

and First Franklin for violations of federal law. Furthermore, based on its investigation, the

United States Attorney’s Office for the Western District of North Carolina filed a civil action,

Bank of America Settlement Agreement — page 2

United States v. Bank of America Corp., et al.,

No. 13-cv-446-MOC (W.D.N.C.),

against Bank

of America seeking a civil monetary penalty pursuant to the Financial Institutions Reform,

Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1833a.

The States, based on their independent investigations of the same conduct, believe

that there are potential legal claims by California, Delaware, Illinois, Maryland, Kentucky, and

New York against Bank of America, Countrywide, Merrill Lynch, and First Franklin for state

law violations in connection with the packaging, origination, marketing, sale, structuring,

arrangement, and issuance of RMBS and CDOs.

The United States Attorney’s Office for the Southern District of New York has

conducted investigations of Countrywide and Bank of America’s origination and sale of

defective residential mortgage loans to the Federal National Mortgage Association (“Fannie

Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively,

“government-sponsored enterprises” or “GSEs”), including investigating allegations asserted by:

Relator, who filed a complaint on or about June 21, 2011, under the

qui tam

provisions of the False Claims Act, 31 U.S.C. §§ 3729,

et seq.

, against Bank of

America, three of its subsidiaries (Countrywide Financial Corporation, Landsafe

Appraisal Services, Inc. and U.S. Trust), and another defendant, asserting

inter

alia

, that, from 2004 to 2011, Bank of America and its subsidiaries originated

residential mortgage loans using inflated appraisals and fraudulently sold those

loans to the GSEs with misrepresentations as to the loans’ quality;

ii.

Relator, who filed a complaint on or about June 4, 2014, under the

qui tam

provisions of the False Claims Act against Countrywide and Bank of America,

alleging,

inter alia

, that, from 2009 to 2014, these entities fraudulently sold

Bank of America Settlement Agreement — page 3

defective residential mortgage loans originated by Countrywide’s Consumer

Markets Division and later Bank of America to the GSEs with misrepresentations

as to the loans’ quality; and

iii.

Relator, who filed a complaint on or about January 14, 2014, under the

qui tam

provisions of the False Claims Act against Defendants Countrywide, Bank of

America, Merrill Lynch, and First Franklin, alleging,

inter alia

, that, from 2008 to

2013, those entities breached representations and warranties by failing to report

thousands of defective loans to the GSEs.

Based on these investigations, the United States believes that there are potential legal claims by

the United States against Bank of America for violations of federal law.

The United States Attorney’s Office for the Western District of North Carolina

has also conducted an investigation of Bank of America and Countrywide submitting false

claims to the Federal Housing Administration (“FHA”), an agency within the United States

Department of Housing and Urban Development, including investigating allegations asserted by

Mortgage Now, Inc., which filed a complaint on or about June 7, 2012, under the

qui tam

provisions of the False Claims Act against Bank of America alleging

inter alia

, that Bank of

America and Countrywide submitted claims to FHA for reimbursement of amounts Bank of

America and Countrywide already had recovered from third-party correspondent lenders. As

part of this investigation, the United States Attorney’s Office for the Western District of North

Carolina examined whether Bank of America settled repurchase claims with Freddie Mac and

Fannie Mae concerning residential mortgages for which Bank of America or Countrywide

received compensation from third party correspondent lenders that Bank of America did not

disclose to Freddie Mac and Fannie Mae.

Bank of America Settlement Agreement — page 4

The United States Attorney’s Office for the Eastern District of New York has

conducted an investigation of Bank of America’s origination of loans insured by the FHA from

May 1, 2009 through March 31, 2012.

The United States Department of Housing and Urban Development has conducted

an investigation of Bank of America’s performance as Master Subservicer under Contract

Number C-OPC-23289 with the Government National Mortgage Association (“Ginnie Mae”).

Bank of America, Countrywide, Merrill Lynch, and/or certain affiliates thereof

have resolved claims filed by the Federal Deposit Insurance Corporation (“FDIC”) as Receiver

for 1st Pacific Bank of California, the FDIC as Receiver for Affinity Bank, the FDIC as Receiver

for CF Bancorp, the FDIC as Receiver for Citizens National Bank, the FDIC as Receiver for

Colonial Bank, the FDIC as Receiver for Eurobank, the FDIC as Receiver for First Banking

Center, the FDIC as Receiver for First Dupage Bank, the FDIC as Receiver for Franklin Bank,

S.S.B., the FDIC as Receiver for Guaranty Bank, the FDIC as Receiver for Horizon Bank, the

FDIC as Receiver for Imperial Capital Bank, the FDIC as Receiver for Independent Bankers

Bank, the FDIC as Receiver for Los Padres Bank, the FDIC as Receiver for Palos Bank & Trust

Co., the FDIC as Receiver for Prosperan Bank, the FDIC as Receiver for SCB Bank, the FDIC as

Receiver for Security Savings Bank, the FDIC as Receiver for ShoreBank, the FDIC as Receiver

for Statewide Bank, the FDIC as Receiver for Strategic Capital Bank, the FDIC as Receiver for

United Western Bank, F.S.B., the FDIC as Receiver for USA Bank, the FDIC as Receiver for

Venture Bank, and the FDIC as Receiver for Warren Bank (the FDIC in its capacity as receiver

for each of the Failed Banks referred to as “FDIC-R”), and claims filed by Bank of America,

N.A. The terms of the resolution of those claims are memorialized in a separate agreement,

attached hereto as Exhibit A.

Bank of America Settlement Agreement — page 5

Bank of America and Merrill Lynch have reached an agreement in principle to

resolve claims by the United States Securities and Exchange Commission (“SEC”). The terms of

the resolution of those claims are reflected in separate documents, attached hereto as Exhibit B.

Bank of America acknowledges the facts set out in the Statement of Facts set

forth in Annex 1, attached hereto and hereby incorporated.

In consideration of the mutual promises and obligations of this Agreement, the

Parties agree and covenant as follows:

TERMS AND CONDITIONS

Payment.

Bank of America shall pay a total amount of $9,650,000,000.00 to resolve

pending and potential legal claims in connection with the Covered Conduct, as defined below

(the “Settlement Amount”), of which $5,020,000,000.00 shall be paid as a civil monetary

penalty. As set out in Paragraph 1(A)(i), $5,000,000,000.00 of the Settlement Amount will be

paid as a penalty recovered pursuant to FIRREA, 12 U.S.C. § 1833a. The remainder will be paid

as set out in Paragraphs 1(A)(ii) to 1(A)(ix) and Paragraphs 1(B) to 1(G) and the Total Tax

Relief Payment Amount as set out in Paragraph 2. As set out in the settlement documents

attached hereto as Exhibit B, $20,000,000.00 of the Settlement Amount will be paid as a penalty

in connection with the claims referenced in Recital Paragraph H.

Within sixty (60) days of receiving written payment processing instructions from

the Department of Justice, Office of the Associate Attorney General, Bank of America shall pay

$8,216,840,000.00 of the Settlement Amount by electronic funds transfer to the Department of

Justice.

Bank of America Settlement Agreement — page 6

i. $5,000,000,000.00, and no other amount, is a civil monetary penalty

recovered pursuant to FIRREA, 12 U.S.C. § 1833a. It will be deposited in the

General Fund of the United States Treasury.

ii. $350,000,000.00, and no other amount, is in settlement of the claims of the

United States identified in Recital Paragraph C and

United States ex rel.

[Sealed] v. [Sealed]

, as disclosed to Bank of America.

iii. $350,000,000.00, and no other amount, is in settlement of the claims of the

United States identified in Recital Paragraph C and

United States ex rel.

[Sealed] v. [Sealed]

, as disclosed to Bank of America.

iv. $50,000,000.00, and no other amount, is in settlement of the claims of the

United States identified in Recital Paragraph D and

United States ex rel.

[Sealed] v. [Sealed]

, as disclosed to Bank of America.

v. $300,000,000.00, and no other amount, is in settlement of the claims of the

United States identified in Recital Paragraph C and

United States ex rel.

[Sealed] v. [Sealed]

, as disclosed to Bank of America.

vi. $800,000,000.00, and no other amount, is in settlement of Bank of America’s

submission of claims through December 31, 2013 for FHA loans originated by

Bank of America or Countrywide on or after May 1, 2009. Any amount that

FHA receives will be deposited into the Federal Housing Administration’s

Capital Reserve Account.

vii.

$200,000,000.00, and no other amount, is in settlement of potential

contractual claims related to Bank of America’s and Countrywide’s

performance as Master Subservicer under Contract Number C-OPC-23289

Bank of America Settlement Agreement — page 7

with Ginnie Mae. Any amount that Ginnie Mae receives will be deposited

into the Government National Mortgage Association’s Financing Account.

viii.$1,031,000,000.00, is paid by Bank of America in settlement of the claims of

the FDIC identified in Recital Paragraph G, pursuant to the settlement

agreement attached hereto as Exhibit A, the terms of which are not altered or

affected by this Agreement.

ix. $135,840,000.00, and no other amount, is paid by Bank of America in

settlement of the claims of the SEC identified in Recital Paragraph H,

pursuant to the settlement documents attached hereto as Exhibit B, the terms

of which are not altered or affected by this Agreement.

$300,000,000.00, and no other amount, will be paid by Bank of America to the

State of California pursuant to Paragraph 8, below, and the terms of written payment instructions

from the State of California, Office of the Attorney General. Payment shall be made by

electronic funds transfer within sixty (60) days of receiving written payment processing

instructions from the State of California, Office of the Attorney General.

$45,000,000.00, and no other amount, will be paid by Bank of America to the

State of Delaware pursuant to Paragraph 9, below, and the terms of written payment instructions

from the State of Delaware, Office of the Attorney General. Payment shall be made by

electronic funds transfer within sixty (60) days of receiving written payment processing

instructions from the State of Delaware, Office of the Attorney General.

$200,000,000.00, and no other amount, will be paid by Bank of America to the

State of Illinois pursuant to Paragraph 10, below, and the terms of written payment instructions

from the State of Illinois, Office of the Attorney General. Payment shall be made by electronic

Bank of America Settlement Agreement — page 8

funds transfer within sixty (60) days of receiving written payment processing instructions from

the State of Illinois, Office of the Attorney General.

$23,000,000.00, and no other amount, will be paid by Bank of America to the

Commonwealth of Kentucky pursuant to Paragraph 11, below, and the terms of written payment

instructions from the Commonwealth of Kentucky, Office of the Attorney General. Payment

shall be made by electronic funds transfer within sixty (60) days of receiving written payment

processing instructions from the Commonwealth of Kentucky, Office of the Attorney General.

$75,000,000.00, and no other amount, will be paid by Bank of America to the

State of Maryland pursuant to Paragraph 12, below, and the terms of written payment

instructions from the State of Maryland, Office of the Attorney General. Payment shall be made

by electronic funds transfer within sixty (60) days of receiving written payment processing

instructions from the State of Maryland, Office of the Attorney General.

$300,000,000.00, and no other amount, will be paid by Bank of America to the

State of New York pursuant to Paragraph 13, below, and the terms of written payment

instructions from the State of New York, Office of the Attorney General. Payment shall be made

by electronic funds transfer within sixty (60) days of receiving written payment processing

instructions from the State of New York, Office of the Attorney General.

Consumer Relief.

In addition, Bank of America shall provide $7,000,000,000.00 worth

of consumer relief as set forth in Annex 2, attached hereto and hereby incorporated as a term of

this Agreement, to remediate harms resulting from the alleged unlawful conduct of Bank of

America. The value of consumer relief provided shall be calculated and enforced pursuant to the

terms of Annex 2. An independent monitor will determine whether Bank of America has

satisfied the obligations contained in Annex 2 (such monitor to be Eric Green), and Bank of

Bank of America Settlement Agreement — page 9

America will provide the Monitor with all documentation the Monitor needs to do so, excluding

all privileged information. All costs associated with said Monitor shall be borne solely by Bank

of America; notwithstanding the fact that Bank of America bears the costs associated with the

Monitor, the Monitor shall be fully independent of Bank of America. Bank of America will

refrain from retaining the Monitor to represent Bank of America in any capacity prior to two

years after the date upon which Bank of America satisfies the Consumer Relief obligations set

forth in Annex 2. Bank of America will also refrain from engaging the Monitor as a mediator in

any matter to which Bank of America is a party until Bank of America satisfies the Consumer

Relief obligations set forth in Annex 2. Bank of America shall also pay $490,160,000.00 (such

amount to be referred to as the “Total Tax Relief Payment Amount”) of the Settlement Amount,

in addition to the $7,000,000,000.00 worth of consumer relief, for the payment of consumer tax

liability as a result of consumer relief as set forth in Annex 3, attached hereto and incorporated as

a term of this Agreement. Such $490,160,000.00 will be deposited into an escrow account (such

account to be referred to as the “Tax Relief Payment Account”) that is a Qualified Settlement

Fund in accordance with Treasury Regulation 1.468B-1(a), and all aspects of the payments

therefrom shall be handled by the Monitor provided for herein and shall not be the responsibility

of Bank of America.

Covered Conduct.

“Covered Conduct” as used herein is defined as:

The creation, origination, pooling, structuring, arranging, formation, packaging,

marketing, underwriting, sale, or issuance prior to January 1, 2009 by the Released Entities (as

defined further below) of the RMBS and CDOs identified in Annex 4, attached hereto and

hereby incorporated. Covered Conduct includes representations, disclosures, or non-disclosures

to RMBS investors about, or made in connection with, the underlying residential mortgage loans,

Bank of America Settlement Agreement — page 10

where the representation, disclosure, or non-disclosure involves information about or obtained

during the process of originating, acquiring, securitizing, underwriting, or servicing residential

mortgage loans in the RMBS identified in Annex 4. Covered Conduct also includes

representations, disclosures, or non-disclosures made in connection with the activities set forth

above about the CDOs identified in Annex 4, attached hereto and hereby incorporated. Covered

Conduct as set forth in this Paragraph 3(A) does not include: (i) representations or non-

disclosures made in connection with the trading of RMBS or CDOs, except to the extent that the

representations, disclosures, or non-disclosures are in the offering materials for the underlying

RMBS or CDOs listed in Annex 4, attached hereto and hereby incorporated; (ii) any conduct

where Bank of America, Countrywide, Merrill Lynch, and First Franklin acted only in the role of

trustee; or (iii) the servicing of residential mortgage loans, except representations or non-

disclosures to investors in the RMBS listed in Annex 4 about servicing, or information obtained

in the course of servicing, such loans.

Covered Conduct includes the administration of RMBS and CDOs identified in

Annex 4, attached hereto and hereby incorporated, as of the Execution Date, to the extent such

administration relates to any actions or inactions with respect to representation and warranties or

the cure, substitution, or repurchase (or failure to do or seek any of the same) of residential

mortgage loans. Covered Conduct includes representations, disclosures, or non-disclosures to

trustees made in connection with the activities set forth above about the residential mortgage

loans included in the RMBS identified in Annex 4, attached hereto and hereby incorporated.

The underwriting and origination of residential mortgage loans by Bank of

America and Countrywide that were sold by Bank of America and Countrywide prior to

December 31, 2013 to the GSEs, including the appraisal of properties in connection with the

Bank of America Settlement Agreement — page 11

origination of such residential mortgage loans, and representations by Bank of America and

Countrywide made prior to December 31, 2013 to the GSEs regarding the underwriting,

origination, and quality control with respect to those residential mortgage loans.

The repurchase, investigation, and reporting obligations of Bank of America,

Countrywide, and First Franklin from January 1, 2006 to December 31, 2013, under the

representations and warranties contained in the GSE Seller/Servicer Guide with respect to

concurrent residential mortgage loans.

The origination, including the appraisal of properties in connection with the

origination of such residential mortgage loans, underwriting, quality control, and endorsement of

single-family residential mortgage loans by Bank of America and Countrywide, as set forth more

fully in Annex 1, originated on or after May 1, 2009, on which claims were submitted on or

before December 31, 2013 to the FHA.

All claims as alleged in the following actions relating to the Covered Conduct

described in Paragraphs 3(A)-3(E),

supra

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America

ii.

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of

America;

iii.

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of

America; and

iv.

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of

America, relating to the submission of claims by Bank of America or

Countrywide on or before December 31, 2013 to FHA for residential

mortgages that: (i) Bank of America or Countrywide acquired from third

Bank of America Settlement Agreement — page 12

party correspondent lenders and (ii) Bank of America or Countrywide

received any form of compensation from third party correspondent lenders

that was not disclosed to FHA. Covered Conduct relating to this matter

also includes Bank of America settling repurchase claims with Freddie

Mac and Fannie Mae concerning residential mortgages for which Bank of

America or Countrywide received compensation from third party

correspondent lenders in connection with actual or anticipated losses on

those mortgages that Bank of America did not disclose to Freddie Mac and

Fannie Mae. Notwithstanding anything to the contrary, all conduct

described in this Paragraph 3(F)(iv) shall be deemed Covered Conduct

under this Agreement.

Bank of America’s and Countrywide’s performance as Master Subservicer under

Contract Number C-OPC-23289, with Ginnie Mae for the period March 1, 2009 through

August 31, 2014.

The underwriting and origination of residential mortgage loans, including the

appraisal of properties in connection with the origination of such residential mortgage loans, by

Bank of America, Countrywide, Merrill Lynch, and First Franklin that were securitized by non-

governmental entities in private label securitizations prior to January 1, 2009.

Cooperation.

Until the date upon which all investigations and any prosecution arising

out of the Covered Conduct are concluded by the Department of Justice, whether or not they are

concluded within the term of this Agreement, Bank of America shall, subject to applicable laws

or regulations: (a) cooperate fully with the Department of Justice (including the Federal Bureau

of Investigation) and any other law enforcement agency designated by the Department of Justice

Bank of America Settlement Agreement — page 13

regarding matters arising out of the Covered Conduct; (b) assist the Department of Justice in any

investigation or prosecution arising out of the Covered Conduct by providing logistical and

technical support for any meeting, interview, grand jury proceeding, or any trial or other court

proceeding; (c) use its best efforts to secure the attendance and truthful statements or testimony

of any officer, director, agent, or employee of any of the entities released in Paragraph 5 at any

meeting or interview or before the grand jury or at any trial or other court proceeding regarding

matters arising out of the Covered Conduct; and (d) provide the Department of Justice, upon

request, all non-privileged information, documents, records, or other tangible evidence regarding

matters arising out of the Covered Conduct about which the Department or any designated law

enforcement agency inquires.

Releases by the United States.

Subject to the exceptions in Paragraph 15 (“Excluded

Claims”), and conditioned upon Bank of America’s full payment of the Settlement Amount and

Bank of America’s agreement, by executing this Agreement, to satisfy the terms in Paragraph 2

(“Consumer Relief”) and Paragraph 4 (“Cooperation”), the United States fully and finally

releases Bank of America, Countrywide, Merrill Lynch, and First Franklin, (“Released Entities”)

and each of their respective successors and assigns:

For the Covered Conduct contained in Paragraphs 3(A), 3(B), 3(C), 3(D), 3(E), and

3(F) from any civil claims the United States has for the Covered Conduct arising

under FIRREA, 12 U.S.C. § l833a; the False Claims Act, 31 U.S.C. §§ 3729,

et seq

the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801,

et seq

.; the Racketeer

Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961,

et seq

.; the Injunctions

Against Fraud Act, 18 U.S.C. § 1345; common law theories of negligence, gross

negligence, indemnification, payment by mistake, unjust enrichment, money had and

Bank of America Settlement Agreement — page 14

received, breach of fiduciary duty, breach of contract, misrepresentation, deceit,

fraud, and aiding and abetting any of the foregoing; or that the Civil Division of the

Department of Justice has actual and present authority to assert and compromise

pursuant to 28 C.F.R. § 0.45.

For the Covered Conduct contained in Paragraph 3(H) from any civil claims the

United States has for the Covered Conduct arising under FIRREA, 12 U.S.C.

§ 1833a.

Releases by the FHA.

Subject to the exceptions in Paragraph 15 (“Excluded Claims”),

and conditioned upon Bank of America’s full payment of the Settlement Amount relating to the

submission of claims to the FHA ($800,000,000.00) and Bank of America’s agreement, by

executing this Agreement, to satisfy the terms in Paragraph 2 (“Consumer Relief”) and

Paragraph 4 (“Cooperation”), the United States Department of Housing and Urban Development,

acting on behalf of FHA, fully and finally releases the Released Entities and their successors and

assigns from any monetary administrative claim the FHA has for the Covered Conduct described

in Paragraphs 3(E) and 3(F),

supra

Releases by the Ginnie Mae.

Subject to the exceptions in Paragraph 15 (“Excluded

Claims”), and conditioned upon: (i) Bank of America’s full payment of the Settlement Amount

relating to Ginnie Mae ($200,000,000.00) and (ii) Bank of America’s agreement, by executing

this Agreement, to satisfy the terms in Paragraph 2 (“Consumer Relief”) and Paragraph 4

(“Cooperation), the United States Department of Housing and Urban Development, acting on

behalf of Ginnie Mae, fully and finally releases the Released Entities and their successors and

assigns from any civil or administrative monetary claim Ginnie Mae has against Bank of

Bank of America Settlement Agreement — page 15

America for the Covered Conduct contained in Paragraph 3(G) under the common law theory of

breach of contract.

Releases by the California Attorney General.

Subject to the exceptions in

Paragraph 15 (Excluded Claims), and conditioned upon Bank of America’s full payment of the

Settlement Amount (of which $300,000,000.00 will be paid to the Office of the California

Attorney General, in accordance with written payment instructions from the California Attorney

General, to remediate harms to the State, pursuant to California Government Code §§ 12650-

12656 and 12658, allegedly resulting from unlawful conduct of the Released Entities), the

California Attorney General fully and finally releases the Released Entities from any civil or

administrative claim for the Covered Conduct contained in Paragraph 3(A) only that the

California Attorney General has authority to bring, including but not limited to: California

Corporate Securities Law of 1968, Cal. Corporations Code § 25000

et seq.

California

Government Code §§ 12658 and 12660 and California Government Code §§ 12650-12656,

common law theories of negligence, payment by mistake, unjust enrichment, money had and

received, breach of fiduciary duty, breach of contract, misrepresentation, deceit, fraud and aiding

and abetting any of the foregoing. The California Attorney General executes this release in her

official capacity and releases only claims that the California Attorney General has the authority

to release for the Covered Conduct contained in Paragraph 3(A). The California Attorney

General agrees that no portion of the funds in this paragraph is received as a civil penalty or fine,

including, but not limited to any civil penalty or fine imposed under California Government

Code § 12651. The California Attorney General and Bank of America acknowledge that they

have been advised by their attorneys of the contents and effect of Section 1542 of the California

Bank of America Settlement Agreement — page 16

Civil Code (“Section 1542”) and hereby expressly waive with respect to this Agreement any and

all provisions, rights, and benefits conferred by Section 1542.

Releases by the State of Delaware.

Subject to the exceptions in Paragraph 15

(Excluded Claims), and conditioned solely upon Bank of America's full payment of the

Settlement Amount (of which $45,000,000.00 will be paid to the State of Delaware, in

accordance with written payment instructions from the State of Delaware, Office of the Attorney

General, to remediate harms to the State allegedly resulting from unlawful conduct of the

Released Entities), the Delaware Department of Justice fully and finally releases the Released

Entities from any civil or administrative claim for the Covered Conduct contained in Paragraph

3(A) only that it has authority to bring, including but not limited to: 6 Del. C. Chapter 12 (the

Delaware False Claims and Reporting Act), 6 Del. C. §§ 2511

et seq

. (the Delaware Consumer

Fraud Act), 6 Del. C. Chapter 73 (the Delaware Securities Act), and common law theories of

negligence, payment by mistake, unjust enrichment, money had and received, breach of fiduciary

duty, breach of contract, misrepresentation, deceit, fraud and aiding and abetting any of the

foregoing. The payment to the State of Delaware shall be used, to the maximum extent possible,

for purposes of providing restitution and remediating harms to the State and its communities

allegedly resulting from unlawful conduct of the Released Entities, including efforts to address

the mortgage and foreclosure crisis, financial fraud and deception, and housing-related

issues. The State of Delaware agrees that no portion of the funds in this paragraph is received as

a civil penalty or fine, including, but not limited to any civil penalty or fine imposed under 6 Del.

C. § 1201 or § 2522.

10.

Releases by the State of Illinois.

Subject to the exceptions in Paragraph 15 (Excluded

Claims), and conditioned solely upon Bank of America’s full payment of the Settlement Amount

Bank of America Settlement Agreement — page 17

(of which $200,000,000.00 will be paid to the State of Illinois, Office of the Attorney General, in

accordance with the written payment instructions from the State of Illinois, Office of the

Attorney General, to remediate harms to the State allegedly resulting from unlawful conduct of

the Released Entities), the Illinois Attorney General of the State of Illinois fully and finally

releases the Released Entities from any civil or administrative claim for the Covered Conduct

contained in Paragraph 3(A) only that it has authority to bring or compromise, including but not

limited to: Illinois Securities Law of 1953, 815 Ill. Comp. Stat. 5/1

et seq

., and common law

theories of negligence, gross negligence, payment by mistake, unjust enrichment, money had and

received, breach of fiduciary duty, breach of contract, misrepresentation, deceit, fraud and aiding

and abetting any of the foregoing. The State of Illinois agrees that no portion of the funds in this

paragraph is received as a civil penalty or fine.

11.

Releases of the Commonwealth of Kentucky.

Subject to the exceptions in

Paragraph 15 (Excluded Claims), and conditioned solely upon Bank of America’s full payment

of the Settlement Amount (of which $23,000,000.00 will be paid to the Commonwealth of

Kentucky, in accordance with written payment instructions from the Commonwealth of

Kentucky, Office of the Attorney General, to remediate harms to the State allegedly resulting

from allegedly unlawful conduct of the Released Entities), the Attorney General of the

Commonwealth of Kentucky fully and finally releases the Released Entities from any civil or

administrative claim for the Covered Conduct contained in Paragraph 3(A) only that it has the

authority to bring or compromise, including but not limited to under: KRS 292.310-292.480

(Kentucky Securities Act), 367.110-367.300 (Kentucky Consumer Protection Act), and common

law theories of negligence, gross negligence, recklessness, willful misconduct, payment by

mistake, unjust enrichment, money had and received, breach of fiduciary duty, breach of

Bank of America Settlement Agreement — page 18

contract, misrepresentation, deceit, fraud, gross negligence, recklessness, willful misconduct, and

aiding and abetting or conspiracy regarding any of the foregoing, as well as claims of unfair,

abusive, or deceptive practices. The Commonwealth of Kentucky agrees that no portion of the

funds in this paragraph is received as a civil penalty or fine.

12.

Releases of the State of Maryland.

Subject to the exceptions in Paragraph 15 (Excluded

Claims), and conditioned solely upon Bank of America’s full payment of the Settlement Amount

(of which $75,000,000.00 will be paid to the State of Maryland, in accordance with written

payment instructions from the State of Maryland, Office of the Attorney General, to remediate

harms to the State allegedly resulting from unlawful conduct of the Released Entities), the

Attorney General of the State of Maryland (“Maryland Attorney General”) fully and finally

releases the Released Entities from any civil or administrative claim for the Covered Conduct

contained in Paragraph 3(A) only that the Maryland Attorney General has authority to bring,

including but not limited to: Maryland Securities Act, Md. Code Ann., Corps. & Assn’s,

§§ 11-101

et seq.

, Maryland Consumer Protection Act, Com. Law §§ 13-101

et seq

., statutes and

regulations in the nature of the False Claims Act or similar Laws, and common law theories of

negligence, gross negligence, recklessness, willful misconduct, payment by mistake, unjust

enrichment, money had and received, breach of fiduciary duty, breach of contract,

misrepresentation, deceit, fraud, indemnification, contribution, restitution, rescission, and aiding

and abetting or conspiracy claims regarding any of the foregoing, as well as claims of unfair,

abusive, or deceptive practices, but excluding any liability arising under the tax provisions of the

Maryland Code and any claims that may arise in any non-enforcement legal action related to any

Maryland governmental entity in its capacity as an investor. The Maryland Attorney General

executes this release in his official capacity and releases only claims that the Maryland Attorney

Bank of America Settlement Agreement — page 19

General has the authority to release for the Covered Conduct. The payment to the State of

Maryland shall be made to the Maryland Attorney General, which shall hold the monies and

distribute them as directed by the Maryland Attorney General for restitution to certain investors,

including state and local governmental entities, and for costs incurred in connection with

restitution, with any remaining funds to be credited to the Mortgage Loan Servicing Practices

Settlement Fund to be used in accordance with Maryland law. The State of Maryland agrees that

no portion of the funds in this paragraph is received as a civil penalty or fine.

13.

Releases by the State of New York.

Subject to the exceptions in Paragraph 15

(Excluded Claims), and conditioned solely upon Bank of America’s full payment of the

Settlement Amount (of which $300,000,000.00 will be paid to the State of New York, in

accordance with written payment instructions from the State of New York, Office of the

Attorney General, to remediate harms to the State allegedly resulting from unlawful conduct of

the Released Entities), the State of New York, by Eric T. Schneiderman, Attorney General of the

State of New York, fully and finally releases the Released Entities from any civil or

administrative claim for the Covered Conduct contained in Paragraph 3(A) only that it has

authority to bring, including but not limited to any such claim under: New York General

Business Law Article 23A, New York Executive Law § 63(12), and common law theories of

negligence, payment by mistake, unjust enrichment, money had and received, breach of fiduciary

duty, breach of contract, misrepresentation, deceit, fraud and aiding and abetting any of the

foregoing. The payment to the State of New York shall be used, to the maximum extent

possible, for purposes of redeveloping and revitalizing housing and home ownership and

rebuilding communities in the State, and for programs intended to avoid preventable

foreclosures, to ameliorate the effects of the foreclosure crisis, to provide funding for housing

Bank of America Settlement Agreement — page 20

counselors and legal assistance, housing remediation and anti-blight projects, to enhance housing

code compliance efforts aimed at addressing blight and disinvestment, and to enhance efforts to

remediate the effects of financial fraud or unfair or deceptive acts or practices. The State of New

York agrees that no portion of the funds in this paragraph is received as a civil penalty or fine.

14.

Releases by the FDIC and the SEC.

The release of claims by the FDIC and the SEC

are contained in separate settlement documents with Bank of America, attached as Exhibits A

and B. Any release of claims by the FDIC and the SEC are governed solely by those separate

settlement documents.

15.

Excluded Claims.

Notwithstanding the releases in Paragraphs 5-14 of this Agreement,

or any other term(s) of this Agreement, the following claims are specifically reserved and not

released by this Agreement:

Any criminal liability;

Any liability of any individual;

Any liability of any person or entity other than the Released Entities and their

successors and assigns;

Any liability arising under Title 26 of the United States Code (the Internal

Revenue Code);

Any liability arising under Title XI of the Kentucky Revised Statutes.

Any liability to or claims of the FDIC (in its capacity as a corporation, receiver, or

conservator) and the SEC, except as expressly set forth in the separate agreements

with those entities;

Bank of America Settlement Agreement — page 21

Any claim related to compliance with the National Mortgage Settlement

(“NMS”), or to compliance with the related agreements reached between the

settling banks and individual states;

Any liability to, or claims brought by, the Federal Reserve Board and its member

institutions, and/or by the United States Department of the Treasury;

Any liability to, or claims brought by, the Department of Veterans Affairs relating

to whole loans insured, guaranteed, or purchased by the Department of Veterans

Affairs;

Any liability to, or claims brought by, Fannie Mae or Freddie Mac relating to

whole loans insured, guaranteed, or purchased by Fannie Mae or Freddie Mac;

Any administrative liability, including the suspension and debarment rights of any

federal agency, except to the extent expressly released in Paragraphs 6 and 7;

Any liability based upon obligations created by this Settlement Agreement;

Any liability for the claims or conduct alleged in the following

qui tam

actions,

and no setoff related to amounts paid under this Agreement shall be applied to any

recovery in connection with any of these actions:

(i)

United States ex rel. O’Donnell

Bank of America Corp. et al.

, No. 12-cv-

1422 (S.D.N.Y.);

(ii)

United States ex rel. Adams, et al. v. Aurora Loan Servs. LLC et al

., No.

11-cv-00535 (D. Nev.) & 14-15031 (9th Cir.);

(iii)

United States, et al. ex rel. Szymoniak v. American Home Mortgage

Servicing, Inc., et al.,

No. 10-cv-01465-JFA

(D.S.C.),

and United States ex

Bank of America Settlement Agreement — page 22

rel. Szymoniak v. ACE Securities Corp., et al.,

No. 13-cv-464-JFA

(D.S.C.), to the extent any claims survive dismissal;

(iv)

United States ex rel. Fisher v. Bank of America, N.A.

, No. 13-cv-01913-

TPG

(S.D.N.Y.);

(v)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(vi)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(vii)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(viii)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(ix)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(x)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America;

(xi)

In re

[CONFIDENTIAL];

(xii)

United States ex rel. Armendariz v. Wiles, et al.

, No. 14-cv-00551

(D.D.C.); and

(xiii)

United States ex rel. [Sealed] v. [Sealed]

, as disclosed to Bank of America,

to the extent it alleges any false or fraudulent statements, claims, and/or

certifications to United States Department of Housing and Urban

Development and/or the GSEs in connection with the reimbursement of

costs or expenses incurred in connection with foreclosure-related

proceedings anywhere in the United States (including foreclosure

proceedings or other proceedings, such as bankruptcy or eviction

proceedings, involving claims or issues relating to foreclosure), any failure

to comply with, or any false or fraudulent statements, claims, and/or

certifications to United States Department of Housing and Urban

Bank of America Settlement Agreement — page 23

Development and/or the GSEs concerning compliance with, quality control

and/or monitoring requirements applicable to such costs or expenses.

Any dispute, claim, or defense which may arise between any Relator and Bank of

America in the matters identified in Paragraph 3(F) regarding attorneys’ fees,

expenses and costs of the Relator under 31 U.S.C. § 3730(d).

Any liability arising under: the Fair Housing Act; the Equal Credit Opportunity

Act; the Home Mortgage Disclosure Act; or any other statute or law that prohibits

discrimination because of race, color, national origin, gender, disability, or any

other protected status.

Any claims related to the alleged manipulation of the London Interbank Offered

Rate or other currency benchmarks.

16.

Releases by Bank of America.

Bank of America and any current or former affiliated

entity and any of its respective successors and assigns fully and finally releases the United States

and the States, and their officers, agents, employees, and servants, from any claims (including

attorney’s fees, costs, and expenses of every kind and however denominated) that Bank of

America has asserted, could have asserted, or may assert in the future against the United States

and the States, and their officers, agents, employees, and servants, related to the Covered

Conduct to the extent released hereunder and the investigation and civil prosecution to date

thereof.

17.

Waiver of Potential FDIC Indemnification Claims by Bank of America.

Bank of

America hereby irrevocably waives any right that it otherwise might have to seek (and in any

event agrees that it shall not seek) any form of indemnification, reimbursement or contribution

from the FDIC in any capacity, including the FDIC in its Corporate Capacity or the FDIC in its

Bank of America Settlement Agreement — page 24

Receiver Capacity for any payment that is a portion of the Settlement Amount set forth in

Paragraph 1 of this Agreement or of the Consumer Relief set forth in Paragraph 2 of this

Agreement, including payments to the United States, the States, and the SEC made pursuant to

Paragraphs 1 and 2 of this Agreement.

18.

Waiver of Potential Defenses by Bank of America.

Bank of America and any current

or former affiliated entity (to the extent that Bank of America retains liability for the Covered

Conduct associated with such affiliated entity) and any of their respective successors and assigns

waive and shall not assert any defenses Bank of America may have to any criminal prosecution

or administrative action relating to the Covered Conduct that may be based in whole or in part on

a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution,

or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this

Agreement bars a remedy sought in such criminal prosecution or administrative action.

19.

Unallowable Costs Defined.

All costs (as defined in the Federal Acquisition Regulation,

48 C.F.R. § 31.205-47) incurred by or on behalf of Bank of America, and its present or former

officers, directors, employees, shareholders, and agents in connection with:

the matters covered by this Agreement;

the United States’ audit(s) and civil investigation(s) of the matters covered by this

Agreement;

Bank of America’s investigation, defense, and corrective actions undertaken in

response to the United States’ audit(s) and civil and any criminal investigation(s)

in connection with the matters covered by this Agreement (including attorney’s

fees);

the negotiation and performance of this Agreement; and

Bank of America Settlement Agreement — page 25

the payment Bank of America makes to the United States pursuant to this

Agreement, are unallowable costs for government contracting purposes

(hereinafter referred to as “Unallowable Costs”).

20.

Future Treatment of Unallowable Costs.

Unallowable Costs will be separately

determined and accounted for by Bank of America, and Bank of America shall not charge such

Unallowable Costs directly or indirectly to any contract with the United States.

21.

Miscellaneous.

This Agreement is intended to be for the benefit of the Parties only and does not

create any third-party rights.

This Agreement is governed by the laws of the United States. The Parties agree

that the exclusive jurisdiction and venue for any dispute relating to this

Agreement is the United States District Court for the District of New Jersey.

The Parties acknowledge that this Agreement is made without any trial or

adjudication or finding of any issue of fact or law, and is not a final order of any

court or governmental authority.

Each Party shall bear its own legal and other costs incurred in connection with

this matter, including the preparation and performance of this Agreement.

Each party and signatory to this Agreement represents that it freely and

voluntarily enters into this Agreement without any degree of duress or

compulsion.

Nothing in this Agreement in any way alters the terms of the NMS, or Bank of

America’s obligations under the NMS.

Bank of America Settlement Agreement — page 26

Nothing in this Agreement constitutes an agreement by the United States

concerning the characterization of the Settlement Amount for the purposes of the

Internal Revenue laws, Title 26 of the United States Code.

For the purposes of construing the Agreement, this Agreement shall be deemed to

have been drafted by all Parties and shall not, therefore, be construed against any

Party for that reason in any dispute.

This Agreement, including all Annexes and Exhibits attached hereto, shall not

apply to, or be used in,

United States ex rel. O’Donnell v. Bank of America Corp.,

et al.

, No. 12-cv-1422 (S.D.N.Y.).

This Agreement constitutes the complete agreement between the Parties. This

Agreement may not be amended except by written consent of the Parties.

The undersigned counsel represent and warrant that they are fully authorized to

execute this Agreement on behalf of the persons and entities indicated below.

This Agreement may be executed in counterparts, each of which constitutes an

original and all of which constitute one and the same Agreement.

This Agreement is binding on Bank of America’s successors, transferees, heirs,

and assigns.

All parties consent to the disclosure to the public of this Agreement by Bank of

America, the United States, the States, the FDIC, and the SEC whose separate

settlement agreements are referenced herein and attached as exhibits to this

Agreement.

This Agreement is effective on the date of signature of the last signatory to the

Agreement (“Effective Date of this Agreement”). Facsimiles of signatures shall

constitute acceptable, binding signatures for purposes of this Agreement.

Bank of America Settlement Agreement — page 28

For the

ited States:

Associate Attorney General

U.S. Department

Justice

950 Pennsylvania Avenue, NW

Washington, D.C.

20530

Phon

(202) 514-9500

Dat

ed:

.,..

08 -2

0-2014

Bank of America Settlement Agreement — page 29

For

the Department

Housing and Urban Development

Carol

Galant

Assistant Secretary for Housing

FHA

Commissioner

U.S. Department

Housing and Urban Development

451

7th

Street,

Washington,

20410

Tel: 202-708-2601

Fax:

202

-708-2580

For

the Department

Housing and Urban Develo

pment

President

Government National Mortgage Association

U.S. Department

Housing and Urban Development

451

7th

Street,

Washington,

20410

Tel

: 202-708-0926

Fax: 202-485-0206

Bank of America Settlement Agreement — page 30

8/20/2014

8/20/2014

Bank of America Settlement Agreement — page 31

8/20/2014

Bank of America Settlement Agreement — page 32

0(7()

For the California Department

Justice:

California Attorney General

Calif

ia Department

stice

455

Golden

Gate,

Suite

San Francisco,

94l

Phone:

(415) 703-5500

Dated:

August

201

Bank of America Settlement Agreement — page 33

For the State

Delaware:

Attorney General for the State

Delaware

Delaware Department

Justice

Carvel State Office Building

820 N. French Street

Wilmington,

19801

Phone: (302) 577-8338

Dated:

);

--V-7-f--'---=---;-f--'-----7~---

Bank of America Settlement Agreement — page 34

For the State

Illinois:

LISA

MADIGAN

Attorney General State

Illinois

500 South Second Street

Springfield, IL 62706

Phone:

(217) 782-1090

t<b

l'-'{

Dated:

----

-----

Bank of America Settlement Agreement — page 35

For the Commonwealth

Kentucky:

Atto ey eneral

Kentucky;

pitol, Suite 118

7 0 apital A venue

Frankfort,

40601

Phone: (502) 696-5643

Bank of America Settlement Agreement — page 36

glas F.

1sl

For the State

Maryland:

Securities Commissioner

Office

the Attorney General

ofMaryland,

Securities Division

200

St. Paul Place

Baltimore, Maryland

2 1

202

Dated

Dou

Attorney General

Office

the Attomey General

Maryland

200

St. Paul Place

Baltimore, Maryland

21202

Dated:

ugus

, 2014

Augu

t 18, 2014

Bank of America Settlement Agreement — page 37

For the State

New

York:

Signature Eric T. Schneiderman

ERIC T. SCHNEIDERMAN

Attorney General

ofthe

State

New York

120

Broadway

New York, NY 10271

Phone: (212) 416-8000

Dated:_~+-'--'-Wr~f.~Y

Bank of America Settlement Agreement

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