187 
satisfaction of the receiver shall have priority in the 
following order: 
‘‘(A) Administrative expenses of the re-
ceiver. 
‘‘(B) Any other general or senior liability of 
the regulated entity and claims of other Federal 
home loan banks arising from their payment ob-
ligations (including joint and several payment 
obligations). 
‘‘(C) Any obligation subordinated to general 
creditors. 
‘‘(D) Any obligation to shareholders or 
members arising as a result of their status as 
shareholder or members. 
‘‘(2) CREDITORS
SIMILARLY
SITUATED.—All 
creditors that are similarly situated under paragraph 
(1) shall be treated in a similar manner, except that 
the Agency may make such other payments to credi-
tors necessary to maximize the present value return 
from the sale or disposition or such regulated entity’s 
assets or to minimize the amount of any loss realized 
in the resolution of cases so long as all creditors simi-
larly situated receive not less than the amount pro-
vided under subsection (e)(2).
188 
‘‘(3) DEFINITION.—The term ‘administrative ex-
penses of the receiver’ shall include the actual, nec-
essary costs and expenses incurred by the receiver in 
preserving the assets of the regulated entity or liqui-
dating or otherwise resolving the affairs of the regu-
lated entity. Such expenses shall include obligations 
that are incurred by the receiver after appointment as 
receiver that the Director determines are necessary 
and appropriate to facilitate the smooth and orderly 
liquidation or other resolution of the regulated entity. 
‘‘(d) PROVISIONS RELATING TO CONTRACTS ENTERED 
INTO BEFORE APPOINTMENT OF CONSERVATOR OR RE-
CEIVER.— 
‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a conservator or re-
ceiver may have, the conservator or receiver for any 
regulated entity may disaffirm or repudiate any con-
tract or lease— 
‘‘(A) to which such regulated entity is a 
party; 
‘‘(B) the performance of which the conser-
vator or receiver, in its sole discretion, deter-
mines to be burdensome; and 
‘‘(C) the disaffirmance or repudiation of 
which the conservator or receiver determines, in
189 
its sole discretion, will promote the orderly ad-
ministration of the affairs of the regulated enti-
ty. 
‘‘(2) TIMING OF REPUDIATION.—The conservator 
or receiver shall determine whether or not to exercise 
the rights of repudiation under this subsection within 
a reasonable period following such appointment. 
‘‘(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided under subparagraph (C) and para-
graphs (4), (5), and (6), the liability of the con-
servator or receiver for the disaffirmance or re-
pudiation of any contract pursuant to para-
graph (1) shall be— 
‘‘(i) limited to actual direct compen-
satory damages; and 
‘‘(ii) determined as of— 
‘‘(I) the date of the appointment 
of the conservator or receiver; or 
‘‘(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or re-
pudiation of such contract or agree-
ment.
190 
‘‘(B) NO LIABILITY FOR OTHER DAMAGES.— 
For purposes of subparagraph (A), the term ‘ac-
tual direct compensatory damages’ shall not in-
clude— 
‘‘(i) punitive or exemplary damages; 
‘‘(ii) damages for lost profits or oppor-
tunity; or 
‘‘(iii) damages for pain and suffering. 
‘‘(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF FINANCIAL CONTRACTS.—In the case of 
any qualified financial contract or agreement to 
which paragraph (8) applies, compensatory 
damages shall be— 
‘‘(i) deemed to include normal and rea-
sonable costs of cover or other reasonable 
measures of damages utilized in the indus-
tries for such contract and agreement 
claims; and 
‘‘(ii) paid in accordance with this sub-
section and subsection (e), except as other-
wise specifically provided in this section. 
‘‘(4) LEASES
UNDER
WHICH
THE
REGULATED 
ENTITY IS THE LESSEE.— 
‘‘(A) IN GENERAL.—If the conservator or re-
ceiver disaffirms or repudiates a lease under
191 
which the regulated entity was the lessee, the con-
servator or receiver shall not be liable for any 
damages (other than damages determined under 
subparagraph (B)) for the disaffirmance or repu-
diation of such lease. 
‘‘(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which that subparagraph applies shall— 
‘‘(i) be entitled to the contractual rent 
accruing before the later of the date— 
‘‘(I) the notice of disaffirmance or 
repudiation is mailed; or 
‘‘(II) the disaffirmance or repudi-
ation becomes effective, unless the lessor 
is in default or breach of the terms of 
the lease; 
‘‘(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
‘‘(iii) have a claim for any unpaid 
rent, subject to all appropriate offsets and 
defenses, due as of the date of the appoint-
ment, which shall be paid in accordance 
with this subsection and subsection (e).
192 
‘‘(5) LEASES
UNDER
WHICH
THE
REGULATED 
ENTITY IS THE LESSOR.— 
‘‘(A) IN GENERAL.—If the conservator or re-
ceiver repudiates an unexpired written lease of 
real property of the regulated entity under which 
the regulated entity is the lessor and the lessee is 
not, as of the date of such repudiation, in de-
fault, the lessee under such lease may either— 
‘‘(i) treat the lease as terminated by 
such repudiation; or 
‘‘(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease, unless the lessee defaults under the 
terms of the lease after the date of such re-
pudiation. 
‘‘(B) PROVISIONS APPLICABLE TO LESSEE 
REMAINING IN POSSESSION.—If any lessee under 
a lease described under subparagraph (A) re-
mains in possession of a leasehold interest under 
clause (ii) of such subparagraph— 
‘‘(i) the lessee— 
‘‘(I) shall continue to pay the con-
tractual rent pursuant to the terms of 
the lease after the date of the repudi-
ation of such lease; and
193 
‘‘(II) may offset against any rent 
payment which accrues after the date 
of the repudiation of the lease, and any 
damages which accrue after such date 
due to the nonperformance of any obli-
gation of the regulated entity under the 
lease after such date; and 
‘‘(ii) the conservator or receiver shall 
not be liable to the lessee for any damages 
arising after such date as a result of the re-
pudiation other than the amount of any off-
set allowed under clause (i)(II). 
‘‘(6) CONTRACTS FOR THE SALE OF REAL PROP-
ERTY.— 
‘‘(A) IN GENERAL.—If the conservator or re-
ceiver repudiates any contract for the sale of real 
property and the purchaser of such real property 
under such contract is in possession, and is not, 
as of the date of such repudiation, in default, 
such purchaser may either— 
‘‘(i) treat the contract as terminated by 
such repudiation; or 
‘‘(ii) remain in possession of such real 
property.
194 
‘‘(B) PROVISIONS
APPLICABLE
TO
PUR-
CHASER
REMAINING
IN
POSSESSION.—If any 
purchaser of real property under any contract 
described under subparagraph (A) remains in 
possession of such property under clause (ii) of 
such subparagraph— 
‘‘(i) the purchaser— 
‘‘(I) shall continue to make all 
payments due under the contract after 
the date of the repudiation of the con-
tract; and 
‘‘(II) may offset against any such 
payments any damages which accrue 
after such date due to the nonperform-
ance (after such date) of any obligation 
of the regulated entity under the con-
tract; and 
‘‘(ii) the conservator or receiver shall— 
‘‘(I) not be liable to the purchaser 
for any damages arising after such 
date as a result of the repudiation 
other than the amount of any offset al-
lowed under clause (i)(II);
195 
‘‘(II) deliver title to the purchaser 
in accordance with the provisions of 
the contract; and 
‘‘(III) have no obligation under 
the contract other than the performance 
required under subclause (II). 
‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 
‘‘(i) IN
GENERAL.—No provision of 
this paragraph shall be construed as lim-
iting the right of the conservator or receiver 
to assign the contract described under sub-
paragraph (A), and sell the property subject 
to the contract and the provisions of this 
paragraph. 
‘‘(ii) NO LIABILITY AFTER ASSIGNMENT 
AND SALE.—If an assignment and sale de-
scribed under clause (i) is consummated, the 
conservator or receiver shall have no further 
liability under the contract described under 
subparagraph (A), or with respect to the 
real property which was the subject of such 
contract. 
‘‘(7) PROVISIONS APPLICABLE TO SERVICE CON-
TRACTS.—
196 
‘‘(A) SERVICES
PERFORMED
BEFORE
AP-
POINTMENT.—In the case of any contract for 
services between any person and any regulated 
entity for which the Agency has been appointed 
conservator or receiver, any claim of such person 
for services performed before the appointment of 
the conservator or the receiver shall be— 
‘‘(i) a claim to be paid in accordance 
with subsections (b) and (e); and 
‘‘(ii) deemed to have arisen as of the 
date the conservator or receiver was ap-
pointed. 
‘‘(B) SERVICES
PERFORMED
AFTER
AP-
POINTMENT AND PRIOR TO REPUDIATION.—If, in 
the case of any contract for services described 
under subparagraph (A), the conservator or re-
ceiver accepts performance by the other person 
before the conservator or receiver makes any de-
termination to exercise the right of repudiation 
of such contract under this section— 
‘‘(i) the other party shall be paid 
under the terms of the contract for the serv-
ices performed; and
197 
‘‘(ii) the amount of such payment shall 
be treated as an administrative expense of 
the conservatorship or receivership. 
‘‘(C) ACCEPTANCE
OF
PERFORMANCE
NO 
BAR
TO
SUBSEQUENT
REPUDIATION.—The ac-
ceptance by any conservator or receiver of serv-
ices referred to under subparagraph (B) in con-
nection with a contract described in such sub-
paragraph shall not affect the right of the conser-
vator or receiver to repudiate such contract 
under this section at any time after such per-
formance. 
‘‘(8) 
CERTAIN
QUALIFIED
FINANCIAL
CON-
TRACTS.— 
‘‘(A) RIGHTS OF PARTIES TO CONTRACTS.— 
Subject to paragraphs (9) and (10) and notwith-
standing any other provision of this Act, any 
other Federal law, or the law of any State, no 
person shall be stayed or prohibited from exer-
cising— 
‘‘(i) any right such person has to cause 
the termination, liquidation, or acceleration 
of any qualified financial contract with a 
regulated entity that arises upon the ap-
pointment of the Agency as receiver for such
198 
regulated entity at any time after such ap-
pointment; 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement relating to one or more quali-
fied financial contracts described in clause 
(i); or 
‘‘(iii) any right to offset or net out any 
termination value, payment amount, or 
other transfer obligation arising under or in 
connection with 1 or more contracts and 
agreements described in clause (i), includ-
ing any master agreement for such con-
tracts or agreements. 
‘‘(B) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—Paragraph (10) of subsection (b) shall 
apply in the case of any judicial action or pro-
ceeding brought against any receiver referred to 
under subparagraph (A), or the regulated entity 
for which such receiver was appointed, by any 
party to a contract or agreement described under 
subparagraph (A)(i) with such regulated entity. 
‘‘(C) CERTAIN
TRANSFERS
NOT
AVOID-
ABLE.—
199 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (11) or any other Federal or 
State laws relating to the avoidance of pref-
erential or fraudulent transfers, the Agency, 
whether acting as such or as conservator or 
receiver of a regulated entity, may not 
avoid any transfer of money or other prop-
erty in connection with any qualified finan-
cial contract with a regulated entity. 
‘‘(ii) EXCEPTION FOR CERTAIN TRANS-
FERS.—Clause (i) shall not apply to any 
transfer of money or other property in con-
nection with any qualified financial con-
tract with a regulated entity if the Agency 
determines that the transferee had actual 
intent to hinder, delay, or defraud such reg-
ulated entity, the creditors of such regulated 
entity, or any conservator or receiver ap-
pointed for such regulated entity. 
‘‘(D) CERTAIN
CONTRACTS
AND
AGREE-
MENTS DEFINED.—In this subsection: 
‘‘(i) 
QUALIFIED
FINANCIAL
CON-
TRACT.—The term ‘qualified financial con-
tract’ means any securities contract, com-
modity contract, forward contract, repur-
200 
chase agreement, swap agreement, and any 
similar agreement that the Agency deter-
mines by regulation, resolution, or order to 
be a qualified financial contract for pur-
poses of this paragraph. 
‘‘(ii) 
SECURITIES
CONTRACT.—The 
term ‘securities contract’— 
‘‘(I) means a contract for the pur-
chase, sale, or loan of a security, a cer-
tificate of deposit, a mortgage loan, or 
any interest in a mortgage loan, a 
group or index of securities, certificates 
of deposit, or mortgage loans or inter-
ests therein (including any interest 
therein or based on the value thereof) 
or any option on any of the foregoing, 
including any option to purchase or 
sell any such security, certificate of de-
posit, mortgage loan, interest, group or 
index, or option, and including any re-
purchase or reverse repurchase trans-
action on any such security, certificate 
of deposit, mortgage loan, interest, 
group or index, or option;
201 
‘‘(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Agency deter-
mines by regulation, resolution, or 
order to include any such agreement 
within the meaning of such term; 
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
curities, certificates of deposit, or mort-
gage loans or interests therein (includ-
ing any interest therein or based on 
the value thereof) or option on any of 
the foregoing, including any option to 
purchase or sell any such security, cer-
tificate of deposit, mortgage loan, in-
terest, group or index, or option; 
‘‘(V) means any margin loan;
202 
‘‘(VI) means any other agreement 
or transaction that is similar to any 
agreement or transaction referred to in 
this clause; 
‘‘(VII) means any combination of 
the agreements or transactions referred 
to in this clause; 
‘‘(VIII) means any option to enter 
into any agreement or transaction re-
ferred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause (I), 
(III), (IV), (V), (VI), (VII), or (VIII), 
together with all supplements to any 
such master agreement, without regard 
to whether the master agreement pro-
vides for an agreement or transaction 
that is not a securities contract under 
this clause, except that the master 
agreement shall be considered to be a 
securities contract under this clause 
only with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause
203 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII); and 
‘‘(X) means any security agree-
ment or arrangement or other credit 
enhancement related to any agreement 
or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause. 
‘‘(iii) 
COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means— 
‘‘(I) with respect to a futures com-
mission merchant, a contract for the 
purchase or sale of a commodity for fu-
ture delivery on, or subject to the rules 
of, a contract market or board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction merchant, a leverage trans-
action; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
204 
chase or sale of a commodity for future 
delivery on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing organi-
zation, or commodity option traded on, 
or subject to the rules of, a contract 
market or board of trade that is 
cleared by such clearing organization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to in 
this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), (II), 
(III), (IV), (V), (VI), (VII), or (VIII), 
together with all supplements to any
205 
such master agreement, without regard 
to whether the master agreement pro-
vides for an agreement or transaction 
that is not a commodity contract 
under this clause, except that the mas-
ter agreement shall be considered to be 
a commodity contract under this clause 
only with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause 
(I), (II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause. 
‘‘(iv) FORWARD CONTRACT.—The term 
‘forward contract’ means— 
‘‘(I) a contract (other than a com-
modity contract) for the purchase, sale, 
or transfer of a commodity or any
206 
similar good, article, service, right, or 
interest which is presently or in the fu-
ture becomes the subject of dealing in 
the forward contract trade, or product 
or byproduct thereof, with a maturity 
date more than 2 days after the date 
the contract is entered into, including, 
a repurchase transaction, reverse re-
purchase 
transaction, 
consignment, 
lease, swap, hedge transaction, deposit, 
loan, option, allocated transaction, 
unallocated transaction, or any other 
similar agreement; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master