in a manner consistent with maxi-
mizing the net return to the estate, 
taking into account the safety of the 
deposit or investment; and 
(III) apply, or direct the trustee 
for the estate to apply, all proceeds 
and funds received and the net return 
on any deposit or investment to make 
distributions in compliance with para-
graphs (3) and (4); 
(ii) may borrow funds or otherwise ob-
tain credit, for the benefit of the estate, in 
compliance with paragraph (2) on a se-
cured or unsecured basis and on a priority, 
pari passu, or subordinated basis; 
(iii) shall, at the times and in the 
manner required by the applicable covered 
bond regulator, submit to the covered bond 
regulator, the Secretary, the applicable in-
denture trustee, the applicable covered 
bondholders, the owner of the residual in-
terest, and any other person designated by 
the covered bond regulator, reports that 
describe the activities of the servicer or ad-
ministrator on behalf of the estate, the 
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS
performance of the cover pool held by the 
estate, and distributions made by the es-
tate; and 
(iv) shall assist the trustee in pre-
paring the final report and the final ac-
count of the administration of the estate. 
(F) SUPERVISION OF TRUSTEE, SERVICER, 
AND ADMINISTRATOR.—The applicable covered 
bond regulator shall supervise the trustee and 
any servicer or administrator for an estate. The 
covered bond regulator shall require that all re-
ports submitted under subparagraph (E)(iii) do 
not contain any untrue statement of a material 
fact and do not omit to state a material fact 
necessary in order to make the statements 
made, in light of the circumstances under which 
they are made, not misleading. 
(G) REMOVAL
AND
REPLACEMENT
OF 
TRUSTEE, SERVICER, AND ADMINISTRATOR.—If 
the covered bond regulator determines that it is 
in the best interests of an estate, the covered 
bond regulator may remove or replace the trust-
ee or any servicer or administrator for the es-
tate. The removal of the trustee or any servicer 
or administrator does not abate any pending ac-
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS
tion or proceeding involving the estate, and any 
successor or other trustee, servicer, or adminis-
trator shall be substituted as a party in the ac-
tion or proceeding. 
(H) PROFESSIONALS.—The trustee or any 
servicer or administrator for an estate may em-
ploy 1 or more attorneys, accountants, apprais-
ers, auctioneers, or other professional persons 
to represent or assist the trustee or the servicer 
or administrator in carrying out its duties. The 
employment of any professional person and all 
terms and conditions of employment, including 
the terms and conditions relating to compensa-
tion, shall conform to the requirements of this 
Act and the oversight program and otherwise 
shall be subject to the approval of the applica-
ble covered bond regulator. 
(I) APPROVED FEES AND EXPENSES.—Un-
less otherwise provided in the applicable terms 
and conditions of appointment or employment, 
all approved fees and expenses of the trustee, 
any servicer or administrator, or any profes-
sional person employed by the trustee or any 
servicer or administrator shall be payable from 
the estate as administrative expenses. 
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS
(J) ACTIONS BY OR ON BEHALF OF ES-
TATE.—The trustee or any servicer or adminis-
trator for an estate may commence or continue 
judicial, administrative, or other actions, in the 
name of the estate or in its own name on behalf 
of the estate, for the purpose of collecting, real-
izing on, or otherwise managing the cover pool 
held by the estate or exercising its other powers 
or duties on behalf of the estate. 
(K) ACTIONS AGAINST ESTATE.—No court 
may issue an attachment or execution on any 
property of an estate. Except at the request of 
the applicable covered bond regulator or as oth-
erwise provided in this subparagraph or sub-
paragraph (J), no court may take any action to 
restrain or affect the resolution of an estate 
under this Act. No person (including the appli-
cable indenture trustee and any applicable cov-
ered bondholder) may commence or continue 
any judicial, administrative, or other action 
against the estate, the trustee, or any servicer 
or administrator or take any other act to affect 
the estate, the trustee, or any servicer or ad-
ministrator that is not expressly permitted by 
this Act, the oversight program, and the related 
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS
transaction documents, except for a judicial or 
administrative action to compel the release of 
funds that— 
(i) are available to the estate; 
(ii) are permitted to be distributed 
under this Act and the oversight program; 
and 
(iii) are permitted and required to be 
distributed under the related transaction 
documents and any contracts executed by 
or on behalf of the estate. 
(L) SOVEREIGN
IMMUNITY.—Except in 
connection with a guarantee provided under 
paragraph (4) or any other contract executed 
by the applicable covered bond regulator under 
this section 4, the Secretary and the covered 
bond regulator shall be entitled to sovereign im-
munity in carrying out the provisions of this 
Act. 
(2) BORROWINGS AND CREDIT.— 
(A) IN GENERAL.—Any servicer or admin-
istrator for an estate created under subsection 
(b)(1) or (c)(2) may borrow funds or otherwise 
obtain credit, on behalf of and for the benefit 
of the estate, from any person in compliance 
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS
with this paragraph (2) solely for the purpose 
of providing liquidity in the case of timing 
mismatches among the assets and the liabilities 
of the estate. Except with respect to an under-
writer, section 5 of the Securities Act of 1933, 
the Trust Indenture Act of 1939, and any State 
or local law requiring registration for an offer 
or sale of a security or registration or licensing 
of an issuer of, underwriter of, or broker or 
dealer in a security does not apply to the offer 
or sale under this paragraph (2) of a security 
that is not an equity security. 
(B) CONDITIONS.—A servicer or adminis-
trator may borrow funds or otherwise obtain 
credit under subparagraph (A)— 
(i) on terms affording the lender only 
claims or liens that are fully subordinated 
to the claims and interests of the applica-
ble indenture trustee and the applicable 
covered bondholders and all other claims 
against and interests in the estate, except 
for the residual interest, if the servicer or 
administrator certifies to the applicable 
covered bond regulator that, in the busi-
ness judgment of the servicer or adminis-
VerDate Mar 15 2010 
03:38 Mar 09, 2011
Jkt 099200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H940.IH
H940
rfrederick on DSKD9S0YB1PROD with BILLS