§ 54.1007   Letter of credit.

   (a) Before being authorized to receive Mobility Fund Phase I support, a
   winning bidder shall obtain an irrevocable standby letter of credit which
   shall be acceptable in all respects to the Commission. Each winning bidder
   authorized to receive Mobility Fund Phase I support shall maintain its
   standby letter of credit or multiple standby letters of credit in an amount
   equal to the amount of Mobility Fund Phase I support that the winning bidder
   has been and is eligible to request be disbursed to it pursuant to § 54.1008
   plus the additional performance default amount described in § 54.1006(f),
   until  at  least  120 days after the winning bidder receives its final
   distribution of support pursuant to § 54.1008(b)(3).

   (1)  The  bank issuing the letter of credit shall be acceptable to the
   Commission. A bank that is acceptable to the Commission is

   (i) Any United States Bank that

   (A) Is among the 50 largest United States banks, determined on the basis of
   total assets as of the end of the calendar year immediately preceding the
   issuance of the letter of credit,

   (B) Whose deposits are insured by the Federal Deposit Insurance Corporation,
   and

   (C) Who has a long-term unsecured credit rating issued by Standard & Poor's
   of A- or better (or an equivalent rating from another nationally recognized
   credit rating agency); or

   (ii) Any non-U.S. bank that

   (A) Is among the 50 largest non-U.S. banks in the world, determined on the
   basis  of  total assets as of the end of the calendar year immediately
   preceding the issuance of the letter of credit (determined on a U.S. dollar
   equivalent basis as of such date),

   (B) Has a branch office in the District of Columbia or such other branch
   office agreed to by the Commission,

   (C) Has a long-term unsecured credit rating issued by a widely-recognized
   credit  rating  agency that is equivalent to an A- or better rating by
   Standard & Poor's, and

   (D) Issues the letter of credit payable in United States dollars.

   (2) [Reserved]

   (b) A winning bidder for Mobility Fund Phase I support shall provide with
   its  Letter of Credit an opinion letter from its legal counsel clearly
   stating,  subject  only  to  customary  assumptions,  limitations, and
   qualifications, that in a proceeding under Title 11 of the United States
   Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”), the bankruptcy court
   would not treat the letter of credit or proceeds of the letter of credit as
   property of the winning bidder's bankruptcy estate under section 541 of the
   Bankruptcy Code.

   (c) Authorization to receive Mobility Fund Phase I support is conditioned
   upon full and timely performance of all of the requirements set forth in
   § 54.1006 and any additional terms and conditions upon which the support was
   granted.

   (1) Failure by a winning bidder authorized to receive Mobility Fund Phase I
   support to comply with any of the requirements set forth in § 54.1006 or any
   other term or conditions upon which support was granted, or its loss of
   eligibility for any reason for Mobility Fund Phase I support, will be deemed
   an automatic performance default, will entitle the Commission to draw the
   entire amount of the letter of credit, and may disqualify the winning bidder
   from the receipt of Mobility Fund Phase I support or additional USF support.

   (2) A performance default will be evidenced by a letter issued by the Chief
   of  either  the Wireless Bureau or Wireline Bureau or their respective
   designees,  which  letter, attached to a standby letter of credit draw
   certificate, shall be sufficient for a draw on the standby letter of credit
   for the entire amount of the standby letter of credit.

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