Exhibit A
DE-AC03-91SF18643/M002
Agreement entered into this 1st day of February, 1991, between the UNITED STATES OF AMERICA, represented by the Department of Energy (hereinafter referred to as Oakland Operations Office), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (for performance at the Lawrence Berkeley Laboratory), a corporation/legal entity existing under the laws of the State of California (hereinafter referred to as the Recipient) and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association under the laws of the United States of America, with its principal offices at 555 California Street, San Francisco, California 94104 (hereinafter referred to as the Bank).
(a) On the effective date of September 18, 1987, the Oakland Operations Office and the Recipient entered into Contract No. DE-AC03-76SF00098 or a Supplemental Contract thereto, providing for a checks-paid method of letter of credit financing.
(b) Oakland Operations Office requires that the Recipient open "Special Deposit Accounts" with the Bank, who is a member of the Federal Reserve System or an "insured" bank within the meaning of the Act creating the Federal Deposit Insurance Corporation (Act of August 23, 1935; 49 Stat. 684, as amended; 12 U.S.C. 264), separate from the Recipient's general or other funds.
(c) The "Special Demand Deposit Accounts" shall be designated:
(ii) Lawrence Berkeley Laboratory Payroll Account.
In consideration of the foregoing, and for other good and valuable consideration, it is agreed that:
(1) The Oakland Operations Office shall have title to the credit balance in said accounts to secure the repayment of all advance payments made to the Recipient and said title shall be superior to any other title or claim with respect to such accounts. After receipt by the Bank of written directions from the Oakland Operations Office Contracting Officer, the Bank shall act thereon and shall be under no liability to any party hereto for any action taken in accordance with the said written directions.
(2) The Bank shall be bound by Clause 7, paragraphs (c) and (d) of said Agreement described in Recital (a) between Oakland Operations Office and the Recipient relating to the deposit and withdrawal of funds in the above "Special Demand Deposit Accounts", which are hereby incorporated into this Agreement by reference, but the Bank shall not be responsible for the application of funds withdrawn from said accounts.
(3) The Oakland Operations Office, or it authorized representatives, shall have access to the books and records maintained by the Bank with respect to such "Special Demand Deposit Accounts" at all reasonable times and for all reasonable purposes, including, without limitation, the inspection or copying of such books and records and any or all memoranda, checks, correspondence, or documents pertaining thereto. Such books and records shall be preserved by the Bank for a period of six (6) years after the final payment under the Agreement.
(4) In the event of the service of any writ of section, levy of execution, or commencement of garnishment proceedings with respect to the "Special Demand Deposit Accounts", the Bank shall promptly notify the Oakland Operations Office Contracting Officer.
(5) Oakland Operations Office will issue a Letter of Credit (irrevocable to the extent obligations have been incurred in good faith thereunder by the Recipient) to the Bank for the benefit of the "Special Demand Deposit Accounts". The Bank agrees to honor upon presentation for payment all checks issued by the Recipient and to restrict all Letter of Credit withdrawals to an amount sufficient to maintain the account balances as close to zero as administratively possible each day.
If documentation furnished by the Bank demonstrates that this withdrawal procedure would be inequitable to Oakland Operations Office or to the Bank, Covenant (5) may be modified upon agreement of all parties concerned.
The Bank shall comply with the provision contained in the Treasury Department Fiscal Requirements Manual (I TFRM 6-2000) which states that ordinarily payment vouchers (TFS 5401) should not be drawn more frequently than daily, or for amounts less than the minimum of $5,000, and in no case more than $5,000,000, unless so stated on the Letter of Credit Authorization.
The Bank agrees to service the accounts in this manner based on the requirements and specifications contained in the Oakland Operations Office solicitation and related sections, dated September 25, 1990. The Bank agrees that "Per Unit Charges", detailed in the Section 2 of the solicitation, "Schedule of Bank Services and Charges", contained in the Bank's proposal shall remain constant during the term of this Agreement.
The Bank shall be compensated for services by the Direct Payment Method.
(6) The Bank shall post collateral, acceptable under Department of the Treasury Department Circular 176, with the Federal Reserve Bank in an amount equal to the Federal funds deposited with the Bank in all of DOE accounts, exceeding the Department of the Treasury-approved deposit insurance.
(7) This Agreement, with all its provisions and covenants, shall be in effect concurrent the Recipient's contract and any renewals thereto or for a term of approximately five (5) years, beginning on the 1st day of March, 1991, and ending on the 28th day of February, 1996, whichever is the shorter period of time. The specific provisions for operating the accounts after expiration are contained in Covenant (11).
(8) The Oakland Operations Office, the Recipient, or the Bank may terminate this Agreement at any time within the five (5) year agreement period upon submitting written notification to the other parties ninety (90) days prior to the desired termination date. The specific provisions for operating the accounts after the termination date are contained in Covenant (11).
(9) The Oakland Operations Office and Recipient may terminate this Agreement at any time upon thirty (30) days notice to the Bank if the Oakland Operations Office and/or Recipient find that the Bank has failed to substantially perform its obligations under this Agreement, or that the Bank is performing its obligations in a manner which precludes the administering of the Recipient's program in an effective and efficient manner.
(10) Notwithstanding the provisions of Covenants (8) and (9), in the event the Agreement (referenced in Recital (a)) between the Oakland Operations Office and is not renewed or is terminated, this Agreement between the Oakland Operations Office, the Recipient, and the Bank shall be terminated upon the delivery to the Bank of a written notice signed by the Contracting Officer.
(11) In the event of termination or expiration, the Bank agrees to retain the Recipient's "Special Demand Deposit Accounts" for an additional 90 day period following the term end date to allow for clearance of outstanding checks. During this 90 day period, the Oakland Operations Office will ensure that the Letter of Credit shall have sufficient funds to cover all outstanding checks presented for payment.
(b) After all checks have been paid, the Bank shall forward the balance of the daily ledger balance by check made payable to the U.S. Department of Energy and mailed to the Finance and Accounting Division, Oakland Operations Office.
(c) During the 90-day period, the Bank shall bill the Recipient for the actual service charges rendered.
(d) During the entire 90-day period, it is further understood that:
(1) The Bank shall maintain collateral in an amount sufficient to collateralize the highest balance in DOE accounts, based upon the ledger balance of said accounts, less Federal Deposit Insurance Corporation coverage on the accounts.
(2) All service charges shall be consistent with the amounts reflected in this Agreement.
(3) All terms and conditions of the proposal submitted by the Bank that are not inconsistent with this 90-day additional term shall remain in effect.
(4) This agreement shall continue in effect, with exception of the following:
(ii) The term of this Agreement (Covenant 7)
(iii) Termination of Agreement (Covenant 8 and 9)
(12) The Bank has submitted the sections entitled: (1) Commercial Bank's Representations and Certifications, including "Questions", and (2) Schedule of Bank Services and Charges. These sections have been accepted by the Recipient and the Oakland Operations Office Contracting Officer and are incorporated herein with the document entitled, "Commercial Bank's Information for Operating a Checks-Paid Letter of Credit", as an integral part of this agreement.
IN WITNESS THEREOF the parties hereto have caused this Agreement, DE-AC03-91SF18643, which consists of 7 pages; including the signature pages to be executed as of the day and year first above written.
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