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EXHIBIT 10.4
BUSINESS ALLIANCE AGREEMENT
by and between
U.S. BANCORP
and
PIPER JAFFRAY COMPANIES
Dated as of December 23, 2003
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TABLE OF CONTENTS
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Page
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ARTICLE I.
SCOPE OF AGREEMENT............................................
2
1.1
Scope.........................................................
2
ARTICLE II.
BUSINESS AGREEMENTS...........................................
2
2.1
General.......................................................
2
2.2
Investment Funds..............................................
2
2.3
Capital Market Services Collaboration.........................
3
2.4
Joint Products and Services...................................
4
2.5
Settlement, Safekeeping and Other Banking Services............
5
2.6
Customer Information Sharing and Access.......................
6
2.7
Securities Dealer Services....................................
6
2.8
Transition Matters............................................
7
ARTICLE III. ALLIANCE
MANAGEMENT...........................................
8
3.1
Alliance Managers.............................................
8
3.2
Meetings......................................................
8
3.3
Responsibilities..............................................
8
ARTICLE IV. TERM
AND TERMINATION..........................................
8
4.1
Term..........................................................
8
4.2
Termination...................................................
8
4.3
Effect of Termination.........................................
10
ARTICLE V.
GENERAL TERMS AND CONDITIONS..................................
10
5.1
Complete Agreement............................................
10
5.2
Expenses......................................................
11
5.3
Governing Law.................................................
11
5.4
Notices.......................................................
11
5.5
Amendment, Modification or Waiver.............................
11
5.6
Successors and Assigns; No Third Party Beneficiaries..........
12
5.7
Counterparts..................................................
12
5.8
Dispute Resolution............................................
12
5.9
Interpretation................................................
12
5.10
Severability..................................................
12
5.11
No Joint Venture..............................................
12
5.12
No Individual Authority.......................................
12
5.13
Non-Exclusivity...............................................
13
5.14
Basis of Bargain..............................................
13
5.15
Force Majeure.................................................
13
5.16
Priority......................................................
13
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EXHIBIT A -- Alliance Managers
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BUSINESS ALLIANCE AGREEMENT
This BUSINESS ALLIANCE AGREEMENT (this "Agreement"), dated as
of December 23, 2003, is made and entered
into by and between U.S. Bancorp, a
Delaware corporation ("Parent"), and PIPER
JAFFRAY COMPANIES, a Delaware
corporation and an indirect, wholly owned
subsidiary of Parent ("Piper
Jaffray"). Parent and Piper Jaffray are
sometimes referred to herein
individually as a "Party" and collectively
as the "Parties". Capitalized terms
used in this Agreement that are not
otherwise defined herein shall have the
meanings ascribed to them in the Separation
Agreement (as defined herein).
RECITALS
WHEREAS, Parent and Piper Jaffray have entered into a certain
Separation and Distribution Agreement dated
as of the date hereof (as it may be
amended from time to time, the "Separation
Agreement"), which sets forth the
principal corporate transactions required
to effect the separation of Parent's
businesses into two independent public
companies;
WHEREAS, pursuant to the provisions of the Separation
Agreement, from and after the consummation
of the Merger and the Contribution,
(i) the Piper Jaffray Group will be engaged
in the Piper Jaffray Business, (ii)
the Parent Group will be engaged in the
Parent Business, (iii) the Piper Jaffray
Group will own and control the Piper
Jaffray Assets and assume and be
responsible for the Piper Jaffray
Liabilities, and (iv) the Parent Group will
own and control the Parent Assets and
assume and be responsible for the Parent
Liabilities;
WHEREAS, Section 3.2(c) of the Separation Agreement provides
that prior to the Distribution, each of
Parent and Piper Jaffray shall enter
into this Agreement, which is the Business
Alliance Agreement referred to in the
Separation Agreement;
WHEREAS, Section 2.4 of the Separation Agreement provides,
among other things, that on or before the
Contribution Effective Time, each of
Parent and Piper Jaffray shall enter into,
or cause appropriate members of the
Group of which it is a member to enter
into, such other agreements, certificates
and other documents as may be deemed to be
advisable by Parent in connection
with the Separation; and
WHEREAS, the Parties desire to enter into this Agreement to
set forth the terms of their agreement
regarding certain business alliances,
arrangements, understandings and
relationships between and among them and the
other members of each of their respective
Groups following the completion of the
Separation (the "Alliance"), including
without limitation, the following: (i)
the referral of selected business between
the Groups; (ii) the marketing and
distribution of certain financial products
and services of the Groups; (iii) the
continued joint provision of certain
services by certain members of each Group;
and (iv) certain other matters intended to
facilitate the transition of the
Piper Jaffray Business to the Piper Jaffray
Group set forth below in this
Agreement.
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NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and
agreements set forth herein, and
intending to be legally bound hereby, the
Parties hereby agree as follows:
ARTICLE I
SCOPE OF AGREEMENT
SECTION 1.1 Scope. In furtherance of, and in order to document
in its entirety, the Alliance between the
Parties, each of Parent and Piper
Jaffray agrees to comply, and to cause the
appropriate members of the Group of
which it is a member to comply, with all of
the terms and conditions of this
Agreement and the Business Agreements (as
defined below) contemplated hereby to
which it, or the applicable member of its
Group, is a party.
ARTICLE II
BUSINESS AGREEMENTS
SECTION 2.1 General. Subject to the immediately following
sentence, the Parties currently desire to
enter into the agreements provided for
in this Article II below (the "Business
Agreements") on the terms set forth
below and otherwise on such other terms and
conditions as are customary for
similar business arrangements, but the
Parties agree that the identity and
description of the terms of the Business
Agreements hereunder may be modified
from time to time by mutual agreement of
the Parties. Notwithstanding anything
herein to the contrary, neither Party shall
have any obligation to enter into
any such Business Agreement if the Parties
are unable to reach agreement on the
terms thereof on or prior to the date that
is six months after the Distribution
Date after negotiating in good faith. Each
Business Agreement shall, subject to
Section 5.16 hereof, constitute a separate
and complete agreement between the
Parties with respect to the subject matter
thereof but may reference or
incorporate the terms and conditions of
this Agreement, any other Business
Agreement and/or the Separation Agreement
if and when appropriate.
SECTION 2.2 Investment Funds. The Parties and/or the
appropriate members of each of their
respective Groups shall negotiate in good
faith to enter into Business Agreements
pursuant to which Piper Jaffray shall
offer customers of the Piper Jaffray Group
various investment fund products
currently managed by Parent's asset
management subsidiary on behalf of First
American Funds ("FAF"). The Parties
currently contemplate the following specific
Business Agreements that shall be
negotiated in good faith and entered into by
and between Piper Jaffray and U.S. Bancorp
Asset Management, Inc., a wholly
owned subsidiary of U.S. Bank
("USBAM"):
(a) Money
Market funds for Piper Jaffray Clients. Under
an agreement to be entered into between Piper Jaffray and USBAM,
money
market balances held in various Piper Jaffray Group client
accounts
shall be invested in one or more classes of money market funds of
FAF
managed by USBAM. Such money market funds shall be the
exclusive
non-state specific retail sweep money market funds offered by the
Piper
Jaffray Group during the term of the agreement except as required
by
applicable law and
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regulations including Piper Jaffray's obligation to offer
suitable
investments to its clients.
This agreement shall provide that shares and/or one or more classes
of
FAF will be named or renamed so as to relate to Piper Jaffray and
that
such shares and/or classes shall have distinct pricing and fee
arrangements designed for the Piper Jaffray Group. The Piper
Jaffray
Group shall provide omnibus shareholder account record keeping
such
that transactions for its clients shall be made through a
single
account for each money market fund or class of FAF. USBAM and
Piper
Jaffray also shall enter into other service arrangements related
to
operational and compliance matters in connection with the
investments
in FAF by Piper Jaffray Group clients. The agreement shall provide
for
agreed-upon payments to Piper Jaffray for making FAF available to
Piper
Jaffray Group clients under this arrangement and shall have an
initial
term of two years and be renewable annually.
(b) Long-term
Mutual Funds for Piper Jaffray Clients.
Piper Jaffray shall include the long-term (non-money market)
mutual
funds of
FAF on its preferred list of mutual fund families provided
that Piper Jaffray continues to maintain such a list or any
similar
program created in future and that such FAF funds meet the
criteria
Piper Jaffray applies equally to all long-term mutual funds
considered
for inclusion on such list or in such program. Pursuant to an
existing
agreement between Piper Jaffray and Quasar Distributors, Piper
Jaffray
shall continue to receive commissions and trailer fees based upon
the
investments of Piper Jaffray Group clients in long-term funds of
FAF.
This agreement shall be renewable annually.
(c) Referrals
by Piper Jaffray to USBAM Institutional
Advisory Group. Under an agreement to be entered into between
Piper
Jaffray and USBAM, Piper Jaffray may solicit clients for the
Institutional Advisory Group of USBAM, which manages separate
accounts
for corporations, governmental entities, endowments,
foundations,
unions and other entities. USBAM shall pay a referral fee to
Piper
Jaffray for introductions or leads that result in new clients for
this
USBAM advisory activity. The agreement shall conform to the
applicable
requirements under the Investment Advisers Act of 1940 with respect
to
cash payments for client solicitations and all other legal or
regulatory requirements.
(d) Piper
Private Equity Fund. If the USBAM Institutional
Advisory Group determines that it would like to make available
interests in Private Equity Partners II, LP, a private equity
fund
sponsored by Piper Jaffray, or a similar fund, to clients of
the
Institutional Advisory Group through its affiliate U.S. Bancorp
Investments, Inc. ("USBII"), USBAM, Piper Jaffray and USBII shall
enter
into an agreement that will address the specific obligations on
the
part of Piper Jaffray Private Capital Group, USBAM
Institutional
Advisory Group and USBII as part of this process and shall provide
for
the payment of amounts to the appropriate parties for their
appropriate
services.
SECTION 2.3 Capital Market Services Collaboration. The Parties
and/or the appropriate members of each of
their respective Groups shall
negotiate in good faith to enter into
Business Agreements pursuant to which
Parent and/or members of the Parent Group
shall
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recommend the Piper Jaffray Group as a
preferred provider of capital market
services to clients of the Parent Group.
Such services shall include both (i)
investment banking services and (ii)
investment account services. The investment
banking services shall consist of both (A)
debt capital market transactions
including senior secured, senior unsecured,
subordinated notes, medium term note
programs, brokered CD programs, trust
preferred securities, non-convertible
preferred securities and commercial paper
programs (but excluding any municipal
finance transactions), and (B) equity
capital market transactions including
public equity offerings, public or private
convertible securities, merger and
acquisition transactions and private equity
transactions. The investment account
services shall include services provided by
Piper Jaffray's fixed income capital
markets sales force and corporation cash
management programs. Such agreement or
agreements shall provide for the payment by
the Piper Jaffray Group of referral
fees to the Parent Group if a Parent Group
client uses any of such preferred
provider services of the Piper Jaffray
Group and the same results in a net
profit to the Piper Jaffray Group.
SECTION 2.4 Joint Products and Services. The Parties and/or
the appropriate members of each of the
respective Groups shall negotiate in good
faith to enter into Business Agreements
pursuant to which the Parties shall
jointly provide certain financial products
and services of certain members of
each Group to shared customers of the
Groups. The Parties currently contemplate
that such agreements will include, without
limitation, the following specific
agreements:
(a) Retirement
Solution Plan Product. Under an agreement
to be entered into between Piper Jaffray and U.S. Bank National
Association, a national banking association and a wholly owned
subsidiary of Parent ("U.S. Bank"), Piper Jaffray and U.S. Bank
shall
continue to market and manage the bundled retirement plan product
known
as "Retirement Solution." Specifically, pursuant to the provisions
of
this agreement, Retirement Solution shall continue to be managed by
the
Institutional Trust and Custody group of U.S. Bank ("IT&C"),
and USBAM
and IT&C shall continue to support the Piper Jaffray Group in
its sales
activities relating to Retirement Solution. IT&C and the Piper
Jaffray
Group shall agree upon new procedures and pricing for new
clients,
including procedures for the payment of commissions, and
communication
processes determined to be desirable or necessary in light of
the
post-Separation structure in order to continue to provide high
service
levels to shared clients and to retain this business. Pricing
on
retirement plan customers as of the Merger and the Contribution,
shall
remain unchanged for one year.
(b) Solution
Online Retirement Plan Product. Under an
agreement to be entered into between Piper Jaffray and U.S. Bank,
Piper
Jaffray's financial advisors shall continue to market and IT&C
shall
continue to manage the online bundled retirement plan product known
as
"Solution Online." Neither the management and distribution of
Solution
Online nor the process by which the Piper Jaffray Group
receives
payments for the distribution of Solution Online shall be
fundamentally
affected by the Separation. IT&C and Piper Jaffray shall agree
upon any
modifications that may be necessary or desirable regarding how
the
product is marketed and distributed.
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(c)
Premier
Portfolio Trust Product (Piper Jaffray
Managed Fiduciary Trust Accounts at Parent). Under an agreement to
be
entered into between U.S. Bank and Piper Jaffray, U.S. Bank and
Piper
Jaffray shall continue to provide in partnership a Premier
Portfolio
Trust product, pursuant to which certain of the investment assets
of
the Piper Jaffray Group clients are held in fiduciary trust
accounts at
U.S. Bank while managed by Piper Jaffray Group financial advisors.
This
agreement shall set forth the framework and requirements respecting
the
Premier Portfolio Trust partnership, including the new
technology,
information access and communication processes that will be
necessary
to continue to jointly offer this product following the completion
of
the Separation.
(d) Mortgage
Joint Venture. Piper Jaffray and U.S. Bank
have formed a joint venture for the purpose of satisfying the
mortgage
product needs of Piper Jaffray Group clients.
SECTION 2.5 Settlement, Safekeeping and Other Banking
Services. The Parties and/or the
appropriate members of each of their respective
Groups shall negotiate in good faith to
enter into Business Agreements pursuant
to which U.S. Bank shall provide to the
Piper Jaffray Group's corporate cash
management
