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EXHIBIT 10.6
NYSE CSA FORM 1D
SUBORDINATED LOAN AGREEMENT - CASH
THIS AGREEMENT is entered into this 22nd
day of December 2003, between USB
Holdings, Inc. (the "Lender") and U.S.
Bancorp Piper Jaffray Inc., (the
"Organization").
1. GENERAL - Subject to the terms and conditions hereinafter
set forth, the Organization promises to pay
to the Lender or its assigns, (a) on
October 31, 2008 (the "Scheduled Maturity
Date") at the office of the
Organization, the principal amount of
$180,000,000 plus accrued and unpaid
interest as of the Scheduled Maturity Date
(treating the Scheduled Maturity Date
as the Interest Payment Date for the
purpose of calculating the Interest Rate
applicable to the period since the last
Interest Payment Date) and (b) on
January 2, 2004 and the first business
banking day in Minneapolis, Minnesota of
each calendar quarter thereafter (each such
date, an "Interest Payment Date"),
interest on the principal amount then
outstanding at the Interest Rate. All
payments made by the Organization
hereunder, both principal and interest, shall
be noted in the books and records of the
Lender and shall be conclusive evidence
of the amounts of such payments absent
manifest error. For the purposes of this
Agreement, "Interest Rate" means, for each
Interest Payment Date, an interest
rate per annum equal to the London
Interbank Offer Rate for three-month
Eurodollar deposits, as reported on
Telerate page 3750 two London business days
prior to the immediately preceding Interest
Payment Date (or, in the case of the
first Interest Payment Date, two London
business days prior to the date hereof)
calculated on an actual/360 day basis, plus
150 basis points, such Interest Rate
to be reset on each subsequent Interest
Payment Date.
2. SUSPENDED REPAYMENT
The Organization's obligation to pay the principal amount
hereof on the Scheduled Maturity Date or
any accelerated maturity date shall be
suspended and the obligation shall not
mature for any period of time during
which after giving effect to such payment
(together with (a) the payment of any
other obligation of the Organization
payable at or prior to the payment hereof
and (b) the return of any Secured Demand
Note and the Collateral therefor held
by the Organization and returnable at or
prior to the payment hereof).
(i) in the
event that the Organization is not operating
pursuant to the alternative net capital requirement
provided for in paragraph (a)(1)(ii) of Rule 15c3-1
(the "Rule") under the Securities Exchange Act of
1934, as amended (the "Act"), the aggregate
indebtedness of the Organization would exceed 1200
percent of its net capital as those terms are defined
in the Rule or any successor rule as in effect at the
time payment is to be made, or such other percent as
may be made
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applicable to the Organization at the time of such
payment by the New York Stock Exchange, Inc. (the
"Exchange") or the Securities and Exchange Commission
(the "SEC"), or
(ii)
in the event that the Organization is operating
pursuant to such alternative net capital requirement,
the net capital of the Organization would be less
than 5 percent (or such other percent as may be made
applicable to the Organization at the time of such
payment by the Exchange or the SEC) of aggregate
debit items computed in accordance with Exhibit A to
Rule 15c3-3 under the Act or any successor rule as in
effect at such time, or
(iii) in
the event that the Organization is registered as a
futures commission merchant under the Commodity
Exchange Act (the "CEA"), the net capital of the
Organization (as defined in the CEA or the
regulations thereunder as in effect at the time of
such payment) would be less than 6 percent (or such
other percentum as may be made applicable to the
Organization at the time of such payment by the
Commodity Futures Trading Commission (the "CFTC") of
the funds required to be segregated pursuant to the
CEA and the regulations thereunder, and the foreign
futures or foreign options secured amount less the
market value of commodity options purchased by
customers on or subject to the rules of a contract
market or a foreign board of trade (provided,
however, the deduction for each customer shall be
limited to the amount of customer funds in such
customer's account(s) and foreign futures and foreign
options secured amounts), or the Organization's net
capital would be less than the minimum capital
requirement as defined by the DSRO, or
(iv)
the Organization's net capital, as defined in the
Rule or any successor rule as in effect at the time
of such payment, would be less than 120 percent (or
such other percent as may be made applicable to the
Organization at the time of such payment by the
Exchange or the SEC) of the minimum dollar amount
required by the Rule as in effect at such time (or
such other dollar amount as may be made applicable to
the Organization at the time of such payment by the
Exchange or the SEC), or
(v) in the
event that the Organization is registered as a
futures commission merchant under the CEA and if its
net capital, as defined in the CEA or the regulations
thereunder as in effect at the time of such payment,
would be less than 120 percent (or such other percent
as may be made applicable to the Organization at the
time of such payment by the CFTC) of the minimum
dollar amount required by the CEA or the regulations
thereunder as in effect at such time (or such other
dollar
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amount as may be made applicable to the Organization
at the time of such payment by the CFTC), or
(vi)
in the event that the Organization is subject to the
provisions of Paragraph (a)(6)(v) or (c)(2)(x)(C) of
the Rule, the net capital of the Organization would
be less than the amount required to satisfy the 1000
percent test (or such other percentum test as may be
made applicable to the Organization at the time of
such payment by the Exchange or the SEC) stated in
such applicable paragraph.
(the net capital necessary to enable the
Organization to avoid such suspension
of its obligation to pay the principal
amount hereof being hereinafter referred
to as the "Applicable Minimum Capital") and
during any such suspension the
Organization shall, as promptly as
consistent with the protection of its
customers, reduce its business to a
condition whereby the principal amount
hereof with accrued interest thereon could
be paid (together with (a) the
payment of any other obligation of the
Organization payable at or prior to the
payment hereof and (b) the return of any
Secured Demand Note and the Collateral
therefor held by the Organization and
returnable at or prior to the payment
hereof) without the Organization's net
capital being below the Applicable
Minimum Capital, at which time the
Organization shall repay the principal amount
hereof plus accrued interest thereon on not
less than five days' prior written
notice to the Exchange. The aggregate
principal amount outstanding pursuant to
this Agreement shall mature on the first
day at which under this paragraph the
Organization has an obligation to pay the
principal amount hereof. If pursuant
to the terms hereof the Organization's
obligation to pay the principal amount
hereof is suspended and does not mature,
the Organization agrees (and the Lender
recognizes) that if its obligation to pay
the principal amount hereof is ever
suspended for a period of six months or
more, it will promptly take whatever
steps are necessary to effect a rapid and
orderly complete liquidation of its
business. If payment is made of all or any
part of the principal hereof on the
Scheduled Maturity Date or any accelerated
maturity date and if immediately
after any such payment the Organization's
net capital is less than the
Applicable Minimum Capital, the Lender
agrees irrevocably (whether or not such
Lender had any knowledge or notice of such
fact at the time of any such payment)
to repay to the Organization, its
successors or assigns, the sum so paid, to be
held by the Organization pursuant to the
provisions hereof as if such payment
had never been made; provided, however,
that any suit for the recovery of any
such payment must be commenced within two
years of the date of such payment.
3. SUBORDINATION OF OBLIGATIONS
The Lender irrevocably agrees that the obligations of the
Organization under this Agreement with
respect to the payment of principal and
interest are and shall be fully and
irrevocably subordinate in right of payment
and subject to the prior payment or
provision for payment in full of all claims
of all other present and future creditors
of the Organization whose claims are
not similarly subordinated (claims
hereunder shall rank pari passu with claims
similarly subordinated) and to claims which
are now or hereafter expressly
stated in the instruments creating such
claims to be senior in right of payment
to the claims of the
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class of this claim arising out of any
matter occurring prior to the date on
which the Organization's obligation to make
such payment matures consistent with
the provisions hereof. In the event of the
appointment of a receiver or trustee
of the Organization or in the event of its
insolvency, liquidation pursuant to
the Securities Investor Protection Act of
1970 ("SIPA") or otherwise, its
bankruptcy, assignment for the benefit of
creditors, reorganization whether or
not pursuant to bankruptcy laws, or any
other marshalling of the assets and
liabilities of the Organization, the holder
hereof shall not be entitled to
participate or share, ratably or otherwise,
in the distribution of the assets of
the Organization until all claims of all
other present and future creditors of
the Organization, whose claims are senior
hereto, have been fully satisfied, or
adequate provision has been made
therefor.
4. PERMISSIVE PREPAYMENT
With the prior written approval of the Exchange, the
Organization may, at its option, make
Prepayment of all or any portion of the
principal amount hereof to the Lender prior
to the Scheduled Maturity Date at
any time subsequent to one year from the
effective date of this agreement. No
Prepayment shall be made, however, if after
giving effect thereto (and to all
other payments of principal of outstanding
subordination agreements of the
Organization, including the return of any
Secured Demand Note and the Collateral
therefor held by the Organization, the
maturity or accelerated maturity of which
are scheduled to occur within six months
after the date such Prepayment is to
occur pursuant to the provisions of this
paragraph, or on or prior to the
Scheduled Maturity Date for payment of the
principal amount hereof disregarding
this paragraph, whichever date is earlier)
without reference to any projected
profit or loss of the Organization.
(i) in the
event that the Organization is not operating
pursuant to the alternative net capital requirement
provided for in paragraph (a)(1)(ii) of the Rule, the
aggregate indebtedness of the Organization would
exceed 1000 percent of its net capital as those terms
are defined in the Rule or any successor rule as in
effect at the time such Prepayment is to be made (or
such other percent as may be made applicable at such
time to the Organization by the Exchange or the SEC),
or
(ii)
in the event that the Organization is operating
pursuant to such alternative net capital requirement,
the net capital of the Organization would be less
than 5 percent (or such other percent as may be made
applicable to the Organization at the time of such
Prepayment by the Exchange or the SEC) of aggregate
debit items computed in accordance with Exhibit A to
Rule 15c3-3 under the Act or any successor rule as in
effect at such time, or
(iii) in
the event that the Organization is registered as a
futures commission merchant under the CEA, the net
capital of the Organization (as defined in the CEA or
the regulations thereunder as in effect at the time
of such Prepayment) would be less than 7 percent (or
such other percent as may
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be made applicable to the Organization at the time of
such Prepayment by the CFTC) of the funds required to
be segregated pursuant to the CEA and the regulations
thereunder, and the foreign futures or foreign
options secured amount less the market value of
commodity options purchased by customers of the
Organization on or subject to the rules of a contract
market or a foreign board of trade (provided,
however, the deduction for each customer shall be
limited to the amount of customer funds in such
customer's account(s) and foreign futures and foreign
options secured amounts) or the Organization's net
capital would be less than the minimum capital
requirement as defined by the DSRO, or
(iv)
the Organization's net capital, as defined in the
Rule or any successor rule as in effect at the time
of such Prepayment, would be less than 120 percent
(or such other percent as may be made applicable to
the Organization at the time of such Prepayment by
the Exchange or the SEC) of the minimum dollar amount
required by the Rule as in effect at such time (or
such other dollar amount as may be made applicable to
the Organization at the time of such Prepayment by
the Exchange or the SEC), or
(v) in the
event that the Organization is registered as a
futures commission merchant under the CEA, its net
capital, as defined in the CEA or the regulations
thereunder as in effect at the ti
