Document:

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                                                                    EXHIBIT 10.3

                           INSURANCE MATTERS AGREEMENT

                                 by and between

                                  U.S. Bancorp

                                       and

                             Piper Jaffray Companies

                          Dated as of December 23, 2003

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                  This INSURANCE MATTERS AGREEMENT, dated as of December 23,
2003, 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", and together with Parent, the "Parties"
and each a "Party").

                  WHEREAS, the Board of Directors of Parent has determined that
it is in the best interests of Parent and its stockholders to separate Parent's
existing businesses into two independent companies;

                  WHEREAS, in furtherance of the foregoing, Parent and Piper
Jaffray have entered into a Separation and Distribution Agreement, dated as of
the date hereof (the "Separation and Distribution Agreement"), and other
ancillary agreements that will govern certain matters relating to the Separation
and the relationship of Parent, Piper Jaffray and their respective Subsidiaries
following the Distribution Date; and

                  WHEREAS, pursuant to the Separation and Distribution
Agreement, the Parties have agreed to enter into this Agreement for the purpose
of setting forth certain agreements regarding insurance matters.

                  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 -- Definitions

                  Capitalized terms used in this Agreement that are not defined
in Article I or other provisions of this Agreement shall have the meanings
assigned to them in the Separation and Distribution Agreement.

                  1.1.     "Agreement" means this Insurance Matters Agreement,
including all the Schedules hereto.

                  1.2.     "Current Parent Policies" means Property and Casualty
insurance policies that insure Parent and one or more of its Subsidiaries or
Affiliates and that have policy periods that begin before and end after the
Distribution Date.

                  1.3.     "Other Policies" means Property and Casualty
insurance policies with policy periods that begin and end before the
Distribution Date and that provide insurance coverage to Parent or one or more
of its Subsidiaries or Affiliates as a result of the acquisition of assets or
shares of, or mergers or consolidations with, other Persons that had previously
purchased such policies or that had succeeded to rights to obtain coverage from
such policies prior to the time of the acquisition, merger or consolidation by
or with Parent or one or more of its Subsidiaries or Affiliates.

                  1.4.     "Prior Parent Policies" means Property and Casualty
insurance policies with policy periods that begin and end before the
Distribution Date that provide insurance coverage to Parent or one or more of
its Subsidiaries or Affiliates and that are neither Current Parent Policies nor
Other Policies.

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                  1.5.     "Property and Casualty" means property and casualty
as that term is commonly used in the insurance business and includes but is not
limited to liability policies (such as directors and officers liability
policies, employment practices liability policies, errors and omissions
liability policies, general liability policies), first party property policies,
crime and bond policies, mail policies, Excess SIPIC policies, excess securities
policies, and workers compensation policies.

                     ARTICLE II -- Current Parent Policies

                  2.1.     With respect to the Current Parent Policies listed in
Schedule A to this Agreement, which were issued for the period from August 1,
2003 to August 1, 2004, Parent hereby agrees, to the extent permitted by the
insurance policy or insurance contract and upon request by Piper Jaffray, to
provide the Piper Jaffray Group such insurance with respect to the Piper Jaffray
Liabilities as is afforded by those policies to the extent that Parent has the
right to do so without paying or incurring any additional premium or costs under
those policies. Prior to the currently scheduled expiration date of those
policies, August 1, 2004, unless earlier terminated by the applicable insurer,
Parent shall not cancel, terminate or amend those policies in a manner that
materially and adversely affects coverage for Piper Jaffray or the Piper Jaffray
Group. Prior to the Distribution Date, Piper Jaffray shall use its commercially
reasonable efforts to obtain written confirmation from the insurers that issued
those policies that Piper Jaffray and the Piper Jaffray Group shall continue to
be "Insured(s)" under those policies (as the term "Insured(s)" is defined in
those policies) from the Distribution Date to August 1, 2004. In the event that
Parent does not have the right to make Piper Jaffray and the Piper Jaffray Group
"Insureds" under those policies (or the insurers refuse to provide confirmation
of Parent's right to do so), Piper Jaffray shall at its own expense obtain
replacement coverage (or bear the risk that such coverage is not available under
the Current Parent Policies) and Parent shall not be directly or indirectly
liable for any failure on the part of Piper Jaffray to obtain coverage or
receive reimbursement under such policies from the insurers.

                  2.2.     With respect to the Current Parent Policies listed in
Schedule B to this Agreement, the period of such policies shall be deemed to end
as of the Distribution Date insofar as Piper Jaffray and the Piper Jaffray Group
are concerned, and Piper Jaffray and the Piper Jaffray Group shall have no right
to extend the period for reporting claims, circumstances or occurrences under
such policies. Piper Jaffray shall use commercially reasonable efforts to
obtain, for the period commencing with the Distribution Date, replacement
insurance policies for risks that would otherwise have been covered by such
policies, or shall self-insure such risks and Parent shall not be directly or
indirectly liable for any failure on the part of Piper Jaffray to insure for
such risks.

                  2.3.     With respect to the coverage of the type provided by
Current Parent Policies, Piper Jaffray shall use commercially reasonable efforts
to obtain its own separate replacement policies that provide substantially
equivalent coverage with commercially appropriate limits for the period
commencing with the Distribution Date. Piper Jaffray shall inform Parent about
the replacement policies that it plans to obtain, and, with respect solely to
the first set of replacement policies obtained for the period

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commencing with the Distribution Date, obtain the consent of Parent to the type
of coverage and the limits obtained by Piper Jaffray, provided that Parent may
not unreasonably withhold such consent.

       ARTICLE III -- Rights in Policies with Inception Dates Prior to the
                                Distribution Date

                  3.1.     As of the Distribution Date, Parent and the Parent
Group assign to Piper Jaffray and the Piper Jaffray Group all rights to
insurance coverage provided for Piper Jaffray Liabilities under the Current
Parent Policies, Prior Parent Policies and Other Policies in accordance with the
terms of such policies and applicable principles of law and equity, subject to
the applicable limits of such policies.

                  3.2.     As of the Distribution Date, Parent and the Parent
Group retain all rights to insurance coverage provided for Parent Liabilities
under the Current Parent Policies, Prior Parent Policies and Other Policies in
accordance with the terms of such policies and applicable principles of law and
equity, subject to the applicable limits of such policies.

                  3.3.     For purposes of the exhaustion of any limits that
apply to coverage available under Current Parent Policies, Prior Parent Policies
or Other Policies, amounts shall be allocated to the policies on a first
come/first served basis. That means that amounts covered by such policies shall
be allocated to such policies in the order in which such amounts were paid by or
on behalf of Parent or the Parent Group, or Piper Jaffray or the Piper Jaffray
Group, with respect to the Parent Liabilities or the Piper Jaffray Liabilities,
respectively. Where the policies provide coverage with respect to the Parent
Liabilities or the Piper Jaffray Liabilities for amounts that are not paid by or
on behalf of Parent or the Parent Group, or Piper Jaffray or the Piper Jaffray
Group, such as for example in the case of first party coverage for the value of
property that is destroyed but not replaced, amounts shall be allocated to
policies in the order in which the relevant losses occurred.

            ARTICLE IV -- Self-Insured Retentions and Related Matters

                  4.1.     With respect to Parent Liabilities, Parent shall pay
or cause to be paid any self-insured retentions, deductibles, retrospective
premiums or other amounts payable by an insured that apply under Current Parent
Policies, Prior Parent Policies or Other Policies. With respect to such
liabilities, Parent shall also pay amounts that are not otherwise covered by the
Current Parent Policies, Prior Parent Policies or Other Parent Policies. In
addition, to the extent that there is any obligation after the Distribution Date
to provide or continue to provide security or collateral to any insurer with
respect to Parent Liabilities, Parent shall provide or cause to be provided such
security or collateral and pay or cause to be paid the cost of doing so.

                  4.2.     With respect to Piper Jaffray Liabilities, Piper
Jaffray shall pay or cause to be paid any self-insured retentions, deductibles,
retrospective premiums or other amounts payable by an insured that apply under
Current Parent Policies, Prior Parent Policies or Other Policies. With respect
to such liabilities, Piper Jaffray shall also pay
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amounts that are not otherwise covered by the Current Parent Policies, Prior
Parent Policies or Other Parent Policies. In addition, to the extent that there
is any obligation after the Distribution Date to provide or continue to provide
security or collateral to any insurer with respect to Piper Jaffray Liabilities,
Piper Jaffray shall provide or cause to be provided such security or collateral
and pay or cause to be paid the cost of doing so.

                  4.3.     To the extent that Parent continues after the
Distribution Date to make any payments or incur any costs that Piper Jaffray is
obligated to make or incur under Section 4.2, for any reason, including as a
result of contractual obligations or for the purpose of ensuring a smooth
transition, Piper Jaffray shall promptly reimburse Parent for the amount of such
payments or costs. Similarly, to the extent that Piper Jaffray continues after
the Distribution Date to make any payments or incur any costs that Parent is
obligated to make or incur under Section 4.1, for any reason, including as a
result of contractual obligations or for the purpose of ensuring a smooth
transition, Parent shall promptly reimburse Piper Jaffray for such payments or
costs.

                  4.4.     To the extent that Parent continues after the
Distribution Date to provide security or collateral to any insurer with respect
to Piper Jaffray Liabilities, Piper Jaffray shall: (a) use commercially
reasonable efforts, in cooperation with Parent, to persuade the insurer to
release Parent from such obligation and to substitute security or collateral
from Piper Jaffray; (b) to the extent requested to do so by Parent, until Parent
is released from such obligations, provide Parent at the expense of Piper
Jaffray with equivalent security or collateral; (c) reimburse Parent for the
cost of continuing to provide such security or collateral; and (d) to the extent
not satisfied by the security or collateral contemplated by subsection (b), at
Parent's option either pay on behalf of Parent any collateral or security
amounts that become due with respect to Piper Jaffray Liabilities or promptly
reimburse Parent for security or collateral amounts paid by Parent with respect
to such liabilities.

                  4.5.     For purposes of the exhaustion of any limits that
apply to self-insured retentions, deductibles, retrospective premiums or other
amounts payable by an insured that apply under Current Parent Policies, Prior
Parent Policies or Other Policies, amounts shall be allocated to such limits on
a first come/first served basis. That means that amounts shall be allocated to
such limits in the order in which such amounts were paid by or on behalf of
Parent or the Parent Group, or Piper Jaffray or the Piper Jaffray Group, with
respect to the Parent Liabilities or the Piper Jaffray Liabilities,
respectively. Where the limits with respect to the Parent Liabilities or the
Piper Jaffray Liabilities apply to amounts that are not paid by or on behalf of
Parent or the Parent Group, or Piper Jaffray or the Piper Jaffray Group, such as
for example in the case of first party coverage for the value of property that
is destroyed but not replaced, amounts shall be allocated to such limits in the
order in which the relevant losses occurred.

                  4.6.     Piper Jaffray, on its own behalf and on behalf of the
Piper Jaffray Group, and their directors, officers and employees, hereby agrees
that insurance policies issued by Midwest Indemnity Inc. do not provide any
insurance coverage to Piper Jaffray or any member of the Piper Jaffray Group or
any of the directors, officers or employees of the foregoing in their capacity
as such.
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                  4.7.     With respect to Piper Jaffray Liabilities that are
insured under Current Parent Policies, Other Policies, and Prior Parent Policies
issued by commercial insurers who are entitled to reinsurance or indemnification
for such liabilities in whole or in part from Parent or a member of the Parent
Group, Piper Jaffray shall: (a) use commercially reasonable efforts, in
cooperation with Parent, to persuade the insurer to release Parent and the
Parent Group from such reinsurance or indemnification obligation and substitute
a reinsurance or indemnification obligation from Piper Jaffray or one of the
Piper Jaffray Subsidiaries; (b) until Parent and the Parent Group are released
from such obligations, provide Parent at the expense of Piper Jaffray with
commercially reasonable security or collateral; and (c) to the extent not
satisfied by the security or collateral contemplated by subsection (b), at
Parent's option either pay on behalf of Parent any reinsurance or
indemnification amounts that become due with respect to Piper Jaffray
Liabilities or promptly reimburse Parent for reinsurance or indemnification
amounts paid by Parent or the Parent Group with respect to such liabilities.

      ARTICLE V - Cooperation With Respect to Claims and Insurance Matters

                  5.1.     With respect to Parent Liabilities, Parent shall have
the right and the responsibility to provide appropriate notice to insurers,
administer claims to the extent necessary or appropriate, submit claims to
insurers for payment, negotiate coverage questions that may arise, and to
arbitrate, litigate and/or compromise coverage disputes and Parent shall not
incur any liability for the failure to do any of the above.

                  5.2.     With respect to Piper Jaffray Liabilities, with
respect only to Current Parent Policies and Prior Parent Policies, Parent shall
have the right but not the obligation to provide appropriate notice to insurers,
submit claims to insurers for payment, negotiate coverage questions that may
arise, and to arbitrate, litigate and/or compromise coverage disputes. Piper
Jaffray shall give prompt written notice to Parent of all claims or losses that
are potentially eligible for coverage under Current Parent Policies and Prior
Parent Policies or that have the potential to reduce deductibles or self-insured
retentions applicable to such policies. Piper Jaffray shall reimburse Parent for
out-of-pocket costs, expenses and fees, including attorneys fees, reasonably
incurred by Parent for services performed by Parent pursuant to this section in
connection with Piper Jaffray Liabilities. In the event that Parent elects not
to exercise its rights under this section with respect to particular claims or
losses after having received notice of such claims or losses from Piper Jaffray,
Parent shall promptly notify Piper Jaffray of that election so that Piper
Jaffray may exercise its rights and responsibilities with respect to such claims
or losses under section 5.3, below.

                  5.3.     With respect to Other Policies, and to the extent
that Parent chooses not to do so under Current Parent Policies and Prior Parent
Policies, Piper Jaffray shall have the right and the responsibility with respect
to Piper Jaffray Liabilities to provide appropriate notice to insurers,
administer claims to the extent necessary or appropriate, submit claims to
insurers for payment, negotiate coverage questions that may arise, and to
arbitrate, litigate and/or compromise coverage disputes.
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                  5.4.     (a) Parent and Piper Jaffray shall cooperate with
each other, and use commercially reasonable efforts to take or cause to be taken
all appropriate actions required of such Party, and to do or cause to be done
all things necessary or appropriate to effectuate the provisions and purposes of
this Agreement and the transactions contemplated hereby, including the execution
of any additional documents or instruments of any kind, the obtaining of
consents which may be reasonably necessary or appropriate to carry out any of
the provisions hereof, and the taking of all such other actions as such Party
may reasonably be requested to take by the other Party from time to time
consistent with the terms of this Agreement; provided however, that nothing
herein shall require Parent to incur any additional premiums or costs with
respect to the Current Parent Policies, Prior Parent Policies or Other Policies.

                  (b)      By way of enumeration of and not of limitation:

                           (i)      each Party shall provide copies of insurance
policies (to the extent that copies are available) or evidence of the existence
of insurance (where actual copies of the policies are not available), to the
other to the extent reasonably required to effectuate the provisions and
purposes of this Agreement;

                           (ii)     each Party shall provide the other with
information reasonably necessary or helpful to either Party in connection with
its efforts to obtain insurance coverage pursuant to and in accordance with the
terms of this Agreement or to purchase new insurance policies, including
information about the relevant portions of prior underwriting submissions, past
and current claims and losses, subject to any confidentiality restrictions
regarding such information, claims and losses;

                           (iii)    each Party shall provide information to the
other about exhaustion of policy limits and amounts applied to the limits of
policies or self-insured retentions or other limits which are discussed in this
Agreement that are potentially applicable to both, and the basis for the
application of such amounts to such limits, so that each Party can monitor the
exhaustion of such limits; and

                           (iv)     subject to Sections 5.2 and 5.3, each Party
shall execute further assignments or allow the other to pursue claims in its
name (subject to appropriate written notice of the fact that it is doing so and
a description of the reasons why it is doing so), including by means of
arbitration or litigation, to the extent necessary or helpful to the other
Party's efforts to obtain insurance coverage to which it is entitled under this
Agreement.

                  5.5.     Parent and Piper Jaffray shall reimburse each other
for out-of-pocket costs, expenses and fees, including but not limited to
attorneys' fees, reasonably incurred in connection with providing cooperation
and assistance to the other pursuant to Section 5.4. Where particular costs,
expense or fees are expected to exceed $10,000, Parent and Piper Jaffray shall
use commercially reasonable efforts to provide estimates of such costs, expenses
or fees to each other prior to the time that they are incurred.
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                  5.6.     In the event of any arbitration or litigation with
any insurers concerning any Current Parent Policy, Prior Parent Policy or Other
Policy that potentially provides coverage for both Parent Liabilities and Piper
Jaffray Liabilities (as determined in good faith by the Party which is
initiating or the subject to such arbitration or litigation), Parent and Piper
Jaffray shall provide prompt written notice to each other of the initiation of
such arbitration or litigation. In the event that such an arbitration or
litigation is initiated by Parent or Piper Jaffray, each Party shall notify the
other in writing at least 60 days prior to the initiation of such proceeding
(unless it is not reasonably possible to do so without prejudicing the effort of
such Party to obtain coverage). The Party receiving any such notice pursuant to
this Section 5.6 shall preserve the confidentiality of that information and use
it for no purpose other than conferring with the other Party and, subject to
Section 5.2, considering whether or not it should join that proceeding as a
party or an amicus, or institute another proceeding against one or more insurers
in the same or some different forum at some time after the first proceeding has
been initiated.

                  5.7.     With respect to the application of the first
come/first served principles set forth in Sections 3.3 and 4.5, Parent and the
Parent Group, and Piper Jaffray and the Piper Jaffray Group, shall act in good
faith and avoid taking any actions for the purpose or with the intention of
accelerating or delaying claims payments or losses in order to obtain some
advantage with respect to the exhaustion of applicable limits. In addition,
Piper Jaffray and the Piper Jaffray Group shall not enter into any written
settlement agreement with any insurer that has the effect of reducing limits
that would otherwise be potentially available under this Agreement to Parent or
the Parent Group without first giving Parent at least 60 days advance written
notice of its intention to enter into such settlement accompanied by a copy of
the proposed settlement so that the Parent may have an opportunity to consider
the impact of such proposed settlement on its interests. Parent and Piper
Jaffray agree to consult with each other and negotiate in good faith about any
such impact.

                  5.8.     Notwithstanding anything in this Agreement to the
contrary (including Section 5.7), neither Parent nor any member of the Parent
Group shall have any right to provide any release under a Current Parent Policy,
a Prior Parent Policy or any Other Policy with respect to any rights that Piper
Jaffray or any member of the Piper Jaffray Group may have under that policy
under this Agreement, without the prior written consent of Piper Jaffray.

                  5.9.     Notwithstanding anything in this Agreement to the
contrary (including Section 5.7), neither Piper Jaffray nor any member of the
Piper Jaffray Group shall have any right to provide any release under a Current
Parent Policy, a Prior Parent Policy or an Other Policy with respect to any
rights that Parent or any member of the Parent Group may have under that policy
under this Agreement, without the prior written consent of Parent.

                  5.10.    Parent and Piper Jaffray agree to preserve the
confidentiality of any information relating to claims and losses, and efforts to
recover insurance therefore in
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accordance with the provisions of Section 6.8 of the Separation and Distribution
Agreement.

                   ARTICLE VI -- Certain Specified Liabilities

                  6.1.     Piper Jaffray has entered into a settlement agreement
(the "Global Settlement") with certain federal and state regulators relating to
alleged conflicts of interest or other allegedly wrongful acts involving
relationships between securities analysis and investment banking services. In
the event that the Global Settlement is approved, Piper Jaffray will become
obligated to pay (a) fines and penalties in the amount of $12.5 million; (b) a
restitution payment in the amount of $12.5 million; and (c) $7.5 million for the
cost of independent market research. Piper Jaffray has established a reserve on
its books in the amount of $32.5 million to pay these amounts. In connection
with the Contribution, Parent has contributed capital to Piper Jaffray to enable
it to establish this reserve. In the event that any insurer provides coverage to
Parent, any Parent Subsidiary, Piper Jaffray or any Piper Jaffray Subsidiary for
all or any part of this $32.5 million amount or any defense costs paid in
connection with the investigation conducted by the regulators or the negotiation
of a settlement with the regulators, the amount of such insurance proceeds, net
of the costs, expenses and fees (including attorneys' fees) actually incurred in
connection with the recovery of such proceeds, shall be allocated as specified
in Sections 6.3 and 6.4.

                  6.2.     In addition to the claims described in Section 6.1,
the Parties have agreed that in the event insurance recoveries are received or
paid out in respect of any Specified Liabilities (as defined in the Separation
and Distribution Agreement), the Parties shall allocate such recoveries (net of
the costs, expenses and fees (including attorneys' fees) actually incurred in
connection with the recovery of such proceeds) in accordance with Section 6.3.

                  6.3.     Except as provided in Section 6.4, the insurance
proceeds received with respect to (1) the Global Settlement, (2) any defense
costs paid in connection with the investigation conducted by the regulators or
the negotiation of a settlement with the regulators, or (3) any Specified
Liabilities, in each case, net of any costs, expenses and fees (including
attorneys' fees) actually incurred in connection with the recovery of such
proceeds, shall be allocated as follows:

                  (a)      Parent and Piper Jaffray shall first be reimbursed
for any out-of-pocket defense costs that each actually incurred in connection
with such Specified Liabilities (if the insurance recoveries with respect to
Global Settlement and Specified Liabilities are not sufficient to reimburse each
for the full amount of its out-of-pocket defense costs, the recoveries shall be
shared in proportion to the amount of out-of-pocket defense costs actually paid
by each with respect to the Specified Liabilities);

                  (b)      to the extent that there are any remaining insurance
recoveries after Parent and Piper Jaffray have been reimbursed for their defense
costs pursuant to subsection (a), such amounts shall next be used to reimburse
Piper Jaffray for any settlement or judgment amounts that it has paid in
connection with Specified Liabilities
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                                      -9-

that were not indemnified by Parent as a result of exhaustion of the $17.5
million maximum limit on Parent's indemnification obligation for such
liabilities; and

                  (c)      to the extent that there are any remaining insurance
recoveries after allocations have been made pursuant to subsections (a) and (b)
above, such remainder shall be allocated and belong to Parent. Piper Jaffray
shall, promptly upon the receipt of any payment of all or any portion of such
remainder, pay such amount over to Parent. Until making such payment to Parent,
Piper Jaffray shall hold such amounts in trust for Parent and not for its own
account.

                  6.4.     In the event of a Change in Control of Piper Jaffray,
any net insurance proceeds received with respect to the Global Settlement that
have not already been paid to or on behalf Piper Jaffray pursuant to section 6.3
as of the effective date of such Change in Control shall belong to Parent, and
Piper Jaffray shall have no right to receive or benefit from any portion of such
proceeds, including as an element in the calculations set forth in Section 6.3.
Piper Jaffray shall, promptly upon the receipt of any payment of or receipt of
the benefit of any payment on its behalf of all or any portion of such net
insurance proceeds, pay such amount over to Parent. Until making such payment to
Parent, Piper Jaffray shall hold such amounts in trust for Parent and not for
its own account.

                         ARTICLE VII - Other Provisions

                  7.1.     Notices. All notices, requests and other
communications to any Party hereunder shall be in writing (including facsimile
transmission) and shall be given (i) by personal delivery to the appropriate
address as set forth below (or at such other address for the Party as shall have
been previously specified in writing to the other Party), (ii) by reliable
overnight courier service (with confirmation) to the appropriate address as set
forth below (or at such other address for the Party as shall have been
previously specified in writing to the other Party), or (iii) by facsimile
transmission (with confirmation) to the appropriate facsimile number set forth
below (or at such other facsimile number for the Party as shall have been
previously specified in writing to the other Party) with follow-up copy by
reliable overnight courier service the next Business Day:

                  (a)      if to Piper Jaffray, to:

                           Piper Jaffray Companies
                           800 Nicollet Mall
                           Minneapolis, Minnesota 55402
                           Attention: General Counsel
                           Fax: (612) 303-1772

                  (b)      if to Parent, to:
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                           U.S. Bancorp
                           800 Nicollet Mall
                           Minneapolis, Minnesota 55402
                           Attention: General Counsel
                           Fax: (612) 303-0898

All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m.
(Minneapolis, Minnesota time) and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.

                  7.2.     Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the Parties. Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the Party entitled to the benefits thereof only by a
written instrument signed by the Party granting such waiver, but such waiver or
the failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. This Agreement shall not be
considered as an attempted assignment of any policy of insurance or as a
contract of insurance and shall not be construed to waive any right or remedy of
any member of the Parent Group in respect of any insurance policy or any other
contract or policy of insurance.

                  7.3.     Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same agreement.

                  7.4.     Entire Agreement. The Separation and Distribution
Agreement, this Agreement, the other Ancillary Agreement and the Schedules
hereto constitute the entire agreement between the parties hereto with respect
to the subject matter hereof, and supersede and cancel all prior agreements,
negotiations, correspondence, undertakings, understandings and communications of
the parties, oral and written, with respect to the subject matter hereof.

                  7.5.     Assignment. This Agreement may not be assigned by
either Party without the written consent of the other Party and any attempted
assignment shall be null and void.

                  7.6.     Binding Nature; Third-Party Beneficiaries. This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person or Persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
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                  7.7.     Severability. This Agreement shall be deemed
severable; the invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of this Agreement or
of any other term hereof, which shall remain in full force and effect, for so
long as the economic or legal substance of the transactions contemplated by this
Agreement is not affected in any manner materially adverse to any Party. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, each Party agrees that such
restriction may be enforced to the maximum extent permitted by applicable law,
and each Party hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction. The
Parties acknowledge that they intend to allocate financial obligations without
violating any laws regarding insurance, self-insurance or other financial
responsibility, or breaching any terms, conditions or provisions of any
insurance policies. If it is determined that any action undertaken pursuant to
the Separation and Distribution Agreement, this Agreement or any other Ancillary
Agreement is violative of any insurance, self-insurance or related financial
responsibility law or regulation or any term, condition or provision of any
insurance policy, the parties agree to work together to do whatever is necessary
to comply with such law or regulation or insurance policy term condition or
provision while trying to accomplish, as much as possible, the allocation of
financial obligations as intended in the Separation and Distribution Agreement,
this Agreement and any other Ancillary Agreement.

                  7.8.     Choice of Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflicts or choice of laws, or any other law that would
make the laws of any jurisdiction other than Delaware applicable.

                  7.9.     Reimbursement. In order to obtain reimbursement of
amounts due under this Agreement, Parent or Piper Jaffray, as the case may be,
shall send a written request for such reimbursement in accordance with Section
7.1, together with such information as is reasonably required to support its
request for reimbursement; provided, however, that to the extent this Agreement
contemplates the automatic reimbursement of or payment with respect to certain
matters, no notice shall be required. Payment shall be due 30 days after receipt
of such request and supporting information or promptly if no notice is required.
If there are questions or disputes about certain amounts for which reimbursement
is requested, payment should be made on a timely basis with respect to other
amounts. With respect to all amounts that are ultimately determined to be owed
under this Agreement -- either by agreement or through litigation -- but that
were not paid in full within 30 days after the date of receipt of the original
request for reimbursement and supporting information or promptly if no notice is
required, interest at the prime rate published by Citibank N.A. from time to
time, compounded monthly, shall be owed for the period beginning from 30 days
after the date of receipt of the original request for reimbursement and
supporting information, or [10] days if no notice is required until the date of
payment.

                  7.10.    Right of Setoff. With respect only to amounts that
may become due pursuant to and in accordance with the terms of this Agreement,
Parent and the
<PAGE>

                                      -12-

Parent Subsidiaries may deduct from, set off, hold back or otherwise reduce in
any manner whatsoever against any such amounts Parent or the Parent Subsidiaries
or their Affiliates may owe to or hold for the benefit of Piper Jaffray, the
Piper Jaffray Subsidiaries, or their respective Affiliates any such amounts owed
by Piper Jaffray or the Piper Jaffray Subsidiaries or their respective
Affiliates to Parent or the Parent Subsidiaries or their respective Affiliates.
In no event shall Parent and the Parent Subsidiaries deduct from, set off, hold
back or otherwise reduce any such amounts from accounts of, or funds on deposit,
of Piper Jaffray, the Piper Jaffray Subsidiaries, or their respective Affiliates
with Parent and the Parent Subsidiaries.

                  7.11.    Representations. Parent represents on behalf of
itself and each other member of the Parent Group and Piper Jaffray represents on
behalf of itself and each other member of the Piper Jaffray Group as follows:

                  (a)      each such Person has the requisite corporate or other
         power and authority and has taken all corporate or other action
         necessary in order to execute, deliver and perform this Agreement; and

                  (b)      this Agreement has been duly executed and delivered
         by such Person and constitutes a valid and binding agreement of it
         enforceable in accordance with the terms thereof (assuming the due
         execution and delivery thereof by the other Party).

                  7.12.    No Liability. Piper Jaffray does hereby, for itself
and as agent for each other member of the Piper Jaffray Group, agree that no
member of the Parent Group or any Parent Indemnitee shall have any Liability
whatsoever as a result of the insurance policies and practices of Parent and its
Subsidiaries as in effect at any time prior to the Distribution Time, including
as a result of the level or scope of any such insurance, the creditworthiness of
any insurance carrier, the terms and conditions of any policy, the adequacy or
timeliness of any notice to any insurance carrier with respect to any claim or
potential claim or otherwise.

                  7.13.    Headings. The table of contents, and the article and
other headings contained in this Agreement are inserted for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
<PAGE>

                                      -13-

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.

                                             U.S. Bancorp
                                             By: /s/ Lee R. Mitau
                                                 -------------------------------
                                                 Name: Lee R. Mitau
                                                 Title: Executive Vice President

                                             Piper Jaffray Companies
                                             By: /s/ James L. Chosy
                                                 -------------------------------
                                                 Name: James L. Chosy
                                                 Title: Secretary<PAGE>

                                                                    EXHIBIT 10.4

                           BUSINESS ALLIANCE AGREEMENT

                                 by and between

                                  U.S. BANCORP

                                       and

                             PIPER JAFFRAY COMPANIES

                          Dated as of December 23, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>
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
</TABLE>

EXHIBIT A -- Alliance Managers

                                       -i-
<PAGE>

                           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.

                                      -1-
<PAGE>

                  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

                                      -2-
<PAGE>
         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

                                      -3-
<PAGE>
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.

                                      -4-
<PAGE>
                  (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 clients settlement, safekeeping and other banking services. The
Parties expect that the use of such settlement services by such clients of the
Piper Jaffray Group will decline over the term of this Agreement as the Piper
Jaffray Group transitions its customers to alternative settlement services. The
Parties currently contemplate that such agreements will include, without
limitation, the following specific agreements:

                  (a)      Basis Point CDs, Commercial Paper, Bankers
         Acceptances. U.S. Bank shall provide certain operational support to the
         Piper Jaffray Group in connection with the Basis Point CD product,
         including, for example, providing the Piper Jaffray Group with credit
         advice, statements of position and confirmations regarding daily
         remittance amounts. Such support shall further provide that the Piper
         Jaffray Group shall promptly provide U.S. Bank with certain information
         and documentation to enable U.S. Bank to provide such operational
         assistance, and the Piper Jaffray Group shall be responsible for late
         fees, penalties and other fees that may arise in connection with the
         provision of this operational assistance.

                  (b)      Safekeeping and Bond Accounting Services. U.S. Bank
         shall provide safekeeping and bond accounting services to its customers
         who purchase from or sell to the Piper Jaffray Group fixed income
         products. These services shall be substantially identical to the
         services U.S. Bank provides to its customers that transact with other
         independent, third party broker-dealers, and these services shall be
         governed by agreements that are substantially identical to the
         agreements between U.S. Bank and its customers that transact with other
         independent, third party broker-dealers. Such agreements shall further
         provide that the Piper Jaffray Group shall promptly provide U.S. Bank
         with certain information and documentation to enable U.S. Bank to
         provide such operational assistance, and the Piper Jaffray Group shall
         be responsible for late fees, penalties and other fees that may arise
         in connection with the provision of this operational assistance.

                                      -5-
<PAGE>
                  (c)      Automated Clearing House Cash Settlement Services.
         Pursuant to an existing agreement, U.S. Bank shall continue to accept
         Automated Clearing House ("ACH") files from members of the Piper
         Jaffray Group to facilitate same-day and/or next day debits and credits
         to the demand deposit accounts maintained at U.S. Bank and other
         financial institutions by Piper Jaffray Group customers. The Piper
         Jaffray Group's ability to add new accounts to such ACH files and the
         gradually declining ACH credit exposure shall be consistent with the
         limits mutually agreed upon by U.S. Bank and the Piper Jaffray Group
         which shall be documented in a separate agreement. ACH services shall
         be offered at the aforementioned agreed upon credit limits subject to
         no material adverse change in the financial condition of the Piper
         Jaffray Group. Standard fee arrangements and other terms and conditions
         shall apply to such ACH activity.

                  (d)      Credit Lines. U.S. Bank shall provide the Piper
         Jaffray Group demand lines of credit, which shall be collateralized by
         marketable securities. Additionally, U.S. Bank shall provide the Piper
         Jaffray Group a daylight overdraft line and a day loan line in the
         amounts mutually agreed upon by U.S. Bank and the Piper Jaffray Group
         which shall be documented in a separate agreement and also be subject
         to no material adverse change in the financial condition of Piper
         Jaffray.

                  SECTION 2.6 Customer Information Sharing and Access. The
Parties and/or the appropriate members of each of their respective Groups shall
negotiate in good faith and enter into Business Agreements pursuant to which the
Parent Group shall share with the Piper Jaffray Group certain information
regarding certain shared customers to the extent permitted by applicable law and
such customers. The Parties currently contemplate that such agreements will
include, without limitation, the following specific agreements:

                  (a)      Parent Group Services (Information Sharing). Under an
         agreement to be entered into between U.S. Bank and Piper Jaffray,
         subject to prior, written customer consent, U.S. Bank shall provide
         Piper Jaffray on a regular basis, information regarding the accounting,
         activity and status of the demand deposit and safekeeping accounts of
         their shared customers. Such information shall be provided under terms
         and conditions that are substantially similar to the terms and
         conditions that govern U.S. Bank's provision of such information to
         other independent, third party broker-dealers or recipients of this
         information.

                  (b)      SAR Access. Under an agreement to be entered into
         between U.S. Bank and Piper Jaffray, subject to any necessary consents,
         U.S. Bank shall provide Piper Jaffray with access to information on
         U.S. Bank's SAR (Sysout Archival and Retrieval) system until the
         conversion of the information to a new system is complete.

                  SECTION 2.7 Securities Dealer Services. U.S. Bancorp Piper
Jaffray, Inc., a wholly owned subsidiary of Piper Jaffray, has entered into a
certain Dealer Agreement with USBII dated as of April 21, 2003, which agreement
shall continue in full force and effect following completion of the Separation
in accordance with it terms. Such agreement provides that Piper Jaffray's fixed
income trading desk shall provide certain services to USBII relating to the
purchase and sale of fixed income securities products to USBII's customers.

                                      -6-
<PAGE>
                  SECTION 2.8 Transition Matters. The Parties and/or the
appropriate members of each of their respective Groups shall negotiate in good
faith and enter into such agreements relating to the transition of the Piper
Jaffray Business, Piper Jaffray Assets and Piper Jaffray Liabilities to the
Piper Jaffray Group as may be jointly determined by the Parties to be necessary
or desirable. The Parties currently contemplate that such agreements will
include, without limitation, the following specific agreements:

                  (a)      Structured Notes Program Modifications. USBII has two
         series of structured notes issued and outstanding, consisting of (i)
         USBI Trust, Series 2002, and (ii) USBI Trust, Series 1998D. The Piper
         Jaffray Group will remain responsible for remarketing and
         administrative services for the structured notes and the Parent Group
         will continue to act as guarantor and trustor. The Parties shall cause
         all necessary amendments to existing agreements reflecting such duties
         to be executed and delivered at or prior to the Contribution Effective
         Time.

                   (b)      Third Party Vendor Contracts. The Parties and/or the
         appropriate members of each of their respective Groups shall enter into
         an agreement or agreements on or prior to the Contribution Effective
         Time that allocate the use of, and payment responsibility for, products
         and services under various third party contracts including
         telecommunications, data communications, network and market data. In
         situations where a contract is currently in the name of one or more
         members of only one Group and none of the members of the other Group
         are parties thereto, but members of both Groups are sharing the
         applicable products or services, such agreement or agreements shall (i)
         specify a method for notifying third party vendors which Party shall
         continue to use the products or services and become solely responsible
         for payments therefor and (ii) obligate such responsible Party to
         indemnify the other Party from and against any further liability under
         the related third party contract.

                  (c)      Prime Account Processing. U.S. Bank shall continue to
         process Piper Jaffray prime accounts until conversion to new system can
         be completed.

                  (d)      Daily Confirms Formatted, Printed and Mailed. U.S.
         Bank shall continue to format, print and mail Piper Jaffray's daily
         confirms until this function is outsourced to a third party vendor,
         which shall not exceed four weeks from the date of the Merger and
         Contribution.

                  (e)      Network Equipment Room Engineering Services. U.S.
         Bancorp shall provide engineering services to support Piper Jaffray's
         portion of the network equipment room on the 8th floor of the 800
         Nicollet Mall, Minneapolis, MN location from the date of the Merger and
         Contribution until the earlier of February 29, 2004 or a third party
         service provider engaged by Piper Jaffray takes over such
         responsibilities.

                                      -7-
<PAGE>
                                   ARTICLE III

                               ALLIANCE MANAGEMENT

                  SECTION 3.1 Alliance Managers. Each Party shall name one or
more representatives to be its alliance manager for this Agreement and each
other Business Agreement contemplated hereunder (collectively, the "Alliance
Managers"). The initial Alliance Managers for each Party are listed in attached
Exhibit A hereto. Either Party may replace any of its Alliance Managers at any
time upon reasonable advance notice to the other.

                  SECTION 3.2 Meetings. Meetings of the Alliance Managers for
each Business Agreement shall be held from time to time as agreed by the
Alliance Managers, but not less than once every calendar quarter. Such meetings
may be conducted either in person or by telephone.

                  SECTION 3.3 Responsibilities. The Alliance Managers shall be
responsible for understanding the full scope of the Alliance. The Alliance
Managers shall further be responsible for engaging the appropriate
representatives of their respective companies to allow the Parties to meet their
obligations hereunder. The responsibilities of the Alliance Managers shall
include, but shall not be limited to, the following:

                  (a)      Overall management of the collaborative Alliance of
         the Parties as contemplated by this Agreement, the other Business
         Agreements and the Separation Agreement; and

                  (b)      The responsibility to attempt to resolve
         expeditiously any conflict between or among the Parties and/or other
         members of each Group related to this Agreement and/or the other
         Business Agreements.

                                   ARTICLE IV

                              TERM AND TERMINATION

                  SECTION 4.1 Term. This Agreement shall commence at the
Contribution Effective Time and shall continue for two (2) years thereafter (the
"Term") unless earlier terminated by either Party as permitted under the
provisions of this Agreement.

                  SECTION 4.2 Termination. (a) This Agreement may be terminated
for cause by either Party if the other Party is in breach of any of its material
obligations under this Agreement and fails to remedy such breach within thirty
(30) days of receipt of a written notice by the other Party that specifies the
material breach.

                  (b)      Either Party may terminate this Agreement, which
termination shall occur immediately, if:

                           (i)      the other Party or any significant
                  Subsidiary of such Party shall make an assignment for the
                  benefit of creditors;

                                      -8-
<PAGE>
                           (ii)     the other Party or any significant
                  Subsidiary of such Party shall petition or apply to any
                  tribunal for the appointment of a trustee or receiver of it,
                  or of any substantial part of its assets, or commence any
                  proceeding relating to it under any bankruptcy,
                  reorganization, arrangement, insolvency, readjustment of debt,
                  dissolution or liquidation law of any jurisdiction whether now
                  or hereafter in effect;

                           (iii)    any bankruptcy, insolvency, receivership or
                  similar petition or application is filed, or any proceedings
                  are commenced against the other Party or any significant
                  Subsidiary of such Party and the other Party or any
                  significant Subsidiary of such Party by any act indicates its
                  approval thereof, consent thereto, or acquiescence therein, or
                  any order is entered appointing a trustee or receiver,
                  adjudicating the other Party bankrupt or insolvent, or
                  approving the petition in any such proceedings and such order
                  remains unstayed or undischarged for more than sixty (60)
                  days; or

                           (iv)     any order is entered in any proceedings
                  against the other Party or any significant Subsidiary of such
                  Party decreeing the dissolution of the other Party or such
                  significant Subsidiary and such order remains unstayed or
                  undischarged for more than sixty (60) days.

                  (c)      Either Party may terminate this Agreement upon
written notice in the event of a Change of Control (defined below), provided
that the Party undergoing the Change of Control shall use its reasonable best
efforts to notify the other Party of such event at the earliest time that it is
legally permitted and practically able to do so. As used herein, "Change of
Control" means, with respect to either Party: (1) the acquisition by any Person
(it being understood that the use of the term "Person" in this definition shall
be deemed to include any group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act")) of Persons) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act for the purposes of this definition) of securities of such Party
where such acquisition causes such Person, directly or indirectly, to
beneficially own more than 50% of either (i) the then outstanding shares of
common stock of such Party ("Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of such Party entitled to
vote generally in the election of directors ("Outstanding Voting Securities");
provided, however, that for purposes of this subsection (a), any acquisition by
(A) any employee benefit plan (or related trust) sponsored or maintained by such
Party or any corporation controlled by such Party or (B) any corporation,
limited liability company or other entity pursuant to a transaction which
complies with clauses (i) and (ii) of subsection (2) below, shall not be deemed
to result in a Change of Control; or (2) the consummation of, a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of such Party (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively,

                                      -9-
<PAGE>
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns such Party or all or substantially all of such Party's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, and (ii) no Person beneficially owns, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation.

                  SECTION 4.3 Effect of Termination. Upon any expiration or
earlier termination of this Agreement, the rights and obligations of the Parties
hereunder shall terminate, excluding those provisions that by their terms extend
beyond such termination. For the avoidance of doubt, nothing herein shall
terminate any on-going payment or other obligation under any other Business
Agreement, which obligations shall be governed solely by the terms of such
Business Agreement (except to the extent, if any, set forth therein).

                                    ARTICLE V

                          GENERAL TERMS AND CONDITIONS

                  SECTION 5.1 Complete Agreement. (a) This Agreement and the
Exhibits hereto, the Business Agreements and the Separation Agreement shall
constitute the entire agreement between the Parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.

                  (b)      Parent represents on behalf of itself and each other
member of the Parent Group and Piper Jaffray represents on behalf of itself and
each other member of the Piper Jaffray Group as follows:

                  (i)      each such Person has the requisite corporate or other
         power and authority and has taken all corporate or other action
         necessary in order to execute, deliver and perform each of this
         Agreement and each other Business Agreement that shall be agreed to and
         finalized in accordance with this Agreement (including Section 2.1
         hereof) (collectively, the "Transaction Agreements") in each case to
         which it is a party and to consummate the transactions contemplated by
         the Transaction Agreements to which it is a party; and

                  (ii)     this Agreement has been duly executed and delivered
         by such Person (if such Person is a party) and constitutes a valid and
         binding agreement of it enforceable in accordance with the terms hereof
         (assuming the due execution and delivery hereof by the other party),
         and each of the other Transaction Agreements to which it will be a
         party will be duly executed and delivered by it and will constitute a
         valid and binding agreement of

                                      -10-
<PAGE>
         it enforceable in accordance with the terms thereof (assuming the due
         execution and delivery thereof by the other party or parties to such
         Transaction Agreement).

                  SECTION 5.2 Expenses. Except as expressly set forth in this
Agreement or in any other Business Agreement or the Separation Agreement, and
regardless of whether or not the Separation or the Distribution is consummated,
all third party fees, costs and expenses paid or incurred in connection with the
transactions contemplated by this Agreement and the Business Agreements shall be
paid by the Party incurring such fees, costs or expenses.

                  SECTION 5.3 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (other than
the laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including matters
of validity, construction, effect, performance and remedies.

                  SECTION 5.4 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed given
to a Party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by
facsimile with confirmation of transmission by the transmitting equipment; or
(c) received or rejected by the addressee, if sent by certified mail, return
receipt requested, in each case to the following addresses and facsimile numbers
and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number or person as a Party may designate
by notice to the other Parties):

                  If to Parent or any member of the Parent Group:

                           U.S. Bancorp
                           800 Nicollet Mall
                           BC-MN-H23I
                           Minneapolis, Minnesota 55402
                           Attention: Lee R. Mitau
                           Fax: (612) 303-0898

                  If to Piper Jaffray or any member of the Piper Jaffray Group:

                           Piper Jaffray Companies
                           800 Nicollet Mall, Suite 800
                           Minneapolis, Minnesota  55402
                           Attention: James L. Chosy
                           Fax: (612) 303-1772

                  SECTION 5.5 Amendment, Modification or Waiver. This Agreement
may be amended, modified, waived or supplemented, in whole or in part, only by a
written agreement signed by each of the Parties. The waiver by the Parties of
any breach of this Agreement shall not be construed as a waiver of any
subsequent breach.

                                      -11-
<PAGE>
                  SECTION 5.6 Successors and Assigns; No Third Party
Beneficiaries. (a) This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the Parties and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
and obligations hereunder shall be assigned or otherwise transferred, in whole
or in part, by any Party without the prior written consent of the other Party.

                 (b)      This Agreement is solely for the benefit of the
Parties and is not intended to confer upon any other Persons any rights or
remedies hereunder.

                  SECTION 5.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  SECTION 5.8 Dispute Resolution. Any controversy, claim or
question of interpretation arising out of or relating to this Agreement
(including without limitation a claimed breach of any of the provisions hereof)
that is not resolved by the Parties shall be resolved in accordance with the
provisions of Section 9.9 of the Separation Agreement.

                  SECTION 5.9 Interpretation. Article and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the Parties and shall not in any way affect the meaning
or interpretation of this Agreement.

                  SECTION 5.10 Severability. If any provision of this Agreement
or the application thereof to any Person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party.

                  SECTION 5.11 No Joint Venture. Notwithstanding any provision
hereof, this Agreement does not create, and is not intended to create, a joint
venture, partnership or agency relationship between the Parties. For all
purposes of this Agreement, each Party shall be and act as an independent
contractor and not as partner, joint venturer or agent of the other and shall
not bind nor attempt to bind the other to any contract. Each Party shall be free
to manage and control its business as it sees fit, without the management,
control or assistance of the other Party, except as otherwise prescribed herein
or in any other Business Agreement or the Separation Agreement.

                  SECTION 5.12 No Individual Authority. Neither Party shall,
without the express, prior written consent of the other Party, take any action
for or on behalf of or in the name of the other Party, assume, undertake or
enter into any commitment, debt, duty or obligation binding upon any other
Party, except for actions expressly provided for in this Agreement or pursuant
to any other Business Agreements entered into between the Parties.

                                      -12-
<PAGE>
                  SECTION 5.13 Non-Exclusivity. Unless otherwise expressly set
forth herein or in any other agreement between the Parties or other members of
their respective Groups, the undertaking referenced herein and the relationship
between the Parties, and all aspects thereof are and shall be non-exclusive.
Provided that such activities do not otherwise constitute a breach of the
Separation Agreement or any Business Agreement, each Party may develop itself,
or purchase or otherwise acquire from third parties, any products or services,
and each Party may engage in any business, even if such business is competitive
with the business of the other Party.

                  SECTION 5.14 Basis of Bargain. Parent and Piper Jaffray
acknowledge that each Party has entered into this Agreement in reliance upon the
disclaimers of warranties and limitations of liability and damages as set forth
in this Agreement and the Separation Agreement, and that such provisions form an
essential basis of the bargain between the Parties and do not cause this
Agreement, or the remedies available hereunder, to fail of its or their
essential purpose.

                  SECTION 5.15 Force Majeure. Excluding the obligation to make
payment when due, in the event that either Party is prevented from performing,
or is unable to perform, any of its obligations under this Agreement due to any
cause beyond the reasonable control of the Party invoking this provision, the
affected Party's performance will be excused and the time for performance will
be extended for the period of delay or inability to perform due to such
occurrence.

                  SECTION 5.16 Priority. Should there be a conflict between any
other Business Agreement and this Agreement or should this Agreement be silent
on a matter addressed in any other Business Agreement (and not in the Separation
Agreement), such other Business Agreement shall prevail as to the subject matter
thereof. Should there be a conflict between this Agreement and the Separation
Agreement or should this Agreement be silent on a matter addressed in the
Separation Agreement, the Separation Agreement shall prevail as to the subject
matter thereof.

                                      -13-
<PAGE>

                  IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed by its duly authorized representative.

                                       U.S. BANCORP

                                       By: /s/ Lee R. Mitau
                                           ---------------------------------
                                           Name: Lee R. Mitau
                                           Title: Executive Vice President

                                       PIPER JAFFRAY COMPANIES

                                       By: /s/ James L. Chosy
                                           ----------------------------------
                                           Name: James L. Chosy
                                           Title:  Secretary

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