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Exhibit 10.5    
    

FIRST AMENDMENT TO

TERM LOAN CREDIT AGREEMENT  

among 

Apartment Investment and Management Company,

AIMCO Properties, L.P.,

AIMCO/Bethesda Holdings, Inc., and

NHP Management Company,

as
Borrowers, 

Bank of America, N.A.,

as Administrative Agent 

and

The Other Financial

Institutions Party Hereto  

Dated as of September 30, 2003 

Banc of America Securities LLC
  as Sole-Lead Arranger 

and 

Sole
Bookrunner 

   FIRST AMENDMENT TO

TERM LOAN CREDIT AGREEMENT  

        This FIRST AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this "Amendment") is dated as of September 30, 2003
(the "Amendment Effective Date") and entered into by and among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"REIT"), AIMCO PROPERTIES, L.P., a Delaware limited partnership ("AIMCO"), AIMCO/BETHESDA
HOLDINGS, INC., a Delaware corporation ("AIMCO/Bethesda") and NHP MANAGEMENT COMPANY, a District of Columbia corporation
("NHP Management") (the REIT, AIMCO, AIMCO/Bethesda and NHP Management collectively referred to herein as
"Borrowers"), BANK OF AMERICA, N.A. ("Bank of America"), as Administrative Agent (in such capacity,
"Administrative Agent"), and the Lenders party hereto, and is made with reference to that certain Term Loan Credit Agreement, dated as of May 30,
2003, by and among Borrowers, each lender from time to time party thereto, and BANK OF AMERICA, N.A., as Administrative Agent (the "Credit Agreement")
(the Credit Agreement as amended by this Amendment, the "Amended Agreement"). Capitalized terms used in this Amendment shall have the meanings set forth
in the Credit Agreement unless otherwise defined herein. 

RECITALS  

        WHEREAS, Borrowers desire to amend the Credit Agreement as more particularly set forth below; 

        WHEREAS, pursuant to the Credit Agreement, certain of the amendments set forth herein require the consent of the Supermajority Lenders,
and the Supermajority Lenders hereby consent thereto; 

        NOW, THEREFORE, in consideration of the agreements, provisions and covenants contained herein, the parties agree as follows: 

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT  

1.1   Amendment to Subsection 1.01 Defined Terms.  

        A.    The defined terms "Adjusted Fixed Charges" and
"Adjusted Fixed Charges Coverage Ratio" are deleted in their entirety. 

        B.    The defined term "Funds From Operations" is deleted in its entirety and
replaced with the following: 

        "Funds From Operations" means, with respect to Borrowers and their Subsidiaries on a consolidated basis, net income calculated in
accordance with GAAP, excluding gains or losses from debt restructuring and sales of property, plus real estate depreciation and amortization (excluding amortization of financing costs), plus
amortization associated with the purchase of property management companies, and after adjustments for unconsolidated partnerships and joint ventures (with adjustments for unconsolidated partnerships
and joint 

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ventures
calculated to reflect funds from operations on the same basis) together with adjustments for the non-cash deferred portion of any income tax provision for unconsolidated
subsidiaries and the payment of dividends on preferred Stock, as interpreted by the National Association of Real Estate Investment Trusts in its March, 1995, White Paper on Funds From Operations;  provided, however, the following shall be excluded when calculating "Funds From
Operations": (i) non-cash adjustments for preferred Stock issuance costs, (ii) non-cash adjustments for loan amortization costs, and
(iii) interest expense charges (or benefits) for minority interest marked-to-market adjustments arising under Statement of Financial Accounting Standards No. 150
of the Financial Accounting Standards Board ("FAS 150") as interpreted under GAAP. 

        C.    The defined term "Gross Asset Value" is deleted in its entirety and
replaced with the following: 

        "Gross Asset Value" means as of any date of determination, the sum of the following, determined for Borrowers, the Guarantors and their
respective Subsidiaries: 

        (i)    Cash
(including Restricted Cash) and Cash Equivalents of both consolidated and unconsolidated Persons, which Cash and Cash Equivalents are owned, directly or indirectly,
by Borrowers, the Guarantors or their respective Subsidiaries as of such date of determination; 

        (ii)   GP
Loans valued at net realizable value as of such date of determination determined in accordance with GAAP; 

        (iii)  with
respect to all real estate assets wholly or partially owned by such Person(s) throughout the most recent four calendar quarters ending on or prior to such date of
determination (other than Real Property Assets Under Development), the Adjusted Total NOI attributable to such real estate assets for such four quarter period divided
by 8.75%; 

        (iv)  with
respect to all real estate assets wholly or partially owned by such Person(s) on such date of determination, but acquired less than four calendar quarters but at
least one calendar quarter preceding such date of determination (other than Real Property Assets Under Development), the Adjusted Total NOI attributable to such real estate assets for the number of
full calendar quarters that such Person(s) owned such assets measured on an annualized basis and divided by 8.75%; 

        (v)   with
respect to all real estate assets owned by such Person(s) on such date of determination, but acquired less than one calendar quarter preceding such date of
determination (other than Real Property Assets Under Development), 95% of the purchase price paid by such Person(s) for such assets; 

        (vi)  the
gross book value of Real Property Assets Under Development as of such date of determination; and 

        (vii) an
amount equal to 400% of Management EBITDA for the four consecutive fiscal quarter period preceding such date of determination. 

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        D.    The defined term "Indebtedness" is deleted in its entirety and replaced
with the following: 

        "Indebtedness" of any Person means without duplication, (a) all indebtedness for borrowed money, (b) all obligations issued,
undertaken or assumed as the deferred purchase price of Property or services, (c) all direct or contingent obligations with respect to surety bonds, letters of credit, bankers' acceptances and
similar instruments (in each case, to the extent material or noncontingent), (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of Properties, (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in
either case with respect to Properties acquired by the Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or
sale of such properties), (f) all Capital Lease Obligations, (g) all net obligations with respect to Swap Agreements, (h) all obligations (other than, in the case of the REIT, the
obligation to acquire Partnership Units in exchange for shares of common Stock of the REIT) to purchase, redeem, or acquire any Stock of such Person or its Affiliates that, by its terms or by the
terms of any security into which it is convertible or exchangeable, (x) is, or upon the happening of any event (other than a change of control event as may be set forth in certain securities of
the REIT and/or AIMCO which has not occurred prior to the date of determination hereunder) or the passage of time would be, required to be redeemed or repurchased by such Person or its Affiliates,
including at the option of the holder, in whole or in part, or (y) has, or upon the happening of an event (other than the above change of control event as may be set forth in certain securities
of the REIT and/or AIMCO which has not occurred prior to the date of determination hereunder) or passage of time would have, a redemption or similar payment due, in each case of clauses (x) and
(y) before the date which is the one (1) year anniversary of the then effective Maturity Date (excluding, however, any such preferred Stock which is convertible only into common Stock of
the REIT), (i) any direct or contingent obligations or liabilities under any equity forward agreements or transactions or under any similar arrangements or transactions, (j) all
indebtedness referred to in clauses (a) through (i) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in Properties (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, and
(k) all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (i) above.
"Indebtedness" shall also include such Person's share of the Indebtedness of any partnership or joint venture in which such Person, directly or
indirectly, holds any interest, and any direct or indirect Recourse or contingent obligations of such Person with respect to Indebtedness of such partnership or joint venture in excess of its
proportionate share. Solely for purposes of Section 7.14 only, "Indebtedness" shall exclude
Intra-Company Debt, security deposits, accounts payable and accrued liabilities, any prepaid rent (as such terms are defined under GAAP) and that portion of the Contingent Acquisition Note, if any,
which is not required under GAAP to be shown as indebtedness of any Borrower or any of their Subsidiaries at any time (including in the event of any acceleration thereof). Notwithstanding the
foregoing, "Indebtedness" shall only include the net obligations of the REIT, AIMCO and NAPICO under the REAL Litigation Settlement Agreement, which
shall be calculated quarterly 

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based
on the sum of (x) the difference of (A) $25,000,000 less (B) an amount equal to the product of (1) the then remaining
number of shares of Cash Deposit Stock held by the REIT or an Affiliate of the REIT in escrow times (2) the average closing share price of such
Cash Deposit Stock on the NYSE over the 21 trading day period immediately prior to each quarter-end and (y) the difference of (A) (without duplication) the outstanding NAPICO
Notes and the REAL Litigation Guaranty less (B) an
amount equal to the product of (1) the then remaining number of shares of Mirror Notes Stock held by NAPICO or an Affiliate of NAPICO as pledgee  times (2) the average closing share price of
such Mirror Notes Stock on the NYSE over the 21 trading day period immediately prior to each
quarter-end. In all events, the net obligations of the REIT, AIMCO and NAPICO under the REAL Litigation Settlement Agreement shall not be less than zero. 

        E.    The defined term "Interest Expense" is deleted in its entirety and
replaced with the following: 

        "Interest Expense" means, for any Person and for any period, without double counting any item, the sum of (x) gross interest
expense paid in, incurred or accrued during such period by such Person (including all commissions, discounts, fees and other charges in connection with standby letters of credit and similar
instruments), including any amounts as capitalized interest, plus (y) dividends paid in, incurred or accrued during such period by such Person with respect to Trust Based Convertible Preferred
Securities, plus (z) the portion of the upfront costs and expenses for Swap Agreements entered into by such Person (to the extent not included in
gross interest expense) fairly allocated to such Swap Agreements as expenses for such period, as determined for such Person in accordance with GAAP;  provided that all interest expense accrued by
Borrowers and their respective Subsidiaries during such period, even if not payable on or before the
Maturity Date, shall be included with "Interest Expense". Notwithstanding the foregoing, "Interest
Expense" shall not include (i) amortization of loan costs and interest accrued under any Intra-Company Debt or (ii) interest expense charges (or benefits) from
minority interest marked-to-market adjustments arising under FAS 150 as interpreted under GAAP. 

        F.    The following defined terms shall be inserted in the correct alphabetical location as follows: 

        "Leverage Premium" means, upon the Borrowers' election of a Temporary Leverage Increase for more than two consecutive quarters, an
additional 25 basis points per annum increase in the Applicable Margin. The Leverage Premium shall be in effect from the date the Compliance Certificate in which the Borrowers have elected a Temporary
Leverage Increase for more than two consecutive quarters is received by Administrative Agent to but excluding the date the next Compliance Certificate in which the Borrowers do not elect a Temporary
Leverage Increase is received by Administrative Agent. 

        "Mirror Notes" means the indemnity obligations of The Casden Company, a California corporation ("The Casden
Company"), to NAPICO, which may be evidenced by certain non-recourse promissory notes issued by The Casden Company or one of its Affiliates to 

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NAPICO
or one of its Affiliates, which will have the same interest rate and maturity schedule as the NAPICO Notes. 

        "REAL Litigation Settlement Agreement" means that certain Settlement Agreement, dated as of August 12, 2003, by and among the REIT,
AIMCO, National Partnership Investment Corp., a California corporation ("NAPICO"), Cerberus Partners, L.P., a Delaware limited partnership, XYZ
Holdings, LLC, a Delaware limited liability company, Alan I. Casden, an individual, The Casden Company, a California corporation and Casden Investment Corp., a California corporation with respect to
the settlement of In re Real Estate Associates Limited Partnership Litigation, CV 98-7035 DDP, United States District Court, Central
District of California (the "REAL Litigation"). 

        "REAL Litigation Settlement Obligations" means, collectively, (i) Loans in the aggregate principal amount of $25,000,000 which were
used by the REIT or one of its Affiliates to make a cash deposit in escrow for the benefit of the plaintiffs of the REAL Litigation (the "Cash
Deposit"), and (ii) certain promissory notes made by NAPICO in the aggregate amount of $35,000,000 in favor of the plaintiffs of the REAL Litigation (the
"NAPICO Notes") and that certain Guaranty made by AIMCO in favor of the plaintiffs of the REAL Litigation with respect to the payment and performance of
the NAPICO Notes (the "REAL Litigation Guaranty"). 

        "REAL Litigation Settlement Pledged Stock" means, collectively, (i) 531,915 shares of common Stock of the REIT placed in escrow by
The Casden Company for release to the REIT in connection with the Cash Deposit (the "Cash Deposit Stock"), as such number of shares may be reduced from
time to time pursuant to the REAL Litigation Settlement Agreement, and (ii) 744,681 shares of common Stock of the REIT (plus up to 60,000 additional shares for accrued interest) pledged by The
Casden Company or one of its Affiliates to NAPICO to secure the payment of the Mirror Notes (the "Mirror Notes Stock"), as such number of shares may be
reduced from time to time pursuant to the REAL Litigation Settlement Agreement. 

        "Temporary Leverage Increase" means, upon the Borrowers' election by indicating their election in writing on the quarterly Compliance
Certificate delivered to Administrative Agent pursuant to Section 6.02(b), an increase in the ratios set forth in either  Section 7.14(e) or
(f). A Temporary Leverage Increase shall be in effect for the fiscal quarter
elected by the Borrowers on the Compliance Certificate. 

1.2   Amendment to Section 1.03 Accounting Terms.  

        A.    Subsection 1.03 shall be deleted in its entirety and replaced with the following: 

        (a)   All
accounting terms not specifically or completely defined in this Agreement shall be construed in conformity with, and all financial data (including financial ratios
and other financial calculations but excluding financial statements) required to be submitted by this Agreement shall be prepared in conformity with, GAAP as in effect on September 30, 2003,  except
as otherwise specifically prescribed herein. 

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        (b)   If
at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, and either Borrowers, Administrative
Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of Requisite Lenders, Administrative Agent and Borrowers); provided,  that, until so amended, such
ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein.
 

1.3   Amendment to Section 2.05 Principal and Interest; Default Rate.  

        A.    Subsection 2.05(c) shall be deleted in its entirety and replaced with the following: 

        (c)   Each
Offshore Rate Loan shall bear interest for each day during the Interest Period with respect thereto at a rate per annum equal to the Offshore Rate determined for
such day plus 285 basis points per annum. 

        B.    Subsection 2.05(d) shall be deleted in its entirety and replaced with the following: 

        (d)   Each
Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus 115 basis points per annum. 

1.4   Amendment to Section 6.02 Certificates, Notices and Other Information.  

        A.    Subsection 6.02(b) shall be amended by deleting clause (1) thereof in its entirety and
replacing it with the following: 

        (1)   a
duly completed Compliance Certificate signed by a Responsible Officer of Borrowers, with such supporting information as may be requested by Administrative Agent,
including a statement as to whether any change in GAAP or in the application thereof has occurred since September 30, 2003, and, if any change has occurred, specifying the effect of such change
on the financial statements accompanying such Compliance Certificate and setting forth a certified reconciliation between calculations of the financial ratios or requirements made before and after
giving effect to such change in GAAP. 

1.5   Amendment to Section 7.05 Investments.  

        A.    Subsection 7.05 shall be amended by deleting the word "and" at the end of clause (m) thereof, deleting the
period from the end of clause (n) thereof and replacing it with "; and" and adding a new clause (o) which will read as follows: 

        (o)   Investments
in the Mirror Notes and the REAL Litigation Settlement Pledged Stock securing the Mirror Notes required pursuant to the REAL Litigation Settlement Agreement. 

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1.6   Amendment to Section 7.07 Restricted Payments.  

        A.    Subsection 7.07 shall be deleted in its entirety and replaced with the following: 

        7.07    Restricted Payments.

        (a)   (i) Declare
or make any Restricted Payment or any distribution of any Properties (including cash, rights, obligations, partnership interests or Partnership Units,
on account of any partnership interests, Partnership Units or Stock) to any Person (other than Borrowers or a Wholly-Owned Subsidiary), or (ii) purchase, redeem or otherwise acquire for value
any of its partnership interests, Partnership Units or Stock, now or hereafter outstanding, from any Person (other than Borrowers or a Wholly-Owned Subsidiary) (all of the foregoing set forth in
clauses (i) and (ii), collectively, being "distributions"), except for the following: (A) the exchange of common Stock of the REIT for
Partnership Units; (B) if no Default or Event of Default exists under Section 8.01(a), (b)
or (c) as a result of a breach of Section 7.14, then the Borrowers and all such Subsidiaries may make "distributions" during any four consecutive
fiscal quarter period in an amount in the aggregate which does not exceed the greater of (1) 90% of Funds From Operations for each four consecutive fiscal quarter period ending on the last day
of each fiscal quarter, or (2) such amount as may be necessary to maintain REIT Status ("distributions" under this clause (B) shall not include any "distributions" under clauses
(A) or (C)); (C) that if no Default or Event of Default exists, the Borrowers and all such Subsidiaries may undertake Permitted Preferred Stock Redemptions;  provided, that, prior to making any Permitted Preferred Stock Redemptions, Borrowers shall first certify
in writing to Administrative Agent (i) that the Net Issuance Proceeds or Net Disposition Proceeds referred to in the definition of "Permitted Preferred Stock Redemptions" have been, or will be,
applied as and to the extent required under Section 2.06 of the Revolver Credit Agreement, and (ii) that the use of funds to make such Permitted Preferred Stock Redemptions shall not
cause a Default or an Event of Default under this Agreement; and (D) (1) the exercise by the Borrowers of their right as a secured party to take possession of the Mirror
Note Stock after a default under the Mirror Note Stock pledge agreement and in accordance with the REAL Litigation Settlement Agreement, and (2) the release to the Borrowers of
the Cash Deposit Stock currently held in escrow for the benefit of the Borrowers in accordance with the REAL Litigation Settlement Agreement; provided,  however, that nothing in this Section 7.07 shall prohibit (A) any Borrower or any
Subsidiary of Borrower from making tenders for or otherwise acquiring for value any partnership interest, Partnership Units or Stock, now or hereafter outstanding, of any Borrower or any Subsidiary of
any Borrower which were not issued by such acquiring Borrower or Subsidiary or (B) any distribution of Property by any Borrower Party, or any Affiliate thereof, in the Ordinary Course of
Business and pursuant to such Borrower Party's or Affiliate's Organization Documents, including (x) any distribution of proceeds from Dispositions permitted under  Section 7.04, (y) any
distribution of proceeds from Dispositions in the Ordinary Course of Business and (z) any distribution by a
non-Wholly-Owned Subsidiary to any Borrower, any of Borrowers' Subsidiaries or to any other Person holding an equity interest in such non-Wholly-Owned Subsidiary. 

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        (b)   (i) Permit
any Subsidiary to make a demand under any Intra-Company Debt which is payable upon demand at any time after the Revolving Commitment Termination Date,
or (ii) permit any payment with respect to Intra-Company Debt while any Event of Default is continuing. 

1.7   Amendment to Section 7.14 Financial Covenants  

        A.    Subsection 7.14 shall be deleted in its entirety and replaced with the following: 

        7.14    Financial Covenants.

        (a)   Permit
the Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than 1.40:1.00. 

        (b)   Intentionally
Omitted. 

        (c)   Permit
the Interest Coverage Ratio as of the end of any fiscal quarter to be less than 2.00:1.00. 

        (d)   Permit
the Unsecured Debt Service Coverage Ratio as of the end of any fiscal quarter to be less than 3.00:1.00. 

        (e)   Permit
the ratio of Total Combined Debt to Gross Asset Value to exceed 0.55:1.00 at any time; provided,  however, at any time during a Temporary Leverage Increase,
the ratio shall not exceed 0.575:1.00; and  provided, further, that for purposes of this  Section 7.14(e), Gross Asset Value shall be reduced by an amount equal to the excess, if any, of (x) the sum of the amounts, as on the
date of determination, from clauses (ii), (vi) and (vii) set forth in the definition of "Gross Asset Value"  over (y) 15% of the sum of the
amounts, as on such date of determination, from clauses (i), (iii), (iv) and (v) set forth in the
definition of "Gross Asset Value". 

        (f)    Permit
the ratio of Total Obligations to Gross Asset Value to exceed 0.65:1.00 at any time; provided,  however, at any time during a Temporary Leverage Increase,
the ratio shall not exceed 0.675:1.00; and  provided, further, that for purposes of this  Section 7.14(f), Gross Asset Value shall be reduced by an amount equal to the excess, if any, of (x) the sum of the amounts, as on the
date of determination, from clauses (ii), (vi) and (vii) set forth in the definition of "Gross Asset Value"  over (y) 15% of the sum of the
amounts, as on such date of determination, from clauses (i), (iii), (iv) and (v) set forth in the
definition of "Gross Asset Value". 

        (g)   Permit
the Encumbered Property Debt Coverage Ratio as of the end of any fiscal quarter to be less than 1.50:1.00. 

        (h)   Permit
the Consolidated Net Worth of the REIT and its Subsidiaries on a consolidated basis to be less at any time than the sum of (x) $3,230,456,000 

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plus (y) 85% of the Net Issuance Proceeds of all issuances of Stock or Partnership Units from and after September 30, 2002. 

        Notwithstanding
anything to the contrary contained herein, the Borrowers acknowledge and agree that in determining EBITDA and Net Operating Income for the Borrowers and their
Subsidiaries, any items of net income (or net loss) on account of the operations of an Institutional Joint Venture shall not be included in the determination of EBITDA and/or Net Operating Income
unless the Cash or Cash Equivalents related thereto have been distributed to Borrowers or their Wholly-Owned Subsidiaries which are Guarantors or are otherwise available to be so distributed without
restriction, excluding ordinary course restrictions which limit distributions to a quarterly or more frequent basis. 

1.8   Amendment to Exhibit B—Form of Compliance Certificate.  

        A.    Exhibit B—Form of Compliance Certificate shall be deleted in its entirety and replaced with
Exhibit B—Form of Compliance Certificate attached hereto as Annex I. 

Section 2. CONDITIONS TO EFFECTIVENESS  

        This Amendment shall become effective as of the Amendment Effective Date, at such time that all of the following conditions are satisfied: 

        A.    Supermajority Lenders shall have executed this Amendment; 

        B.    Guarantors and Pledgors shall have executed this Amendment with respect to Section 5; 

        C.    On or before the Amendment Effective Date, Borrowers shall have paid to Administrative Agent an amendment fee in an
aggregate amount equal to the sum of 20 basis points times the Pro Rata Shares of Combined Commitments of each Lender who is party to this Amendment. The amendment fee will be distributed to each
Lender who is a party to this Amendment in accordance with the foregoing; 

        D.    If required by Administrative Agent, Lenders and their respective counsel shall have received originally executed copies
of one or more favorable written opinions of counsel for Borrowers, Guarantors and Pledgors in form and substance satisfactory to Administrative Agent and its counsel, dated as of the Amendment
Effective Date, with respect to the validity, binding effect and enforceability of this Amendment, and due authorization, execution and delivery thereof, and as to such other matters as Administrative
Agent acting on behalf of Lenders may request; 

        E.    Administrative Agent and its counsel shall have received executed resolutions from Borrowers, Guarantors and Pledgors
authorizing the entry into and performance of this Amendment and the Credit Agreement as amended, all in form and substance satisfactory to Administrative Agent and its counsel; 

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        F.    Borrowers shall have paid the fees, costs and expenses of Administrative Agent's counsel in connection with this
Amendment; 

        G.    Administrative Agent shall have received evidence satisfactory to it and its counsel that the Casden Agent and the Casden
Lenders (i) have modified, or concurrently with the Amendment Effective Date will modify, the Casden Loan and the Casden Credit Agreement in a manner satisfactory to Administrative Agent and
the Lenders and Administrative Agent shall have been provided with true, correct and complete copies of the documents effecting such modifications to the Casden Loan and Casden Credit Agreement and
(ii) have consented to or waived their right to consent to the Borrowers', Guarantors' and Pledgors' execution and delivery of this Amendment; and 

        H.    Administrative Agent shall have received evidence satisfactory to it and its counsel that the Revolver Agent (as defined
herein) and the Revolver Lenders (i) have modified, or concurrently with the Amendment Effective Date will modify, the Revolver Credit Agreement in a manner satisfactory to Administrative Agent
and the Lenders and Administrative Agent shall have been provided with true, correct and complete copies of the documents effecting such modifications to the Revolver Credit Agreement and
(ii) have consented to or waived their right to consent to the Borrowers', Guarantors' and Pledgors' execution and delivery of this Amendment. 

Section 3. BORROWERS' REPRESENTATIONS AND WARRANTIES  

        In order to induce the Supermajority Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Borrowers represent and
warrant to each Lender that the following statements are true, correct and complete: 

        3.1   Corporate Power and Authority. Borrowers have all requisite power and
authority to enter into this Amendment and any other agreements, guaranties or other operative documents to be delivered pursuant to this Amendment, to carry out the transactions contemplated by, and
perform their obligations under, the Amended Agreement. Each of the Borrowers, Pledgors and Guarantors is in good standing in the respective states of their organization on the Amendment Effective
Date; 

        3.2   Authorization of Agreements. The execution and delivery of this Amendment
and the performance of the Amended Agreement have been duly authorized by all necessary action on the part of Borrowers and the other parties delivering any of such documents, as the case may be.
Except as disclosed on Schedule 3.2, the organizational documents of the Borrowers, Pledgors and Guarantors have not been modified in any material respect since May 30, 2003; 

        3.3   No Default. After giving effect to this Amendment, no Default or Event of
Default exists under the Credit Agreement as of the Amendment Effective Date. Further, after giving effect to this Amendment, no Default or Event of Default would result under the Amended Agreement
from the consummation of this Amendment; 

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        3.4   No Conflict. The execution, delivery and performance by Borrowers,
Pledgors and Guarantors of this Amendment and the performance of the Amended Agreement by Borrowers, Pledgors and Guarantors does not and will not (i) violate any provision of any applicable
material law or any governmental rule or regulation applicable to Borrowers, Pledgors, Guarantors or any of their Subsidiaries, the Organization Documents of Borrowers, Pledgors, Guarantors or any of
their Subsidiaries or any order, judgment or decree of any court or other Governmental Authority binding on Borrowers, Pledgors, Guarantors or any of their Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Borrowers, Pledgors, Guarantors or any of their Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Borrowers, Pledgors, Guarantors or any of their Subsidiaries not otherwise permitted by
the Amended Agreement, or (iv) require any approval of members or stockholders or any approval or consent of any Person under any Contractual Obligation of Borrowers, Pledgors, Guarantors or
any of their Subsidiaries, except for such approvals or consents which have been or will be obtained on or before the Amendment Effective Date and such approvals or consents disclosed in writing to
Lenders in accordance with Section 5.03 of the Credit Agreement; 

        3.5   Governmental Consents. The execution and delivery by Borrowers,
Guarantors and Pledgors of this Amendment and the performance by Borrowers, Guarantors and Pledgors under the Amended Agreement does not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body; 

        3.6   Binding Obligation. The Credit Agreement, as amended by this Amendment,
has been duly executed and delivered by Borrowers, Pledgors and Guarantors and is enforceable against Borrowers, Pledgors and Guarantors in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability; and 

        3.7   Incorporation of Representations and Warranties From Credit Agreement.
After giving effect to this Amendment, the representations and warranties contained in Section 5 of the Credit Agreement are and will be true, correct and complete in all material respects on
and as of the Amendment Effective Date to the same extent as though made on and as of such date, except representations and warranties solely to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. 

Section 4. MISCELLANEOUS  

4.1   Reference to and Effect on the Credit Agreement and the Other Loan Documents.  

        A.    On and after the Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import 

12

 

referring
to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall
mean and be a reference to the Credit Agreement, as amended by this Amendment. 

        B.    Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed. 

        C.    The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under, the Credit Agreement or any of the other Loan Documents. 

        4.2   Fees and Expenses. Borrowers acknowledge that all reasonable costs, fees and expenses incurred by
Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrowers. On or before October    ,
2003, the Borrowers hereby agree to pay the reasonable fees, cost and expenses of Administrative Agent's counsel in connection with this Amendment. 

        4.3   Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. 

        4.4   Counterparts; Effectiveness. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document. This Amendment shall become effective upon the execution of a counterpart hereof by each Borrower and each Lender, and receipt by Borrowers and Administrative Agent of
written, facsimile or telephonic notification of such execution and authorization of delivery thereof. 

        4.5   Entire Agreement. This Amendment embodies the entire agreement and understanding among the
parties with respect to the amendment to the Credit Agreement, and supersedes all prior agreements and understandings, oral or written, relating thereto. 

Section 5. ACKNOWLEDGEMENT AND CONSENT  

        A.    Guarantors are party to that certain Amended and Restated Payment Guaranty, dated as of May 30, 2003, to the extent
amended hereby, pursuant to which Guarantors have guarantied the Obligations. Pledgors are party to that certain Borrowers Pledge Agreement, dated as of May 30, 2003, to the extent amended
hereby, pursuant to which Pledgors have pledged the Pledged Collateral as security for the Secured Obligations (as defined in the Borrowers Pledge Agreement). 

13

 

        B.    Each Guarantor and each Pledgor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement
and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment. Each Guarantor hereby confirms that each Guaranty to which it is a party or otherwise
bound, and each Pledgor hereby confirms that the Pledge Agreement to which it is a party or otherwise bound, will continue to guaranty or secure, as the case may be, to the fullest extent possible the
payment and performance of all of the "Indebtedness" (as defined in the applicable Guaranty) or the "Secured Obligations" (as defined in the Borrowers Pledge Agreement), as the case may be, including
without limitation the payment and performance of all such "Indebtedness" or "Secured Obligations", as the case may be, with respect to the Obligations of Borrowers now or
hereafter existing under or in respect of the Credit Agreement (as amended hereby) and the Notes defined therein. 

        C.    Each Guarantor acknowledges and agrees that any Guaranty to which it is a party or otherwise bound, and each Pledgor
acknowledges and agrees that the Pledge Agreement to which it is a party or otherwise bound, shall continue in full force and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. Each Guarantor and each Pledgor represents and warrants that all representations and warranties
contained in the Credit Agreement and the Guaranty and/or the Pledge Agreement, as the case may be, to which it is a party or otherwise bound are true, correct and complete in all material respects on
and as of the Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on and as of such earlier date. 

        D.    Each Guarantor and each Pledgor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Amendment, such Guarantor or such Pledgor, as the case may be, is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor
or such Pledgor to any future amendments to the Credit Agreement. 

        E.    Each Lender hereby (i) acknowledges that it has received and reviewed the terms and provisions of that certain
Sixth Amendment to Interim Credit Agreement, dated as of September 30, 2003 (the "Casden Amendment") among the REIT, AIMCO, NHP Management
(collectively, the "Casden Borrowers"), Lehman Commercial Paper Inc., as administrative agent, syndication agent and a lender
("Lehman"), each lender from time to time party thereto, and Lehman Brothers Inc., as sole lead arranger, and (ii) consents to the
modifications and amendments as set forth in the Casden Amendment to the Casden Credit Agreement and the Casden Loan Documents. 

        F.    Each Lender hereby (i) acknowledges that it has received and reviewed the terms and provisions of that certain
Third Amendment to Fifth Amended and Restated Credit Agreement, dated as of September 30, 2003 (the "Revolver Amendment") among the REIT, 

14

 

AIMCO,
NHP Management and AIMCO/Bethesda (collectively, the "Revolver Borrowers"), Bank of America, N.A., as administrative agent and letter of credit
issuing lender (in such capacity, the "Revolver Agent"), and each lender from time to time party thereto, and (ii) consents to the
modifications and amendments as set forth in the Revolver Amendment to the Revolver Credit Agreement and the Revolver Loan Documents. 

[Signatures
on Next Page] 

15

QuickLinks

Exhibit 10.5<Page>

                                                                    Exhibit 10.1

                                     FORM OF

                           EMPLOYEE BENEFITS AGREEMENT

                                 BY AND BETWEEN

                                  U.S. BANCORP

                                       AND

                          PIPER JAFFRAY COMPANIES INC.

                                   DATED AS OF
                                  [     ], 2003

<Page>

                                TABLE OF CONTENTS

<Table>
<S>                 <C>                                                                        <C>
ARTICLE I           DEFINITIONS................................................................1
     1.1            Affiliate..................................................................1
     1.2            Agreement..................................................................1
     1.3            Ancillary Agreements.......................................................1
     1.4            Approved Leave of Absence..................................................1
     1.5            Auditing Party.............................................................1
     1.6            Award......................................................................2
     1.7            Benefit Plan...............................................................2
     1.8            Close of the Distribution Date.............................................2
     1.9            COBRA......................................................................2
     1.10           Code.......................................................................2
     1.11           Committee..................................................................2
     1.12           Convertible High Performance Option........................................2
     1.13           Convertible Parent Option..................................................2
     1.14           Convertible Restricted Stock...............................................3
     1.15           Covered Employees..........................................................3
     1.16           Distribution...............................................................3
     1.17           Distribution Date..........................................................3
     1.18           Distribution Year..........................................................3
     1.19           ERISA......................................................................3
     1.20           Former Parent Employee.....................................................3
     1.21           Former Piper Jaffray Employee..............................................3
     1.22           Health and Welfare Plans...................................................3
     1.23           High Performance Option....................................................3
     1.24           HIPAA......................................................................3
     1.25           Immediately after the Distribution Date....................................3
     1.26           Independent Third Party....................................................3
     1.27           Liabilities................................................................4
     1.28           Match Date.................................................................4
     1.29           Non-Convertible High Performance Option....................................4
     1.30           Non-Convertible Parent Option..............................................4
     1.31           Non-parties................................................................4
     1.32           NYSE.......................................................................4
     1.33           Option.....................................................................4
     1.34           Parent.....................................................................4
     1.35           Parent Common Stock........................................................4
     1.36           Parent Employee............................................................4
     1.37           Parent Entities............................................................4
     1.38           Parent Executive Benefit Plans.............................................4
     1.39           Parent Flexible Benefit Plans..............................................4
     1.40           Parent Long-Term Incentive Plans...........................................4
     1.41           Parent Non-Qualified Retirement Plan.......................................5
     1.42           Parent Non-Qualified Retirement Plan Participant...........................5
     1.43           Parent Opening Stock Value.................................................5
</Table>

<Page>

<Table>
     <S>            <C>                                                                       <C>
     1.44           Parent Pension Plan........................................................5
     1.45           Parent Post-Retirement Welfare Benefits Plan...............................5
     1.46           Parent Savings Plan........................................................5
     1.47           Parent Severance Pay Program...............................................5
     1.48           Parent Stock Value.........................................................5
     1.49           Participating Company......................................................5
     1.50           Person.....................................................................6
     1.51           Piper Jaffray..............................................................6
     1.52           Piper Jaffray Business.....................................................6
     1.53           Piper Jaffray Common Stock.................................................6
     1.54           Piper Jaffray Common Stock Value...........................................6
     1.55           Piper Jaffray Employee.....................................................6
     1.56           Piper Jaffray Entities.....................................................6
     1.57           Piper Jaffray Executive Benefit Plans......................................6
     1.58           Piper Jaffray Flexible Benefit Plan........................................6
     1.59           Piper Jaffray Long-Term Incentive Plan.....................................6
     1.60           Piper Jaffray Non-Qualified Retirement Plan................................6
     1.61           Piper Jaffray Savings Plan.................................................7
     1.62           Piper Jaffray Savings Plan Trust...........................................7
     1.63           Restricted Stock...........................................................7
     1.64           Restricted Stock Unit......................................................7
     1.65           Separation.................................................................7
     1.66           Separation and Distribution Agreement......................................7
     1.67           Subsidiaries...............................................................7
     1.68           Tax Sharing Agreement......................................................7
     1.69           Transferred Account Balances...............................................7
     1.70           Transition Date............................................................7
     1.71           U.S........................................................................7

ARTICLE II          GENERAL PRINCIPLES.........................................................7
     2.1            Employment of Piper Jaffray Employees......................................7
     2.2            Assumption and Retention of Liabilities; Related Assets....................8
     2.3            Piper Jaffray Participation in Parent Benefit Plans........................8
     2.4            Service Recognition........................................................8
     2.5            Approval by Parent as Sole Stockholder.....................................8

ARTICLE III         DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS.............................9
     3.1            Savings Plan...............................................................9
     3.2            Company Match..............................................................9
     3.3            Parent Pension Plan........................................................9
                    (a)  Retention of Parent Pension Plan......................................9
                    (b)  Commencement of Pension..............................................10
                    (c)  Vesting..............................................................10

ARTICLE IV          HEALTH AND WELFARE PLANS..................................................10
     4.1            General...................................................................10
</Table>

                                      -ii-
<Page>

<Table>
<S>                 <C>                                                                       <C>
                    (a)  Establishment of Piper Jaffray Health and Welfare Plans..............10
                    (b)  Retention of Sponsorship and Liabilities.............................10
                    (c)  Certain Specific Claims..............................................11
     4.2            Flexible Benefit Plan.....................................................11
     4.3            Workers' Compensation Liabilities.........................................12
     4.4            Payroll Taxes and Reporting of Compensation...............................12
     4.5            Parent Post-Retirement Welfare Benefits Plan..............................12
                    (a)  Retention of Parent Post-Retirement Welfare Benefits Plan............12
                    (b)  Piper Jaffray Post-Retirement Welfare Benefits Plans.................12
     4.6            COBRA and HIPAA Compliance................................................13

ARTICLE V           EXECUTIVE BENEFITS AND OTHER BENEFITS.....................................13
     5.1            Assumption of Obligations.................................................13
     5.2            Parent Executive Incentive Plan and the Annual Incentive Plan.............13
                    (a)  Piper Jaffray Bonus Awards...........................................13
                    (b)  Parent Bonus Awards..................................................13
     5.3            Parent Long-Term Incentive Plans..........................................14
                    (a)  Non-Convertible Parent Options.......................................14
                    (b)  Convertible Parent Options...........................................14
                    (c)  Incentive Stock Options; Foreign Grants/Awards.......................14
                    (d)  Other Awards.........................................................15
                         (i)   Convertible Parent Restricted Stock............................15
                         (ii)  Non-Convertible Parent Restricted Stock........................15
                         (iii) Restricted Stock Units.........................................15
                    (e)  Aggregate Limit......................................................15
                    (f)  Miscellaneous Option and Other Award Terms...........................16
                    (g)  Waiting Period for Exercisability of Options.........................17
                    (h)  Restrictive Covenants................................................17
     5.4            Registration Requirements.................................................18
     5.5            Parent Non-Qualified Retirement Plans.....................................18
     5.6            Severance Plans...........................................................18

ARTICLE VI          GENERAL AND ADMINISTRATIVE................................................19
     6.1            Sharing of Participant Information........................................19
     6.2            Reasonable Efforts/Cooperation............................................19
     6.3            No Third-Party Beneficiaries..............................................19
     6.4            Audit Rights With Respect to Information Provided.........................19
     6.5            Fiduciary Matters.........................................................20
     6.6            Consent of Third Parties..................................................20

ARTICLE VII         MISCELLANEOUS.............................................................20
     7.1            Effect If Distribution Does Not Occur.....................................20
     7.2            Relationship of Parties...................................................21
     7.3            Affiliates................................................................21
     7.4            Notices...................................................................21
     7.5            Incorporation of Separation and Distribution Agreement Provisions.........21
</Table>

                                      -iii-
<Page>

SIGNATURES OF THE PARTIES

                                      -iv-
<Page>

                           EMPLOYEE BENEFITS AGREEMENT

     This EMPLOYEE BENEFITS AGREEMENT, dated as of [   ], 2003 is by and between
U.S. Bancorp, a Delaware corporation ("PARENT"), and Piper Jaffray Companies, a
Delaware corporation ("PIPER JAFFRAY"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned to them in Article
I hereof or assigned to them in the Separation and Distribution Agreement (as
defined below), as applicable.

     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, Parent and
Piper Jaffray have agreed to enter into this Agreement for the purpose of
allocating assets, Liabilities and responsibilities with respect to certain
employee compensation and benefit plans and programs between and among them.

     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

     For purposes of this Agreement, the following terms shall have the
following meanings:

     1.1    "AFFILIATE" has the meaning given that term in the Separation and
Distribution Agreement.

     1.2    "AGREEMENT" means this Employee Benefits Agreement, including all
the Schedules hereto.

     1.3    "ANCILLARY AGREEMENTS" has the meaning given that term in the
Separation and Distribution Agreement.

     1.4    "APPROVED LEAVE OF ABSENCE" means an absence from active service (i)
due to an individual's inability to perform his or her regular job duties by
reason of illness or injury and resulting in eligibility to receive benefits
pursuant to the terms of the Parent Short-Term Disability Program or the Parent
Long-Term Disability Program, or (ii) pursuant to an approved leave policy with
a guaranteed right of reinstatement.

     1.5    "AUDITING PARTY" has the meaning set forth in Section 6.4(a).

<Page>

     1.6    "AWARD," when immediately preceded by "Parent," means Parent
Restricted Stock and Parent Restricted Stock Units and, when immediately
preceded by "Piper Jaffray," means Piper Jaffray Restricted Stock and Restricted
Stock Units.

     1.7    "BENEFIT PLAN" shall mean, with respect to an entity or any of its
Subsidiaries, (a) each "employee welfare benefit plan" (as defined in Section
3(1) of ERISA) and all other employee benefits arrangements, policies or payroll
practices (including, without limitation, severance pay, sick leave, vacation
pay, salary continuation, disability, retirement, deferred compensation, bonus,
stock option or other equity-based compensation, hospitalization, medical
insurance or life insurance) sponsored or maintained by such entity or by any of
its Subsidiaries (or to which such entity or any of its Subsidiaries contributes
or is required to contribute) and (b) all "employee pension benefit plans" (as
defined in Section 3(2) of ERISA), occupational pension plan or arrangement or
other pension arrangements sponsored, maintained or contributed to by such
entity or any of its Subsidiaries (or to which such entity or any of its
Subsidiaries contributes or is required to contribute). When immediately
preceded by "Parent," Benefit Plan means any Benefit Plan sponsored, maintained
or contributed to by Parent or a Parent Entity. When immediately preceded by
"Piper Jaffray," Benefit Plan means any Benefit Plan sponsored, maintained or
contributed to by Piper Jaffray or any Piper Jaffray Entity. The Piper Jaffray
Benefit Plans in effect prior to the Distribution are listed in Schedule 1.7
hereto.

     1.8    "CLOSE OF THE DISTRIBUTION DATE" means 11:59:59 P.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the Distribution Date.

     1.9    "COBRA" means the continuation coverage requirements for "group
health plans" under Title X of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, and as codified in Code Section 4980B and ERISA
Sections 601 through 608.

     1.10   "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary or final regulation in force under that
provision.

     1.11   "COMMITTEE" has the meaning set forth in Section 5.3(a).

     1.12   "CONVERTIBLE HIGH PERFORMANCE OPTION" means each portion of a High
Performance Option, on a grant by grant basis, which is not a Non-Convertible
High Performance Option.

     1.13   "CONVERTIBLE PARENT OPTION" means a Parent Option that, as of the
Distribution Date, (i) is not a High Performance Option, (A) is outstanding
under any Parent Long-Term Incentive Plan, (B) is vested, (C) is held by a
person who is a Piper Jaffray Employee, and (D) would by its terms continue to
vest and would remain exercisable for the remainder of its term following such
employee's termination of employment (x) by Parent other than for "cause" or
"misconduct" or (y) by the optionee, (ii) is not a High Performance Option, (A)
is outstanding under any Parent Long-Term Incentive Plan, (B) is held by a
person who is a Piper Jaffray Employee, and (C) would terminate within 90 days
following a termination of the optionee's employment other than for "gross and
willful misconduct" or "cause" or (iii) is a Convertible High Performance
Option.

                                       -2-
<Page>

     1.14   "CONVERTIBLE RESTRICTED STOCK" has the meaning set forth in
Section 5.3(d)(i).

     1.15   "COVERED EMPLOYEES" has the meaning set forth in Section 4.2(i).

     1.16   "DISTRIBUTION" has the meaning given that term in the Separation and
Distribution Agreement.

     1.17   "DISTRIBUTION DATE" has the meaning given that term in the
Separation and Distribution Agreement.

     1.18   "DISTRIBUTION YEAR" means the calendar year during which the
Distribution Date occurs.

     1.19   "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended. Reference to a specific provision of ERISA also includes any
proposed, temporary or final regulation in force under that provision.

     1.20   "FORMER PARENT EMPLOYEE" means any individual who is a former
employee of Parent or a Parent Entity as of the Distribution Date.

     1.21   "FORMER PIPER JAFFRAY EMPLOYEE" means any individual who is a former
employee of Piper Jaffray or a Piper Jaffray Entity as of the Distribution Date.

     1.22   "HEALTH AND WELFARE PLANS" shall mean any plan, fund or program
which was established or is maintained for the purpose of providing for its
participants or their beneficiaries, through the purchase of insurance or
otherwise, medical, dental, surgical or hospital care or benefits, or benefits
in the event of sickness, accident, disability, death or unemployment, or
vacation benefits, apprenticeship or other training programs or day care
centers, scholarship funds, or prepaid legal services, including any such plan,
fund or program as defined in Section 3(1) of ERISA. When immediately preceded
by "Parent," Health and Welfare Plans means each Health and Welfare Plan that is
a Parent Benefit Plan. When immediately preceded by "Piper Jaffray," Health and
Welfare Plans means each Health and Welfare Plan that is a Piper Jaffray Benefit
Plan.

     1.23   "HIGH PERFORMANCE OPTION" means a Parent Option that, as of the
Distribution Date, (i) is outstanding under any Parent Long-Term Incentive Plan,
(ii) is held by a person who is a Piper Jaffray Employee, (iii) is unvested,
(iv) was granted on January 19, 1999 or February 16, 1999 and (v) were not
granted pursuant to plan UC83 or UM80.

     1.24   "HIPAA" means the health insurance portability and accountability
requirements for "group health plans" under the Health Insurance Portability and
Accountability Act of 1996, as amended.

     1.25   "IMMEDIATELY AFTER THE DISTRIBUTION DATE" means on the first moment
of the day after the Distribution Date.

     1.26   "INDEPENDENT THIRD PARTY" has the meaning set forth in
Section 5.3(f)(vi) of this Agreement.

                                       -3-
<Page>

     1.27   "LIABILITIES" has the meaning given that term in the Separation and
Distribution Agreement.

     1.28   "MATCH DATE" has the meaning set forth in Section 3.2.

     1.29   "NON-CONVERTIBLE HIGH PERFORMANCE OPTION" means fifty percent, on a
grant by grant basis, of the shares of Parent Common Stock subject to a High
Performance Option.

     1.30   "NON-CONVERTIBLE PARENT OPTION" means a Parent Option outstanding
under any Parent Long-Term Incentive Plan as of the Distribution Date other than
a Convertible Parent Option.

     1.31   "NON-PARTIES" has the meaning set forth in Section 6.4(b).

     1.32   "NYSE" means the New York Stock Exchange, Inc.

     1.33   "OPTION," when immediately preceded by "Parent," means an option
(either nonqualified or incentive) to purchase shares of Parent Common Stock
pursuant to a Parent Long-Term Incentive Plan. When immediately preceded by
"Piper Jaffray," Option means an option (either nonqualified or incentive) to
purchase shares of Piper Jaffray Common Stock pursuant to the Piper Jaffray
Long-Term Incentive Plan.

     1.34   "PARENT" is defined in the preamble to this Agreement.

     1.35   "PARENT COMMON STOCK" has the meaning set forth in the Separation
and Distribution Agreement.

     1.36   "PARENT EMPLOYEE" means any individual who, immediately prior to the
Close of the Distribution Date, is either actively employed by, or then on
Approved Leave of Absence from, any Parent Entity.

     1.37   "PARENT ENTITIES" means the members of the Parent Group, as defined
in the Separation and Distribution Agreement, and their respective Subsidiaries
and Affiliates, excluding any business or operations (whether current or
historical, regardless of whether discontinued or sold) that are included in the
Piper Jaffray Business.

     1.38   "PARENT EXECUTIVE BENEFIT PLANS" means the executive benefit and
nonqualified plans, programs, and arrangements established, sponsored,
maintained, or agreed upon, by any Parent Entity for the benefit of employees
and former employees of any Parent Entity before the Close of the Distribution
Date.

     1.39   "PARENT FLEXIBLE BENEFIT PLANS" means the Parent Flexible Benefit
Plan, as in effect as of the time relevant to the applicable provision of this
Agreement.

     1.40   "PARENT LONG-TERM INCENTIVE PLANS" means any of the U.S. Bancorp
2001 Stock Incentive Plan, the U.S. Bancorp 2001 Employee Stock Incentive Plan,
the U.S. Bancorp 1999 Stock Incentive Plan, the Firstar Corporation 1999
Employee Stock Incentive Plan, the Firstar Corporation 1998 Employee Stock
Incentive Plan, the U.S. Bancorp 1998 Executive Stock

                                       -4-
<Page>

Incentive Plan, the U.S. Bancorp 1997 Stock Incentive Plan, the Star Banc
Corporation 1996 Starshare Stock Incentive Plan for Employees, the 1991
Performance and Equity Incentive Plan of the former U.S. Bancorp, the Piper
Jaffray 1993 Omnibus Stock Plan, the U.S. Bancorp 1991 Executive Stock Incentive
Plan and any other stock incentive plan of Parent, all as in effect as of the
time relevant to the applicable provisions of this Agreement.

     1.41   "PARENT NON-QUALIFIED RETIREMENT PLAN" means the U.S. Bancorp
Non-Qualified Retirement Plan in effect as of the time relevant to the
applicable provision of this Agreement.

     1.42   "PARENT NON-QUALIFIED RETIREMENT PLAN PARTICIPANT" means any
individual who has an accrued balance in the Parent Non-Qualified Retirement
Plan as of the Distribution Date.

     1.43   "PARENT OPENING STOCK VALUE" means the opening per-share price of
Parent Common Stock as listed on the NYSE as of the opening of trading on the
first trading day following the Distribution Date; PROVIDED, HOWEVER, that if
the Distribution occurs at a time when the NYSE is open for trading, Parent
Opening Stock Value shall mean the price at which Parent Common Stock trades as
of the moment immediately after the Distribution; and PROVIDED, FURTHER, that if
the Distribution occurs prior to opening of trading on the NYSE on the
Distribution Date, the Parent Opening Stock Value shall mean the price at which
Parent Common Stock first trades on the Distribution Date.

     1.44   "PARENT PENSION PLAN" means the U.S. Bancorp Pension Plan in effect
as of the time relevant to the applicable provision of this Agreement.

     1.45   "PARENT POST-RETIREMENT WELFARE BENEFITS PLAN" means the Health and
Welfare Plan of Parent providing medical, dental or death benefits for retirees.

     1.46   "PARENT SAVINGS PLAN" means the U.S. Bancorp 401(k) Savings Plan as
in effect as of the time relevant to the applicable provision of this Agreement.

     1.47   "PARENT SEVERANCE PAY PROGRAM" means the U.S. Bancorp Severance Pay
Program and the Parent Severance Pay Excess Plan, including any severance
benefits payable under the U.S. Bancorp Comprehensive Welfare Benefit Plan or
any component Benefit Plans thereof such as the U.S. Bancorp Comprehensive
Welfare Benefit Middle Management Change in Control Excess Plan, each as in
effect as of the time relevant to the applicable provision of this Agreement.

     1.48   "PARENT STOCK VALUE" means the closing per-share price of the Parent
Common Stock trading "regular way with due bills" as listed on the NYSE as of
4:00 P.M., Eastern Standard Time or Eastern Daylight Time (whichever shall then
be in effect) on the trading day immediately preceding the Distribution Date.

     1.49   "PARTICIPATING COMPANY" means (a) Parent, (b) any Person (other than
an individual) that Parent has approved for participation in, and which is
participating in, a plan sponsored by any Parent Entity, and (c) any Person
(other than an individual) which, by the terms of such a plan, participates in
such plan or any employees of which, by the terms of such plan, participate in
or are covered by such plan.

                                       -5-
<Page>

     1.50   "PERSON" has the meaning given that term in the Separation and
Distribution Agreement.

     1.51   "PIPER JAFFRAY" is defined in the preamble to this Agreement.

     1.52   "PIPER JAFFRAY BUSINESS" has the meaning given to that term in the
Separation and Distribution Agreement.

     1.53   "PIPER JAFFRAY COMMON STOCK" means the Piper Jaffray Common Stock as
defined in the Separation and Distribution Agreement.

     1.54   "PIPER JAFFRAY COMMON STOCK VALUE" means the excess of the Parent
Stock Value over the Parent Ex-Dividend Closing Stock Value. For purposes of
this Section 1.54, the "Parent Ex-Dividend Closing Stock Value" means the
closing per-share price of the Parent Common Stock trading "ex-dividend" as
listed on the NYSE as of 4:00 P.M., Eastern Standard Time or Eastern Daylight
Time (whichever shall then be in effect) on the Dividend Date; PROVIDED,
HOWEVER, that if the Dividend occurs at a time when the NYSE is open for
trading, Parent Ex-Dividend Closing Stock Value shall mean the price at which
Parent Common Stock trading "ex-dividend last trades immediately before the
Dividend; PROVIDED, FURTHER, that if the Dividend occurs prior to the first
trade on the Dividend Date, the Parent Ex-Dividend Closing Stock Value shall
mean the price at which Parent Common Stock trading "ex-distribution" or "when
issued (to give effect to the Dividend)" last trades on the trading day
immediately preceding the Distribution Date.

     1.55   "PIPER JAFFRAY EMPLOYEE" means any individual who, immediately prior
to the Distribution, is either actively employed by, or then on Approved Leave
of Absence from, a Piper Jaffray Entity.

     1.56   "PIPER JAFFRAY ENTITIES" means the Piper Jaffray Group as defined in
the Separation and Distribution Agreement and any business or operations
(whether current or historical regardless of whether discontinued or sold)
included in the Piper Jaffray Business.

     1.57   "PIPER JAFFRAY EXECUTIVE BENEFIT PLANS" means the executive benefit
and nonqualified plans, programs, and arrangements established, sponsored,
maintained, or agreed upon, by any Piper Jaffray Entity for the benefit of
employees and former employees of any Piper Jaffray Entity before the Close of
the Distribution Date.

     1.58   "PIPER JAFFRAY FLEXIBLE BENEFIT PLAN" means the flexible benefit
plan to be established by Piper Jaffray pursuant to Section 4.2 of this
Agreement as in effect as of the time relevant to the applicable provision of
this agreement.

     1.59   "PIPER JAFFRAY LONG-TERM INCENTIVE PLAN" means the long-term
incentive plan or program to be established by Piper Jaffray, effective
immediately prior to the Distribution Date, in connection with the treatment of
Awards as described in Article V.

     1.60   "PIPER JAFFRAY NON-QUALIFIED RETIREMENT PLAN" has the meaning set
forth in Section 5.5.

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     1.61   "PIPER JAFFRAY SAVINGS PLAN" means the 401(k) and profit sharing
plan to be established by Piper Jaffray pursuant to Section 3.1 of this
Agreement, as in effect as of the time relevant to the applicable provision of
this agreement.

     1.62   "PIPER JAFFRAY SAVINGS PLAN TRUST" means a trust relating to the
Piper Jaffray Savings Plan intended to qualify under Section 401(a) and be
exempt under Section 501(a) of the Code.

     1.63   "RESTRICTED STOCK," when immediately preceded by "Parent," means
shares of Parent Common Stock issued under a Parent Long-Term Incentive Plan
subject to forfeiture in the event that certain terms and conditions are not
satisfied and, when immediately preceded by "Piper Jaffray," means shares of
Piper Jaffray Common Stock issued under the Piper Jaffray Long-Term Incentive
Plan subject to forfeiture in the event that certain terms and conditions are
not satisfied.

     1.64   "RESTRICTED STOCK UNIT" when immediately preceded by "Parent," means
units representing hypothetical shares of Parent Common Stock issued under a
Parent Benefit Plan and, when immediately preceded by "Piper Jaffray," means
units representing hypothetical shares of Piper Jaffray Common Stock issued
under the Piper Jaffray Long-Term Incentive Plan.

     1.65   "SEPARATION" has the meaning given that term in the Separation and
Distribution Agreement.

     1.66   "SEPARATION AND DISTRIBUTION AGREEMENT" is defined in the preamble
to this Agreement.

     1.67   "SUBSIDIARIES" has the meaning given that term in the Separation and
Distribution Agreement.

     1.68   "TAX SHARING AGREEMENT" means the Tax Sharing Agreement entered into
as of the date hereof between Parent and Piper Jaffray.

     1.69   "TRANSFERRED ACCOUNT BALANCES" has the meaning set forth in
Section 4.2(i).

     1.70   "TRANSITION DATE"  has the meaning set forth in Section 4.1(a).

     1.71   "U.S." means the 50 United States of America and the District of
Columbia.

                                   ARTICLE II
                               GENERAL PRINCIPLES

     2.1    EMPLOYMENT OF PIPER JAFFRAY EMPLOYEES. All Piper Jaffray Employees
shall continue to be employees of Piper Jaffray or another Piper Jaffray Entity,
as the case may be, immediately after the Distribution.

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     2.2    ASSUMPTION AND RETENTION OF LIABILITIES; RELATED ASSETS.

            (a)     As of the Distribution Date, except as expressly provided in
this Agreement, the Parent Entities shall assume or retain and Parent hereby
agrees to pay, perform, fulfill and discharge, in due course in full (i) all
Liabilities under all Parent Benefit Plans, (ii) all Liabilities with respect to
the employment or termination of employment of all Parent Employees, Former
Parent Employees and their dependents and beneficiaries, and other service
providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or nonpayroll
worker of any Parent Entity or in any other employment, non-employment, or
retainer arrangement, or relationship with any Parent Entity), in each case to
the extent arising in connection with or as a result of employment with or the
performance of services to any Parent Entity, and (iii) any other Liabilities
expressly assigned to Parent under this Agreement. All assets held in trust to
fund the Parent Benefit Plans and all insurance policies funding the Parent
Benefit Plans shall be Parent Assets (as defined in the Separation and
Distribution Agreement), except to the extent specifically provided otherwise in
this Agreement.

            (b)     From and after the Distribution Date, except as expressly
provided in this Agreement, Piper Jaffray and the Piper Jaffray Entities shall
assume or retain, as applicable, and Piper Jaffray hereby agrees to pay,
perform, fulfill and discharge, (i) all Liabilities under all Piper Jaffray
Benefit Plans, (ii) all Liabilities with respect to the employment or
termination of employment of all Piper Jaffray Employees and other service
providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or nonpayroll
worker of Piper Jaffray or a Piper Jaffray Entity or in any other employment,
non-employment, or retainer arrangement, or relationship with Piper Jaffray or a
Piper Jaffray Entity), and their dependents and beneficiaries, and (iii) all
Liabilities that are expressly assigned to Piper Jaffray or any Piper Jaffray
Entity under this Agreement.

     2.3    PIPER JAFFRAY PARTICIPATION IN PARENT BENEFIT PLANS. Except as
expressly provided in this Agreement, effective as of the Close of the
Distribution Date, Piper Jaffray and each other Piper Jaffray Entity shall cease
to be a Participating Company in any Parent Benefit Plan, and Parent and Piper
Jaffray shall take all necessary action before the Distribution Date to
effectuate such cessation as a Participating Company.

     2.4    SERVICE RECOGNITION. Piper Jaffray shall cause the Piper Jaffray
Benefit Plans with respect to which service is a relevant factor to credit Piper
Jaffray Employees who are employed by Piper Jaffray immediately following the
Distribution with service before the Distribution Date recognized by Parent
under the terms of Parent Benefit Plans with respect to which service is a
relevant factor, except (a) to the extent duplication of benefits would result
and (b) for purposes of benefit accruals under any defined benefit pension plan.

     2.5    APPROVAL BY PARENT AS SOLE STOCKHOLDER. Prior to the Distribution,
Parent shall cause Piper Jaffray to adopt the Piper Jaffray 2003 Long-Term
Incentive Plan substantially in the form attached hereto as EXHIBIT A.

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                                   ARTICLE III
                 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS

     3.1    SAVINGS PLAN. As soon as practicable (and in no event later than 30
days) after the Distribution Date, Piper Jaffray shall establish the Piper
Jaffray Savings Plan and the Piper Jaffray Savings Trust. As soon as practical
following the establishment of the Piper Jaffray Savings Plan and the Piper
Jaffray Savings Trust, Parent shall cause the accounts (including any
outstanding loan balances) of the Piper Jaffray Employees who elect a transfer
under the Parent Savings Plan to be transferred to the Piper Jaffray Savings
Plan and the Piper Jaffray Savings Trust in cash or such other assets as
mutually agreed by Parent and Piper Jaffray, and Piper Jaffray shall cause the
Piper Jaffray Savings Plan to assume and be solely responsible for all
Liabilities under the Piper Jaffray Savings Plan to or relating to Piper Jaffray
Employees who elect a transfer of their accounts (to the extent assets related
to those accounts are transferred from the Parent Savings Plan). Piper Jaffray
will cause the Piper Jaffray Savings Plan to accept direct and indirect
rollovers from the Parent Savings Plan of any account balances of such Piper
Jaffray Employees in accordance with the applicable provisions of the Code.
Notwithstanding the foregoing, the Piper Jaffray Savings Plan shall not be
required to accept a rollover of any Parent Common Stock that is held in the
accounts of Piper Jaffray Employees. Any outstanding participant loans to Piper
Jaffray Employees who elect a transfer under the Parent Savings Plan of their
account to the Piper Jaffray Savings Plan shall be transferred to the Piper
Jaffray Savings Plan in kind. Parent and Piper Jaffray agree to cooperate in
making all appropriate filings and taking all reasonable actions required to
implement the provisions of this Section 3.1; PROVIDED that Piper Jaffray
acknowledges that it will be responsible for complying with any requirements and
applying for any determination letters with respect to the Piper Jaffray Savings
Plan.

     3.2    COMPANY MATCH. Prior to the Distribution, Parent shall amend the
Parent Savings Plan to provide for the making of matching contributions under
the Parent Savings Plan to Piper Jaffray Employees for contributions made to the
Parent Savings Plan by such Piper Jaffray Employees on or prior to the
Distribution Date. As soon as possible following the Distribution Date (the
"MATCH DATE"), Parent shall, to the extent (a) permissible under Treasury
regulations and (b) such contributions are deemed to be qualified contributions,
pursuant to compliance testing of the Parent Savings Plan, contribute to
accounts of Piper Jaffray Employees under the Parent Savings Plan all matching
contributions, if any, due to the Piper Jaffray Employees who participate in the
Parent Savings Plan through the Distribution Date pursuant to the terms and
conditions of the Parent Savings Plan. As soon as practicable following the end
of the year in which the Distribution Date occurs, Piper Jaffray shall, to the
extent (a) permissible under Treasury regulations and (b) such contributions are
deemed to be qualified contributions, pursuant to compliance testing of the
Piper Jaffray Savings Plan, contribute to the Piper Jaffray Savings Plan all
matching contributions, if any, due under the terms and conditions of the Piper
Jaffray Savings Plan to the Piper Jaffray Employees who participate in the Piper
Jaffray Savings Plan from the Distribution Date through the end of the year in
which the Distribution Date occurs.

     3.3    PARENT PENSION PLAN.

            (a)     RETENTION OF PARENT PENSION PLAN. Effective as of the Close
of the Distribution Date, Parent shall retain:

                                       -9-
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                    (i)    sponsorship of the Parent Pension Plan and its
related trust and any other trust or other funding arrangement established or
maintained with respect to such plan, or any assets held as of the Distribution
Date with respect to such plan; and

                    (ii)   all Liabilities relating to, arising out of or
resulting from claims incurred by or on behalf of any individuals with respect
to benefits under the Parent Pension Plan.

            (b)     COMMENCEMENT OF PENSION. Effective as of the Close of the
Distribution Date, each Piper Jaffray Employee who is a participant in the
Parent Pension Plan shall be deemed to have terminated employment with Parent
and, to the extent vested in his or her benefit under the plan, shall be
eligible to request distribution of his or her pension in accordance with the
terms of such plan.

            (c)     VESTING. Following the Close of the Distribution Date, each
Piper Jaffray Employee who is a participant in the Parent Pension Plan as of
immediately prior to the Distribution Date and not vested in his or her benefit
under the Parent Pension Plan as of the Distribution Date shall continue to vest
in his or her benefit under the Parent Pension Plan for so long as such Piper
Jaffray Employee remains employed with Piper Jaffray or a Piper Jaffray Entity,
but upon termination of such employment such Piper Jaffray Employee's benefit
shall no longer continue to vest. Piper Jaffray shall notify Parent on a
quarterly basis at the end of each quarter following the Distribution Date of
any participant in the Parent Pension Plan who is not vested in his or her
benefit under the Parent Pension Plan who has terminated employment with Piper
Jaffray and the Piper Jaffray Entities.

                                   ARTICLE IV
                            HEALTH AND WELFARE PLANS

     4.1    GENERAL.

            (a)     ESTABLISHMENT OF PIPER JAFFRAY HEALTH AND WELFARE PLANS.
Effective as of January 1, 2004 (the "TRANSITION DATE"), Piper Jaffray shall
adopt Health and Welfare Plans for the benefit of Piper Jaffray Employees, and
Piper Jaffray shall be responsible for all Liabilities relating to, arising out
of or resulting from health and welfare coverage or claims incurred by or on
behalf of Piper Jaffray Employees or their covered dependents under the Piper
Jaffray Health and Welfare Plans on or after the Transition Date.

            (b)     RETENTION OF SPONSORSHIP AND LIABILITIES. As of immediately
prior to the Transition Date, Parent shall retain:

                    (i)    sponsorship of all Parent Health and Welfare Plans
and any trust or other funding arrangement established or maintained with
respect to such plans, including any "voluntary employee's beneficiary
association", or any assets held as of the Transition Date with respect to such
plans;

                    (ii)   all Liabilities relating to, arising out of, or
resulting from health and welfare coverage or claims incurred by or on behalf of
Parent Employees, Former Parent

                                      -10-
<Page>

Employees, Piper Jaffray Employees and Former Piper Jaffray Employees, or their
covered dependents under the Parent Health and Welfare Plans on or before the
Transition Date; and

                    (iii)  except as provided in Section 4.1(c), all Liabilities
relating to health and welfare coverage or claims incurred by or on behalf of
Parent Employees, Former Parent Employees and Former Piper Jaffray Employees or
their covered dependents on or after the Transition Date under the Parent Health
and Welfare Plans.

Except as provided in Section 4.1(c), Parent shall not assume any Liability
relating to health and welfare claims incurred by or on behalf of Piper Jaffray
Employees or their covered dependents on or after the Transition Date, and such
claims shall be satisfied pursuant to Section 4.1(a). Except as provided in
Section 4.1(c), a claim or Liability (1) for medical, dental, vision and/or
prescription drug benefits shall be deemed to be incurred upon the rendering of
health services giving rise to the obligation to pay such benefits; (2) for life
insurance and accidental death and dismemberment and business travel accident
insurance benefits and workers' compensation benefits shall be deemed to be
incurred upon the occurrence of the event giving rise to the entitlement to such
benefits; (3) for salary continuation or other disability benefits shall be
deemed to be incurred upon the effective date of an individual's disability
giving rise to the entitlement to such benefits; and (4) for a period of
continuous hospitalization shall be deemed to be incurred on the date of
admission to the hospital.

            (c)     CERTAIN SPECIFIC CLAIMS. Parent shall be responsible for all
Liabilities under the applicable Parent Health and Welfare Plan that relate to,
arise out of or result from any period of continuous hospitalization of a Piper
Jaffray Employee or Former Piper Jaffray Employee or his or her covered
dependent that begins before the Transition Date under a Parent Health and
Welfare Plan and continues after the Transition Date; PROVIDED, HOWEVER, that
Parent shall not be responsible for Liabilities in excess of the benefits
otherwise provided by the terms of the respective plans. Parent also shall be
responsible for all Liabilities under the applicable Parent Health and Welfare
Plan that relate to, arise out of or result from any denture work, bridge work,
crown installation or root canal therapy for a Piper Jaffray Employee, Former
Piper Jaffray Employee or his or her covered dependent for which preparatory
dental services have been rendered under a Parent Health and Welfare Plan on or
before the Transition Date and such dental treatment continues after the
Transition Date, PROVIDED that such dental treatment is concluded within
allowable time limitations under the applicable Parent Health and Welfare Plan.
Coverage for any such hospitalization or dental services shall be provided after
the Transition Date without interruption under the appropriate Parent Health and
Welfare Plan until such hospitalization or treatment for such condition is
concluded or discontinued subject to applicable plan rules and limitations.

     4.2    FLEXIBLE BENEFIT PLAN. Parent shall be responsible for all
Liabilities of the Piper Jaffray Employees who are participants in the Parent
Flexible Benefit Plan (the "COVERED EMPLOYEES") under the health care
reimbursement program, the transit and parking reimbursement program and the
dependent care reimbursement program of the Parent Flexible Benefit Plan for
claims incurred at any time during the 2003 plan year of the Parent Flexible
Benefit Plan and submitted to the Parent in accordance with the terms and
conditions of the Parent Flexible Benefit Plan.

                                      -11-
<Page>

     4.3    WORKERS' COMPENSATION LIABILITIES. Except as provided below, all
workers' compensation Liabilities relating to, arising out of, or resulting from
any claim by a Parent Employee, Former Parent Employee, Piper Jaffray Employee
and Former Piper Jaffray Employee that results from an accident occurring, or
from an occupational disease which becomes manifest, before the Close of the
Distribution Date shall be retained by Parent; provided, however, that all
amounts payable by Parent relating to, arising out of or resulting from any such
claim by a Piper Jaffray Employee shall be deemed to be a Piper Jaffray
Liability for purposes of the Insurance Matters Agreement and shall be paid by
Parent or Piper Jaffray as set forth in the Insurance Matters Agreement. All
workers' compensation Liabilities relating to, arising out of, or resulting from
any claim by a Parent Employee, Former Parent Employee or Former Piper Jaffray
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by Parent. All workers' compensation Liabilities relating to, arising
out of, or resulting from any claim by a Piper Jaffray Employee that results
from an accident occurring, or from an occupational disease which becomes
manifest, on or after the Distribution Date shall be retained by Piper Jaffray.
For purposes of this Agreement, a compensable injury shall be deemed to be
sustained upon the occurrence of the event giving rise to eligibility for
workers' compensation benefits or an occupational disease becomes manifest, as
the case may be. Parent, Piper Jaffray and the other Piper Jaffray Entities
shall cooperate with respect to any notification to appropriate governmental
agencies of the Distribution and the issuance of new, or the transfer of
existing, workers' compensation insurance policies and claims handling
contracts.

     4.4    PAYROLL TAXES AND REPORTING OF COMPENSATION. Parent and Piper
Jaffray shall, and shall cause the other Parent Entities and the other Piper
Jaffray Entities to, respectively, take such action as may be reasonably
necessary or appropriate in order to minimize Liabilities related to payroll
taxes after the Distribution Date. Parent and Piper Jaffray shall, and shall
cause the other Parent Entities and the other Piper Jaffray Entities to,
respectively, each bear its responsibility for payroll tax obligations and for
the proper reporting to the appropriate governmental authorities of compensation
earned by their respective employees after the Close of the Distribution Date,
including compensation related to the exercise of Options.

     4.5    PARENT POST-RETIREMENT WELFARE BENEFITS PLAN.

            (a)     RETENTION OF PARENT POST-RETIREMENT WELFARE BENEFITS PLAN.
As of the Distribution Date, Parent shall retain (i) sponsorship of all Parent
Post-Retirement Welfare Benefits Plans and any trust or other funding
arrangement established or maintained with respect to such plans, or any assets
held as of the Distribution Date with respect to such plans and (ii) all
Liabilities relating to, arising out of, or resulting from retiree health and
welfare coverage or claims incurred by or on behalf of Parent Employees, Former
Parent Employees, Former Piper Jaffray Employees or their covered dependents
under the Parent Post-Retirement Welfare Benefits Plans. Parent shall not assume
any Liability relating to post-retirement welfare claims incurred by or on
behalf of Piper Jaffray Employees or their covered dependents after the
Distribution Date, and such claims shall be satisfied by Piper Jaffray pursuant
to Section 4.5(b).

            (b)     PIPER JAFFRAY POST-RETIREMENT WELFARE BENEFITS PLANS.
Effective as of the Distribution Date, (i) Piper Jaffray may, in its sole
discretion, adopt Post-Retirement Welfare Benefits Plans for the benefit of
Piper Jaffray Employees, and (ii) Piper Jaffray shall be

                                      -12-
<Page>

responsible for all Liabilities relating to, arising out of or resulting from
health and welfare coverage or claims incurred by or on behalf of Piper Jaffray
Employees or their covered dependents under the Piper Jaffray Post-Retirement
Welfare Benefits Plans.

     4.6    COBRA AND HIPAA COMPLIANCE. Parent shall be responsible for
administering compliance with the health care continuation requirements of
COBRA, the certificate of creditable coverage requirements of HIPAA, and the
corresponding provisions of the Parent Health and Welfare Plans with respect to
Piper Jaffray Employees and their covered dependents who incur a COBRA
qualifying event or loss of coverage under the Parent Health and Welfare Plans
at any time on or before December 31, 2003. Effective on the Transition Date,
Piper Jaffray or another Piper Jaffray Entity shall be responsible for
administering compliance with the health care continuation requirements of
COBRA, the certificate of creditable coverage requirements of HIPAA, and the
corresponding provisions of the Piper Jaffray Health and Welfare Plans with
respect to Piper Jaffray Employees and their covered dependents who incur a
COBRA qualifying event or loss of coverage under the Piper Jaffray Health and
Welfare Plans at any time after December 31, 2003. The parties hereto agree that
the consummation of the transactions contemplated by this Agreement and the
Separation Agreement shall not constitute a COBRA qualifying event for any
purpose of COBRA.

                                    ARTICLE V
                      EXECUTIVE BENEFITS AND OTHER BENEFITS

     5.1    ASSUMPTION OF OBLIGATIONS. Except as provided in this Agreement,
effective as of the Distribution Time, Piper Jaffray shall assume and be solely
responsible for all Liabilities to or relating to Piper Jaffray Employees under
all Parent Executive Benefit Plans and Piper Jaffray Executive Benefit Plans.
None of the transactions contemplated by the Separation and Distribution
Agreement or any of the Ancillary Agreements, including, without limitation,
this Agreement, constitutes a change in control for purposes of any Employee
Benefit Plan.

     5.2    PARENT EXECUTIVE INCENTIVE PLAN AND THE ANNUAL INCENTIVE PLAN.

            (a)     PIPER JAFFRAY BONUS AWARDS. Piper Jaffray shall be
responsible for determining all bonus awards that would otherwise be payable
under the U.S. Bancorp Executive Incentive Plan and the U.S. Bancorp Annual
Incentive Plan to Piper Jaffray Employees for the Distribution Year. Piper
Jaffray shall also determine for Piper Jaffray Employees (i) the extent to which
established performance criteria (as interpreted by Piper Jaffray, in its sole
discretion) have been met, and (ii) the payment level for each Piper Jaffray
Employee. Piper Jaffray shall assume all Liabilities with respect to any such
bonus awards payable to Piper Jaffray Employees for the Distribution Year and
thereafter.

            (b)     PARENT BONUS AWARDS. Parent shall be responsible for
determining all bonus awards that would otherwise be payable under the U.S.
Bancorp Executive Incentive Plan and the U.S. Bancorp Annual Incentive Plan to
Parent Employees for the Distribution Year. Parent shall also determine for
Parent Employees (i) the extent to which established performance criteria have
been met, and (ii) the payment level for each such Parent Employee. Parent shall

                                      -13-
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retain all Liabilities with respect to any such bonus awards payable to Parent
Employees for the Distribution Year and thereafter.

     5.3    PARENT LONG-TERM INCENTIVE PLANS. Parent and Piper Jaffray shall use
their reasonable best efforts to take all actions necessary or appropriate so
that each outstanding Option and Award granted under any Parent Long-Term
Incentive Plan held by any individual shall be adjusted as set forth in this
Article V.

            (a)     NON-CONVERTIBLE PARENT OPTIONS. As determined by the
Compensation Committee of the Parent Board of Directors (the "COMMITTEE") in its
sole discretion pursuant to its authority under any of the Parent Long-Term
Incentive Plans, each Non-Convertible Parent Option shall be subject to the same
terms and conditions after the Distribution as the terms and conditions
applicable to such Non-Convertible Parent Option immediately prior to the
Distribution; PROVIDED, HOWEVER, that from and after the Close of the
Distribution (i) the number of shares of Parent Common Stock subject to such
Non-Convertible Parent Option, rounded to the nearest whole share, shall be
equal to the product of (x) the number of shares of Parent Common Stock subject
to such Non-Convertible Parent Option immediately prior to the Distribution Date
and (y) the quotient obtained by dividing the Parent Stock Value by the Parent
Opening Stock Value and (ii) the exercise price of such Non-Convertible Parent
Option, rounded to the nearest whole cent, shall be equal to the quotient
obtained by dividing (x) the exercise price of such Non-Convertible Parent
Option immediately prior to the Distribution by (y) the quotient obtained by
dividing the Parent Stock Value by the Parent Opening Stock Value; PROVIDED,
HOWEVER, that, in the case of any Non-Convertible Parent Option to which Section
421 of the Code applies by reason of its qualification under Section 422 of the
Code as of the Distribution, the exercise price, the number of shares of Parent
Common Stock subject to such option and the terms and conditions of exercise of
such option shall be determined in a manner consistent with the requirements of
Section 424(a) of the Code.

            (b)     CONVERTIBLE PARENT OPTIONS. As determined by the Committee
in its sole discretion pursuant to its authority under any of the Parent
Long-Term Incentive Plans, each Convertible Parent Option shall be converted at
the time of the Distribution into a Piper Jaffray Option, which shall be granted
pursuant to the Piper Jaffray Long-Term Incentive Plan and shall have a
Black-Scholes value equal to the Black-Scholes value of the Convertible Parent
Option as of the last trading date prior to the Distribution Date (as such
values are determined in the sole discretion of the Committee, whose
determination, notwithstanding anything herein to the contrary, shall be final,
binding and conclusive for all purposes under the applicable Parent Long-Term
Incentive Plan), assuming for this purpose that the remaining life of the
Convertible Parent Option is the remaining contractual life of such option and
subject to such other terms and conditions as the Committee may specify.

            (c)     INCENTIVE STOCK OPTIONS; FOREIGN GRANTS/AWARDS. To the
extent that any of the Parent Options described in Section 5.3(a) are "incentive
stock options," Parent shall use its commercially reasonable efforts to
preserve, at and after the Distribution, the value and tax treatment accorded to
such incentive stock options, and, to the extent that the Parent Awards
described in Section 5.3(d) below or any of the Parent Options described in
Section 5.3(a) or 5.3(b) are granted to non-U.S. employees under any domestic or
foreign equity-based incentive program sponsored by a Parent Entity, subject to
the provisions of such Sections 5.3(a), 5.3(b)

                                      -14-
<Page>

and 5.3(d), Parent and Piper Jaffray shall use their commercially reasonable
efforts to preserve, at and after the Distribution, the value and tax treatment
accorded to such Parent Options and such Parent Awards granted to non-U.S.
employees under any domestic or foreign equity-based incentive program sponsored
by a Parent Entity. The parties hereby delegate to the Parent Executive Vice
President-Human Resources, for periods before the Distribution Date, the
authority to determine an appropriate methodology for adjusting such grants or
awards in a manner that is, to the extent possible, consistent with the
treatment of such awards and grants for U.S. employees.

            (d)     OTHER AWARDS.

                    (i)    CONVERTIBLE PARENT RESTRICTED STOCK. As determined by
the Committee in its sole discretion pursuant to its authority under any of the
Parent Long-Term Incentive Plans, each share of Parent Restricted Stock held by
a Piper Jaffray Employee ("CONVERTIBLE RESTRICTED STOCK") shall be converted at
the Distribution into a number of shares of Piper Jaffray Restricted Stock,
rounded to the nearest whole share, required to be granted to the holder of such
Parent Restricted Stock in order that the fair value of such Piper Jaffray
Restricted Stock (as determined by the Committee in its sole discretion
following methods and assumptions consistent with SFAS 123) as of immediately
following the Distribution Date shall equal the fair value of the Parent
Restricted Stock immediately prior to the Distribution Date.

                    (ii)   NON-CONVERTIBLE PARENT RESTRICTED STOCK. As
determined by the Committee in its sole discretion pursuant to its authority
under any of the Parent Long-Term Incentive Plans, each share of Parent
Restricted Stock that is not Convertible Restricted Stock shall be subject to
the same terms and conditions after the Distribution as the terms and conditions
applicable to such Parent Restricted Stock immediately prior to the
Distribution; PROVIDED, HOWEVER, that on the Close of the Distribution, the
holder of the Parent Restricted Stock shall receive a number of shares of Piper
Jaffray Common Stock determined in the manner set forth in Section 3.1 of the
Separation and Distribution Agreement. Notwithstanding anything in any award
agreement evidencing the grant of such Parent Restricted Stock to the contrary,
in no event shall the Piper Jaffray Common Stock received with respect to such
Parent Restricted Stock be subject to any restriction.

                    (iii)  RESTRICTED STOCK UNITS. As determined by the
Committee in its sole discretion pursuant to its authority under any of the
Parent Long-Term Incentive Plans, each Parent Restricted Stock Unit shall be
subject to the same terms and conditions after the Distribution as the terms and
conditions applicable to such Parent Restricted Stock Unit immediately prior to
the Distribution; PROVIDED, HOWEVER, that from and after the Close of the
Distribution the number of shares of Parent Common Stock subject to such Parent
Restricted Stock Unit, rounded to the nearest whole share, shall be equal to the
product of (x) the number of shares of Parent Common Stock subject to such
Parent Restricted Stock Unit immediately prior to the Distribution Date and (y)
the quotient obtained by dividing the Parent Stock Value by the Parent Opening
Stock Value.

            (e)     AGGREGATE LIMIT. Notwithstanding any provision of this
Section 5.3 to the contrary, if the aggregate number of shares of Piper Jaffray
Common Stock subject to Piper Jaffray Options and the number of shares of Piper
Jaffray Restricted Stock issuable pursuant to

                                      -15-
<Page>

Sections 5.3(b) and 5.3(d)(i) would exceed 8,000,000 in the aggregate, then the
number of shares of Piper Jaffray Common Stock subject to Piper Jaffray Options
and shares of Piper Jaffray Restricted Stock issuable under Sections 5.3(b) and
5.3(d)(i) shall be reduced on an individual pro rata grant-by-grant basis such
that 8,000,000 shares of Piper Jaffray Common Stock shall be subject to Piper
Jaffray Options and Piper Jaffray Awards issuable pursuant to Sections 5.3(b)
and 5.3(d)(i).

            (f)     MISCELLANEOUS OPTION AND OTHER AWARD TERMS.

                    (i)    Parent and Piper Jaffray acknowledge that, in the
context of the Separation, the adjustment to Parent Options and the Parent
Awards as set forth in this Section 5.3 will be implemented, in part, by the
issuance of Piper Jaffray Options and Piper Jaffray Awards under the terms of
the Piper Jaffray Long-Term Incentive Plan. Accordingly, it is intended that, to
the extent of the issuance of such Piper Jaffray Options and Piper Jaffray
Awards in connection with the adjustments set forth in this Section 5.3, the
Piper Jaffray Long-Term Incentive Plan shall be considered a successor to the
Parent Long-Term Incentive Plan and to have assumed the obligation of the Parent
Long-Term Incentive Plan to make the adjustment of Parent Options and Parent
Awards as set forth in this Section 5.3.

                    (ii)   After the Distribution Date, Parent Options and
Parent Awards adjusted pursuant to Section 5.3, regardless of by whom held,
shall be settled by Parent pursuant to the terms of the Parent Long-Term
Incentive Plan, and Piper Jaffray Options and Piper Jaffray Awards, regardless
of by whom held, shall be settled by Piper Jaffray pursuant to the terms of the
Piper Jaffray Long-Term Incentive Plan.

                    (iii)  Parent or a Parent Entity shall claim the benefit of
federal, state, and local tax deductions related to the exercise of all adjusted
Parent Options and the vesting or settlement, as applicable, of Parent Awards
after the Distribution Date and none of Piper Jaffray or any Piper Jaffray
Entity shall claim any such tax deductions. After the Distribution Date, Parent
and the Parent Entities shall be responsible for the proper payroll tax
treatment and the proper reporting to the appropriate governmental authorities
of compensation relating to all option exercises of Parent Options and vesting
or settlement, as applicable, of Parent Awards.

                    (iv)   Piper Jaffray or a Piper Jaffray Entity shall claim
the benefit of federal, state and local tax deductions related to the exercise
of Piper Jaffray Options and the vesting or settlement, as applicable, of Piper
Jaffray Awards after the Distribution Date and neither Parent nor any Parent
Entity shall claim any such tax deductions. After the Distribution Date, Piper
Jaffray and the Piper Jaffray Entities shall be responsible for the proper
payroll tax treatment and the proper reporting to the appropriate governmental
authorities of compensation relating to all option exercises of Piper Jaffray
Options and vesting or settlement, as applicable, of Piper Jaffray Awards.

                    (v)    Parent and Piper Jaffray agree to act (or to take
such action) with respect to such federal, state, or local tax deductions, and
with respect to fulfilling the payroll tax and reporting obligations on
compensation as are reasonably necessary or appropriate to achieve, maintain
and/or preserve such tax results.

                                      -16-
<Page>

                    (vi)   If (A) as a result of a determination (as defined in
Section 1313 of the Code) or (B) in the opinion of nationally recognized tax
counsel to Parent or Piper Jaffray, which opinion and tax counsel are reasonably
acceptable to the other party hereto, as a result of final or pending Treasury
Regulations, Internal Revenue Service announcement or otherwise, in each case,
there is a substantial likelihood that the tax deductions related to the
exercise of Options or Awards under this Agreement and/or the payroll tax and
reporting obligations related to the exercise of Options or vesting or
settlement of Awards, will be inconsistent with all or any part of Section 5.3
above, the parties shall negotiate in good faith to restructure the arrangements
set forth herein so that (I) if, pursuant to the determination or opinion, a
party gets a tax deduction it was not entitled to claim under the terms of this
Agreement, that party shall pay over to the party entitled to claim the
deduction under the terms of this Agreement, as if and for the tax year(s)
recognized through a reduction in taxes due and/or the receipt of a refund in an
amount equal to the lesser of (X) its tax benefit and (Y) the benefit otherwise
available to the party entitled to such deduction under the terms of this
Agreement, as if and for the tax year(s) when such deduction would have resulted
in a reduction in taxes due and/or the receipt of a refund and (II) the
reporting and financial burden of the payroll taxes are, to the extent
practicable, as described above. Any such amounts shall be payable within 30
days of the filing of the return in which the benefit described in (X) or (Y) of
the preceding sentence, whichever is later, is reflected. If the parties are
unable to reach an agreement on how to restructure the arrangements set forth
herein within 90 days of such determination or the receipt of the opinion of
counsel described in the first sentence of this subparagraph (vi) such
disagreement shall be resolved by a nationally recognized law firm or accounting
firm ("INDEPENDENT THIRD PARTY"), selected in a manner similar to the procedure
set forth in Section 3(b)(iii) of the Tax Sharing Agreement, whose judgment
shall be conclusive and binding upon the parties. The cost of any Independent
Third Party shall be shared equally between the parties.

            (g)     WAITING PERIOD FOR EXERCISABILITY OF OPTIONS. The Parent
Options and Piper Jaffray Options shall not be exercisable during a period
beginning on a date prior to the Distribution Date determined by Parent in its
sole discretion, and continuing until the Parent Opening Stock Value and the
Piper Jaffray Common Stock Value are determined immediately after the
Distribution, or such longer period as Parent determines necessary to implement
the provisions of this Section 5.3.

            (h)     RESTRICTIVE COVENANTS. Following the Distribution Date,
Piper Jaffray shall use its reasonable best efforts to monitor the Piper Jaffray
Employees and Former Piper Jaffray Employees to determine whether any such Piper
Jaffray Employees or Former Piper Jaffray Employees have breached any of the
restrictive covenants in the agreements evidencing the terms of their Parent
Options and Parent Awards. As soon as practicable following Piper Jaffray's
reasonable belief that a Piper Jaffray Employee or Former Piper Jaffray Employee
has breached any such covenant, Piper Jaffray shall provide Parent in writing
with the name and address of such employee or former employee and the name and
address of the enterprise in which such employee or former employee is believed
to have been engaged. Notwithstanding the foregoing or anything in any agreement
evidencing the terms of any Parent Options and Parent Awards to the contrary, it
shall not be a violation of any non-competition or non-solicitation of clients
or customers covenant for a holder of a Parent Option or Parent Award to engage
in acts on behalf of Piper Jaffray or a Piper Jaffray Entity that are otherwise
prohibited by the terms of such non-competition or non-solicitation of clients
or customers covenants.

                                      -17-
<Page>

     5.4    REGISTRATION REQUIREMENTS. As soon as possible following the time as
of which the Registration Statement (as defined in the Separation and
Distribution Agreement) is declared effective by the Securities and Exchange
Commission but in any case before the Distribution Date and before the date of
issuance or grant of any Piper Jaffray Option and/or shares of Piper Jaffray
Common Stock pursuant to this Article V, Piper Jaffray agrees that it shall file
a Form S-8 Registration Statement with respect to and cause to be registered
pursuant to the Securities Act of 1933, as amended, the shares of Piper Jaffray
Common Stock authorized for issuance under the Piper Jaffray Long-Term Incentive
Plan as required pursuant to such Act and any applicable rules or regulations
thereunder, with such registration to be effective prior to the Distribution
Date.

     5.5    PARENT NON-QUALIFIED RETIREMENT PLANS. Effective as of the
Distribution Date, Piper Jaffray shall establish a non-qualified pension plan
(the "PIPER JAFFRAY NON-QUALIFIED RETIREMENT PLAN") that is substantially
identical to the Parent Non-Qualified Retirement Plan to provide benefits to
Piper Jaffray Employees and Former Piper Jaffray Employees from and after the
Distribution Date who were participants in the Parent Non-Qualified Retirement
Plan as of immediately prior to the Distribution Date. Effective as of the
Distribution Date, Piper Jaffray shall assume and be solely responsible for all
Liabilities of Parent for, or relating to, benefits accrued through the
Distribution Date by or with respect to Piper Jaffray Employees and Former Piper
Jaffray Employees under the Parent Non-Qualified Retirement Plan and the Piper
Jaffray Non-Qualified Retirement Plan.

     5.6    SEVERANCE PLANS. The Parent Severance Pay Program provides for the
payment of certain compensation and benefits in the event of the termination of
employment of the individual covered by the terms of such plans. As of the Close
of the Distribution Date, Parent shall retain all Liabilities relating to the
Parent Severance Pay Program and all Liabilities relating to, arising out of, or
resulting from claims incurred by or on behalf of any individual under such
plans. A Piper Jaffray Employee shall not be deemed to have terminated
employment for purposes of determining eligibility for benefits under the
Severance Pay Plan or other similar plans and programs in connection with or in
anticipation of the consummation of the transactions contemplated by the
Separation and Distribution Agreement, and shall cease to be covered thereby as
of the Close of the Distribution Date. Piper Jaffray shall be solely responsible
for all Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any Piper Jaffray
Employee's employment that occurs as a result of or in connection with or
following the consummation of the transactions contemplated by the Separation
and Distribution Agreement, including any amounts required to be paid (including
any payroll or other taxes), and the costs of providing benefits, under any
applicable severance, separation, redundancy, termination or similar plan,
program, practice, contract, agreement, law or regulation (such benefits to
include any medical or other welfare benefits, outplacement benefits, accrued
vacation, and taxes). The Parent shall retain all Liabilities with respect to
the termination of any Piper Jaffray Employee or Former Piper Jaffray employee
prior to the Distribution Date.

                                      -18-
<Page>

                                   ARTICLE VI
                           GENERAL AND ADMINISTRATIVE

     6.1    SHARING OF PARTICIPANT INFORMATION. Parent and Piper Jaffray shall
share, and Parent shall cause each other Parent Entity to share, and Piper
Jaffray shall cause each other Piper Jaffray Entity to share with each other and
their respective agents and vendors (without obtaining releases) all participant
information necessary for the efficient and accurate administration of each of
the Piper Jaffray Benefit Plans and the Parent Benefit Plans. Parent and Piper
Jaffray and their respective authorized agents shall, subject to applicable
laws, be given reasonable and timely access to, and may make copies of, all
information relating to the subjects of this Agreement in the custody of the
other party, to the extent necessary for such administration. Until the Close of
the Distribution Date, all participant information shall be provided in the
manner and medium applicable to Participating Companies in Benefit Plans of
Parent generally, and thereafter until December 31, 2003, all participant
information shall be provided in a manner and medium as may be mutually agreed
to by Parent and Piper Jaffray.

     6.2    REASONABLE EFFORTS/COOPERATION. Each of the parties hereto will use
its commercially reasonable efforts to promptly take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Each of the parties hereto shall cooperate fully
on any issue relating to the transactions contemplated by this Agreement for
which the other party seeks a determination letter or private letter ruling from
the Internal Revenue Service, an advisory opinion from the Department of Labor
or any other filing, consent or approval with respect to or by a governmental
agency.

     6.3    NO THIRD-PARTY BENEFICIARIES. 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. Except as expressly provided in this Agreement,
nothing in this Agreement shall preclude Parent or any other Parent Entity, at
any time after the Close of the Distribution Date, from amending, merging,
modifying, terminating, eliminating, reducing, or otherwise altering in any
respect any Parent Benefit Plan, any benefit under any Benefit Plan or any
trust, insurance policy or funding vehicle related to any Parent Benefit Plan.
Except as expressly provided in this Agreement, nothing in this Agreement shall
preclude Piper Jaffray or any other Piper Jaffray Entity, at any time after the
Close of the Distribution Date, from amending, merging, modifying, terminating,
eliminating, reducing, or otherwise altering in any respect any Piper Jaffray
Benefit Plan, any benefit under any Benefit Plan or any trust, insurance policy
or funding vehicle related to any Piper Jaffray Benefit Plan.

     6.4    AUDIT RIGHTS WITH RESPECT TO INFORMATION PROVIDED.

            (a)     Each of Parent and Piper Jaffray, and their duly authorized
representatives, shall have the right to conduct reasonable audits with respect
to all information required to be provided to it by the other party under this
Agreement. The party conducting the audit (the "AUDITING PARTY") may adopt
reasonable procedures and guidelines for conducting audits and the selection of
audit representatives under this Section 6.4. The Auditing Party shall have the
right to make copies of any records at its expense, subject to any restrictions
imposed by applicable laws and to any confidentiality provisions set forth in
the Separation and Distribution

                                      -19-
<Page>

Agreement, which are incorporated by reference herein. The party being audited
shall provide the Auditing Party's representatives with reasonable access during
normal business hours to its operations, computer systems and paper and
electronic files, and provide workspace to its representatives. After any audit
is completed, the party being audited shall have the right to review a draft of
the audit findings and to comment on those findings in writing within ten
business days after receiving such draft.

            (b)     The Auditing Party's audit rights under this Section 6.4
shall include the right to audit, or participate in an audit facilitated by the
party being audited, of any Subsidiaries and Affiliates of the party being
audited and to require the other party to request any benefit providers and
third parties with whom the party being audited has a relationship, or agents of
such party, to agree to such an audit to the extent any such persons are
affected by or addressed in this Agreement (collectively, the "NON-PARTIES").
The party being audited shall, upon written request from the Auditing Party,
provide an individual (at the Auditing Party's expense) to supervise any audit
of a Non-party. The Auditing Party shall be responsible for supplying, at the
Auditing Party's expense, additional personnel sufficient to complete the audit
in a reasonably timely manner. The responsibility of the party being audited
shall be limited to providing, at the Auditing Party's expense, a single
individual at each audited site for purposes of facilitating the audit.

     6.5    FIDUCIARY MATTERS. It is acknowledged that actions required to be
taken pursuant to this Agreement may be subject to fiduciary duties or standards
of conduct under ERISA or other applicable law, and no party shall be deemed to
be in violation of this Agreement if it fails to comply with any provisions
hereof based upon its good faith determination that to do so would violate such
a fiduciary duty or standard. Each party shall be responsible for taking such
actions as are deemed necessary and appropriate to comply with its own fiduciary
responsibilities and shall fully release and indemnify the other party for any
Liabilities caused by the failure to satisfy any such responsibility.

     6.6    CONSENT OF THIRD PARTIES. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, the parties hereto shall use their reasonable best efforts to
implement the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement cannot be implemented due to the
failure of such third party to consent, the parties hereto shall negotiate in
good faith to implement the provision in a mutually satisfactory manner. The
phrase "reasonable best efforts" as used herein shall not be construed to
require any party to incur any non-routine or unreasonable expense or Liability
or to waive any right.

                                   ARTICLE VII
                                  MISCELLANEOUS

     7.1    EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the Separation and
Distribution Agreement is terminated prior to the Distribution Date, then all
actions and events that are, under this Agreement, to be taken or occur
effective immediately prior to or as of the Close of the Distribution Date, or
Immediately after the Distribution Date, or otherwise in connection with

                                      -20-
<Page>

the Separation Transactions shall not be taken or occur except to the extent
specifically agreed by Parent and Piper Jaffray.

     7.2    RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.

     7.3    AFFILIATES. Each of Parent and Piper Jaffray shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by another Parent Entity
or a Piper Jaffray Entity, respectively.

     7.4    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):

            (a)     if to Parent:

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

     with copies to:

                    Wachtell, Lipton, Rosen & Katz
                    51 West 52nd Street
                    New York, NY  10019
                    Attention:  Adam D. Chinn
                    Facsimile No.:  (212) 403-2209

            (b)     if to Piper Jaffray:

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

     7.5    INCORPORATION OF SEPARATION AND DISTRIBUTION AGREEMENT PROVISIONS.
The following provisions of the Separation and Distribution Agreement are hereby
incorporated

                                      -21-
<Page>

herein by reference, and unless otherwise expressly specified herein, such
provisions shall apply as if fully set forth herein (references in this Section
7.5 to an "Article" or "Section" shall mean Articles or Sections of the
Separation and Distribution Agreement, and references in the material
incorporated herein by reference shall be references to the Separation and
Distribution Agreement): Article IV (relating to Survival and Indemnification);
Article V (relating to Certain Additional Covenants); Article VI (relating to
Access to Information); Article VII (relating to No Representations or
Warranties); Article VIII (relating to Terminations); Article IX (relating to
Miscellaneous).

                                      -22-
<Page>

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

                                     U.S. BANCORP

                                     By:
                                        -------------------------------
                                     Name:
                                     Title:

                                     PIPER JAFFRAY COMPANIES

                                     By:
                                        -------------------------------
                                     Name:
                                     Title:

                                      -23-

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