Document:

<PAGE>

                                                                    EXHIBIT 10.1

                           EMPLOYEE BENEFITS AGREEMENT

                                 BY AND BETWEEN

                                  U.S. BANCORP

                                       AND

                             PIPER JAFFRAY COMPANIES

                                   DATED AS OF
                                DECEMBER 22, 2003

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                                TABLE OF CONTENTS
<TABLE>
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<S>                                                                                      <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       Covered Employees......................................................   2
     1.13       Distribution...........................................................   2
     1.14       Distribution Date......................................................   2
     1.15       Distribution Year......................................................   2
     1.16       ERISA..................................................................   2
     1.17       Former Parent Employee.................................................   3
     1.18       Former Piper Jaffray Employee..........................................   3
     1.19       Health and Welfare Plans...............................................   3
     1.20       HIPAA..................................................................   3
     1.21       Immediately after the Distribution Date................................   3
     1.22       Independent Third Party................................................   3
     1.23       Liabilities............................................................   3
     1.24       Match Date.............................................................   3
     1.25       Non-parties............................................................   3
     1.26       NYSE...................................................................   3
     1.27       Option.................................................................   3
     1.28       Parent.................................................................   3
     1.29       Parent Common Stock....................................................   3
     1.30       Parent Employee........................................................   4
     1.31       Parent Entities........................................................   4
     1.32       Parent Executive Benefit Plans.........................................   4
     1.33       Parent Flexible Benefit Plans..........................................   4
     1.34       Parent Long-Term Incentive Plans.......................................   4
     1.35       Parent Non-Qualified Retirement Plan...................................   4
     1.36       Parent Non-Qualified Retirement Plan Participant.......................   4
     1.37       Parent Opening Stock Value.............................................   4
     1.38       Parent Pension Plan....................................................   4
     1.39       Parent Post-Retirement Welfare Benefits Plan...........................   4
     1.40       Parent Savings Plan....................................................   5
     1.41       Parent Severance Pay Program...........................................   5
     1.42       Parent Stock Value.....................................................   5
     1.43       Participating Company..................................................   5
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<TABLE>
<S>                                                                                      <C>
     1.44       Person.................................................................   5
     1.45       Piper Jaffray..........................................................   5
     1.46       Piper Jaffray Business.................................................   5
     1.47       Piper Jaffray Common Stock.............................................   5
     1.48       Piper Jaffray Employee.................................................   5
     1.49       Piper Jaffray Entities.................................................   5
     1.50       Piper Jaffray Executive Benefit Plans..................................   6
     1.51       Piper Jaffray Flexible Benefit Plan....................................   6
     1.52       Piper Jaffray Long-Term Incentive Plan.................................   6
     1.53       Piper Jaffray Non-Qualified Retirement Plan............................   6
     1.54       Piper Jaffray Savings Plan.............................................   6
     1.55       Piper Jaffray Savings Plan Trust.......................................   6
     1.56       Restricted Stock.......................................................   6
     1.57       Restricted Stock Unit..................................................   6
     1.58       Separation.............................................................   6
     1.59       Separation and Distribution Agreement..................................   6
     1.60       Subsidiaries...........................................................   6
     1.61       Tax Sharing Agreement..................................................   6
     1.62       Transferred Account Balances...........................................   7
     1.63       Transition Date........................................................   7
     1.64       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................   7
     2.3        Piper Jaffray Participation in Parent Benefit Plans....................   7
     2.4        Service Recognition....................................................   8
     2.5        Approval by Parent as Sole Stockholder.................................   8

ARTICLE III     DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS.........................   8
     3.1        Savings Plan...........................................................   8
     3.2        Company Match..........................................................   8
     3.3        Parent Pension Plan....................................................   9
                (a)    Retention of Parent Pension Plan................................   9
                (b)    Commencement of Pension.........................................   9
                (c)    Vesting.........................................................   9

ARTICLE IV      HEALTH AND WELFARE PLANS...............................................  10
     4.1        General................................................................  10
                (a)    Establishment of Piper Jaffray Health and Welfare Plans.........  10
                (b)    Retention of Sponsorship and Liabilities........................  10
                (c)    Certain Specific Claims.........................................  10
     4.2        Flexible Benefit Plan..................................................  11
     4.3        Workers' Compensation Liabilities......................................  11
     4.4        Payroll Taxes and Reporting of Compensation............................  11
     4.5        Parent Post-Retirement Welfare Benefits Plan...........................  12
</TABLE>

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<TABLE>
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                (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.............................................  12

ARTICLE V       EXECUTIVE BENEFITS AND OTHER BENEFITS..................................  12
     5.1        Assumption of Obligations..............................................  12
     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.......................................  13
                (a)    Parent Options..................................................  13
                (b)    Parent Restricted Stock.........................................  14
                (c)    Restricted Stock Units..........................................  15
                (d)    Incentive Stock Options; Foreign Grants/Awards..................  16
                (e)    Miscellaneous Option and Other Award Terms......................  14
                (f)    Waiting Period for Exercisability of Options and Grant
                       of Options and Awards...........................................  15
                (g)    Restrictive Covenants...........................................  16
     5.4        Registration Requirements..............................................  16
     5.5        Parent Non-Qualified Retirement Plans..................................  16
     5.6        Severance Plans........................................................  16
     5.7        Employee Cash Awards in Connection with the Distribution...............  17

ARTICLE VI      GENERAL AND ADMINISTRATIVE.............................................  17
     6.1        Sharing of Participant Information.....................................  17
     6.2        Reasonable Efforts/Cooperation.........................................  18
     6.3        No Third-Party Beneficiaries...........................................  18
     6.4        Audit Rights With Respect to Information Provided......................  18
     6.5        Fiduciary Matters......................................................  19
     6.6        Consent of Third Parties...............................................  19

ARTICLE VII     MISCELLANEOUS..........................................................  19
     7.1        Effect If Distribution Does Not Occur..................................  19
     7.2        Relationship of Parties................................................  19
     7.3        Affiliates.............................................................  20
     7.4        Notices................................................................  20
     7.5        Incorporation of Separation and Distribution Agreement Provisions......  20

SIGNATURES OF THE PARTIES
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                           EMPLOYEE BENEFITS AGREEMENT

         This EMPLOYEE BENEFITS AGREEMENT, dated as of December 22, 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).
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         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     "Covered Employees" has the meaning set forth in Section
4.2(i).

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

         1.14     "Distribution Date" has the meaning given that term in the
Separation and Distribution Agreement.

         1.15     "Distribution Year" means the calendar year during which the
Distribution Date occurs.

         1.16     "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.

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         1.17     "Former Parent Employee" means any individual who is a former
employee of Parent or a Parent Entity as of the Distribution Date.

         1.18     "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.

         1.19     "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.

         1.20     "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.

         1.21     "Immediately after the Distribution Date" means on the first
moment of the day after the Distribution Date.

         1.22     "Independent Third Party" has the meaning set forth in Section
5.3(f)(vi) of this Agreement.

         1.23     "Liabilities" has the meaning given that term in the
Separation and Distribution Agreement.

         1.24     "Match Date" has the meaning set forth in Section 3.2.

         1.25     "Non-parties" has the meaning set forth in Section 6.4(b).

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

         1.27     "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.

         1.28     "Parent" is defined in the preamble to this Agreement.

         1.29     "Parent Common Stock" has the meaning set forth in the
Separation and Distribution Agreement.

                                      -3-
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         1.30     "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.

         1.31     "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.

         1.32     "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.

         1.33     "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.

         1.34     "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 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.

         1.35     "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.

         1.36     "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.

         1.37     "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.

         1.38     "Parent Pension Plan" means the U.S. Bancorp Pension Plan in
effect as of the time relevant to the applicable provision of this Agreement.

         1.39     "Parent Post-Retirement Welfare Benefits Plan" means the
Health and Welfare Plan of Parent providing medical, dental or death benefits
for retirees.

                                      -4-
<PAGE>

         1.40     "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.

         1.41     "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.

         1.42     "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 Distribution Date; provided, however, that if the
Distribution occurs at a time when the NYSE is open for trading, Parent Stock
Value shall mean the price at which Parent Common Stock trades "regular way with
due bills" as of the moment immediately prior to the Distribution; and,
provided, further, that if the Distribution occurs prior to opening of trading
on the NYSE on the Distribution Date, Parent Stock Value shall mean 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 date immediately
preceding the Distribution Date.

         1.43     "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.

         1.44     "Person" has the meaning given that term in the Separation and
Distribution Agreement.

         1.45     "Piper Jaffray" is defined in the preamble to this Agreement.

         1.46     "Piper Jaffray Business" has the meaning given to that term in
the Separation and Distribution Agreement.

         1.47     "Piper Jaffray Common Stock" means the Piper Jaffray Common
Stock as defined in the Separation and Distribution Agreement.

         1.48     "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.

         1.49     "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.

                                      -5-
<PAGE>

         1.50     "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.

         1.51     "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.

         1.52     "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.

         1.53.    "Piper Jaffray Non-Qualified Retirement Plan" has the meaning
set forth in Section 5.5.

         1.54     "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.

         1.55     "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.

         1.56     "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.

         1.57     "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.

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

         1.59     "Separation and Distribution Agreement" is defined in the
preamble to this Agreement.

         1.60     "Subsidiaries" has the meaning given that term in the
Separation and Distribution Agreement.

         1.61     "Tax Sharing Agreement" means the Tax Sharing Agreement
entered into as of the date hereof between Parent and Piper Jaffray.

                                      -6-
<PAGE>

         1.62     "Transferred Account Balances" has the meaning set forth in
Section 4.2(i).

         1.63     "Transition Date" has the meaning set forth in Section 4.1(a).

         1.64     "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.

         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

                                      -7-
<PAGE>

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.

                                  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

                                      -8-
<PAGE>

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:

                           (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.

                                      -9-
<PAGE>

                                   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 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

                                      -10-
<PAGE>

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.

         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

                                      -11-
<PAGE>

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 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

                                      -12-
<PAGE>

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
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)      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 Parent Option shall be subject to the same terms and conditions
after the Distribution as the terms and conditions applicable to such 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 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 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 Parent Option, rounded to the
nearest whole cent, shall be equal to the quotient obtained by dividing (x) the
exercise price of such 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 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.

                                      -13-
<PAGE>

                  (b)      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 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 (including any Piper Jaffray Employee who
held Parent Restricted Stock as of immediately prior to the Distribution) 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.

                  (c)      Parent 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.

                  (d)      Incentive Stock Options; Foreign Grants/Awards. To
the extent that the Parent Awards or any of the Parent Options 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 Sections 5.3(a),
5.3(b), 5.3(c) 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.

                  (e)      Miscellaneous Option and Other Award Terms.

                           (i)      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. The Distribution shall constitute a
termination of employment for all Piper Jaffray Employees for purposes of any
Parent Option or Parent Award.

                           (ii)     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

                                      -14-
<PAGE>

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.

                           (iii)    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.

                           (iv)     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.

                           (v)      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.

                  (f)      Waiting Period for Exercisability of Options and
Grant of Options and Awards. The Parent Options and Piper Jaffray Options shall
not be exercisable during a period

                                      -15-
<PAGE>

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
Parent 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. In addition, Piper Jaffray shall not grant any Piper Jaffray Option
or Piper Jaffray Award under the Piper Jaffray Long-Term Incentive Plan during
the period commencing on the Distribution Date and ending on the date that is 90
days after the Distribution Date.

                  (g)      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.

         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

                                      -16-
<PAGE>

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 Parent Employee or Former
Parent Employee under such plans. A Piper Jaffray Employee shall not be deemed
to have terminated employment for purposes of determining eligibility for
benefits under the Parent Severance Pay Program 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.

         5.7      Employee Cash Awards in Connection with the Distribution.
Piper Jaffray shall use the Capital Contribution contributed pursuant to clause
(1) of Section 2.6 of the Separation and Distribution Agreement as well as an
additional $23,500,000 (the "Employee Cash Award Pool") for the sole purpose of
providing each Piper Jaffray Employee selected by the Compensation Committee of
the Board of Directors of Piper Jaffray (the "Piper Jaffray Compensation
Committee") with a cash award (an "Employee Cash Award") in an amount determined
by the Piper Jaffray Compensation Committee, which shall generally be payable as
on the terms and conditions not inconsistent herewith as are approved by the
Committee and the Piper Jaffray Compensation Committee and as are set forth in
the agreements evidencing the grant of the Employee Cash Awards substantially in
the forms attached hereto on Exhibit A, provided that in no event shall Piper
Jaffray allocate any amount of the Employee Cash Award Pool or pay or provide
any other bonus or amount or other compensation or consideration at any time
with respect to any Parent Options or Parent Awards granted to Piper Jaffray
Employees under the U.S. Bancorp 2001 Employee Stock Incentive Plan or the U.S.
Bancorp 1998 Executive Stock Incentive Plan, and, notwithstanding the provisions
of this Agreement or any other agreement to the contrary, Piper Jaffray shall be
responsible for and shall indemnify Parent against all Liabilities arising under
or in connection with the Employee Cash Award Pool.

                                   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

                                      -17-
<PAGE>

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 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

                                      -18-
<PAGE>

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 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.

                                      -19-
<PAGE>

         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 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).

                                      -20-
<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: /s/ Lee R. Mitau
                                              ----------------------------------
                                          Name: Lee R. Mitau
                                          Title: Executive Vice President

                                          PIPER JAFFRAY COMPANIES

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

                                      -21-<PAGE>

                                                                    EXHIBIT 10.2

                              TAX SHARING AGREEMENT

         This TAX SHARING AGREEMENT (this "Agreement"), is entered into as of
December 23, 2003 by and between U.S. Bancorp, a Delaware corporation
("Parent"), and Piper Jaffray Companies, a Delaware corporation and an indirect,
wholly owned subsidiary of Parent ("SpinCo").

                               W I T N E S S E T H

         WHEREAS, Parent and SpinCo have entered into a Separation and
Distribution Agreement, dated as of the date hereof (the "SDA");

         WHEREAS, Parent intends to distribute the stock of SpinCo in the
External Spin-Off (as defined below) to holders of shares of Parent Common Stock
(as defined in the SDA) and to effect certain related transactions;

         WHEREAS, for U.S. federal income tax purposes, it is intended that each
of the Spin-Off-Related Transactions (as defined below) shall qualify as a
tax-free transaction under Sections 355 and/or 368(a)(1)(D) of the Internal
Revenue Code of 1986, as amended (the "Code");

         WHEREAS, at the close of business on the Distribution Date (as defined
in the SDA), the taxable year of SpinCo shall close for U.S. federal income tax
purposes; and

         WHEREAS, the parties hereto wish to provide for the payment of Income
Taxes and Other Taxes (each as defined herein) and entitlement to refunds
thereof, allocate responsibility and provide for cooperation in connection with
the filing of returns in respect of Income Taxes and Other Taxes, and provide
for certain other matters relating to Income Taxes and Other Taxes;

         NOW, THEREFORE, in consideration of the premises and the
representations, covenants and agreements herein contained and intending to be
legally bound hereby, Parent and SpinCo hereby agree as follows:

         1.       DEFINITIONS. Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to them in the SDA. For
purposes of this Agreement, the following terms shall have the meanings set
forth below:

                  "Actually Realized" or "Actually Realizes" means, for purposes
of determining the timing of the incurrence of any Spin-Off Tax Liability,
Income Tax Liability or Other Tax Liability or the realization of a Refund (or
any related Income Tax or Other Tax cost or benefit) by a Person in respect of
any payment, transaction, occurrence or event, the time at which the amount of
Income Taxes or Other Taxes paid (or Refund realized) by such Person is
increased above or reduced below the amount of Income Taxes or Other Taxes that
such Person would have been required to pay (or Refund that such Person would
have realized) but for such payment, transaction, occurrence or event.

<PAGE>

                  "Aggregate Spin-Off Tax Liabilities" means the sum of the
Spin-Off Tax Liabilities with respect to each Taxing Jurisdiction.

                  "Board Certification" means a certified copy of a resolution
of the SpinCo Board in which the SpinCo Board, after an investigation of the
facts and advice concerning the applicable law, finds and warrants to Parent
that (a) following the transaction at issue, one or more Persons will not have
acquired, and will not have the right to acquire, directly or indirectly, more
than 35% (by vote or value) of the outstanding Equity Securities of SpinCo or
any member of the SpinCo Group (determined immediately after such transaction)
taking into account all relevant issuances, redemptions or other acquisitions of
(and agreements to issue, redeem or otherwise acquire) Equity Securities (and
assuming the exercise or conversion of all such Equity Securities (if such
Equity Securities are options or warrants or similar exercisable or convertible
securities) and the closing of all such agreements) from the point in time two
years prior to the External Spin-Off to the date immediately following such
transaction and pursuant to any other transaction which is part of a plan or
series of related transactions (within the meaning of Section 355(e) of the
Code) that includes the External Spin-Off, (b) SpinCo will be the surviving
entity if such transaction is a merger (and the transaction is not a reverse
subsidiary merger in which SpinCo is the surviving entity) and (c) the facts and
conclusions contained in the resolution will be true and correct at the time the
transaction at issue closes.

                  "Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions located in the State of Minnesota are
authorized or obligated by law or executive order to close.

                  "Cash Acquisition Merger" means a merger of a newly-formed
Subsidiary of SpinCo with a corporation, limited liability company, limited
partnership, general partnership or joint venture (in each case, not previously
owned, directly or indirectly, by SpinCo) solely for cash pursuant to which
SpinCo acquires such corporation, limited liability company, limited
partnership, general partnership or joint venture and no Equity Securities of
SpinCo or any SpinCo Subsidiary are issued, sold, redeemed or acquired, directly
or indirectly.

                  "Carryback" means the carryback of a Tax Attribute (including,
without limitation, a net operating loss, a net capital loss or a tax credit) by
a member of the SpinCo Group from a Post-Distribution Taxable Period to a
Pre-Distribution Taxable Period.

                  "Code" has the meaning set forth in the recitals of this
Agreement.

                  "Combined Return" means a consolidated, combined or unitary
Income Tax Return or Other Tax Return that actually includes, by election or
otherwise, one or more members of the Parent Group together with one or more
members of the SpinCo Group.

                  "Contribution" means those certain capital contributions to
SpinCo by PJC made in connection with the Internal Spin-Off.

                  "Distribution-Related Proceeding" means any Proceeding in
which the IRS, another Tax Authority or any other party to such Proceeding
asserts a position that could reasonably be expected to adversely affect the
Tax-Free Status of any of the Spin-Off-Related Transactions.

                                      -2-
<PAGE>

                  "Equity Securities" means any stock or other equity securities
treated as stock for tax purposes, or options, warrants, rights, convertible
debt, or any other instrument or security that affords any Person the right,
whether conditional or otherwise, to acquire stock or to be paid an amount
determined by reference to the value of stock.

                  "External Spin-Off" means the pro rata distribution by Parent
of the stock of SpinCo to the holders of Parent Common Stock with respect to
such stock.

                  "Fifty-Percent or Greater Interest" has the meaning ascribed
to such term for purposes of Sections 355(d) and (e) of the Code.

                  "Final Determination" means the final resolution of liability
for any Income Tax or Other Tax, which resolution may be for a specific issue or
adjustment or for a taxable period, (a) by IRS Form 870 or 870-AD (or any
successor forms thereto), on the date of acceptance by or on behalf of the
taxpayer, or by a comparable form under the laws of a State, local, or foreign
taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall
not constitute a Final Determination to the extent that it reserves (whether by
its terms or by operation of law) the right of the taxpayer to file a claim for
Refund or the right of the Tax Authority to assert a further deficiency in
respect of such issue or adjustment or for such taxable period (as the case may
be); (b) by a decision, judgment, decree, or other order by a court of competent
jurisdiction, which has become final and unappealable; (c) by a closing
agreement or accepted offer in compromise under Sections 7121 or 7122 of the
Code, or a comparable agreement under the laws of a State, local, or foreign
taxing jurisdiction; (d) by any allowance of a Refund or credit in respect of an
overpayment of Income Tax or Other Tax, but only after the expiration of all
periods during which such Refund may be recovered (including by way of offset)
by the jurisdiction imposing such Income Tax or Other Tax; or (e) by any other
final disposition, including by reason of the expiration of the applicable
statute of limitations or by mutual agreement of the parties.

                  "Income Tax" (a) means (i) any foreign or any United States
federal, State or local tax, charge, fee, impost, levy or other assessment that
is based upon, measured by, or calculated with respect to (A) net income or
profits (including, but not limited to, any capital gains, gross receipts, or
minimum tax, and any tax on items of tax preference, but not including the
business and occupation taxes in the state of Washington and local jurisdiction
within the state of Washington, sales, use, value added, real property gains,
real or personal property, transfer or similar taxes), (B) multiple bases
(including, but not limited to, corporate franchise, doing business or
occupation taxes), if one or more of the bases upon which such tax may be based,
by which it may be measured, or with respect to which it may be calculated is
described in clause (a)(i)(A) of this definition, or (C) any net worth,
franchise or similar tax, in each case together with (ii) any interest and any
penalties, fines, additions to tax or additional amounts imposed by any Tax
Authority with respect thereto and (b) includes any transferee or successor
liability in respect of an amount described in clause (a) of this definition.

                  "Income Tax Benefit" means, with respect to the effect of any
Carryback on the Income Tax Liability of Parent or the Parent Group for any
taxable period, the excess of (a) the hypothetical Income Tax Liability of
Parent or the Parent Group for such taxable period, calculated as if such
Carryback had not been utilized but with all other facts unchanged over (b)

                                      -3-
<PAGE>

the actual Income Tax Liability of Parent or the Parent Group for such taxable
period, calculated taking into account such Carryback (and treating a Refund as
a negative Income Tax Liability, for purposes of such calculation).

                  "Income Tax Liabilities" means all liabilities for Income
Taxes.

                  "Income Tax Return" means any return, report, filing,
statement, questionnaire, declaration or other document required to be filed
with a Tax Authority in respect of Income Taxes.

                  "Indemnified Party" means any Person seeking indemnification
pursuant to the provisions of this Agreement.

                  "Indemnifying Party" means any party hereto from which any
Indemnified Party is seeking indemnification pursuant to the provisions of this
Agreement.

                  "Independent Third Party" means a nationally recognized law
firm or any of the following accounting firms or their successors: Ernst & Young
LLP, KPMG LLP, Deloitte & Touche LLP and PricewaterhouseCoopers LLP.

                  "Internal Spin-Off" means the distribution by PJC of all the
stock of SpinCo to its sole shareholder, Parent.

                  "IRS" means the Internal Revenue Service of the United States.

                  "Losses" means any and all losses, liabilities, claims,
damages, obligations, payments, costs and expenses, matured or unmatured,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known
or unknown (including, without limitation, the costs and expenses of any and all
Actions, threatened Actions, demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such Actions or threatened actions).

                  "Other Tax Liabilities" means all liabilities for Other Taxes.

                  "Other Tax Returns" means any return, report, filing,
statement, questionnaire, declaration or other document required to be filed
with a Tax Authority in respect of Other Taxes.

                  "Other Taxes" means all forms of taxation, whenever created or
imposed, and whether of the United States of America or elsewhere, and whether
imposed by a local, municipal, governmental, State, federation or other body,
and without limiting the generality of the foregoing, shall include the business
and occupation taxes in the state of Washington and local jurisdiction within
the state of Washington, superfund, sales, use, ad valorem, value added,
transfer, recording, withholding, payroll, employment, excise, occupation,
premium or property taxes (in each case, together with any related interest,
penalties and additions to tax, or additional amounts imposed by any Tax
Authority thereon); provided, however, that Other Taxes shall not include any
Income Taxes.

                                      -4-
<PAGE>

                  "Parent Consolidated Group" means the affiliated group of
corporations (within the meaning of Section 1504(a) of the Code without regard
to the exclusions in Section 1504(b)(1) through (8)) of which Parent is the
common parent (and any predecessor or successor to such affiliated group).

                  "Parent Group" means (a) Parent and each Person that is a
direct or indirect Subsidiary of Parent (including any Subsidiary of Parent that
is disregarded for U.S. federal Income Tax purposes (or for purposes of any
State, local, or foreign tax law)) immediately after the External Spin-Off after
giving effect to the Spin-Off-Related Transactions, (b) any corporation (or
other Person) that shall have merged or liquidated into Parent or any such
Subsidiary and (c) any predecessor or successor to any Person otherwise
described in this definition.

                  "Parent Separate Return" shall mean any Separate Return
required to be filed by Parent or any member of the Parent Group.

                  "Permitted Transaction" means any transaction that satisfies
the requirements of Sections 5(c)(i), 5(c)(ii) or 5(c)(iii).

                  "Person" means any individual, partnership, joint venture,
limited liability company, corporation, association, joint stock company, trust,
unincorporated organization or similar entity or a governmental authority or any
department or agency or other unit thereof.

                  "PJC" means U.S. Bancorp Piper Jaffray Companies, Inc., a
Delaware corporation.

                  "Post-Distribution Taxable Period" means a taxable period (or
portion thereof) that begins after the Distribution Date.

                  "Pre-Distribution Taxable Period" means a taxable period (or
portion thereof) that ends on or before the Distribution Date.

                  "Private Letter Ruling" means (a) any private letter ruling
issued by the IRS in connection with any of the Spin-Off-Related Transactions or
(b) any similar ruling issued by any Tax Authority other than the IRS in
connection with any of the Spin-Off-Related Transactions.

                  "Private Letter Ruling Documents" means (a) any Private Letter
Ruling, any request for a Private Letter Ruling submitted to the IRS, together
with the appendices and exhibits thereto and any supplemental filings or other
materials subsequently submitted to the IRS, in connection with the
Spin-Off-Related Transactions or (b) any similar filings submitted to any other
Tax Authority in connection with any such request for a Private Letter Ruling.

                  "Proceeding" means any audit or other examination, or judicial
or administrative proceeding relating to liability for, or Refunds or
adjustments with respect to, Income Taxes or Other Taxes.

                                      -5-
<PAGE>

                  "Refund" means any refund of Income Taxes or Other Taxes,
including any reduction in Income Tax Liabilities or Other Tax Liabilities by
means of a credit, offset or otherwise.

                  "Representative" means with respect to a Person, such Person's
officers, directors, employees and other authorized agents.

                  "Restriction Period" means the period beginning on the date
hereof and ending on the second anniversary of the Distribution Date.

                  "Separate Return" means (a) in the case of any Income Tax
Return or Other Tax Return required to be filed by any member of the SpinCo
Group (including any consolidated, combined or unitary return), any such tax
return that does not include any member of the Parent Group and (b) in the case
of any Income Tax Return or Other Tax Return required to be filed by any member
of the Parent Group (including any consolidated, combined or unitary return),
any such tax return that does not include any member of the SpinCo Group.

                  "Settlement Statement" means a detailed reconciliation showing
the amount of cash that is to be exchanged between Parent and SpinCo in
settlement of all SpinCo Group current tax accounts as recorded on the SpinCo
general ledger for all Pre-Distribution Taxable Periods. Such amount shall be
computed as the sum of (i) the balance of the current income tax payable account
of the members of the SpinCo Group as of the Distribution Date and (ii) the
difference between (A) the deferred tax liability or deferred tax asset recorded
on the SpinCo general ledger as of the Distribution Date and (B) the deferred
tax liability or deferred tax asset recorded on the SpinCo general ledger as
adjusted for the pro forma Income Tax Returns described in Section 3.

                  "SpinCo Board" means the Board of Directors of SpinCo.

                  "SpinCo Business" means each trade or business actively
conducted (within the meaning of Section 355(b) of the Code) by SpinCo or any
member of the SpinCo Group immediately after the External Spin-Off, as set forth
in the Tax Opinion Documents.

                  "SpinCo Consolidated Group" means the affiliated group of
corporations (within the meaning of Section 1504(a) of the Code without regard
to the exclusions in Section 1504(b)(1) through (8)) of which SpinCo is the
common parent, determined immediately after the External Spin-Off (and any
predecessor or successor to such affiliated group other than the Parent
Consolidated Group).

                  "SpinCo Consolidated Tax Amount" means, for any
Pre-Distribution Taxable Period and the portion of any Straddle Period that ends
on the Distribution Date, the amount of (i) federal Income Tax that would be due
and payable by SpinCo if the SpinCo Group had filed a consolidated federal
Income Tax Return, or (ii) State or local Income Taxes that would be due and
payable by SpinCo or members of the SpinCo Group if the SpinCo Group or its
members had filed all relevant State or local Income Tax Returns in all
applicable jurisdictions on a separate, consolidated, combined or unitary basis,
in each case without any entity that is a member of the Parent Group. The
relevant SpinCo Consolidated Tax Amount shall be calculated: (i) as if SpinCo
were the common parent filing consolidated, combined or unitary

                                      -6-
<PAGE>

returns with its eligible subsidiaries, (ii) as if the SpinCo Group had never
been included in the Parent Consolidated Group or any other group filing a
Combined Return, (iii) in the case of federal Income Taxes, applying the highest
marginal tax rate, in the case of State Income Taxes, applying the actual state
rate (or amount) for those States being calculated without regard to the Parent,
and in the case of Other Taxes, applying the highest applicable tax rate,, (iv)
by applying separately to the SpinCo Group any provisions of the Code that
require consolidated computations, such as Code Sections 1201-1212 and 1231, and
(v) treating gains or losses on intercompany transactions in the manner required
by Treasury Regulation Section 1.1502-13.

                  "SpinCo Group" means (a) SpinCo and each Person that is a
direct or indirect Subsidiary of SpinCo (including any Subsidiary of SpinCo that
is disregarded for U.S. federal Income Tax purposes (or for purposes of any
State, local, or foreign tax law)) immediately after the External Spin-Off after
giving effect to the Spin-Off-Related Transactions, (b) any corporation (or
other Person) that shall have merged or liquidated into SpinCo or any such
Subsidiary and (c) any predecessor or successor to any Person otherwise
described in this definition.

                  "SpinCo Group Member Transaction" means any transaction
described in Sections 5(b)(i) through 5(b)(vi) hereof, without regard to the
exceptions thereto, that is undertaken by a member of the SpinCo Group other
than SpinCo.

                  "SpinCo Separate Return" means any Separate Return required to
be filed by SpinCo or any member of the SpinCo Group, including, without
limitation any U.S. consolidated federal Income Tax Returns of the SpinCo
Consolidated Group required to be filed with respect to a Post-Distribution
Taxable Period.

                  "Spin-Off Tax Liabilities" means, with respect to any Taxing
Jurisdiction, the sum of (a) any increase in Income Tax Liability or Other Tax
Liability (or reduction in a Refund) Actually Realized as a result of any
corporate-level gain or income recognized with respect to the failure of any of
the Spin-Off-Related Transactions to qualify for Tax-Free Status under the
income tax law of such Taxing Jurisdiction pursuant to any settlement, Final
Determination, judgment, assessment, proposed adjustment or otherwise, (b)
interest on such amounts calculated pursuant to such Taxing Jurisdiction's laws
regarding interest on tax liabilities at the highest Underpayment Rate for
corporations in such Taxing Jurisdiction from the date such additional gain or
income was recognized until full payment with respect thereto is made pursuant
to Section 3 hereof (or in the case of a reduction in a Refund, the amount of
interest that would have been received on the foregone portion of the Refund but
for the failure of any of the Spin-Off-Related Transactions to qualify for
Tax-Free Status), and (c) any penalties actually paid to such Taxing
Jurisdiction that would not have been paid but for the failure of any of the
Spin-Off-Related Transactions to qualify for Tax-Free Status in such Taxing
Jurisdiction.

                  "Spin-Off-Related Transactions" means (i) the Contribution
together with the Internal Spin-Off and (ii) the External Spin-Off.

                  "Straddle Period" means any taxable period that begins before
the Distribution Date and ends after the Distribution Date.

                                      -7-
<PAGE>

                  "Tax Attribute" means a consolidated, combined or unitary net
operating loss, net capital loss, unused investment credit, unused foreign tax
credit, or excess charitable contribution (as such terms are used in Treasury
Regulations 1.1502-79 and 1.1502-79A or comparable provisions of foreign, State
or local tax law), or a minimum tax credit or general business credit.

                  "Tax Authority" means a governmental authority (foreign or
domestic) or any subdivision, agency, commission or authority thereof or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including, without
limitation, the IRS).

                  "Tax Counsel" means tax counsel of recognized national
standing that is acceptable to Parent.

                  "Tax-Free Status" means the qualification of each of the
Spin-Off-Related Transactions, as the case may be, (a) as a transaction
described in Sections 355(a) and/or 368(a)(1)(D) of the Code, (b) as a
transaction in which the stock distributed thereby is qualified property for
purposes of Section 361(c) of the Code, and (c) as a transaction in which all of
Parent and the members of the Parent Group and SpinCo and the members of the
SpinCo Group recognize no income or gain other than intercompany items or excess
loss accounts taken into account pursuant to the Treasury Regulations
promulgated pursuant to Section 1502 of the Code.

                  "Taxing Jurisdiction" means the United States and any
government or governmental unit having jurisdiction to tax Parent or SpinCo or
any of their respective Affiliates.

                  "Tax Opinion" means the tax opinion issued by Tax Counsel in
connection with the Spin-Off-Related Transactions.

                  "Tax Opinion Documents" means the Tax Opinion and the
information and representations provided on behalf of Parent and SpinCo to Tax
Counsel in connection therewith.

                  "Tax-Related Losses" means:

                  (a)      the Aggregate Spin-Off Tax Liabilities,

                  (b)      all accounting, legal and other professional fees,
and court costs incurred in connection with any settlement, Final Determination,
judgment or other determination with respect to such Aggregate Spin-Off Tax
Liabilities, and

                  (c)      all costs, expenses and damages associated with
stockholder litigation or controversies and any amount paid by Parent or SpinCo
in respect of the liability of shareholders, whether paid to shareholders or to
the IRS or any other Tax Authority payable by Parent or SpinCo or their
respective Affiliates, in each case, resulting from the failure of any of the
Spin-Off-Related Transactions to qualify for Tax-Free Status.

                  "Underpayment Rate" means the annual rate of interest
described in Section 6621(c) of the Code for large corporate underpayments of
Income Tax (or similar

                                      -8-
<PAGE>

provision of State, local, or foreign Income Tax law, as applicable), as
determined from time to time.

                  "Unqualified Tax Opinion" means an unqualified opinion of Tax
Counsel on which Parent may rely to the effect that a transaction will not
disqualify any of the Spin-Off-Related Transactions from Tax-Free Status,
assuming that the Spin-Off-Related Transactions would have qualified for
Tax-Free Status if such transaction did not occur.

         2.       FILING OF TAX RETURNS; PAYMENT OF TAXES.

                  (a)      Filing of Tax Returns; Payment of Income Taxes and
Other Taxes.

                           (i)      Parent Consolidated Returns; Other Combined
Returns. Parent shall prepare and file or cause to be prepared and filed (A) all
U.S. consolidated federal Income Tax Returns of the Parent Consolidated Group
and (B) all other Combined Returns. Parent shall pay, or cause to be paid, and
shall be responsible for, any and all Income Taxes and Other Taxes due or
required to be paid with respect to or required to be reported on any such
Income Tax Return or Other Tax Return (in each case, including any increase in
such Income Tax Liabilities or Other Tax Liabilities as a result of a Final
Determination).

                           (ii)     Parent Separate Returns. Parent shall
prepare and file or cause to be prepared and filed all Parent Separate Returns.
Parent shall pay, or cause to be paid, and shall be responsible for, any and all
Income Taxes or Other Taxes due or required to be paid with respect to or
required to be reported on any Parent Separate Return (including any increase in
such Income Tax Liabilities or Other Tax Liabilities as a result of a Final
Determination).

                           (iii)    SpinCo Separate Returns.

                                    (A)      Parent shall prepare and file or
cause to be prepared and filed all SpinCo Separate Returns that are Income Tax
Returns for Pre-Distribution Taxable Periods or for Straddle Periods. Parent
shall pay, or cause to be paid, and shall be responsible for, any and all Income
Taxes due or required to be paid with respect to or required to be reported on
any such SpinCo Separate Return (including any increase in such Income Tax
Liabilities as a result of a Final Determination).

                                    (B)      SpinCo shall prepare and file or
cause to be prepared and filed (1) SpinCo Separate Returns that are Other Tax
Returns for Pre-Distribution Taxable Periods or Straddle Periods, and (2) all
SpinCo Separate Returns for Post-Distribution Taxable Periods. SpinCo shall pay,
or cause to be paid, and shall be responsible for, any and all Income Taxes or
Other Taxes due or required to be paid with respect to or required to be
reported on any such SpinCo Separate Returns (including any increase in such
Income Tax Liabilities or Other Tax Liabilities as a result of a Final
Determination).

                  (b)      Preparation of Tax Returns.

                           (i)      Parent (or its designee) shall determine the
entities to be included in any Combined Return and make or revoke any Income Tax
elections, adopt or change any

                                      -9-
<PAGE>

accounting methods, and determine any other position taken on or in respect of
any Income Tax Return or Other Tax Return required to be prepared and filed by
Parent pursuant to Section 2(a)(i) or 2(a)(iii)(A). Notwithstanding the
immediately preceding sentence, any Income Tax Return or Other Tax Return filed
by Parent pursuant to Section 2(a)(i) or 2(a)(iii)(A) with respect to any
Pre-Distribution Taxable Period or Straddle Period shall, to the extent relating
to SpinCo or the SpinCo Group, be prepared consistent with Parent's past
practice for the filing of such returns and shall not include any tax election
relating to SpinCo or the SpinCo Group that is inconsistent with past practice
(or, where no such past practice exists, shall not reflect any tax return
position or include any tax election that would adversely affect SpinCo or the
SpinCo Group), except to the extent that SpinCo consents to such return position
or tax election (such consent not to be unreasonably withheld).

                           (ii)     SpinCo shall, and shall cause each member of
the SpinCo Group to, prepare and submit promptly to Parent, at SpinCo's expense,
all information that Parent shall reasonably request, in such form as Parent
shall reasonably request, relating to the rights and obligations of Parent or
SpinCo hereunder, including any such information so requested to enable Parent
to prepare any Income Tax Returns or Other Tax Return required to be filed by
Parent pursuant to Section 2(a)(i) or 2(a)(iii)(A) or any pro forma Income Tax
Return required to be prepared by parent pursuant to Section 3(b). Parent shall
request any such information in writing, which request shall specify the date by
which Parent requires receipt of the requested information in order to complete
the relevant returns in a timely fashion.

                           (iii)    Except as required by applicable law or as a
result of a Final Determination, SpinCo shall not, and shall cause the members
of the SpinCo Group not to, take any position that is either inconsistent with
the treatment of the Spin-Off-Related Transactions as having Tax-Free Status (or
analogous status under State, local or foreign law) or, with respect to a
specific item of income, deduction, gain, loss, or credit on an Income Tax
Return or Other Tax Return, treat such specific item in a manner which is
inconsistent with the manner such specific item is reported on an Income Tax
Return or Other Tax Return prepared or filed by Parent pursuant to Section 2(a)
hereof (including, without limitation, the claiming of a deduction previously
claimed on any such Income Tax Return or Other Tax Return). SpinCo may, for a
Post Distribution Taxable Period, (other than the portion of a Straddle Period
beginning after the Distribution Date) elect to change methods of accounting for
items of income or deduction as allowed by applicable law.

                           (iv)     Except as required by applicable law or as a
result of a Final Determination, Parent and SpinCo shall take all actions
necessary or appropriate to close the taxable period of the members of the
SpinCo Group as of the close of the Distribution Date.

         3.       SHARING OF INCOME TAXES AND OTHER TAXES.

                  (a)      General Principle. Anything in Section 2 hereof to
the contrary notwithstanding, Tax sharing payments between Parent and SpinCo
shall be determined and settled in the manner specified in paragraphs (b) and
(c) hereof.

                  (b)      Preparation of Pro Forma Income Tax Returns and
Related Documentation.

                                      -10-
<PAGE>

                           (i)      No later than 105 days after the
Distribution Date, Parent shall deliver to SpinCo (A) a pro forma federal Income
Tax Return of SpinCo reflecting the SpinCo Consolidated Tax Amount for the
Pre-Distribution Taxable Period ending on the Distribution Date, (B) the
required pro forma state or local Income Tax Returns of SpinCo or members of the
SpinCo group reflecting the SpinCo Consolidated Tax Amount for the
Pre-Distribution Taxable Period and the portion of any Straddle Period ending on
the Distribution Date, (C) a detailed schedule of the current tax accounts of
the SpinCo Group as reflected on the SpinCo general ledger, and (D) the
Settlement Statement (collectively the "Settlement Documents"). Parent shall
prepare the Settlement Documents in good faith and shall deliver such documents
together with summary schedules and a statement showing a calculation of the
amount required to be paid pursuant to paragraph (c) hereof. More detailed
schedules will be made available by Parent upon SpinCo's reasonable request.

                           (ii)     If within thirty (30) days of receiving the
Settlement Documents pursuant to Section 3(b)(i) hereof, SpinCo provides written
notice to Parent that it disagrees with any item reflected in the Settlement
Documents, the parties shall in good faith confer with each other to resolve any
such disagreement. The failure of SpinCo to provide the notice described in the
preceding sentence within the thirty (30) day period specified shall be deemed
to indicate that SpinCo agrees with its share of Taxes reflected in the
Settlement Documents.

                           (iii)    If within ten (10) days of receipt by Parent
of the notice from SpinCo described in Section 3(b)(ii), any disputed item
remains unresolved, the parties will have another ten (10) days to retain an
Independent Third Party to resolve such dispute. If the parties cannot agree
within those ten (10) days on an Independent Third Party, then each of the
parties will have another ten (10) days to select an Independent Third Party and
the Independent Third Parties so selected will have five (5) additional days to
jointly select another Independent Third Party. The Independent Third Party
shall resolve any disputed items within thirty (30) days; provided, that the
Independent Third Party shall not adopt any tax return position advanced by the
SpinCo Group unless it concludes that such position (i) would have a likelihood
of success on the merits under applicable law that is greater than 50 percent
and (ii) is not directly inconsistent with a position taken on an Income Tax
Return of the Parent Consolidated Group or any member thereof. Any determination
made by the Independent Third Party shall be (i) in writing, (ii) made within
thirty (30) days following the selection of the Independent Third Party, and
(iii) final and binding upon the parties. The costs of any Independent Third
Party shall be shared equally by the parties. The Settlement Documents shall be
revised by Parent to the extent necessary to reflect the resolution by the
Independent Third Party.

                  (c)      Payment Procedures.

                           (i)      Once the parties have agreed on, or the
Independent Party has resolved any disputed items with respect to, the
Settlement Documents described in Section 3(b)(i), any amount required to be
paid pursuant to the Settlement Statement shall be paid within thirty (30) days
of the agreement on or resolution of such documents and, in the event of a
determination by the Independent Third Party, shall bear interest at the
Underpayment Rate from the first date specified in the first sentence of Section
3(b)(iii).

                                      -11-
<PAGE>

                           (ii)     If a pro forma Income Tax Return described
in Section 3(b) of this Agreement reflects a Tax asset that, under applicable
law, may be used to produce a net Tax benefit to Parent, Parent shall pay to
SpinCo an amount equal to the net Tax benefit produced by such Tax asset within
thirty (30) days after Parent Actually Realizes such net Tax benefit; provided,
however, that Parent shall not be required to make any payment to SpinCo
pursuant to this provision to the extent that such Tax asset was reflected in
the Settlement Documents.

                  (d)      Restructuring Taxes. Anything in this Section 3 to
the contrary notwithstanding but subject to SpinCo's obligations pursuant to
Section 5(e), Parent shall bear any and all Income Taxes and Other Taxes,
whether paid by Parent or SpinCo, attributable to any restructuring transactions
effected by the Parent Consolidated Group in anticipation of the External
Spin-Off; provided, however, if any such restructuring transaction or the
payment by Parent of any Income Tax or Other Tax attributable to such
restructuring transaction results in aggregate net Tax benefits to SpinCo in
excess of $5,000,000, SpinCo shall pay to Parent an amount equal to the entire
amount of net Tax benefits within thirty (30) days after SpinCo Actually
Realizes such net Tax benefits.

         4.       INDEMNIFICATION FOR INCOME AND OTHER TAXES.

                  (a)      Indemnification by Parent. From and after the
Distribution Date, Parent and each member of the Parent Group shall jointly and
severally indemnify, defend and hold harmless SpinCo and each member of the
SpinCo Group and each of their respective Representatives and Affiliates (and
the heirs, executors, successors and assigns of any of them) from and against
(i) all Spin-Off Tax Liabilities incurred by any member of the Parent Group,
(ii) without duplication, all Income Tax Liabilities and Other Tax Liabilities
that any member of the Parent Group is responsible for pursuant to Section 2 or
Section 3(d) (subject to Parent's right to receive payments from SpinCo under
Section 3), (iii) all Income Taxes incurred by any member of the SpinCo Group as
a result of a Final Determination disallowing any deduction for a payment set
forth on Schedule 4(a) hereof, (iv) all Income Taxes and Other Taxes incurred by
any member of the SpinCo Group by reason of the breach by Parent or any member
of the Parent Group of any of Parent's covenants hereunder, (v) any Income Taxes
and Other Taxes of any member of the Parent Group for which SpinCo or any member
of the SpinCo Group may be liable pursuant to Treasury Regulations Section
1.1502-6 or any similar provision of state or local law, and (vi) all
Tax-Related Losses incurred by any member of SpinCo Group as a result of an
action after the External Spin-Off by Parent or a member of the Parent Group,
which action caused any of the Spin-Off-Related Transactions not to have
Tax-Free Status, and, in each case, any related costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses); provided, however,
that Parent shall have no obligation to indemnify, defend or hold harmless any
Person pursuant to this Section 4(a) to the extent that any such indemnification
obligation is otherwise attributable to any breach by SpinCo or any member of
the SpinCo Group of any of SpinCo's representations or covenants hereunder
(including any representations made in connection with the Tax Opinion or any
Private Letter Ruling).

                  (b)      Indemnification by SpinCo. From and after the
Distribution Date, SpinCo and each member of the SpinCo Group shall jointly and
severally indemnify, defend and hold harmless Parent and each member of the
Parent Group and each of their respective Representatives and Affiliates (and
the heirs, executors, successors and assigns of any of them)

                                      -12-
<PAGE>

from and against (i) all Income Tax Liabilities, Other Tax Liabilities, Spin-Off
Tax Liabilities and Tax-Related Losses that SpinCo or any member of the SpinCo
Group is responsible for under Section 2 or Section 5 (including, without
limitation, any Income Tax Liabilities, Other Tax Liabilities, Spin-Off Tax
Liabilities or Tax-Related Losses arising with respect to a Permitted
Transaction for which SpinCo is liable pursuant to Section 5(e)(i)) and (ii) all
Income Taxes, Other Taxes, Spin-Off Tax Liabilities or other Tax-Related Losses
incurred by any member of the Parent Group or SpinCo Group by reason of the
breach by SpinCo or any member of the SpinCo Group of any of SpinCo's
representations or covenants hereunder (including any representations made in
connection with the Tax Opinion or any Private Letter Ruling) and, in each case,
any related costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses).

                  (c)      Timing of Indemnification. Any payment and
indemnification made pursuant to this Section 4 shall be made by the
Indemnifying Party promptly, but, in any event, no later than:

                           (i)      in the case of an indemnification obligation
with respect to any Spin-Off Tax Liabilities, Income Tax Liabilities or Other
Tax Liabilities, the later of (A) five Business Days after the date the
Indemnified Party notifies the Indemnifying Party and (B) five Business Days
prior to the date the Indemnified Party is required to make a payment of taxes,
interest, or penalties to the applicable Tax Authority (including a payment with
respect to an assessment of a tax deficiency by any Taxing Jurisdiction or a
payment made in settlement of an asserted tax deficiency) or realizes a reduced
Refund; and

                           (ii)     in the case of any payment or
indemnification of any Losses not otherwise described in clause (i) of this
Section 4(c) (including, but not limited to, any Losses described in clause (b)
or (c) of the definition of Tax-Related Losses, attorneys' fees and expenses and
other indemnifiable Losses), the later of (A) five Business Days after the date
the Indemnified Party notifies the Indemnifying Party and (B) five Business Days
prior to the date the Indemnified Party makes a payment thereof.

         5.       SPIN-OFF RELATED MATTERS.

                  (a)      Representations.

                           (i)      Tax Opinion Documents. SpinCo hereby
represents and warrants that (i) it has examined the Tax Opinion Documents
(including, without limitation, the representations to the extent that they
relate to the plans, proposals, intentions, and policies of SpinCo, its
Subsidiaries, the SpinCo Business, or the SpinCo Group) and (ii) to the extent
in reference to SpinCo, its Subsidiaries, the SpinCo Business, or the SpinCo
Group, the facts presented and the representations made therein are true,
correct and complete.

                           (ii)     Tax-Free Status. SpinCo hereby represents
and warrants that it has no plan or intention of taking any action, or failing
or omitting to take any action or knows of any circumstance, that could
reasonably be expected to (i) cause any of the Spin-Off-Related Transactions not
to have Tax-Free Status or (ii) cause any representation or factual statement
made in this Agreement, the SDA, the Tax Opinion Documents, or any of the
Ancillary

                                      -13-
<PAGE>

Agreements to be untrue in a manner that would have an adverse effect on the
Tax-Free Status of any of the Spin-Off-Related Transactions.

                           (iii)    Plan or Series of Related Transactions.
SpinCo hereby represents and warrants that, to the knowledge of SpinCo and the
SpinCo Group's management, none of the Spin-Off-Related Transactions are part of
a plan (or series of related transactions) pursuant to which a Person will
acquire stock representing a Fifty-Percent or Greater Interest in SpinCo or any
successor to SpinCo.

                  (b)      Covenants.

                           (i)      Actions Consistent with Representations and
Covenants. SpinCo shall not take any action or permit any member of the SpinCo
Group to take any action, and SpinCo shall not fail to take any action or permit
any member of the SpinCo Group to fail to take any action, where such action or
failure to act would be inconsistent with or cause to be untrue any material,
information, covenant or representation in this Agreement, the SDA, the Tax
Opinion Documents or any of the Ancillary Agreements.

                           (ii)     Preservation of Tax-Free Status; SpinCo
Business. SpinCo shall not (A) take any action (including, but not limited to,
any cessation, transfer or disposition of all or any portion of any SpinCo
Business; payment of extraordinary dividends to shareholders; and acquisitions
or issuances of stock) or permit any member of the SpinCo Group to take any such
action, and SpinCo shall not fail to take any such action or permit any member
of the SpinCo Group to fail to take any such action, in each case, where such
action or failure to act would cause any of the Spin-Off-Related Transactions
not to have Tax-Free Status and (B) until the first day after the Restriction
Period, engage in any transaction that would result in it or any member of the
SpinCo Group ceasing to be a company engaged in any SpinCo Business (including,
without limitation, any cessation, transfer or disposition of any SpinCo
Business).

                           (iii)    Sales, Issuances and Redemptions of Equity
Securities. Until the first day after the Restriction Period, none of SpinCo or
any member of the SpinCo Group shall, or shall agree to, sell or otherwise issue
to any Person, or redeem or otherwise acquire from any Person, any Equity
Securities of SpinCo or any member of the SpinCo Group; provided, however, that
(A) the adoption by SpinCo of a shareholder rights plan shall not constitute a
sale or issuance of such Equity Securities, (B) SpinCo and the members of the
SpinCo Group may repurchase such Equity Securities to the extent that such
repurchases meet the requirements of Section 4.05(1)(b) of Revenue Procedure
96-30, (C) SpinCo and the members of the SpinCo Group may issue such Equity
Securities to the extent such issuances satisfy Safe Harbor VI (relating to
acquisitions in connection with a person's performance of services) or Safe
Harbor VII (relating to acquisitions by a retirement plan of an employer) of
Treasury Regulation Section 1.355-7T(d).

                           (iv)     Tender Offers; Other Business Transactions.
Until the first day after the Restriction Period, none of SpinCo or any member
of the SpinCo Group shall (A) solicit any Person to make a tender offer for, or
otherwise acquire or sell, the Equity Securities of SpinCo, (B) participate in
or support any unsolicited tender offer for, or other acquisition, issuance or
disposition of, the Equity Securities of SpinCo or (C) approve or otherwise
permit any proposed

                                      -14-
<PAGE>

business combination or any transaction which, in the case of clauses (A), (B)
or (C), individually or in the aggregate, together with any transaction
occurring within the four-year period beginning on the date which is two years
before the Distribution Date and any other transaction which is part of a plan
or series of related transactions (within the meaning of Section 355(e) of the
Code) that includes the External Spin-Off, results in one or more Persons
acquiring (except for acquisitions that otherwise satisfy Safe Harbor VI
(relating to acquisitions in connection with a person's performance of services)
or Safe Harbor VII (relating to acquisitions by a retirement plan of an
employer) of Treasury Regulation Section 1.355-7T(d)) directly or indirectly
stock representing a 5% or greater interest in SpinCo (or any successor
thereto). In addition, none of SpinCo or any member of the SpinCo Group shall at
any time, whether before or subsequent to the expiration of the Restriction
Period, engage in any action described in clauses (A), (B) or (C) of the
preceding sentence if it is pursuant to an arrangement negotiated (in whole or
in part) prior to the first anniversary of the External Spin-Off, even if at the
time of the External Spin-Off or thereafter such action is subject to various
conditions.

                           (v)      Dispositions of Assets. Until the first day
after the Restriction Period, none of SpinCo or any member of the SpinCo Group
shall sell, transfer, or otherwise dispose of or agree to dispose of assets
(including, for such purpose, any shares of capital stock of a Subsidiary and
any transaction treated for tax purposes as a sale, transfer or disposition)
that, in the aggregate, constitute more than 40% of the gross assets of SpinCo,
nor shall SpinCo or any member of the SpinCo Group sell, transfer, or otherwise
dispose of or agree to dispose of assets (including, for such purpose, any
shares of capital stock of a Subsidiary and any transaction treated for tax
purposes as a sale, transfer or disposition) that, in the aggregate, constitute
more than 40% of the consolidated gross assets of the SpinCo Group. The
foregoing sentence shall not apply to sales, transfers, or dispositions of
assets in the ordinary course of business. The percentages of gross assets or
consolidated gross assets of SpinCo or the SpinCo Group, as the case may be,
sold, transferred, or otherwise disposed of, shall be based on the fair market
value of the gross assets of SpinCo and the members of the SpinCo Group as of
the Distribution Date. For purposes of this Section 5(b)(v), a merger of SpinCo
or one of its Subsidiaries with and into any Person shall constitute a
disposition of all of the assets of SpinCo or such Subsidiary.

                           (vi)     Liquidations, Mergers, Reorganizations.
Until the first day after the Restriction Period, neither SpinCo nor its
Subsidiaries shall, or shall agree to, voluntarily dissolve or liquidate or
engage in any merger (except for a Cash Acquisition Merger), consolidation or
other reorganization; provided, however, mergers of direct or indirect
wholly-owned Subsidiaries of SpinCo solely with and into SpinCo or with other
direct or indirect wholly-owned Subsidiaries of SpinCo, and liquidations of
SpinCo's Subsidiaries, are not subject to this Section 5(b)(vi) to the extent
not inconsistent with the Tax-Free Status of the Spin-Off-Related Transactions.

                  (c)      Permitted Transactions. Notwithstanding the
restrictions otherwise imposed by Sections 5(b)(iii) through 5(b)(vi), during
the Restriction Period, SpinCo may (w) approve, participate in, support or
otherwise permit a proposed business combination or transaction that would
otherwise breach the covenant set forth in Section 5(b)(iv), (x) sell or
otherwise dispose of the assets of the SpinCo Group in a transaction that would
otherwise breach the covenant set forth in Section 5(b)(v), (y) merge SpinCo or
any member of the SpinCo Group with another entity without regard to which party
is the surviving entity in a transaction that

                                      -15-
<PAGE>

would otherwise breach the covenant set forth in Section 5(b)(vi), or (z) issue
Equity Securities of SpinCo or any member of the SpinCo Group in a transaction
that would otherwise breach the covenant set forth in Section 5(b)(iii), if and
only if such transaction would not violate Section 5(b)(i) or Section 5(b)(ii)
and one of the following Sections 5(c)(i), 5(c)(ii) or 5(c)(iii) are satisfied.

                           (i)      Supplemental Ruling; Tax Opinion. Prior to
entering into any agreement contemplating a transaction described in clauses
(w), (x), (y) or (z) of Section 5(c) and prior to consummating any such
transaction: (A) SpinCo shall request that Parent obtain a Private Letter Ruling
in accordance with Section 5(d)(ii) of this Agreement and Parent shall have
received such a Private Letter Ruling in form and substance satisfactory to
Parent in its sole and absolute discretion or (B) SpinCo shall provide Parent
with an Unqualified Tax Opinion in form and substance satisfactory to Parent in
its sole and absolute discretion (and in determining whether an opinion is
satisfactory, Parent may consider, among other factors, the appropriateness of
any underlying assumptions and management's representations if used as a basis
for the opinion).

                           (ii)     Board Approval. Prior to entering into any
agreement contemplating a transaction described in clauses (y) or (z) of Section
5(c) (expressly excluding for this purpose transactions described in clause (x)
of Section 5(c)) and prior to consummating any such transaction, the following
conditions are satisfied: (A) following the transaction at issue, one or more
Persons will not have acquired, and will not have the right to acquire, directly
or indirectly, more than 35% (by vote or value) of the outstanding Equity
Securities of SpinCo or any member of the SpinCo Group (determined immediately
following such transaction) taking into account all relevant issuances of (and
agreements to issue) Equity Securities (and assuming the exercise or conversion
of all such Equity Securities (if such Equity Securities are options or warrants
or similar exercisable or convertible securities) and the closing of all such
agreements) from the point in time two years prior to the External Spin-Off to
the date immediately following such transaction and pursuant to any other
transaction which is part of a plan or series of related transactions (within
the meaning of Section 355(e) of the Code) that includes the External Spin-Off,
(B) SpinCo will be the surviving entity if such transaction is a merger (and the
transaction is not a reverse subsidiary merger in which SpinCo is the surviving
entity) and (C) SpinCo delivers to Parent a Board Certification.

                           (iii)    Subsidiary Transaction. Prior to entering
into any agreement contemplating a transaction described in clauses (x), (y) or
(z) of Section 5(c) that is a SpinCo Group Member Transaction and prior to
consummating any such SpinCo Group Member Transaction: (A) SpinCo shall provide
Parent with adequate advance written notice of the intent of a member of the
SpinCo Group to enter into an agreement contemplating such SpinCo Group Member
Transaction in accordance with the terms of Section 5(f)(iii) and (B) Parent
determines in its reasonable discretion that such SpinCo Group Member
Transaction would not reasonably be expected to adversely affect the Tax-Free
Status of any of the Spin-Off Related Transactions (such discretion to be
exercised in good faith no later than ten (10) Business Days after receipt of
such notice and with the sole purpose of preserving the Tax-Free Status of the
Spin-Off Related Transactions).

                  (d)      Private Letter Rulings and Restrictions on SpinCo.

                                      -16-
<PAGE>

                           (i)      Private Letter Ruling at Parent's Request.
Parent shall have the right to obtain a Private Letter Ruling in its sole and
absolute discretion. If Parent determines to obtain a Private Letter Ruling,
SpinCo shall (and shall cause each member of the SpinCo Group to) cooperate with
Parent and take any and all actions reasonably requested by Parent in connection
with obtaining the Private Letter Ruling (including, without limitation, by
making any representation or covenant or providing any materials or information
requested by any Tax Authority; provided that SpinCo shall not be required to
make (or cause any member of the SpinCo Group to make) any representation or
covenant that is inconsistent with historical facts or as to future matters or
events over which it has no control). In connection with obtaining a Private
Letter Ruling pursuant to this Section 5(d)(i), (A) Parent shall keep SpinCo
informed in a timely manner of all material actions taken or proposed to be
taken by Parent in connection therewith; (B) Parent shall (1) reasonably in
advance of the submission of any Private Letter Ruling Document, provide SpinCo
with a draft copy thereof, (2) reasonably consider SpinCo's comments on such
draft copy, and (3) provide SpinCo with a final copy; and (C) Parent shall
provide SpinCo with notice reasonably in advance of, and SpinCo shall have the
right to attend, any formally scheduled meetings with any Tax Authority (subject
to the approval of the Tax Authority) that relate to such Private Letter Ruling.

                           (ii)     Private Letter Rulings at SpinCo's Request.
Parent agrees that at the reasonable request of SpinCo pursuant to Section
5(c)(i), Parent shall (and shall cause each member of the Parent Group to)
cooperate with SpinCo and use its reasonable best efforts to seek to obtain, as
expeditiously as possible, a Private Letter Ruling from the IRS and/or any other
applicable Tax Authority for the purpose of confirming compliance on the part of
SpinCo or any member of the SpinCo Group with its obligations under Section 5(b)
of this Agreement. Further, in no event shall Parent be required to file any
request for a Private Letter Ruling under this Section 5(d)(ii) unless SpinCo
represents that (A) it has reviewed the request for the Private Letter Ruling
and any materials, appendices and exhibits submitted or filed therewith, and (B)
all information and representations, if any, relating to any member of the
SpinCo Group, contained in the Ruling Documents are true, correct and complete
in all material respects. SpinCo shall reimburse Parent for all reasonable costs
and expenses incurred by the Parent Group in obtaining a Private Letter Ruling
requested by SpinCo within ten (10) Business Days after receiving an invoice
from Parent therefor. SpinCo hereby agrees that Parent shall have sole and
exclusive control over the process of obtaining a Private Letter Ruling, and
that only Parent shall apply for a Private Letter Ruling. In connection with
obtaining a Private Letter Ruling pursuant to this Section 5(d)(ii), (A) Parent
shall keep SpinCo informed in a timely manner of all material actions taken or
proposed to be taken by Parent in connection therewith; (B) Parent shall (1)
reasonably in advance of the submission of any Private Letter Ruling Document,
provide SpinCo with a draft copy thereof, (2) reasonably consider SpinCo's
comments on such draft copy, and (3) provide SpinCo with a final copy; and (C)
Parent shall provide SpinCo with notice reasonably in advance of, and SpinCo
shall have the right to attend, any formally scheduled meetings with any Tax
Authority (subject to the approval of the Tax Authority) that relate to such
Private Letter Ruling.

                           (iii)    Prohibition on SpinCo. SpinCo hereby agrees
that neither it nor any member of the SpinCo Group shall seek any guidance from
the IRS or any other Tax Authority (whether written, verbal or otherwise)
concerning any of the Spin-Off-Related Transactions (or the impact of any
transaction on any of the Spin-Off-Related Transactions).

                                      -17-
<PAGE>

                  (e)      Liability for Undertaking Certain Actions.
Notwithstanding anything in this Agreement to the contrary, SpinCo and each
member of the SpinCo Group shall be responsible for any and all Tax-Related
Losses that are attributable to, or result from:

                           (i)      any act or failure to act by SpinCo or any
member of the SpinCo Group, which action or failure to act breaches any of the
covenants described in Section 5(b)(i) through 5(b)(vi) of this Agreement
(without regard to the exceptions or provisos set forth in such provisions),
expressly including, for this purpose, any Permitted Transaction and any act or
failure to act that breaches Section 5(b)(i) or 5(b)(ii), regardless of whether
such act or failure to act is permitted by Section 5(b)(iii) through 5(b)(vi);

                           (ii)     any acquisition of Equity Securities of
SpinCo or any member of the SpinCo Group by any person or persons (including,
without limitation, as a result of an issuance of SpinCo Equity Securities or a
merger of another entity with and into SpinCo or any member of the SpinCo Group)
or any acquisition of assets of SpinCo or any member of the SpinCo Group
(including, without limitation, as a result of a merger) by any Person or
Persons; and

                           (iii)    Tax Counsel withdrawing all or any portion
of the Tax Opinion or any Tax Authority withdrawing all or any portion of a
Private Letter Ruling issued to Parent in connection with the Spin-Off-Related
Transactions because of a breach by SpinCo or any member of the SpinCo Group of
a representation made in this Agreement (or made in connection with the Tax
Opinion or any Private Letter Ruling contemplated by Section 5(d)).

                  (f)      Cooperation.

                           (i)      Without limiting the prohibition set forth
in Section 5(d)(iii), until the first day after the Restriction Period, SpinCo
shall furnish Parent with a copy of any ruling request that any member of the
SpinCo Group may file with the IRS or any other Tax Authority and any opinion
received that in any respect relates to, or otherwise reasonably could be
expected to have any effect on, the Tax-Free Status of any of the
Spin-Off-Related Transactions.

                           (ii)     Parent shall reasonably cooperate with
SpinCo in connection with any request by SpinCo for an Unqualified Tax Opinion
pursuant to Section 5(c)(i).

                           (iii)    Until the first day after the Restriction
Period, SpinCo will provide adequate advance notice to Parent in accordance with
the terms of Section 5(f)(iv) of any action described in Sections 5(b)(i)
through 5(b)(vi) within a period of time sufficient to enable Parent (A) to seek
injunctive relief pursuant to Section 5(g) in a court of competent jurisdiction
or (B) with respect to a SpinCo Group Member Transaction, determine that such
SpinCo Group Member Transaction would not reasonably be expected to adversely
affect the Tax-Free Status of any of the Spin-Off Related Transactions, as set
forth in Section 5(c)(iii).

                           (iv)     Each notice required by Section 5(f)(iii)
shall set forth the terms and conditions of any such proposed transaction,
including, without limitation, (A) the nature of any related action proposed to
be taken by the board of directors of SpinCo, (B) the approximate number of
Equity Securities (and their voting and economic rights) of SpinCo or any member
of the SpinCo Group (if any) proposed to be sold or otherwise issued, (C) the
approximate value of SpinCo's assets (or assets of any member of the SpinCo
Group) proposed to be transferred, and

                                      -18-
<PAGE>

(D) the proposed timetable for such transaction, all with sufficient
particularity to enable Parent to seek such injunctive relief or make a
determination pursuant to Section 5(c)(iii), as applicable. Promptly, but in any
event within 30 days, after Parent receives such written notice from SpinCo,
Parent shall notify SpinCo in writing of Parent's decision to seek injunctive
relief pursuant to Section 5(g).

                           (v)      From and after the date Parent first
requests a Private Letter Ruling pursuant to Section 5(d) until the first day
after the two-year anniversary of such date that Parent receives such Private
Letter Ruling (pursuant to Section 5(d)(i) or 5(d)(ii)), neither SpinCo nor any
member of the SpinCo Group shall take (or refrain from taking) any action to the
extent that such action or inaction would have caused a representation given by
SpinCo in connection with any such request for a Private Letter Ruling to have
been untrue as of the relevant representation date, had SpinCo or any member of
the SpinCo Group intended to take (or refrain from taking) such action on the
relevant representation date.

                  (g)      Enforcement. The parties hereto acknowledge that
irreparable harm would occur in the event that any of the provisions of this
Section 5 were not performed in accordance with their specific terms or were
otherwise breached. The parties hereto agree that, in order to preserve the
Tax-Free Status of the Spin-Off-Related Transactions, injunctive relief is
appropriate to prevent any violation of the foregoing covenants; provided,
however, that injunctive relief shall not be the exclusive legal or equitable
remedy for any such violation.

         6.       REFUNDS. Parent shall be entitled to all Refunds (and any
interest thereon received from the applicable Tax Authority) in respect of
Income Taxes and Other Taxes paid with respect to any Tax Return filed by Parent
or any member of the Parent Group. Subject to the proviso in Section 3(d),
SpinCo shall be entitled to all Refunds (and any interest thereon received from
the applicable Tax Authority) in respect of Income Taxes and Other Taxes paid
with respect to any Tax Return filed by SpinCo or any member of the SpinCo
Group. A party receiving a Refund to which another party is entitled pursuant to
this Section 6 shall pay the amount to which such other party is entitled within
ten (10) Business Days after such Refund is Actually Realized. Each of Parent
and SpinCo shall fully cooperate with the other party in connection with, any
claim for Refund in respect of an Income Tax or Other Tax for which any member
of the Parent Group or the SpinCo Group, as the case may be, is responsible
pursuant to Section 2.

         7.       TAX CONTESTS.

                  (a)      Notification. SpinCo shall promptly notify Parent in
writing of any communication with respect to any pending or threatened
Proceeding in connection with an Income Tax Liability or Other Tax Liability (or
any issue related thereto) of SpinCo or any member of the SpinCo Group for which
a member of the Parent Group may be responsible pursuant to this Agreement;
provided, however, that in the case of any Distribution-Related Proceeding, such
notice shall be provided no later than ten (10) Business Days after SpinCo first
receives written notice from the IRS or other Tax Authority of such
Distribution-Related Proceeding). SpinCo shall include with such notification a
true, correct and complete copy of any written communication, and an accurate
and complete written summary of any oral communication, received by SpinCo or a
member of the SpinCo Group. The failure of SpinCo

                                      -19-
<PAGE>

timely to forward such notification in accordance with the immediately preceding
sentence shall not relieve Parent of any obligation to pay such Income Tax
Liability or Other Tax Liability or indemnify SpinCo and the members of the
SpinCo Group and their respective Representatives, Affiliates, successors and
assigns therefor, except to the extent that the failure timely to forward such
notification actually prejudices the ability of Parent to contest such Income
Tax Liability or Other Tax Liability or increases the amount of such Income Tax
Liability or Other Tax Liability.

                  (b)      Representation with Respect to Tax Disputes. Parent
(or such member of the Parent Group as Parent shall designate) shall have the
sole right to represent the interests of the members of the Parent Group and the
members of the SpinCo Group and to employ counsel of its choice at its expense
in any Proceeding relating to (A) any U.S. consolidated federal Income Tax
Returns of the Parent Consolidated Group, (B) any other Combined Returns, (C)
any Parent Separate Returns, and (D) any SpinCo Separate Returns that are Income
Tax Returns relating to Pre-Distribution Taxable Periods or Straddle Periods.
SpinCo (or such member of the SpinCo Group as SpinCo shall designate) shall have
the sole right to represent the interests of the members of the SpinCo Group and
to employ counsel of its choice at its expense in any Proceeding relating to (A)
SpinCo Separate Returns that are Other Tax Returns relating to Pre-Distribution
Taxable Periods and (B) SpinCo Separate Returns relating to Post-Distribution
Taxable Periods.

                  (c)      Power of Attorney. Each member of the SpinCo Group
shall execute and deliver to Parent (or such member of the Parent Group as
Parent shall designate) any power of attorney or other document requested by
Parent (or such designee) in connection with any Proceeding described in the
first sentence of Section 7(b).

                  (d)      Distribution-Related Proceedings. In the event of any
Distribution-Related Proceeding as a result of which SpinCo could reasonably be
expected to become liable for any Tax-Related Losses and with respect to which
Parent has the right to represent the interests of the members of the Parent
Group and/or the members of the SpinCo Group pursuant to Section 7(b) above, (A)
Parent shall provide SpinCo with copies of any document received by Parent from
any Tax Authority in connection with any such Proceeding no later than ten (10)
Business Days after Parent first receives such document, (B) Parent shall
consult with SpinCo reasonably in advance of taking any significant action in
connection with such Proceeding, (C) Parent shall consult with SpinCo and offer
SpinCo a reasonable opportunity to comment before submitting any written
materials prepared or furnished in connection with such Proceeding, (D) Parent
shall defend such Proceeding diligently and in good faith as if it were the only
party in interest in connection with such Proceeding, and (E) Parent shall
permit SpinCo to participate in any meetings or conference calls with any Tax
Authority if Parent reasonably determines that Parent would not be prejudiced by
such participation; provided, that, SpinCo's rights under this Section 7(d)
shall be limited to that portion of any Distribution-Related Proceeding that
directly relates to the Tax-Free Status of the Spin-Off-Related Transactions.
SpinCo shall be responsible for any expenses incurred by SpinCo in connection
with its participation in a Distribution-Related Proceeding.

         8.       APPORTIONMENT OF TAX ATTRIBUTES; CARRYBACKS.

                  (a)      Apportionment of Tax Attributes.

                                      -20-
<PAGE>

                           (i)      If the Parent Consolidated Group has a Tax
Attribute, the portion, if any, of such Tax Attribute apportioned to SpinCo or
any member of the SpinCo Consolidated Group and treated as a carryover to the
first Post-Distribution Taxable Period of SpinCo (or such member) shall be
determined in accordance with Treasury Regulation Section 1.1502-79 and, if
applicable, Section 1.1502-79A.

                           (ii)     No Tax Attribute with respect to
consolidated U.S. federal Income Tax of the Parent Consolidated Group, other
than those described in Section 8(a)(i), and no Tax Attribute with respect to
consolidated, combined or unitary State, local, or foreign Income Tax, in each
case, arising in respect of a Combined Return shall be apportioned to SpinCo or
any member of the SpinCo Group, except as Parent (or such member of the Parent
Group as Parent shall designate) determines is otherwise required under
applicable law.

                           (iii)    Parent (or its designee) shall determine the
portion, if any, of any Tax Attribute which must (absent a Final Determination
to the contrary) be apportioned to SpinCo or any member of the SpinCo Group in
accordance with this Section 8(a) and applicable law, and the amount of tax
basis and earnings and profits to be apportioned to SpinCo or any member of the
SpinCo Group in accordance with applicable law, and shall provide written notice
of the calculation thereof to SpinCo as soon as practicable after the
information necessary to make such calculation becomes available to Parent.

                           (iv)     Except as otherwise required by applicable
law or pursuant to a Final Determination, SpinCo shall not take any position
(whether on a Tax Return or otherwise) that is inconsistent with the information
contained in the written notice delivered by Parent pursuant to Section
8(a)(iii).

                  (b)      Carrybacks. In the event that SpinCo (or the
appropriate member of the SpinCo Group) is able to carry back losses, credits or
other tax attributes against its income or tax liability in a Combined Return,
(i) Parent shall cooperate with SpinCo, at SpinCo's expense, in seeking from the
appropriate Tax Authority such Refund as reasonably would result from such
Carryback, and (ii) SpinCo shall be entitled to any Income Tax Benefit Actually
Realized by a member of the Parent Group (including any interest thereon
received from such Tax Authority), to the extent that such Refund is directly
attributable to such Carryback, within 30 days after such Refund is Actually
Realized; provided, however, that SpinCo shall indemnify and hold the members of
the Parent Group harmless from and against any and all collateral tax
consequences resulting from or caused by any such Carryback, including (but not
limited to) the loss or postponement of any benefit from the use of tax
attributes generated by a member of the Parent Group or an Affiliate thereof if
(x) such tax attributes expire unutilized, but would have been utilized but for
such Carryback, or (y) the use of such tax attributes is postponed to a later
taxable period than the taxable period in which such tax attributes would have
been utilized but for such Carryback. If there is a Final Determination that
results in any change to or adjustment of an Income Tax Benefit Actually
Realized by a member of the Parent Group that is directly attributable to a
Carryback, then Parent (or its designee) shall make a payment to SpinCo, or
SpinCo shall make a payment to Parent (or its designee), as may be necessary to
adjust the payments between SpinCo and Parent (or its designee) to reflect the
payments that would have been made under this Section 8(b) had the adjusted
amount of such Income Tax Benefit been taken into account in computing the
payments due under this Section 8(b).

                                      -21-
<PAGE>

         9.       COOPERATION AND EXCHANGE OF INFORMATION.

                  (a)      Cooperation and Exchange of Information. (A) Parent
and Spinco agree to make good faith efforts to request from the other party all
information it may need within six (6) months of the Distribution Date. (B) Each
of Parent and SpinCo, on behalf of itself and each member of the Parent Group
and the SpinCo Group, respectively, after six (6) months has lapsed, agrees to
use good faith efforts to provide the other party (or its designee) with such
cooperation or information as such other party (or its designee) reasonably
shall request in connection with the determination of any payment or any
calculations described in this Agreement, the preparation or filing of any
Income Tax Return or Other Tax Return or claim for Refund, or the conduct of any
Proceeding. Such cooperation and information shall include, without limitation,
(i) promptly forwarding copies of appropriate notices and forms or other
communications (including, without limitation, information document requests,
revenue agent's reports and similar reports, notices of proposed adjustments and
notices of deficiency) received from or sent to any Tax Authority or any other
administrative, judicial or governmental authority, (ii) providing copies of all
relevant Income Tax Returns or Other Tax Returns, together with accompanying
schedules and related workpapers, documents relating to rulings or other
determinations by any Tax Authority, and such other records concerning the
ownership and tax basis of property, or other relevant information, (iii) the
provision of such additional information and explanations of documents and
information provided under this Agreement (including statements, certificates,
forms, returns and schedules delivered by either party) as shall be reasonably
requested by Parent (or its designee) or SpinCo (or its designee), as the case
may be, (iv) the execution of any document that may be necessary or reasonably
helpful in connection with the filing of an Income Tax Return or Other Tax
Return, a claim for a Refund, or in connection with any Proceeding, including
such waivers, consents or powers of attorney as may be necessary for Parent or
SpinCo, as the case may be, to exercise its rights under this Agreement, and (v)
the use of Parent's or SpinCo's, as the case may be, reasonable efforts to
obtain any documentation from a governmental authority or a third party that may
be necessary or reasonably helpful in connection with any of the foregoing. Any
request for information or documents pursuant to this Section shall be made by
the requesting party in writing. The other party shall promptly (and in no event
later than 30 days after receipt of the request) provide the requested
information. The requesting party shall indemnify the other party for any
reasonable out-of-pocket expenses incurred by such party in connection with
providing any information or documentation pursuant to this Section 9. Upon
reasonable notice, each of Parent and SpinCo shall make its, or shall cause the
members of the Parent Group or the SpinCo Group, as applicable, to make their,
employees and facilities available on a mutually convenient basis to provide
explanation of any documents or information provided hereunder. Any information
obtained under this Section 9 shall be kept confidential, except as otherwise
reasonably may be necessary in connection with the filing of Income Tax Returns
or Other Tax Returns or claims for Refund or in conducting any Proceeding.

                  (b)      Retention of Records. Each of Parent and SpinCo agree
to use good faith efforts to retain (i) all Income Tax Returns and Other Tax
Returns, related schedules and workpapers, in respect of any taxable period that
ends on or before or includes the Distribution Date or any other taxable period
that may be subject to a claim hereunder until the later of (A) the expiration
of the statute of limitations (including extensions) for the taxable periods to
which such Income Tax Returns, Other Tax Returns relate and (B) the Final
Determination of any

                                      -22-
<PAGE>

payments that may be required in respect of such taxable periods under this
Agreement, and (ii) all material records and other documents as required under
Section 6001 of the Code and the regulations promulgated thereunder (and any
similar provision of State, local, or foreign law) existing on the date hereof
or created until seven (7) years after the Distribution Date.

                  (c)      Remedies. Each of Parent and SpinCo hereby
acknowledges and agrees that (i) the failure of any member of the Parent Group
or the SpinCo Group, as the case may be, to comply with the provisions of this
Section 9 may result in substantial harm to the Parent Group or the SpinCo
Group, as the case may be, including the inability to determine or appropriately
substantiate an Income Tax Liability or Other Tax Liability (or a position in
respect thereof) for which the Parent Group (or a member thereof) or the SpinCo
Group (or a member thereof), as applicable, would be responsible under this
Agreement or appropriately defend against an adjustment thereto by a Tax
Authority, (ii) the remedies available to the Parent Group for the breach by a
member of the SpinCo Group of its obligations under this Section 9 shall include
(without limitation) the indemnification by SpinCo of the Parent Group for any
Income Tax Liabilities or Other Tax Liabilities incurred or any Tax benefit lost
or postponed by reason of such breach and the forfeiture by the SpinCo Group of
any related rights to indemnification by Parent and (iii) the remedies available
to the SpinCo Group for the breach by a member of the Parent Group of its
obligations under this Section 9 shall include (without limitation) the
indemnification by Parent of the SpinCo Group for any Income Tax Liabilities or
Other Tax Liabilities incurred or any Tax benefit lost or postponed by reason of
such breach and the forfeiture by the Parent Group of any related rights to
indemnification by SpinCo.

                  (d)      Reliance by Parent. If any member of the SpinCo Group
supplies information to a member of the Parent Group in connection with an
Income Tax Liability or Other Tax Liability and an officer of a member of the
Parent Group signs a statement or other document under penalties of perjury in
reliance upon the accuracy of such information, then upon the written request of
such member of the Parent Group identifying the information being so relied
upon, the chief financial officer of SpinCo (or his or her designee) shall
certify in writing that to his knowledge (based upon consultation with
appropriate employees) the information so supplied is accurate and complete.
SpinCo agrees to indemnify and hold harmless each member of the Parent Group and
its directors, officers and employees from and against any fine, penalty, or
other cost or expense of any kind attributable to a member of the SpinCo Group
having supplied, pursuant to this Section 9, a member of the Parent Group with
inaccurate or incomplete information in connection with an Income Tax Liability
or Other Tax Liability.

                  (e)      Reliance by SpinCo. If any member of the Parent Group
supplies information to a member of the SpinCo Group in connection with an
Income Tax Liability or Other Tax Liability and an officer of a member of the
SpinCo Group signs a statement or other document under penalties of perjury in
reliance upon the accuracy of such information, then upon the written request of
such member of the SpinCo Group identifying the information being so relied
upon, the chief financial officer of Parent (or his or her designee) shall
certify in writing that to his knowledge (based upon consultation with
appropriate employees) the information so supplied is accurate and complete.
Parent agrees to indemnify and hold harmless each member of the SpinCo Group and
its directors, officers and employees from and against any fine, penalty, or
other cost or expense of any kind attributable to a member of the Parent Group
having supplied,

                                      -23-
<PAGE>

pursuant to this Section 9, a member of the SpinCo Group with inaccurate or
incomplete information in connection with an Income Tax Liability or Other Tax
Liability.

                  (f)      Excluded Information. Anything in this Section 9 to
the contrary notwithstanding, neither Parent nor SpinCo shall be required to
provide the other with (A) any information with respect to which it reasonably
determines that such information may be privileged, and (B) any information that
it is required to keep confidential; provided, that, each party shall use
reasonable efforts to separate any information described in clause (A) or (B)
from information that it is required to provide to the other party pursuant to
this Section 9.

         10.      PAYMENTS.

                  (a)      Method of Payment. All payments required by this
Agreement shall be made by (i) wire transfer to the appropriate bank account as
may from time to time be designated by the parties for such purpose; provided
that, on the date of such wire transfer, notice of the transfer is given to the
recipient thereof, or (ii) any other method agreed to by the parties. All
payments due under this Agreement shall be deemed to be paid when available
funds are actually received by the payee.

                  (b)      Interest. Any payment required by this Agreement that
is not made on or before the date required hereunder shall bear interest, from
and after such date through the date of payment, at the Underpayment Rate.

                  (c)      Characterization of Payments. For all tax purposes,
the parties hereto agree to treat, and to cause their respective Affiliates to
treat, (i) any payment required by this Agreement, as either a contribution by
Parent to SpinCo or a distribution by SpinCo to Parent, as the case may be,
occurring immediately prior to the External Spin-Off and (ii) any payment of
interest or non-federal Income Taxes by or to a Tax Authority, as taxable or
deductible, as the case may be, to the party entitled under this Agreement to
retain such payment or required under this Agreement to make such payment, in
either case, except as otherwise required by applicable law or a Final
Determination; provided, that in the event it is determined that, pursuant to
applicable law or a Final Determination, any such treatment is not permissible
(or that an Indemnified Party nevertheless suffers an Income Tax or Other Tax
detriment as a result of such payment), the payment in question shall be
adjusted to place the Indemnified Party in the same after-tax position it would
have enjoyed absent such Final Determination.

         11.      LEGAL AND ACCOUNTING FEES. Except as otherwise provided
herein, any fees or expenses for legal, accounting or other professional
services shall be borne by the party incurring such fees or expenses.

         12.      NOTICES. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given upon (a) a transmitter's confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard overnight
courier the following Business Day or if delivered by hand the following
Business Day), or (b) confirmed delivery of a standard overnight courier or
delivered by hand, to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice):

                                      -24-
<PAGE>

                  If to Parent, to:     U.S. Bancorp
                                        800 Nicollet Mall
                                        Minneapolis, Minnesota 55402
                                        Attn: General Counsel
                                        Telecopier: (612) 303-0898

                  If to SpinCo to:      Piper Jaffray Companies
                                        800 Nicollet Mall
                                        Minneapolis, Minnesota 55402
                                        Attn: General Counsel
                                        Telecopier: (612) 303-1772

Such names and addresses may be changed by notice given in accordance with this
Section 14.

         13.      DESIGNATION OF AFFILIATE. Parent may assign any of its rights
or obligations under this Agreement to any member of the Parent Group as it
shall designate; provided, however, that no such assignment shall relieve Parent
of any obligation to make a payment hereunder to SpinCo to the extent such
designee fails to make such payment.

         14.      MISCELLANEOUS. Except to the extent otherwise provided in this
Agreement, this Agreement shall be subject to the provisions of Article IX
(Miscellaneous) of the SDA to the extent set forth therein.

                                      -25-
<PAGE>

                  IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first written above.

                                           U.S. BANCORP

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

                                           PIPER JAFFRAY COMPANIES

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

                                      -26-

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