DISCUSSION ON EQUITY CAPITAL MARKETS

Tuesday, December 12th, 2006

Chris Christina Principal (612) 303-8521 Christie.L.Christina@pjc.com

Elissa Kluever Associate (612) 303-6378 Elissa.M.Kluever@pjc.com

PIPER JAFFRAY MANAGEMENT COMMITTEE

Andrew Duff
Chairman & Chief Executive Officer

Tom Schnettler
Vice Chairman & Chief Financial Officer

Todd Firebaugh
Chief Administrative Officer

Jim Chosy
General Counsel

Jon Salveson
Head of Investment Banking

Frank Fairman
Head of Public Finance Services

Bob Peterson
Head of Equities

Ben May
Head of High -Yield & Structured Products

Capital Markets Institutional Sales & Sales Trading Trading Research

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CORPORATE & INSTITUTIONAL SERVICES

Investment Banking and Equities Groups
Investment Banking
Existing Industries
Consumer FIG Health Care Technology

New Industries
Alternative Energy Business Services Industrial Growth

Equities Capital Markets

Equity Capital Markets Convertible Originations Corporate & Venture Services

Distribution
Institutional Sales & Sales Trading

Research

Investment Research (Equity & Fixed Income)

Trading

EQUITY CAPITAL MARKETS TEAM

Organization Chart
Chad Abraham
Head of Equity Capital Markets

Maura Stoltz Hasan

Executive Assistant

Origination
John Baumgartner
Principal Consumer & FIG

Execution
Chris Christina
Principal Consumer & FIG

Steve Schmidt
Vice President Technology

Neil Riley
Vice President Health Care & Technology

John Crowther
Associate

Elissa Kluever
Associate

Greg Klancher
Associate

Jonathan Jewett
Analyst

PIPEs / RDs
David Stadinski
Managing Director

Chris Christina
Principal

Eric Helenek
Vice President

Chad Huber
Analyst

EQUITY CAPITAL MARKETS

Type of Transactions Completed on the Equity Capital Markets (ECM) Desk
Types of transactions completed through the Piper Jaffray Equity Capital Markets desk

Initial Public Offerings

An initial public offering (IPO) is when a private company sells its stock for the FIRST time in the public markets 146 IPOs have been completed in 2006, raising nearly $33 billion in capital Piper has completed 28 IPOs in 2006, raising over $4 billion in capital The average number of IPOs completed since 2000 has been 163, with a high of 373 completed in 2000 and a low of 70 completed in 2002
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EQUITY CAPITAL MARKETS

Type of Transactions Completed on the Equity Capital Markets (ECM) Desk
Types of transactions completed through the Piper Jaffray Equity Capital Markets desk

Follow-on Offerings

A follow-on offering is when an already public company sells its stock, either primary shares or shares from selling shareholders, in the public markets 457 follow-ons have been completed in 2006, raising nearly $92 billion in capital Piper has completed 43 follow-ons in 2006, raising over $7 billion in capital The average number of follow-ons completed since 2000 has been 416, with a high of 520 completed in 2004 and a low of 346 completed in 2002

Additional Types of Offerings (Follow-on

Underwritten Shelf Takedowns 144 Block Trades PIPEs (Private Investment in Public Equity) Registered Direct Offerings
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Offerings)

BROAD DEPTH OF EQUITY OFFERING ALTERNATIVES

There is a Growing Continuum of Offering Alternatives for Equity Issuers
Traditional Follow-on Registered Direct (RD) Underwritten Shelf Takedown Bought Deal Private Investment in Public Equity (PIPE) Block Trade (Rule 144

Initial Public Offering (IPO) Institutional)

$64,687,500

$97,232,500

$44,845,338

$57,960,000

$12,000,000

Initial Public Offering May 6 , 2005

th

Traditional Followon November 8 , 2005

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Bought Deal June 14th, 2006

Initial Public Offering May 1 , 2000

st

PIPE August 9th, 2006

$54,740,000

$40,089,000

$17,710,000

$120,000,000

$16,615,932

$95,737,500

Initial Public Offering June 25 , 1999

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Traditional Followon May 25 , 2004

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Rule 144 Block Trade August 26 , 2004

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Initial Public Offering January 28 , 2005

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Rule 144 Block Trades August/Sept 2005

Bought Deal June 15th, 2006

EQUITY CAPITAL MARKETS

Pipers Involvement in Equity Capital Markets Offerings
Piper functions as a Bookrunner, Co-Lead Manager and Co-Manager depending upon the deal

Piper Roles
Sole-Bookrunner: ECM desk functions as the lead manager on the deal and is responsible for coordinating the roadshow, building indications of interest, pricing the deal, allocating stock, billing & delivering the stock offered in the issue and stabilization in the immediate aftermarket; receives senior economic fees on the deal and furthest to the left on the cover Joint-Bookrunner: same responsibilities as solebookrunner, but split with another manager

Deal economics depend upon the status and maturity of the issuer

Co-Lead Manager: no bookrunning responsibilities; however, receives differentiated economics on the deal and a better position on the cover Co-Manager: most junior participating management position with no bookrun responsibilities; offers additional sponsorship to issuer; receives junior 8 economics and far right position on cover

EQUITY CAPITAL MARKETS

Pipers Involvement in Equity Capital Markets Offerings
Piper functions as a Bookrunner, Co-Lead Manager and Co-Manager depending upon the deal

Deal Economics
Fixed Economics: set gross spread to the banks on the offering, which is comprised of management fees, underwriting fees, and the selling concession Jump-Ball: subset of the selling concession based on who the designated account gives credit for the sale, bookrunner(s) frequently capped; underwriting and management fees fixed Bought Deal Spread: banks principal capital put at risk to buy shares from the issuer/selling shareholder at a discount to last trade and in turn sold to institutions at a discount from last trade and a premium to the price paid to the issuer/selling shareholder

Deal economics depend upon the status and maturity of the issuer

PIPER JAFFRAY COVER POSITIONS

Piper as Sole-Bookrunner Piper as Joint-Bookrunner

Piper as Co-Lead Manager

Piper as Co-Manager

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PIPER JAFFRAY BOOKRUN OFFERINGS

$95,737,500 $247,817,032 $16,779,966

Follow -on
August 2006

Follow -on
August 2006

Registered Direct
August 2006

$62,560,000

$44,845,338

$20,925,000

IPO
June 2006

Follow -on
June 2006

Follow -on
June 2006

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EQUITY CAPITAL MARKETS

Overview of Equity Capital Markets Origination Execution
Primary roles of the groups within Equity Capital Markets Origination and Execution Origination of Transaction with Investment Banking Discussion of Economics and Number of Managers on Deal Size and Time of Transaction Constant Communication with Management during the Roadshow Marketing the Deal with Sales Roadshow Layout Distribution Strategy Allocation Decisions Deal Pricing Opening and Trading Process

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CORPORATE CLIENT COMMUNICATION

The Role of the Equity Capital Markets Team
Situation
Client Targeting, Pitches, and Industry Conferences

Role
Update of Equity Capital Markets Conditions/Trends Deal Strategy, Structure & Tim ing Com pany Positioning & Piper J affray Marketing Valuation Discussion Introduction Process Presentation Coaching Sales Force Education Institutional Sales Feedback Research Analyst Feedback Order Book Updates Market Updates Institutional Account Profiles Recap of Roadshow and Order Book Offering Distribution Overview Aftermarket Trading Intelligence Trading Updates Green Shoe Management Trading Monitoring/Account Intelligence
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Prior to Roadshow

During Roadshow

Pricing

Aftermarket

EQUITY CAPITAL MARKETS

Equity Capital Markets Role in deal offering
The role of Equity Capital Markets in the pricing of an offering is to balance the desires of the corporate client and institutional client The goal is to find the socalled marketclearing price that pleases both parties
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Equity Capital Markets Desk

Corporate Client & Investment Banker
Wants to sell for the highest price Maximize offering value for the corporate client Maximize profit for the firm

Institutional Client & Sales Force

Wants to buy for the lowest price Generate increased value for the Institutional client Increase likelihood of long-term stock appreciation

GOLF GALAXY CASE STUDY

Golf Galaxy priced an upsized, $63.6 million initial public offering at $14.00, one point above its $11 - $13 filed range

Golf Galaxy Inc. (NASDAQ: GGXY)

Initial Public Offering Filing Range 7/29/2005 at $14.00$63,595,000 $11.00 - $13.00
Piper Jaffray Sole Bookrun Initial Public Offering July 29th, 2005

Shares Filed 3,333,000 Shares Offered 3,950,000 Shares Offered with Green Shoe 4,542,500 Primary 3,000,000 Secondary 1,542,500 Post-Deal Market Capitalization Sole Bookrunner Co-Lead Manager Co-Managers $148.9 million

Piper Jaffray William Blair A.G. Edwards, Wedbush Morgan Fund new store openings, general corporate purposes, and unpaid dividends due to preferred

The Company is headquartered in Eden Prairie, Minnesota and is a leading specialty retailer of golf equipment, apparel and accessories

Use of Proceeds pay all accrued shareholders

Transaction Highlights
Roadshow accounts on meetings and 6 group 9 Days, 14 Cities (Domestic Only); approximately 175 the roadshow via 62 institutional 1-on-1 functions

Order Book 16x oversubscribed; 210 accounts indicating on the deal; 85% of 1-on-1 meetings converted into orders; 90 orders of 10% or greater 1 Day Aftermarket Performance from offer price Offer = $14.00; Open = $17.05; Close = $18.61; +33% Piper Jaffray served as the sole sell-side sale to Dicks Sporting Goods from IPO)

Post-IPO/ Aftermarket 15 advisor to Golf Galaxy in their (11/13/06) at a price of $18.82 (+32%

GOLF GALAXY CASE STUDY

IPO Execution Timeline
Week of May 16th

Introduction

File IPO Deal kick-off. Piper Jaffray research analyst gives a teach-in to the sales force giving them a better understanding of the business and its growth outlook. Golf Galaxy travels to the Piper Jaffray office and presents its story to the sales force. This is the same presentation that will be used on the IPO roadshow with institutional investors. Golf Galaxy begins its roadshow. The company management travels with the Piper Jaffray investment banker and a member of the institutional sales force. The roadshow will take them to institutional investors throughout the United States. The roadshow begins in Chicago and continues through Kansas City, Denver, San Diego, Los Angeles, San Francisco, Minneapolis and Milwaukee.
Company continues its roadshow through Boston, New York, Baltimore and Philadelphia. Roadshow ends on Thursday afternoon. All-in-all, Golf Galaxy presented in front of 175 institutional investors via 62 1-on-1 appointments and 6 group functions

Week of July 13

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Week of July 20th

Week of July 27

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Pricing on July 29th

IPO is priced at $14.00 per share above the $11-$13 filing range. Piper Jaffray receives orders for 16x the number of shares that are being offered in the deal. 85% of 1-on-1 meeting attendees submit and order to Piper Jaffray. Piper Jaffrays Equity Capital Markets team works to allocate all of the shares to the institutional investors.
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EQUITY CAPITAL MARKETS OVERVIEW

Piper Jaffray has consistently been a Top Equity Underwriter
IPOs, Follow-ons & Convertibles in 2006 YTD
Rank 1 1 3 4 5 6 6 8 9 10 11 12 1 3 14 15 16 17 18 19 19 21 22 23 23 25 Manager J .P. Morgan Securities Inc. Citigroup Global Markets Inc. Banc of Am erica Securities Merrill Lynch & Co. UBS Securities Inc. Wachovia Capital Markets LLC Goldm Sachs & Co. an Credit Suisse Lehm Brothers an Morgan Stanley Deutsche Bank Securities Inc. Bear Stearns & Co Inc. Pipe Ja y & Co r ffra Cowen & Co., LLC J efferies & Co Inc. Raym ond J am es Thom Weisel Partners L.L.C. as RBC Capital Markets CIBC World Markets A.G. Edwards & Sons Inc. KeyBanc Capital Markets Keefe Bruyette & Woods Inc. Stifel Nicolaus & Co J MP Securities LLC Robert W. Baird & Co. Inc No. 160 160 150 149 137 124 124 121 119 118 110 80 7 8 71 66 62 59 54 47 47 37 36 35 35 32

IPOs in 2006 YTD

Rank 1 2 3 4 5 5 5 8 9 1 0 10 12 13 14 14 16 17 18 19 19 19 22 22 24 25 Manager J .P. Morgan Securities Inc. Credit Suisse Banc of Am erica Securities Merrill Lynch & Co. Goldm Sachs & Co. an UBS Securities Inc. Citigroup Global Markets Inc. Deutsche Bank Securities Inc. Cowen & Co., LLC Pipe Ja y & Co r ffra Morgan Stanley Bear Stearns & Co Inc. Lehm Brothers an Wachovia Capital Markets LLC Thom Weisel Partners L.L.C. as CIBC World Markets J efferies & Co Inc. Raym ond J am es RBC Capital Markets WilliamBlair & Co Keefe Bruyette & Woods Inc. A.G. Edwards & Sons Inc. J MP Securities LLC Pacific Growth Equities Lazard Capital Markets No. 46 40 35 34 32 32 32 31 29 2 8 28 27 26 24 24 19 17 13 12 12 12 11 11 8 7

EQUITY CAPITAL MARKETS OVERVIEW

Sector Rank IPOs & Follow-On Offerings Completed in 2006
Consumer Financial
No. 17 1 6 16 15 13 13 12 10 10 10 9 8 Rank 1 2 3 4 5 5 7 7 7 10 10 1 5 Manager Keefe Bruyette & Woods Inc. Citigroup Global Markets Inc. Wachovia Capital Markets LLC Banc of Am erica Securities J .P. Morgan Securities Inc. Merrill Lynch & Co. Credit Suisse UBS Securities Inc. Sandler, O'Neill & Partners, L.P. Bear Stearns & Co Inc. Deutsche Bank Securities Inc. Pipe Ja y & Co r ffra No. 36 31 25 22 21 21 20 20 20 15 15 1 2

Piper Jaffray continues to be one of the most active managers across key growth sectors

Rank 1 2 2 4 5 5 7 8 8 8 11 12

Manager Wachovia Capital Markets LLC P r Ja y & Co ipe ffra J .P. Morgan Securities Inc. Goldm Sachs & Co. an Citigroup Global Markets Inc. Banc of Am erica Securities Merrill Lynch & Co. Cowen & Co., LLC Lehm Brothers an Credit Suisse Thom Weisel Partners L.L.C. as Deutsche Bank Securities Inc.

Health Care
Rank 1 2 3 3 5 6 6 8 9 9 11 11 Manager Cowen & Co., LLC P r Ja y & Co ipe ffra UBS Securities Inc. J .P. Morgan Securities Inc. CIBC World Markets Banc of Am erica Securities Morgan Stanley Merrill Lynch & Co. Thom Weisel Partners L.L.C. as Lehm Brothers an Goldm Sachs & Co. an Rodm & Renshaw, Inc. an No. 27 2 5 21 21 20 19 19 17 16 16 15 15

Technology
Rank 1 2 3 4 5 5 5 8 9 10 11 12 Manager Credit Suisse Goldm Sachs & Co. an Morgan Stanley Lehm Brothers an Pipe Ja y & Co r ffra J .P. Morgan Securities Inc. Deutsche Bank Securities Inc. Thom Weisel Partners L.L.C. as Citigroup Global Markets Inc. Cowen & Co., LLC UBS Securities Inc. Banc of Am erica Securities No. 28 26 23 22 2 1 21 21 20 19 17 16 15

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EQUITY CAPITAL MARKETS OVERVIEW

Historical IPO Volume
Number of IPOs Completed 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 80 70 76 409

Number of IPOs by Year

531 450 373 252 210

170

146

IPO Capital Raised by Year

$80 Capital Raised ($B) $69.2 $46.9 $42.6 $40 $37.8 $39.0 $24.8 $20 $14.5 $44.1 $35.0 $33.4 $71.2

$60

$0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD

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EQUITY CAPITAL MARKETS OVERVIEW

Historical Follow-on Volume
Number of Follow-ons by Year
Number of FOs Completed 700 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD
464 415 398 374 431 617 628 520 424 346 457

$150 Capital Raised ($B) $125 $100 $75 $50 $25 $0

Follow-on Capital Raised by Year

$111.9 $74.6 $81.2 $75.4 $124.8 $84.2 $69.3 $68.8 $90.3 $85.0 $92.2

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006 YTD

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EQUITY CAPITAL MARKETS

What is Equity Capital Markets to You? Equity Capital Markets is a dedicated resource for equity offering
information and analysis, related trading intelligence, and broader market information/color Equity Capital Markets provides a weekly update of the following:
Week in Review Deal Commentary Industry Calendar YTD Performance Tables YTD Deal Performance Week Pricings Current Backlog Week Filings League Tables Withdrawn/Postponed Piper Transactions

Equity Capital Markets is a dedicated resource for

equity offering information and analysis

Equity Capital Markets works with Investment Banking to tailor the best advice/approach for IPOs, follow-on offerings, and other equity-linked transactions Equity Capital Markets works with our corporate clients, Investment Banking, company/underwriters counsel, and Institutional Sales and Sales Trading to manage all aspects of the deal execution process
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EQUITY CAPITAL MARKETS

Questions? Comments?

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