Document:

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement is entered into as of the 20th day of August,
2003,  by and between XRG,  INC., a Delaware  corporation  ("XRG"),  R&R EXPRESS
INTERMODAL,  INC., a Pennsylvania corporation ("R&R"). XRG, and R&R are referred
to herein  individually as "Party" and collectively as "Parties." This Agreement
contemplates  a  transaction  in which  XRG  will  acquire  the  stock of R&R in
consideration of the shareholders of R&R receiving shares of the common stock of
XRG.

     Now,  therefore,  in  consideration  of  the  respective   representations,
promises, warranties and covenants of the Parties set forth herein, the Parties,
intending to be legally bound, agree as follows.

     1. Definitions.

     "Closing" has the meaning set forth in Section 2(g) below.  "Closing  Date"
has the meaning set forth in Section 2(g) below.

     "Disclosure Schedule" is the information provided to XRG as described
in Section 3 below.

     "Environmental,  Health, and Safety  Requirement(s)" shall mean any and all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

     "Liability" or  "Liabilities"  or "liability"  or  "liabilities"  means any
liability  (whether known or unknown,  whether  asserted or unasserted,  whether
absolute or  contingent,  whether  accrued or unaccrued,  whether  liquidated or
unliquidated,  and whether due or to become due),  including  any  liability for
taxes.

     "Ordinary  Course of  Business"  means  the  ordinary  course  of  business
consistent with past custom and practice (including with respect to quantity and
frequency).

     "Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental  entity (or any department,  agency, or political  subdivision
thereof).

     "Securities  Act"  means the  Securities  Act of 1933 (15  U.S.C.ss.77a  et
seq.).

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     2. Transaction.

     (A)  Purchase  of  Stock.  Subject  to the  terms  and  conditions  of this
Agreement, XRG shall purchase from the shareholders of R&R, and the shareholders
of R&R shall sell,  transfer,  convey, and deliver to XRG, all of the issued and
outstanding stock of R&R (the "R&R Shares") at the Closing for the consideration
specified below in Section 2 (B).

     (B) Purchase  Consideration  - XRG Common Stock. As  consideration  for the
purchase of the R&R Shares,  XRG shall issue to the  shareholders of R&R 200,000
shares  of  common  stock  of  XRG,  and  will  include  those  shares  in a S-3
registration  statement to be filed with the Securities and Exchange Commission,
on or about  August __,  2003.  The amount of shares  set forth  herein  will be
issued to the shareholders of R&R in proportion to their respective  holdings of
the shares of R&R. The number of XRG Shares is subject to  adjustment  after the
acquisition based on the future market price of the XRG Shares. Specifically, in
the  event the XRG  Shares  held by the  shareholders  of R&R do not have a fair
market  value  equal to or greater  than  $200,000,  then the  Company  shall be
obligated to issue the  shareholders of R&R additional  shares of Company common
stock  sufficient  to result in the fair market  value of the XRG Shares held by
the shareholders of R&R having a total value equal to $200,000.

     (C) The  Closing.  The  closing of the  transactions  contemplated  by this
Agreement  (the  "Closing")  shall  take place at the  offices  of XRG,  5301 W.
Cypress Street, Suite 111, Tampa, Florida 33607 on such date as agreed to by the
Parties  following the  satisfaction or waiver of all pre-closing  conditions to
the  obligations  of the Parties to  consummate  the  transactions  contemplated
hereby ("Closing Date").

     At the Closing:

     (1) The Shareholders of R&R will deliver to XRG:

     (a) certificates representing the R&R Shares, duly endorsed (or accompanied
by duly executed stock powers), for transfer to XRG;

     (b) a certificate  executed by the  Shareholders  of R&R  representing  and
warranting  to XRG that  each of the  Shareholders  of R&R  representations  and
warranties in this Agreement was accurate in all respects as of the date of this
Agreement  and is accurate in all  respects as of the Closing Date as if made on
the Closing Date; and

     (2) XRG will deliver to the Shareholders of R&R:

     (a)  certificates  for a total of 200,000 shares of XRG common stock issued
to the shareholders of R&R ; subject to the Minimum Stock Value in 2.(B).

     (b) a certificate  executed by XRG to the effect that,  except as otherwise
stated in such certificate, each of XRG's representations and warranties in this
Agreement  was accurate in all respects as of the date of this  Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing Date.

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     3.  Representations  and  Warranties  of the  Shareholders  of R&R  Express
Intermodal, Inc.

     The  Shareholders of R&R,  jointly and severally,  represent and warrant to
XRG as follows (as used herein, "Acquired Company" shall mean R&R):

     3.1 ORGANIZATION AND GOOD STANDING

     (a) Part 3.1 of the  Disclosure  Schedule  contains a complete and accurate
list for the Acquired  Company of its name, its  jurisdiction of  incorporation,
other  jurisdictions  in  which  it  is  authorized  to  do  business,  and  its
capitalization  (including  the identity of each  stockholder  and the number of
shares held by each).  The Acquired  Company is a  corporation  duly  organized,
validly  existing,  and in good standing under the laws of its  jurisdiction  of
incorporation,  with full corporate  power and authority to conduct its business
as it is now being  conducted,  to own or use the  properties and assets that it
purports to own or use,  and to perform  all its  obligations  under  applicable
contracts.  The Acquired  Company is duly  qualified to do business as a foreign
corporation  and is in good  standing  under  the  laws of each  state  or other
jurisdiction  in which either the  ownership or use of the  properties  owned or
used by it, or the  nature of the  activities  conducted  by it,  requires  such
qualification.

     (b)  The   Shareholders  of  R&R  have  delivered  to  XRG  copies  of  the
organizational documents of the Acquired Company as currently in effect.

     3.2 AUTHORITY; NO CONFLICT

     (a) This Agreement  constitutes the legal, valid, and binding obligation of
the  Shareholders  of  R&R,  enforceable  against  the  Shareholders  of  R&R in
accordance with its terms.  Upon the execution and delivery by the  Shareholders
of R&R'  Closing  Documents  will  constitute  the  legal,  valid,  and  binding
obligations of the Shareholders of R&R,  enforceable against the Shareholders of
R&R in accordance with their respective  terms. The Shareholders of R&R have the
absolute and unrestricted right, power,  authority,  and capacity to execute and
deliver this  Agreement and the  Shareholders  of R&R' Closing  Documents and to
perform their  obligations  under this  Agreement and the  Shareholders  of R&R'
Closing Documents.

     (b) Except as set forth in Part 3.2 of the Disclosure Schedule, neither the
execution and delivery of this Agreement nor the  consummation or performance of
any of the  contemplated  transactions  will,  directly or  indirectly  (with or
without notice or lapse of time):

     (i)  contravene,  conflict  with,  or  result  in a  violation  of (A)  any
provision of the  organizational  documents of the Acquired Company,  or (B) any
resolution adopted by the board of directors or the stockholders of any Acquired
Company;

     (ii)  contravene,  conflict  with, or result in a violation of, or give any
governmental  authority  or  other  Person  the  right to  challenge  any of the
contemplated  transactions or to exercise any remedy or obtain any relief under,
any law or  court  order to which  either  Acquired  Company  or  either  of the
Shareholders of R&R, or any of the assets owned or used by any Acquired Company,
may be subject;

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     (iii)  contravene,  conflict  with,  or result in a violation of any of the
terms or  requirements  of,  or give any  governmental  authority  the  right to
revoke,  withdraw,  suspend,  cancel,  terminate,  or modify,  any  governmental
authorization  that is held by any Acquired Company or that otherwise relates to
the business of, or any of the assets owned or used by, any Acquired Company;

     (iv) cause XRG or any Acquired  Company to become  subject to, or to become
liable for the payment of, any tax;

     (v) cause any of the assets owned by any Acquired  Company to be reassessed
or revalued by any taxing authority;

     (vi)  contravene,  conflict with, or result in a violation or breach of any
provision  of, or give any Person the right to declare a default or exercise any
remedy under,  or to accelerate  the maturity or  performance  of, or to cancel,
terminate, or modify, any contract to which the acquired Company is a party; or

     (vii) result in the imposition or creation of any encumbrance  upon or with
respect to any of the assets owned or used by any Acquired Company.

     Except as set forth in Part 3.2 of the  Disclosure  Schedule,  neither  the
Shareholders of R&R nor the Acquired  Company is or will be required to give any
notice to or obtain any consent from any Person in connection with the execution
and delivery of this Agreement or the  consummation or performance of any of the
transactions hereunder.

     3.3 CAPITALIZATION

     The  authorized  equity  securities  of R&R consist of _________  shares of
common stock,  par value $______ per share,  of which _______  shares are issued
and outstanding.  All of the issued and outstanding shares of R&R constitute the
R&R Shares.  The  Shareholders  of R&R are, and will be on the Closing Date, the
record and  beneficial  owners and  holders of all of the R&R  Shares,  free and
clear of all  encumbrances.  No  legend  or  other  reference  to any  purported
encumbrance appears upon any certificate representing the R&R Shares. All of the
outstanding equity securities of each Acquired Company have been duly authorized
and validly issued and are fully paid and nonassessable.  There are no contracts
relating to the issuance,  sale,  or transfer of any equity  securities or other
securities of any Acquired Company. None of the outstanding equity securities or
other  securities  of any  Acquired  Company  was  issued  in  violation  of the
Securities Act or any other legal requirement.  No Acquired Company owns, or has
any contract to acquire, any equity securities or other securities of any Person
or any direct or indirect equity or ownership interest in any other business.

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     3.4 FINANCIAL STATEMENTS

     The  Shareholders  of R&R have  delivered to XRG: (a)  [unaudited]  balance
sheets  of the  Acquired  Company  as of June  30,  2003,  and  (b) the  related
[unaudited] statements of income, changes in stockholders' equity, and cash flow
for each of the  period  then  ended  ("Financial  Statements").  The  Financial
Statements and notes fairly represent the financial condition and the results of
operations,  changes in  stockholders'  equity,  and cash flow of each  Acquired
Company as of the respective  dates of, and for the periods  referred to in, the
Financial Statements.

     3.5 BOOKS AND RECORDS

     The books of account,  minute books,  stock record books, and other records
of the  Acquired  Company,  all of which have been made  available  to XRG,  are
complete and correct and have been  maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls.
The minute books of the Acquired  Company contain  accurate and complete records
of all meetings held of, and  corporate  action taken by the  stockholders,  the
boards of directors  and  committees  of the boards of directors of the Acquired
Company,  and no  meeting  of any  such  stockholders,  board  of  directors  or
committee  has been held for which  minutes  have not been  prepared and are not
contained in such minute books.  At the Closing,  all of those books and records
will be in the possession of the Acquired Company.

     3.6 TITLE TO PROPERTIES; LEASES

     Part 3.6 of the Disclosure  Schedule  contains a complete and accurate list
of all real property,  leaseholds (a lease under which the Acquired Company is a
lessee or lessor,  other than leases for  personal  property  having a value per
item or aggregate  payments of less than $5,000 per annum),  or other  interests
therein  owned by the acquired  Company.  The  Acquired  Company owns all of the
properties  and(whether  real,  personal,  or  mixed  and  whether  tangible  or
intangible) that are located in the facilities  operated by the Acquired Company
or are  reflected  as owned in the books and  records of the  Acquired  Company,
including all of the properties and assets reflected in the Financial Statements
(except for assets held under capitalized leases disclosed or not required to be
disclosed in Part 3.6) of the  Disclosure  Schedule and personal  property  sold
since the date of the Financial  Statements in the Ordinary  Course of Business,
and all of the  properties  and assets  purchased or  otherwise  acquired by the
Acquired Company since the date of the Financial Statements (except for personal
property  acquired and sold since the date of the  Financial  Statements  in the
Ordinary  Course of Business and  consistent  with past  practice) are listed in
Part  3.6 of  the  Disclosure  Schedule.  All  material  properties  and  assets
reflected in the  Financial  Statements  are free and clear of all  encumbrances
except as disclosed in Part 3.6 of the Disclosure  Schedule.  There is not, with
respect to any lease, any existing event of default, or event which (with notice
or lapse of time or both) would  constitute an event of default,  on the part of
the  acquired  Company,  and the  Acquired  Company has not received any written
notice of any such event.  The Acquired  Company enjoys peaceful and undisturbed
possession  under each such lease.  None of the rights of the  acquired  Company
under  any  lease  set  forth in Part  3.6 will be  subject  to  termination  or
modification  and no consent or approval  of any third  party is required  under
such  lease as a result of the  consummation  of the  contemplated  transactions
hereunder.

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     3.7 CONDITION AND SUFFICIENCY OF ASSETS

     The equipment of the Acquired  Company is  structurally  sound,  is in good
operating  condition and repair,  and is adequate for the uses to which they are
being  put,  and none of such  equipment  is in need of  maintenance  or repairs
except for  ordinary,  routine  maintenance  and repairs that is not material in
nature or cost.  The  equipment of the Acquired  Company is  sufficient  for the
continued  conduct of the  Acquired  Company'  businesses  after the  Closing in
substantially the same manner as conducted prior to the Closing.

     3.8 ACCOUNTS RECEIVABLE

     All accounts  receivable of the Acquired  Company that are reflected in the
Financial Statements or the accounting records of the Acquired Company as of the
Closing  Date  (collectively,  the  "Accounts  Receivable")  represent  or  will
represent  valid  obligations  arising  from  sales  actually  made or  services
actually performed in the Ordinary Course of Business.  Unless paid prior to the
Closing  Date,  the  Accounts  Receivable  are or will be as of the Closing Date
current and collectible,  net of the respective  reserves shown in the Financial
Statements or the accounting  records of the Acquired  Company as of the Closing
Date (which  reserves are adequate and calculated  consistent with past practice
and will not  represent a material  adverse  change in the  composition  of such
Accounts  Receivable in terms of aging).  Subject to such reserves,  each of the
Accounts  Receivable  either has been or will be collected in full,  without any
set-off, within ninety (90) days after the day on which it first becomes due and
payable. There is no contest,  claim, or right of set-off, other than returns in
the  Ordinary  Course of  Business,  under any  contract  with any obligor of an
Accounts  Receivable  relating  to the  amount  or  validity  of  such  Accounts
Receivable. Part 3.8 of the Disclosure Schedule contains a complete and accurate
list of all Accounts  Receivable as of June 30, 2003,  which list sets forth the
aging of such Accounts Receivable.

     3.9 NO UNDISCLOSED LIABILITIES

     Except as set forth in Part 3.9 of the  Disclosure  Schedule,  the Acquired
Company have no  liabilities  or  obligations  of any nature  (whether  known or
unknown and whether absolute,  accrued,  contingent,  or otherwise),  except for
liabilities  or  obligations  reflected  or  reserved  against in the  Financial
Statements and current  liabilities  incurred in the Ordinary Course of Business
since the respective dates thereof.

     3.10 TAXES

     (a) The Acquired  Company has filed or caused to be filed on a timely basis
all tax returns that are or were  required to be filed by or with respect to any
of them, either  separately or as a member of a group of corporations,  pursuant
to applicable laws and  regulations.  The  Shareholders of R&R have delivered or
made  available  to XRG copies of all such tax returns  relating to income taxes
filed since 2000.  The  Acquired  Company has paid,  or made  provision  for the
payment  of, all taxes that have or may have  become due  pursuant  to those tax
returns or  otherwise,  or pursuant to any  assessment  received by the acquired
Company, except such taxes, if any, as are listed in Part 3.11 of the Disclosure
Schedule and are being contested in good faith.

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     (b) The United States  federal and state income tax returns of the Acquired
Company subject to such taxes have been audited by the IRS or relevant state tax
authorities  or are  closed by the  applicable  statute of  limitations  for all
taxable years  through 1999.  Part 3.11 of the  Disclosure  Schedule  contains a
complete  and accurate  list of all audits of all such tax returns,  including a
reasonably  detailed  description  of the nature and outcome of each audit.  All
deficiencies  proposed  as a result  of such  audits  have been  paid,  reserved
against,  settled, or, as described in Part 3.11 of the Disclosure Schedule, are
being  contested  in good  faith by  appropriate  proceedings.  Part 3.11 of the
Disclosure  Schedule  describes all  adjustments  to the United  States  federal
income tax returns  filed by the Acquired  Company or any group of  corporations
including the Acquired  Company for all taxable years since  inception,  and the
resulting  deficiencies proposed by the IRS. Except as described in Part 3.11 of
the Disclosure Schedule, the Acquired Company has not given or been requested to
give waivers or  extensions  (or is or would be subject to a waiver or extension
given by any other Person) of any statute of limitations relating to the payment
of taxes of the  Acquired  Company  or for which  the  Acquired  Company  may be
liable.

     (c) All taxes that the Acquired  Company is or was  required by  applicable
laws or  regulations  to  withhold or collect,  including,  without  limitation,
social  security and other payroll and  employee-related  taxes,  have been duly
withheld or collected and, to the extent required,  have been paid to the proper
governmental entity.

     (d) All tax returns filed by (or that include on a consolidated  basis) the
Acquired Company are true, correct, and complete.

     3.11 NO MATERIAL ADVERSE CHANGE

     Since the date of the latest  Financial  Statement,  there has not been any
material  adverse  change in the business,  operations,  properties,  prospects,
assets,  or  condition  of the  Acquired  Company,  and no event has occurred or
circumstance exists that may result in such a material adverse change.

     3.12 EMPLOYEE BENEFITS

     (a) As used in this Section 3.12, the following terms have the meanings set
forth below.

     "Company  Plan" means all Plans of which the  Acquired  Company or an ERISA
Affiliate  of the  Acquired  Company is or was a Plan  Sponsor,  or to which the
Acquired  Company  or an  ERISA  Affiliate  of the  Acquired  Company  otherwise
contributes  or has  contributed,  or in which the Acquired  Company or an ERISA
Affiliate of the Acquired Company  otherwise  participates or has  participated.
All  references  to Plans are to  Company  Plans  unless  the  context  requires
otherwise.

     "ERISA Affiliate"  means,  with respect to the Acquired Company,  any other
person that,  together with the company,  would be treated as a single  employer
under IRCss.414.

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     "Multi-Employer Plan" has the meaning given in ERISA ss. 3(37)(A).

     "Other  Benefit  Obligations"  means  all  obligations,   arrangements,  or
customary practices,  whether or not legally  enforceable,  to provide benefits,
other than salary, as compensation for services  rendered,  to present or former
directors,  employees,  or agents,  other than  obligations,  arrangements,  and
practices  that  are  Plans.  Other  Benefit   Obligations   include  consulting
agreements under which the compensation  paid does not depend upon the amount of
service rendered,  sabbatical policies,  severance payment policies,  and fringe
benefits within the meaning of IRC ss. 132.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation,  or any successor
thereto.

     "Pension Plan" has the meaning given in ERISA ss. 3(2)(A).

     "Plan" has the meaning given in ERISA ss. 3(3).

     "Plan Sponsor" has the meaning given in ERISA ss. 3(16)(B).

     "Qualified  Plan"  means  any  Plan  that  meets  or  purports  to meet the
requirements of IRC ss. 401(a).

     (b) Part 3.12 of the Disclosure  Schedule  contains a complete and accurate
list of all Company Plans and  identifies as such all Company Plans that are (A)
defined benefit Pension Plans, (B) Qualified Plans, or (C) Multi-Employer Plans.

     (c) The  Shareholders  of R&R have delivered to XRG, or will deliver to XRG
within ten days of the date of this Agreement:

     (i) all documents  that set forth the terms of each Company Plan and of any
related trust, including (A) all plan descriptions and summary plan descriptions
of Company Plans for which the Acquired  Company are required to prepare,  file,
and distribute  plan  descriptions  and summary plan  descriptions,  and (B) all
summaries and descriptions furnished to participants and beneficiaries regarding
Company Plans for which a plan  description  or summary plan  description is not
required;

     (ii) all personnel, payroll, and employment manuals and policies;

     (iii) all collective  bargaining agreements pursuant to which contributions
have been made or  obligations  incurred  (including  both  pension  and welfare
benefits)  by the  Acquired  Company and the ERISA  Affiliates  of the  Acquired
Company,   and  all   collective   bargaining   agreements   pursuant  to  which
contributions are being made or obligations are owed by such entities;

     (iv) a written  description  of any Company  Plan that is not  otherwise in
writing;

     (v) all registration statements filed with respect to any Company Plan;

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     (vi) all insurance  policies  purchased by or to provide benefits under any
Company Plan;

     (vii) all contracts with third party administrators,  actuaries, investment
managers,  consultants,  and other  independent  contractors  that relate to any
Company Plan;

     (viii) all reports  submitted  within the four years  preceding the date of
this Agreement by third party  administrators,  actuaries,  investment managers,
consultants, or other independent contractors with respect to any Company Plan;

     (ix) all  notifications  to employees of their rights under  ERISAss.601 et
seq. and IRCss.4980B;

     (x) the Form 5500  filed in each of the most  recent  three plan years with
respect to each Company Plan,  including all schedules  thereto and the opinions
of independent accountants;

     (xi) all  notices  that were  given by the  Acquired  Company  or any ERISA
Affiliate of the Acquired  Company or any Company Plan to the IRS, the PBGC,  or
any  participant  or  beneficiary,  pursuant to  statute,  within the four years
preceding  the date of this  Agreement,  including  notices  that are  expressly
mentioned elsewhere in this Section 3.12;

     (xii) all notices that were given by the IRS, the PBGC,  or the  Department
of Labor to any Acquired  Company,  any ERISA Affiliate of the Acquired Company,
or any Company Plan within the four years preceding the date of this Agreement;

     (xiii) the most recent  determination  letter for each Plan of the Acquired
Company that is a Qualified Plan.

     (d) Except as set forth in Part 3.12 of the Disclosure Schedule:

     (i) The Acquired Company has performed all of their respective  obligations
under all Company Plans. The Acquired  Company has made  appropriate  entries in
their financial records and statements for all obligations and liabilities under
such Plans.

     (ii) No statement,  either  written or oral,  has been made by the Acquired
Company to any Person  with regard to any Plan that was not in  accordance  with
the Plan and that could have an adverse  economic  consequence  to the  Acquired
Company or to XRG.

     (iii) The Acquired  Company,  with respect to all Company  Plans,  are, and
each  Company  Plan,  is, in full  compliance  with  ERISA,  the IRC,  and other
applicable  laws including the  provisions of such laws  expressly  mentioned in
this Section 3.12, and with any applicable collective bargaining agreement.

     (A) No  transaction  prohibited  by ERISA has occurred  with respect to any
Company Plan.

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     (B) The  Acquired  Company has no  liability to the IRS with respect to any
Plan.

     (C) The  Acquired  Company has no liability to the PBGC with respect to any
Plan .

     (D) All  filings  required  by ERISA  and the IRC as to each Plan have been
timely filed, and all notices and disclosures to participants required by either
ERISA or the IRC have been timely provided.

     (iv) Each  Company  Plan can be  terminated  within  thirty  days,  without
payment of any  additional  contribution  or amount and  without  the vesting or
acceleration of any benefits promised by such Plan.

     (v) No event has  occurred or  circumstance  exists that could  result in a
material  increase  in premium  costs of Company  Plans that are  insured,  or a
material  increase  in  benefit  costs of such  Plans and  obligations  that are
self-insured.

     (vi)  Other  than  claims  for  benefits   submitted  by   participants  or
beneficiaries, no claim against, or legal proceeding involving, any Company Plan
is pending or, to the Shareholders of R&R' knowledge, is threatened.

     (vii) The Acquired Company and each ERISA Affiliate of the Acquired Company
has met the minimum funding standard,  and has made all contributions  required,
under ERISA.

     (viii) The Acquired  Company has paid all amounts due to the PBGC  pursuant
to ERISA.

     (ix) Neither the Acquired  Company nor any ERISA  Affiliate of the Acquired
Company  has filed a notice of intent to  terminate  any Plan or has adopted any
amendment to treat a Plan as terminated. The PBGC has not instituted proceedings
to treat any Company Plan as terminated.  No event has occurred or  circumstance
exists that may constitute  grounds under ERISA for the  termination  of, or the
appointment of a trustee to administer, any Company Plan.

     (x) No amendment has been made,  or is  reasonably  expected to be made, to
any Plan that has  required or could  require the  provision  of security  under
ERISA.

     (xi) No accumulated funding deficiency,  whether or not waived, exists with
respect to any Company Plan; no event has occurred or  circumstance  exists that
may  result  in an  accumulated  funding  deficiency  as of the  last day of the
current plan year of any such Plan.

     (xii)  The   Shareholders  of  R&R  have  no  knowledge  of  any  facts  or
circumstances that may give rise to any liability of the Acquired Company or XRG
to the PBGC under ERISA.

                                   Page - 10
<PAGE>

     (xiii) Neither the Acquired Company nor any ERISA Affiliate of the Acquired
Company has withdrawn from any  Multi-Employer  Plan with respect to which there
is any  outstanding  liability  as of the date of this  Agreement.  No event has
occurred or  circumstance  exists that presents a risk of the  occurrence of any
withdrawal  from,  or  the  participation,   termination,   reorganization,   or
insolvency  of, any  Multi-Employer  Plan that could result in any  liability of
either the Acquired Company or XRG to a Multi-Employer Plan.

     (xiv) Neither the Acquired  Company nor any ERISA Affiliate of the Acquired
Company  has  received  notice  from  any  Multi-Employer  Plan  that  it  is in
reorganization or is insolvent,  that increased contributions may be required to
avoid a reduction in plan benefits or the  imposition of any excise tax, or that
such Plan intends to terminate or has terminated.

     (xv) No  Multi-Employer  Plan to which the  Acquired  Company  or any ERISA
Affiliate of the Acquired  Company  contributes or has contributed is a party to
any  pending  merger  or  asset  or  liability  transfer  or is  subject  to any
proceeding brought by the PBGC.

     (xvi)  Except to the extent  required  under ERISA or the IRC,  neither the
Acquired  Company  provides health or welfare benefits for any retired or former
employee nor is obligated  to provide  health or welfare  benefits to any active
employee following such employee's retirement or other termination of service.

     (xvii) The Acquired Company has the right to modify and terminate  benefits
to  retirees  (other  than  pensions)  with  respect to both  retired and active
employees.

     (xviii) No payment that is owed or may become due to any director, officer,
employee,  or  agent  of the  Acquired  Company  will be  non-deductible  to the
Acquired Company.

     (xxiv)  The  consummation  of  the  contemplated  transactions  under  this
Agreement  will not  result in the  payment,  vesting,  or  acceleration  of any
benefit.

     3.13 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

     (a) Except as set forth in Part 3.13 of the Disclosure Schedule:

     (i) the Acquired  Company is, and at all times has been, in full compliance
with all  laws  and  regulations  that  are or were  applicable  to it or to the
conduct or  operation  of its  business  or the  ownership  or use of any of its
assets;

     (ii) no event has  occurred  or  circumstance  exists that (with or without
notice or lapse of time) (A) may  constitute  or  result in a  violation  by the
Acquired  Company of, or a failure on the part of the Acquired Company to comply
with, any  applicable law or regulation,  or (B) may give rise to any obligation
on the part of the Acquired Company to undertake,  or to bear all or any portion
of the cost of, any remedial action of any nature; and

                                   Page - 11
<PAGE>

     (iii) the Acquired  Company has  received no notice or other  communication
(whether oral or written) from any  governmental  body regarding (A) any actual,
alleged,  possible,  or potential  violation of, or failure to comply with,  any
applicable law or regulation, or (B) any actual, alleged, possible, or potential
obligation on the part of the Acquired  Company to undertake,  or to bear all or
any portion of the cost of, any remedial action of any nature.

     (b) Part 3.13 of the Disclosure  Schedule  contains a complete and accurate
list of each governmental  authorization or license that is held by the acquired
Company or that  otherwise  relates to the  business of, or to any of the assets
owned or used by, the Acquired Company.  Each authorization or license listed in
Part 3.13 of the  Disclosure  Schedule  is valid and in full  force and  effect.
Except as set forth in Part 3.13 of the Disclosure Schedule:

     (i) the Acquired  Company is in full  compliance  with all of the terms and
requirements  of each  authorization  and license  identified  or required to be
identified in Part 3.13 of the Disclosure Schedule;

     (ii) no event has occurred or circumstance exists that may (with or without
notice or lapse of time) (A)  constitute  or result  directly or indirectly in a
violation  of or a  failure  to  comply  with  any  term or  requirement  of any
authorization  or license  listed or  required  to be listed in Part 3.13 of the
Disclosure  Schedule,  or (B) result  directly or indirectly in the  revocation,
withdrawal, suspension, cancellation, or termination of, or any modification to,
any authorization or license listed or required to be listed in Part 3.13 of the
Disclosure Schedule;

     (iii)  the   Acquired   Company  has  not  received  any  notice  or  other
communication  (whether oral or written) from any governmental body or any other
Person regarding (A) any actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any governmental authorization
or license,  or (B) any actual,  proposed,  possible,  or potential  revocation,
withdrawal,  suspension,  cancellation,  termination  of, or modification to any
governmental authorization or license; and

     (iv) all  applications  required  to have been filed for the renewal of the
governmental authorizations and licenses listed or required to be listed in Part
3.13 of the Disclosure  Schedule have been duly filed on a timely basis with the
appropriate  governmental  bodies,  and all other filings  required to have been
made with respect to such governmental authorizations or licenses have been duly
made on a timely basis with the appropriate governmental bodies.

     The  governmental  authorizations  and licenses  listed in Part 3.13 of the
Disclosure   Schedule   collectively   constitute   all  of   the   governmental
authorizations and licenses necessary to permit the Acquired Company to lawfully
conduct and operate their  businesses in the manner they  currently  conduct and
operate such businesses and to permit the Acquired  Company to own and use their
assets in the manner in which they currently own and use such assets.

     3.14 LEGAL PROCEEDINGS; ORDERS

     (a) Except as set forth in Part 3.14 of the Disclosure  Schedule,  there is
no pending legal proceeding:

                                   Page - 12
<PAGE>

     (i) that has been  commenced  by or against  the  Acquired  Company or that
otherwise  relates to or may affect the  business of, or any of the assets owned
or used by, the Acquired Company; or

     (ii) that challenges, or that may have the effect of preventing,  delaying,
making  illegal,  or  otherwise   interfering  with,  any  of  the  contemplated
transactions under this Agreement.

     To the knowledge of the Shareholders of R&R and the Acquired  Company,  (1)
no such legal proceeding has been  threatened,  and (2) no event has occurred or
circumstance  exists  that  may  give  rise  to or  serve  as a  basis  for  the
commencement of any such  proceeding.  The Shareholders of R&R have delivered to
XRG copies of all pleadings,  correspondence,  and other  documents  relating to
each  legal  proceeding  listed in Part  3.14 of the  Disclosure  Schedule.  The
proceedings  listed  in Part  3.14 of the  Disclosure  Schedule  will not have a
material  adverse  effect on the business,  operations,  assets,  condition,  or
prospects of the Acquired Company.

     (b) Except as set forth in Part 3.14 of the Disclosure Schedule:

     (i) there is no court or  government  agency  order to which  the  Acquired
Company, or any of the assets owned or used by the Acquired Company, is subject;

     (ii) the  Shareholders  of R&R are not  subject to any court or  government
agency order that relates to the business of, or any of the assets owned or used
by, the Acquired Company; and

     (iii) no officer,  director,  agent, or employee of the Acquired Company is
subject to any court or  government  agency order that  prohibits  such officer,
director,  agent,  or employee  from  engaging  in or  continuing  any  conduct,
activity, or practice relating to the business of the Acquired Company.

     3.15 ABSENCE OF CERTAIN CHANGES AND EVENTS

     Except as set forth in Part 3.15 of the Disclosure Schedule, since the date
of the most recent Financial  Statement,  the Acquired Company has conducted its
businesses only in the Ordinary Course of Business and there has not been any:

     (a) change in the Acquired  Company's  authorized or issued  capital stock;
grant of any stock  option or right to purchase  shares of capital  stock of the
Acquired Company;  issuance of any security convertible into such capital stock;
grant of any registration rights;  purchase,  redemption,  retirement,  or other
acquisition by the Acquired  Company of any shares of any such capital stock; or
declaration  or  payment of any  dividend  or other  distribution  or payment in
respect of shares of capital stock;

     (b) amendment to the organizational documents of the Acquired Company;

     (c) payment or increase by the Acquired  Company of any bonuses,  salaries,
or other compensation to any stockholder,  director,  officer, or (except in the
Ordinary Course of Business)  employee or entry into any employment,  severance,
or similar contract with any director, officer, or employee;

                                   Page - 13
<PAGE>

     (d)  adoption  of, or increase in the  payments to or benefits  under,  any
profit sharing,  bonus,  deferred  compensation,  savings,  insurance,  pension,
retirement,  or other  employee  benefit  plan for or with any  employees of the
Acquired Company;

     (e)  damage  to or  destruction  or loss of any  asset or  property  of the
Acquired Company, whether or not covered by insurance,  materially and adversely
affecting the properties, assets, business, financial condition, or prospects of
the Acquired Company, taken as a whole;

     (f) entry into,  termination of, or receipt of notice of termination of any
license, distributorship,  dealer, sales representative,  joint venture, credit,
or similar agreement;

     (g)  sale  (other  than  sales  of  inventory  in the  Ordinary  Course  of
Business),  lease, or other disposition of any asset or property of the Acquired
Company or mortgage,  pledge,  or imposition of any lien or other encumbrance on
any material asset or property of the Acquired Company;

     (h)  cancellation  or  waiver of any  claims or rights  with a value to the
Acquired Company in excess of $10,000;

     (i) material change in the accounting methods used by the Acquired Company;
or

     (j) agreement,  whether oral or written,  by the Acquired Company to do any
of the foregoing.

     3.16 CONTRACTS

     (a) Part  3.16(a)  of the  Disclosure  Schedule  contains  a  complete  and
accurate  list,  and the  Shareholders  of R&R  have  delivered  to XRG true and
complete copies, of:

     (i) each  contract  that  involves  performance  of services or delivery of
goods or materials  by the  Acquired  Company of an amount or value in excess of
$5,000;

     (ii) each  contract that  involves  performance  of services or delivery of
goods or materials  to the  Acquired  Company of an amount or value in excess of
$5,000;

     (iii) each lease, rental or occupancy agreement,  license,  installment and
conditional  sale  agreement,  and other  contract  affecting  the ownership of,
leasing of, title to, use of, or any leasehold or other interest in, any real or
personal   property  (except  personal   property  leases  and  installment  and
conditional  sales agreements  having a value per item or aggregate  payments of
less than $5,000 and with terms of less than one year);

                                   Page - 14
<PAGE>

     (iv) each  licensing  agreement or other  contract with respect to patents,
trademarks,  copyrights,  software,  or other intellectual  property,  including
agreements  with  current  or  former  employees,  consultants,  or  contractors
regarding the  appropriation  or the  non-disclosure  of any of the Intellectual
Property Assets;

     (v) each collective  bargaining agreement and other contract to or with any
labor union or other employee representative of a group of employees;

     (vi)  each  joint  venture,  strategic  alliance,  partnership,  and  other
contract  (however named) involving a sharing of product design and development,
profits,  losses,  costs, or liabilities by the Acquired  Company with any other
Person;

     (vii)  each  contract  containing  covenants  that  in any way  purport  to
restrict the business  activity of the Acquired  Company or limit the freedom of
the  Acquired  Company to engage in any line of business or to compete  with any
Person;

     (viii) each  contract  providing  for payments to or by any Person based on
production,  sales,  purchases, or profits, other than direct payments for goods
including  any   manufacturing   license,   product   distribution,   and  sales
representation agreements;

     (ix) each power of attorney that is currently effective and outstanding;

     (x) each contract for capital expenditures in excess of $20,000;

     (xi) each written warranty, guaranty, and or other similar undertaking with
respect to contractual  performance  extended by the Acquired Company other than
in the Ordinary Course of Business; and

     (xii)  each  amendment,  supplement,  and  modification  (whether  oral  or
written) in respect of any of the foregoing.

     Part 3.16(a) of the  Disclosure  Schedule  sets forth  reasonably  complete
details  concerning such  contracts,  including the parties to the contracts and
the  amount  of the  remaining  commitment  of the  Acquired  Company  under the
contracts.

     (b) Except as set forth in Part 3.16(b) of the Disclosure Schedule:

     (i) the  Shareholders  of R&R  (and no  Person  related  to  either  of the
Shareholders  of R&R) have or may have  acquired  any rights  under any contract
that  relates to the  business  of, or any of the  assets  owned or used by, the
Acquired Company; and

     (ii) to the knowledge of the Shareholders of R&R and the Acquired  Company,
no officer, director, agent, employee, consultant, or contractor of the Acquired
Company is bound by any  contract  that  purports  to limit the  ability of such
officer,  director, agent, employee,  consultant, or contractor to (A) engage in
or continue any conduct,  activity,  or practice relating to the business of the
Acquired  Company,  or (B) assign to the Acquired Company or to any other Person
any rights to any invention, improvement, or discovery.

                                   Page - 15
<PAGE>

     (c) Except as set forth in Part 3.16(c) of the  Disclosure  Schedule,  each
contract  identified  or  required  to be  identified  in  Part  3.16(a)  of the
Disclosure  Schedule is in full force and effect and is valid and enforceable in
accordance with its terms.

     (d) Except as set forth in Part 3.16(d) of the Disclosure Schedule:

     (i) the Acquired  Company is, and at all times has been, in full compliance
with all  applicable  terms and  requirements  of each contract under which such
Acquired  Company  has or had any  obligation  or  liability  or by  which  such
Acquired  Company or any of the assets owned or used by such Acquired Company is
or was bound;

     (ii) each other Person that has or had any  obligation  or liability  under
any contract  under which the Acquired  Company has or had any rights is, and at
all  times  has  been,  in  full  compliance  with  all  applicable   terms  and
requirements of such contract;

     (iii) no event has  occurred or  circumstance  exists that (with or without
notice or lapse of time) may contravene, conflict with, or result in a violation
or breach of, or give the Acquired  Company or other Person the right to declare
a default or  exercise  any remedy  under,  or to  accelerate  the  maturity  or
performance of, or to cancel, terminate, or modify, any contract; and

     (iv) no Acquired Company has given to or received from any other Person any
notice or other  communication  (whether oral or written)  regarding any actual,
alleged,  possible,  or potential  violation or breach of, or default under, any
contract.

     (e) There are no renegotiations of, attempts to renegotiate, or outstanding
rights to  renegotiate  any  material  amounts  paid or payable to the  Acquired
Company  under  current  or  completed  contracts  with any Person  and,  to the
knowledge of the  Shareholders of R&R and the Acquired  Company,  no such Person
has made written demand for such renegotiation.

     (f) The contracts relating to the sale, design,  manufacture,  or provision
of products or services by the  Acquired  Company has been  entered  into in the
Ordinary Course of Business and have been entered into without the commission of
any act alone or in concert with any other Person, or any  consideration  having
been paid or promised, that is or would be in violation of any applicable law or
regulation.

     3.17 INSURANCE

     (a) The Shareholders of R&R have delivered to XRG:

     (i) true and  complete  copies of all  policies of  insurance  to which the
Acquired Company is a party or under which the Acquired Company, or any director
of the  Acquired  Company,  is or has been  covered at any time  within the five
years preceding the date of this Agreement;

     (ii) true and complete copies of all pending  applications  for policies of
insurance; and

                                   Page - 16
<PAGE>

     (iii) any  statement  by the auditor of the  Acquired  Company's  Financial
Statements  with  regard to the  adequacy  of such  entity's  coverage or of the
reserves for claims.

     (b) Part 3.17(b) of the  Disclosure  Schedule sets forth,  by year, for the
current policy year and each of the five preceding policy years:

     (i) a summary of the loss experience under each policy;

     (ii) a statement  describing  each claim under an  insurance  policy for an
amount in excess of $1,000, which sets forth:

     (A) the name of the claimant;

     (B) a description of the policy by insurer,  type of insurance,  and period
of coverage; and

     (C) the amount and a brief description of the claim; and

     (iii) a statement  describing the loss  experience for all claims that were
self-insured, including the number and aggregate cost of such claims.

     (c) Except as set forth on Part 3.17(c) of the Disclosure Schedule:

     (i) All policies to which the  Acquired  Company is a party or that provide
coverage to either of the  Shareholders  of R&R,  the Acquired  Company,  or any
director or officer of the Acquired Company:

     (A) are valid, outstanding, and enforceable;

     (B) are issued by an insurer that is financially sound and reputable;

     (C) taken together,  provide adequate insurance coverage for the assets and
the operations of the Acquired Company for all risks normally insured against by
a Person carrying on the same business or businesses as the Acquired Company and
for all other risks to which the Acquired Company are normally exposed;

     (D) are sufficient for compliance  with all applicable laws and regulations
and  contracts to which the Acquired  Company is a party or by which any of them
is bound;

     (E) will continue in full force and effect  following the  consummation  of
the contemplated transactions under this Agreement; and

     (F) do not  provide  for any  retrospective  premium  adjustment  or  other
experienced-based liability on the part of the Acquired Company.

                                   Page - 17
<PAGE>

     (ii) Neither the Shareholders of R&R nor the Acquired Company have received
(A) any refusal of coverage or any notice that a defense  will be afforded  with
reservation of rights, or (B) any notice of cancellation or any other indication
that any  insurance  policy is no longer in full  force or effect or will not be
renewed or that the issuer of any policy is not  willing or able to perform  its
obligations thereunder.

     (iii) The  Acquired  Company has paid all premiums  due, and has  otherwise
performed all of their  respective  obligations,  under each policy to which the
Acquired Company is a party or that provides coverage to the Acquired Company or
director thereof.

     (iv) The  Acquired  Company  has given  notice to the insurer of all claims
that may be insured thereby.

     3.18 ENVIRONMENTAL MATTERS

     Except as set forth in part 3.18 of the Disclosure Schedule:

     (a) The Acquired  Company is, and at all times has been, in full compliance
with,  and  has  not  been  and is not in  violation  of or  liable  under,  any
Environmental,  Health, and Safety Requirement.  Neither the Shareholders of R&R
nor the  Acquired  Company  has any basis to expect,  nor has any of them or any
other  Person  for  whose  conduct  they  are or may be held  to be  responsible
received,  any actual or threatened order,  notice, or other  communication from
(i) any governmental  body or private citizen acting in the public interest,  or
(ii) the current or prior owner or operator of any  facility  now or  previously
owned  by the  Acquired  Company  ("Facilities"),  of any  actual  or  potential
violation  or  failure  to comply  with any  Environmental,  Health,  and Safety
Requirement,  or of any actual or threatened  obligation  with respect to any of
the Facilities or any other  properties or assets  (whether real,  personal,  or
mixed) in which  the  Shareholders  of R&R or the  Acquired  Company  has had an
interest,  or with respect to any property or facility at or to which  hazardous
materials were generated,  manufactured,  refined, transferred,  imported, used,
stored or processed by the  Shareholders  of R&R, the Acquired  Company,  or any
other  Person for whose  conduct  they are or may be held  responsible,  or from
which  hazardous  materials have been  transported,  treated,  stored,  handled,
transferred, disposed, recycled, or received.

     (b) There are no pending or, to the  knowledge of the  Shareholders  of R&R
and the Acquired Company, threatened claims, encumbrances, or other restrictions
of any nature,  resulting from or arising under any  Environmental,  Health, and
Safety  Requirement  with respect to or affecting  any of the  Facilities or any
other  properties  and assets  (whether real,  personal,  or mixed) in which the
Shareholders of R&R or the Acquired Company has or had an interest.

     (c) Neither the  Shareholders of R&R nor the Acquired Company has any basis
to expect, nor has any of them or any other Person for whose conduct they are or
may be held responsible,  received, any citation,  directive,  inquiry,  notice,
order,  summons,  warning,  or other  communication that relates to any alleged,
actual,  or  potential  violation  or failure to comply with any  Environmental,
Health,  and  Safety  Requirement,  or of  any  alleged,  actual,  or  potential
obligation to undertake or bear the cost of any liability with respect to any of
the Facilities or any other  properties or assets  (whether real,  personal,  or
mixed) in which the  Shareholders  of R&R or the Acquired  Company had or has an
interest,  or with  respect  to any  property  or  facility  at which  hazardous
materials were stored, generated, manufactured,  refined, transferred, imported,
used,  or processed by the  Shareholders  of R&R, the Acquired  Company,  or any
other Person for whose conduct they are or may be held responsible.

                                   Page - 18
<PAGE>

     (d) Neither the  Shareholders of R&R, the Acquired  Company,  nor any other
Person  for  whose  conduct  they  are or  may  be  held  responsible,  has  any
Environmental,  Health,  and Safety  Requirement  liability  with respect to the
Facilities or with respect to any other  properties  and assets  (whether  real,
personal, or mixed) in which the Shareholders of R&R or the Acquired Company (or
any  predecessor),  has or had an interest,  or at any property  geologically or
hydrologically adjoining the Facilities or any such other property or assets.

     (e) There are no hazardous  materials present on or in the Facilities or at
any geologically or hydrologically  adjoining property,  including any hazardous
materials  contained in barrels,  above or underground storage tanks (except for
above-ground fuel storage tanks),  landfills,  land deposits,  dumps,  equipment
(whether moveable or fixed) or other containers,  either temporary or permanent,
and  deposited  or  located  in land,  water,  sumps,  or any other  part of the
Facilities  or such  adjoining  property,  or  incorporated  into any  structure
therein or thereon.  Neither the Shareholders of R&R, the Acquired Company,  any
other  Person for whose  conduct  they are or may be held  responsible,  nor any
other Person, has permitted or conducted, or is aware of, any hazardous activity
conducted  with  respect to the  Facilities  or any other  properties  or assets
(whether  real,  personal,  or mixed) in which  the  Shareholders  of R&R or the
Acquired  Company has or had an  interest,  except in full  compliance  with all
applicable Environmental, Health, and Safety Requirements.

     (f) There has been no release or, to the knowledge of the  Shareholders  of
R&R and the Acquired Company,  threat of release,  of any hazardous materials at
or from the Facilities or from or by any other  properties  and assets  (whether
real,  personal,  or  mixed) in which the  Shareholders  of R&R or the  Acquired
Company has or had an interest, or any geologically or hydrologically  adjoining
property, whether by the Shareholders of R&R, the acquired Company, or any other
Person.

     (g) The  Shareholders of R&R have delivered to XRG true and complete copies
and results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by the  Shareholders  of R&R or the  Acquired  Company  pertaining  to
hazardous materials or hazardous activities in, on, or under the Facilities,  or
concerning  compliance by the Shareholders of R&R, the Acquired Company,  or any
other  Person  for  whose  conduct  they  are or may be held  responsible,  with
Environmental, Health, and Safety Requirements.

         3.19     EMPLOYEES

     (a) Part 3.19 of the Disclosure  Schedule  contains a complete and accurate
list of the following  information for each employee or director of the Acquired
Company, including each employee on leave of absence or layoff status: employer;
name;  job  title;  current  compensation  paid or  payable  and any  change  in
compensation  since  inception;  vacation  accrued;  and  service  credited  for
purposes of vesting and eligibility to participate under the Acquired  Company's
pension,  retirement,  profit-sharing,  thrift-savings,  deferred  compensation,
stock bonus,  stock option,  cash bonus,  employee  stock  ownership  (including
investment  credit  or  payroll  stock  ownership),  severance  pay,  insurance,
medical, welfare, or vacation plan, other employee benefit plan.

                                   Page - 19
<PAGE>

     (b) No employee or  director of the  Acquired  Company is a party to, or is
otherwise bound by, any agreement or arrangement, including any confidentiality,
noncompetition,  or  proprietary  rights  agreement,  between  such  employee or
director and any other Person  ("Proprietary  Rights Agreement") that in any way
adversely  affects  or will  affect  (i) the  performance  of his  duties  as an
employee  or  director  of the  Acquired  Company,  or (ii) the  ability  of the
Acquired  Company to conduct its  business,  including  any  Proprietary  Rights
Agreement  with the  Shareholders  of R&R or the  Acquired  Company  by any such
employee or  director.  To the  Shareholders  of R&R'  knowledge,  no  director,
officer,  or other key employee of the Acquired Company intends to terminate his
employment with such Acquired Company.

     (c) Part 3.19 of the  Disclosure  Schedule  also  contains a  complete  and
accurate list of the following information for each retired employee or director
of the Acquired Company, or their dependents, receiving benefits or scheduled to
receive benefits in the future: name, pension benefit,  pension option election,
retiree medical insurance coverage,  retiree life insurance coverage,  and other
benefits.

     3.20 LABOR RELATIONS; COMPLIANCE

     The  Acquired  Company  has  not  been  nor is a  party  to any  collective
bargaining or other labor contract.  There has not been,  there is not presently
pending or existing,  and to the  Shareholders  of R&R'  knowledge  there is not
threatened,  (a) any strike,  slowdown,  picketing,  work stoppage,  or employee
grievance process, (b) any legal or governmental proceeding against or affecting
the Acquired Company relating to the alleged  violation of any law or regulation
pertaining  to labor  relations or employment  matters,  including any charge or
complaint filed by an employee or union with the National Labor Relations Board,
the Equal  Employment  Opportunity  Commission,  or any comparable  governmental
body,  organizational  activity, or other labor or employment dispute against or
affecting the Acquired  Company or their  premises,  or (c) any  application for
certification  of a  collective  bargaining  agent.  No event  has  occurred  or
circumstance  exists that could provide the basis for any work stoppage or other
labor dispute. There is no lockout of any employees by the Acquired Company, and
the  Acquired  Company  contemplates  no such action.  The Acquired  Company has
complied in all respects with all laws and  regulations  relating to employment,
equal employment  opportunity,  nondiscrimination,  immigration,  wages,  hours,
benefits,  collective  bargaining,  the payment of social  security  and similar
taxes, occupational safety and health, and plant closing. No Acquired Company is
liable for the payment of any compensation, damages, taxes, fines, penalties, or
other amounts, however designated, for failure to comply with any applicable law
or regulation.

     3.21 INTELLECTUAL PROPERTY

     (a) Intellectual  Property Assets--The term "Intellectual  Property Assets"
includes:

     (i) the Acquired  Company's' names, all fictional  business names,  trading
names, registered and unregistered  trademarks,  service marks, and applications
(collectively, "Marks"); and

                                   Page - 20
<PAGE>

     (ii) all know-how, trade secrets, confidential information, customer lists,
software,   technical   information,   formulas,   data,   process   technology,
specifications,  plans,  drawings,  product design  information  and blue prints
(collectively,  "Trade  Secrets");  owned,  used,  or licensed  by the  Acquired
Company.

     (b) Part 3.21 of the Disclosure  Schedule  contains a complete and accurate
list and summary description of all Intellectual Property Assets of the Acquired
Company.

     (c) Know-How Necessary for the Business

     (i)  The  Intellectual  Property  Assets  identified  in  Part  3.21 of the
Disclosure  Schedule,  and the Trade  Secrets that are owned by, or for which an
absolute  right  to use  is  held  by,  the  Acquired  Company,  are  all of the
intellectual  property  and  know-how  that are  necessary  and required for the
operation  of all  aspects  of the  Acquired  Company'  businesses  as they  are
currently conducted.  With respect to all such Intellectual Property Assets, the
Acquired  Company is the owner of all right,  title, and interest therein and to
each of the Intellectual  Property Assets, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims, and or has
the  absolute  right to the use  thereof  pursuant  to the  terms of a valid and
enforceable written agreement.

     (ii)  Except  as set  forth in Part  3.21 of the  Disclosure  Schedule,  no
employee of the Acquired Company has entered into any contract that restricts or
limits in any way the scope or type of work in which the employee may be engaged
or requires the employee to transfer, assign, or disclose information concerning
his/her work to any Person other than the Acquired Company.

     3.22 CERTAIN PAYMENTS

     No  Acquired  Company or  director,  officer,  agent,  or  employee  of the
Acquired  Company,  or, to the Shareholders of R&R' knowledge,  any other Person
associated with or acting for or on behalf of the acquired Company, has directly
or indirectly (a) made any contribution,  gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form,  whether  in money,  property,  or  services  (i) to  obtain  favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured,  (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of the Acquired Company, or (iv) in violation of any
law or regulation,  (b) established or maintained any fund or asset that has not
been recorded in the books and records of the Acquired Company.

     3.23 DISCLOSURE

     (a) No  representation  or  warranty  of the  Shareholders  of R&R in  this
Agreement and no statement in the Disclosure  Schedule omits to state a material
fact  necessary  to make  the  statements  herein  or  therein,  in light of the
circumstances in which they were made, not misleading.

                                   Page - 21
<PAGE>

     (b) No notice  given  pursuant to this  Agreement  will  contain any untrue
statement  or omit to state a material  fact  necessary  to make the  statements
therein or in this Agreement,  in light of the  circumstances in which they were
made, not misleading.

     (c) There is no fact  known to the  Shareholders  of R&R that has  specific
application  to either of the  Shareholders  of R&R or to the  Acquired  Company
(other  than  general  economic  or  industry  conditions)  and that  materially
adversely affects or, as far as the Shareholders of R&R can reasonably  foresee,
materially threatens, the assets, business,  prospects,  financial condition, or
results of  operations  of the  Acquired  Company that has not been set forth in
this Agreement or the Disclosure Schedule.

     3.24 RELATIONSHIPS WITH RELATED PERSONS

     None of the  Shareholders  of R&R have owned (of record or as a  beneficial
owner) an equity interest or any other financial or profit interest in, a Person
that has (i) had  business  dealings  or a material  financial  interest  in any
transaction  with  the  Acquired  Company,   other  than  business  dealings  or
transactions  conducted  in the  Ordinary  Course of Business  with the Acquired
Company  at  substantially   prevailing   market  prices  and  on  substantially
prevailing  market  terms,  or (ii)  engaged in  competition  with the  Acquired
Company with  respect to any line of the  products or services of such  Acquired
Company (a "Competing Business") in any market presently served by such Acquired
Company,  except for less than one percent of the  outstanding  capital stock of
any Competing Business that is publicly traded on any recognized  exchange or in
the over-the-counter  market. Except as set forth in Part 3.24 of the Disclosure
Schedule,  none of the  Shareholders  of R&R is a party to any contract with, or
has any claim or right against, the Acquired Company.

     4.  Representations and Warranties of XRG. XRG represents and warrants that
the  statements  contained  in this Section 4 are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date.

     (a)  Organization  of XRG. XRG is a  corporation  duly  organized,  validly
existing, and in good standing under the laws of the State of Delaware.

     (b)  Authorization  of  Transaction.  XRG has full power and  authority  to
execute and deliver this  Agreement  and to perform its  obligations  hereunder.
This  Agreement  constitutes  the valid and legally  binding  obligation of XRG,
enforceable in accordance with its terms and conditions.

     (c)  Noncontravention.  Neither  the  execution  and the  delivery  of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which XRG is subject or any  provision of its
charter or bylaws or (ii)  conflict  with,  result in a breach of,  constitute a
default under,  result in the  acceleration of, create in any party the right to
accelerate,  terminate,  modify,  or  cancel,  or require  any notice  under any
agreement,  contract, lease, license,  instrument, or other arrangement to which
XRG is a party or by which it is bound or to which any of its assets is subject.
XRG does not need to give any notice to,  make any  filing  with,  or obtain any
authorization,  consent, or approval of any government or governmental agency in
order for the  Parties  to  consummate  the  transactions  contemplated  by this
Agreement.

                                   Page - 22
<PAGE>

     (d) Brokers  Fees.  XRG has no liability or  obligation  to pay any fees or
commissions  to any broker,  finder,  or agent with respect to the  transactions
contemplated by this Agreement for which R&R could become liable or obligated.

     5. Pre-Closing Covenants.  The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.

     (a) General.  Each of the Parties will use its  reasonable  best efforts to
take all action and to do all things  necessary in order to consummate  and make
effective the transactions contemplated by this Agreement.

     (b) Operation of Business.  R&R will not engage in any  practice,  take any
action, or enter into any transaction outside the Ordinary Course of Business.

     (c) Preservation of Business. R&R will maintain and continue to promote its
business,  its business  operations,  and its business  relationships,  and will
maintain its property,  including its present operations,  physical  facilities,
working conditions, and relationships with its suppliers, customers, independent
contractors and employees.

     (d) Full Access,  Cooperation and  Authorization.  The Shareholders of R&R,
will permit  representatives of XRG to have full access at all reasonable times,
and in a manner so as not to interfere  with the normal  business  operations of
R&R, to all premises,  properties,  personnel,  books,  records  (including  Tax
records),  contracts,  and  documents  of or  pertaining  to R&R.  R&R and their
officers  and  employees  will  cooperate  with  XRG and  facilitate  XRG's  due
diligence  investigation  of R&R.  The  Shareholders  of R&R  execution  of this
Agreement constitutes  authorization to R&R's accountants,  attorneys,  bankers,
lenders  and  other   professional   advisors  and   consultants  to  meet  with
representatives  of XRG and  disclose  to XRG any and all  information  in their
possession regarding R&R.

     (e) Notice of  Developments.  Each Party will give prompt written notice to
the other Party of any material adverse  development  causing a breach of any of
its own  representations  and  warranties  in Section 3 and Section 4 above.  No
disclosure by any Party pursuant to this Section 5(e), however,  shall be deemed
to amend  or  supplement  the  Disclosure  Schedule  or to  prevent  or cure any
misrepresentation, breach of warranty, or breach of covenant.

     (f) Exclusivity. The Shareholders of R&R will revoke any current
listing of its business for sale. R&R will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any of the stock or assets of R&R (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek the foregoing. The Shareholders of R&R, will
notify XRG immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to the foregoing.

                                   Page - 23
<PAGE>

     6. Conditions to Obligation to Close.

     (a)  Conditions to  Obligation of XRG. The  obligation of XRG to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions at or prior to Closing:

     (i) the  representations  and warranties set forth in Section 3 above shall
be true and correct in all material respects at and as of the Closing Date;

     (ii) the  Shareholders  of R&R, and R&R,  shall have performed and complied
with all of their  covenants  hereunder  in all  material  respects  through the
Closing;

     (iii) the  Shareholders  of R&R, and R&R,  shall have procured any required
third party consents;

     (iv) no action,  suit, or proceeding shall be pending or threatened  before
any court or  quasi-judicial  or  administrative  agency of any federal,  state,
local, or foreign  jurisdiction or before any arbitrator  wherein an unfavorable
injunction,  judgment,  order,  decree,  ruling,  or charge  would  (A)  prevent
consummation of any of the  transactions  contemplated  by this  Agreement,  (B)
cause any of the  transactions  contemplated  by this  Agreement to be rescinded
following  consummation,  (C)  affect  adversely  the  right  of XRG to own  the
Purchased Assets;

     (v)  all  actions  to be  taken  by the  Shareholders  of  R&R,  and R&R in
connection with  consummation of the  transactions  contemplated  hereby and all
certificates,  opinions, instruments, and other documents required to effect the
transactions  contemplated  hereby will be reasonably  satisfactory  in form and
substance to XRG; and

     (vi)  completion  to  XRG's  satisfaction  of  its  due  diligence  review,
including the Disclosure Schedule;

     XRG may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

     (b)  Conditions to  Obligation of R&R. The  obligation of R&R to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

     (i) the  representations  and warranties set forth in Section 4 above shall
be true and correct in all material respects at and as of the Closing Date;

     (ii) XRG  shall  have  performed  and  complied  with all of its  covenants
hereunder in all material respects through the Closing;

     (iii) no action,  suit, or proceeding shall be pending or threatened before
any court or  quasi-judicial  or  administrative  agency of any federal,  state,
local, or foreign  jurisdiction or before any arbitrator  wherein an unfavorable
injunction,  judgment,  order,  decree,  ruling,  or charge  would  (A)  prevent
consummation  of any of the  transactions  contemplated by this Agreement or (B)
cause any of the  transactions  contemplated  by this  Agreement to be rescinded
following consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);

                                   Page - 24
<PAGE>

     (iv) all actions to be taken by XRG in connection with  consummation of the
transactions  contemplated hereby and all certificates,  opinions,  instruments,
and other documents required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to R&R.

R&R may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.

     7. Termination.

     (a) Termination of Agreement.  This Agreement may be terminated as provided
below:

     (i) XRG, the  Shareholders  of R&R, and R&R may terminate this Agreement by
mutual written consent at any time prior to the Closing;

     (ii) XRG may  terminate  this  Agreement  by giving  written  notice to the
Shareholders of R&R, and R&R if XRG is not reasonably satisfied with the results
of its  continuing due diligence  review  regarding R&R or the  information  set
forth in the Disclosure Schedule; or

     (iii) XRG may  terminate  this  Agreement by giving  written  notice to the
Shareholders  of R&R,  and R&R at any time prior to the Closing (A) in the event
R&R, or the  Shareholders  of R&R have  breached  any  material  representation,
warranty,  or covenant contained in this Agreement in any material respect,  XRG
has notified R&R, or the Shareholders of R&R, as applicable,  of the breach, and
the breach has continued without cure for a period of thirty (30) days after the
notice of breach,  or (B) if the  Closing  shall not have  occurred on or before
August 1,  2003,  by reason of the  failure  of any  condition  precedent  under
Section  6(a)  hereof  (unless  the failure  results  primarily  from XRG itself
breaching  any   representation,   warranty,   or  covenant  contained  in  this
Agreement).

     (b) Effect of Termination.  If any Party terminates this Agreement pursuant
to Section 7(a) above, all rights and obligations of the Parties hereunder shall
terminate  without any liability of any Party to any other Party (except for any
liability  of any Party  then in breach  and  except as  provided  in  Section 8
below).  If XRG terminates this Agreement  pursuant to Section  7(a)(iii) above,
R&R, and the  Shareholders  of R&R,  jointly and severally,  shall be liable for
XRG's costs and expenses related to the transaction hereunder.

     8. Indemnification by R&R, and the Shareholders of R&R.

     R&R, and the  Shareholders of R&R,  jointly and severally,  shall indemnify
and hold  harmless  XRG and XRG and their  respective  stockholders,  directors,
officers and affiliates (collectively, the "Indemnified Persons") from, and will
pay to the Indemnified Persons the amount of, any loss, liability, claim, damage
(including  incidental and consequential  damages),  expense (including costs of
investigation  and defense and  reasonable  attorneys'  fees) or  diminution  of
value,  whether or not  involving  a  third-party  claim  arising,  directly  or
indirectly, from or in connection with:

                                   Page - 25
<PAGE>

     (a) any breach of any  representation  or warranty made by R&R,  and/or the
Shareholders of R&R in this Agreement,  the Disclosure Schedule, any supplements
to the Disclosure  Schedule,  or any other certificate or document  delivered by
R&R, and/or the Shareholders of R&R pursuant to this Agreement;

     (b) any  breach  by R&R,  or the  Shareholders  of R&R of any  covenant  or
obligation of such Party set forth in this Agreement;

     (c) any claim by any Person for brokerage or finder's  fees or  commissions
or similar  payments based upon any agreement or  understanding  alleged to have
been made by any such Person with R&R, or the Shareholders of R&R (or any Person
acting on their behalf) in connection with any of the transactions  contemplated
under this Agreement; or

     (d) audits or claims by any taxing authority with respect to any tax return
filed by R&R, or the Shareholders of R&R prior to the Closing Date.

     The  remedies  provided in this Section 8 will not be exclusive of or limit
any other remedies that may be available to the Indemnified Persons.

     9. Miscellaneous.

     (a) Survival of Representations and Warranties.  All of the representations
and  warranties  of the Parties  contained in this  Agreement  shall survive the
Closing hereunder.

     (b) Press Releases and Public Announcements. No Party shall issue any press
release or make any public  announcement  relating to the subject matter of this
Agreement prior to the Closing  without the prior written  approval of the other
Party, except as to SEC requirements of disclosure.

     (c) No  Third-Party  Beneficiaries.  This  Agreement  shall not  confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

     (d) Entire Agreement.  This Agreement  (including the documents referred to
herein)  constitutes the entire agreement between the Parties and supersedes any
prior  understandings,  agreements,  letters of intent, or representations by or
between the  Parties,  written or oral,  to the extent they relate in any way to
the subject matter hereof.

     (e) Succession  and  Assignment.  This Agreement  shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of its
rights,  interests,  or obligations hereunder without the prior written approval
of the other Party or Parties; provided, however, that XRG may (i) assign any or
all of its rights and interests  hereunder to one or more of its  affiliates and
(ii)  designate  one or  more  of its  affiliates  to  perform  its  obligations
hereunder (in any or all of which cases XRG nonetheless shall remain responsible
for the performance of all of its obligations hereunder).

                                   Page - 26
<PAGE>

     (f)   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

     (g) Headings. The section headings contained in this Agreement are inserted
for  convenience   only  and  shall  not  affect  in  any  way  the  meaning  or
interpretation of this Agreement.

     (h)  Notices.   All  notices,   requests,   demands,   claims,   and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder shall be deemed duly given if (and then three
business days after) it is sent by registered or certified mail,  return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

                  If to R&R:

                  P.O. Box 16098 Pittsburgh, PA
                  ATTN:  Shareholders of R&R

                  If to the  Shareholders of R&R:

                  P.O. Box 16098 Pittsburgh, PA
                  ATTN:  Shareholders of R&R

                  If to XRG:

                  XRG, Inc.
                  5301 W. Cypress Street
                  Suite 111
                  Tampa, FL  33607
                  ATTN: Kevin P. Brennan

     Any  Party  may  send  any  notice,   request,   demand,  claim,  or  other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service,  telecopy,  ordinary  mail,  or electronic  mail),  but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received by the intended  recipient.  Any
Party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.

                                   Page - 27
<PAGE>

     (i)  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the domestic laws of the State of Florida without giving effect
to any choice or  conflict  of law  provision  or rule  (whether of the State of
Florida or any other  jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.

     (j) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the Parties. No
waiver by any Party of any default, misrepresentation,  or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or  subsequent  default,  misrepresentation,  or  breach  of  warranty  or
covenant  hereunder  or affect in any way any  rights  arising  by virtue of any
prior or subsequent such occurrence.

     (k)  Severability.  Any term or provision of this Agreement that is invalid
or  unenforceable  in any  situation  in any  jurisdiction  shall not affect the
validity or  enforceability  of the remaining terms and provisions hereof or the
validity or  enforceability  of the  offending  term or  provision  in any other
situation or in any other jurisdiction.

     (1) Expenses.  Each of XRG, R&R, and the  Shareholders of R&R will bear its
or his own costs and expenses  (including  legal fees and expenses)  incurred in
connection with this Agreement and the transactions contemplated hereby.

     (m) Construction.  The Parties have participated jointly in the negotiation
and drafting of this Agreement.  In the event an ambiguity or question of intent
or  interpretation  arises,  this  Agreement  shall be  construed  as if drafted
jointly  by the  Parties  and no  presumption  or  burden of proof  shall  arise
favoring  or  disfavoring  any Party by virtue of the  authorship  of any of the
provisions of this  Agreement.  Any reference to any federal,  state,  local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations  promulgated  thereunder,  unless the  context  requires  otherwise.
Nothing in the  Disclosure  Schedule  shall be deemed  adequate  to  disclose an
exception to a  representation  or warranty  made herein  unless the  Disclosure
Schedule  identifies the exception with reasonable  particularity  and describes
the relevant facts in reasonable detail.  Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed  adequate to disclose an  exception to a  representation  or
warranty made herein (unless the  representation  or warranty has to do with the
existence of the document or other item  itself).  The Parties  intend that each
representation,  warranty,  and covenant contained herein shall have independent
significance.

     (n)  Incorporation of Exhibits.  The Exhibits  identified in this Agreement
are incorporated herein by reference and made a part hereof.

     (o) Specific Performance.  Each of the Parties acknowledges and agrees that
the other Party would be damaged  irreparably in the event any of the provisions
of this  Agreement are not performed in accordance  with their specific terms or
otherwise are breached.  Accordingly,  each of the Parties agrees that the other
Party shall be entitled to an injunction to prevent any breach of the provisions
of this Agreement and to enforce  specifically  this Agreement and the terms and
provisions hereof in any action instituted in any court of the State of Florida,
in  addition  to any  other  remedy  to which it may be  entitled,  at law or in
equity.

                                   Page - 28
<PAGE>

     (p)  Submission  to  Jurisdiction.  Each  of  the  Parties  submits  to the
jurisdiction  of the courts of the State of Florida in any action or  proceeding
arising  out of or  relating  to this  Agreement  and agrees  that all claims in
respect  of the action or  proceeding  may be heard and  determined  in any such
court. Each party also agrees not to bring any action or proceeding  arising out
of or relating to this Agreement in any other court.  Each of the Parties waives
any defense of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety, or other security that might be required
of any other Party with respect thereto. Any Party may make service on the other
Party by sending or  delivering  a copy of the process to the Party to be served
at the address and in the manner  provided  for the giving of notices in Section
8(h) above. Nothing in this Section 8(p), however, shall affect the right of any
Party to serve legal process in any other manner  permitted by law or in equity.
Each Party agrees that a final  judgment in any action or  proceeding so brought
shall be conclusive  and may be enforced by suit on the judgment or in any other
manner provided by law or in equity.

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first indicated above.

XRG, INC.

By:
   ---------------------------------
         Kevin P. Brennan
         President

R&R EXPRESS INTERMODAL, INC.

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

Exhibits:

                                   Page - 29QuickLinks
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EXHIBIT 10.4  

FORM  

 OF  

 BUSINESS ALLIANCE AGREEMENT  

 by and between  

 U.S. BANCORP  

 and  

 PIPER JAFFRAY COMPANIES  

 Dated as of                     , 2003  

 
  
 

    TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	ARTICLE I.	 	SCOPE OF AGREEMENT	 	  2
	1.1	 	Scope	 	  2
	ARTICLE II.	 	BUSINESS AGREEMENTS	 	  2
	2.1	 	General	 	  2
	2.2	 	Investment Funds	 	  2
	2.3	 	Capital Market Services Collaboration	 	  3
	2.4	 	Joint Products and Services	 	  4
	2.5	 	Settlement, Safekeeping and Other Banking Services	 	  5
	2.6	 	Customer Information Sharing and Access	 	  6
	2.7	 	Securities Dealer Services	 	  6
	2.8	 	Transition Matters	 	  6
	ARTICLE III.	 	ALLIANCE MANAGEMENT	 	  7
	3.1	 	Alliance Managers	 	  7
	3.2	 	Meetings	 	  7
	3.3	 	Responsibilities	 	  7
	ARTICLE IV.	 	TERM AND TERMINATION	 	  8
	4.1	 	Term	 	  8
	4.2	 	Termination	 	  8
	4.3	 	Effect of Termination	 	  9
	ARTICLE V.	 	GENERAL TERMS AND CONDITIONS	 	  9
	5.1	 	Complete Agreement	 	  9
	5.2	 	Expenses	 	10
	5.3	 	Governing Law	 	10
	5.4	 	Notices	 	10
	5.5	 	Amendment, Modification or Waiver	 	11
	5.6	 	Successors and Assigns; No Third Party Beneficiaries	 	11
	5.7	 	Counterparts	 	11
	5.8	 	Dispute Resolution	 	11
	5.9	 	Interpretation	 	11
	5.10	 	Severability	 	11
	5.11	 	No Joint Venture	 	11
	5.12	 	No Individual Authority	 	12
	5.13	 	Non-Exclusivity	 	12
	5.14	 	Basis of Bargain	 	12
	5.15	 	Force Majeure	 	12
	5.16	 	Priority	 	12
	

EXHIBIT A — Alliance Managers	
 	

 

-i-

  

 
 

BUSINESS ALLIANCE AGREEMENT    
    

        THIS BUSINESS ALLIANCE AGREEMENT (this "Agreement"), dated as of                , 2003, is made and
entered into by
and between U.S. BANCORP, a Delaware corporation ("Parent"), and PIPER JAFFRAY COMPANIES, a Delaware corporation and an indirect, wholly owned subsidiary of Parent
("Piper Jaffray"). Parent and Piper Jaffray are sometimes referred to herein individually as a "Party" and collectively as the
"Parties". Capitalized terms used in this Agreement that are not otherwise defined herein shall have the meanings ascribed to them in the Separation Agreement (as defined
herein). 

 
 

RECITALS    
    

        WHEREAS, Parent and Piper Jaffray have entered into a certain Separation and Distribution Agreement dated as of the date hereof (as it may be amended from time to
time, the "Separation Agreement"), which sets forth the principal corporate transactions required to effect the separation of Parent's businesses into two independent
public companies; 

        WHEREAS,
pursuant to the provisions of the Separation Agreement, from and after the consummation of the Merger and the Contribution, (i) the Piper Jaffray Group will be engaged in
the Piper Jaffray Business, (ii) the Parent Group will be engaged in the Parent Business, (iii) the Piper Jaffray Group will own and control the Piper Jaffray Assets and assume and be
responsible for the Piper Jaffray Liabilities, and (iv) the Parent Group will own and control the Parent Assets and assume and be responsible for the Parent Liabilities; 

        WHEREAS,
Section 3.2(c) of the Separation Agreement provides that prior to the Distribution, each of Parent and Piper Jaffray shall enter into this Agreement, which is the
Business Alliance Agreement referred to in the Separation Agreement; 

        WHEREAS,
Section 2.4 of the Separation Agreement provides, among other things, that on or before the Contribution Effective Time, each of Parent and Piper Jaffray shall enter
into, or cause appropriate
members of the Group of which it is a member to enter into, such other agreements, certificates and other documents as may be deemed to be advisable by Parent in connection with the Separation; and 

        WHEREAS,
the Parties desire to enter into this Agreement to set forth the terms of their agreement regarding certain business alliances, arrangements, understandings and relationships
between and among them and the other members of each of their respective Groups following the completion of the Separation (the "Alliance"), including without limitation,
the following: (i) the referral of selected business between the Groups; (ii) the marketing and distribution of certain financial products and services of the Groups; (iii) the
continued joint provision of certain services by certain members of each Group; and (iv) certain other matters intended to facilitate the transition of the Piper Jaffray Business to the Piper
Jaffray Group set forth below in this Agreement. 

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        NOW,
THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties
hereby agree as follows: 

 
 

ARTICLE I
  
    SCOPE OF AGREEMENT    
    

        SECTION
1.1    Scope.    In furtherance of, and in order to document in its entirety, the
Alliance between the Parties, each of Parent and Piper Jaffray agrees to comply, and to cause the appropriate members of the Group of which it is a member to comply, with all of the terms and
conditions of this Agreement and the Business Agreements (as defined below) contemplated hereby to which it, or the applicable member of its Group, is a party. 

 
 

ARTICLE II
  
    BUSINESS AGREEMENTS    
    

        SECTION 2.1    General.    Subject to the immediately following sentence, the
Parties currently desire to enter into the agreements provided for in this Article II below (the "Business Agreements") on the terms set forth below and otherwise
on such other terms and conditions as are customary for similar business arrangements, but the Parties agree that the identity and description of the terms of the Business Agreements hereunder may be
modified from time to time by mutual agreement of the Parties. Notwithstanding anything herein to the contrary, neither Party shall have any obligation to enter into any such Business Agreement if the
Parties are unable to reach agreement on the terms thereof on or prior to the date that is six months after the Distribution Date after negotiating in good faith. Each Business Agreement shall,
subject to Section 5.16 hereof, constitute a separate and complete agreement between the Parties with respect to the subject matter thereof but may reference or incorporate the terms and
conditions of this Agreement, any other Business Agreement and/or the Separation Agreement if and when appropriate. 

        SECTION
2.2    Investment Funds.    The Parties and/or the appropriate members of each of
their respective Groups shall negotiate in good faith to enter into Business Agreements pursuant to which Piper Jaffray shall offer customers of the Piper Jaffray Group various investment fund
products currently managed by Parent's asset management subsidiary on behalf of First American Funds ("FAF"). The Parties currently contemplate the following specific
Business Agreements that shall be negotiated in good faith and entered into by and between Piper Jaffray and U.S. Bancorp Asset Management, Inc., a wholly owned subsidiary of U.S. Bank
("USBAM"): 

        (a)    Money
Market Funds for Piper Jaffray Clients. Under an agreement to be entered into between Piper Jaffray and USBAM, money market balances
held in various Piper Jaffray Group client accounts shall be invested in one or more classes of money market funds of FAF managed by USBAM. Such money market funds shall be the exclusive
non-state specific retail sweep money market funds offered by the Piper Jaffray Group during the term of the agreement. This agreement shall provide that shares and/or one or more classes
of FAF will be named or renamed so as to relate to Piper Jaffray and 

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that
such shares and/or classes shall have distinct pricing and fee arrangements designed for the Piper Jaffray Group. The Piper Jaffray Group shall provide omnibus shareholder account record keeping
such that transactions for its clients shall be made through a single account for each money market fund or class of FAF. USBAM and Piper Jaffray also shall enter into other service arrangements
related to operational and compliance matters in connection with the investments in FAF by Piper Jaffray Group clients. The agreement shall provide for agreed-upon payments to Piper
Jaffray for making FAF available to Piper Jaffray Group clients under this arrangement and shall have an initial term of two years and be renewable annually. 

        (b)    Long-term
Mutual Funds for Piper Jaffray Clients. Under an agreement to be entered into between Piper Jaffray and USBAM, Piper
Jaffray shall include the long-term (non-money market) mutual funds of FAF on its preferred list of mutual fund families. Piper Jaffray shall enter into a separate dealer
agreement with USBAM under which Piper Jaffray shall receive commissions and trailer fees based upon the investments of Piper Jaffray Group clients in long-term funds of FAF. This
agreement shall be renewable annually. 

        (c)    Referrals
by Piper Jaffray Corporate Venture Services to USBAM Institutional Advisory Group. Under an agreement to be entered into between
Piper Jaffray and USBAM, Piper Jaffray may solicit clients for the Institutional Advisory Group of USBAM, which manages separate accounts for corporations, governmental entities, endowments,
foundations, unions and other entities. USBAM shall pay a referral fee to Piper Jaffray for introductions or leads that result in new clients for this USBAM advisory activity. The agreement shall
conform to the applicable requirements under the Investment Advisers Act of 1940 with respect to cash payments for client solicitations. 

        (d)    Joint
Distribution of Piper Private Equity Fund. Under an agreement to be entered into between Piper Jaffray and USBAM, the USBAM
Institutional Advisory Group shall offer interests in Private Equity Partners II, LP, a private equity fund sponsored by Piper Jaffray, to clients of the Institutional Advisory Group through its
affiliate U.S. Bancorp Investments, Inc. ("USBII"). This agreement shall provide for specific obligations on the part of Piper Private Equity Group and USBAM
Institutional Advisory Group as part of the distribution process and shall provide for the payment of amounts to USBAM Institutional Advisory Group based upon the commitments made by Institutional
Advisory Group clients to invest in Private Equity Partners II, LP. 

        SECTION
2.3    Capital Market Services Collaboration.    The Parties and/or the
appropriate members of each of their respective Groups shall negotiate in good faith to enter into Business Agreements pursuant to which Parent and/or members of the Parent Group shall recommend the
Piper Jaffray Group as a preferred provider of capital market services to clients of the Parent Group. Such services shall include both (i) investment banking services and
(ii) investment account services. The investment banking services shall consist of both (A) debt capital market transactions including senior secured, senior unsecured, subordinated
notes, medium term note programs, brokered CD programs, trust preferred securities, non-convertible preferred securities and commercial paper programs (but excluding any municipal finance 

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transactions),
and (B) equity capital market transactions including public equity offerings, public or private convertible securities, merger and acquisition transactions and private equity
transactions. The investment account services shall include services provided by Piper Jaffray's fixed income capital markets sales force and corporation cash management programs. Such agreement or
agreements shall provide for the payment by the Piper Jaffray Group of referral fees to the Parent Group if a Parent
Group client uses any of such preferred provider services of the Piper Jaffray Group and the same results in a net profit to the Piper Jaffray Group. 

        SECTION
2.4    Joint Products and Services.    The Parties and/or the appropriate members
of each of the respective Groups shall negotiate in good faith to enter into Business Agreements pursuant to which the Parties shall jointly provide certain financial products and services of certain
members of each Group to shared customers of the Groups. The Parties currently contemplate that such agreements will include, without limitation, the following specific agreements: 

        (a)    Retirement
Solution Plan Product. Under an agreement to be entered into between Piper Jaffray and U.S. Bank National Association, a national
banking association and a wholly owned subsidiary of Parent ("U.S. Bank"), Piper Jaffray and U.S. Bank shall continue to market and manage the bundled retirement plan
product known as "Retirement Solution." Specifically, pursuant to the provisions of this agreement, Retirement Solution shall continue to be managed by the Institutional Trust and Custody group of
U.S. Bank ("IT&C"), and USBAM and IT&C shall continue to support the Piper Jaffray Group in its sales activities relating to Retirement Solution. IT&C and the Piper
Jaffray Group shall agree upon new procedures and pricing, including procedures for the payment of commissions, and communication processes determined to be desirable or necessary in light of the
post-Separation structure in order to continue to provide high service levels to shared clients and to retain this business. 

        (b)    Solution
Online Retirement Plan Product. Under an agreement to be entered into between Piper Jaffray and U.S. Bank, Piper Jaffray's
financial advisors shall continue to market and IT&C shall continue to manage the online bundled retirement plan product known as "Solution Online." Neither the management and distribution of Solution
Online nor the process by which the Piper Jaffray Group receives payments for the distribution of Solution Online shall be fundamentally affected by the Separation. IT&C and Piper Jaffray shall agree
upon any modifications that may be necessary or desirable regarding how the product is marketed and distributed. 

        (c)    Premier
Portfolio Trust Product (Piper Jaffray Managed Fiduciary Trust Accounts at Parent). Under an agreement to be entered into between
U.S. Bank and Piper Jaffray, U.S. Bank and Piper Jaffray shall continue to provide in partnership the Premier Portfolio Trust product, pursuant to which investment assets of the Piper Jaffray Group
clients are held in fiduciary trust accounts at U.S. Bank while managed by Piper Jaffray Group financial advisors. This agreement shall set forth the framework and requirements respecting the Premier
Portfolio Trust partnership, including the new technology, information access and communication processes that will be necessary to continue to jointly offer this product following the completion of
the Separation. 

-4-

 

        (d)    Mortgage
Joint Venture. Piper Jaffray and U.S. Bank have formed a joint venture for the purpose of satisfying the mortgage product needs of
Piper Jaffray Group clients. 

        SECTION
2.5    Settlement, Safekeeping and Other Banking Services.    The Parties and/or
the appropriate members of each of their respective Groups shall negotiate in good faith to enter into Business Agreements pursuant to which U.S. Bank shall provide to the Piper Jaffray Group's
corporate cash management clients settlement, safekeeping and other banking services. The Parties expect that the use of such settlement services by such clients of the Piper Jaffray Group will
decline over the term of this Agreement as the Piper Jaffray Group transitions its customers to alternative settlement services. The Parties currently contemplate that such agreements will include,
without limitation, the following specific agreements: 

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

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

        (c)    Automated
Clearing House Cash Settlement Services. Under an agreement to be entered into between U.S. Bank and Piper Jaffray, subject to
certain discretionary credit limitations, U.S. Bank shall continue to accept Automated Clearing House ("ACH") files from members of the Piper Jaffray Group to facilitate
same-day and/or next day debits and credits to the demand deposit accounts maintained at U.S. Bank by Piper Jaffray Group customers. The credit limitations shall gradually decrease to
bring U.S. Bank's credit exposure to the Piper Jaffray Group to a level consistent with the credit risk profile of a substantially similar independent, third party broker-dealer. Standard fee
arrangements and other terms and conditions shall apply to such ACH activity. The Piper Jaffray Group's ability to add new accounts to such ACH files shall be limited until U.S. Bank's ACH 

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related
credit exposure to the Piper Jaffray Group is consistent with the level of ACH related credit exposure that U.S. Bank would provide to a substantially similar independent, third party
broker-dealer. 

        (d)    Credit
Lines. U.S. Bank shall provide the Piper Jaffray Group demand lines of credit, which shall be collateralized by marketable
securities. Additionally, at its discretion, U.S. Bank may provide the Piper Jaffray Group a daylight overdraft line and a discretionary day loan line. 

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

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

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

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

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

        (a)    Structured
Notes Program Modifications. USBII has two series of structured notes issued and outstanding, consisting of (i) USBI
Trust, Series 2002, and (ii) 

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        USBI
Trust, Series 1998D. The Piper Jaffray Group will remain responsible for remarketing and administrative services for the structured notes and the Parent Group will continue
to act as guarantor and trustor. The Parties shall cause all necessary amendments to existing agreements reflecting such duties to be executed and delivered at or prior to the Contribution Effective
Time. 

        The
Parties have further agreed that Piper Jaffray will provide assistance with restructuring the debt represented by the Maricopa County, AZ IDA bonds due 3/1/2002 and 9/1/2028 pursuant
to the terms of a Business Agreement to be entered into between the Parties. 

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

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

 
 

ARTICLE III
  
    ALLIANCE MANAGEMENT    
    

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

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

        SECTION
3.3    Responsibilities.    The Alliance Managers shall be responsible for
understanding the full scope of the Alliance. The Alliance Managers shall further be responsible for engaging the appropriate representatives of their respective companies to allow the Parties to 

-7-

 

meet
their obligations hereunder. The responsibilities of the Alliance Managers shall include, but shall not be limited to, the following: 

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

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

 
 

ARTICLE IV
  
    TERM AND TERMINATION    
    

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

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

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

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

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

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

-8-

 

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

        (c)   Either
Party may terminate this Agreement upon written notice in the event of a Change of Control (defined below), provided that the Party undergoing the Change of
Control shall use its reasonable best efforts to notify the other Party of such event at the earliest time that it is legally permitted and practically able to do so. As used herein,
"Change of Control" means, with respect to either Party: (i) the direct or indirect acquisition of either (A) the majority of the voting stock of such Party
or (B) all or substantially all of the assets of such Party, in either circumstance by another entity that is unaffiliated with such Party in a single transaction or series of related
transactions; or (ii) such Party is merged with or into, or consolidated with, another entity and as a result thereof (A) another entity or person, or, if such entity or person is
controlled by another person or entity, such ultimate controlling entity or person, shall directly or indirectly beneficially own a majority of the voting stock of such Party (or the surviving
corporation in such merger or consolidation) or (B) the board of directors of such Party (or the surviving corporation in such merger or consolidation) shall upon consummation of or pursuant to
the merger or consolidation cease to have a majority of its members be persons who were members of the board of directors of such Party prior to execution of the definitive transaction agreement
providing for such merger or consolidation. 

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

 
 

ARTICLE V
  
    GENERAL TERMS AND CONDITIONS    
    

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

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

        (i)    each
such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform
each of this Agreement and each other Business Agreement that shall be agreed to and finalized in accordance with this Agreement (including Section 2.1 hereof) 

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(collectively,
the "Transaction Agreements") in each case to which it is a party and to consummate the transactions contemplated by the Transaction Agreements to which it
is a party; and 

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

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

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

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

        If
to Parent or any member of the Parent Group: 

U.S.
Bancorp

800 Nicollet Mall

BC-MN-H23I

Minneapolis, Minnesota 55402

Attention: Lee R. Mitau

Fax: (612) 303-0898 

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

Piper
Jaffray Companies

800 Nicollet Mall, Suite 800

Minneapolis,
Minnesota 55402

Attention: James L. Chosy

Fax: (612) 303-1772 

-10-

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	U.S. BANCORP
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	
 Name:

Title:
	

 	
 	

 	
 	

 
	 	 	PIPER JAFFRAY COMPANIES
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	 	
 Name:

Title:

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QuickLinks

TABLE OF CONTENTS

BUSINESS ALLIANCE AGREEMENT

RECITALS

ARTICLE I SCOPE OF AGREEMENT

ARTICLE II BUSINESS AGREEMENTS

ARTICLE III ALLIANCE MANAGEMENT

ARTICLE IV TERM AND TERMINATION

ARTICLE V GENERAL TERMS AND CONDITIONS

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